I agree with Cathy's numbers, except for the omission of payroll taxes.  My husband and I are in the 28% tax bracket, so we pay 28% taxes on our taxable income (the income after making all our deductions for business expenses, charity, etc.), plus we pay the payroll taxes - 15.3% self-employment tax on my business earnings, and half that (7.65%) on my husband's earnings because employers pay half the payroll tax and the employee pays the other half.  

As I have said before, I don't innately hate taxes.  I would be happy to pay them if I saw them being used to benefit average people.  Also to bring down the national debt.  They should really offer us the opportunity to assign a portion of our taxes to go directly to paying off the debt.  I am sure quite a few Americans would be willing to pay a bit extra for that.  

Continuing even further off topic ... I find it interesting that so many people believe that a "progressive" tax rate is fair. "The rich need to pay their fair share." Why is it that someone making more money should get to keep a smaller percentage of what they make?  They'd pay more just by making more -- isn't that the most fair way of doing it?

Imagine if iStock felt the same way: bronze RC exclusives would receive 45%, while black diamond RCs (if there are any) would earn 25%.  Hey, sounds fair to me!   

A self-employed "rich" person living in a high tax state can easily approach a 50% tax rate, depending on circumstances.

The highest Federal tax rate is 35%. Self-employment tax is an additional 15.3% (the proposed cut notwithstanding), but that applies only to the first $107K of earnings. Only 2.9% is applied to all earnings. State and even city taxes (rare) can be as high as more than 10% (though deductions on the federal return might lower the real rate a bit).

I've never been up there, but while I'd love to earn that kind of money, I suspect I wouldn't be that thrilled with giving up almost half of it to the government.

"... highest Federal tax rate is 35%..."  That is only on income over $373,650 below that is taxed at lower rates.  There are the brackets -- married filing jointly -- 10% for the first $16,750, 15% from there to $68,000, 25% from there to $137,300, 28% from there to $209,250, 33% from there to 373,650 where the 35% rate cuts in on all above.

See: http://www.savewealth.com/taxes/rates/2010/jointmarried/

fred

I agree with Cathy's numbers, except for the omission of payroll taxes.  My husband and I are in the 28% tax bracket, so we pay 28% taxes on our taxable income (the income after making all our deductions for business expenses, charity, etc.), plus we pay the payroll taxes - 15.3% self-employment tax on my business earnings, and half that (7.65%) on my husband's earnings because employers pay half the payroll tax and the employee pays the other half.  

As I have said before, I don't innately hate taxes.  I would be happy to pay them if I saw them being used to benefit average people.  Also to bring down the national debt.  They should really offer us the opportunity to assign a portion of our taxes to go directly to paying off the debt.  I am sure quite a few Americans would be willing to pay a bit extra for that.  

"...in the 28% tax bracket, so we pay 28% taxes on our taxable income..." Nope. If you are filing jointly you only pay 28% on all income over $137,300 and at lower levels below that (see my previous post).   Big difference.

Americans taxes are at their lowest rate in 60 years.  (If that makes anyone feel better!)

See:  http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm  



fred

Now, why do I have to pay 30% if I don'tlive in the USA?   

Someone will correct me if I am wrong but I believe that is just a witholding rate and you can file a U.S. Tax return to get back whatever you paid that was in excess of what you owed.

fred

Quote from: adijr on December 11, 2010, 21:07

I am a canadian living in the US as a student. Canadian taxes are skyhigh compared to here. Most people I know in Canada and with whom I've at least mentioned finances are quite content to pay their taxes, even those taxed at 50%.

I am really curious why (some?) people are sooo eager to not pay taxes here in the US. In my mind, the equation was very simple, more taxes = more social programs, infrastructure, etc. (of course, assuming no excess of corruption)
...

Excess of corruption?  All of these social programs are inherently corrupt.  The famous Canadian health system (using Ontario as an example) has maybe 80% of its funding skimmed out of the system by bureaucratic "overhead" which is about what you would expect of any government monopoly.  I have some inside knowledge of this because of a friend inside the system who had access to a confidential audit.  And the system is corrupt.  You won't read much about this in the papers or see it on TV but when it comes to getting jumped up in the queue for hard-to-get medical services (like MRIs) there a lot of favoritism, bribes and extortion going on.  Not out-and-out cash bribes AFAIK, but more like people getting bumped up in the queue if they are a crony of a politician, or getting an immediate upgrade to their hospital care if they threaten a politician that they will complain to the press and expose the crappiness of the system.  That's for medical care.  For the awarding and paying out of government contracts, I'm sorry to tell you that there is a lot of blatant corruption going on, as in envelopes of cash changing hands.  A little bit of this came out over the sponsorship scandal, but some ex-government employees told me some stories indicating that sponsor-gate was not the exception to how government contracting works, but the norm.

I believe that there is not a single province in Canada which can balance its budget right now (with the possible exception of Alberta) and the federal government is running an all-time-record deficit.  The money is disappearing into the pockets of the politicians, their cronies who have government contracts, and the unionized bureaucrats.  Meanwhile, the infrastructure is crumbling.  The highways and major roads of Ontario are so full of cracks and potholes, you'd think you were in a third-world country.  In Quebec the highway bridges have been literally collapsing because of lack of maintenance.

Government monopolies don't work - that's why in Canada the health care is rationed and people are dying on waiting lists for operations, and in North Korea the food is rationed and people die of malnutrition.  The reason why monopolies don't work is that the people who run the monopolies have no competition and therefore can abuse the system and make it as expensive as they want, and they will not lose their "customers".

This system, the one in North America, Europe, Japan and Australia is probably not going to last much longer.  Foreigners are not going to keep lending money to these governments forever, so that they can skim all the cream off the top and then offer crappy "social services" to the sheep.  The tax base is already crumbling because all kinds of businesses, big and small, are being pinched because their customers are getting poorer and taxes and regulations are getting more onerous (see 1099).

You can do what you want with your own money, but I don't think that it will help anyone (least of all yourself) if you pay any more into this mess than you have to.

I don't disagree that most governments have some corruption, but I think for the sort of facts you're posting you need some references (and I mean statistics, studies, etc back up by some scientific plan, not an article from FoxNews). I've heard all too many times about the long lines and people dying because they can't get a surgery, but very little in terms of proper numbers. I can definitely understand how overhead goes up due to strong unions, misuse of money and so on. But to go from that to saying that all these systems will collapse, especially without numbers, might be overdoing it.  And this of course is a completely different discussion from the one that decides just who is allowed to have medical access in each system.

I'd also like to see some numbers about this Canadian crumbling infrastructure you mention. This differs from my personal experience, but of course my experience might be particularly lucky.

Stating monopolies don't work in the sense you did sort of argues against government in general, since by definition government is a monopoly. By your logic, they can just pass whatever laws they want, since there is no competition, and they won't lose their customers. If this is indeed the problem, we are all doomed. Oh, and let's not put Canada and North Korea to prove the same point, shall we?

So let me sum it up for myself. If you state facts (and quite strong conclusions), some sources would be awesome.
Also, what do people who have low amounts of money do? There are many students who are on loans, many people starting a new life, many immigrants, many people who lose their ** in floods, many microstockers entering the business. I'm willing to allow some of my tax money go to needless jobs and unions if the rest goes to build a nice infrastructure. It's not all rosy and nice, but I think it works decently enough. But maybe being a student I'm still too naive...

Anyway, please note that if i woke the beast, i'm happy to stop posting on the subject. I don't mean for this discussion to go into arguments, I'm literally trying to understand a different line of thinking.

My combined federal and state income taxes come out to 33%, plus 10% sales tax, plus property tax, plus social security tax, plus medicare tax, plus utility taxes, plus vehicle registration tax, plus gasoline tax.... plus.... plus.... plus....

on the flip side, imagine if you had to pay out of pocket for the police, fire, roads, food safety testing, military, schools, etc. etc. I am sure we each have a lot of things we'd like to avoid paying for, but on the whole there are a lot of things the govt. should do, and even some of them it does a better job than the private sector would.

Quote from: pet_chia on December 12, 2010, 12:36

Quote from: adijr on December 11, 2010, 21:07

I am a canadian living in the US as a student. Canadian taxes are skyhigh compared to here. Most people I know in Canada and with whom I've at least mentioned finances are quite content to pay their taxes, even those taxed at 50%.

I am really curious why (some?) people are sooo eager to not pay taxes here in the US. In my mind, the equation was very simple, more taxes = more social programs, infrastructure, etc. (of course, assuming no excess of corruption)
...

Excess of corruption?  All of these social programs are inherently corrupt...

I don't disagree that most governments have some corruption, but I think for the sort of facts you're posting you need some references (and I mean statistics, studies, etc back up by some scientific plan, not an article from FoxNews)...

Excellent post.  Anxious too see an answer.

c h e e r s
fred

... I don't disagree that most governments have some corruption, but I think for the sort of facts you're posting you need some references (and I mean statistics, studies, etc back up by some scientific plan, not an article from FoxNews) ...

An article from Fox News, LOL.  I never watch it.  I'm going to go out on a limb and say that probably if you watched Fox News for a little while, and then compared their opinions to other networks, you would conclude that all of these networks are pro-(big)-government, and they only disagree on which areas should have Big Government and which areas should have Really Really Big Government.

Here is the case against government, it rests on logic and not on statistics.

A government is by definition a group of people who claim a monopoly on the use of violence in a particular geographic region.  Violence is the beginning and end of government power (if you don't believe it then try subtracting from your tax payment the money which you feel is being wasted or stolen, and wait to see what happens).  Yet, governments claim that this violence is necessary for them to perform beneficial acts of charity and cooperative "public works".  That is a logical impossibility - governments are saying, "Let us help you ... or we'll kill you."  That is not charity, it is brigandage.

... I've heard all too many times about the long lines and people dying because they can't get a surgery, but very little in terms of proper numbers. I can definitely understand how overhead goes up due to strong unions, misuse of money and so on. But to go from that to saying that all these systems will collapse, especially without numbers, might be overdoing it.  And this of course is a completely different discussion from the one that decides just who is allowed to have medical access in each system ...

With the possible exception of Norway, Alberta and a handful of oil sheikdoms who can (for now) afford to pay for exorbitant social welfare programs, there is NO country right now that I am aware of who provides welfare, medicare, government pensions, etc. and who can balance their budget.  None of 'em.  Go google it if you want, I think you'll find that all of these countries are facing not only budget problems right now, but are also facing more and more severe problems in the next few decades because of demographic problems.  They will have many, many more old people who expect receive pensions and free medical care than they will have young, working people who could be taxed to support the old people.  Whatever savings that older people might have put away are being severely eroded through monetary inflation (printing money) so it's hard to see how any of this is going to end well.  Laughably, what the EU considered to be a "good" amount of unbalanced budget was to borrow "only" an extra 3 percent per year of the value of the entire production of the country.  Even that is digging a hole then pulling down the walls down on yourself (and your children and grandchildren) but many of the countries, especially the benighted PIIGS, simply lied about their deficits and were allowed to participate in the Euro welfare scam anyways.

Any system that gives away "free" stuff will end in the same way.  When the cost of something (to the consumer) approaches zero, the demand approaches infinity.  Stated another way, there is no such thing as a free lunch (unless you steal it).

What happened was this - the politicians who created these social welfare programs did not give a cr_ap whether they would be sustainable for 20, 50 or 100 years.  Being politicians, they sought to grab power only in the next election.  That is the only horizon that matters to any politician.  Every "social program" is in fact a pyramid scheme.  The neatest example I can think of is a little old gal called Ida May Fuller, the first ever recipient of US Social Security.

By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system.

Nice little scam!  And she didn't finish collecting the free money until around 40 years after the politicians who created SS won their election in 1936.  Did they care?  Why would they?  Not a single one of them will still be alive when SS collapses in a cesspool of unfunded liabilities in a decade or two from now.

If you dig a bit into the origins and future of every other social welfare program - such as Canada's Biggest Sacred Cow (medicare) you will find the same, scummy, political opportunism and the same, hopeless financial dead-end.  That is why I say that government welfare programs are not just a little bit corrupt and inefficient, but they are inherently corrupt.  It is an irrational fantasy to believe that politicians can create or sustain wealth in a country by collecting money under threat of violence and redistributing it to their political supporters so that they can win the next election.

Quote from: adijr on December 12, 2010, 18:17

... I don't disagree that most governments have some corruption, but I think for the sort of facts you're posting you need some references (and I mean statistics, studies, etc back up by some scientific plan, not an article from FoxNews) ...

An article from Fox News, LOL.  I never watch it.  I'm going to go out on a limb and say that probably if you watched Fox News for a little while, and then compared their opinions to other networks, you would conclude that all of these networks are pro-(big)-government, and they only disagree on which areas should have Big Government and which areas should have Really Really Big Government.

Here is the case against government, it rests on logic and not on statistics.

A government is by definition a group of people who claim a monopoly on the use of violence in a particular geographic region.  Violence is the beginning and end of government power (if you don't believe it then try subtracting from your tax payment the money which you feel is being wasted or stolen, and wait to see what happens).  Yet, governments claim that this violence is necessary for them to perform beneficial acts of charity and cooperative "public works".  That is a logical impossibility - governments are saying, "Let us help you ... or we'll kill you."  That is not charity, it is brigandage.

Quote

... I've heard all too many times about the long lines and people dying because they can't get a surgery, but very little in terms of proper numbers. I can definitely understand how overhead goes up due to strong unions, misuse of money and so on. But to go from that to saying that all these systems will collapse, especially without numbers, might be overdoing it.  And this of course is a completely different discussion from the one that decides just who is allowed to have medical access in each system ...

With the possible exception of Norway, Alberta and a handful of oil sheikdoms who can (for now) afford to pay for exorbitant social welfare programs, there is NO country right now that I am aware of who provides welfare, medicare, government pensions, etc. and who can balance their budget.  None of 'em.  Go google it if you want, I think you'll find that all of these countries are facing not only budget problems right now, but are also facing more and more severe problems in the next few decades because of demographic problems.  They will have many, many more old people who expect receive pensions and free medical care than they will have young, working people who could be taxed to support the old people.  Whatever savings that older people might have put away are being severely eroded through monetary inflation (printing money) so it's hard to see how any of this is going to end well.  Laughably, what the EU considered to be a "good" amount of unbalanced budget was to borrow "only" an extra 3 percent per year of the value of the entire production of the country.  Even that is digging a hole then pulling down the walls down on yourself (and your children and grandchildren) but many of the countries, especially the benighted PIIGS, simply lied about their deficits and were allowed to participate in the Euro welfare scam anyways.

Any system that gives away "free" stuff will end in the same way.  When the cost of something (to the consumer) approaches zero, the demand approaches infinity.  Stated another way, there is no such thing as a free lunch (unless you steal it).

What happened was this - the politicians who created these social welfare programs did not give a cr_ap whether they would be sustainable for 20, 50 or 100 years.  Being politicians, they sought to grab power only in the next election.  That is the only horizon that matters to any politician.  Every "social program" is in fact a pyramid scheme.  The neatest example I can think of is a little old gal called Ida May Fuller, the first ever recipient of US Social Security.

Quote

By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system.

Nice little scam!  And she didn't finish collecting the free money until around 40 years after the politicians who created SS won their election in 1936.  Did they care?  Why would they?  Not a single one of them will still be alive when SS collapses in a cesspool of unfunded liabilities in a decade or two from now.

If you dig a bit into the origins and future of every other social welfare program - such as Canada's Biggest Sacred Cow (medicare) you will find the same, scummy, political opportunism and the same, hopeless financial dead-end.  That is why I say that government welfare programs are not just a little bit corrupt and inefficient, but they are inherently corrupt.  It is an irrational fantasy to believe that politicians can create or sustain wealth in a country by collecting money under threat of violence and redistributing it to their political supporters so that they can win the next election.

Well, Malthus thinks we've all starved by now!

c h e e r s
fred

Here is the case against government, it rests on logic and not on statistics.

IMO, 'logic' is a very dangerous word. It is very poorly defined, and in many cases one person's logic is another person's horror. One can define it in the mathematical sense, or in a psychological sense, or w/e, but most often I see people equating logic to their common sense, and you can see how it falls downhill from there. I love logic, how I learned it, which is within a science regime. But I feel like in a general conversational setting, saying "Logically, X is true" does not make it so. Most often, it doesn't match my definition of logic anyway.

Although I disagree with many of your opinions, I'm happy to argue peacefully. However, I find it awkward that you are so against giving me some figures/sources/stats.

Defining the government solely on violence seems a bit reaching. In fact, I'm quite confused over which government you are now talking about. I am quite certain that if I stated on my tax return that I do not agree with a certain chunk of the money, there won't be a violence threat. In fact, there won't be a prison sentence (unless I am attempting fraud). In fact, even a fee won't be immediate. This is, at least, in Canada, and it's only based on my experience and my friends'. I claim not to know what is the case in the US or others, nor do I plan to test it out in either country. However, stating the the governments will essentially say "Let us help you ... or we'll kill you." is the sort of thing where I'd need more than your opinion for.

The thing that scares me mostly is that you're omitting giving any sources even when you state strong facts ("With the possible exception  ... there is NO country right now that I am aware of who provides welfare, medicare, government pensions, etc. and who can balance their budget. "). Which countries are you aware of? How are you getting to this conclusion (numbers?)? Are they balancing their budget any worse than other country? Last I heard, the US budget isn't doing too well (http://en.wikipedia.org/wiki/2010_United_States_federal_budget, 1.3 Trillion def).

I understand your motivation for politicians to limit their planning of the future, but there can be arguments against (such as people proposing/protesting about future planning). I'm not saying you're wrong, but simple that having that argument does not make you right. The statements like "That is the only horizon that matters to any politician.  Every "social program" is in fact a pyramid scheme." is where I'd appreciate some sources/stats as backup. I understand you can get occational examples and that systems have holes - but examples do not prove absolutes (this is why statistics are much more important that case studies).

If you dig a bit into the origins and future of every other social welfare program - such as Canada's Biggest Sacred Cow (medicare) you will find the same, scummy, political opportunism and the same, hopeless financial dead-end.  That is why I say that government welfare programs are not just a little bit corrupt and inefficient, but they are inherently corrupt.  It is an irrational fantasy to believe that politicians can create or sustain wealth in a country by collecting money under threat of violence and redistributing it to their political supporters so that they can win the next election.

You write well - very strong and articulate words with nice punchlines, very estetic. But you have to show evidence behind your statements. Without it, we are just arguing about who can write more eloquently or convincingly without reference to the truth. I think turth has gotten lost along the way, and given way to strong opinion. I hoped to see why people are happy to keep more money in their pocket in balance against social programs. Not trusting the government is a good start, but we need evidence of strong misbehaviour with sources. Your sentence "It is an irrational fantasy to believe that politicians can create or sustain wealth in a country by collecting money under threat of violence and redistributing it to their political supporters so that they can win the next election." may wow the reader, but other than you expressing that this is how you feel (as a conclusion to your opinion post), and making it sound very sensationalist, there is no substance to it. Discussion is fine, strong and absolute statements, especially those based solely on opinion, are not.

I don't think I wish to argue against you, so please don't take it that way. It seems I've got my answer insofar as your opinion, anyway; and it seems that I have alot more reading to do until I can understand everything people are talking about.

To the board: I apologize for propagating this. I wished to find out how people rationalize their taxes here, not argue about the "corrupt irrational fantasy" that is Canada, which I was using as an example. I suggest we get back to microstocking.