I read a comment earlier today in which the author proposed a progressive income tax as follows – “…if you make under 100K, 25%. If you make 100K to 1M, 40%. if you make over 1M, 65%.” (as it was pasted from the site)
I made the following response to the moron that came up with this harebrained and liberal dependency theology answer. Please forgive me in advance for being long-winded, but I simply couldn’t find a stopping place in order to step down off my soap-box.
BTW – I refuse to call any member of the House of Representatives a Representative and will call them out for what they are – Politicians and Whores for Special Interest Groups – because when was the last time that any one of them actually “represented” what is truly in not only their constituent’s best interest, but that of America as a whole? Their only concern is, as I also state later, that they vote in whatever way best serves them and their masters…and their masters, my fellow Americans, are not the American people, rather the special interest groups that contribute heavily to their re-election coffers. Their sole purpose, it sometimes seems, is to reward only the lobbyists and special interest groups, who so unashamedly are willing to sacrifice the greater good for benefits that will reward only a few. _____________________________________________________
65%??? Are you insane??? I don’t make anywhere near 1m…or even 100K…or even 50K…but a 65% income tax rate?
So, 65% federal + 10-15% state = 75%-80% of income gone to taxes? How is that anywhere near fair? You mean to tell me that you would be OK with an individual keeping only 20%-25% of what he has worked hard to earn?
How about this breakdown for your progressive taxation scenario?
Under 20K = 10%
20K-100K = 16%
100K-250K = 20%
250K-1M = 24%
Over 1M = 28%
All from payroll deduction and the employer matches (just like they do now). No rebates, no income tax returns, no loopholes, no deductions, no exemptions.
I believe that there are some very simple and easy steps that could be taken to eliminate the crisis in which we currently find ourselves steeped…a crisis that the politicians intentionally created, with each party’s only intent as being to see if the other side would blink. A very dangerous game of “Chicken” played by only 536 people (Senators=100; Congressmen=435; President=1) with the lives, livelihoods, and an economy supporting in excess of 300,000,000 citizens in the balance.
First, and foremost – in order to eliminate the deficit and get the national debt down to a reasonable level, it would be absolutely mandatory to roll spending levels back to 2008 (at least, if not further) and freeze them for 2-5 yrs, except for Defense, SS COLA’s, and VA benefits. Along with that, eliminate both the Inheritance Tax and Capital Gains Tax. It is those capital gains that drives much of the job creation vehicle in this great country. Without those absolute mandatory unrepealable protections, D.C. would revert immediately back to the “…OMG, look at how much money we’ve got to spend!!!” mentality. Then, after the specified time frame, we could begin to increase spending, but only to limits and on items strictly governed by constitutional mandate. Also, it would require an amendment to allow a Line Item Veto.
Personally, I’m in favor of a true flat tax – all persons in all income brackets taxed at exactly the same rate (20% is a nice round number). If you want a fair tax system, you can’t get much fairer than one in which someone making $20k pays $4k in taxes and someone making $20M pays $4M in taxes. Even with a 15% flat tax rate, and total wage income in the US (est 2012) of approx $13 trillion (source: http://bber.unm.edu/econ/us-tpi.htm), revenue would be approx $2 trillion. Bump that number to 20% and revenues automatically increase to $2.6 trillion – fully 69.7% of the over-loaded and bloated 2012 budget of $3.729 trillion. In conjunction with that is the matching tax paid by employers. Fix the system so that employers match only 50% of what is withheld from the employees pay, and for income tax alone the revenues would amount to $3.9 trillion and this years budget is met – with a nearly $200 billion surplus. The only thing left to do is trim the fat, spend where it’s necessary, and eliminate everything else.
Now, imagine the possibilities that would exist were it established as the progressive plan I showed earlier. With the higher income earners paying at a higher rate, while giving relief to the lower-income individuals, there would be a greater perception of equity, and hence, a much fairer tax system in play.
Then, there is the corporate tax income to consider. I haven’t seen facts and figures on that, but it is substantial. Lowering the corporate rate from 35% to 21%, in conjunction with the elimination of tax credits and loopholes, would cause revenues not only to increase, but corporations would have a stable platform on which to plan for expansion and hiring. As it is now, even with record profits, many corporations are simply hoarding their cash because they have no idea what the future is going to hold.
In conjunction with the flat tax, institute a national sales tax of…say…12%. With approx 112,000,000 households in the U.S., and each of them spending approx $48,000/yr, a 12% national sales tax would generate another nearly $650 billion in revenue. Even if you: a) work under the table in order to escape paying income tax; b) draw some type of entitlement check (and I do NOT include VA and SS benefits) such as SSI, SSDI, TANF, or some other cash benefit; or c) are unemployed for whatever reason, you still – simply out of necessity – buy groceries (at the very least) and contribute to the economy.
Another form of revenue would be to eliminate the income tax refund system. In doing away with the income tax forms and taxing only wages paid as income, the loopholes that many use to minimize (legally) the amount of taxes they pay in any given year. In 2012, the IRS paid refunds to approx 100,000,000 (100 million) taxpayers, with an average refund of about $2,716 (source: http://www.bargaineering.com/articles/average-tax-refund.html). That represents a total of approx $271,000,000,000 ($271 billion) paid out of the federal coffers for…….what, exactly? For a short-term stimulus that has become as much a rite of passage every spring as opening day for Major League Baseball? A time where, rather than pay down on debt (the sensible thing to do), the recipients go on a splurge and buy the big-ticket items that they’ve been salivating over for the past year? Imagine for a moment, if you will, that the U.S. Treasury was able to retain that $271 billion dollars. That is approx 7.5% of the 2012 federal budget. This is a significant figure.
In order to protect and take Medicare/Social Security off life support, it would be neccesary to introduce a Constitutional Amendment that would protect those trust funds from being robbed in order to provide for the general budget. Borrowing also would NOT be allowed. Keep SS/FICA taxes at their current rates, but make these funds absolutely hands-off except for their very specific and limited uses.
Bottom line? For this entire budget mess, BOTH sides must agree to some steep spending cuts – whether or not an agreement is reached on revenue. As I read in a paper written by a prominent economist (can’t remember just who), “This is more of a spending crisis than a budget crisis.” For the amount of money the federal gov’t brings in, there is no reason that we should be at the point we are today – except the politicians in D.C. have viewed the American people as nothing more than a blank check for waaaaay too long. Personally, I’m sick and tired of it and I simply do not and cannot trust anything that a politician says…because I know that as soon as they’re done with my group and moved on to another crowd, they’re going to be stabbing me in the back and telling the new group exactly what they want to hear, regardless how it affects me. What it all boils down to is this – Politicians are going to vote in whatever way best benefits them and the masters they serve…and their masters, my fellow Americans, are not the American people, rather the special interest groups that contribute heavily to their re-election coffers.
In response to my rant, a friend of mine said, “That’d be killing a lot of Sacred Cows Ben. Congress wouldn’t be happy.”
My response to that?
I am sick of that mentality, Gerald. Who honestly cares about what Congress thinks? That’s the whole problem in a nutshell. For too long, it’s been about what makes Washington and the lobbyists happy, rather than what’s best for the American people and the economy. If the Senators and Representatives (as well as Mr. President) would all forget about their re-election campaigns and give a lot more consideration about what’s best for their constituents, they wouldn’t have to work nearly as hard during election season to keep their seat! Politicians should be made to pay with their jobs for their irresponsible votes. But the sheeple of this country, by and large, have that dadgum welfare mentality and seem to think (just as the politicians who represent them) that if they can only tax the rich a little more, they can spend, spend, spend on the poor…then, the poor can finally be on equal footing with the rich. That.Will.Never.Happen!
Jesus said it best in Matt 26:11, “For you have the poor with you always…” Taxing the rich out of existence in order to pay for the poor does nothing but eliminate the rich. This is always a bad idea. It is the rich among us who have the resources and who provides jobs for the poor. Taking money out of the pockets of the rich man does only two things: 1) makes the rich resentful towards the poor and much less willing to help, and 2) exacerbates and perpetuates the problems of the poor.