Stimulus package? uhh what

And Chief, that is the greatest avatar...ever!

 

Good catch, Chris! Yes I did pay Social Security and Medicaid taxes and always have, and forgot that at a certain income point they are not paid

That's not fair!

PS those income tax rates are only on eligible income (minus deductions) and before bonus credits like child tax credits, energy credits, etc. This is why I went many years without sending anything to the IRS. A homeowner with kids can make $20k, $30k, $40k and not owe the IRS a dime

 

No, actually, I didn't pay more than that. Those numbers are federal income tax, only. My federal income tax this last year was slightly under 5% of my gross income. So the richest are paying over 3 times as much of a percentage as I am. I don't have problems with that - I don't think they should pay a higher percentage, because they are also paying a lot more kinds of taxes than I am - corporate, capital gains, etc. I have more of an issue with people like Tim Geithner and Tom Daschle who lecture people about how they need to pay taxes, and end up being tax cheats themselves. The fact that a tax cheat is now at the head of the IRS makes me much more upset than a rich person not paying more than 17% of their income in federal income tax.

 

I gotta say that p****s me off also. It seems as if the only time people need to pay tax is when they are being considered for a high level government job. Great message in these times.

What about UBS helping millionaires to hide their funds! Crazy. If you're an American citizen then you need to man up and fork over the $ or leave.

 

You guys, and gal, have a lively debate going. This is one thread I may need to go back and read from the beginning. Just curious, but do Ron Paul and the Austrian theory of economics ever find their way into your political/fiscal/economic debates?

 

I am somewhat intrigued by the Austrian school, and a lot of it makes sense to me. Ron Paul, however, did not impress me as much.

Sorry. It seems like everybody is behaving themselves here, though. No personal attacks or anything out of line.

 

I agree about the sheltering of funds in offshore accounts that allows people to avoid tax liability. Unfortunately, the current tax law has no power in this respect. That is why the Fair Tax is an attractive proposal. It is a tax that is unavoidable. You could have every last penny in an offshore account in Switzerland, or Liechtenstein, or wherever, but you would still be paying the tax. It is a consumption tax, but with "prebates" that would lessen the tax burden on those at the lower end of the economic spectrum.

 

Not as often as they probably should.

 

I agree with Dr Mike on the fair tax system, it is the simplest way we have to fix what is right now a seriously broken system. I mean come on with over 60,000 pages of current tax code, who can honestly say that they are not breaking the law at some point in their tax return. I can guarntee that there is no single person in the country that can honestly say they have read or understand the entire thing. We need to wipe the slate and start over, fair tax is the easiest way to go, there are no loopholes. You spend money you pay tax.

 

So the fair tax is not an income tax?

hmm...

 

Yeah, without going into specifics, it would do away with the federal income tax, and replace it with a national sales tax. Everybody pays the same percentage. However, they determine what the cost is for essential items, divide that amount by either 4 or 12, and then give everybody either quarterly or monthly "prebate" checks to compensate them for the cost of essentials. Hence, individuals who cannot afford to buy as much stuff may end up paying little or no taxes. It is sort of like the deductions that you now get to take on your income, so that you are not taxed below a certain income level.

There is no way to avoid this tax - if you buy something, you pay the tax. Unless rich people want to do all of their purchases out of country, they can't avoid it - and even then they will run into foreign taxes.

With this system, you take home all of your pay. There is no concern in April of each year as to whether you paid enough taxes and no stress wondering if you paid them correctly - it also does away nicely with the need for IRS auditors. The only thing to control is whether or not businesses are properly charging the tax. Maybe we could cut that bureaucracy significantly. Furthermore, presidents would no longer have to worry about whether appointments had paid their taxes!

 

so there will be a federal tax on top of ebay fees with a fair tax? how would the government collect those?

or what I mean is, would the fair tax kill local business with everyone running to the internet to get away from city sales tax + county sales tax + state sales tax + federal sales tax ?

 

Used items would not be taxed - the Fair Tax is only charged once on an item. So if you buy a used item on eBay, it would be tax free. However, I would think that it would be easier to collect taxes on eBay businesses that sell new items, whereas now they have to figure out the locations of sellers and buyers.

I'm not sure exactly how that would work, though. But I doubt you would see wholesale flocking to the internet. As to the other sales taxes, that is an issue to take up with your state and local leaders. I don't pay sales tax at all of those levels. But the Fair Tax only replaces the federal income tax.

 

Interesting.

Stimulating, even

 

Most places try to catch you on that with their state income tax. Lots of states will require that you pay them sales tax for items you bought out of state. This, I assume, is to discourage you from thinking you could go to another state to make a major purchase in the hopes of avoiding your state's high sales tax. Of course, I believe they credit you some of what you might already have paid for sales tax.