Who pays taxes in America?

[Peter1469]

I do not believe that 50% of the country paying 2.9% of the taxes is fair or healthy for a society.  I have seen good articles on this in the past.  But I am off to the airport.   

[Vermouth]

I wouldn't quarrel with making adjustments to the brackets, but I tend to agree with Grumpy that the details of reducing tax rates shouldn't be addressed until we have curtailed spending. It's tremendously irresponsible to continue to reduce taxes and go deeper into national debt.

I can see how a maximum rate of 75% or 90% would be stifling, but I don't see how a bump to 33% or 35% dampens entrepreneurial activity in any way.

[they call me MR. GRUMPY god damn it!]

I wouldn't quarrel with making adjustments to the brackets, but I tend to agree with Grumpy that the details of reducing tax rates shouldn't be addressed until we have curtailed spending. It's tremendously irresponsible to continue to reduce taxes and go deeper into national debt.

I can see how a maximum rate of 75% or 90% would be stifling, but I don't see how a bump to 33% or 35% dampens entrepreneurial activity in any way.

i did not say this.  i just believe that the fundamental problem with deficit/debt is the govts addiction to spending money that is not theirs.  any discussion of taxes is a waste of time and breath unless and until we have a demonstrated commitment to reduce the size and scope of govt in accordance to its constitutional limits.  at that time we will find that most of the ideas re taxes put forth within this forum will provide more than adequate funding for the govt to meet its responsibilities.

[SDML]

I wouldn't quarrel with making adjustments to the brackets, but I tend to agree with Grumpy that the details of reducing tax rates shouldn't be addressed until we have curtailed spending. It's tremendously irresponsible to continue to reduce taxes and go deeper into national debt.

I can see how a maximum rate of 75% or 90% would be stifling, but I don't see how a bump to 33% or 35% dampens entrepreneurial activity in any way.

1) I disagree with Grumpy's assertion. One doesn't have to come before the other - they can come simultaneously. In fact, we need economic reform that extends beyond just taxes or gov spending habits. We need economic reform that includes monetary policy, revamping our currency & banking, reducing not just gov spending (and borrowing!!!), but the types of spending gov chooses to do, a complete re-thinking of ALL taxes & fees (while tossing out personal income tax ASAP), and more. Much more. None of these can happen in a vacuum, and none of these needs to be ignored so that we can discuss something else, or none of it ever gets done.

2) I'm self-employed and I'd be happy to tell you how 30+% stifles MY activity. Or you can look at the pending & threatened lawsuits of non-profit orgs by for-profit orgs. The YMCA, for example (a non-profit), was/is being quietly threatened by several gyms who opine that it is questionable whether or not the Y should be able to keep 30+% (what they would be paying in taxes) to re-invest in their biz while the others have to give that amount away when both are essentially in the same biz. It forced the Y to re-think their mission statement and make appropriate changes in several locations across the US.

Is it fair to give one biz a 30% advantage over another if they do essentially the same thing to serve the community? I'd LOVE to keep 30% of my income.

Of course, my examples mix corporate taxes and personal income taxes, but the point stands.

[Michael Johnson]

If Russia can implement a flat tax, the United States can implement a flat tax. I'm thinking ten percent.

[Vermouth]

2) I'm self-employed and I'd be happy to tell you how 30+% stifles MY activity. Or you can look at the pending & threatened lawsuits of non-profit orgs by for-profit orgs. The YMCA, for example (a non-profit), was/is being quietly threatened by several gyms who opine that it is questionable whether or not the Y should be able to keep 30+% (what they would be paying in taxes) to re-invest in their biz while the others have to give that amount away when both are essentially in the same biz. It forced the Y to re-think their mission statement and make appropriate changes in several locations across the US.

Is it fair to give one biz a 30% advantage over another if they do essentially the same thing to serve the community? I'd LOVE to keep 30% of my income.

Of course, my examples mix corporate taxes and personal income taxes, but the point stands.

I'm not familiar with the corporate tax code, but are you saying that as a self-employed person, you stop doing business for the year once your income hits the 30+% bracket?

[SDML]

No, what I'm saying is that 30% is a hindrance. My biz would grow by leaps & bounds if I had an extra 30% to re-invest. Imagine the extra jobs, the new innovations, the new businesses that would crop up, the strengthened economy and more if we got rid of the personal income tax and chopped the corporate tax in half. Add to that removing other stupid barriers to enter an industry (regulations, fees, etc.).

Michael - welcome aboard. I hate a flat tax, too.

[Vermouth]

No, what I'm saying is that 30% is a hindrance. My biz would grow by leaps & bounds if I had an extra 30% to re-invest. Imagine the extra jobs, the new innovations, the new businesses that would crop up, the strengthened economy and more if we got rid of the personal income tax and chopped the corporate tax in half. Add to that removing other stupid barriers to enter an industry (regulations, fees, etc.).

It is up to you how much of your current profit you reinvest into your business and how much you pocket. You get tax breaks for business expenses.

I agree with a lot of your argument about reducing taxes and spending, but I don't see any benefit to growth for the sake of growth. I would be happy with a sustainable economy and a high standard of living.

[SDML]

I agree with a lot of your argument about reducing taxes and spending, but I don't see any benefit to growth for the sake of growth. I would be happy with a sustainable economy and a high standard of living.

I totally agree. Growth for the sake of growth is, in a word, stupid. Or, in another word, self-destructive.

That said, the US economy, while vibrant and varied in many ways, would be stronger of several things happened. One of those things (and I'm way over-simplifying for brevity) is that since the requisite rate of growth is tied to the rate of inflation, and since the rate of inflation is tied to gov spending & borrowing & our fiat currency, we are forced to "grow for the sake of growth" at the moment. If, however, we switched from our weak "hallucinatory" (fiat) currency to a strong "backed" (commodity) currency, it would stop inflation in it's tracks. That, in turn, leads to no need for constant economic growth.

Couple that with the removal of corporate welfare (industry subsidies, protective legislation, draconian regulation, etc.), and you'll get businesses interested in the long-term rather than blinded to anything other than the next quarter...which in turn makes for a major shift in how everything works. The "sustainable" begins to apply to everything, not just the economy.

Again, very oversimplified - but there it is.