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Heisman Gator |
I cant remember if I posted this story here or not. So if it has been discussed I apologize in advance.
47% Pay NOTHING in Federal Income Tax! 6,000 people in this country with income over $1 million dollars a year have ZERO federal income tax. Almost 1 million people who make over 100k a year pay nothing in federal income tax. As part of the defeatthedebt thread: this needs to be addressed FIRST before raising everyone's taxes. |
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Heisman Gator |
Yet certain people on this board complain because there are some making poverty level wages who pay no taxes.
I'm starting to see the advisability of a flat tax for everyone but lower the starting point to a level where the poor would pay something but wouldn't be overburdened. But millionaires paying nothing is ludicrous. |
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Heisman Gator |
Why are millionaires paying nothing? Can we research that before bashing them? What if their gross income is a million but their net income is very low? |
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Heisman Gator |
I thought it was obvious that they are getting deductions,writeoffs and loopholes that the rest us don't get. Do you really think someone making a million dollars and paying no taxes is actually spending the same amount for their personal use as you and me and and families making poverty level subsistence? |
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Heisman Gator |
urg8rb8: can you provide a scenario? I cannot think of a scenario that someone makes over $1million a year yet their taxable income is less than $30k. Seems a bit far-fetched to me.
I have always been an advocate that EVERYONE (including poor and seniors) need to pay SOMETHING in federal income tax. It costs money to run this country. And when people are excluded from paying income taxes, then they have no incentive to change things they dont like. There is no buy-in, if you will. |
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Heisman Gator |
Agree with Rick.If not a flat tax then some kind of minimum tax for everyone.
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Freshman Gator |
Isnt the WH now proposing to make fed. employees exempt from the new cadillac health plan tax. Thats about 25% of the work force.
"No one in this world can you trust. Not men, not women, not beasts. (he points to the sword he just completed) But this... this you can trust." Father of Conan the Barbarian |
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Head Ball Coach |
Seems like there is a reason for this, I had read about this sometime back. Maybe something to do with business operating loss carryforwards? Or maybe some have extraordinarily high medical expenses?
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Heisman Gator |
Like a subcontractor who makes a little off the top from buy/selling something. All I'm asking is what loopholes are there that allows someone NETTING a million a year to pay ZERO taxes? I'm not saying there isn't... I'm just asking what it is. What is the circumstance of those 6,000 people circumventing the tax system? |
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Heisman Gator |
I dont know...someone needs to look into it thats for sure. Pull their IRS forms and see what loopholes these people are getting. May be that Lboy is right...but I have a hard time to fathom that someone has that much in medical bills net alone 6,000 people.
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All-American Gator |
Tax loving commie pinko rickie boy!!! |
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Head Ball Coach |
In terms of 47% pay nothing, keep in mind this is only income tax. There is also FICA, plus state and local taxes. I recall seeing something a few years ago that if you take into account all taxes, the total percent of tax burden as a percent of income has actually gotten flatter, as a result of the Bush tax cuts and increasing sales taxes.
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Heisman Gator |
That doesnt lessen the impact. We all should pay FICA. State and local taxes vary of course.
I read that too...when considering ALL taxes, the rate is fairly flat. But how the heck do people earning $1million get out of paying federal income tax. Just nuts! |
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Head Ball Coach |
Link There are various reasons, if you want to wade through the above document. Best I can tell, the biggest items for high income types is partnership / S Corp net loss. I guess I really need to understand when they say "income" how do they define it? Also, municipal tax exempt bond income I think is a big one also.
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Head Ball Coach |
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Heisman Gator |
L-boy just write "and PBHO sucks" at the end and I'd swear it was a Robalo post.
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Heisman Gator |
If they have partnership/S-corp losses, they don't make $1MM. This is why I think income taxes should not be based on yearly numbers but on cumulative numbers. Think about the poor tree farmer who goes years with very little income and then gets hammered in 40years when the good stuff comes in. Darn, that was painful. |
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Senior Gator |
Line 8B is for tax exempt interest income. I don't believe there is a limit on the amount. I personally know someone who sold his software company for $6M and put a significant amount into tax-free munis and also funded some private mortgages (the latter taxed, of course).
Another point of confusion here is the difference between being a millionaire and earning a million dollars each year. I could inherit a $1M home, have no income and be a millionaire on paper, not only not earning any income, but paying money to retain ownership (maintenance, taxes, insurance, etc.). Try not paying your annual $50K property tax bill in NJ to keep the overpaid public employees employed and retired , in some cases in their 40’s. Can you say tax deed? I currently own such an asset with a cost of $400K and a monthly expense of $800 for POA and taxes. Imagine bringing a $400K deposit to a bank and paying $800 per month for them to control it, all the while watching the principal decline to $200K. Again, first hand. Mine. The asset is a vacant commercial office space built out to custom specs for a large road construction management company. And then we wonder why with 5% of the stimuless dedicated to infrastructure and the remainder to tax cuts and pork projects, why unemployment will soon exceed 10%. There’s your hope and change. The Narcissistic Novice: Barack Hussien Obama MMMM MMMM MMMM! |
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Head Ball Coach |
Its just how they define income and where it is on the tax form. AGI - adjusted gross income, is at the bottom of the first page. Losses from partnerships or S corporations flow through Schedule A itemized deductions, which come out on page 2. Presumably if there were income from said business, it would show up on page 1 of 1040. That is why its probably not wise to have knee jerk reactions to statistics that are thrown out there. You kind of have to understand what it in the numbers first.
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Senior Gator |
Schedule "A" is for itemized deductions. Sub "S" income and losses flow through Schedule "E", as does partnership income. |
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Head Ball Coach |
Schedule A Line 28 Sch A Instructions
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Senior Gator |
Partnership and Sub "S" income is on line 17 with income / losses reflected on Schedule "E". With rental properties, three properties are shown on each Schedule "E".
As a lender, my eyes first go to line 22 before any analysis is completed. It usually gives a good starting point when disecting returns, including, in many cases, numerous associated returns since most income / losses shown on Schedule "E" are actually from another return, personally owned rental properties coming in second. I have personally viewed 1040's with $10M paid in tax liability. I'm not sure what percentage of 1040's pay that amount of tax (I've seen two in 32 years), but then again, clients with $10M in gross receipts are sent up the ladder to departments that only deal in $10M+ companies. I prefer dealing with smaller companies that make up the majority who employ most of us in small to moderate size communities. |
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Head Ball Coach |
Yes the lower class and lower middle class folks most of the time do not pay a dime. Some Upper Class get away with it at times. However most money makes pay almost all of the taxes along with the middle and upper middle class folks. I think most of us fit in that middle to upper middle class and know what I mean.
After all Federal, State, Local, Sales Tax, Fed Excise Tax we are taxed at a 50% rate or better. I hope that tickles you liberals to death. Now that I have been forced to retire I am fighting with the SS people over my money which I paid in over the years. They call it their money and not our's by the way. |
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Head Ball Coach |
Neil (and others) that is simply not true
Below is a graph that figures the average effective tax rate, all types of taxes, federal, state, local across income group Citizens for Tax Justice  Below is a graph of just federal taxes (including FICA, etc)  So while Federal taxes are somewhat progressive, add state and local taxes into the mix and the progressivity vanishes at all but the lowest levels. So you can make your own judgement as to whether that is good or bad, but just so that everybody understands the underlying facts.
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Heisman Gator |
That is correct Neil. SS is a tax, not payment to purchase an annuity. You have no property rights. Darn, that was painful. |
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Head Ball Coach |
True that SS taxes are not added into the equation when we do our taxes at the end of the year. You add those taxes with what you pay otherwise and we come close to the 50% line. It goes with out saying the more Gross Income, the more taxes you will pay.
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Head Ball Coach |
Dammit Neil, look at my above post. The percents DO include Social security taxes, and taxes DO NOT come anywhere near 50%
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Heisman Gator |
My total taxes are around the 27% number.
Darn, that was painful. |
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Head Ball Coach |
That sounds about right - most people in the top half of incomes are going to be in the 25-33% range unless there is something unusual going on. I don't know how people get to 40 and 50% - I assume they just start adding MARGINAL tax rates together (and they often aren't additive) and just don't understand the concept of effective / average tax rate.
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Head Ball Coach |
Thanks for the correction on SS taxes. We also pay other taxes we fail to add in. Taxes on cell phones and home phones. Taxes on our cable bills. Taxes on utility bills and the lost goes on and on. GOD forbid you smoke or the rate is even higher.
With all taxes and fees which are nothing more than a tax, I paid last year close to 50%. |
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