Someone posted the old "10 guys pay $100 for a dinner" story -- and others called the poster on the underlying notion that most people pay no tax at all.

The WSJ article and the source it quotes is now hidden behind the subscription wall, but if it was quoted accurately in this Wikipedia article, the tax burden is roughly as follows:

    * The top 0.1% of taxpayers by income pay 17.4% of all federal taxes (earning 9.1% of the income).
    * The top 1% of taxpayers by income pay 36.9% of all federal taxes (earning 19% of the income).
    * The top 5% of taxpayers pay 57.1% of all federal taxes (earning 33.4% of the income).
    * The bottom 50% pay 3.3% of all individual income taxes (earning 13.4% of the income).

Caveats:  The WSJ article was likely talking about income taxes, and specifically excluded the "poor tax", of 12.4% (6.2% paid by you, 6.2% paid by your employer) on the first ~$100K you earn, that goes to fund the Social Security ponzi scheme and disproportionately affects people earning under $100K/year.  Nor does it include all the WSJ analysis include all those other taxes that you're paying.

It's pretty indisputable, however, that the US is well past  the tipping point suggested by someone (unknown, but often misattributed to Alexander Tytler) who wrote:

"A democracy is always temporary in nature: it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority will always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, always followed by a dictatorship."

When finally swept into power as as Emperor, I shall immediately make the following two Constitutional amendments to whatever nation I happen to end up ruling:

1) There shall be no withholding of taxes from paychecks.  On Tax Day, every citizen must write the Emperor a check for the full amount of the taxes owed. 
2) All voting for elected office shall take place within five business days of before Tax Day.  None of this waiting six months for November crap like they did in the States, when Tax Day was six months away in both directions.

i got completely screwed with the ss tax, which hits me hard as the "self-employment" tax. that's pretty much what i'm going to be working to pay off for the next few months.

as for these statistics, i actually just plain... don't believe them. i saw bush's tax returns this year, and i know about the characters at enron etc. i wonder if this is based on actual tax returns and what the rich actually pay, or if it's figured in the abstract based on how the system ideally works. cuz i know these characters do quite well for themselves and find all these ways to get around paying their taxes. what does the typical ceo make these days? and what does he pay in taxes? as compared to FDR days? i mean, why is the income disparity so wide these days? why do people even get 300 million dollar retirement packages? when they do, where does that money come from?

there's one thing i know for sure: the rich in this country do better than they do in any other country on earth, and the poor in this country are more numerous and fare worse than they do in just about any other civilized country on earth. america's on the verge of becoming third world, and i rather suspect that shifting more and more of the tax burden onto the poor and the working class isn't going to help. but i know the rich want that, and they pretty much own the politicians so... ::)

Trying to understand the US tax system here.  Obviously i appreciate that self employed people do things differently but don't the majority pay a percentage in tax each month.  A set percentage based on your earnings bracket I mean.

Trying to understand the US tax system here.  Obviously i appreciate that self employed people do things differently but don't the majority pay a percentage in tax each month.  A set percentage based on your earnings bracket I mean.
Yes.  The higher your income, the higher the percentage....I think the highest is 31%, which is what we're in :-\\  Self-employed people can either pay theirs (the % is the same as everyone else) with each "check", monthly, quarterly, or in 1 lump sum.

Yes.  The higher your income, the higher the percentage....I think the highest is 31%, which is what we're in :-\\  Self-employed people can either pay theirs (the % is the same as everyone else) with each "check", monthly, quarterly, or in 1 lump sum.


So what is so important about April 15th?

So what is so important about April 15th?
That's the day you have to file your income taxes (and hopefully, get a refund)

So what is so important about April 15th?


My son was born on April 15th so I was able to count him as a deduction for that tax year, a day later and I would have had to wait until the next year to claim him. 

My son was born on April 15th so I was able to count him as a deduction for that tax year, a day later and I would have had to wait until the next year to claim him. 



I thought it was Dec. 31 the cut off for babies to be counted as a deduction.  ???




Cat

At long last can we cease and desist posting urban legends?

There was an Alexander Tytler of 19th century Scottish peerage, but he didn't say that.
There is a Professor Joseph Olson of Hamline University, but he didn't say any of that either.
Furthermore, this essay was debunked over three years ago.

http://www.snopes.com/politics/quotes/tyler.asp

The number of right-wing screeds pulled out of thin air suggests contemporary conservative dogma is collapsing faster than its adherents can prop it up.

Stick a fork in Reaganomics.  It's done.

Tia is absolutely right.  America is sliding into Third World status while we listen to the perpetual whine of the self-pitying rich. 
"Taxes are like soooo unfair, dude.  We shouldn't have to pay them 'coz we're better than everybody else." 
If anybody has a sense of entitlement....
::)

Don't Americans pay tax as they earn? It seems the easiest & most logical way of handling taxes. Rather than paying one big lump sum at the end of the year.

Don't Americans pay tax as they earn? It seems the easiest & most logical way of handling taxes. Rather than paying one big lump sum at the end of the year.


Most of the time -- but it's hard to predict how much you'll owe at the end of the year because your (mortgage, stock investments, side businesses, etc) other economic activity changes how much you'll owe.  Most small business owners have to estimate their taxes quarterly, and "estimate" often means "fill out the same sorts of forms they'd have to fill out if they were filing their taxes anyways". 

My argument against withholding is that it masks how much tax is actually being paid.  So, when I'm Emperor, there won't be any withholding from paychecks.  My subjects will keep every penny their employers earn, and then, on Tax Day, they'll have to write me a check for the full amount they owe.  Keeping my little playthings painfully aware of how much my rule is costing them would be a good way for me to prevent myself from becoming an overbearing burden on my subjects.

My second imperial proclamation ("November, not April!") would ensure that my voters would be keenly aware of the tens of thousands of dollars I was charging them for my gracious rule at a time very close to my re-election. So if the price was too high, they'd not only be mad at me, they'd be mad at me at precisely the time when they were most able to do something about it. 

I'd be forced to either run a very efficient government, or I'd find myself out of Imperial office.  Most Emperors hate that sort of thing, which is why we have the sort of taxation system we have, and why we spend all those infuriating hours reconciling what was withheld with what we actually owe... as far away from election day as possible.


Trying to understand the US tax system here.


Ah.  Mistake number one!  That way lies madness.  Turn back!

"It was an All-in-One and One-in-All of limitless being and scope — not merely a thing of one Legislative-Regulatory continuum, but allied to the ultimate animating essence of government's whole unbounded sweep — the last, utter sweep which has no confines and which outreaches fancy and mathematics alike. It was perhaps that which certain secret cults of Washington have whispered of as THE INTERNAL REVENUE CODE, and which has been a deity under other names; that which the chartered accountants of Yuggoth worship as the Beyond-One, and which the vaporous brains of the lobbyists know by an untranslatable Sign..."

I thought it was Dec. 31 the cut off for babies to be counted as a deduction.  ???




Cat


No,  most people don't know that, it works for contributions to an IRA account, too.

Most of the time -- but it's hard to predict how much you'll owe at the end of the year because your (mortgage, stock investments, side businesses, etc) other economic activity changes how much you'll owe. 


In reality though how many people have stock investments and side businesses?  Actually in the UK if you are careful about when you sell shares you still don't have to pay any tax.  You get a capital gains allowance each year, so as long as you don't go over that amount you don't pay tax.  I had a lot of shares to sell so I sold some in March (up to my allowance in gains) and I'm selling the rest soon.

I'm a bit hazy on the tax on mortgages but I'm fairly sure that it is not something that would affect how much tax you paid (or maybe it's sorted as part of your mortgage payments).  I don't know, that's my husbands job!

My son was born on April 15th so I was able to count him as a deduction for that tax year, a day later and I would have had to wait until the next year to claim him. 



I thought it was Dec. 31 the cut off for babies to be counted as a deduction.  ???




Cat

No,  most people don't know that, it works for contributions to an IRA account, too.
Maybe the law has changed since your son was born because my 3 kids were born in March, April & May and I got to claim all 3 of them in the year they were born.  As long as the baby's born by Dec 31, you can claim them for the entire year....so, if you have a baby at 11:55 on Dec 31, you get the deduction...12:01 Jan 1, 2006, you have to wait until you file your 2008 taxes.

In reality though how many people have stock investments and side businesses?  Actually in the UK if you are careful about when you sell shares you still don't have to pay any tax.  You get a capital gains allowance each year, so as long as you don't go over that amount you don't pay tax.  I had a lot of shares to sell so I sold some in March (up to my allowance in gains) and I'm selling the rest soon.

I'm a bit hazy on the tax on mortgages but I'm fairly sure that it is not something that would affect how much tax you paid (or maybe it's sorted as part of your mortgage payments).  I don't know, that's my husbands job!
Here, you can deduct the interest you pay on a mortgage.

No,  most people don't know that, it works for contributions to an IRA account, too.



I knew about the IRA, but didn't know about kids.



Maybe the law has changed since your son was born because my 3 kids were born in March, April & May and I got to claim all 3 of them in the year they were born.  As long as the baby's born by Dec 31, you can claim them for the entire year....so, if you have a baby at 11:55 on Dec 31, you get the deduction...12:01 Jan 1, 2006, you have to wait until you file your 2008 taxes.



Thanks for informing me. I wouldn't know since I've never had any kids. See, it is true, you learn something new everyday.  ;D  (Karma to both of you).



Cat

I knew about the IRA, but didn't know about kids.



Thanks for informing me. I wouldn't know since I've never had any kids. See, it is true, you learn something new everyday.  ;D  (Karma to both of you).



Cat
I didn't know about the IRA thing....then again, we've usually maxxed out long before then.....karma back :-*

At long last can we cease and desist posting urban legends?

There was an Alexander Tytler of 19th century Scottish peerage, but he didn't say that.


Correct -- which is why I pointed out in my original post that it's a misquote attributed to the guy.  But thanks for the Snopes official debunking. 

I finally found the source of the WSJ's data, though.  According to The IRS's own page - SOI Tax Stats - Individual Income Tax Rates and Tax Shares, where you can get it for multiple years, here is the distribution of who pays what, as a function of how much you make.

If (whoever said the quote that is most commonly misattributed to Tytler) was right, we're way past the tipping point, and collapse is inevitable. 

Trying to understand the US tax system here.  Obviously i appreciate that self employed people do things differently but don't the majority pay a percentage in tax each month.  A set percentage based on your earnings bracket I mean.


That's basically right! But under Bush, the ones who make the least amount of money do not pay taxes, in fact, they get tax credits. Then when they begin to make enough to pay taxes, they can use their collected tax credits so they do not have to pay taxes then either. The idea is to help them catch up without the worry of taxes while they are doing it. The richest in our country pay the most taxes, over 90 percent of all taxes are paid by the richest in our country.

i got completely screwed with the ss tax, which hits me hard as the "self-employment" tax. that's pretty much what i'm going to be working to pay off for the next few months. 

I am self employed too. (or was, I am sick now) What I do is put aside money each month in a savings account to pay taxes so that I am not hit with them all in april.



as for these statistics, i actually just plain... don't believe them. i saw bush's tax returns this year,

Really, where? I would like to see them too, it's all very interesting. Like remember Kerry's, Edwards & Bush's when they came out during the last election - extremely interesting! While Kerry & Edwards paid as much as a middle class American earner would with their millions, Bush paid his! I found it interesting too that while Kerry and Edwards were on the campaign trail telling us all that they would get rid of the tax loopholes, they used them to the hilt -so hypocritical!  Also, Kerry gave in ten years to charity what Bush does in one year, another fascinating fact! 


i wonder if this is based on actual tax returns and what the rich actually pay,

They pay the largest tax income for our country by far!



...what does the typical ceo make these days? and what does he pay in taxes? as compared to FDR days? i mean, why is the income disparity so wide these days? why do people even get 300 million dollar retirement packages? when they do, where does that money come from? 

It's Capitalism that makes disparity it's how our free society / country works. We are not socialist, (thank God) yet.


there's one thing i know for sure: the rich in this country do better than they do in any other country on earth, and the poor in this country are more numerous and fare worse than they do in just about any other civilized country on earth. america's on the verge of becoming third world, and i rather suspect that shifting more and more of the tax burden onto the poor and the working class isn't going to help. but i know the rich want that, and they pretty much own the politicians so... ::)


Nonsense! America is not even close to becoming a third world country, my goodness! It couldn't be further from the truth. Our country's economy is better than any other country, the next in line would need to do three times better just to catch up. Our national average income raise under Bush is 2nd best in our country's history, second only to the year after world war two. Our unemployment average under Bush is better than it has been in over four decades and our economy is stronger than it has been in over four decades. Hating the rich for what they have is no solution, the best "revenge" is getting even by getting rich yourself.

voters discover that they can vote themselves generous gifts from the public treasury

Voters are the problem of course.  We need to impose a huge poll tax and disenfranchise all citizens who do not own property or whose debts are greater than their assets.
::)

You see, this rhetoric does not even sound 18th century Scottish.  It is pure late 20th century Republican. 

Basically, the tax system we had between the New Deal and Ronald Reagan is what allowed the middle class to fluorish.  "Generous gifts" such as zero payment home loans and college grants allowed people to become home owners and learn a trade or profession without plummeting into irrecoverable debt.  That's not a "gift."  That's an investment.

It is the corporations who receive the "generous gifts" when the U.S. government pays them to divest in the U.S. workforce to exploit cheap labor overseas or when the U.S. government hikes payroll taxes and raids the Social Security trust fund to pay for tax cuts for rich people who don't need them.

(I need not mention the "trickle down" re-investment reasoning was a farce.)

It tickles me that you didn't comment on anything I said in that last post... I guess that is the one you chose to ignore because it actually has some real and good news in it. Oh well, I like to be tickled.

It tickles me that you didn't comment on anything I said in that last post... I guess that is the one you chose to ignore because it actually has some real and good news in it. Oh well, I like to be tickled.



Why should I continue to comment on anything you say?