Can anybody logically explain to me, not only why we have income tax, but why we tax a much higher percent on people who earn more?
No, I actually don't. I can see someone's point about the income tax in general, but lets stay on topic, the progressive income tax system. Why does it exist?
Because the only way they could originally get the tax passed was by promising they would only tax 1% on average workers and 7% on the extremely rich. These days I'm not entirely convinced that our taxes are still progressive (as they call it). Consider someone working for minimum wage who earns $10,000 spends $1,000 on gas and $1,000 on cigarettes. They may pay no income tax, but they do end up paying 13% to social security (i know, only 6.5% shows on your pay stub but that other 6.5% comes out of your payroll budget). So, $1,300 in SS, $300 for medicare, $300 for cigarettes, and $250 for gas. There's 21% from someone who "doesn't pay taxes" Then consider someone who earns $1 million a year. They only pay the 13% SS up to $100,000 of income, so their total SS contribution is only $13,000 (10 times higher despite the fact their income is 100 times higher.) 35% of the income is $350,000, and could be reduced by using income to buy a hybrid car or invest in energy savings for the house, add in some stock losses compared to the 10-15% capital gains tax and pretty quickly you could get that total tax rate down to the low 20s too. My point is the income tax is theoretically progressive, but the payroll taxes, gas taxes, cigarette taxes, and environmental credits are all extremely regressive.
I see you gave some options for "rich people" to increase their income by doing extra things, more work, but.. don't rich people do enough work already? I mean, they usually earn that much for a reason. As far as the other stuff being regressive, that doesn't make much sense, because a rich person can buy all the same stuff. So because higher income folks will have extra money after they pay for their necessities, we tax the living shit out of them to make sure they don't? Why do people have to make sh!t so complicated? There shouldn't be a "progressive" income tax and there shouldn't be "regressive" social security. Do people honestly think that this doesn't discourage people from getting into higher income brackets? You don't think this doesn't encourage a large bracket of serfs? You don't think this is tearing the middle class apart?
You use different sorts of services which are provided by government free of cost or at subsidiesed rates. And with that government has to main law and order with police. And army for the protection of the country. It is only possible when government have money. So to raise money government impose taxes. So you have to pay income tax. And other question that why people who earn more have to pay more taxes, the simple answer of that question is that, the budget is a document of political documents. The cause of imposing taxes upon richer is that richer has to pay for the poor who is not able to earn much for himself. So to compensate it government impose more taxes upon the person who earns more.
so what are the incentives for one to make more money exactly? what incentives are there when you know, the more money you make, the more you'll be paying for people who aren't making money? kinda funny, almost like it's smarter to be the one at the bottom being paid for?
if you make more money you make more money even though you're taxed more, c'mon. Of course you already knew the answer as I said. All this whining about taxes is coming up over and over. Will it end when RP finally gets out of the race?
Yes you may make more than a poor person, but why do you not keep everything you've EARNED? What is the point of a skilled job anymore? You may go to college for 4, 8, 12 years, or you may not go at all and be a skilled entrepreneur because you are smart, and you bust your ass but somehow the more you make the less you keep? So if you factor in time, effort and money, unless you are banking big time, being at the bottom income bracket with this system has way more incentives than being at the top.
this is not true. the more you make the more you keep. I prefer making 120000 and keeping 90000 than making 30000 and keeping 26000 don't you?
Abolish the Income Taxes. Cut 1.5 Trillion in spending. Have 500 Billion each year in surplus. Store surplus. In event of war, use surplus to fund war. If it has been 10 years of surplus, that is 5 trillion to fund a war without needing to pick the pockets of the American people. Simplistic? Yes. Is that okay? Yes. Sometimes keeping things simplistic is better than being complex. Imagine. Canada (This is just a thought problem, don't think I am bashing our socialist pig neighbors [socialist pig is a joke]) attacks the United States with a ground incursion into Michigan and prepares for all out invasion. Thus the surplus fund of 5 trillion is immediately released into the Military. With that much immediate funding a war could be done and over with in a year. In fact, it could be handed out as 500 billion to 1 trillion a year, enough to fund a Second World War length conflict. But no. We'll keep spending it like a crackho who gets his welfare check.
Amen. And by the way.. real wars need not be funded by the government. Real wars are those that nearly every citizen is willing to fight and die for one's cause for no money at all.
Wonderful thread topic Nate! The income tax is the collateral, the guarantee in order to have the FED be the lender of last resort. The only way the government can secure deficit spending, is to have taxation as collateral, a way of guaranteeing to be able to repay debts. That is why the 16th Amendment came in at the same time as the Federal Reserve. They are intertwined. Otherwise, who would invest in, or lend money to the government? As far as why people are taxed more, has it's origins in some very sneaky stuff related to the income tax in the first place. Technically, the government is supposed to be able to tax profits. So wages create a quandary, because earning money to eat, or for shelter is not a profit. That's part of the reason why the first "X" amount of income is untaxed. Although one can quickly see how it degenerates into a lifestyle tax. How you may spend more than the untaxed amount on finer food, better living and such. Living better may actually cost you more. Nutty hunh? Don't even mention the cost of monetary inflation, which pushes prices up. This is incredibly regressive for anyone dependent on the state for basic living allowances. The issue is bigger than serfs or the middle class. The question is, who owns the fruit of your labor? If you do not, then who does? What happens to the system if people stop producing? By what moral authority does the state, or a democratic decision (for which you may be in the minority) confiscate your wealth? The government provides nothing free of cost. Someone, somewhere is paying for it, just not you. My friend, you will never be free, as long as you are dependent on the government stealing from others for your benefit.
Probably not. It will only end when there are satisfactory answers. And I have yet to read them. But why would the rate change? Why would you keep less per hour of effort as you exert more effort? Sure at 13%, if it was flat. Nate's question is about progressive taxes. Why do you pay more per dollar unit, or hour work unit, or per transaction, the more you work/accomplish/trade etc? This might be the best answer yet. That is assuming that the banking interests do not have a stake in the government being able to debt spend. Nonetheless, it's a solid socialist position to take. The rich should not become much richer than the poor. Regardless if they make better decisions, save more, learn more, work more, or achieve more. The better man does over his fellow man, we must punish and hinder him from realizing the reward of those achievements. This is socialism. There is only the group, not the individual.
We adopted the other 9 planks to Communist manifesto, so what's the point of not practicing all 10. The real question should be, why Americans vote for Communists? And the answer is, because they hate the alternative.