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Dark Marvel

Member Since: Sat May 17, 2008
Posts: 5,955
Subj: Re: What's wrong with spreading the wealth?
Posted: Mon Oct 20, 2008 at 09:24:31 am CDT
Reply Subj: Re: What's wrong with spreading the wealth?
Posted: Sat Oct 18, 2008 at 01:17:25 pm CDT (Viewed 880 times)

> To counter your statistics the top 5% of income earners pay about 60% of the total tax bill where the bottom 50% pay about 3% of the bill and about 30% of income earners pay no income tax at all.
> ***Those bottom 50% is it because they choose not to pay taxes or is it because they cannot afford it? statistics can be tricky because I guarantee you the top 5% are fine with the amount of tax they pay, and if a little more taxes means they might not get the yacht they want this year, or they might have to hold out on their 4th mansion...then so be it. As for those that pay no income tax at all...don't you have to pay taxes? If not you go to jail? I am asking because I am not sure how that works.
The people in the bottom 50% pay little or no taxes because of the way the tax system is structured. Their income is low enough that after they take into account all deductions and/or credits their tax bill is zero and in many cases is a refund in excess of what they may have paid in for federal withholding. It is not a case of not paying or not being able to afford to pay. The tax structure is formed in a manner to keep low income individuals from bearing the tax burden.

> A good number of that 30% probably also receive the current refundable tax credits so they are taking from the system not adding to it. Just because someone has money withheld from their check each pay period for federal w/h it does not mean they are a taxpayer.
> >
> > You also need to remeber that many of those billionaires started up companies that hire thousands of people. Take away the incentive to make more money and many companies will not grow and create new jobs.
> ***I see what you are saying but people would stop the expansion of their company because they would have to pay more taxes? Going by that logic. I have a choice of not creating jobs for more people, so that they could make a living and feed their families because if I do my taxes will go up another 3% or I could help out a lot more people and take the 3% tax increase. To me...the choice is clear. I am not a tax expert per say but that seems to be the idea that I keep hearing.
As someone who prepares taxes for a living I can shed some knowledge on this. When a business owner is told that everything else remaining the same his tax bill will be $30k larger next (Number used for example purposes), he/she will be faced with some decisions. Among them will be - 1. Do I reduce my personal salary by $30k and keep all my current employees hired and/or add the new employee I was considering; 2. Do I keep my personal salary the same and lay off a current employee and/or put off the additional employee I was considering; 3. Do I raise the prices of my service/product so I can keep my salary the same and retain all my current employees.

If the company has a strong cash position they may just absorb the tax increase and go on as if nothing happened or maybe increase prices slightly. A company that is tight on cash will either cut the owners wages, layoff employees, or forego expansion. The easiest item to cut from the expense sheet is payroll so except for the rare owner that is willing to cut his own personal wages someone is getting laid off or the rest of us will pay hire prices.

Now just magnify the effect for large corporations and it gets even worse. After all, if these CEO's were willing to cut their own wages we would not see some of the stories coming that have come out of the current crisis.
> >
> > I believe Bil Gates has made many an employee richer because he had the incentive to grow his business and early employees enjoyed that growth to create wealth for them.
> ***and that is awesome, but that is also an exception to the rule. Pay more taxes and help more people while not really losing much yourself or purposely not make more money, so that less people will be hired, and you won't have to pay more taxes...It just doesn't sound right to do the latter. It actually sounds unpatriotic to do the latter. I think we all can agree that the Bush tax cut have done nothing but make the deficit larger and put the burden on the middle class. I am just ready for change and I personally like Obama's plan, because it will benefit me and most people I now that do not make quarter of a million dollars a year.
Personally, I don't feel the Bush tax cuts are the problem but the ever increasing spending done by the government, some of which is Bush's fault.

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