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Your real tax rate: 40%

articles.moneycentral.msn.com

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Re: Your real tax rate: 40%

#141

Post by stinkytaco »

Dove wrote: post #109
buro9 wrote: post #38

Earlier quoted context omitted.

You could always try the military... you've got one hell of an expensive lean, mean fighting machine there. I'm pretty sure it would still be as good for defence at a fraction of the cost.

Be careful with that. Warfighting is every bit as complex, technical and dynamic a discipline as computers. Maybe more so. Do you have a developed opinion on ballistic defense, our nuclear posture, our relative emphasis on COIN vs. conventional warfare? No? Then you are in the position of an executive eying the expensive IT department with a foggy notion that it could get the job done for half the cost, without a cle…

Indeed, the military is one of the most studied, analyzed and questioned branches of the government (speaking as a former military man). I remember the time I read the GAO report on the Patriot Missle System, it was a huge eye opener for me. The government is much more transparent than we give it credit for, we just have to be willing to put the time in.

Re: Your real tax rate: 40%

#142

Post by meric »

run4yourlives wrote: post #93
Elite wrote: post #42

Earlier quoted context omitted.

I'm no fan of excessive taxing, but if you shifted the source of all current tax revenue to consumption based transactions, this would cripple the poor and middle class. For much of the lower/middle class, a significant, sometimes 100% of their income goes to consumption. For the wealthy, consumption as percent of income can be very small.

Your argument makes a major assumption: That this isn't already the case. The current system is regressive in practice, though not in theory. If this wasn't the case, Buffet wouldn't be paying 17%. Spending 100%+ of your income on consumption can be the norm for lower income earners, it is true. That does not extend however into 100%+ of income spent on consumption that is required for basic sustainability, especiall…

Now, how about a progressive consumption tax? Impossible to implement, but perfect for the situation you just described.

Re: Your real tax rate: 40%

#143

Post by stinkytaco »

JoeAltmaier wrote: post #97
Retric wrote: post #18

Earlier quoted context omitted.

wow, talk about administrative overhead) would actually effectively lower everyones tax burden by several percentage points. ??? Where is the savings? The IRS is a tiny fraction of US government spending. Edit: IRS $12.15 billion in 2010, total federal expenditures $3.552 trillion . So it's 1/3 of 1% of the federal budget.

Around tax time, thousands of smart people set up shop to "do your taxes". And all of us waste time and effort. Make it automatic and flat, and we ALL get to go back to work. Much larger savings that the total IRS budget.

Where that sounds like a good idea, I think the reality would be grossly unfair. First of all, what's an income? Is it just money I earn? What about interest (paid and earned), capital gains (money I don't actually have, but earned) or government benefits? You're already making exceptions defining income.

Second, there's the practical matter of people/business who operate on extremely thin profit margins and if you could even practically tax them.

I think in reality a flat tax has great benefits to the wealthy but gets progressively more burdensome as you get poorer. After all, the more money you have, the more money you can make, thus making the "flat tax" exacerbate the gap between rich and poor.

Re: Your real tax rate: 40%

#144

Post by mixmax »

jsankey wrote: post #126
rubashov wrote: post #85

Earlier quoted context omitted.

As a result of their tax rate and size of government? That's ridiculous. Denmark is wealthy and comfortable because it's full of Danes. I bet you Danes in the US are even wealthier and more comfortable than Danes in Denmark.

To be honest your point seems completely vacuous (far more ridiculous than the point you are responding to). It appears to reduce to "Danes are magical - I think". What makes Danes special? Is this not related to the sort of government they would create and support?

"Danes are magical"

I can assure you we are not.

Re: Your real tax rate: 40%

#145

Post by byrneseyeview »

smeatish wrote: post #138
byrneseyeview wrote: post #101

Earlier quoted context omitted.

If you own "billions," you presumably own equity or debt (maybe some commodities, but it's not likely). If you own debt, you're paying taxes on the interest. If you own equity, the value of that equity is the net present value of future cash flows--meaning it's 'taxed' at the rate at which corporations are taxed. In addition, spending a lot of money and then making it a 'work expense' still requires lots of income. Y…

As a side note, one interesting difference between owning equities from a company that you started versus that you purchased from savings is that your work invested into the company is NOT taxed. If you can create $100k of value a year in your own company or earn a salary of $100k (which after taxes nets you only $60k that you can contribute to purchasing assets), it will take you a lot longer to build up the value o…

Your work is not normally taxed; your income is. If your company is worth something, it's based on some kind of future earnings. And those future earnings are taxed.

Re: Your real tax rate: 40%

#146

Post by icegreentea »

cperciva wrote: post #84
tedunangst wrote: post #80

Earlier quoted context omitted.

American gas prices include all taxes.

I said unlike everything else, not everywhere else. Gasoline is the only thing I can think of in Canada for which the advertised price includes taxes.

At least in Ontario, alcohol has the tax wrapped in the price as well. Well, at least at stores, don't remember about restaurants.

Re: Your real tax rate: 40%

#147

Post by rubashov »

jsankey wrote: post #126
rubashov wrote: post #85

Earlier quoted context omitted.

As a result of their tax rate and size of government? That's ridiculous. Denmark is wealthy and comfortable because it's full of Danes. I bet you Danes in the US are even wealthier and more comfortable than Danes in Denmark.

To be honest your point seems completely vacuous (far more ridiculous than the point you are responding to). It appears to reduce to "Danes are magical - I think". What makes Danes special? Is this not related to the sort of government they would create and support?

They are high time preference and relatively high IQ. These are the features that distinguish the various ethnicities that build pleasant societies.

Re: Your real tax rate: 40%

#148

Post by laut »

_delirium wrote: post #50
mixmax wrote: post #46

If you think that's high you should be happy you don't live in Denmark. "The large public sector (30% of the entire workforce on a full-time basis) is financed by the world's highest taxes. A value added tax of 25% is levied on the sale of most goods and services (including groceries). The income tax in Denmark ranges from 42.9% to 63% progressively, levied on 4 out of 10 full-time employees. Such high rates mean tha…

The people who do live in Denmark seem pretty happy about doing so, though ( http://www.sciencedaily.com/releases/2006/11/061113093726.ht... ). One reason might be that they're fairly wealthy to begin with, so it's taking a large percentage out of a large pie (Denmark's per-capita GDP is ~DKK 375,000 = ~$62,000). The social safety net is also rather strong as a result of the government's large amount of income, and i…

Everyone is brought up to think it's the best country in the world. But I'm glad I emigrated and the other people I know who moved seem pretty happy about it too.

No that stuff isn't free just because it's paid for by taxes. And because the government has kept growing the government is now running a deficit. It will have to do reforms to avoid growing the debt.

Some think the big government system is great. I don't. But even if you do think it's nice, the problem is that it's not sustainable.

The growth of the economy is projected be the 2nd lowest in OECD only in front of Japan.

Denmark has been a rich country for a while but as the government has grown it has been falling down the list and is now out of the top 10.

Re: Your real tax rate: 40%

#149

Post by ww520 »

JoeAltmaier wrote: post #99
leelin wrote: post #47

Very cool, it seems the researchers took into account all sorts of things like state sales tax, state income tax, corporate tax, welfare / handout type programs, and spending + savings habits. From what I can tell the key inflection points in the graph come from four issues. 1.) How much can one contribute to retirement accounts to avoid paying income tax that year? 2.) Where are the key discontinuous cutoff points i…

Really rich people have little or no income. The dodge comes in taking your jet, car, residence, living expenses etc as work expenses. While you OWN billions, your income may be thousands.

What rich people do to avoid paying income tax is to structure the payment as long term capital gain. Capital gain is taxed at a lower rate than income tax. Of course if you stuff the jet/car/residence/gold-cards as corporate expenses, the capital gain would be lower, too.

Re: Your real tax rate: 40%

#150

Post by izendejas »

stinkytaco wrote: post #137
randallsquared wrote: post #34

Earlier quoted context omitted.

It's not like the entire tax goes into a black hole It's arguable that we'd be better off were that so... part of the tax burden is all the people employed by those taxes who don't actually contribute anything to society on net (that is, whose jobs wouldn't be done at all on the free market)... in this way, taxes can have something like double their cost in harm, potentially.

This is an interesting idea. What jobs would not exist on the free market? Let's just take, for example, a traffic engineer. Someone whose job it is to make sure the network of roads runs smoothly, interconnects between states and more or less provides a consistent infrastructure for the transportation of goods. It's quite possible this wouldn't exist in the free market, just look how long it's taken to standardize t…

Funny you mention the internet (TCP/IP, etc). That's one thing I'm glad the government--be it university funded researchers and DARPA among others--took care of. I can't imagine a large Telco designing the internet. We certainly wouldn't have net neutrality and the Googles would probably not exist.
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