3 ms·

Um, perhaps actually enumerating what X and Y are would be a start? Or defining what "poor" means? A lot of people conveniently forget about sales tax (and po

by akeefer 17y ago

Um, perhaps actually enumerating what X and Y are would be a start? Or defining what "poor" means? A lot of people conveniently forget about sales tax (and potentially other sorts of government fees, like vehicle registration fees) when saying "poor people don't pay taxes." Sales tax is an incredibly regressive form of taxation, as are gasoline taxes, cigarette taxes, etc.

nazgulnarsil 17y ago
sigh okay let's say we have a consumption tax of 10%. By definition your tax rate can not exceed 10% (it will be 10% if you spend all your money). this is peanuts. the tax rates for the top 2 quintiles range from 25% to 32%, and that's straight income before paying all those same consumption taxes. frankly, your argument is flawed from the get go. if we're going to assume a decreasing marginal utility of money (which is what theft from the highly productive is usually justified with) we can't use straight up percentages of income as our metric since the whole thing relies on the idea that taking 10% from a poor person is worse than taking 10% from a rich person. But if we do that we have a whole new problem on our hands. How do we determine the rate at which the utility of money decreases?
- emmett 17y ago
  Making $30k/year, you are taxed at 15% for social security, another 6% for medicare, 13% federal income taxes, and then depending where you live you pay state income taxes and city income taxes as well. Then you pay 10% sales tax. You get no write offs for a mortgage, because you can't afford a house. The total easily comes to 40% (15% + 6% + 13% + 10% sales tax, not even including state taxes), well exceeding the 25-32% paid at the top. Because the top earners spend a much lower percentage of their income, they are far less effected by sales tax proportionally. Medicare and social security top out at 100k income. So the top earners pay 32%, and that's it (actually less when you include the tax breaks a good accountant can find you). And that's how you can say that the poor pay more taxes than the rich.
  - nazgulnarsil 17y ago
    you just asserted that income taxes for the poor are 34%...
    - emmett 17y ago
      The percentage of income paid in taxes by the poor is about 34% (ignoring state and city taxes which can easily bump the total above 40% alone). Sales tax is equivalent to income tax for a poor person (albiet at a discount rate given that their rent, and in some cases food, is not taxed). Sales tax is not the equivalent for a rich person, who can save the bulk of their income. Therefore it is fair and not misleading to include sales tax as an additional part of income taxes for the poor. And it's correct to say that poor people pay more than the rich in taxes. Because of the way the tax system is structured, someone making around 100k a year is taxed most heavily, then less and less in either direction away from that point.
      - nazgulnarsil 17y ago
        no. the poor pay about 10-15% in income tax, then about 7-9% in sales taxes.
        akeefer 17y ago
        Doesn't your 10-15% ignore social security and medicare taxes?
        emmett 17y ago
        Social security is 15% of a poor person's income alone. Medicare is another 6%. At 30k/year, you additionally pay 13% federal income tax. That means that the amount of money from your paycheck going to the federal government totals 34%. A poor person making $30k/year is paying 34% of their income to the federal government, before any other taxes. It's not all officially named "income tax", but it's paid as a percentage of income which meets the definition of an income tax. (http://www.google.com/search?q=define%3Aincome+tax&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a http://www.google.com/search?q=define%3Aincome+tax&ie=ut...)
- akeefer 17y ago
  I was disagreeing with your statement "It isn't a fallacy that the poor don't pay taxes." It very much is a fallacy; they pay all kinds of taxes (as pointed out by the other commenter they pay medicare tax and social security tax as well as sales taxes, gas taxes, etc.). I wasn't making the argument that they pay more in taxes as a percentage of their income, or any argument around utility. There are arguments to be made around that, but I wasn't making them. I was also basically saying that the whole "your argument is so ludicrous I won't dignify it with a response" thing was a cop-out. Just assuming they must receive more in social services than they pay in taxes, without any attempt to quantify either number, doesn't make for a compelling argument.
  - nazgulnarsil 17y ago
    if the poor paid more in taxes than they receive in benefits why wouldn't social programs be net profitable? the argument makes no sense.
    - randallsquared 17y ago
      I don't know exactly what effective tax rates are for the poor (but when I was poorer I was much more concerned about how much I was paying in taxes, for whatever that's worth, and this was just two years ago), but it could easily be the case that such services mostly would be profitable were they not run by an organization with an interest in justifying a higher budget, instead of making a profit. My own feeling is that many things the government now does at a loss could be done profitably in a competitive market, and lots of services for the poor fall into this category.
      - nazgulnarsil 17y ago
        I agree. the poor in our country live like kings not because of social programs but because the market forces prices down to a level where everyone can afford more luxuries.
    - akeefer 17y ago
      That entirely depends on how you define "the poor" and how you quantify benefits. Is the military a social program? Police? National defense? How do you quantify one person's portion of that? If we're talking purely about direct social programs like welfare or housing vouchers or medicaid, then homeless people will definitely receive more benefits than they pay in taxes, and people earning $30k year will almost certainly not. If instead you include all that other stuff like defense and highway spending and assume everyone receives a roughly equal share of those benefits then the argument becomes pointless; the average person pays less than 1/300 millionth of the overall tax revenue but receives 1/300 millionth of the benefits.

by akeefer 17y ago

nazgulnarsil 17y ago

sigh okay let's say we have a consumption tax of 10%. By definition your tax rate can not exceed 10% (it will be 10% if you spend all your money). this is peanuts. the tax rates for the top 2 quintiles range from 25% to 32%, and that's straight income before paying all those same consumption taxes. frankly, your argument is flawed from the get go. if we're going to assume a decreasing marginal utility of money (which is what theft from the highly productive is usually justified with) we can't use straight up percentages of income as our metric since the whole thing relies on the idea that taking 10% from a poor person is worse than taking 10% from a rich person. But if we do that we have a whole new problem on our hands. How do we determine the rate at which the utility of money decreases?

emmett 17y ago
Making $30k/year, you are taxed at 15% for social security, another 6% for medicare, 13% federal income taxes, and then depending where you live you pay state income taxes and city income taxes as well. Then you pay 10% sales tax. You get no write offs for a mortgage, because you can't afford a house. The total easily comes to 40% (15% + 6% + 13% + 10% sales tax, not even including state taxes), well exceeding the 25-32% paid at the top. Because the top earners spend a much lower percentage of their income, they are far less effected by sales tax proportionally. Medicare and social security top out at 100k income. So the top earners pay 32%, and that's it (actually less when you include the tax breaks a good accountant can find you). And that's how you can say that the poor pay more taxes than the rich.
- nazgulnarsil 17y ago
  you just asserted that income taxes for the poor are 34%...
  - emmett 17y ago
    The percentage of income paid in taxes by the poor is about 34% (ignoring state and city taxes which can easily bump the total above 40% alone). Sales tax is equivalent to income tax for a poor person (albiet at a discount rate given that their rent, and in some cases food, is not taxed). Sales tax is not the equivalent for a rich person, who can save the bulk of their income. Therefore it is fair and not misleading to include sales tax as an additional part of income taxes for the poor. And it's correct to say that poor people pay more than the rich in taxes. Because of the way the tax system is structured, someone making around 100k a year is taxed most heavily, then less and less in either direction away from that point.
    - nazgulnarsil 17y ago
      no. the poor pay about 10-15% in income tax, then about 7-9% in sales taxes.
      - akeefer 17y ago
        Doesn't your 10-15% ignore social security and medicare taxes?
      - emmett 17y ago
        Social security is 15% of a poor person's income alone. Medicare is another 6%. At 30k/year, you additionally pay 13% federal income tax. That means that the amount of money from your paycheck going to the federal government totals 34%. A poor person making $30k/year is paying 34% of their income to the federal government, before any other taxes. It's not all officially named "income tax", but it's paid as a percentage of income which meets the definition of an income tax. (http://www.google.com/search?q=define%3Aincome+tax&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a http://www.google.com/search?q=define%3Aincome+tax&ie=ut...)
akeefer 17y ago
I was disagreeing with your statement "It isn't a fallacy that the poor don't pay taxes." It very much is a fallacy; they pay all kinds of taxes (as pointed out by the other commenter they pay medicare tax and social security tax as well as sales taxes, gas taxes, etc.). I wasn't making the argument that they pay more in taxes as a percentage of their income, or any argument around utility. There are arguments to be made around that, but I wasn't making them. I was also basically saying that the whole "your argument is so ludicrous I won't dignify it with a response" thing was a cop-out. Just assuming they must receive more in social services than they pay in taxes, without any attempt to quantify either number, doesn't make for a compelling argument.
- nazgulnarsil 17y ago
  if the poor paid more in taxes than they receive in benefits why wouldn't social programs be net profitable? the argument makes no sense.
  - randallsquared 17y ago
    I don't know exactly what effective tax rates are for the poor (but when I was poorer I was much more concerned about how much I was paying in taxes, for whatever that's worth, and this was just two years ago), but it could easily be the case that such services mostly would be profitable were they not run by an organization with an interest in justifying a higher budget, instead of making a profit. My own feeling is that many things the government now does at a loss could be done profitably in a competitive market, and lots of services for the poor fall into this category.
    - nazgulnarsil 17y ago
      I agree. the poor in our country live like kings not because of social programs but because the market forces prices down to a level where everyone can afford more luxuries.
  - akeefer 17y ago
    That entirely depends on how you define "the poor" and how you quantify benefits. Is the military a social program? Police? National defense? How do you quantify one person's portion of that? If we're talking purely about direct social programs like welfare or housing vouchers or medicaid, then homeless people will definitely receive more benefits than they pay in taxes, and people earning $30k year will almost certainly not. If instead you include all that other stuff like defense and highway spending and assume everyone receives a roughly equal share of those benefits then the argument becomes pointless; the average person pays less than 1/300 millionth of the overall tax revenue but receives 1/300 millionth of the benefits.