Income Inequality

[WarTim 3,456]

Agree 100%

[homersapien 11,369]

How about the 1%ers paying a more fair share and How about raising revenues to pay off the deficit?

Of note, the top 2 tax brackets are already at the Clinton levels (i.e., the Bush cuts sunset after 10 years).

I would prefer a higher rate to offset the already there loopholes and the soon to be added to loopholes to come.

Oh yeah? How high would you go? Would you push the cap gains rate further as well?

Rob, I could see 39.5% shift down one level and a new cap at 41.

We could debate capital gains for sometime. I have very mixed feelings about capital gains. Should it be raised, yes, but capital gains taxing is very damaging to small business. I will have to think on that. Maybe raise the capital gains threshold to over $1M but raise the % after that?

The problem with raising capital gains is that you are taxing money that has already been taxed once. Investments are made with money that was left after paying the income tax on it the first time around.

The basis amount invested is not "taxed again", only the gains.

[TheBlueVue 177]

I think when capital gains essentially become one's sole source of income, the claim that at one time way back in the past the initial money was taxed as income loses steam. It becomes patently unfair for someone making millions to be taxed at 15% on a six or seven figure yearly income while someone making under $100k is paying a higher percentage simply based on a man-made classification of "income" vs "capital gains."

How in the world is that "patently unfair"? Lets use your example and say a person is making $1 million dollars a year off of investments and pays 15%. I wasn't a math major but he'll pay $150,000 in federal income taxes best I can tell. You use the figure a person making $100,000 is paying a higher percentage but even if he's paying 38% which he is not, he's paying $38,000. So you think it is unfair for someone to pay 4 times more in taxes than the other one earned n gross income? Hell, I do too! Frankly, I dont see it being more fair for the person making a $million dollars a year to end up having to pay more than that. Honestly, I really don't understand the logic.

I used to have to pay quarterly estimates and would get penalized if I under estimated my income. That always upset me because it felt like the govt was penalizing me for being more successful than I estimated. Most people who complain about income taxes being unfair have never really paid any other than withholding from their pay checks, a large portion of which, they'll get back when they file their returns. Pay $30 or $40Gs a year in federal income taxes during the year, and write another check to the IRS on April 15th then come back and tell me you feel like you need to be paying more federal income tax. Moreover, I can guarantee you the person paying $150,000 a year in federal income taxes believes he's easily paying more than enough and I would agree with him completely. Its easy to get caught up rationalizing confiscatory tax policy when you focus only on the percentages and not the actual amount of money the govt is taking from you.

[DKW 86 7,419]

How about the 1%ers paying a more fair share and How about raising revenues to pay off the deficit?

Of note, the top 2 tax brackets are already at the Clinton levels (i.e., the Bush cuts sunset after 10 years).

I would prefer a higher rate to offset the already there loopholes and the soon to be added to loopholes to come.

Oh yeah? How high would you go? Would you push the cap gains rate further as well?

Rob, I could see 39.5% shift down one level and a new cap at 41.

We could debate capital gains for sometime. I have very mixed feelings about capital gains. Should it be raised, yes, but capital gains taxing is very damaging to small business. I will have to think on that. Maybe raise the capital gains threshold to over $1M but raise the % after that?

The problem with raising capital gains is that you are taxing money that has already been taxed once. Investments are made with money that was left after paying the income tax on it the first time around.

The basis amount invested is not "taxed again", only the gains.

Capital Gains are not multi-taxed. Dividends are the traditional multi-taxed objects.

[AUTUmike 79]

Titan, how about a Flat Tax?

I might be ok with it if there was an exemption up to a certain level of income. When a person makes $50,000, every bit of that is going to just living a decent life with very few "luxuries" (not talking diamonds and Bentleys, just anything beyond food/clothing/shelter/healthcare). To me it's hardly right to tax such a person just struggling to make ends meet and feed their family while a person making $15 million a year gets a low tax rate and still has millions to live on after.

It would depend on the percentage and whether it was flexible enough to take care of the things we need to take care of.

You [correctly] highlight the fact that a flat tax is, by definition, a regressive tax. However, the issue with your idea of an exemption (which I agree with in principle) is that flat taxes are typically proposed as consumption taxes--meaning it becomes near-impossible to correctly target individuals at different income levels. As a result, to keep a flat tax from being regressive, you would have to waive taxes on all of the essentials (food, clothing, etc.) and this would have to be across the board unless you want to present proof of income anytime you go to the grocery store. ...Yet another reason that the flat tax argument is a half-baked policy prescription.