Anyway, I'll be honest with you, I am not a fan of republicans at all... but I came to the point where I have to listen to them a bit more carefully. Beyond all the conservative BS etc... tax is my main concern at the moment. I'm worried... It's what impacts my life everyday. I feel like half of the money I earn is taken away and given back to the government. W2's or business owner's it's the same problem. So my question is, what do you guys think about paying too much taxes? Do you care? Is this one of your main problems?
What I do take issue with is the fact that I don't think my tax dollars are being used as effectively as they should be, not just because I don't feel like I get proportionate value from what they're supposedly funding, but more importantly I dont think anyone is.
I think by and large the world runs on incentives, and I don't think that the people whose job it is to allocate the resources obtained through taxes have the kind of skin in the game that's necessary to make decisions in the long term best interest of all parties involved. Anytime you have a scenario where a organization of people in society unbounded by naturally selective forces, waste and misallocation of resources will take place. It would make me feel a lot better if my taxes were going towards a system characterized by bottom up trial and errors rather than grand design, and unfortunately I think the latter best describes how our country appropriates tax dollars to our collective benefit.
As for your other question, I think there is something fundamentally fair about the concept of proportionality. I don't think its the job or role of taxation to act as punishment, because it's not as "fair" for someone making 50k a year to pay 20% in taxes to pay the same 20% as someone making 500k. I find great injustice in this idea, as I want to live in a society that seeks to empower people to become the best that they can, in a spiritual and economic sense. Not send the message that those who've achieved economic success somehow have engaged in a misdeed they have to pay or make up for.
Proportionality of what, is much of the question. Progressive taxation is often justified by pointing at the fact that money (like most things) has diminishing marginal utility. Taking $10k from someone making $50k is far more of a burden than taking $100k from someone making $500k.
The issue with fairness is that it's impossible to arrive at a definition of fairness without it inevitably just serving the interest of whomever defined it.
I'm aware of the definition, instead of replying with semantics you could try to outline the specifics of your defense of it.
From how I see it, in no morally relativistic sense do I see how making more money means I should have to forfeit more of my income because that's what's decided to be right and just by people who make less money.
I think if someone claims they have a bigger claim on my money because I earn more, you must PROVE why that is.
I think we should either pay enough taxes to cover our routine government expenses, or cut the expenses to meet the revenues from taxes.
Generally the GOP talks about cutting taxes and spending, but shifts the burden to debt and various user fees. Democrats get blamed for raising taxes, but generally raise taxes to meet existing obligations (as well as use taxes as punitive means to change social or business policy).
For 2014 my household had an AGI of approximately $900k, of which we paid around $250k in US Federal taxes, roughly $70k in NY State taxes, and another $32k in NYC taxes. So, roughly 42% tax rate when you combine all three (I'm ignoring sales taxes).
I don't think I pay too much in tax.
Would I like it to be less? Sure. But I like having roads that are paved, bridges that don't fall down, police and firemen who are paid a decent wage. None of these services are free. Many of these services (at least in NYC) started out as commercial services in the 1800s and shifted to being government produced and funded.
You know why? Because humans suck at forecasting their own needs. I don't have kids, but I pay for schools in my taxes. I don't plan to have a fire, or be the victim of a crime, yet I continue to subsidize the people who are victims of crimes, even (indirectly) the people who commit those crimes.
Americans seem to be uniquely blind to the benefits of the social system we’ve created over the past 230+ years. All we see are the system, its bugs and inefficiencies, the corruption, the costs. We fail to recognize the benefits.
The US economy is an extremely imperfect capitalist system, but until someone explains to me clearly, without waving hands, or relying on the Laffer curve, how to fund socially shared obligations without paying taxes, then I'll pay them and use other forms of influence to try to change how my taxes are used.
Because the alternative is to resort to building a castle and a moat, and hiring a bunch of flunkies to guard me and my moat and my money, and effectively create my own little government.
If you want to accumulate wealth, focus less on how much money you pay in taxes, and more on how to make the money you earn work more for you. If you earn $1MM in app sales in one year, fantastic, great for you. Pay your taxes, and invest the remainder to build up a business that earns you $500k a year with minimal effort on your part.
Of that $900k AGI, only about $450k was wages, the rest is earnings from investments (which get taxed differently depending on how they're paid).
I'm not losing money, I'm contracting out a variety of services I'd otherwise have to pay for.
I think that taxes should be reserved for those with some level of financial stability/independence. I don't know how to come up with a benchmark for that, though.
If I earned what I do now in a low cost of living environment, then I could pay 80% and still get by just fine.
Put simply, as a UK citizen, to a very good approximation, a worker earning 50K pa pays the same amount of tax whether they own a 5 bedroom home outright or whether they live in a tent. (Council tax / property tax exists but is generally small).
I don't think that's an efficient policy. It makes bootstrapping much more difficult than it should be.
This is if you make a million dollars in salary or in profit. If you reinvest that money into the business, you aren't taxed to nearly the same extent, while still retaining the value. If you have a million bucks floating around, you're also in a position to invest your money outside the business and take advantage of capital gains rates: https://www.irs.gov/taxtopics/tc409.html
Obvious disclaimer: I am not a lawyer.
Yes it is a little crazy that most people pay an effective 50%+ tax rate and there is little to show in return.
Singapore is probably one of the better models for how taxes should be, but everyone likes to promote this myth that a country as large as the US could not do the same thing.
I say why not.
EDIT: That sounded hella confrontational, and I don't mean that at all. I'm really interested if Singapore has found a better way to fund their government that we don't use for some reason.
besides I'd be much more worried about the trade war they all want to start more than anything.
Next, would be all the federal workers they want to layoff to get those taxes cuts. lay off a couple million people and see what happens to the economy.
Another related question is how efficient gov in allocating the help. I wish there is a separate gov body that quantifies the efficiency of all allocations.
Who knows, perhaps, when inefficiencies are removed, taxes we pay now is enough to build a just society with big middle class. I personally consider Wall Street's bailouts and international military interventions are among the biggest gov inefficiencies.
