I'm starting to wonder why Democrats raise taxes

[JJ Husker]

Let's say more realistically, Bob is self employed and makes $138,000. Bob pays;

6.2% of 118 employee share $7136

6.2% of 118 employer share $7136

2.9% of 138 both shares of Medicare $4002

$18,274 total ss and Medicare

Plus another roughly $47,000 fed & state Income tax.

So round numbers $65,000 total out of $138 leaves him $73,000. Effective rate 47%.

 

While Joe paid a little more than $1200 and has about 18,000 left.

 

One of them paid about $65k the other maybe $2k.

Bob still has $73k left while Joe only has $18k left.

When that apparently isn't enough, is the solution still to take even more from Bob? I mean there is $55k left until they are left with the same amount. What if that isn't enough?

 

BTW, I am not claiming the 47% effective tax rate is correct. It is a bit less than that with deductions and whatnot. But it's not a lot less than this example.

 

As you say, they both have the same value as humans. But one of them paid 32 times more real dollars and about a 40% higher percentage but Bob still has more leftover.... Should the concern be removing the cap and getting another $2480 out of Bob?

[JJ Husker]

I'll reply to your post tomorrow.

One more thing to add and maybe we can find some common ground here.

If someone works 40 hours a week from age 18-70, do they deserve to have enough $ to pay for food and shelter and basic necessities until they die at the average life expectancy age of 79?

I know some people would say no but I think most would say yes.

The problem I have with people wanting to get rid of social security is they don't often mention what we would do for the people who are earning more back than they paid in (which helps them survive). One thing we could do that most on the right would fight against is raise minimum wages so that those people can save enough for their retirement.

Right now the living wage in Omaha is $9.80. If I'm calculating correctly, it's $9.19 if we get rid of social security. If we pretend living wage is the same for a 70-79 year old, a living wage that would pay through retirement age would be $10.78. But 70-80 year olds tend to need more $.

(This is a bit of a segue but it totally makes sense for Nebraskans to be conservative about minimum wage. Our minimum wage is very close to being at the living wage for an individual with no kids. The same can't be said for the coasts).

I'm not a believer in a minimum wage increase doing much good. I wouldn't say I'm opposed to raising it, I just think the benefit of that small increase gets offset by the mutiple small cost increases it will cause for those who it is intended to help.

 

Hypothetically let's increase minimum wage $1.00 per hour. That gives that person an additional $2,000 per year. Those increased wages also will mostly get passed on to consumers. So if this person works at McDonalds, McD's starts charging a little more for everything on their menu....and so does every other business that is now paying more in wages. Are the people who got this wage increase immune to rising costs for virtually everything they have to buy? The answer is that $2000 raise pretty much just got wiped out with increased costs on everything.

 

I wish raising the minimum wage would do some good for low income people but I really don't think it does much at all. My other thought is that minimum wage type jobs are not meant to support a family. Teenagers and some young single people also need jobs and a source of income. Sorry but not every job can be expected to be sufficient for raising a family or even for being enough for one person to really live on. The key is to grow the economy and create higher paying jobs. Not falsifying things and trying to make a burger flipping job enough. We need those types of jobs but they have their limits for what we can expect from them.

 

Using your prior example, I don't think a person working 40 hours at a minimum wage job should expect that to be enough. One of the basic problems with our economy is that it has shifted so far to the service industry (typically minimum wage type) and away from higher paying manufacturing jobs etc. We buy cheap crap from overseas and whine about the lost jobs and and somehow think we now need to pay the mother of 2 more to hand food out a window for 40 hours a week rather than paying a pimple faced teen less to do it for only 10 hours a week just so he can have a little spending money.

 

Sorry, rambling, way too tired.

[Moiraine]

Just to be clear (but maybe you realized this) I'm talking an increase only if we got rid of social security. That's not to say I don't think it should be increased anyway. It's just a (different) discussion we've had on the board before.

 

The problem is... lots of adults are paid minimum wage now for doing things similar to what you're talking about. Our production per worker has increased by a ton because of automation. So companies are making more $ but spending less.

 

Automation is just another reason why those decent $15/hour without a college degree jobs are extremly rare now. But that doesn't mean the people doing the leftover minimum wage jobs don't need to eat. We've become too good at doing most things. We need humans for less and less menial jobs. But not everyone is capable of doing more than a menial job.

[Moiraine]

Let's say more realistically, Bob is self employed and makes $138,000. Bob pays;

6.2% of 118 employee share $7136

6.2% of 118 employer share $7136

2.9% of 138 both shares of Medicare $4002

$18,274 total ss and Medicare

Plus another roughly $47,000 fed & state Income tax.

So round numbers $65,000 total out of $138 leaves him $73,000. Effective rate 47%.

 

While Joe paid a little more than $1200 and has about 18,000 left.

 

One of them paid about $65k the other maybe $2k.

Bob still has $73k left while Joe only has $18k left.

When that apparently isn't enough, is the solution still to take even more from Bob? I mean there is $55k left until they are left with the same amount. What if that isn't enough?

 

BTW, I am not claiming the 47% effective tax rate is correct. It is a bit less than that with deductions and whatnot. But it's not a lot less than this example.

 

As you say, they both have the same value as humans. But one of them paid 32 times more real dollars and about a 40% higher percentage but Bob still has more leftover.... Should the concern be removing the cap and getting another $2480 out of Bob?

You've made good points with all of this, especially at that amount basically having your income halved if all of that was accurate. At $138k it's a big deal so I don't really have an answer for that. The $1,200 itself isn't a big deal but the rest is. On the other hand if your income is $1 million I don't have a problem with any of it.

[zoogs]

I don't know how you can see this as not a good deal for the wealthy. You can earn 118k or 1000k in a year, and you still contribute the same amount to the crucial social security safety net.

 

For people who earn less than 118k, yes, it seems quite unfair.

[JJ Husker]

If my income was $1M per year, I wouldn't have a problem and wouldn't being crying about it. But it is way too easy to say for anyone to say that about some hypothetically significantly elevated income level. People at $40k can say it about me, and people in my shoes can say it about the $1M level. I can make a really good case about how those between $100k and $200k income levels, particularly small business owners, are already being overly taxed. The tough part of it is, I dont ever get to even collect as actual income all the money my tax form says I made. To use round numbers, let's say Bob collects $100k in the form of a paycheck and his books show a $50k profit for a $150k gross income. Part of the problem is Bob likely never sees much of that $50k as his business can't afford to distribute 100% of profits. There are capital expenditures, cash flow concerns and bankers to keep happy. About the best a guy can hope for is to be able to distribute about 50% of the book profit and guess what, that is almost all eaten up by paying the taxes on it. So it is really like Bob only made $125k but got taxed for $150k. How much does that really leave for Bob after we figure all the taxes and he cant collect all the income he's being taxed on? I'm not exaggerating these things. I may be using rough numbers but I'm not falsely misleading on any of it.

 

The middle and upper middle class are being taxed quite heavily IMO. So, when you say just remove the cap at $118k, I sort of feel like my only purpose here is to be kept alive for the harvesting of my body parts. Really, I and many in the similar situation are already paying more than enough, more than is fair, more than should be required. It's not as simple as saying but you make 6 times what Joe does so here's another bill to pay.

[JJ Husker]

I don't know how you can see this as not a good deal for the wealthy. You can earn 118k or 1000k in a year, and you still contribute the same amount to the crucial social security safety net.For people who earn less than 118k, yes, it seems quite unfair.

I'm not sure exactly what you mean by "good deal" and you may have a way different interpretation of what "unfair" is.

 

One definition of fair would be, I put a dollar in and I get a dollar out. Fair can get conflated and subjective real quick when you start talking about other people's money or about this group but not that group.

 

Maybe we should flip the cap and lower it. Exempt the first $50k of income from SS tax for everybody. Just one idea.

[zoogs]

Fair as in social welfare is an important, shared, common good, enjoyed by us all. Good deal as in the wealthy (well, starting from the upper middle class) appear to not really have to pay for it. No matter how much their ability to do so increases.

 

Your definition of fair would be called a bank.

[JJ Husker]

If I get time sometime today, I am going start anther thread related to this subject. The idea being that everyone can breakdown a couple different income levels and assign percentages where there think 100% of that income should go. Say a person makes $100,000, how much to each of the different taxes, how much to healthcare insurance and costs, food, housing, savings (if any) etc. I think it will be interesting to see people's ideas and differences at the 50k, 150k and 1M levels. I will probably specify for a family of 4. So you can be thinking about that in anticipation of my awesome topic idea;-)

[zoogs]

That's certainly interesting. I don't know that I have very specific numbers about it, so I'm open to ideas like "current levels are too much" as well as "current levels are too little."

 

I'm more thinking that society bears costs for not having certain things, like welfare, healthcare, and some measure of income equality. These social and medical aid programs are necessarily created by taxation. So are other things -- national defense, national infrastructure, scientific research, the space program. Stimulus spending in times of recession. Etc.

 

In a very general sense, these are things a nation needs to do to stay strong and healthy. So we need to have a tax system that gets us there, and those who can afford to pay more should do so. It's completely counterproductive for tax policy to disproportionately punish the less well off when the programs for which they're paying are meant to help the same people. It's like giving a cancer patient treatment while requiring them to inject themselves with the flu every now and then.

[JJ Husker]

That's certainly interesting. I don't know that I have very specific numbers about it, so I'm open to ideas like "current levels are too much" as well as "current levels are too little."I'm more thinking that society bears costs for not having certain things, like welfare, healthcare, and some measure of income equality. These social and medical aid programs are necessarily created by taxation. So are other things -- national defense, national infrastructure, scientific research, the space program. Stimulus spending in times of recession. Etc.In a very general sense, these are things a nation needs to do to stay strong and healthy. So we need to have a tax system that gets us there, and those who can afford to pay more should do so. It's completely counterproductive for tax policy to disproportionately punish the less well off when the programs for which they're paying are meant to help the same people. It's like giving a cancer patient treatment while requiring them to inject themselves with the flu every now and then.

I agree with all of that 100%. However, if we don't delve deeper than the general idea that those are good things and poor people need more help, we can skate right past reality and overlook the limits of finite resources or the repercussions on the big picture.

 

I'm not some cold hearted greedy evil bastard that just wants more for me and less for the needy. I know there are huge numbers that need and deserve help. Unfortunately this world has always tended towards general poverty. Yes, there are those "haves" who can afford to provide assistance more than others. I think it's only prudent to explore what that looks like and a little more technically how it should work otherwise we have no idea if our general thoughts of "these are good things" and "these people need help" jive with what we can actually do about it. As an example, if I gave $10 to every panhandler with a sign that I pass daily, I may soon run out of money. For some people that amount could be $1 or $10 or $500. It still doesn't change the facts that there are people that need help, it is good to help them, and those that can provide the help have financial constraints. Both sides of the equation have to be considered.

[BigRedBuster]

 

That's certainly interesting. I don't know that I have very specific numbers about it, so I'm open to ideas like "current levels are too much" as well as "current levels are too little."I'm more thinking that society bears costs for not having certain things, like welfare, healthcare, and some measure of income equality. These social and medical aid programs are necessarily created by taxation. So are other things -- national defense, national infrastructure, scientific research, the space program. Stimulus spending in times of recession. Etc.In a very general sense, these are things a nation needs to do to stay strong and healthy. So we need to have a tax system that gets us there, and those who can afford to pay more should do so. It's completely counterproductive for tax policy to disproportionately punish the less well off when the programs for which they're paying are meant to help the same people. It's like giving a cancer patient treatment while requiring them to inject themselves with the flu every now and then.

I agree with all of that 100%. However, if we don't delve deeper than the general idea that those are good things and poor people need more help, we can skate right past reality and overlook the limits of finite resources or the repercussions on the big picture.

 

I'm not some cold hearted greedy evil bastard that just wants more for me and less for the needy. I know there are huge numbers that need and deserve help. Unfortunately this world has always tended towards general poverty. Yes, there are those "haves" who can afford to provide assistance more than others. I think it's only prudent to explore what that looks like and a little more technically how it should work otherwise we have no idea if our general thoughts of "these are good things" and "these people need help" jive with what we can actually do about it. As an example, if I gave $10 to every panhandler with a sign that I pass daily, I may soon run out of money. For some people that amount could be $1 or $10 or $500. It still doesn't change the facts that there are people that need help, it is good to help them, and those that can provide the help have financial constraints. Both sides of the equation have to be considered.

 

I agree.

 

I have always been of the belief that a civilized society has a certain level of safety net for people who fall through the cracks or can't take care of themselves.

 

The debate should not be if those safety nets are there. The debate should be at what level those safety nets exist and how they are funded.

 

I also have always been uncomfortable with the attitude of....."Oh, the rich can pay for it". Sure, they (along with anyone who is sustaining themselves) should be helping with the cause. But, there should be a limit to what society is willing to forcefully take from any individual.

[zoogs]

Yes, I agree that there must be a continuing debate of what level they should be funded. Just be aware that there are actually people who believe they should not exist. And these people, banded together in a coalition designed to deliver political favor to those who would immediately benefit from the dismantling of these programs, will ALWAYS make the argument that the status quo is too much and that we can't afford it.

 

It's not merely the rich that can pay for it. Everyone can pay for it -- well, not the poor, because they literally can't. But the middle class, the wealthy. The idea is that we pay a share that is commensurate with our ability to do so.

 

And this is not the status quo of today. Because the extremely wealthy (top percentages of people as well as corporations) have secured political wins to favor them (because of course they're the ones with the influence to do so), they enjoy as large an advantage as they can in paying less and less. All of this advantage comes at the expense of those who aren't extremely wealthy, both people and corporations.

 

But yeah, it certainly may be the case that both groups of people need to pay more.

[BigRedBuster]

People who want programs dismantled because they would directly benefit financially are no different than people who WANT more programs because they would benefit financially even though they are able but not willing to do what it takes to take care of themselves.

There are lots of both sides in this country.

 

Supporting one of these groups while ridiculing the other does not make someone virtuous.

[zoogs]

There is no equivalence there. We're talking about the usage of public resources. One group should not be getting them, but they are because they have the ability to make things that way. The other should, but the scales are tilted against them.

 

These are not equally questionable uses of government policy, IMO.