Should The Rich Pay More Taxes?

[Granddaddy]

You knowledge on the tax is very broad but your basis is very clear. Nothing anyone presents or says will change that. Therefore I will not bother to read your posts (or listen to Rush)
When a poor man gives something, that is a sacrifice indeed. When a rich man gives something, it hardly rises to the same level.

There has been nothing germain to the thesis presented to indicate that the thesis is not true. Small businesses provide jobs & are deterred from that by the current application of taxation as described above.

Your philosophical statement stated and restated has nothing to do with the thesis stated (which might be explained by your admission that you are not reading the posts). Further taxes have nothing to do with giving. Choice is a prerequisite for giving. When it comes to the tax code, there is no choice, therefore no giving. Instead it is a levy by government mandate. When it comes to the poor in the US, the bottom 48% pay no income taxes. So the levy of income taxes imposed by the government falls entirely on the other 52%. In fact the top 5% of all wage earners, pays over 58% of the total income taxes paid. But taxes aren't gifts, whether paid by the super wealthy or the marginal tax payer because they aren't accompanied by the choice to pay them.

Where's that thread about health care funding or maybe who's really to blame for the last financial collapse? Waiting for you to take a defendable position......

[Granddaddy]

Are we all agreed then that the supposed "rich" who own small businesses shouldn't see increased incomes taxes and that increasing the taxes of small business owners deters job opportunties?

[YardleyLabs]

Are we all agreed then that the supposed "rich" who own small businesses shouldn't see increased incomes taxes and that increasing the taxes of small business owners deters job opportunties?

No. I think businesses should pay no income taxes at all. I think those who profit from business -- whether as employees or owners -- should be taxed based on their total incomes and without regard to how they earned their money. There is no reason why income earned on wealth should be taxed at a lower rate than income earned by labor.

[Granddaddy]

No. I think businesses should pay no income taxes at all. I think those who profit from business -- whether as employees or owners -- should be taxed based on their total incomes and without regard to how they earned their money. There is no reason why income earned on wealth should be taxed at a lower rate than income earned by labor.

You've said that already. Earned income is taxed the same. It's capital gains that are treated differently if held longer than 12 mos. Further, the things you support require major legislation changes.

But with all your comments, you have avoided the thesis. Question is, do you understand that under current law, by being unable to retain earnings, that small business hiring is affected/reduced?

[YardleyLabs]

You've said that already. Earned income is taxed the same. It's capital gains that are treated differently if held longer than 12 mos. Further, the things you support require major legislation changes.

But with all your comments, you have avoided the thesis. Question is, do you understand that under current law, by being unable to retain earnings, that small business hiring is affected/reduced?

I have not avoided the thesis at all. I have disagreed with it. There is a difference.

All income is income, as I have stated before. I don't care if it comes from capital gains, interest, dividends, inheritance, sale of house, prostitution, or a nice traditional w-2 job. It should all be taxed at the same rate. The only justification for taxing capital gains and dividends at a lower rate is that corporate profits have already been taxed through corporate income taxes. I believe that corporation income tax is what needs to be eliminated. The justification for lower tax rates on dividends and capital gains then disappears (BTW, corporate profits then also increase by the amounts previously paid in taxes.).

I have also commented repeatedly that I believe that corporate earnings should be able to be retained within the company for reinvestment. I believe that can be done within current law if corporate taxes are eliminated and don't understand your concerns about why smaller companies need to remain as sub-s or llc structures if such taxes no longer exist. If a business owner is not willing to follow controls governing segregation of revenues and assets as are required of c-corps, then they may need to continue paying taxes on all earnings without the option of retaining earnings within the business. The problem at that point is their business decision, not the law.

I have operated at different times as a sole proprietorship, as a partnership, as a c-corp, and as a public company. Each carries its risks and benefits and, yes, I am aware of them. However, eliminating corporate taxes would immediately do away with the primary justification of many of those distinctions.

[road kill]

So....do any of you have an answer to the OP's question?
9 pages....no answer?

I am just not sure why 10% of the population should pay 90% of the taxes.

(not an exact number, but it gets thrown around a lot)

I kind of like how Florida does it...........


stan b

[Granddaddy]

I have not avoided the thesis at all. I have disagreed with it. There is a difference.

All income is income, as I have stated before. I don't care if it comes from capital gains, interest, dividends, inheritance, sale of house, prostitution, or a nice traditional w-2 job. It should all be taxed at the same rate. The only justification for taxing capital gains and dividends at a lower rate is that corporate profits have already been taxed through corporate income taxes. I believe that corporation income tax is what needs to be eliminated. The justification for lower tax rates on dividends and capital gains then disappears (BTW, corporate profits then also increase by the amounts previously paid in taxes.).

I have also commented repeatedly that I believe that corporate earnings should be able to be retained within the company for reinvestment. I believe that can be done within current law if corporate taxes are eliminated and don't understand your concerns about why smaller companies need to remain as sub-s or llc structures if such taxes no longer exist. If a business owner is not willing to follow controls governing segregation of revenues and assets as are required of c-corps, then they may need to continue paying taxes on all earnings without the option of retaining earnings within the business. The problem at that point is their business decision, not the law.

I have operated at different times as a sole proprietorship, as a partnership, as a c-corp, and as a public company. Each carries its risks and benefits and, yes, I am aware of them. However, eliminating corporate taxes would immediately do away with the primary justification of many of those distinctions.

And the above is your direct answer to the question of whether the rich should pay more taxes (the rich in my thesis being owners of growing small businesses)? Are you in politics? If not, you have a real talent for not anwering the question at great length and then asserting that you have.

Let's assume we can't change the current tax structure or associated laws (& we both know it won't happen under the current congress of one party & the pres a different party), like I wish I had Bill Gate's wealth & didn't have to worry about it, BUT THAT IS NOT GOING TO HAPPEN. So you would rather hold to that pipe dream wish list & ignore a current, real problem or offer something that might create jobs under present constraints?

And BTW, even the dictionary doesn't recognize inheritance as income, much less the IRS, so you are in lonely territory there. To produce income, earnings from work or investment have to be present. In the case of inheritance, the closest thing to it is a gift. This is no implication that inheritance should or should not be taxed, that's a different thread but you keep that pipe lit........

[YardleyLabs]

And the above is your direct answer to the question of whether the rich should pay more taxes (the rich in my thesis being owners of growing small businesses)? Are you in politics? If not, you have a real talent for not anwering the question at great length and then asserting that you have.

Let's assume we can't change the current tax structure or associated laws (& we both know it won't happen under the current congress of one party & the pres a different party), like I wish I had Bill Gate's wealth & didn't have to worry about it, BUT THAT IS NOT GOING TO HAPPEN. So you would rather hold to that pipe dream wish list & ignore a current, real problem or offer something that might create jobs under present constraints?

And BTW, even the dictionary doesn't recognize inheritance as income, much less the IRS, so you are in lonely territory there. To produce income, earnings from work or investment have to be present. In the case of inheritance, the closest thing to it is a gift. This is no implication that inheritance should or should not be taxed, that's a different thread but you keep that pipe lit........

First, the rich are generally not owners of small businesses. While the percentage of people owning small businesses who also earn over $200k per year is higher than for the general population, small business owners are only a small fraction of those with incomes over $200k. If you raise the income limits higher, say over $1 million, the number of small business owners goes down rapidly.

Second, yes I believe in a progressive tax system. I also believe that the tax system is defined by all the taxes that exist and not just the income tax. The Federal income taxes is one of the only progressive taxes in existence (see my first post for more on this). Almost all other taxes are regressive. That is why you see conservative complaints being leveled against the "unfairness" of the income tax while social security taxes, which are regressive, are ignored. That is why Reagan received kudos for cutting taxes when he more than doubled social security taxes. The fact is that the primary function of government is the protection of wealth, property, and the economy, and the primary beneficiaries of those activities are those earning the most money. They (we) should pay more in taxes to reflect that. The notion of per capita taxation diappeared with the founding of our Republic and a final stake was driven through its heart with the adoption of the 16th amendment. There was good reason for that then and better reason today.

[Granddaddy]

First, the rich are generally not owners of small businesses. While the percentage of people owning small businesses who also earn over $200k per year is higher than for the general population, small business owners are only a small fraction of those with incomes over $200k. If you raise the income limits higher, say over $1 million, the number of small business owners goes down rapidly.

Second, yes I believe in a progressive tax system. I also believe that the tax system is defined by all the taxes that exist and not just the income tax. The Federal income taxes is one of the only progressive taxes in existence (see my first post for more on this). Almost all other taxes are regressive. That is why you see conservative complaints being leveled against the "unfairness" of the income tax while social security taxes, which are regressive, are ignored. That is why Reagan received kudos for cutting taxes when he more than doubled social security taxes. The fact is that the primary function of government is the protection of wealth, property, and the economy, and the primary beneficiaries of those activities are those earning the most money. They (we) should pay more in taxes to reflect that. The notion of per capita taxation diappeared with the founding of our Republic and a final stake was driven through its heart with the adoption of the 16th amendment. There was good reason for that then and better reason today.

Again you avoid the thesis, to instead pontificate on your view of how taxes should be levied and collected - requring a complete overall of the tax code - favoring the large multi-national corporations.

1st, the rich for my thesis included owners of small businesses with combined company & personal income of $200K or more. The rich, as defined by current proposals of the democratic party include everyone with income over $200K regardless of its origin, personal or company (in the case of small business owners). There are a significant number of small businesses within this category. This means, as I have stated previously, all small business owners whose companies earn in excess of $200K per year, simply because of the current tax code wording, requires these small business owners to pays income taxes on those company earnings as if they are that owner's personal income, even when not otherwise distributed & used personally. Such a practice, is THE primary deterrent to additional hiring by growing small businesses. This is particularly relevant now because of the high unemployment rate which persists dispite the massive stimuli & bailouts by the Obama government. It is even more relevant, because (according to fed gov statistics), such small businesses have provided the majority of new jobs within the US over the last 15 years. And there has been no suggestion from my part to raise the exception from income taxes upon the rich per say. Instead I have suggested a simple & very narrow exemption of small business earnings from income taxes as long as they remain in the business (to be on par with large corp tax status). Notwithstanding your claims to the insignificance of such small businesses, they do employ the majority of Americans & have consistently provided the majority of jobs within the US over the last 15 yrs.

And to your assertion that "we" should pay more taxes, the obvious answer is "we" do. So much so that the top 5% pay 58%+ of all income taxes & the bottom 48% pay no income taxes at all (see the link to IRS statistics above).

And just a minor, yet substantial, correction to your assertion that FICA taxes are regressive. They are, in fact, just as progressive as the income tax for everyone earning under $106,800 in salary or wages. This means that to the vast majority of wage earners, the FICA tax levy is progressive. Just another note, gov aid to individuals, is the single most progressive portion of US gov aid that exists. Meaning that such payments are strictly limited to the lowest income earners or not to earners at all. I'm not implying fair or unfair, just that the tax code is stacked against moderate & wealthy tax payers at both ends.

My original post & all subsequent have all been motivated by the persistent, high rate of unemployement while billions have been spent on US gov programs that have not yielded one net new job when compared to the 15 yr avg rate of employment within the US. And since small business provides and has provided the majority of new jobs within the US over the same 15 yrs, it only makes logical sense to address the needs of small business in order to create new jobs. If the simple, narrowly focused tax consideration I suggest above were adopted, within 2-3 yrs our unemployment rate would likely be reduced by 50% or more. This would significantly reduce gov costs of unemployment, greatly increase real production within the US and create the demand for that increased production.

And there may be some merit to your suggestions, but they ignore the thesis of this thread topic.

[road kill]

So....do any of you have an answer to the OP's question?
9 pages....no answer?

I am just not sure why 10% of the population should pay 90% of the taxes.

(not an exact number, but it gets thrown around a lot)

I kind of like how Florida does it...........


stan b

No, sorry, we can't waste time answering the OP's question.

There is bandwidth to be consumed.......


RK