Ok, I really don't want to appear stupid or anything.... LOL But I have asked this question to friends and family members and I have never really gotten an answer that makes me think it is right!! It is in reguards to taxes. My question is, why does everyone think that the upper class in America should pay more taxes??? I have never understood this. To me, the fair way to do it is lets say that everyone needs to pay 10 percent on their income.... point blank, that is they way is should be!! But the upper class has a higher tax bracket just because they make more money??? Why is that right??? When you go into a store, they don't ask your income and then decide how much you should pay for a loaf of bread... you don't pay more for anything based on your income other than taxes! Why is that??? Why is that fair?? There is always this talk about how tax cuts affect on the upper class (which I don't agree with) but they are paying more to begin with!!!! Trust me, I am not in that upper class...LOL But I still don't think it is fair. Can anyone explain to my why it is fair??

By Colette on Monday, October 11, 2004 - 09:35 am:

I agree. I think there should be a flat tax across the board.

By Juli4 on Monday, October 11, 2004 - 10:16 am:

i think it should be flat also, but know that will never happen. I think that people really like to hear that the rich are taxed and almost resent the fact they are rich and want to "stick it to them". I think some people think that if one person is rich it must be because he took it from someone else but that is not true. the rich pay 60% of the taxes as it is.

By Kaye on Monday, October 11, 2004 - 02:00 pm:

Well you have to keep in mind that although the tax bracket goes up, the more money you make the smarter you are with your finances. It's called creative accounting. Working class people, tend to give little to charities and have less tax breaks. But if you make millions you certainly don't pay taxes on that. For example if you make 70k, by time you have your deductions you are only paying taxes on closer to 30. But if you make 500k you are probably only paying taxes on 160, so still way less than half. If we went to a flat tax I think we would have to do away with alot of tax breaks.

By Cybermommyx4 on Monday, October 11, 2004 - 02:24 pm:

Well...
This is the way I see it. It may not be "fair" and the example may be a bit oversimplified, but I think this is why...

If you make $100 per week and you need to feed your family, then cutting that down to $90 (the "flat" 10%) would REALLY make it MORE difficult for you to feed your family.

If you make $2000 per week, but pay 20% in taxes (twice as much, percentage-wise, as the guy that only makes $100 per week), that still leaves you with $1600 to feed your family. Doesn't seem like it would "sting" as much...

I know that there is a lot more to it than that, but I think it's the basic idea behind tax brackets. Just like a sliding fee scale,etc. Those who really can't afford to pay are subsidized by those who can afford to pay a little more. I know there are many who take advantage of this in society, but the ones mostly affected are the children. Children have no control over whether they are born into a poor family or a wealthy family, but they are all entitled to the same level of care.

By Emily7 on Monday, October 11, 2004 - 02:35 pm:

I think the thing I do not understand the most is the marriage penalty. Can anyone explain that to me???

By Vicki on Monday, October 11, 2004 - 02:58 pm:

Well, just because it wouldn't "sting" as much doesn't make it right!! And as far as the creative financing and giving to charities... if the rich people are the ones that mostly give to the charities, than don't you think taking away the tax benefit to it would reduce the amount they might give? That in turn would hurt the very lowest of the low income that get all the benefits of them giving in the first place! LOL The whole thing just doesn't make sense to me. I don't see why just because you go out and make a great living, your fair share is higher than the people who are in the lower or middle class!! To me, fair share should be fair share!! And I don't understand the marriage penalty either, so I can't help you there!! LOL

By Ginny~moderator on Monday, October 11, 2004 - 06:24 pm:

Kaye and Wendy are right, there is a certain level of "social engineering" built into our tax system, on the theory that people with really large incomes have more disposable income left after taxes even at a higher tax rate, and are therefore not "hurt" as much. The theory behind what is called the marriage tax is that when two people live together certain expenses are reduced (housing and utilities and real estate taxes being examples), so unless they file "married filing separately", their combined incomes put them in a higher tax bracket. Of course, if they file "married filing separately" only one of them can take the mortgage interest and real estate tax deductions, and I think before the recent changes in the tax structure they still paid more in taxes than if they were single and "living together".

The creative financing is a different thing - it includes tax shelters, the fact that the capital gains tax is lower than the income tax rate, having enough income to shelter some of it in ways that it is not taxed or taxed at a lower rate, like buying municipal bonds which, I think (but don't know for sure) produce income which is not taxable at the federal level.

As to whether rich people are the ones who give most to charities, I don't know any statistics on that.

Part of the theory behind having higher tax rates for higher income levels is simply that they are still left with a whole lot of money and hurt less; part of it is that one of the reasons they are wealthy is they benefit from living in a country and system which made it possible for them to become wealthy.

I will try to find a chart which compares income taxes in the US with that of other industrialized nations. My memory is that we pay significantly less than in most industrialized nations. One chart I found compares Japan, the United Kingdom (England, etc.), France and Germany, and we definitely pay less

http://www5.cao.go.jp/zenbun/wp-e/wp-je02/wp-je02-2-1-11z.html

By Cocoabutter on Monday, October 11, 2004 - 10:06 pm:

I agree with Ginny (! ) and I would like to add that the disposable income that the rich are left with eventually makes it's way into the economy as well, whether in the form of investing or spending.


This is an explanation that I found on the internet and saved on my computer a long time ago. It explains how tax cuts work and why the rich pay more and therefore, when given tax cuts it seems, are given a bigger break. I thought it might shed some light.


The Truth about Taxes
by Anonymous

Let's put tax cuts in more simple terms.

Suppose that every day, ten men go out for dinner.

The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men-the poorest-would pay nothing;
The fifth would pay $1:
The sixth would pay $3;
The seventh $7;
The eighth $12;
The ninth $18.

The tenth man-the richest-would pay $59.

That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement-until one day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20."

So now dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes.

So the first four men were unaffected. They would still eat for free. But what about the other six-the paying customers?

How could they divvy up the $20 windfall so that everyone would get his "fair share?"

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would end up being *paid* to eat their meal.

So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man paid nothing,
the sixth pitched in $2,
the seventh paid $5,
the eighth paid $9,
the ninth paid $12,
leaving the tenth man with a bill of $52 instead of his earlier $59.

Each of the six was better off than before. And the first four continued to eat for free.

But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man.

He pointed to the tenth. "But he got $7!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got seven times more than me!"

"That's true!" shouted the seventh man.

"Why should he get $7 back when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short!

And that, boys and girls, is how the tax system works.

The people who pay the highest taxes get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just might not show up at the table anymore.

By Imamommyx4 on Tuesday, October 12, 2004 - 12:36 am:

I'll add my own gripe to this one. I'm a pharmacist. A few years ago in Tennessee the state legislators decided that certain professions, all of which had some sort of education, should pay a Professional Privilege Tax. Just an arbitrary tax placed on certain people with an education. Yes I may make a little more than your average joe. But at the time this new tax went in to effect, I had 3 teenage sons at home and my dh was not working and in college. I really didn't have an extra $500 to pay this little privilege tax in addition to my license renewal fee and malpractice insurance. Doctors, pharmacists, engineers, architects to name a few were on this list. Nurses weren't because they had lobbyists that yelled loud. It's annoying but what do you do?

By Ginny~moderator on Tuesday, October 12, 2004 - 05:51 am:

I think business "privilege" or professional "privilege" taxes are iniquitious, particularly as most of the professions are already required to pay licensing fees. You are right, Debbie, the organizations with the largest lobbies don't get hit with them. Though I'm surprised doctors didn't manage to slip out of it.

Philadelphia has something called a "business privilege" tax, and every business in the city pays a tax based on it's income, without regard to its expenses or whether it actually makes a profit. As bad as taxes are in Philadelphia (and they are considered fairly bad), I think this is the worst.

Taxes of this nature are a legislating body's method (whether federal, state or local) of raising revenue without upsetting the majority of the voters, and I personally consider them a form of dishonesty on the part of the legislating body. An income tax is, to my mind, far fairer.

By Ginny~moderator on Tuesday, October 12, 2004 - 06:20 am:

Don't forget, by the way, that all wage earners pay Social Security tax, which is 6.2% of income up to $87,900 - earn more than $87,900 and you don't pay SS tax on income over that amount. So when you say the current income tax rate for the lowest earners is 10%, remember that they are paying an additional 6.2% on top of that. But the person who is paid $250,000 a year only pays 2.2% of that income in SS tax. Where is the fairness in that?

By Kaye on Tuesday, October 12, 2004 - 09:36 am:

I think the fairness in ss ends up in the receiving part. I am not entirely sure, but I don't think you draw out proportionatly to SS what you put in, I think there is a cap, so my grandmother who put in next to nothing for ss gets 1200 a month, but someone who maxed out only gets like 2400. Of course then there are all the lovely tx teachers, my dad is maxed out via the military, but was a teacher in the end and he get 0 ss, because of our stupid law! Defeat Delay!