Taxes: putting it in perspective

[IG.]

As the tax season is coming, I thought how to better visualize the amount of individual income taxes the US government is collecting. So, I figured I'll simply divide what I project to be around $1.5 trillion in individual taxes for 2014 tax year by the US population of about 320 million. The result is about $4,500 per person - including all, from newborns to those who are 120-year-old. Roughly half the people are working, so it would be around $9,000 for every working person.

The number seems pretty high. However, it looks absolutely ridiculous when compared to the median income of.... about $27,000/person. So, on average an employed person has to give up 1/3 of earnings just for federal taxes. Just crazy! Oh, it gets better - it's growing: $1.4 trillion for prior year, and about $1.3 trillion the year before that. And that doesn't include state/local taxes, sales tax, etc.

The reason I started all these calculations... I thought what if everyone simply pays equal amount of taxes, and we will be done with it. I naively thought that if we divide the taxes among all people, the per person amount would be minuscule. Boy, was I wrong!

 

[mysql]

I pay anywhere from 12% to 20% income tax, depending on what I did during the year.

 

[IG.]

We should start a petition that riding a motorcycle is an absolutely needed therapy, and thus all associated expenses should be tax deductible.

 

[RedBusarider]

Problem. The illegals NEVER pay taxes. But they take advantage of every benefit they can get even while being here illegally.

 

[TallTom]

I see nothing wrong with the idea of a flat tax rate. 10% for the person that makes $2M a year is just as painful as 10% for the person that makes 20K a year.

Something has gone drastically wrong when GE Corp. pays less taxes than I do.

 

[Blrry]

Sounds terrible when you pull numbers out of your butt.... "The income of the median U.S. household was $51,900 in 2013" according to the Census Bureau (nobody calculates it per person), but if you throw in 2.63 persons per household (per same Census Bureau) then the median income is roughly $19,300 per person. Are the rest of your numbers as far off as your median income guess was? (hint: they are)

When you do math and you have garbage in, you get garbage out, and your argument is founded on crapola. Waste of pixels.

 

[dadofthree]

You don't want to know what I'm paying this year, but on top of all that add in what you pay everytime you pump a gallon of gas

 

[mysql]

I see nothing wrong with the idea of a flat tax rate. 10% for the person that makes $2M a year is just as painful as 10% for the person that makes 20K a year.

Something has gone drastically wrong when GE Corp. pays less taxes than I do.

The argument against that is that while you might be right on face value, % wise, a loaf of bread or toilet paper will cost a poor person a significantly larger share of their take home income.

The real problem I have is that there are so many loopholes. The richer you are, the more of them there are to take advantage of.

 

[skydivr]

The argument against that is that while you might be right on face value, % wise, a loaf of bread or toilet paper will cost a poor person a significantly larger share of their take home income.

The real problem I have is that there are so many loopholes. The richer you are, the more of them there are to take advantage of.

The only people who can afford the attorney's to find you 'loopholes' are those with annual incomes in the 7 figure range...

 

[wiesjon]

If everyone were to pay a flat tax or sales tax on every item they purchased there would be no way to cheat on your taxes except to stop consuming. It would be impossible for drug dealers, politicians, millionaire oil men, movie stars, etc. to avoid paying taxes unless they wanted the dollar number only in the bank. There would be no reason to have a lot of dollars unless you spent them. Poor people through billionaires would not escape taxes. That is the only sure way to prevent tax cheats and loopholes. The other great thing is that there would be 0 need for tax returns. You pay your tax when you consume. There goes turbo tax, CPAs, and the myriad agencies bent on tax collection. Just have to determine what the fair tax percentage would be. Poor people would pay less tax, rich people more tax - no loop holes period.

 

[TallTom]

I am not for penalizing someone because they are rich. It would be a de-incentive for anyone to become rich. Flat tax, everyone takes the same load.

 

[mysql]

You guys are missing out on the fact that most taxes are paid by the top earners. To make it work with a flat tax, you'd be hitting those who cannot afford it on the bottom of the scale. That gives them even less reason to work, and we'd end up with even more people on the bottom to support.

Personally, I don't think the government needs to tax anyone at all. They already print money. Don't tax anyone at all, just keep printing money and dilute our share instead of printing money, taxing the company, taxing the individual, and taxing each sale.

PS: I like the flat tax in theory, but the reality of it is that it isn't going to be feasible.

 

[IG.]

Sounds terrible when you pull numbers out of your butt.... "The income of the median U.S. household was $51,900 in 2013" according to the Census Bureau (nobody calculates it per person), but if you throw in 2.63 persons per household (per same Census Bureau) then the median income is roughly $19,300 per person. Are the rest of your numbers as far off as your median income guess was? (hint: they are)

When you do math and you have garbage in, you get garbage out, and your argument is founded on crapola. Waste of pixels.

Blrry, I won't make sarcastic remarks while using your screen name and playing on double meaning. I will simply say that I looked it up and simply copied. I didn't do any calculations.

How much do Americans earn? What is the average US income and other income figures. Fiscal cliff talks only useful in context of incomes.

Look for this phrase: "The median wage in the US per person is $26,695."

 

[IG.]

If everyone were to pay a flat tax or sales tax on every item they purchased there would be no way to cheat on your taxes except to stop consuming. It would be impossible for drug dealers, politicians, millionaire oil men, movie stars, etc. to avoid paying taxes unless they wanted the dollar number only in the bank. There would be no reason to have a lot of dollars unless you spent them. Poor people through billionaires would not escape taxes. That is the only sure way to prevent tax cheats and loopholes. The other great thing is that there would be 0 need for tax returns. You pay your tax when you consume. There goes turbo tax, CPAs, and the myriad agencies bent on tax collection. Just have to determine what the fair tax percentage would be. Poor people would pay less tax, rich people more tax - no loop holes period.

You have a good point, and this approach seems to be fair. However, I see a big problem related to human psychology: such approach would discourage consumer spending, promote cash transaction, and cheating.

The real problem is the 800 lb gorilla in the room - US government takes away too much. It's unreasonable. That is why no matter how tax system changes, it will only get worse.

 

[VIPER]

only problem i see with the article is its way out of date. There is no cure for the irs and taxes other then removal.

 

[Blrry]

Apparently, my quoting of the Census bureau wasn't nearly as accurate as "mybudget360" is in IG's mind. But, he's so damned right, in spite of what real numbers have to say about anything. I should take a quote written in 2012 as accurate, not actual numbers reported by the census... Garbage ig, garbage out. Double entendre that!:stoopid:

 

[IG.]

Let's see if you can do the math Blrry. Get the total $$ amount of taxes paid by individuals and divide by the number of working individuals. Let's see if you can do that.

Per household numbers are less of an illustration because a single person is considered a household, and a family of 4 is considered a household.

The point of the post was to illustrate the amount of taxes we all pay. Your nit picking is a waste of time, especially if you cannot provide your own number, nor can you point what is wrong with the calculation in the article I used besides being for 2012 year (it's only worse in 2015). You don't see the forest, but stuck on one tree, so to speak.

 

[orenp]

Ahh the old arguing technique (notice I didn't say "debating" or "discussion") -- don't address the issue -- attack the presenter and the details. No one can in good faith argue the point that government spending at all levels - Federal, State, County, City, etc. isn't WAY TOO HIGH. If anyone ran their business the way the Feds do they would be bankrupt (and probably in jail) in a very short time. Our current levels of spending are unsustainable under any taxation method. And whatever statistics you choose to use it's clear that the government is taking too much of everyone's hard earned income -- so much so that they are dragging down nearly everyone's (at least those that I know) lifestyle a notch or three.
So the point is let's not argue about the details on just how much the government is taking - it's too much, ok - and instead we need to focus on why we continue to agree, as a nation, to spend more than we have, resulting in unsustainable levels of borrowing and taxation. It's really a simple problem; we (as a nation - not us here) just don't want to go through the turmoil and national hand wringing of solving the problem. And, there a lot of folks (Obama word ) out there with a vested interest in not solving the problem (read: high level government employees and politicians). So they're absolutely gonna block any and all attempts at solution .

 

[02spool]

Stop making sense orenp ,What's your point ,enlightenment?..as if that will work....carry on.

 

[IG.]

orenp, you are absolutely right! Look for a viable solution in my signature.