hobbsyoyo
Deity
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You want to talk about fronts? How about the front your side puts up whenever the CBO produces a score you don't like? Bring out the SAD Fake News flak cannons. Bigly.
[RD] Getting SALTy
- Thread starter BvBPL
- Start date
I was not talking about the income tax. Plus, if you want to offset FICA with credits, then you have to consider increasing tax liability through embedded taxes - such as a renter who is actually paying the property taxes. You would also have to net out government benefits (roads, military protection, corporate subsidies) which makes virtually all of us net negative tax payers given the deficit.
onejayhawk
Afflicted with reason
Thank you. It's nice to have the point acknowledged.
If you want to bring in state and local taxes, why not start with the obvious--sales tax.
J
onejayhawk
Afflicted with reason
Why is regressive relevant? JR is arguing that everyone pays taxes and sales taxes are the most obvious. Not everyone pays federal taxes, not even when you count FICA.
J
metalhead
Angry Bartender
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FICA is an income tax
Can you show your work on "some do not even pay FICA after credits?"
civvver
Deity
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He's trying to say some people get so much back in credits it's more than they pay in fica, but it's probably a teeny tiny amount of people that actually get that. Like you'd have kids and max the EIC and get child tax credit and make very little as well like minimum wage.
Fica is an extremely regressive tax in my opinion but it stands that way because it's technically insurance premiums for a fixed benefit amount, that's why everyone pays it and it phases out. People argue it's not regressive because those who make less income supposedly receive more in benefits on the other end. At the end of the day though social security is hardly merit based, it's really like basic income for people over a certain age. Thus is should just be like regular taxes, maybe everyone should pay it starting from $1 but I don't believe it should be capped on earnings on the other end. You could fix a ton of social security solvency issues by just raising that threshold but congress will never go for it as it would be a gigantic tax increase on rich people.
Regarding the senate tax plan it seems like a bum deal for the middle class. I expect my taxes to go down a few hundred bucks, hardly anything but it's better than nothing I suppose. If it were up to me, well my full tax plan would be a much bigger overhaul including raising the cap on income taxed by fica, not taxing long or short term capital gains at all on the first 10k or so to encourage middle class people to invest outside of their 401ks, increasing child tax credits, but mostly I'd just leave current deductions and brackets alone and just change the percentages. Make the 10% bracket 7% and the 15% bracket 13%. Everyone who makes over ~47000 single (the top of the 15% bracket for single filers taking standard deduction plus one exemption) or ~90000 married would get the exact same tax break, around 900 for a single filer, around 1800 for a joint filer. People at the bottom would still get relief though it'd be much less of course cus it's still percentages but this would greatly benefit the middle class as those in the middle of that bracket would see the biggest percentage gains.
If your goal is to give the lower and middle classes a tax break without just giving away a $500 credit to every person like we got from bush that one year, it seems like an obvious solution to me to simply reduce the percentages in the lower brackets, but clearly this doesn't benefit rich people enough so it will never happen.
Fica is an extremely regressive tax in my opinion but it stands that way because it's technically insurance premiums for a fixed benefit amount, that's why everyone pays it and it phases out. People argue it's not regressive because those who make less income supposedly receive more in benefits on the other end. At the end of the day though social security is hardly merit based, it's really like basic income for people over a certain age. Thus is should just be like regular taxes, maybe everyone should pay it starting from $1 but I don't believe it should be capped on earnings on the other end. You could fix a ton of social security solvency issues by just raising that threshold but congress will never go for it as it would be a gigantic tax increase on rich people.
Regarding the senate tax plan it seems like a bum deal for the middle class. I expect my taxes to go down a few hundred bucks, hardly anything but it's better than nothing I suppose. If it were up to me, well my full tax plan would be a much bigger overhaul including raising the cap on income taxed by fica, not taxing long or short term capital gains at all on the first 10k or so to encourage middle class people to invest outside of their 401ks, increasing child tax credits, but mostly I'd just leave current deductions and brackets alone and just change the percentages. Make the 10% bracket 7% and the 15% bracket 13%. Everyone who makes over ~47000 single (the top of the 15% bracket for single filers taking standard deduction plus one exemption) or ~90000 married would get the exact same tax break, around 900 for a single filer, around 1800 for a joint filer. People at the bottom would still get relief though it'd be much less of course cus it's still percentages but this would greatly benefit the middle class as those in the middle of that bracket would see the biggest percentage gains.
If your goal is to give the lower and middle classes a tax break without just giving away a $500 credit to every person like we got from bush that one year, it seems like an obvious solution to me to simply reduce the percentages in the lower brackets, but clearly this doesn't benefit rich people enough so it will never happen.
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The corporate tax rate should be set based on how much payroll increased or decreased over the year.
metalhead
Angry Bartender
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I understand the theory of what he is saying. What I would like for him to do is actually provide the scenarios under which one receives more back in deductions and refundable tax credits than one pays in income and FICA taxes.
I believe the phrase that started this was "When only half the population pays any tax" . . . funny that "any" = "Federal Income"
Lexicus
Deity
Indeed. You would probably see a majority of the population in slightly net-negative figures (ie, pay a little bit to the government) while the richest Americans receive massive net payouts from the government.
Why does George Soros deserve my great-great grandkids' money?
civvver
Deity
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I mean it's pretty easy to dream up a scenario where this happens. Fica is ~9% so all you have to do is find a scenario where someone has 0 taxable income and credits over 9% of their gross pay. Like a single dad making 10k a year, gets a 1000 credit, no taxable income, fica payments would be about 900 so he nets $100.
People who work part time or not at all could potentially fit a scenario like this but I doubt it's very many people since this is very far below the poverty line.
BvBPL
Pour Decision Maker
As a back of the envelope calculation, a single person with three minor children earning $20,000 a year would have a federal tax liability of ~$3500 and an EIC of ~$5900. (That under the current tax code)
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onejayhawk
Afflicted with reason
That's correct. Zero or low income after standard deduction, but tax credits in excess of FICA payments. This is not a small group.
I have not run the figures to calculate the exact lines, but a single mother of three can make $18,000 and still get the maximum $6300 EIC. The standard deduction is $9350, call it half, and marginal rate is 10%. That makes Federal income tax of $900. Using a FICA calculator, we get $1300. So the federal tax of $2200 is far below the credit of $6300. This is well down in the poverty range, but not uncommon.
J
Not uncommon, but not half the adult population.
onejayhawk
Afflicted with reason
Thanks, for acknowledging the point. Half the adult population pays no FIT, as originally stated. Saying FICA is also income tax is a valid point, but a minor one and you have beaten it to death.
J
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Your original statement said ANY Taxes, not FIT. I do accept your retreat to FIT though. We need to figure out a way to get those retirees, veterans and single moms to pay up on FIT.
onejayhawk
Afflicted with reason
Propose a zero minimum FIT tax and see what happens. I guarantee it will score well with CBO.
Back to the tax bill, it's now out of committee and onto the floor. This is going to be close.
https://www.realclearpolitics.com/a..._reform_step_votes_to_open_debate_135651.html
J
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