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Thread: Income tax: Ever calculated how wealthy you'd be without it?

  1. #61
    Member Zippyjuan's Avatar
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    It's my understanding that it's more like 20% that goes toward servicing the interest on the national debt. From the GPO (.PDF file):

    According to Obama (from that same report, emphasis mine):






    Originally Posted by President Obama

    That is why, working with the Congress, we will establish a bipartisan fiscal commission charged with identifying additional policies to put our country on a fiscally sustainable path—balancing the Budget, excluding interest payments on the debt, by 2015.
    Why do you suppose that President Obama explicitly excluded interest on the debt as a budget consideration? Is it because "deficits don't matter", or could it be that it's just too staggering to even think about?
    I cannot speak for the president but perhaps he said excluding interest on the debt because that is the only part of the budget you cannot negotiate on or cut (aside from paying off the debt or adding to it). As a percent of the budget, interest on the debt is not 20%. Using the figures you provided which show $343 billion in interest for the 2012 fiscal year, that is out of a budget of nearly $3.8 trillion http://en.wikipedia.org/wiki/2012_Un...federal_budget or under ten percent (closer to nine). BUt you are correct that the amount will continue to go up unless the debt goes down and in all likelyhood the interest rates on the debt will rise in the future from their current historic lows so the percent of the budget eaten up by the debt will get bigger and bigger in the future.

    As for his quote- I don't see even the remotest chance of a balanced budget by 2013 in the first place. The required cuts and tax increases (you can't do it simply via one or the other though mathematically you could via tax increases alone- that would mean doubling the income tax and if only by cuts you would have to get rid of the equivelent of everything outside Social Security/ Medicare, and interest on the debt) necessary to achive that are too great.
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  3. #62

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    Quote Originally Posted by Nickels View Post
    Wouldn't more people be investing, and therefore decrease the return on investment profits?

    What?! You just had to make me laugh tonight.
    Quiz: Test Your "Income" Tax IQ!

    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of apportionment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  4. #63

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    Quote Originally Posted by Nickels View Post
    How about printed money? Which is not a cost to you, other than by inflation.
    OMG. Seriously?
    Quiz: Test Your "Income" Tax IQ!

    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of apportionment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  5. #64

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    Quote Originally Posted by Danke View Post
    What?! You just had to make me laugh tonight.
    Think about it a little. Name a business to invest in, oil? Food production? Electricity generating?

    What happens when more money is put into oil production? You either make oil more expensive, or find more oil. Either way, the investor will make less money if more people are investing in it. If you put more money into growing rice, you'll either waste in on costs and make rice more expensive, or get more rice, and each grain of rice will be worth less.

    You're probably thinking stocks, where more people buying the same thing leads to it appreciating, but that stops as soon as somebody decides to sell, and then it goes downward, every investor wants to make his money back.

  6. #65

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    Quote Originally Posted by Nickels View Post
    Think about it a little. Name a business to invest in, oil? Food production? Electricity generating?

    What happens when more money is put into oil production? You either make oil more expensive, or find more oil. Either way, the investor will make less money if more people are investing in it. If you put more money into growing rice, you'll either waste in on costs and make rice more expensive, or get more rice, and each grain of rice will be worth less.

    You're probably thinking stocks, where more people buying the same thing leads to it appreciating, but that stops as soon as somebody decides to sell, and then it goes downward, every investor wants to make his money back.
    Money follows productive industries. The ones that give the greatest gains for said investment or security on return. Speculators bet, some lose, some win.
    Last edited by Danke; 08-09-2012 at 08:14 PM.
    Quiz: Test Your "Income" Tax IQ!

    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of apportionment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  7. #66

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    Quote Originally Posted by Danke View Post
    Money follows productive industries. The ones that give the greatest gains for said investment or security on return. Speculators bet, some lose, some win.
    do you define productivity by profitability and demand?

  8. #67

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    Quote Originally Posted by Nickels View Post
    do you define productivity by profitability and demand?
    I don't think it matters what my definition of may or may not be. People should be able to keep the fruits of their labor, outside of government confiscation. And that compensation should be free of government intervention.
    Quiz: Test Your "Income" Tax IQ!

    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of apportionment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  9. #68

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    Quote Originally Posted by Danke View Post
    I don't think it matters what my definition of may or may not be. People should be able to keep the fruits of their labor, outside of government confiscation. And that compensation should be free of government intervention.
    and isn't the fruits of their labor, at least the price of compensation, even with intervention, still market determined?

    If you worked for $100 an hour and were taxed 30%, you net $70.
    Would you take the same job if I said I paid $70 and guaranteed tax free?
    Would you care how much leaves your employer's pocket, as long as there's always enough for your labor?

  10. #69

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    Quote Originally Posted by Zippyjuan View Post
    I cannot speak for the president but perhaps he said excluding interest on the debt because that is the only part of the budget you cannot negotiate on or cut (aside from paying off the debt or adding to it).
    ^^^ This - the part I put in bold. The principle debt cannot, and will not EVER be paid down, let alone paid off. Our genius economist from the left, the great, grand and nobel-exalted Paul Krugman explains why, in his view:

    Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

    This is, however, a really bad analogy in at least two ways.

    First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

    Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.
    See that? Governments don't have pay back their debt. Just debase the currency with a full expectation of a growing economy, and that will render the debt small or irrelevant in comparison to the quantity and diluted value of the debauched currency.

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    Quote Originally Posted by EcoWarrier View Post
    100% correct. Do not tax production by abolishing income, sales and property taxes. Use commonly created wealth to fund common services. Geonomics does that.
    What is commonly funded wealth ? I must have missed that in life, I have no commonly funded wealth , I have a little bit that I was able to retain , of my earnings after all the theft ....

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    Quote Originally Posted by Kluge View Post
    Who are they paid by? Magic fairies? I didn't realize that legitimate hypotheses involved the existence of bins of gold at the end of rainbows. I'm going to have to go with bxm042--I think you're being intentionally ridiculous and perhaps trolling.
    I am opposed to all Magic Fairies who steal from me and in my old age , becoming less patient , probably make magic fairie sandwiches in the future ....

  13. #72

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    Here are a few aspects little considered as to the whole underpinning scheme surrounding the federal income tax:

    Breaking down your lifelong loss:
    http://www.iwarrior.defendindependen...p?p=1068#p1068

    Additional loss realized through stoppage at the source (W-4 Withholding):
    http://www.iwarrior.defendindependen...p?p=1152#p1152

    Quote Originally Posted by Winston Churchill
    “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
    Sic Semper Tyrannis ~ Consilio et Animis

  14. #73
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    When you include deductions, the average tax rate a person making $50k a year (you used $52k in your example- this is pretty close), that person is actualy paying closer to five percent in income taxes or $2,600 ($50 a week).

    http://www.usatoday.com/money/perfi/...ate/52682372/1
    The effective tax rate, meanwhile, is the amount a taxpayer pays in taxes as a percentage of total income. The average effective federal tax rate for American taxpayers is 11%, according to an analysis of 2009 IRS data by the Tax Foundation, a non-profit research organization. For individuals with adjusted gross income of $50,000 or less, the average effective tax rate is less than 5%, according to the Tax Foundation.

    That rate doesn't include the amount taxpayers pay in Social Security and Medicare taxes.

    Confusion about the difference between marginal and effective tax rates often causes taxpayers to overestimate their tax liabilities,
    The marginal tax rate (the rate listed in tax bracket rate lists) is not applied to every dollar you earn which brings the average rate on your entire income lower.

    Adding in your FICA figure of $3,978.00, that comes to $6578 a year- less than half of the $14,768.00 you came up with in your article.
    Last edited by Zippyjuan; 08-10-2012 at 12:11 AM.
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  15. #74

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    Quote Originally Posted by Zippyjuan View Post
    When you include deductions, the average tax rate a person making $50k a year (you used $52k in your example- this is pretty close), that person is actualy paying closer to five percent in income taxes or $2,600 ($50 a week).

    http://www.usatoday.com/money/perfi/...ate/52682372/1


    The marginal tax rate (the rate listed in tax bracket rate lists) is not applied to every dollar you earn which brings the average rate on your entire income lower.

    Adding in your FICA figure of $3,978.00, that comes to $6578 a year- less than half of the $14,768.00 you came up with in your article.
    In other words, less than 13%. Let's hear what this guy says next, what's 13% going to buy him?

  16. #75

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    Quote Originally Posted by Weston White View Post
    Here are a few aspects little considered as to the whole underpinning scheme surrounding the federal income tax:

    Additional loss realized through stoppage at the source (W-4 Withholding):
    http://www.iwarrior.defendindependen...p?p=1152#p1152
    why use 4%? Where do you get a 4% guaranteed return? But forget that, so you came up with an impressive $30K after 40 years. Congratulations, you get a new car after 40 years. Or do you? Will the car cost the same if you had an extra $30K?

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    Who was buying cars ? I was buying silver at $5 an ounce .

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    Too many variables. I would like to think this place would not focus so much on the money.

    Overall it would even out, but how many more could home school? Not have to have a second income? Be able to take their time finding a job that suits then rather than accepting whatever? Would a small business hire an extra worker? Would people go with a shorter workweek?
    May the wings of liberty never lose a feather.

  19. #78

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    Quote Originally Posted by MelissaWV View Post
    Too many variables. I would like to think this place would not focus so much on the money.

    Overall it would even out, but how many more could home school? Not have to have a second income? Be able to take their time finding a job that suits then rather than accepting whatever? Would a small business hire an extra worker? Would people go with a shorter workweek?
    How do you even get to all that without questioning how much money the government takes from you?
    Well, I got Rand started on his campaign (just search around here to see). I advised Thomas Massie before he ran for Congress. I am currently advising 2 liberty campaigns for the state legislature. I ran the war-room and won Minnesota for Ron Paul a few weeks back. There are other things I'm probably forgetting.
    Yet I can't afford $200 to go to a seminar--Matt Collins

  20. #79
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    Quote Originally Posted by Kluge View Post
    How do you even get to all that without questioning how much money the government takes from you?
    The hypothetical assumes money was never taken and that we have a higher income, or maybe I am reading it wrong.

    If you suddenly got the money back in one fell swoop it'd be different.

    I am generalizing, but personally if there were no income tax I would not be making oodles more money. I write "exempt" at my steady job, and most of my deductions help offset what I supposedly "owe." There's no state income tax to worry about. What would I do with it? Not much. Especially if it was just over time, rather than one giant windfall. The truth is that if people's paychecks all increased by the amount they were paying in Federal taxes, most folks would just amplify their current habits.
    May the wings of liberty never lose a feather.

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    My Mrs. is going to retire in Feb, work part time and continue to expand her home business , I am going to work another 14 years , I imagine, it took , us collectively , around , nearly 80 years of work to get here , would have been a hell of alot easier not just working with half our earnings ( after all taxes ) , but much more .

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    In answer to the original question , I would easily have accumulated enough wealth to not work my regular job anymore , which , dang sure would have been nice !

  23. #82
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    The catch is that people seem to be assuming that they would be doing something different with their money than they currently do. If you never had to pay income taxes you would be allocating your money in the same percentges as you currently do- buying things, saving, investing. If you haven't saved a ton of money already, you would not have saved a ton more if you never paid any taxes (and again, about half of all income tax filers don't pay any income tax already anyways. Unless your income level is very high, you woldn't have earned much money than you have already. Unless, as Melissa points out, you were given back all of the income tax dollars you have already paid on one fell swoop. Then and only then would you have much more of anything than you currently do.
    I am Zippy and I approve of this message. But you don't have to.

  24. #83

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    Have you ever calculated how wealthy you would be without federal deficit spending?
    Stop the Looting and Start Prosecuting! Gold plated Tungsten IS Money!
    We Must Dissent A colher não existe.
    A government is just a body of people, notably, usually, ungoverned.

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    Quote Originally Posted by idiom View Post
    Have you ever calculated how wealthy you would be without federal deficit spending?
    Think about oil , then gas prices ...

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    It's not really about how wealthy you'd be.

    It's about how much smaller Government would be.
    May the wings of liberty never lose a feather.

  27. #86

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    If you - a $12 hour earner today - take your payroll tax of 7.65% and invest it each month at 20 until age 70 or about $160 a month, you will retire with over $5 million assuming a 10% yearly gain which is doable over 50 years. That number occurs without you increasing that $160 and even with the ups and down of the market. If you only get half the return, it's still not a bad number to retire on. But the later you start investing in life the harder it becomes to make a sufficient amount to retire.

    So in general, yes, I would be wealthy. I would also own the asset unlike now with SS. If you make it to that age, you get thrown on a fixed income that doesn't even pay the basic bills. And if you die before retirement, the govt simply says sorry about your luck. Isn't it Pesoli wonderful?

    Side Note: I don't have kids or any mortgage deduction so the income tax definitely hurts me because I actually pay it and never receive a refund or welfare check like most families with kids.
    Be responsible. Take care of yourself. Don't tread on other people. Slow down. Question everything. Start now.

    We are all born libertarians then something goes really wrong. Despite this truth, most people are still libertarians yet not know it.

  28. #87

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    Quote Originally Posted by Liberty74 View Post
    If you - a $12 hour earner today - take your payroll tax of 7.65% and invest it each month at 20 until age 70 or about $160 a month, you will retire with over $5 million assuming a 10% yearly gain which is doable over 50 years. That number occurs without you increasing that $160 and even with the ups and down of the market. If you only get half the return, it's still not a bad number to retire on. But the later you start investing in life the harder it becomes to make a sufficient amount to retire.

    So in general, yes, I would be wealthy. I would also own the asset unlike now with SS. If you make it to that age, you get thrown on a fixed income that doesn't even pay the basic bills. And if you die before retirement, the govt simply says sorry about your luck. Isn't it Pesoli wonderful?

    Side Note: I don't have kids or any mortgage deduction so the income tax definitely hurts me because I actually pay it and never receive a refund or welfare check like most families with kids.
    That's the sort of information I was interested in. Thanks.
    Well, I got Rand started on his campaign (just search around here to see). I advised Thomas Massie before he ran for Congress. I am currently advising 2 liberty campaigns for the state legislature. I ran the war-room and won Minnesota for Ron Paul a few weeks back. There are other things I'm probably forgetting.
    Yet I can't afford $200 to go to a seminar--Matt Collins

  29. #88

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    Quote Originally Posted by Nickels View Post
    why use 4%? Where do you get a 4% guaranteed return? But forget that, so you came up with an impressive $30K after 40 years. Congratulations, you get a new car after 40 years. Or do you? Will the car cost the same if you had an extra $30K?
    Personally, I am done with your idiotic posts and until further notice, I will no longer be responding to them. Please, do yourself a favor and use your brain-power to think on your own, at least give it a go every now and then.


    And to Zippy, deductions, exemptions, credits, etc., are entirely another issue all on their own, varying entirely from one person onto the next. Deductions and the like, are designated really to serve as candy for the babes, thereby propagating the whole of the income tax scheme as its sort of virtual enabler.

    Those sums were intended to serve as a basic example of what really is; however for a bit more clarification: Filing as single for TY-2011 while earning $52,000-$9,500=$42,500; for which the taxable portion is $6,756, equaling 12.99% of the originating $52,000. Clearly, a bit larger than the above mentioned 5%.

    Quote Originally Posted by Winston Churchill
    “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
    Sic Semper Tyrannis ~ Consilio et Animis

  30. #89

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    The biggest cost to the individual of the income tax isn't the nominal amount that individuals pay for the tax. It's the problems associated with compliance, the invasion of privacy, the fact that it rewards cheats like Romney, the fact that despite claims to the contrary it is massively regressive, rewarding the wealthy and penalizing the middle class.

  31. #90
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    Quote Originally Posted by Weston White View Post
    Personally, I am done with your idiotic posts and until further notice, I will no longer be responding to them. Please, do yourself a favor and use your brain-power to think on your own, at least give it a go every now and then.


    And to Zippy, deductions, exemptions, credits, etc., are entirely another issue all on their own, varying entirely from one person onto the next. Deductions and the like, are designated really to serve as candy for the babes, thereby propagating the whole of the income tax scheme as its sort of virtual enabler.

    Those sums were intended to serve as a basic example of what really is; however for a bit more clarification: Filing as single for TY-2011 while earning $52,000-$9,500=$42,500; for which the taxable portion is $6,756, equaling 12.99% of the originating $52,000. Clearly, a bit larger than the above mentioned 5%.
    The average tax rate is critical since that determines just what you are really paying in income taxes - and thus would have if the income tax did not exist. Let's try a tax calculator- I used this one here- http://www.calcxml.com/calculators/f...kn=#calcoutput and used only the standard deduction. For a family of two filing jointly, the estimated tax liability came out to be $$4,005 or 7.7%. For single, one exemption it came back with $6,592 or yes, over 12%. $52,000 is above the figure posted for incomes of "below $50,000". For income levels of $50,000 to $74,000 it indicates an average tax rate of 7%. Our 12% assumes no deductions taken so that would be the maximum paid by somebody in that bracket- others will have more dedictions reducing the average.

    If you - a $12 hour earner today - take your payroll tax of 7.65% and invest it each month at 20 until age 70 or about $160 a month, you will retire with over $5 million assuming a 10% yearly gain which is doable over 50 years. That number occurs without you increasing that $160 and even with the ups and down of the market. If you only get half the return, it's still not a bad number to retire on. But the later you start investing in life the harder it becomes to make a sufficient amount to retire.

    So in general, yes, I would be wealthy. I would also own the asset unlike now with SS. If you make it to that age, you get thrown on a fixed income that doesn't even pay the basic bills. And if you die before retirement, the govt simply says sorry about your luck. Isn't it Pesoli wonderful?
    So are you investing at that rate? (that percent of your income every month- I highly doubt you can find something consistantly yielding 10% for an investment though).
    I am Zippy and I approve of this message. But you don't have to.

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