OMB: Top 20% pay 95% of taxes, middle class 'single digits'

[Zippyjuan]

The second link show Ireland lower and it uses 2015 data. The chart you showed used 2014 data, so I went with the more recent data.

Thanks.

[Swordsmyth]

What items would you cut? Social Security and risk getting blamed for putting grannie out on the streets and making her eat catfood and losing your re-election? Medicare/ Medicaid? Again, making it tough on grannie (Ron Paul said he would not cut those but "honor commitments" to those who have qualified for benefits)? Maybe the Department of Defense? Gotta take care of those terrorists. Can't be soft on them. That would cost Republicans votes. They are big on defense. Leave those off and the maximum you can cut is about $500 billion in a $4 trillion budget.

We have had this discussion before, DOD is the prime target, $500B in a $4T budget is a significant fraction in and of itself, and there are lots of government departments that can be eliminated entirely, all the rest can be drastically cut by eliminating waste, fraud and abuse.

And don't allow any new enrollments on SS or medicare etc.

[TheTexan]

Just as I thought, that Fed study based that figure on total tax burden compared to national GDP, not on an individual level.

https://www.chicagofed.org/publicati.../2017/382#ftn7

An individual, or a family of four, pay over 50% of their income every year in combined taxation.

Sure, the effective tax rate is right at 50% for anyone earning a half decent living, but thats a small price to pay for roads, police, fire, and 4000 military bases around the world

[Zippyjuan]

We have had this discussion before, DOD is the prime target, $500B in a $4T budget is a significant fraction in and of itself, and there are lots of government departments that can be eliminated entirely, all the rest can be drastically cut by eliminating waste, fraud and abuse.

And don't allow any new enrollments on SS or medicare etc.

Get rid of every single department and you are still spending $3.5 trillion. That would about balance your budget. If you cut 100% of EVERYTHING except defense, Social Security, and Medicare. Waste, fraud, and abuse are pennies out of the $4 trillion. Can't get to a balanced budget that way. And again, whatever you want to cut, you piss off voters which costs you votes in the next election.

[TheTexan]

And even a lower tax rate of 25% is a perfectly reasonable, rational amount.

I mean, all the other countries do it

[Swordsmyth]

Get rid of every single department and you are still spending $3.5 trillion. That would about balance your budget. If you cut 100% of EVERYTHING except defense, Social Security, and Medicare. Waste, fraud, and abuse are pennies out of the $4 trillion. Can't get to a balanced budget that way. And again, whatever you want to cut, you piss off voters which costs you votes in the next election.

Cut government regulations and tax receipts will rise dramatically, and we can gut the DOD budget without losing votes by closing all overseas bases, stopping the wars and bringing the boys back home.

[Krugminator2]

And don't allow any new enrollments on SS or medicare etc.

The problem is SS/Medicare are Ponzi schemes. The government would be paying benefits for the next 70+ years and if you stop enrolling people those payroll taxes will go away which would make the underfunding much worse. So you you would still end up at the solution of having to cut benefits.

Cut government regulations and tax receipts will rise dramatically, and we can gut the DOD budget without losing votes by closing all overseas bases, stopping the wars and bringing the boys back home.

Philosophically I am for that. But the United States spends less now as a percentage of GDP than at most points in the last 100 years. Military spending is historically low right now. Entitlements are the bulk of budget.

[Swordsmyth]

The problem is SS/Medicare are Ponzi schemes. The government would be paying benefits for the next 70+ years and if you stop enrolling people those payroll taxes will go away which would make the underfunding much worse. So you you would still end up at the solution of having to cut benefits.

They could keep the taxes until all the beneficiaries are dead but stop adding beneficiaries, that is not good but it is the best option we have had since the inception of the entitlements.

[Krugminator2]

They could keep the taxes until all the beneficiaries are dead but stop adding beneficiaries, that is not good but it is the best option we have had since the inception of the entitlements.

So you would be dicking over anyone just entering the labor force, making them pay for the generation who was irresponsible with government spending.

[Swordsmyth]

So you would be dicking over anyone just entering the labor force, making them pay for the generation who was irresponsible with government spending.

I don't like it, but do we have any better way out of the system?

[Zippyjuan]

Cut government regulations and tax receipts will rise dramatically, and we can gut the DOD budget without losing votes by closing all overseas bases, stopping the wars and bringing the boys back home.

Closing bases and moving them back home doesn't really save you anything since you still need to pay for places for them to be and all their equipment and things. Then you have the costs of closing down and packing and moving everything and building new facilities to house them. It would take a very long time and be decades before any actual savings were seen- assuming the money wasn't just spent on another program or weapons system. Even if you just fire them instead of keeping them in the military, the moving costs (and cleanup costs of bases) will still be more than your savings for many years.

Ron claimed we could save $1 trillion that way, but the numbers don't add up.

[Zippyjuan]

The problem is SS/Medicare are Ponzi schemes. The government would be paying benefits for the next 70+ years and if you stop enrolling people those payroll taxes will go away which would make the underfunding much worse. So you you would still end up at the solution of having to cut benefits.



Philosophically I am for that. But the United States spends less now as a percentage of GDP than at most points in the last 100 years. Military spending is historically low right now. Entitlements are the bulk of budget.

Ron Paul suggested "letting young people opt out" of programs like Social Security. That is fine and may help 50 years from now when those kids today are finally ready to retire and have no Social Security but in the mean time, they are not paying any money into the Social Security system. And since it is a "pay as you go" system where this year's payouts come from this year's tax revenues, you need to get that money no longer coming in from someplace else. That means higher taxes or cuts in other things- or more debt.

[Swordsmyth]

Closing bases and moving them back home doesn't really save you anything since you still need to pay for places for them to be and all their equipment and things. Then you have the costs of closing down and packing and moving everything and building new facilities to house them. It would take a very long time and be decades before any actual savings were seen- assuming the money wasn't just spent on another program or weapons system.

It can be done, and the bill drops dramatically just by ending the wars.

[Krugminator2]

I don't like it, but do we have any better way out of the system?

Yes. I would start with means testing. That seems the easiest. Then move onto raising the retirement age. Those seem like no-brainers.

Then if I had my way (which would never happen) I would start aggressively cutting the SS/Medicare welfare from the greedy geezers. Seniors created the problem. They should not get full benefits. The programs should be treated like a bankrupt business where remaining assets are given to creditors.

[Krugminator2]

Ron Paul suggested "letting young people opt out" of programs like Social Security. That is fine and may help 50 years from now when those kids today are finally ready to retire and have no Social Security but in the mean time, they are not paying any money into the Social Security system. And since it is a "pay as you go" system where this year's payouts come from this year's tax revenues, you need to get that money no longer coming in from someplace else. That means higher taxes or cuts in other things- or more debt.

Okay? You just reworded what I said. I am in agreement with you/myself.

And yeah, this is Ron's worst issue.

[TheTexan]

Closing bases and moving them back home doesn't really save you anything since you still need to pay for places for them to be and all their equipment and things. Then you have the costs of closing down and packing and moving everything and building new facilities to house them. It would take a very long time and be decades before any actual savings were seen- assuming the money wasn't just spent on another program or weapons system.

We should probably keep all those bases then to save money

[Swordsmyth]

Yes. I would start with means testing. That seems the easiest. Then move onto raising the retirement age. Those seem like no-brainers.

Then if I had my way (which would never happen) I would start aggressively cutting the SS/Medicare welfare from the greedy geezers. Seniors created the problem. They should not get full benefits. The programs should be treated like a bankrupt business where remaining assets are given to creditors.

Perhaps a mixture of our ideas would work, but the programs must END completely at some point, which means you will have to stop all new beneficiaries while keeping the taxes until the beneficiaries are gone.

[Zippyjuan]

Yes. I would start with means testing. That seems the easiest. Then move onto raising the retirement age. Those seem like no-brainers.

Then if I had my way (which would never happen) I would start aggressively cutting the SS/Medicare welfare from the greedy geezers. Seniors created the problem. They should not get full benefits. The programs should be treated like a bankrupt business where remaining assets are given to creditors.

They have been raising the retirement age. For me, full Social Security will be at age 67 (it used to be 62 for everybody). And there are limits on how much money you can earn if you want to still work while on it- the more you make, the lower your benefits. The maximum without reducing your benefits is only $16,000 a year. https://www.ssa.gov/planners/retire/whileworking2.html

[TheTexan]

They have been raising the retirement age. For me, full Social Security will be at age 67

I plan to be dead from liver failure long before then

[Zippyjuan]

I plan to be dead from liver failure long before then

Investing your retirement money in whiskey, eh?

[Krugminator2]

They have been raising the retirement age. For me, full Social Security will be at age 67 (it used to be 62 for everybody). And there are limits on how much money you can earn if you want to still work while on it- the more you make, the lower your benefits. The maximum without reducing your benefits is only $16,000 a year. https://www.ssa.gov/planners/retire/whileworking2.html

The original benefit was around 62 and the average lifespan was not far from that. I would be fine making the full benefit closer to age 75 because the average lifespan is about 78. I would be in favor of phasing out benefits completely over a certain income.

[Madison320]

The "progressive" system makes the greatest number of people happy. The low income social justice warriors think they are taxing (redistributing) the rich, and the rich know that they have enough loopholes to pay less than the middle class. It's win-win.

I would rather no one pay incomes taxes, but without that, I'd be happy with a progressive system that is zero all the way up to $1,000,000/year. Pretty sure that was the original sales job to get income tax passed in the first place.

The progressive system makes the poor happy, not the rich. And yeah, it's the greatest number. Just when we had slavery back in the day. It was great for most people but it sucked for the slaves.

The idea that the rich have lots of loopholes is a myth, comrade. That's why they're moving offshore.

[austin870]

So you would be dicking over anyone just entering the labor force, making them pay for the generation who was irresponsible with government spending.

It is not about being "irresponsible". It is flat plain and simple "extortion". I currently pay for 80 million to get free cradle to grave healthcare on Medicaid. I pay in and get nothing myself. Same with all the entitlement programs I am not eligible for. Social Security and Medicare are entitlement programs too. They are also paid for with "taxes". It was made clear to FDR the federal government could start neither an investment or insurance program. They all blatantly compete with existing private business. He was told however he could "call" the program anything he liked. Much like "healthcare for all" etc. He could blatantly lie to the the people about what the program actually is so that is what he did. People are still deluded 80 years later.

This is why we can dump Mexican National citizens, disabled and people who paid the minimum contribution into the system yet draw forever. What is so unique about people getting screwed on entitlements and taxes? The larger group of people always votes to extort from the smaller group. Once the boomers are gone the next group can vote in whatever entitlements they please. That is democracy better known as mob rule.

[charrob]

We have had this discussion before, DOD is the prime target, $500B in a $4T budget is a significant fraction in and of itself, and there are lots of government departments that can be eliminated entirely, all the rest can be drastically cut by eliminating waste, fraud and abuse.

Ron Paul and Daniel McAdams have said in a number of their videos that the entire military/security complex (including the 17 "security" agencies) cost the taxpayer over $1 trillion per year and in one video estimated the cost to about $1.2 trillion per year. Not sure, but this probably includes veteran's health benefits and pensions; active duty military can retire, with full pension, after 20 years so someone enlisting at age 18 can basically retire with full pension and health benefits at 38 years old. The taxpayer then pays for their pension from 38 years old to the end of their life. That's a lot of years to be paying for no productivity.

Where are the 17 "security" agencies in this chart?

And don't allow any new enrollments on SS or medicare etc.

Yes. I would start with means testing. That seems the easiest. Then move onto raising the retirement age. Those seem like no-brainers.

Another possibility is that all income over $110,000 (or something near that) has no social security tax. For someone making $2 million per year, they only pay a social security tax on the first $110,000. Beyond that they pay no social security tax. Some have suggested charging a social security tax for a person's full income. Not a very popular solution, but one that has been talked about. For sure, social security should not be given to those who have not paid into the system. It was meant for retirees and should return to that purpose. Also, currently, illegal immigrants filling out tax forms are getting the unearned tax credits reserved for low income wage earners; this should change also. If it were up to me I'd get rid of the unearned tax credits entirely, however if that cannot be accomplished, at least they need to stop giving this welfare to illegal immigrants.

[Zippyjuan]

Where are the 17 "security" agencies in this chart?

Mostly all in the Department of Defense/ Military. They are including the entire Department of Defense, Veterans benefits, and even counting a portion of "interest on the debt" to get to their figures. Some student financial aid is included in the Defense Department budget for some reason.

[Mike4Freedom]

Pretty much all of that is untrue. If you add up all taxes at the federal state and local level, the rate comes to 26%. The only European country with lower overall taxes is Ireland. http://time.com/money/4862673/us-tax...ecd-countries/ http://www.taxpolicycenter.org/brief...nternationally

It still makes sense to cut taxes even without spending cuts because lower taxes encourage more production. That is the supply side argument.

bull $#@!ing $#@!

We will go over my tax what it is here and what it would be in lets say Italy. In Italy I would have a an income tax rate of 43%. With very little property tax.

Now lets go over my situation in the US with my current income. Federal would be 28%, PA state tax 3.07%, city of pittsburgh local tax rate 3%, social security 6.2% from me, my employer has to match another 6.2%, medicare 1.45% for me, 1.45% for my employer. This total = 49.37% so that article you posted is bull$#@!.

[oyarde]

So, I feel like I have to reiterate this since I've often pointed out the same thing on the other side.

The top 20% are really just people in the highest earning time of their lives. Meaning, that the individuals who are in the top 20% this year will not be the same individuals 5 years from now. In fact, there is a large percentage of these people who are only in the top 20% for one year - when they receive an inheritance or a settlement payment of some sort. Then, when you factor in geographical differences, the numbers get even more mushy. We're really talking about the same people as those in the lower brackets.

Those class warriors on both sides always seem to forget that we are not talking about the perennially wealthy when we use stats in this way.

That is interesting . My highest earning yrs by far while I was working was probably five only of the last 50 before I retired . Since I retired and right before I retired I sold homes one at a time and cashed in 401K's one at a time to not have more than one transaction like that per yr . When I am done at least a few of those years will be equal to the greater five while I was working .

[Krugminator2]

bull $#@!ing $#@!

We will go over my tax what it is here and what it would be in lets say Italy. In Italy I would have a an income tax rate of 43%. With very little property tax.

Now lets go over my situation in the US with my current income. Federal would be 28%, PA state tax 3.07%, city of pittsburgh local tax rate 3%, social security 6.2% from me, my employer has to match another 6.2%, medicare 1.45% for me, 1.45% for my employer. This total = 49.37% so that article you posted is bull$#@!.

https://turbotax.intuit.com/tax-tools/ 28% is a marginal rate. The effective income tax rate at 150k is 18%, State and local taxes are deductible on the federal return.

I just googled Italy. 75k euros and above is 43% marginal rate in Italy. And isn't like they have a generous deduction 28k is in the 38% marginal rate. They have a 22% VAT on top of 28% corporate tax rate.

[TheTexan]

If you think about it, a 40-50% effective tax rate is very low, compared to lets say a tax rate of 60-70%

We should all feel very lucky to live in a country with such low taxes

[specsaregood]

https://turbotax.intuit.com/tax-tools/ 28% is a marginal rate. The effective income tax rate at 150k is 18%, State and local taxes are deductible on the federal return.

28% plus, self-employment tax, social security taxes, medicare taxes? 28% is by no means the norm. plus state and local income taxes, plus property taxes, plus sales taxes.... yeah closer to 50%.

I know that when I take 40% off the top of all income, it comes out about right just to pay federal and state income taxes and that doesn't include property taxes and sales taxes.