American Politics

[TikindiDragon]

Then how would people get the benefits that are available through marriage? Or are you saying those aren't necessary whatsoever?

Seperate Civil agreement, or contract, that could be entered into by any two parties (resident in the same household, regardless of wether or not they were in a relationship - it could include, for example, siblings living together) which would confer all the current legal benefits of 'marriage'. That's been my argument for ages.

[philpot123]

Seperate Civil agreement, or contract, that could be entered into by any two parties (resident in the same household, regardless of wether or not they were in a relationship - it could include, for example, siblings living together) which would confer all the current legal benefits of 'marriage'. That's been my argument for ages.

Right, something along those lines. Some alternative method of setting up a legal counterpart. Really, if our tax code was simplified and whatnot we wouldn't need a lot of the benefits at all, but that may be too drastic of a step for some people really the only things that would need to be dealt with would be things like estate planning and medical decisions if we eliminated the tax benefits.

Edited November 21, 2012 by philpot123

[brairtrainer]

Right, something along those lines. Some alternative method of setting up a legal counterpart. Really, if our tax code was simplified and whatnot we wouldn't need a lot of the benefits at all, but that may be too drastic of a step for some people really the only things that would need to be dealt with would be things like estate planning and medical decisions if we eliminated the tax benefits.

Then we come to the fact that the tax structure is set up with tax benefits and breaks for other things and some of the reasons that middle class and working class families can pay for things is because of the marriage and children tax breaks. Here's a controversial opinion for you, lets just go to a percentage tax and say (hypothetically) that everyone pays 12% of their wages to the government.

 

I know that then come issues with having to pay for healthcare and other things, and for people who are living on wages less than what it takes to survive. I believe that with a system like this there should be an appeals system based on how much you make x bills, with everyone dealt with on a case by case basis. The people who max out their credit cards so they can't pay don't get a break, but people who are surviving on them because a loved one is in the hospital or because their wages aren't a living wage and they can't survive on the wage in that area can have either lower percentage, or be given an exemption

 

[hazeh]

Still don't see why percentage taxes are a bad thing.

[lightbird]

Still don't see why percentage taxes are a bad thing.

In many European countries, people pay high percentage taxes which then go to fund pensions, education (including universities) and healthcare, so I don't see it being bad either.

 

OH BUT HEY SOCIALISM.

[TikindiDragon]

In many European countries, people pay high percentage taxes which then go to fund pensions, education (including universities) and healthcare, so I don't see it being bad either.

 

OH BUT HEY SOCIALISM.

*waves hand*

 

We have various tax brackets here in the UK. Works just fine.

[brairtrainer]

*waves hand*

 

We have various tax brackets here in the UK. Works just fine.

Have them in the united states but the higher tax bracket pays the least because of tax breaks right now

[philpot123]

Then we come to the fact that the tax structure is set up with tax benefits and breaks for other things and some of the reasons that middle class and working class families can pay for things is because of the marriage and children tax breaks. Here's a controversial opinion for you, lets just go to a percentage tax and say (hypothetically) that everyone pays 12% of their wages to the government.

 

I know that then come issues with having to pay for healthcare and other things, and for people who are living on wages less than what it takes to survive. I believe that with a system like this there should be an appeals system based on how much you make x bills, with everyone dealt with on a case by case basis. The people who max out their credit cards so they can't pay don't get a break, but people who are surviving on them because a loved one is in the hospital or because their wages aren't a living wage and they can't survive on the wage in that area can have either lower percentage, or be given an exemption

I AGREE WHOLEHEARTEDLY. <3 I've always advocated a flat tax.

[hazeh]

Phil, I don't believe she was arguing for flat tax?

Or maybe I'm missing something here.

[Fuzzbucket]

*waves hand*

 

We have various tax brackets here in the UK. Works just fine.

Well, no. Because the richest pay proportionately the least - and that is even assuming they don;t pay fancy accountants to evade it all anyway. There should be NO cut off level for NI contributions either; they should go right to the top at the full percentage. (non UK listeners may allow your eyes to glaze over at this point )

[philpot123]

Phil, I don't believe she was arguing for flat tax?

Or maybe I'm missing something here.

"Here's a controversial opinion for you, lets just go to a percentage tax and say (hypothetically) that everyone pays 12% of their wages to the government."

 

That's basically a flat tax. Perhaps I'm the one who is misunderstanding, but that's the impression I got. I'll gladly eat my words and go back to disagreeing with everyone if I've grossly misunderstood

[Fuzzbucket]

"Here's a controversial opinion for you, lets just go to a percentage tax and say (hypothetically) that everyone pays 12% of their wages to the government."

 

That's basically a flat tax. Perhaps I'm the one who is misunderstanding, but that's the impression I got. I'll gladly eat my words and go back to disagreeing with everyone if I've grossly misunderstood

A TRUE flat tax is when every tax is 12%. Income tax. Sales tax. The only country I KNOW of that has one is Slovakia. I think it's 20%. They have gone off it though, and are bringing back progressive rates from 2013. But yes, 12% for all would be one kind of flat tax.

 

But I do think that seriously rich people should pay more.

 

More to the point, to allow for those on minimum wage - never mind those in sweat shops in places where there IS no minimum wage - there should be a threshold below which you pay no tax.

 

In Canada there is negative income tax for those people; that's another way to do it - except that you have to wait till the end of the year to get it back - which is very hard on the very low income family.

[philpot123]

A TRUE flat tax is when every tax is 12%. Income tax. Sales tax. The only country I KNOW of that has one is Slovakia. I think it's 20%. They have gone off it though, and are bringing back progressive rates from 2013. But yes, 12% for all would be one kind of flat tax.

 

But I do think that seriously rich people should pay more.

 

More to the point, to allow for those on minimum wage - never mind those in sweat shops in places where there IS no minimum wage - there should be a threshold below which you pay no tax.

 

In Canada there is negative income tax for those people; that's another way to do it - except that you have to wait till the end of the year to get it back - which is very hard on the very low income family.

I think income tax isn't ideal anyways. It's easy to avoid. One alternative I've heard economists suggest is a solely sales tax based system. Cash businesses like drug dealing and prostitution avoid paying income tax, but everyone shops... And it would also result in rich people paying more, because they spend more... a LOT more purely hypothetical of course. But it sounds like an interesting idea.

[brairtrainer]

I think income tax isn't ideal anyways. It's easy to avoid. One alternative I've heard economists suggest is a solely sales tax based system. Cash businesses like drug dealing and prostitution avoid paying income tax, but everyone shops... And it would also result in rich people paying more, because they spend more... a LOT more purely hypothetical of course. But it sounds like an interesting idea.

The problem I see with a sales tax has to do with companies from overseas, or when you order from a company overseas. I don't know if the US can sales tax it but sounds like you'd have to have some high teriffs to keep people buying in the country

[Alpha1]

I think income tax isn't ideal anyways. It's easy to avoid. One alternative I've heard economists suggest is a solely sales tax based system. Cash businesses like drug dealing and prostitution avoid paying income tax, but everyone shops... And it would also result in rich people paying more, because they spend more... a LOT more purely hypothetical of course. But it sounds like an interesting idea.

As a percentage of their income, they will obviously not pay more. Ever heard of the FairTax? It calls for a massive rebate because a national sales tax replacing all of those current taxes would be much more regressive.

 

 

 

 

[7Deadly$ins]

As a percentage of their income, they will obviously not pay more. Ever heard of the FairTax? It calls for a massive rebate because a national sales tax replacing all of those current taxes would be much more regressive.

What he means is that if someone makes a million dollars and is taxed 12%, they pay $120000, whereas if someone makes $1000, they'd only pay $120. So, the richer person pays more. The downside to this is that the $120 is a bigger burden on the poorer person than the $120000 is on the richer person.

[hazeh]

Whoa, wait a minute. I think I just realized that I got something mixed up.

 

I want the tax that means if my moms has to pay 33% of her income, than so should everyone else. Is that a flat tax? For some reason I was under the impression it was a percentage tax. o_O

[7Deadly$ins]

Whoa, wait a minute. I think I just realized that I got something mixed up.

 

I want the tax that means if my moms has to pay 33% of her income, than so should everyone else. Is that a flat tax? For some reason I was under the impression it was a percentage tax. o_O

That's a flat tax.

 

I'm surprisingly one of the few people here who doesn't seem to like it.

[hazeh]

Oh. Well then.

 

Apparently I like flat taxes |D

 

Why don't you like it?

[Alpha1]

What he means is that if someone makes a million dollars and is taxed 12%, they pay $120000, whereas if someone makes $1000, they'd only pay $120. So, the richer person pays more. The downside to this is that the $120 is a bigger burden on the poorer person than the $120000 is on the richer person.

 

He mentioned a sole sales tax. It wouldn't work like a flat income tax, since the rich won't be using all their money for consumption. They would be paying a lower percentage of their income than the poor.

 

Oh. Well then.

 

Apparently I like flat taxes |D

 

Why don't you like it?

 

If it's a true flat tax, then all those deductions and credits that make all those families pay little to no tax are gone. And most people who like the flat tax always seem to be content with the rest of the system.... Republicans pushing for the flat income tax hope people don't put their attention the on the low capital gains rates, state sales and property taxes, and the regressive payroll taxes.

 

The rich are able to accumulate masses of money from doing nothing productive via stocks, rental homes, owning land/minerals, lobbying the government to enable rent-seeking activities, etc. The rich are getting 93% of the gains in the economic recovery.

 

I think income and capital gains should only apply to high income earners. You can narrow the gap to make it revenue neutral with a land value tax. No deadweight loss, and it captures all that unearned money from land value increases.

[Fuzzbucket]

As a percentage of their income, they will obviously not pay more. Ever heard of the FairTax? It calls for a massive rebate because a national sales tax replacing all of those current taxes would be much more regressive.

Also if everything - including food and essentials like hydro and rent - carries the same percentage of tax, as happens in some countries, it is unbelievably much more of a burden on those with low incomes. 20% more on that fourth Ferrari to someone on $250k is spitting in the ocean. 20% more on fruit and veg to someone on $10k (yes, appallingly there are people trying to live on that kind of money) means a really bad diet for their kids.

[TikindiDragon]

In the UK Capital Gains tax is paid on all monies (over £10,600) made from scources other than employment. The rate of Capital Gains is 18% for people in the lowest income tax bracket, and 28% on everything over that.

 

There are certain rules that, basically, boil down to if a company has paid out corporation tax on it's profits, then it does not pay Capital Gains Tax on monies recieved from any company it is a major (greater than 10%) shareholder in. I think I have that right, anyway. Not exactly an expert on corporate tax laws.

 

For those interested in taxation in the UK:

 

There are three income tax bands. The lowest is at 20% on anything up to £35k a year. Then it's 40% for income between £35k and £150k. Finally 50% is paid on all earning over £150k.

 

Each person also has a 'Personal Allowance' which is not taxed. At it's base level this is £7,475. Those over the age of 65 have higher personal allowances. For every £2 earned over £100k the personal allwance is reduced by £1 - so anyone earning over £114,950 would have no personal allowance.

 

National Insurance is collected along with income tax. National Insurance is not paid on the first £7,592 (£146 per week) of earnings. NI is paid at a rate of 12% on earnings between £7,592 and £42,484 (£817 per week), and at 14% on earnings above £42,484. NI can get very complicated for the self-employed as employers also make contributions toward their employees NI.

 

NI has to have been paid at a certain rate for a certain number of years for a person to later be entitled to a full state pension - there exists the option to pay the exquivalent cost of a year's NI contributions in order to make sure that one has accrued enough years of NI payments in order to qualify for the full state pension. Some personal situations (long-term illness or disability meaning you can't work, not working in order to provide full time care for a relative etc) mean the you are credited with NI without having to pay a top-up fee.

 

Edited to add: It's also (possibly anyway) interesting to note Inheritance Tax.

 

Inheritance tax is paid on the estate of a deceased person, and it is only paid if the value of the estate is more than £325,000 (this is known as the 'inheritance tax threshold). Inheritance tax is a flat 40% on any value over the £325k threshold, although if more than 10% of the estate is being left to charity the rate of inheritance tax is reduced to 36%. If a person dies without a will then the entire estate (or, to be more accurate, the vast majority of it depending on the existence of other relatives) will automatically pass to their husband/wife/civil partner. Inheritance tax in normally not paid on any part of an estate left to a spouse or civil partner, even if the estate is over the inheritance tax threashold.

Edited November 22, 2012 by TikindiDragon

[Kestra15]

20% more on fruit and veg to someone on $10k (yes, appallingly there are people trying to live on that kind of money) means a really bad diet for their kids.

*waves*

 

I have, in seven years, made a grand total of £54,000 - so that's only ~ £,7,500 ~ $12,000 a year. On average. For four of those years my annual income was under $10,000.

[Fuzzbucket]

Don't forget that there is MASSIVE tax evasion - by the rich; that large companies are not paying corporation tax (notably, Amazon and Starbucks - boycotts are starting as we speak) - and that NI contributions as a percentage stops at - as I recall - £40k.

 

AND that the government wants to stop the 50%.

 

It's good in principle - but it needs to be PROPERLY enforced. There should be none of those ways the rich can make all sorts of stuff tax deductible by paying themselves through shadow companies, parking their money off shore, and the rest.

 

I actually like the way the US still (as far as I know) makes you pay tax on your offshore assets. That would bring in a HUGE amount into the UK treasury if it were enforced.

 

*waves*

 

I have, in seven years, made a grand total of £54,000 - so that's only ~ £,7,500 ~ $12,000 a year. On average. For four of those years my annual income was under $10,000.

To be fair (I too worked in the NHS !) isn't that partly because of your voluntary work ? Correct me (stamp on my head !) if I'm wrong and you were full time in the NHS. )

 

And - not OK but still - you are a two income household ? NOT that that makes it OK.

Edited November 22, 2012 by fuzzbucket

[TikindiDragon]

I believe the 50% tax band is being reduced to 45% in the next tax year fuzz. And, yes, I do think the UK should adopt the same principle as the US in having UK tax apply to worldwide assets of UK residents. There's a lot of technically legal tax evasion going on among higher earners.

 

@ Kestra - If I remember cprrectly doesn't that mean you haven't been accruing an NI stamp in that entire time?