USA's tax system explained for the slow of wit

[WarFalcon]

Let's put tax cuts in terms everyone can understand!

Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this. The first four men-the poorest-would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18. The tenth man-the richest-would pay $59.

That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement-until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So now dinner for the ten only cost $80. The group stillw anted to pay their bill the way we pay our taxes.

So the first four men were unaffected. They would still eat for free. But what about the other six-the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?" The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being "paid" to eat their meal.

So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving thet enth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth. "But he got $7!" "Yeah, that's right," exclaimed thef ifth man. "I only saved a dollar, too. It's unfair that he got seven times more than me!" "That's true!" shouted the seventh man. "Why should he get $7 back when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short!

And that, boys and girls, journalists and college instructors, is how the tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.

There are lots of good restaurants in Europe, the Caribbean, and many other places in this world where enjoyable meals can be purchased without being beat up!

[Nodrog]

You missed out the bit where it was the rich guy who actually found the restaurant, cooked the food, assembled the chairs, and extracted from the ground the minerals used to produce the cutlery.

Ah, wf. Very brilliant of you; stealing the style of a Saturday night live skit to make yourself seem wittier.

I love it!

[xtrasyn]

What was the point?

[Caesar2]

for once i agree with you wf, tho i think here in europe we get ripped of more

in germany, first of all we add about 20% as VAT, then another 10-20% to pay for social insurance for the waiter, so that the actual bill would be 140$. then everyone has to pay about the same (about 30$ each; i forgot about the costs for all those financial employees who take care of the whole system)
but then everyone gets a lot of it paid back by the state, lets say 15$ at least, so that in the end, the rich pay 25$, the poor only pay 15$ (for a meal that is worth 10$ )

[Ste]

Originally posted by WarFalcon
lovely story

Unfortunately the rich people I know would be way too stingey to pay that much - they would complain that the system exploits the rich.

[WarFalcon]

Originally posted by Ste


Unfortunately the rich people I know would be way too stingey to pay that much - they would complain that the system exploits the rich.

yet that is the way the stepped tax system works here in America, the rich pay bigger % of taxes. The top 1% of the people pay over 40% of the taxes or something like that....

[WarFalcon]

Originally posted by Miasma



I thought corporate taxes paid 35-40% of the taxes in america.


Maybe im wrong.

2.5 Mil people = 0.000016% of the total tax each, I wonder what that is in real money and how it compares to their earnings*.



*My math could be horribly wrong, i just woke up.

2.5 million people from which tax bracket?

[WarFalcon]

Originally posted by Miasma


your 1% richest.


IIRC the pop of the US is something like 250 mil.


btw you dodged my point on corporate taxes.

It would look like last year the top 1% paid about 25% just from glancing at these quick stats. Of course this is just income tax (?) I think, so once you add in things like state, property, etc... they end up paying a lot more (40% is the term I've seen before but I cant find it right now so believe it or not). All corporate taxes amount to less than the top 1% of individual taxes.

http://www.irs.gov/taxstats/article/...102886,00.html

take a look at this, I'll try to find something better if I think of it later.

[hyfe]

Originally posted by WarFalcon

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short!

so they still ordered for 10 people when only 9 were eating ?! .. not the brightest chaps to begin with then i guess...

True, true

[acropolis]

Originally posted by WarFalcon



It would look like last year the top 1% paid about 25% just from glancing at these quick stats. Of course this is just income tax (?) I think, so once you add in things like state, property, etc... they end up paying a lot more (40% is the term I've seen before but I cant find it right now so believe it or not). All corporate taxes amount to less than the top 1% of individual taxes.

http://www.irs.gov/taxstats/article/...102886,00.html

take a look at this, I'll try to find something better if I think of it later.

These stats confuse the hell out of me. However, I do know this:

the top ten percent payed at least as much as the top 1%, so

Top 1 percent AGI break (TY 1999) [3,4] $293,415
Top 10 percent AGI break (TY 1999) [3,4] $87,682

can't represent taxes paid.

Anyway, at your dinner table, the top guy has about $2000 in his pocket, the guy next to him has maybe $200, the next four maybe $100 between them, and the bottom 4 have perhaps 4 cents.

And instead of the cook saying 'the same meal is going to be $20 cheaper from now on,' it should have been 'psst, hey rich guy, I can cut the bill by $20 if you want. I'll just give smaller meals to the other nine'

Anyway, the rich get the most from government so they pay the most. I admit poor folk bitch too much. But rich people bitch way too much too, so they get no pity from me.

[Nodrog]

Originally posted by acropolis


And instead of the cook saying 'the same meal is going to be $20 cheaper from now on,' it should have been 'psst, hey rich guy, I can cut the bill by $20 if you want. I'll just give smaller meals to the other nine'

Given he is paying for the meal in the first place, wouldnt he be fully entitled to take him up on his offer?

Originally posted by acropolis

Anyway, the rich get the most from government so they pay the most.

How do the rich get the most from the government? I dont understand

Originally posted by acropolis

I admit poor folk bitch too much. But rich people bitch way too much too, so they get no pity from me.

Perhaps they think that suffering in silence is "retarded".

[acropolis]

Originally posted by Nodrog
Given he is paying for the meal in the first place, wouldnt he be fully entitled to take him up on his offer?
How do the rich get the most from the government? I dont understand
Perhaps they think that suffering in silence is "retarded".

It loses something in the 'meal' analogy. But in general, I was more pointing out why the others had reason to complain.

This one I can answer. In the event that the government 'quit,' and someone else took over, it would be the rich who lost their land, their money, etc. As the poor own nothing, such a hostile takeover would not really affect them (in the short run at least). Simply put, "One function of (capitalist) government is to protect the individual's right to own their property. This function is beneficial (obviously) to each individual exactly in proportion to the amount of property they own."

'The suffering rich.' Heh. Oh god, please let me 'suffer.'

[Nodrog]

Originally posted by acropolis
It loses something in the 'meal' analogy. But in general, I was more pointing out why the others had reason to complain.

This one I can answer. In the event that the government 'quit,' and someone else took over, it would be the rich who lost their land, their money, etc. As the poor own nothing, such a hostile takeover would not really affect them (in the short run at least). Simply put, "One function of (capitalist) government is to protect the individual's right to own their property. This function is beneficial (obviously) to each individual exactly in proportion to the amount of property they own.

I dont understand. You seem to be saying that the poor are somehow doing the rich a favour by not stealing everything they own, and that this 'favour' is a moral justification for demanding payment from them. Its nothing more than the playground argument "Give me one of your sweets or Ill beat you up and take the whole bag", but on a wider scale.

Or have I misunderstood.

[acropolis]

Originally posted by Nodrog
I dont understand. You seem to be saying that the poor are somehow doing the rich a favour by not stealing everything they own, and that this 'favour' is a moral justification for demanding payment from them. Its nothing more than the playground argument "Give me one of your sweets or Ill beat you up and take the whole bag", but on a wider scale.

Or have I misunderstood.

Only true of communist revolution. And it depends on the assumption of some deeper truth about property rights. Anyway, from a perspective of foreign invasion, it works. The poor won't care, and the rich will lose everything. Etc.

[LHC]

Using the food analogy here...

Why should the street scum tramp monsters that contributed in no way have a right to complain about a meal they don't deserve? They should die.

[the_dastardley_chihuahua]

Originally posted by LHC
Using the food analogy here...

Why should the street scum tramp monsters that contributed in no way have a right to complain about a meal they don't deserve? They should die.

if the poor people got together to draw straws they could eat the one who lost and kill 2 birds with one stone:
fewer poor people
the poor people that are left arent hungry anymor

genius!

[Deffeh]

amusing

[Vanilla]

Tax? What is that?

There is no tax in New Hampshire

{{{{{GRIN}}}}}

[Dante Hicks]

Originally posted by Nodrog
I dont understand. You seem to be saying that the poor are somehow doing the rich a favour by not stealing everything they own, and that this 'favour' is a moral justification for demanding payment from them.

No. What he said was that the government protects the rich "more" as they have more to lose by loss of police/army (etc.) protection. This is not about moral justification - merely funding relative social peace. If Housing Benefit/Income Support/etc. were completley removed overnight in the UK then the poor would still remain poor (although possibly evicted) but the rich could potentially be impoverished by their homes, etc being burned to the ground by ensuing chaos.

I think it's silly to argue who get's more from the government since at the moment everyone is forced to use government funded facilities (e.g. roads). Formally someone who is unemployed will receive more directly from the state (HB, Income Support, JSA, etc) than myself (full-time employment), although every company I have been paid by has been utterly dependent on government facilities. We can hypothesis about government spending/tax levels if roads, police, etc were all privatised but that's the not the actually existing system at the moment.

Back to the original post : Unless Sales-Tax in the US works differently from I assume (very possibly, my knowledge is very limited on US fiscal matters) then NO ONE can avoid funding the government. The bottom 40% will obviously pay less taxes (directly) but they cannot avoid paying sales taxes on numerous items (correct me if I'm wrong here).

[Vermillion]

Originally posted by Dante Hicks
No. What he said was that the government protects the rich "more" as they have more to lose by loss of police/army (etc.) protection.

Ok, technically true, but when you say it that way it is something of a non point. Its like saying if you were to cut off the top 15% of everyone's body, Tall people would lose more.

Yes, but everyone would suffer tremendously were the protections of society and civilisation removed. One could further argue that the Wealthy would be more able to protect themselves from harm in this situation than the poor. The wealthy already do this in places where society is breaking down, such as in parts of South Africa and Russia... in those cases, it is the poor who are unable to provide for their own defence and suffer more.

[Vermillion]

Originally posted by Dante Hicks
but they cannot avoid paying sales taxes on numerous items (correct me if I'm wrong here).

Unless you are one of the few who enjoy tax-exempt status, like natives...

[Dante Hicks]

Originally posted by Vermillion
Unless you are one of the few who enjoy tax-exempt status, like natives...

Even here though, they would still fund the government (albeit indirectly) since a certain % of the cost of goods/services they purchase would be made up by taxes (of one kind or another).

This is why personally I feel looking at taxes can quickly become silly - no one (irrespective of how skilled your accountants are) can avoid funding the government in one way or another. In economic terms looking at the labour carried out by groups might be more useful (if harder to measure).

Ok, technically true, but when you say it that way it is something of a non point. Its like saying if you were to cut off the top 15% of everyone's body, Tall people would lose more.

I agree, which is why looking at taxes is silly but I was responding to Nod's point. Still : Think of it like insurance premiums. I have (say) $10k of capital to be insured which costs $100 per annum. You have $20k, so you pay $200. Obviously this "insurance" is not something you can claim on - it's more of a security package (protection racket)...

And yes, obviously the poor would suffer more (or at least quicker) if the state collapsed or decline dramatically. In South Africa however, although private security firms have filled some of the void left by the state the remaining police have dramatically higher presence in rich (i.e. white) areas. Although, somewhat amusingly at least a few of the police stations I saw in South Africa have signs proclaiming the fact they are "Protected by XYZ" where XYZ are one of the local private security firms.

is this analogy really what bushs tax-reforms are like? all i hear here is thats its more like the rich today pay only 20$ for the food and the poor have to pay 5$

[Lakhim]

The bottom 10% take up more tax dollars then the top 10%. welfare, SS, ect. The top 10% doesnt need to mooch off the government for unemployment. And everyone gets schooling, police protection and voting priviliges for free. Thus the rich pay the most money and get the least back

[Dante Hicks]

Originally posted by Lakhim
And everyone gets schooling, police protection and voting priviliges for free. Thus the rich pay the most money and get the least back

The rich get most/more back out of the overall economic system of which the government is a fundamental part. Whether the economic system could still function in the same way without a state is not necessarily a given.

[Nodrog]

Originally posted by Dante Hicks
The rich get most/more back out of the overall economic system of which the government is a fundamental part..

I still dont understand what depth this angle has beyond "theyre paying them not to physically harm them and steal their possessions". Theres a word for that you know.

[Dante Hicks]

Originally posted by Nodrog
I still dont understand what depth this angle has beyond "theyre paying them not to physically harm them and steal their possessions". Theres a word for that you know.

OK, look at it this way :

A rich doctor (private practice, etc.) earns a million dollars a year. He pays $500,000 a year in taxes. So, net $500k. Not bad. Where does he get this money from? His patients. Let's say his patients are a big farmer, a movie studio executive and a lawyer. Where do they get their money (obviously it'd be private medical insurance, but let's just cut to the direct route)? The big farmer may receive subsidies from the government (plus some of the people who buy his produce will be state employee's + welfare recepients). Some of the movie studio's customers are people who receive money from welfare (plus other random federal employees). Same with the lawyer, who wouldn't be able to do his job without a state funded court system (Etc.)

Obviously it's a lot more complicated than this, and you can argue that the state is an unnecessary element in most of this (e.g. no need for public subsidies to farmers) - and fair enough, but it currently exists and supports the economic health of the nation on which the doctor (as much as anyone else). Again, you might disagree with government intervention in the economy (again, fine) but that's what is currently in place.

The US government spends what, over a trillion bucks a year? Funnily enough, most of that money ends up in rich folks pockets, yes? If it all suddenly disappeared then obviously the movie executive, farmer and lawyer would have less money to pay our good doctor here.

Obviously this is personally why I feel fiscal arguments are all ********, but still.

[Lakhim]

Originally posted by Dante Hicks
The rich get most/more back out of the overall economic system of which the government is a fundamental part. Whether the economic system could still function in the same way without a state is not necessarily a given.

No they dont. The rich do not get the most out of the system, as a middle class american, i cant name one thing that the goverment does for us outside of education and social security (And security, but that is handled by the state)

[Vermillion]

The main thing that society does for the Rih is allow them the ability to get Rich. That may sound odd, but the fact is most other systems either prevent or put significant blocks in the way of people trying to get wealthy. Communism prevents it, as does feodalism, many other systems require status of birth to obtain wealth. A society like the United States provides the means and the encouragement to become wealthy.

Mind you, thats I do not know if you can say that is something 'given' to the wealthy, as in reality it is an opportunity provided (in theory) to all...

[Dante Hicks]

Originally posted by Lakhim
No they dont. The rich do not get the most out of the system, as a middle class american, i cant name one thing that the goverment does for us outside of education and social security (And security, but that is handled by the state)

When I said "the economic system" I did not mean the state. I meant the totality of the economic system - i.e. businesses, markets, charities, etc. As a middle class american I doubt you are in the top 10% (which is what we were talking about) but still - I imagine you receive more in wages/benefits than someone classed as poor. Now, before you inevitably shout "But I earned that!" - it is still something you have got from the economic system (of which the state is part).

Now, see my earlier example. I have no idea of what you or your parents do to earn a living but I'd imagine that a good deal of that money came indirectly from the government. The government when they collect taxes do not simply burn the money. It goes back into the economy as a whole, funding (indirectly) businesses like the one I presume you work for. A lot of people (e.g. Warfalcon) feel this intervention is unnecessary, but it still goes on.

There are a whole host of things that the state does to help you. For example, the US Military arguably helps to keep the price of oil low by patrolling cargo lanes and/or "stabalising" oil rich countries. Do you drive or use oil/electricity? If you do, then keeping commodity prices low is what some of your taxes go on.

(And that's even ignoring the Python-esque law & order, roads, scientific research, fire safety, FCC-style checking and standards compliance, military defence, etc.)

[Lakhim]

So your saying that the poor dont drive, eat, or use anything. My point is that there are more tax dollars focused towards the poor then there are towards the rich

[Dante Hicks]

Originally posted by Lakhim
So your saying that the poor dont drive, eat, or use anything. My point is that there are more tax dollars focused towards the poor then there are towards the rich

No. That's not what I said. Obviously the government has specific programs which are focused towards poorer people. Medicaid, social security (although middle class older Americans are massive recepients afaik of welfare) and things like this are there to "help" poor people. However, rich people (obviously) do better overall from the whole economic system than poor people. The state is there to keep the whole economic system ticking over (not just stopping workers insurrection or lawlessness, also just to stop gigantic crashes).

So the state is a gigantic support network for a system - a system which benefits YOU (you being the top 10%, nothing personal) more than a homeless guy living on the street, or even the welfare mother with eight kids. She may receive more dollars directly from Uncle Sam than you, but you do better (one presumes) than her out of the state-supported capitalism.

Originally posted by WarFalcon



yet that is the way the stepped tax system works here in America, the rich pay bigger % of taxes. The top 1% of the people pay over 40% of the taxes or something like that....

Not quite. In your story, the non paying poor guys and the rich guy are somewhat over represented. The guys paying $6-$12 would in reality have to bring along their brothers and sisters, who would together be paying the bulk of the bill. What you also forget to mention is that the rich guy, for his share, does not get an equal meal. He eats half the food and leaves the lest for the 9 others plus the middle class guys' siblings. What you also fail to explain is that one of the 3 non paying poor guys are actually rich guys who magically don't have a taxable income, but will be driving home in a large BMW after the meal anyway.

Don't take this as socialist propaganda, or a moral judgement about the American taxation system which I couldnt care less about, but take it as it is: the umpteenth demonstration that you talk a lot but rarely understand the matter you write about.

[Tactitus]

Originally posted by Lakhim
No they dont. The rich do not get the most out of the system, as a middle class american, i cant name one thing that the goverment does for us outside of education and social security (And security, but that is handled by the state)

Given that education, social security and related programs (e.g., medicare) account for over half of the federal budget (and the defense budget, which presumably benefits everyone, claims another 20% of the total budget), your claim that the upper and middle classes don't get much from the government is quite... interesting.

I suspect middle and upper income people also tend to receive more (and more expensive) education and live longer (thus requiring more social security and medicare).

[Lakhim]

Originally posted by Tactitus

Given that education, social security and related programs (e.g., medicare) account for over half of the federal budget (and the defense budget, which presumably benefits everyone, claims another 20% of the total budget), your claim that the upper and middle classes don't get much from the government is quite... interesting.

I suspect middle and upper income people also tend to receive more (and more expensive) education and live longer (thus requiring more social security and medicare).

But the middle class can pay for it, as they do with higher education. Social security, welfare and public schools arnt used as much with the middle classers and not used at all (most of the time) with the rich

[Dante Hicks]

Originally posted by Lakhim
But the middle class can pay for it, as they do with higher education. Social security, welfare and public schools arnt used as much with the middle classers and not used at all (most of the time) with the rich

OK, so who benefits from poor people's education? Just the poor, yes? The rich guy doesn't get any benefit at all, or does he?

Let's say this guy runs a shop. Or a factory. Or whatever. Who works there? Presumably, somewhere along the line, poor(er) people. Who educated them? The state. And whose now getting the benefit? Yes, that's right, the rich guy. Now do you see? You could abolish welfare and public education, but private business would simply have to increase wages to pay for schooling/health plans (or train people to read themselves which is massively expensive). I'm sure some would say this situation would still be preferable since it would increase incentives to work, but that's a seperate argument.

[Lakhim]

Originally posted by Dante Hicks
OK, so who benefits from poor people's education? Just the poor, yes? The rich guy doesn't get any benefit at all, or does he?

Let's say this guy runs a shop. Or a factory. Or whatever. Who works there? Presumably, somewhere along the line, poor(er) people. Who educated them? The state. And whose now getting the benefit? Yes, that's right, the rich guy. Now do you see? You could abolish welfare and public education, but private business would simply have to increase wages to pay for schooling/health plans (or train people to read themselves which is massively expensive). I'm sure some would say this situation would still be preferable since it would increase incentives to work, but that's a seperate argument.

who benefits from getting a better job from the education....

The poor person of course

[Tactitus]

Originally posted by Lakhim
But the middle class can pay for it, as they do with higher education. Social security, welfare and public schools arnt used as much with the middle classers and not used at all (most of the time) with the rich

Er, we're talking about the USA, right? Public schools are the mainstay of the middle class in the US. Likewise social security and medicare. Even in higher education, there are plenty of public subsidies (state-run universities, government guaranteed loans, etc).

Of course most middle income households could pay for these things directly, but why should they? Since they are forced to fund them with their taxes, they'd be foolish not to take advantage of them whenever they can.

[Dante Hicks]

Originally posted by Lakhim
who benefits from getting a better job from the education....

The poor person of course

And the rich guy. Surely you see this? If the country was full of illiterate retards then how well do you think American businesses would be able to compete with others?

[eple]

so the point was that insanely rich people should not pay more to society than poor guys?

I bet the poor souls weep between the champanges in their limo.

[Dibdevlin]

Originally posted by Dante Hicks
And the rich guy. Surely you see this? If the country was full of illiterate retards then how well do you think American businesses would be able to compete with others?

Your image of an economic system is closed. Why do you think the US has immigrants.

Simly because someone yields more money from an economy system doesn't mean they unjustly getting more out of that system. They may be offering more into the system than someone else.

isnt the whole idea of progressive taxes, that simply those people who can effort it pay the most?

[Dibdevlin]

Originally posted by Tactitus

Given that education, social security and related programs (e.g., medicare) account for over half of the federal budget (and the defense budget, which presumably benefits everyone, claims another 20% of the total budget), your claim that the upper and middle classes don't get much from the government is quite... interesting.

I suspect middle and upper income people also tend to receive more (and more expensive) education and live longer (thus requiring more social security and medicare).

Well as part of the upper class I can say that I didn't get a single bit of my education from the Government. Went to private school all my life.

I also don't know anyone who gets SS or uses Medicade. They all have pensions and private medical insurance that yields much better results.

[Dibdevlin]

Originally posted by wu_trax
isnt the whole idea of progressive taxes, that simply those people who can effort it pay the most?

I think the question is how progressive should the tax be, the article he quoted was in responce to the attacks of the Bush tax cut in America where people bitched about the top wage earners getting most of the money back, when in fact they pay most of the taxes so if you are going to give back taxes to increase consumption most of it is going to go into the hands of the wealthy because they are the ones who pay the taxes.

Originally posted by Dibdevlin


I think the question is how progressive should the tax be, the article he quoted was in responce to the attacks of the Bush tax cut in America where people bitched about the top wage earners getting most of the money back, when in fact they pay most of the taxes so if you are going to give back taxes to increase consumption most of it is going to go into the hands of the wealthy because they are the ones who pay the taxes.

do the rich get the highest taxcuts 'nominal' (i.e. in $) or in %?

(btw, how does bush finance tax-cuts, with all those depts he accumulated in the last years? just wondering)

[Dibdevlin]

Originally posted by wu_trax

do the rich get the highest taxcuts 'nominal' (i.e. in $) or in %?

(btw, how does bush finance tax-cuts, with all those depts he accumulated in the last years? just wondering)

The budget went into debt to pay for it, which makes sense given how low interest rates are in the US. When the economy is in recession you are supposed to spend your way out of it.

I don't remember the exact break down percentage wise versus $ wise. Some of the changes were heavily weighted towards wealthy people because the Bush tax cut removed two taxes which were considered "unfair".

One was the marraige tax penalty where two people who got married ended up paying more taxes than they did before they were married all things being equal.

The other was the inheritance/death tax, by which the federal government taxes a percentage of a person's estate when they die. Mostly rich people leave estates, but it was hurting farmers and buisness owners etc.

If you take out those two tax cuts out I believe the rest of the tax cuts were spread equally over the income brackets, but I could be wrong.

[acropolis]

Originally posted by Tactitus

Er, we're talking about the USA, right? Public schools are the mainstay of the middle class in the US. Likewise social security and medicare. Even in higher education, there are plenty of public subsidies (state-run universities, government guaranteed loans, etc).

Of course most middle income households could pay for these things directly, but why should they? Since they are forced to fund them with their taxes, they'd be foolish not to take advantage of them whenever they can.

You are far too kind to him

When he brings up entitlements he doesn't realize that the rich don't help pay for those programs.

When he brings up education he doesn't realize that the rich don't help pay for education (that much).

To start with. Entitlements, social security, medicaid, medicare, etc. They make up most of the federal spending. How can I say that the rich don't help? Because these programs are supported by "employment taxes" which the rich don't pay. They come directly out the salaries of wage earners, while the true rich folk don't earn wages. They make their money off capital gains (from stocks etc.) which does not have employment taxes (they do pay income tax on capital gains, but watch for Bush initiating a bill to end that).

Education is another argument of his that is ended because the rich don't help (not as bad here as in entitlements). Education is payed for by the individual states. State income is made up mostly of sales tax, where the rich buy slightly more **** but not much. Most states have an income tax, but it is often pretty slight (2% here). DibDevlin points out that property taxes are also a major source of income in a lot of states, so the rich on occasion pay more money to live in nicer neighborhoods (which in turn have better schools, square one ahoy).

Originally posted by Vermillion


Ok, technically true, but when you say it that way it is something of a non point. Its like saying if you were to cut off the top 15% of everyone's body, Tall people would lose more.

Heh. Are you trying to get a job as a writer for Limbaugh?

It is just a silly analogy because the poor have nothing. In fact, the bottom 10% has a very large debt. Losing 15% for them would be a net gain. As it would be tough to have a negative body size, your analogy simply does not work.

Its more like saying if you were to take 15% of everyone's money, people without any to start with probably wouldn't care. Course they might start caring when someone told them they had to help pay to defend everyone else's money...