Zippin Pippin likely to cost half-million more than anticipated

CP Chris said:

I don't see anybody turning down pay raises to avoid paying more money to the government. It's understandable that nobody likes to pay taxes, but they're an absolutely necessary part of an organized society.

I have actually declined a position that would have put me in a higher tax bracket resulting in less take-home pay than I was making at the time. It would not have been a good financial move for me.

And no one's saying taxes aren't necessary. But I fail to see how, if the 'rich' are paying the same percentage as everyone else, the poor and middle class get screwed. What's not fair is being forced to pay a higher percentage because I worked my ass off to make more money for myself and my family. To be told that the money I earn isn't mine is infuriating. I should have the right to use my extra income for whatever I'd like, be it for charity, investment, or to fill my oversized garage with exotic cars.

And this is coming from someone who makes diddly, by comparison. I have two kids and a wife who's a stay-at-home mom, a mortgage and two car payments. Contrary to what I've said in the past, I don't have buckets of extra money.

The problem now is, the deficit is so monumental that everyone is getting screwed (except for the 50% who pay nothing, it would seem, according to the stats Gonch linked to). In addition to a flat tax that's fair for everyone, government spending needs to be drastically reduced. To me, that's the real issue, and where the ever-loving 'change' the Messiah we have in the White House promised should really start...the federal government is just too damn huge.

Vater said:
But I fail to see how, if the 'rich' are paying the same percentage as everyone else, the poor and middle class get screwed.

This:

Ensign Smith said:
In 2006, the top 10% of earners in the U.S. accounted for 73% of all taxes paid. That sounds pretty bad, until you learn that (in 2007) the top 10% also possessed 84% of all financial wealth in the country. So on that basis, those at the top aren't even paying at tax parity with the bottom 90% -- they're paying a smaller percentage on their financial wealth than the rest of us.

What's not fair is being forced to pay a higher percentage because I worked my ass off to make more money for myself and my family.

One aspect that seems to be ignored is that the society around you - the one that is, in part, supported/sustained by taxes - has provided the framework for you to be able to make more money. You might not have the same "American dream" opportunities in a country with 3rd world-type conditions.

I do agree that some government spending needs to be reigned in, starting with the military/wars (though I've yet to witness a cavalcade of GOP folk leading that charge. How shocking.

Vater said:
I have actually declined a position that would have put me in a higher tax bracket resulting in less take-home pay than I was making at the time. It would not have been a good financial move for me.

But isn't U.S. income tax graduated, so that only the amount above a certain threshold is taxed at the higher rate? The amount below the threshold should have been the same as you were paying before; then you'd have your raise minus the larger amount, which, assuming they're not taking more than 100%, should still leave you with more net income than you had before. At least, that's the way I understand it... I've never been in such a position to bother figuring it out. :)

Questions to ponder...

How does a relatively small amount of rich holding the majority of wealth while also footing the majority of the government bill affect the average citizen's life? How do our "poor" and "middle class" compare to countries that utilize different forms of government? Do our poor and middle class have tougher opportunities to move ahead as compared to other countries?

The mythical "rich" are 2/3rds small business owners. If you restore the rates to Clinton era levels, 45-55% of small business income would be affected. We are sitting at 10% unemployment (real rate higher). How can you expect to create jobs when you take money away from the people who do the hiring?

djDaemon said:
One aspect that seems to be ignored is that the society around you - the one that is, in part, supported/sustained by taxes - has provided the framework for you to be able to make more money. You might not have the same "American dream" opportunities in a country with 3rd world-type conditions.

But that just says that he should pay taxes (which he isn't disputing) not how much. And if he is making 10 times as much, why should he be paying more than 10 times as much in taxes? And isn't that same society around everyone?

I do agree that some government spending needs to be reigned in, starting with the military/wars (though I've yet to witness a cavalcade of GOP folk leading that charge. How shocking.

"Some" spending doesn't need to be reigned in. "A lot" of it does. Across the board. The $50 trillion unfunded promised liabilities won't be covered by cutting defense spending and increasing taxes on the rich. We accelerated consumption (and thus our standard of living) through deficits/debt. Anyone who has ever had to get out of debt knows that doing so isn't easy. Increased taxes and reduced government spending will decrease our overall standard of living in the short term (where our politicians live and breath unfortunately). There is no way around it. And every day we wait makes addressing the problem that much tougher.

Here's my issue:

It seems that everyone wants to argue about what won't help, but no one has any better suggestions as to what will. Sure, maybe increasing taxes on the rich and cutting defense spending won't cure all of our problems, but that doesn't mean we shouldn't do it because it's not the end-all.

That's like saying you can't afford to pay your credit card off completely, so you're not going to bother making any small payments until you can. Paying it in small payments might be an uphill battle, but it's better than stagnation.

What do I know, though?

Aamilj said:
How can you expect to create jobs when you take money away from the people who do the hiring?

Since we're talking about personal income taxes here, are those folks spending their personal income on hiring people at the businesses they own? Or is the idea that we'll decrease FICA tax rates as well, which businesses pay half of? (Unless your company "spins you off" as an independent contractor, as mine did, so that all the FICA burden is on you.)

Raven-Phile said:
It seems that everyone wants to argue about what won't help, but no one has any better suggestions as to what will. Sure, maybe increasing taxes on the rich and cutting defense spending won't cure all of our problems, but that doesn't mean we shouldn't do it because it's not the end-all.

We had that discussion a couple of pages back (at least I think it was this discussion not another one here). No one is saying (at least no one will admit to saying) that just because one or two proposed actions won't solve all of our debt/deficit problems that we shouldn't take those one or two actions. But I think the problem is that too many folks think we can just cut around the edges (and almost always its edges that do not affect them) and everything will be fine. In the end, I think we need a combination of across the board spending cuts and tax increases (and to be meaningful in numbers/dollars they will need to hit the middle as well as those at the top).

I agree that raising taxes isn't the only solution, but it definitely needs to be one of many solutions.

Vater said:
But I fail to see how, if the 'rich' are paying the same percentage as everyone else, the poor and middle class get screwed.

I wish I could remember where I found the article, but it did a good job explaining the pitfalls of a flat tax. Basically, to make it work the rate would be set around 18%. According to the article, the effective rate on the top 2% right now is around 23%. However, your typical middle class family is paying around 8%. So your middle class sees a huge hike compared to what they're currently paying, and the highest level of earners save a bundle.

GoBucks89 said:
...if he is making 10 times as much, why should he be paying more than 10 times as much in taxes?

It depends on how you look at it. From a percentage of income standpoint, no, the person earning 10 times as much should not pay 10 times the percentage of those making 1/10th. But if a graduated tax systems results in that higher earner paying more than 10 times as much, then I don't necessarily have a problem with it.

"Some" spending doesn't need to be reigned in. "A lot" of it does. Across the board. The $50 trillion unfunded promised liabilities won't be covered by cutting defense spending and increasing taxes on the rich.

Who is proposing that one, two or even a dozen of these solutions will solve all of the Country's debt issues? Certainly not me.

Aamilj said:
How can you expect to create jobs when you take money away from the people who do the hiring?

Is there some sort of Godwin-type law regarding how long it takes for someone to bring up voodoo economics?

GoBucks89 said:

OK, I kind of get it. I got lost a few pages back, and I wasn't sure if that's how you meant it or not. I know there are a select few (Not necessarily here, but politicians and their backers) who probably do think that way. I think it's bullheaded, and don't like to see things like that going on, because it gets us, as a country, nowhere.

The tax codes is far more convoluted than I even care to consider, but I think one of the main aspects of the working-model flat-tax is that "deductions and exemptions" are no longer a means to reduce your taxable income. At least, that was true when I last took classes in Economics that were relevant to said topic (over 20 years ago now).

There are an infinite number of ways to cut spending....have to admit I'd love to see the end of the practice of "buying" Congressional votes with earmarks. I'd also like to stop giving money to those allies (and enemies) who are in better fiscal shape than our own conuntry is in.

You could also pretty much guarantee that when the oil companies are making record profits year in and year out, they'd be paying *something* in taxes. Maybe the "liberal" label I have attached to my forehead isn't really that fitting - I'm more fiscally conservative than 90% of our elected officials in EITHER party.

Hombre:

The vast majority of small businesses (i.e. the ones who hire people and create more taxable events) file as S or LLC. This means corporate profits/losses pass through to personal income. The question is valid, and I don't have a good answer...How can you expect to create jobs when you take money away from the people who do the hiring?

I know spending has to be cut and cut drastically. I'm not sold on raising taxes as the answer (right now). We have 10% unemployment and a recession. Raising taxes is probably not prudent. No doubt we need a complete tax structure change. Sadly, the old adage that we can just tax the rich to get our funding does not work mathematically. We've spent ourselves to a corner. Both political parties are playing the same game that got us here...pretending it is 1980. Democrats play class warfare. Republicans think tax cuts (while doing nothing to cut spending) is the answer to everything.

Aamilj said:
How can you expect to create jobs when you take money away from the people who do the hiring?

This is one of the oldest, and least substantiated arguments against graduated tax brackets. Wealthy folks, for the most part, don't hire more people simply because they have the cash laying around to do so. They hire people when the amount of business they're doing warrants doing so.

And, as it turns out, having 95+% of the population pay a lower effective tax rate than those business owners gives that majority more money to spend while patronizing said business owners' establishments, which in turn gives those business owners a reason to hire more employees (who then, in turn, help increase overall tax revenue).

Raven-Phile said:

GoBucks89 said:

OK, I kind of get it. I got lost a few pages back, and I wasn't sure if that's how you meant it or not. I know there are a select few (Not necessarily here, but politicians and their backers) who probably do think that way. I think it's bullheaded, and don't like to see things like that going on, because it gets us, as a country, nowhere.

Two of our biggest debt issues are social security and medicare. We have known they were big issues for a long time now. But other than some tweaks on the edges, we haven't done anything to address those problems in a signficant way. It gets tougher to resolve them the longer we wait. But no politician wants to talk about them because its the quickest way to getting voting out of office (or not getting elected in the first place). And if you want to get yourself stoned with rocks, talk to seniors about cutting social security or medicare.

We do need to start somewhere. The debt commission has come up with a few different proposals. I see merit to all of them. Not sure there is much of a chance that we will be them enacted though. But who knows. Maybe politicians will surprise me one day in a positive way.

But politicians understand that cutting government spending will decrease the size of the economy. There will be fewer government benefit dollars being put into the economy. And if we were paying for spending with tax revenue rather than debt, the reduced taxes that would coincide with the reduced spending would offset each other. But we are paying for the spending with debt so reducing the spending won't be offset. Same is true with increased taxes. If we had no debt/deficits, increase taxes would result in increased government spending which would go into the economy. Doesn't happen though if you are using to increased taxes to reduce debt/deficits.

Politicians (and all of us really) got addicted to the growth that deficit spending brought us. Just like folks who were using their houses as ATMs and debt as income. But that didn't end well for consumers and the economy as a whole. Not sure whats different about the federal government's addiction to debt other than a whole lot more zeros.

Vater said:
I have actually declined a position that would have put me in a higher tax bracket resulting in less take-home pay than I was making at the time.

Huh? We have a graduated tax rate system. Dollars to a certain point are taxed at one rate, and dollars over that are taxed at the next highest rate, and so on. So if $10k was the ceiling for 10%, and the next level was 12%, I'd pay $1k + 12% on the amount above the first $10k.

Aamilj said:
How can you expect to create jobs when you take money away from the people who do the hiring?

Ahhh... trickle down economics! While I realize the economy is complex, and I'm not naive enough to believe there's a silver bullet, I have to point out that the economy was suboptimal in the waning years of the Reagan era, and got worse under H.W. Bush, including a ballooning deficit, while under Clinton, with generally higher taxes, we had a balanced budget and a stronger economy. Just sayin'.

I don't know any business, small, medium or large, where hiring rates are determined by anything other than work load demand. I certainly wouldn't hire more people because I had extra money on hand if there weren't more demand for their production. And if I really thought I could make more money by hiring more people, but didn't have the investment capital on hand, I'd take a loan.

As I think more about this, it probably applies a whole lot more to smaller businesses than larger ones (where hires are closer connected to output).

Wasn't part of the recent stimulus package a tax break to companies that hired new workers?

Right now at my employer, our IT department is WAY understaffed, and they won't give us any more spots. In fact, whenever someone leaves or changes to a new department, they refuse to back fill that position, citing "budget cuts". It's odd that we use more and more technology every day, but our administration sees us as an un-necessary department, because we don't generate revenue.

Raven-Phile said:
It's odd that we use more and more technology every day, but our administration sees us as an un-necessary department, because we don't generate revenue.

I had a boss who felt that way about the entire company. Every minute you're at work is another minute you're costing the company money, no matter whether you're creating products that will earn revenue or just using the bathroom. I guess that was supposed to be motivation. He also liked going to the shareholders and showing them how much he's slashed payroll to "streamline" operations, never considering how much productivity dropped since those of us who remained had to cover the tasks of the people who were fired (or, in the more likely case, the tasks were simply left undone).