What is a "fair share" in terms of tax paid by someone who makes $1 million per year?

[Moderate Right]

As for what is "fair share" I think the reason that term is used now is because of effective tax rates. Many super wealthy individuals end up with an effective tax rate that is lower than the effective tax rate of Americans making less (see this for example). And many corporations raking in billions pay effective tax rates of 0 because of various loopholes. That's the fairness issue being pointed to.

I think "fair share" arguments also are pointed at the disparity in income vs. capital gains tax rates. What the "fairest" rate for each income level is I don't know, but I also don't think that's the point. If the wealthiest are paying rates lower than those who are less wealthy, that simply is not their "fair share" whatever the ideal rate may be.

Effective tax rates make no difference. 50% of Americans pay zero in federal income taxes while the top 10% pay the huge portion of all federal income taxes collected. Does Warren Buffet's secretary really want to pay the tax bill of Warren Buffet? I think not.

 

[Lakryte]

Effective tax rates make no difference. 50% of Americans pay zero in federal income taxes while the top 10% pay the huge portion of all federal income taxes collected. Does Warren Buffet's secretary really want to pay the tax bill of Warren Buffet? I think not.

Effective tax rates are what you actually pay, so of course they make a difference. If you tax rate on paper is 25%, but you actually pay 0%, it's the 0% that matters. Are you suggesting that the wealthy should pay lower tax rates than those who have less? Because even with flat taxes the wealthiest will pay a huge portion of all federal income taxes. It's just math.

 

[Lakryte]

Actually, the figure was around 47% to 48% but with the Republican's new tax law changes, that percentage is expected to now top 50%. And, we are talking about federal income taxes, not FICA and not if you bought a burger at McDonalds and paid taxes on it. Do you really want to compare the 7.65% taken out of Joe Shmoe's paycheck to all of the 7.65%'s paid by Walmart?

Please read my post again. I already addressed the idea that FICA is not the income tax (see bolded portion below). My point remains. Any American who earns income pays at least 7.65% of that income in federal taxes.

It isn't quite true that half pay none. Anyone who works pays at least 7.65% of their income in Social Security and Medicare taxes. True, that is not the "income tax" per se, but it is still a tax on income. But to the larger point that a minority of Americans pay a majority of federal taxes, that is true.

 

[Moderate Right]

Effective tax rates are what you actually pay, so of course they make a difference. If you tax rate on paper is 25%, but you actually pay 0%, it's the 0% that matters. Are you suggesting that the wealthy should pay lower tax rates than those who have less? Because even with flat taxes the wealthiest will pay a huge portion of all federal income taxes. It's just math.

And the math shows that the rich pay almost all of the federal income taxes collected.

 

[Moderate Right]

Please read my post again. I already addressed the idea that FICA is not the income tax (see bolded portion below). My point remains. Any American who earns income pays at least 7.65% of that income in federal taxes.

Talking about FICA means nothing. The poor pay FICA taxes. The rich pay much, much more in FICA taxes than the poor. The poor also pay federal gasoline taxes. So what? Bottom line, those 50% pay zero in federal income taxes. Their effective tax rate is zero. How about making the rich's effective tax rate zero? If the left are so upset about tax rates then why doesn't Warren Buffet and his secretary swap income taxes paid?

 

[Keridan]

IMHO, a "fair share" of federal income tax is 25% of gross income from all sources above 138% of the federal poverty line for a 4 person household.

($1,000,000 - $34,638) X .25 = $241,341

A federal income tax return does not get much simpler than that (above).

Curiosity here: why use gross income? Money spent to make that income should be taxed evenly with money put in pocket?

 

[Casper]

I've seen many politicians call for high income earners to "pay their fair share" as they call for higher taxes on such earners. However, I've never seen any of these politicians or their supporters articulate precisely what that fair share amount should be. I realize fair share may be dependent on income so let's take someone who makes $1 million per year. If you agree with these politicians who think the current level of taxation is not sufficient then how much tax should someone making $1 million per year being paying in taxes? I'd like a specific amount or at least a range.

Enjoy everyone should pay the same rate, but deductions need to be very limited, and employers need to not be able to use their company credit cards accounts to hide their actual income. 15% for everyone, period.

 

[ttwtt78640]

Curiosity here: why use gross income? Money spent to make that income should be taxed evenly with money put in pocket?

Because how that income was later spent should have no bearing on one's federal income tax liability.

 

[Keridan]

Because how that income was later spent should have no bearing on one's federal income tax liability.

I think I understand your reasoning, but I run a small business. Using an example from that: I spend about 4k a year in ladders and 5k a year in leaf blowers. That 9k (using a rough estimate of 200k gross) is just one of many things I absolutely have to spend to keep working and keep others working. Another example would be 69k in employee pay. (this is assuming they are producing as required). This is 78k I never put in my pocket. It doesn't include advertising to find jobs, truck maintenance, etc. In reality, my gross was 200k, but I took home 122k in this example. From that, I pay the given 25% (rounded and not including what taxes were paid out of the 69k mentioned above) and I end up with a 50k tax burden. Compared to what I would pay from what I actually took home to spend on my own family, that's 50k vs. 30.5k.

Different companies have different expenses and different people have different positions. If we tax gross and ignore what was spent (and already taxed) to make that income, we end up with wildly different tax rates.

 

[ttwtt78640]

I think I understand your reasoning, but I run a small business. Using an example from that: I spend about 4k a year in ladders and 5k a year in leaf blowers. That 9k (using a rough estimate of 200k gross) is just one of many things I absolutely have to spend to keep working and keep others working. Another example would be 69k in employee pay. (this is assuming they are producing as required). This is 78k I never put in my pocket. It doesn't include advertising to find jobs, truck maintenance, etc. In reality, my gross was 200k, but I took home 122k in this example. From that, I pay the given 25% (rounded and not including what taxes were paid out of the 69k mentioned above) and I end up with a 50k tax burden. Compared to what I would pay from what I actually took home to spend on my own family, that's 50k vs. 30.5k.

Different companies have different expenses and different people have different positions. If we tax gross and ignore what was spent (and already taxed) to make that income, we end up with wildly different tax rates.

I think that the confusion is that I was addressing personal federal income tax. I favor no federal taxation of business (corporate?) income at all.

 

[Keridan]

I think that the confusion is that I was addressing personal federal income tax. I favor no federal taxation of business (corporate?) income at all.

That's fair enough! It does leave a couple gray areas, though. One is that I file as an S-election corp, which means my taxes are decided similar to an LLC and personal income/business are more entangled. The other is that some people could use that as a loophole and leave the money sitting in a business account until they spend it. That doesn't sound so bad until you realize they are only getting taxed on spent money and not earned money like everyone else.

We've touched on it before. You and I feel a lot the same. A complicated tax code doesn't serve anyone but those who are failing to serve the people. Thanks for the clarification of personal vs. corporate for me.

 

[ttwtt78640]

That's fair enough! It does leave a couple gray areas, though. One is that I file as an S-election corp, which means my taxes are decided similar to an LLC and personal income/business are more entangled. The other is that some people could use that as a loophole and leave the money sitting in a business account until they spend it. That doesn't sound so bad until you realize they are only getting taxed on spent money and not earned money like everyone else.

We've touched on it before. You and I feel a lot the same. A complicated tax code doesn't serve anyone but those who are failing to serve the people. Thanks for the clarification of personal vs. corporate for me.

I get an annual 1099 from my landlord for maintenance/repair work that I do (as a self-employed handyman) on her several rental properties. Her accountant includes only my labor charges on that 1099 since my bills to her break out material and labor costs separartely. Most of my customers simply pay me cash so that income does not get reported to the IRS.

 

[Lakryte]

Talking about FICA means nothing. The poor pay FICA taxes. The rich pay much, much more in FICA taxes than the poor. The poor also pay federal gasoline taxes. So what? Bottom line, those 50% pay zero in federal income taxes. Their effective tax rate is zero. How about making the rich's effective tax rate zero? If the left are so upset about tax rates then why doesn't Warren Buffet and his secretary swap income taxes paid?

The rich pay 0% social security taxes for income in excess of $132,900. I bring up FICA taxes because FICA taxes are taxes on income, and we are talking about income taxes. When everyone who earns income pays at least 6.2% in taxes on that income, that is not an effective rate of 0. That is an effective rate of at least 6.2%. Math doesn't lie.

Are you suggesting that the rich should pay a lower tax rate than the poor?

 

[Lakryte]

And the math shows that the rich pay almost all of the federal income taxes collected.

True statement, but that was never in dispute. Your contention that "effective tax rates make no difference" was what I took issue with. And it is obviously false, because what people actually pay in taxes most certainly makes a difference. Tell someone who on paper owes 25% of income in tax but effectively only has to pay 10% of income in taxes that that 15% difference makes no difference. Come on now.

Also, my question still stands. Are you suggesting that the wealthy should pay lower tax rates than those who have less?

 

[Conservative]

True statement, but that was never in dispute. Your contention that "effective tax rates make no difference" was what I took issue with. And it is obviously false, because what people actually pay in taxes most certainly makes a difference. Tell someone who on paper owes 25% of income in tax but effectively only has to pay 10% of income in taxes that that 15% difference makes no difference. Come on now.

Also, my question still stands. Are you suggesting that the wealthy should pay lower tax rates than those who have less?

Another question that you want to ignore, since approximately 50% of income earners pay zero Federal Income taxes how do you give these people a tax cut and why should the taxes on others be raised to compensate? Seems you have your own problems in your owns state that you ought to solve before spouting your opinion here

https://www.foxnews.com/opinion/joh...-the-bay-bad-laws-cause-citys-homeless-crisis

 

[Lakryte]

Another question that you want to ignore, since approximately 50% of income earners pay zero Federal Income taxes how do you give these people a tax cut and why should the taxes on others be raised to compensate? Seems you have your own problems in your owns state that you ought to solve before spouting your opinion here

https://www.foxnews.com/opinion/joh...-the-bay-bad-laws-cause-citys-homeless-crisis

I'm going to ignore your attempt to pivot to problems in California and stay on topic.

Remember, your initial claim was that "effective tax rates make no difference." What people actually pay in taxes most certainly makes a difference. To take your example of a large percentage of Americans not paying any taxes: their effective tax rate is zero despite their marginal tax rate likely being higher than that. So you have provided another example of why your initial claim is simply not true.

 

[Conservative]

I'm going to ignore your attempt to pivot to problems in California and stay on topic.

Remember, your initial claim was that "effective tax rates make no difference." What people actually pay in taxes most certainly makes a difference. To take your example of a large percentage of Americans not paying any taxes: their effective tax rate is zero despite their marginal tax rate likely being higher than that. So you have provided another example of why your initial claim is simply not true.

My claim is that ALL Americans that earn income should pay something in Federal Income Taxes and that taking more from the rich will never generate enough to fund the liberal spending appetite. My claim is also that no matter what the taxes paid you are always going to get the abuses you see in California, which is one of the highest cost of living states in the nation with the highest taxes that cannot seem to find a solution to the homeless and poverty issues.

 

[Tbird19482]

My claim is that ALL Americans that earn income should pay something in Federal Income Taxes and that taking more from the rich will never generate enough to fund the liberal spending appetite. My claim is also that no matter what the taxes paid you are always going to get the abuses you see in California, which is one of the highest cost of living states in the nation with the highest taxes that cannot seem to find a solution to the homeless and poverty issues.

Again you should do a little research before you post lies
Here is a search I did
I asked what political party is fiscally more responsible and this is what I got
very interesting seeing you keep saying it is the Liberals that are spending all the money

which party is more fiscally responsible - Google Search

Do you have anything to back up your clams?
have a nice day

 

[Tbird19482]

My claim is that ALL Americans that earn income should pay something in Federal Income Taxes and that taking more from the rich will never generate enough to fund the liberal spending appetite. My claim is also that no matter what the taxes paid you are always going to get the abuses you see in California, which is one of the highest cost of living states in the nation with the highest taxes that cannot seem to find a solution to the homeless and poverty issues.

One more thing EVEN The Federalist ( a very Conservative paper ) says the Republicans are not as fiscally responsible as the dems and liberals are
You can read it here
No, Republican Presidents Aren't Responsible For Most Of America's Debt
have a nice day

 

[Exquisitor]

One more thing EVEN The Federalist ( a very Conservative paper ) says the Republicans are not as fiscally responsible as the dems and liberals are
You can read it here
No, Republican Presidents Aren't Responsible For Most Of America's Debt
have a nice day

Sure they are.

No, the Presidents aren't responsible, its the people who elected them.

Bush was the first one to give it away to the rich and put wars on credit when Al Gore would have had the Debt paid by now.

If we had lent Obama a little more in the beginning we might have got off this whole wrong track.

Now Don Cheeto does the same thing.

So don't try to spin it that the Democrats are to blame.

 

[Exquisitor]

I've seen many politicians call for high income earners to "pay their fair share" as they call for higher taxes on such earners. However, I've never seen any of these politicians or their supporters articulate precisely what that fair share amount should be. I realize fair share may be dependent on income so let's take someone who makes $1 million per year. If you agree with these politicians who think the current level of taxation is not sufficient then how much tax should someone making $1 million per year being paying in taxes? I'd like a specific amount or at least a range.

I'm not asking people to pay their fair share of taxes, I'm asking them to pay more than their fair share.

This is the only way we will get out of debt.

If you want to get out of debt, you have to go mental, you buy cheaper food, fewer vitamins, nobody gets anything for Christmas, I stop eating out, I think about walking and using the internet at the library, I get a second job so I don't spend my money in recreation in my spare time.

If you gouge too much the economy slows down and its engines run out of fuel, if you take too little, the extractors go into full steam and the economy is depleted of funds and the consumer looses resources.

Your fair share depends on what other taxes you must sustain such as Social Security and State taxes.

If your paying 25% before loopholes now, then a flat tax of 33% or 40% might pay the debt.

Resources and success would go to those products and services that were more essential rather than gimmicks as in a tax cut.

 

[Tbird19482]

Sure they are.

No, the Presidents aren't responsible, its the people who elected them.

Bush was the first one to give it away to the rich and put wars on credit when Al Gore would have had the Debt paid by now.

If we had lent Obama a little more in the beginning we might have got off this whole wrong track.

Now Don Cheeto does the same thing.

So don't try to spin it that the Democrats are to blame.

First of all I was NOT blaming the Dems for all this and IF you had read the article I posted you would have known that
If you go back and read some of my posts you will see where I have stated the fact over and over again that the Republicans keep repeating the lie that Obama doubled the debt or ran it up more then all his predecessors combined
FACT is there have only been two Presidents in the last 50 years that did that and they were both Republicans
Reagan almost tripled it and G W Bush doubled it
The fact it the Republicans are the ones that mess things up ( ex Trump and GW ) and the dems get us back on track
Have a nice afternoon

 

[Exquisitor]

First of all I was NOT blaming the Dems for all this and IF you had read the article I posted you would have known that
If you go back and read some of my posts you will see where I have stated the fact over and over again that the Republicans keep repeating the lie that Obama doubled the debt or ran it up more then all his predecessors combined
FACT is there have only been two Presidents in the last 50 years that did that and they were both Republicans
Reagan almost tripled it and G W Bush doubled it
The fact it the Republicans are the ones that mess things up ( ex Trump and GW ) and the dems get us back on track
Have a nice afternoon

No, Obama ran up a debt, but if they had spent a little more in the beginning, well, Don Cheeto would not have won and then how would we spank the Republicans for their behavior?

If Al Gore had won in 2020, we'd have the debt paid by now.

Looks like the Republicans are being shut out, when median income rises in a district it goes Democrat.