Social Question

josie's avatar

What percentage of someone else's income are you entitled to?

Asked by josie (22422 points ) September 20th, 2010

Let’s figure that every American benefits somehow by the distribution of Federal tax revenue. If people could argue persuasivly otherwise, the current tax philosophy would not pass muster in a democracy.
But the following is also true-
statistics from the U.S. Internal Revenue Service for 2000 show that returns showing less than $15,000 in adjusted gross income amounted to 30% of total returns filed but accounted for less than 1% of tax paid. By contrast, although they made up only 2% of all taxpayers that year, taxpayers reporting $200,000 or more in adjusted gross income paid 45% of all federal income taxes.

That means that some people do not pay very much for the same overall benefit of being a citizen as others.

That means that those who do not pay much tax, are getting their per capita “share” paid by somebody else.

If someone does not pay their per capita “share” of benefit, what percentage of somebody else’s income are they entitled to in order to make up for the shortfall? Is the current percentage too much, too little, or just about right?

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45 Answers

Ltryptophan's avatar

Definitely entitled to some large percentage of anyone who makes more than 100m per year. That is just crazy…so they should give some of that to everyone. But not more than 50% that is usury. I don’t care how much money someone makes noone has a right to take more than half of it just on GP.

wundayatta's avatar

Do you have a source for your figures? I thought that taxes on the middle class generated much more income than taxes on the wealthy.

How much of someone else’s income am I entitled to? As much as is needed to create a safe, productive society. We are all in this together. We—Americans (or any other nation’s people)—are much better off when we cooperate than if we are at each other’s throats. We generate more wealth when we cooperate.

Wealthy people become wealthy because they benefit from the labor of others. If people do not feel they are compensated well enough, trouble could ensue. Sometimes the wealthy just won’t see reason unless we force it on them. So we pass tax legislation that takes money from the wealthy, who won’t notice it’s gone, and provide food and housing and medical care to people living in poverty, and who notice it a lot.

What percentage you ask? Well, in the early part of the century, there was a 90% income tax on the wealthy. I think the highest rate is down to 35% or 38% these days. In countries in Europe, the rich, as well as everyone else, are taxed at much higher rates than we see in the US.

Clearly, these handouts to the rich (yes, letting them keep more of the money they earned is a handout to them) aren’t working. They are just allowing the rich to be ever more irresponsible. We need to get them under control, or this country will tear itself apart at the seams. The proper tax rate? Oh, I’d say 50% for now. We’ll see how it goes.

jaytkay's avatar

Federal income tax is only part of the picture. If you want to pick and choose which pieces count, I can play, too.

FICA (Social Security plus Medicare)
At $15,000 the tax is 7.65%
At $1,015,000 the tax is 0.8%

The working poor tax rate is about ten times the millionaire’s rate.

josie's avatar

@wundayatta
Well, in the early part of the century, there was a 90% income tax on the wealthy
What are you talking about?
http://www.truthandpolitics.org/top-rates.php

MeinTeil's avatar

None None None None None None None None None None None None None None None None None None None None None None None None None

jaytkay's avatar

@josie I think your link agrees with @wundayatta, showing the top marginal rate was about 90% from 1942 to 1963.

P.S. Top rate does not mean your whole income is taxed at that rate.

Today’s top rate is 35%. Nobody pays 35% on their whole taxable income.
You only pay 35% on income over $373,650

Everybody pays 10% on the first $8,375
Everybody pays 15% on income between $8,375.01 and $34,000.00
Everybody pays 25% on income between $34,000.01 and $82,400.00
Everybody pays 28% on income between $82,400.01 and $171,850.00
Everybody pays 33% on income between $171,850.01 and $373,650

Meaning if you make $8,375, your tax is $837.50
If you make $8,376, your tax is $837.65 ($837.50 + $0.15 on that extra dollar)

And so on up the brackets

ETpro's avatar

@MeinTeil Move to Somalia. You’re gonna just love it. No evil gubment and ZERO taxes.

@josie I think @wundayatta has provided the perfect answer and @jaytkay has explained why progressive taxes are not all that unfair. @MeinTeil has posted on any tax question that we should always cut taxes. I suppose that when they get to zero that might be enough. Or perhaps we should keep right on cutting taxes into negative numbers, having our Government cut us a check for each dollar we declare. That would sure help the National Debt… GROW!

Most of us, however, are aware we need some things that government does. We need the government to provide for the common defense, build and repair roads, control air traffic, fight fires, educate our children, police our streets, incarcerate felons, etc. We are aware we can’t have all that for free. But a flat tax sounds so tempting. It would certainly simplify figuring your taxes. In fact, Republicans pushing for it call it the “fair” tax because it taxes all at the same rate. But is it really fair?

Consider that a flat tax would need to be pegged at around 13% if it were levied on every dollar earned, and 15% or more if applied on all consumption (a sales of Value Added Tax).

Now, consider three families of four.
Family 1 earns $20,000 in a year. That would put them below the poverty line in America.
Family 2 earns $200,000 a year. Doing really well.
Family 3 is a real Daddy Warbucks case, earning $200,000,000 a year. Don’t laugh. Heads of Hedge Funds routinely make bonuses 5 times that large, and that’s on top of their base salary.

Family 1 pays $20,000×13% = $2,600 in taxes, leaving them just $17,400 a year or $1,450 a month to live, pay for housing, food, clothing. They will be very lucky if they can keep a roof over their heads.

Family 2 pays $200,000×13% = $26,000 in taxes. That leaves only $174,000 a year or $14,500 a month to squeak by on. Admittedly a daunting task, but doable so long as you confine yourself to neighborhoods like Beverly Hills or Brentwood.

Family 3 pays $200,000,000×13% = $26,000,000 in taxes. WOW! A bunch of money. But the have $174 million left over after taxes. Even with a couple of estates and a yacht, they have plenty to buy up family 2’s small business along with a bunch more. So next year they can look forward to netting $300 million and the year after that maybe $450 million.

A flat, regressive tax sets up a situation where wealth very rapidly concentrates in the hands of the already wealthy, and the deck gets increasingly stacked against the bottom 95% ever being able to rise higher. It is called oligarchy.

There are 2 dozen countries around the world that have a flat tax of some form today. Here’s the list. Does anyone seriously maintain that any of these are models of economic prosperity we should emulate in US tax policy?
Albania
Bosnia and Herzegovina
Bulgaria
Czech Republic
Estonia
Georgia
Guernsey
Hatti
Kazakhstan
Iraq
Jersey
Kyrgyzstan
Latvia
Lithuania
Macedonia
Mongolia
Montenegro
Mauritius
Romania
Russia
Serbia
Slovakia
Ukraine
http://en.wikipedia.org/wiki/Flat_tax#Countries_that_have_flat_tax_systems

Nullo's avatar

None save for the Almighty. People who get a percentage of it do so because it’s better than the alternative. I would, of course, apply this to everyone.
I pay my taxes because I like some of the services that government provides, and I like not being sent to jail for not paying my taxes.

Remember, the government is supposed to work for the people, not the other way around.

Stuff like this really irritates me.

Cruiser's avatar

Judging by the above answers, these are tough passionate issues @josie…10% of our workforce somehow survives on $7.25 an hour minimum wages and please forgive me if I am wrong on that figure and even if it was $8.25 and hour that is only $40.00 more a week and hardly enough a dinner and dessert at Mc Donalds and Red Box Movie. These numbers do not factor in withholding taxes or rent or food or transportation or health care.

I am a middle of the road conservative but I am also compassionate in that people need a break in order just to survive. To think of taxing everyone is insane and to not accept the burden of supporting this great country that gave those 6 figure or more earners a chance to enjoy a great life is even more insane. I am not talking about socialism but I am talking about compassion and giving these hard working people who clean our streets and the bathrooms of our grade schools, who give us $.99 cleaned and pressed dress shirts…who lay the mulch in our city parks…who empty the trash after a festival or concert. Someone makes this all happen for very little in return and to use taxes as an excuse to further an agenda is missing the point that there is a price to pay for what we do have and we must pay it….but we don’t have to bend over and smile while an ineffectual government squanders every penny of what we do pay to support ours and everyone else’s hard work in this country!

DPWilsonHenry's avatar

No one is entitled to anyone else’s product of their own labor. If you feel entitled to even just 10%, consider this situation:
What if you held someone in slavery for 10% of their year, and they were forced to provide for you?
There is no fundamental difference.

ETpro's avatar

@DPWilsonHenry There is a HUGE fundamental difference. Try living as a slave for 36 days and see if you like that just as well as living as a free person who has to pay US income taxes.

jrpowell's avatar

I pay taxes to keep people from stealing my stuff. If my pennies go to food stamps so people at least have food I’m cool with that. Spending money on the military is what pisses me off.

Nullo's avatar

@johnpowell The military also keeps people from stealing your stuff.

thekoukoureport's avatar

Funny, the more I watch and listen and look at the world around me, I keep hearing a famous saying in my head “let them eat cake”. This is truly turning into an election of class warfare and the rich are winning. The less than 2% who are making tens of millions of dollars annually are fighting for a measly 5% of their vast fortunes. This country allowed those individuals to attain such wealth under a much more restrictive tax then we have today. How can anyone who has enjoyed the prosperity of our great nation not want to contribute to it’s continuation is beyond me. It just seems to come to another age old saying in my head. “fuck’em I’ve got mine”

jrpowell's avatar

@Nullo :: I don’t believe that.

Nullo's avatar

@johnpowell That is your privilege.

ETpro's avatar

@thekoukoureport You asked, “How can anyone who has enjoyed the prosperity of our great nation not want to contribute to it’s continuation is beyond me.”

Victor Hugo answered that long ago with these true words, “There is always more misery among the lower classes than there is humanity in the higher.”

Tomfafa's avatar

Brilliant question!

bendonahower's avatar

From the standpoint of developing the best public policy, I think you have to backwards from how this question is asked. Instead of asking how much of someone else’s money do another person deserve ask what are the entitlements and social programs that we want as a society. Then, how do we pay for these programs and entitlements in an equitable way?

ETpro's avatar

@bendonahower Very well said. Nobody takes a penny in taxes from you if you live in Somalia. But nobody comes if you call the police or fire department. No school teaches yur kids. If you want to visit relatives on the other side of the country, you need not just a car but you need to build yourself a road at your own expense, and hire a private army to protect you as you drive on it. And you need to pull this all off where the anual per-capita income is $600. Is that what we want in the name of fairness?

josie's avatar

@bendonahower @ETpro et al. I did not imply that a good alternative is not pay the cops or firemen. In fact, it is nice when you call the cops and they show up. That means they are getting paid. With tax money. Since some people pay little or no tax, that means that when the cops show up at their house somebody else paid the tax. Which means a little bit extra of the tax was taken out of their income. Which means that the people who called the cops got the benefit of somebody else’s income.
So the question still stands.
If you are the person who gets their share of the cops salary paid for by me, how much of my income are you entitled to in order to pay your share of the cops tab? You obviously believe that you are entitled to some of it, or you would feel crummy about the whole deal. So, how much? People seem to think it is fair to take from one and give to another. At what point is it too much to take? Everybody seems to think it is OK to take from somebody else. Does anybody ever say, Maybe it is too much?

thekoukoureport's avatar

You can take my money for wars… That’s patriotic….
You can take my money giving tax cuts and not paying for them…. Thats sound business
You can write no child left behind and not pay for it… Thats good education… bad for kids
You can deregulate the banks. They need to to remain competative…. Bad for families
You can propse free trade…. Thats good for the economy…..Bad for employment

Healthcare for all… Socialist!
Consumer protection…. Excess government!
Responsible tax structure… Bad for small business!
Stimulus…. Saved us from outright depression… you spent us into oblivion!
Bailouts…. Saved industries and millions of jobs….Government takeover!
Cash for clunkers… Saving citizens money every day….. welfare
Energy Tax Credits…. Saving citizens money every day….welfare
Tax cuts for the middle class…..9 different cuts…....He’s raising taxes next year!
Student loan reform…. government takover.. socialist.
Race to the top…... True education reform…. No mention?

Same tired arguments, Time to stand up and say enough is enough. We the people need to stand up and end once and for all this party of corporate interests. This economy will start up again, this government is working. If we allow the above mindset to stop the change you will no longer have a government and a president that has started to actually look at the big picture by focusing this recovery on “We the people”

How much of your money do I deserve? Nothing! We the people deserve our share because we the people made it possible for you and everyone else to prosper. The question and all like them are designed to promote anger in the respondents. Most of the people who are “taking your money” live in squalor with an education system that will keep them there and a police and fire department that are helpless at best (all due to a low tax base of course) So where are your tax dollars going? look at the top portion of the diatribe because nobody has taken anymore of your taxes these past 18 months and look how great your doing!

josie's avatar

@thekoukoureport Pretty touchy.
BTW, How do you know I’m doing so great? Is it the sunglasses?

thekoukoureport's avatar

the pretty smile

josie's avatar

@thekoukoureport
I doubt your sincerity, but thanks for the compliment. Other people say the same thing.
Anyway, why not just answer the question? Lots of people have comments about poverty, injustice, rich people, poor people, the military, cops, Somalia etc. But nobody will offer a number. What percentage of my income are you entitled to?
It is clear from your answer that you believe that somebody out there is entitled to some part of it.
If it is not YOU then great. What percentage are THEY entitled to.
Seems simple enough to give a percentage.
The states and fed determine a percentage based on my income. They change it occasionally. Do you think that they finally got it right? Are they off one way or the other?
I’ll even make it easier. What is the absolute most that people are entitled to? Should it ever be 100%?. If the notion of percentage bothers you, then just give a dollar figure.

wundayatta's avatar

You tell me what your income is, and I’ll tell you what portion should be taxed.

josie's avatar

@wundayatta The question is what are you (or if not you, somebody else) entitled to? The tax rates change according to the direction the political wind blows. The legislatively dictated tax rate is established by caprice, not by a moral claim by one person upon another.
What percentage are you entitled to, whether or not you getting it? Or are you saying that one person’s entitlement increases or decreases according to somebody else’s income.

But for fun, what if I make 25,000. What is the entitlement?
What about 50,000. What are you entitled to?
What about 100,00? What is your entitlement
What about 150,000? The entitlement?
What if I live on social security?
It’s one of those. Have at it.

thekoukoureport's avatar

The Clinton era Tax levels proved to not only balance the budget but bring our national debt DOWN. Before george bush took office this country was on schedule to be debt free in seven years.

so I will go with that.

wundayatta's avatar

First of all, it’s not that any individual is entitled to anything. It’s that we are all in this together: building roads, educating children, fighting wars, making sure people have an opportunity to get out of poverty. So no one is entitled to anything. We have a social compact, and we have agreed, in this nation, that richer people should pay a higher marginal rate than poor people. It’s called a graduated income tax. I’m sure you know all this.

What’s fair? I’m not unhappy with the way things are not. 25K—no tax. 50K—5% tax 100K—25% tax 150K 30%. 250k—35% 500K 40% 1000k and up—50%. Something like that. Given that those who make more than 150K earn about half the income in the country, it seems only fair that they pay more for the things the country does for them. They sure benefit more from what the country does.

thekoukoureport's avatar

who exactly are THEY? What should we do with THEM? We took away their education and they still wont leave, we took away there manufacturing and they Still wont leave, Now were taking away their houses and they STILL wont leave. lets take away their food…. Hope you have a good backup for your wonderful tax free world. They had that here before you know, it was called the wild west. Good luck with that one.

josie's avatar

@thekoukoureport Never said anything about tax free. Just wondered what my entitlement is if it turns out that I can’t pay for services myself.
Dude, did we catch you on a bad day?

thekoukoureport's avatar

Well you’ve questioned my sincerity, have you not? Would it have been better if I commented on the dirt all over your face? LOL

They allows for generalizations and from my experience racial undertones.(not that I want to go on that tangent, just need to be said) These are Americans! People suffering and yes if it where you I would want someone to give you the ability to pull yourself back up, through welfare, reeducation, job training or placement, i want all of our resouces used to benefit EVERY AMERICAN so we can all have our right to pursie happiness!

wundayatta's avatar

@josie You are entitled to the same as anyone else would be in your circumstances. If you should have the misfortune to lose everything, you would be entitled to Medicaid and Section 8 housing (good luck finding any), and Food Stamps. Maybe you could get unemployment compensation for a while, too. If you were older, you could get Social Security and Medicare.

When you pass a homeless person, do you think, “Thank God I’ll never be like that,” or do you think, “There but for the grace of God, go I?”

thekoukoureport's avatar

Section 8 housing in rich neighborhoods in New Jersey are over 55 communities. That way the poor can’t take advantage of the better schools. The seniors start to vote against school budgets and education continues to suffer! Thats okay cause they are already getting theirs…. so F*&^ the kids right?

wilma's avatar

Where I live folks making over $150,000 live right next door to folks making less than $15,000 annually.
They drive on the same roads. Their children go to the same school. They get the same cable TV, and cell phone signals. They have the same congresspeople. They all pay 6% sales tax on the non-food items that they purchase. Each family pays the same taxes on gasoline and the same percentage of taxes on real-estate property that they own, based on the property’s value. They both have exactly the same fire, police and other emergency services protection.
The person making $15,000 gets some extra benefits because of his low income, such as; some food assistance, some medical assistance, some education assistance.
The person making $15,000 a year pays no income taxes. The person making $150,000 will pay about 30%.
This is not a hypothetical situation, I know these people.
What I don’t understand is how the person making more money is gaining that much more from living in America.

thekoukoureport's avatar

And you can thank America for making that country what it is today.

Nullo's avatar

@thekoukoureport It is my contention that the problem with the schools is not financial, but rather philosophical. Some of the greatest minds of the 20th century went to schools that had no computers, few textbooks, were furnished with naught but a radiator for heat, and windows for cooling. In some cases, they didn’t have cafeterias, kids brought their own lunches, they didn’t have clubs, they didn’t have band, or sports.
School wasn’t as fun, sure, but apparently it worked out pretty well anyway.

It has been my observation that students who want to learn will do so, and those that do not, will not.
Example 1: I had, in high school, a state-required Government class; since all students were required to pass it in order to graduate, the content was kept simple. I paid some attention to the lectures and the readings and aced every test offered. I don’t know what my classmates did, but most of them failed miserably.
I don’t think that the difference was the money; like myself, much of the class came from middle-class families. And I don’t think that it was a difference in natural talent; I’m smart, sure, but not that far above average, and the material was excessively simple anyway. The difference was, I am certain, how much we cared about the class.

Example 2: One of my best friends was bused in from a single-parent home in the bad part of town. Most of those bused students didn’t really care about school, either, but he did. He did well in his classes, was active in clubs, graduated with honors, went to college, and recently returned from a year abroad in Japan. A man who carpe’d the diem.

Example 3: Another of my best friends lives in a nice neighborhood and has wealthy parents; he himself is very intelligent – he is the only person that I know who scored a 36 on any part of the ACT. He did ridiculously well in math and science classes, not so well in English, and graduated uneventfully. He started going to a prestigious Catholic college, dropped out in his second year, and ended up at a degree-completion school.

wundayatta's avatar

@Nullo And these cases mean….........?

I trust you do not expect anyone to make generalizations based on your experiences.

Nullo's avatar

As I said, those are my observations. Different people, different backgrounds, different parental income rates, all at the same school, all performing differently. It’s a bit fuzzy as case studies go, but it’s what I’ve got. It is teh backing for my observation that the school’s funding isn’t the determining factor -or at least not the only determining factor – when it comes to the quality of education received.
Rather than making generalizations, I was in fact trying to undermine one of @thekoukoureport‘s assumptions. Verbosely.
I may have gotten a little carried away, really.

thekoukoureport's avatar

for every three examples I can take you to Camden NJ.

Nullo's avatar

@thekoukoureport Perhaps even further illustrating my point. If the basic philosophies (both of the teachers and the students) are wacky, no amount of extra funding will help.

ETpro's avatar

@josie Sorry I am so late to get to your question to me. My answer is that governments should take from each member of the society only as much as is needed to build a strong society that works for us all. That absolutely implies a progressive tax system where some at the very bottom pay minimal amounts into the system. If we put a sales tax in place, it would need to be around 23% and the growing portion of our society who live in poverty would be devastated by such a tax. The wealthiest 2% would mostly welcome it, because since they don’t need to spend much of their income, it would lower their effective tax rate.

For the extremely wealthy, the top 1/10th of 1%, it would be an enormous bonanza. They would, on average, keep a great deal more of their average * million a year in income. They would use all that extra cash to buy up smaller businesses, and to invest off=shore where returns are high. You would soon end up with an oligarchy, with the wealthiest Americans owning virtually all the nation’s wealth. That’s the formula for a banana republic.

I call your attention to the post above listing the two dozen nations that already do have some form of flat tax or sales tax. Which one do you consider the model the US should try to emulate?

thekoukoureport's avatar

@Nullo Really? cause my point is entirely economic. Because our education system is based on a local tax structure(600 school districts) with local standards (600 school boards) our kids suffer.

Some in my state are getting a much better education than my son or daughter. Why? cause they live in a different zip code! Thats ridiculous! If you don’t belive that All kids can have a future, check out the work that has been done in the Harlem school district.

Nullo's avatar

@thekoukoureport The schools are getting more money, perhaps, but that doesn’t translate into better education. The quality of education doesn’t depend on funding, but rather on the teachers and the students. I direct you again to the schools from the early part of the last century. A lot can be done with a little, but only if people are willing to do it.

Tomfafa's avatar

The most important factor in the quality of education is parent participation… in my opinion. Money is lower in the level of importance. Too much money spoils education chances for kids. Just like cities that collect the most taxes are most deeply in debt.

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