Berkeley CSUA MOTD:2010:April:12 Monday <Tuesday>
Berkeley CSUA MOTD
2010/4/12-5/10 [Reference/Tax] UID:53782 Activity:moderate
4/12    My gf did her taxes. She was unemployed most of last year and only
        paid about $500 in federal tax. She is getting a refund of $1300.
        We are both rather annoyed at this. How can you get a refund of
        more than you paid in?! (This is a rhetorical question. I know
        how.) Another acquaintance of mine makes less than half of what I
        do, but her take home is only 20% less. Even though I put money into
        my 401k (to shelter the income) and have a mortgage interest deduction
        (she does not itemize) she just got a huge refund. I got a (little)
        bill. I paid about 15x in taxes what she paid. I cannot believe there
        are goobers who want to raise taxes. 50% of people aren't paying any
        as it is! You want to raise my taxes? Eliminate some bogus credits
        first! Those with more income should shoulder more of the bill,
        but these free rides are ridiculous. You can't have half of the
        country not only not paying taxes, but getting refunds on top of it!
        "The bottom 40 percent, on average, make a profit from the federal
        income tax, meaning they get more money in tax credits than they
        would otherwise owe in taxes. For those people, the government
        sends them a payment."
        \_ It's call the erosion the middle class.
        \_ I made several billion less than GE and apparently paid more
           US taxes than they did:
           \_ Did you also put 323,000 people to work, paying payroll
              taxes for all of them and likely millions in sales taxes
              and other taxes? If you did then I'm in favor of refunding
              any income tax you paid.
        \_ It's called the erosion the middle class.
           Really rich makes the rules, or at minimum, controls how
           the rules are applied, so they don't pay all that much into
           the system.  No matter, the system is designed to fall
           apart eventually because with enough discouragement of the
           right thing to do, no one will do the right thing.  No
           empire lasts forever. As the joke goes, "make your time..."
           I only tolerate it because I think of it as paying for my
           Mom's benefits in a very indirect way.  If you don't have
           anyone in your family who can draw from the broken system,
           what can I say.  Switch to cash business, hide it away, and
           retire as soon as possible and become part of the leeches.
           I plan to retire fairly early and stop participating in the
           broken system, as much as I can, anyway.
        \_ Look what I found through Google:
           "These findings raise serious questions about the future of
            the U.S. income tax system...."
        \_ If you include all taxes, not just income tax, everyone pays
           taxes. Overll tax rates including FICA and Sales tax are pretty
           flat above about the bottom quintile. Income tax is pretty
           progressive (high earners pay more) but most other taxes are
           regressive (poor people pay more, as a percentage).
                                                  \_ percentage of income, or
                                                     percentage of the
                                                     particular service or good
                                                     or whatever subject to
                                                     that tax?
           \- leonhardt should have also mentioned the giant mortage
              interest dedection [~$100bn]. do you think the OP is
              stupid or disingenuous?
              \_ Is that a rhetorical question?
           \_ Rebuttal to some points he makes:
              1. I wouldn't call myself "very wealthy". I think the perception
                 of who is "very wealthy" has changed. I am middle-class,
                 _maybe_ upper middle class if I lived somewhere less expensive.
                 Let's be realistic. People who make over $52100 are not
                 all "wealthy". Saying that $52100 is the statistical
                 middle class may be true, but you cannot live a
                 traditional middle class lifestyle on that salary in any
                 urban part of the country. That doesn't mean people who
                 make less should pay no tax and it doesn't mean that
                 people who make more should shoulder the burden of all of
                 the tax revenue. If you make $100000 per year you are not
                 John D. Rockefeller.
                 \_ You can live a middle class lifestyle on $52k/yr in most
                    of the country. Just not in expensive areas. That is quite
                    a bit of money in San Antonio, for instance.
              2. "It will have to raise taxes even more than it otherwise
                  would on everybody else. Or it will have to find deep cuts
                  in Medicare, Social Security, military spending and the
                  other large (generally popular) federal programs."
                  I would lobby for either of these options. I think some
                  deep cuts need to be made and I also think that people
                  in the bottom 50% need to start paying more than they do
                  now, even if that means the top 50% also sees an increase.
                  One cannot just raise taxes on the top 50%. Everyone has
                  to share in the pain and right now that's just not true.
              3. Focusing on payroll taxes is a distraction unless you
                 own a company. This is not money coming out of my (or
                 your) pocket. In fact, this is another way of saying that
                 the wealthy (who own the companies) are also bankrolling
                 other benefits for the poor. State tax is a red herring. Some
                 states have none at all and we can choose to move there if we
                 wish. Mortgage deduction is also irrelevant. If the bottom
                 50% had huge mortgage deductions they would still pay 0 (or
                 get a refund). It's just a way for homeowners to keep from
                 getting _really_ reamed compared to the bottom percentiles.
                 Without it the gap would be even worse.
                 \_ you're a (wordy) idiot.
                    \_ Nice rebuttal. You obviously have no counter.
                       \_ you obviously have no clue, so why bother?
                          \_ Pathetic.
                 \_ You don't understand what "payroll taxes" are. This is
                    another name for FICA, which everyone pays, though it is
                    only taxed on the first $100k or so of income.
                    \_ Everyone pays less than _half_ of. (Example: only
                       the employer contributes to FUTA). Further, money that
                       "you pay" (the other half) is mandated by law to be
                       withheld by your employer. Since it is mandatory
                       and it comes out of your paychecks (and not out of,
                       say, your capital gains on stock or other income
                       you make outside of your employment) you could make a
                       good argument that it's really your employer paying all
                       of it. This is slightly different from income taxes
                       (which you pay out of your salary also) because with
                       income taxes some people pay more and others pay less
                       depending on their situation. So that's money that, if
                       your tax situation allows, you may get to keep. Not so
                       with payroll taxes (unless you switch jobs in the middle
                       of a year and overpay). It's never really "yours" to
                       begin with unless you are an independent
                       contractor/business owner. For example, I cannot lower
                       my FICA withholding, invest it for the year, make a
                       profit on it, and pay the amount due at the end of
                       the year. So how is this money really "mine"? What
                       it is is money paid by my employer on my behalf.
                       \_ It's yours because it comes out of *your* salary.
                          When someone gives you a job offer and says you'll
                          be paid $100K/year, you will claim your salary is
                          $100K/year, it will go down as $100K/year on your
                          tax forms, but the amount you get to spend is
                          less FICA.  Sales tax is mandatory, too, that doesn't
                          mean it's money paid on your behalf by the business
                          you're buying from.
                          Returning to: you're an idiot.
                          \_ Semantics. It's your employer paying it. As
                             I said, you have no chance of retaining your
                             _half_. Sales tax is not at all mandatory in any
                             way. I can live a lifestyle in which I pay no
                             sales tax at all or I can end up paying 100%
                             of my salary in sales tax depending on my
                             situation and my choices. Not so with "payroll
                             taxes". Instead of calling me names, realize
                             that "you" are not paying these payroll taxes.
                             These are employer contributions in your name
                             under the guise of salary.
                             \_ Guess what: If you don't have a salary, you
                                don't pay payroll tax.
                                \_ True. This is just another way of saying
                                   that employers always pay for it. If
                                   you don't have an employer, you don't
                                   pay it. Ever. Not so with income tax or
                                   sales tax. The evidence is strong that
                                   this is a tax employers pay. Employees
                                   may pay it in legal terms, but the
                                   reality is that employers pay it all
                                   unless you are an independent contractor,
                                   which 90+% of people are not.
                                   \_ There is no such thing as "employer
                                      paying for ***" as they'll just pass
                                      the cost to the employee.  There is no
                                      such thing as free beer. !op
                                      \_ I would argue the opposite. There
                                         is no such thing as "employee
                                         paying for ***" as it is because
                                         of the employer that the employee
                                         has any money at all. Of course,
                                         the employer also relies on
                                         employees, but it's much easier
                                         to find a janitor to work at Microsoft
                                         than to found Microsoft.
                                         \_ Do you think your employer pays
                                            for your health care because it
                                            comes out of your paycheck?  How
                                            about unemployment?
                                            \_ How do you get the money to pay
                                               for it if not from your
                                               employer? And if you quit
                                               your job you will stop
                                               paying unemployment and
                                               _really_ start paying for
                                               your health care in earnest.
                                               \_ What kind of insane logic
                                                  is that?  You got the money
                                                  from your employer, therefore
                                                  your employer paid for it?
                                                  Your employer gives you
                                                  a *salary*.  That salary
                                                  belongs to *you*.  Deductions
                                                  from that salary are things
                                                  that *you are paying for*,
                                                  just as surely as if you
                                                  spent the money on a
                                                  cheeseburger.  -tom
                                                  \_ Some deductions, yes.
                                                     Others, no. You are
                                                     forced to pay for
                                                     unemployment insurance.
                                                     In fact, not only are
                                                     you forced, but your
                                                     employer hands the
                                                     money over for you. You
                                                     are not forced to buy a
                                                     cheeseburger. If my
                                                     employer took out $3
                                                     of my salary every
                                                     month and gave me a
                                                     cheeseburger instead
                                                     and I could not
                                                     change this then I
                                                     would say that my
                                                     employer bought me a
                                                     cheeseburger, not
                                                     that he paid me $3
                                                     with which I bought a
                                                     cheeseburger. I
                                                     might be vegetarian
                                                     and I don't even want
                                                     that cheeseburger. I
                                                     just want my $3 to go
                                                     buy a nice salad, but
                                                     no dice. So how is
                                                     that $3 mine? In the
                                                     case of health
                                                     insurance, I can opt
                                                     out of that and go
                                                     get my own if I wish,
                                                     but most employers heavily
                                                     subsidize health
                                                     insurance and if you
                                                     opt out you do not
                                                     get their subsidy in
                                                     cash, although I worked
                                                     somewhere where I did.
                                                     \_ Let me put it this way:
                                                        if tomorrow they
                                                        stopped requiring
                                                        employees to pay
                                                        unemployment taxes,
                                                        I'm pretty sure you'd
                                                        expect the money saved
                                                        to go to you rather
                                                        than your employer.
                                                        Because it's part
                                                        of your salary.  -tom
                                                        \_ I see your point.
                                                           Do you see mine?
                                                           If you quit your job
                                                           to live off of
                                                           your large
                                                           inheritance do you
                                                           still owe the
                                                           payroll tax?
                                                           How can that be
                                                           if you're the
                                                           one that owes
                                                           it and pays it?
                                                           It's a payment
                                                           on your behalf.
                                                           If it's no longer
                                                           mandated you may
                                                           see a gain at first,
                                                           but I would argue it
                                                           would be mostly
                                                           competed away
                                                           long-term as people
                                                           were willing to work
                                                           for just a little
                                                           more take home than
                                                           before even if
                                                           it means a smaller
                                                           salary. E.g., Joe
                                                           who made $50K and
                                                           took home $40K
                                                           (but now takes
                                                           home $50K) is now
                                                           finding his job at
                                                           risk from the new
                                                           college grad willing
                                                           to work for $45K (and
                                                           take home $45K).
                                                           The new equilibrium
                                                           will see some of the
                                                           windfall with the
                                                           employer and some
                                                           with the employee
                                                           calling into
                                                           question whose it
                                                           was to begin with.
                                                           \_ there's really
                                                              no question
                                                              whose it is.
                                                              The fact that
                                                              you can avoid
                                                              payroll tax by
                                                              not being on
                                                              payroll doesn't
                                                              mean that someone
                                                              else is paying
                                                              it.  You can
                                                              avoid sales tax
                                                              by not buying
                                                              anything, but
                                                              when you buy
                                                              something, you're
                                                              still paying
                                                              sales tax.  -tom
2010/4/12-5/10 [Uncategorized] UID:53783 Activity:nil
4/12    Is the free MS Security Essentials any good?
Berkeley CSUA MOTD:2010:April:12 Monday <Tuesday>