A kid in my tax class said to the professor, "The problem with our tax system is that we make people pay too much. The soaring tax rates are out of control." The teacher told him that the top tax bracket was 91% under Eisenhower, over 70% under Nixon, and over 50% when Reagan entered office. It is now 35%. When tax revenue is less than expenditures, and tax revenue has been
constantly decayed since the 1950s, the solution seems obvious.

You wouldn't expect a poor bastard with a fluff education to fund the maintenance and development of infrastructure would you? You would be an ass if you did.

The ultra rich have monetary power and influence and they are in the best position to make good choices. Make them pay a large portion of the tax burden and you will find decision making much improved. Do the opposite, place the tax burden more heavily on the poor and you will have no influence on decision making. (Dropping the top tax bracket from 90% to 35% shifts the tax burden and this is what I am referring to).

Pretty much so.

Is also wonder about ability to live off a income then with the tax % as opposed to now. Even with a low tax % most still can't live in a single family house like they did back then

Think about what your taxes pay for (infrastructure for example). Pretty much impossible to have some of these things without taxes.

Also people are always in favor of cuts to things when it affects someone else.. not so much when it affects them.

Should we be having a discussion on what should/should not be funded by taxes? Always, it's part of democracy. But we should also be fully aware of the consequences one way or the other.

I blame the white man. See below. Thank you.

valid point. people should be more concerned on what the tax money is actually being used on as opposed to how much is being taxed.

imagine if things like welfare, social security and 2.1m dollar tax refunds werent being abused.

Just imagine if the white man had stayed in Europe where they belong. This country would still be tax free. lol

As opposed to the "native americans" who kicked out a prior human population some 5000 years or so prior?
ok then:P
Almost no human population lives on the land of their ancestors.. Chinese: displaced prior population
Japanese: Displaced prior population
European: displaced prior population
India? Definately displaced prior population
Middle east: Displaced prior population
North/South america: Displaced prior population?
Mars: you better believe that's a paddling!

Hey I just like the idea of women doing all the work LMAO.

For the record though, a 91% tax bracket is ridiculous.

I'm all about jacking tax rates up on the super-wealthy, but anything where you're actually paying more than you're keeping is a bit much.

Twain: It wouldn't be ridiculous if the top tax bracket was high enough. Lets take Zuckerberg for example. To make up a number, lets say he made 7 billion last year. (lets ignore that dividends are taxed at 15% too because this was a poor example). Is it really terrible that he pays 6.x billion in taxes?

If you institute a tax across the board then it isn't as unfair. The real question is, what would the government be doing with all that money. Is the spending necessary? At current debt levels I would say yes. Pay off our insane debt. Under any sort of normal circumstances I would say that 90% is insane. It is still nothing anyone could compromise on.

I guess what I am saying is, you do what you need to do. Thanks WWII generation.

Yes, let's penalize the wealthy for being successful. That'll encourage progress and innovation. Keep in mind that the same wealthy people you enjoy vilifying are the same people that do all the hiring in this country.

Whether you like it or not, it's their money. Period. The government has no right to take an absurd amount of it. It's legalized stealing.

Somebody has to pay; why not take from the haves rather than the have-nots? Are you suggesting that Zuckerberg wouldn't have made FB if he knew that 6B of 7B that he could make would be taxed?

That's almost as absurd as my saying "I'm going to stop buying food, because I always just eat it anyway".

We already do take it from the haves instead of the have nots. Pretty much every method of taxation that is currently imposed is progressive: income taxes, property taxes (based on the value of the property which is generally correlated with wealth) etc.

People love to point out how "low" the tax rate is on dividends and capital gains, but they neglect to account for the fact that double taxation is occurring. e.g. any corporate revenue being issued as a dividend is already net of corporate tax, as such the total tax burden on that dividend income = dividend tax rate + corporate tax rate. The combination of both taxes works out to roughly the same (if not slightly higher, in most cases) than the highest marginal income tax bracket.

There is no case of double taxation on regular income tax since labour income is paid by the employer out of gross revenue, before any tax obligations are remitted.

end of rant.
H4 (aka the tax-man)

@h4: regarding double taxation you would think so.. but it depends on how crafty the corporation is about it (dividends).. in aggregate I would say you are correct though (for dividends).

Regarding capital gains there is no double taxation as your capital gains are as the result of a trades between individuals and typically have no impact on a corporation at all. (ie if I buy bmo stocks for 80 and sell them for 100 it has zero impact on bmo or their financial statements). The lower tax level on stock was intended to compensate for risk.

There is sort of double taxation on personal income because I pay sales tax and mandatory user fees from my post-tax income (yeah ok my logic is somewhat twisted but..) :P

Also there is no capital gains tax on primary dwelling in canada.. which I guess is irrelevant to your point :P

Zuckerberg is a poor example. Instead, you should be thinking of the countless number of small business owners making $250k+. Why expand and hire more people if the government is just to claim over half your profits?

But even without that argument, the fact still remains that it doesn't matter what Zuckerberg did to make his money or how much he has. Personally, I despise FB and refuse to use it. But I will always argue that he has the right to hold on to his money. It's his. Not the government's. Not the poor man down the street. It belongs to him. And if private property isn't held sacred, what is? He uses public services like everyone else so he needs to pay taxes, but the sky high rates being discussed here are ridiculous. It's thievery.

You all need a serious dose of Atlas Shrugged. Ayn Rand wasn't always right, but her views on penalizing the wealthy are dead-on.

Yes I agree on the capital gains front, I thought about that some after I posted, but really it depends on the nature of the capital gain.

A stock does not gain value for no reason. Generally it is due to holding a large cash reserve (which corporate tax was paid on when it was first posted) or from spending profit/cash reserve on capital/expansion/acquisition (which they then receive a tax credit for, so there is a gain to be had in this sense).

But when a dividend is paid out it negatively impacts the stock value, so shareholders lose yet again on that front.

Dividends are paid out after corporate taxes are calculated... from t here it transfers to you personally and you have to pay tax again.

Thus it's double taxation.


You can be crafty to an extent and say.. give you, your wife and two kids all $32,000 each in dividends keeping it below the 16,000 personal tax floor.

Then you only pay 26% tax on $128,000 (likely higher in other provinces, since AB is usually cheaper).

still. if that all went to one person you're looking at jumping into a 38% tax bracket or so on personal income. plus the 26% corporate tax already paid = sucky day :P

@H4: stock's are worth whatever investors are willing to pay for them which may/may not have anything to do with corporate cash holdings or profits or deployment of capital (which is done pre-tax). Sometimes people flee/buy entire sectors due to externalities (as in 2008) or for other reasons (low interest environment between 1995-2006). Other than the arbitrage argument, dividends may have positive or negative impacts on a share price depending on the situation. Remember, trading stocks is trading ownership of the company. Sometimes the price is purely speculative. It's not uncommon to experience capital gains on stocks from companies who have paid no taxes (they simply didn't make money but their situation improved for example so the market re-evalutated what the shares were worth).

I strongly suspect that there is very little correlation between stock price (and capital gains) and corporate taxes paid.
Consider this: person A buys the stock at 60, and based on improved profits the price jumps to 80. They sell it to me (and pay taxes). In this instance your assertion is correct. Now lets say that the following year the corporation makes less profits than anticipated (and pays less tax). The stock price falls back to 60. I sell it. In this case your assertion is incorrect: The corporation pays tax, and I get a tax credit (for arguments sake it reduces my capital gains taxes to zero) so total taxes paid in this case between me and the corporation is definitely going to be less than most marginal personal income tax rates:P

"Then you only pay 26% tax on $128,000 (likely higher in other provinces, since AB is usually cheaper). still. if that all went to one person."
AB is only cheaper at higher income tax levels. At lower ones.. not so much :)
Up to $78,043 in income you pay less tax in Ontario than Alberta. (http://www.taxtips.ca)

still is a messy tax system.

If you're tricky and have a 4 member family...that 128,000 divdend income. Between the corporate tax you pay and the personal tax you pay.... your tax bill is

$33,280 in every province

if instead you decide to be honest, and not pay dividends to your wife and kids. or if you were single... your tax bill is..

AB- 55,374
ON-55,848
BC-57,297
MB-67,080
PEI- 68,775

based on that.. what's the incentive to be honest?

this was discussed last year too and doubt there's any new arguments.

I didn't say CT paid would affect the stock price, but dividends paid does (as it reduces the cash reserve and weakens the firm).

One thing I've learned with the tax code (especially with the real estate business) is it pays to be smart, rather than "honest."

I'm not saying that bucking the system is the way to go, but if you can reclass something and pay less taxes, DO IT. If you can do something to lower realized income, DO IT. And this is exactly what the "super wealthy" do. They find loopholes in the tax code, usually by paying the right people to find them. You'd be amazed at what exists out there if you can pay for it.

It all depends on who you talk too, and you usually have options with your taxes depending on how things are classified (this is coming from one of my accountants).

For me the problems are pretty simple:

-The codes are too complicated/too layered and need to be simplified.
-(this is a reach) People need to have more control over where their tax money is going. I don't want to write out one big check to the IRS at the end of the year. I would rather distribute it as I see fit, and then show the IRS (although I'd like to see this $540 Billion paperweight out of the picture all together) the records of who I paid my taxes to. If people had this kind of power, they would be less apt to pay an accountant to find the loopholes. I find that most people pay their accountants the way they do just to keep the money out of government hands. I actually have a friend that says "I'd rather pay my accountant $1 million, then pay the government $1." Extreme, but I get his point.

Except that infrastructure is paid for by property taxes and not income taxes, your Prof would have a valid point.

It's unfortunate that his glaring error throws out his argument.

While I lean progressive on most things.......

Drop all federal income taxes, for a "consumption tax"

throw in a 3-5% "surcharge" till the federal deficit is paid.

How many business would FLOCK to our country if we had a 0 percent business and income tax rate.....

you can even do scaleable refunds based on income, up to 100-125K, and it'd still work!

all things bought out of country and brought in country pay the exact same tax...

this eliminates, death tax, taxing dividends, income tax, and business taxes.

Local/state taxes would be maintained however they are maintained.

Your taxed on your spending,
you make money you keep it,
eventually people will want to spend the money they make, and they'll have more of it, + the companies relocating= tax boon....

Taxes suck and I hate to pay them.

I hate paying for YOUR child's education. Especially since they will skip most of their classes.

I hate paying for YOUR health care. You have cancer and that's YOUR problem.

I hate paying for road maintenece. I don't own a vehicle and since I don't use the roads, they mean nothing to me.

I hate paying for street lights. If you don't like the dark, don't leave the house during it.

I hate paying for the police, all they do is harass me. They help no one.

TAXES SUCK.

Who needs Taxes when we have stimulus money!

fixed.

doesn't apply if the corporation if the corporation doesn't pay a lot of tax like martian said. as an example, overseas holding companies in tax havens. you pay income or capital gains on your holdings but the holding company doesn't pay much (and none to the US) on its profits.

Oh oh thanks! I used the politically correct term for it.

Moar money = better right?

Simple question: can anybody show me long-term correlation of any sort between tax rates on "job creators" and unemployment? State or federal, pick your metric. For something so deeply ingrained in one party's platform that 10:1 cut-to-tax plans are rejected, it should be trivial to show the link.

"Job creators" is usually meant to describe top earners, but I'd be curious to see any supposed link to corporate tax rates as well.

Yes, lets allow the infrastructure that was built using revenue from higher tax brackets collapse because rich people don't have enough money. Kudos.

250k is not rich. Rich people make multiple millions of dollars per year. You are making an example of the middle or upper middle class

We already do ... well, the important stuff that has to be done correctly anyway ;)

Bu: Tax cuts allow people to retain more money which they can spend on products or services. As we essentially manufacture nothing in the USA, purchasing products stimulates the service industry just as buying a service would. The vast majority or the service industry earns minimum wage. Certainly the median income is not much over $10-$12 per hour.

Manufacturing jobs would garner a much higher wage (obviously this is true or the cost-benefit of importing the goods would be negative). The solution is to create manufacturing jobs and the majority of tax cuts, at least those that fill political debate, are aimed at reducing income taxes, be it corporate of business. These tax cuts are too general and not specific enough to encourage business owners to branch into manufacturing.

Aponic - The top tax bracket is currently $388k+. That's a small to mid-size business owner. That's who the tax code considers to be rich. It's not "millions" like you stated. The $250k number I used was a close estimate, considering that income level is paying just 2% less than the highest bracket.

The "infrastructure" you are so scared of collapsing is an impossibly bloated bureaucracy that absolutely needs to shrink. Entitlement spending is out of control because everyone thinks they deserve something for nothing. Defense spending is absurd because we insist on being the world police. It all needs to be dramatically scaled back.

But all this is irrelevant. I have yet to see someone explain why the government is justified in taking a citizen's private property. It's not yours. It's not the government's. It belongs to the person that makes it. They are under no obligation to pay for their neighbor's food stamps, an old woman's 30 years worth of Social Security checks, or a military base in Kuwait.

Spear: the entire concept behind a government is that it is an entity for the betterment of the community, which the community must support; support must include some financial contribution, even if by that you mean "give the chief some of your hunt!"; not all need contribute, but there must be enough to support it.

With that in mind, I would say it IS the governments right to take some of your stuff.


Unless you prefer anarchy.

Anarchy? Really? Please don't put words in my mouth. That's ridiculous. I'm not arguing that the tax rate should be zero. I started earlier that people should pay taxes. Everyone uses roads, police, national defense, etc. They should pay for that. The problem (and this is what is currently happening in the U.S) is when the government has expanded so rapidly that more and more tax revenues are needed to feed the insatiable behemoth.

The solution is to shrink the government, not take more money.

That sounds an awful lot like an argument for zero taxes to me...?

I guess I should have reposted my earlier statement concerning Zuckerberg about how everyone should pay some sort of tax. I thought  saying it once would be enough, but apparently not. In the paragraph you just quoted, I was referring to excessive taxes, i.e. the money that doesn't rightfully belong to the government because it goes to a product or service the person being taxed doesn't use or need.

Nobody in their right mind argues for anarchy. You know that. You're setting up a straw man to distract from the real issue. 

What you all are forgetting is that in our country every male at age 18 must register for the draft. This means the POOR MAN who has nothing to protect in this country is basically defending the RICH MANS wealth. Think on that, the poor guy who has no vested interest to protect can be forced to die to defend the property of a rich man. Meanwhile, the rich guy can hide in college or leave the country until the conflict is over and never loose their citizenship or rights. This alone should be reason enough for the RICH MAN to have to buck up to help along the little guy. You cannot have it both ways. You cannot say, i want my stuff protected and taken care of and he needs to pay an equal share when the other guy has nothing and nothing to protect.

All you people who scream EQUAL taxes ect. If you really want it, lets be really fair. Everyone is taxed once a year based on their total net worth. Every year they pay 10% or their total net worth to be lowered once our national debt is payed off. You are free to make as much money as you can but that whay it is a fair tax. Everyone is paying the exact same % to protect the wealth of our nation and improve its infrastructure for the good of all. I realize this would be a hard tax to do and probably not practical, but look at what it would mean to be truly "fair". I doubt the poor would have a problem with this tax. I am willing to bet only the rich would scream unfair- all the while asking the poor man to go and die defending their wealth.

You mentioned networth being taxed instead of income, but what you're essentially proposing is a flat tax (or "fair tax" as some call it). You think rich people would oppose a flat tax? Ummmm, I strongly beg to differ. Not sure how you reach that conclusion. Why would a rich person oppose the elimination of a progressive tax system that takes the most from them? And the poor would throw a fit over a flat tax. Right now, nearly half the country doesn't even pay taxes. You don't think they'd be upset if they suddenly were expected to contribute? The poor are used to drawing money out of the system, not putting into it.

And the last draft was almost 40 years ago during Vietnam. I'm not sure why you even brought that up. It hasn't happened in decades and it would be politically impossible to bring it back. Let's keep the discussion relevant.

You are dumb to think it could not be brought back. Of course it could. A lot of smart people thought things would never be bad again like they were in the great depression- but they are. Wait, if and when times get bad enough the draft will be back. Count on it. Also, i promise you the rich would not be for a flat tax based on Net Worth. Income, maybe but not NW. See, they like hiding their income over seas and then having the wealth here. No, the rich do not want fair. They are blinded by greed as to what fair really is.

If you think i am wrong look at police protection. In the ghetto, you will wait for hours to get a cop. In a rich area the patrol all the time and respond in minutes or less. The wealthy want all the protection our gov offers but they do not want to pay for it.

...yet they do pay for it. Almost all of it. The top 10% pay around 70% of all tax revenues. The bottom 50% pay around 2%. Facts are facts. The points you're making aren't based on reality.

the reality is that the top 10% have 90% of our nations wealth. If you say they are paying only 70% of all tax revenues then they are paying 20% less than they should. You prove my point. If we are making it fair- it should be based on wealth, not income. The bottom 50% of people have LESS than what they are paying in taxes. Stop being a heartless bastard and buck up to pay for defending your wealth ya greedy bastard.

Spear, that statistic shows just how disparate incomes are. The % of tax revenue being lower than the % of income distribution shows how regressive the current income tax structure can be.

One good start would be that money made in stocks should be taxed as income not the little 10% or so that it is.

Their wealth was already taxed when they earned it. Why do you keep referring to taxing networth? Not even the most diehard liberals advocate taxing networth beyond simple property taxes. The money they have has already been taxed once. Are you saying it should be taxed again? That's an extreme position.

And my original point has yet to be addressed. Why are the rich expected to pay for the poor? I've already demonstrated that they already pay a ridiculous percentage of total taxes. Haven't they done enough? They already fund social security, medicare, medicaid, welfare, unemployment, national defense, the alphabet soup of gov't agencies, etc. Yet you feel they should pay more. Karl Marx would be proud at your insistence on social leveling. He took your exact reasoning to it's logical conclusion and ended up on the "ash heap of history."

They do not pay much in taxes. Corporate taxes are very minute. Taxes on stocks are small. They pay less of a % than someone making 30k a year does. Think on that- you can make 6 bill a year and pay less % of taxes than someone making 30k a year. Thats wrong. Spear, most of them did not "earn it", they inherited it. Why do you think Bush put in a hold on the death tax? It was because a lot of old oil mogols were about to die. It enabled them to keep their wealth in their families. There is no need for that. Before you argue any more about how unfair taxes are try getting rid of EVERY loop hole and exemption for everyone. The rich would cry and scream. They wont do it because the people in congress are crooked.