A talk about taxes

[Mizmoon]

in the general discussion thread people are talking about flat tax vs. current tax, etc. One person asserted repeatedly that the top wage earners pay "more than their fair share". I'd like to share my tax experience over the course of several brackets.

When I started out I was very broke. In fact, at one point my child and I were on welfare. At that time I loved tax season because it meant a refund and a bit of a financial boost. I was a student for many years, graduated, married, and found myself with a household income of about $80,000 per year. At that time taxes meant that we got nothing back. We were about even with our mortgage deduction, child deduction, etc.

Then we started cooking with gas. Over the next few years our income rocketed to nearly $200,000 per year. I was very worried about having a big tax bill at the end of the year so I began looking to find ways to reduce the burden. I invested in a state college savings program, maxed our 401k funds, and took other tax saving efforts. I was stunned to find out that at the end of the tax year my efforts had reduced our taxable rate to 19%. If I had tried harder I could have probably gotten it much lower.

The next year we had a baby and I decided to stay home with her. This meant I stopped working and our income went down to about $130,000 per year. Still I kept up all of the contributions and tax saving strategies (all things I read - no pro advice). Guess what? That year I got back (brace yourself) a nearly $10,000 refund.

The point of all this personal info is this: The richer I got, the less I paid as a percentage of my income. And I wasn't even trying hard.

I don't know what to make of all this in the big picture but I do know that our tax system appears to be totally broken and unfair - and that's from someone who has been all over the spectrum.

[SheilaT]

1. Thanks for posting

these specifics.

I'm going door to door meeting voters, since I'm running for office. The other day a man told me he pays 50% of his income in taxes. I told him I doubted that. I should have pointed out we no longer have a top bracket above -- what is it, 35%? 30%? these days.

He also said that the top pays 95% of the taxes and looked completely incredulous when I pointed out that's because they have 95% of the income.

He kept repeating he worked very hard for his money, and I said so do the people making very little.

I wonder why some who work at a desk, inside and out of the elements, think they work so much harder (and deserve so much more)than those who work with their hands and are outside all day.

[trotsky]

2. "95% of the taxes"

Is a very misleading claim pushed by the anti-tax movement, but right-wing types (like the guy you met) just love to parrot it. The rich pay 95% of Federal income tax. But is that the only tax we pay? Thing is, when you add in all taxes and fees, we already have a considerably flat tax, about 15-19% across the board.

[SheilaT]

3. And as my husband keeps on telling me,

I'm really not a front door political science, I'm a guest on the doorstep, but I cannot let various idiotic statements go unchallenged.

I'm probably completely unsuitable to run for office, but this is being a completely amazing experience.

[trotsky]

5. You have major props from me for trying.

I could never run for office because I'd want to slap the bejesus out of a moron like that! :)

[SheilaT]

6. Quite honestly,

if the people who asked me to run actually had any idea what I'm really like, they probably would have asked someone else.

What I am, is a strong Democrat. As I get older, I get more firmly believing in the ideals of the Democratic Party. I've been a union member, and I support unions more than ever. I truly believe we owe it to ourselves to help out the least among us. I find it very hard to remain silent when I see wrongs committed.

As for being qualified for the office I'm running for, since four years ago a women I knew personally and thought was a complete nut-case ran and won this seat, I figure if she can do the job, anyone can do it. I'm not up against her, however. A former office-holder came out of retirement to defeat her in the primary two years ago, and was unopposed in the general election. He's actually very much a good guy Republican, but has a primary challenge from a "conservative", which means a right-wing nut-case around here. If the incumbent wins, I'll do well to get 40% of the vote. If the challenger wins, I'll almost certainly win, because all of the moderate Republicans will now vote for me.

I'll know sometime tomorrow evening, as our primary is tomorrow.

[soupkitchen]

4. Well, what always interests me about the tax complainers

is that these guys are always the first ones on line looking for a government subsidy or contract.
During the vice-presidential debates the not so clever Joe Lieberman tried to trap Cheney into admitting that he was personally better off than four years before. To which Cheney snorted, "Well, not becasue of the government."
Now if Joe Lieberman had the slightest mental alacrity he would have then pointed out that the Haliburtan Company, from which Cheney drew his 'private' wealth, makes much of its money from government contracts, but old Joe was a little slow.
The point is, taxes are the lubrication of the economic engine. And rich people not wanting to pay remind me of card sharks who don't want to put up the ante for the poker game.