Religion, Politics and World Events They make great dinner conversation, don't you think? plus Political Film

Observation on taxes

Old 04-07-06, 08:02 AM
  #1  
DVD Talk Hero
Thread Starter
 
Join Date: Nov 1999
Posts: 36,980
Observation on taxes

So my roommate and I did our taxes last weekend. A few things I noticed. I made a little over five times what he made based on our gross annual income. If you add in FICA taxes, I paid more in federal taxes than his gross annual income. Just my federal taxes were over 20 times his federal taxes even though I only made 5 times the income. Gotta love the progressive tax system.


He didn't understand why I was paying so much more. I wonder how many Americans have no concept of "progressive" taxes.


Another observation. We have the same basic standard of living. A lot of that may be due to the fact that I'm cheap. Not counting the house, he probably spends more a month than I do. One reason I think we should move to a consumption tax.
Venusian is offline  
Old 04-07-06, 08:23 AM
  #2  
DVD Talk Hero
 
Join Date: Aug 2001
Location: in da cloud
Posts: 26,196
true progress is increasing the number of "loopholes" so we can pay less taxes and make the feel gooders think we are paying our fair share
al_bundy is offline  
Old 04-07-06, 08:25 AM
  #3  
DVD Talk Legend
 
Vibiana's Avatar
 
Join Date: Jan 2006
Location: Living in a van down by the river
Posts: 13,677
Originally Posted by Venusian
One reason I think we should move to a consumption tax.
Could you explain what you mean by this -- do you mean a consumption tax in addition to income taxes, or instead of?
Vibiana is offline  
Old 04-07-06, 08:29 AM
  #4  
DVD Talk Hero
Thread Starter
 
Join Date: Nov 1999
Posts: 36,980
Originally Posted by Vibiana
Could you explain what you mean by this -- do you mean a consumption tax in addition to income taxes, or instead of?
instead of
Venusian is offline  
Old 04-07-06, 08:31 AM
  #5  
DVD Talk Godfather
 
Giantrobo's Avatar
 
Join Date: Apr 1999
Location: South Bay
Posts: 56,655
Originally Posted by Vibiana
Could you explain what you mean by this -- do you mean a consumption tax in addition to income taxes, or instead of?
Most likely instead of. I might have this wrong but this is my simplistic understading of the Consumption Tax. Everyone is simply taxed on what they buy and nothing more. The more you spend, the more tax you pay. Don't want to pay, don't buy things. But who can go without buying things right? Also, anyone who's now getting through life by not paying taxes will be taxed because everytime they buy something they're paying consumption taxes.

Most importantly, no money taken from your check each payday means more money to spend. More money to spend means you'll spend more money. It sounds like a win win for both the Government and the people.

Last edited by Giantrobo; 04-07-06 at 08:35 AM.
Giantrobo is offline  
Old 04-07-06, 08:52 AM
  #6  
Suspended
 
Join Date: Jan 2002
Posts: 52,192
Charge people taxes according to their weight.
DVD Polizei is offline  
Old 04-07-06, 09:00 AM
  #7  
DVD Talk Limited Edition
 
Join Date: May 2000
Location: Colorado
Posts: 5,613
And it would basically get rid of the IRS..
cpgator is offline  
Old 04-07-06, 09:06 AM
  #8  
DVD Talk Hero
Thread Starter
 
Join Date: Nov 1999
Posts: 36,980
Originally Posted by Giantrobo
Most importantly, no money taken from your check each payday means more money to spend. More money to spend means you'll spend more money. It sounds like a win win for both the Government and the people.
but things will cost more so i dont think it will affect spending like you think.
Venusian is offline  
Old 04-07-06, 09:22 AM
  #9  
Admin-Thanos
 
VinVega's Avatar
 
Join Date: Nov 2000
Location: Caught between the moon and NYC
Posts: 31,102
A consumption tax would increase taxes on the lowest income earners in society and lower taxes for the richest. That's a wonderful idea!
VinVega is offline  
Old 04-07-06, 09:32 AM
  #10  
DVD Talk Legend
 
sracer's Avatar
 
Join Date: Feb 2000
Location: Prescott Valley, AZ
Posts: 12,479
Originally Posted by VinVega
A consumption tax would increase taxes on the lowest income earners in society and lower taxes for the richest. That's a wonderful idea!
Well, there could be provisions for basic necessity items that wouldn't be taxed... or some other accomodations made.

But if anyone thinks that this will eliminate the IRS, think again. The spaghetti tax system we currently have will be even more convoluted under a consumption tax system. There would be all sorts of special cases for items to be taxed differently. Lobbyists will urge Congress to pass tax bills that would more heavily tax the competitors of those represented by the lobbyists. The wealthy would set up schemes where they don't actually "buy" high ticket items (and therefore bypass the consumption tax).

All of this is why the current tax system is here to stay, the consumption tax sounds appealing, and why a flat tax will NEVER happen.
sracer is offline  
Old 04-07-06, 09:40 AM
  #11  
DVD Talk Legend
 
Join Date: Feb 2002
Location: Sugar Land, TX
Posts: 14,303
Originally Posted by VinVega
A consumption tax would increase taxes on the lowest income earners in society and lower taxes for the richest. That's a wonderful idea!
Yeah, it's un-American for everyone to be treated (taxed) equally.
cdollaz is offline  
Old 04-07-06, 10:03 AM
  #12  
DVD Talk Hero
Thread Starter
 
Join Date: Nov 1999
Posts: 36,980
Originally Posted by VinVega
A consumption tax would increase taxes on the lowest income earners in society and lower taxes for the richest. That's a wonderful idea!
looking at my roommate and me, that is true. he would probably pay more in taxes than i do, but that is because he spends more than i do. is there something wrong with that?
Venusian is offline  
Old 04-07-06, 10:16 AM
  #13  
Admin-Thanos
 
VinVega's Avatar
 
Join Date: Nov 2000
Location: Caught between the moon and NYC
Posts: 31,102
Originally Posted by Venusian
looking at my roommate and me, that is true. he would probably pay more in taxes than i do, but that is because he spends more than i do. is there something wrong with that?
Low income people who currently pay a small amount of taxes or who don't qualify to pay income taxes will increase the amount of taxes they pay as the goods and services they buy will go up in price. People who don't spend 100% of their income each year will get a nice break as the extra money they pull in will not be taxed and they can save more while the poor will have to spend more.
VinVega is offline  
Old 04-07-06, 10:24 AM
  #14  
DVD Talk Godfather
 
The Bus's Avatar
 
Join Date: Aug 2001
Location: New York
Posts: 54,829
The United States can have one type of tax system:

1. Simple
2. Fair

You can only pick one. What is so hard to understand about this?
The Bus is offline  
Old 04-07-06, 10:29 AM
  #15  
DVD Talk Limited Edition
 
Join Date: Nov 2004
Location: Pleasantville - in black & white ;P
Posts: 5,970
My momma always says "who said life was ever fair?"
mosquitobite is offline  
Old 04-07-06, 10:44 AM
  #16  
X
Administrator
 
X's Avatar
 
Join Date: Oct 1987
Location: AA-
Posts: 10,684
Originally Posted by Venusian
looking at my roommate and me, that is true. he would probably pay more in taxes than i do, but that is because he spends more than i do. is there something wrong with that?
You bought the house, didn't you? What would be the consumption tax on that?
X is offline  
Old 04-07-06, 10:47 AM
  #17  
DVD Talk God
 
kvrdave's Avatar
 
Join Date: Aug 1999
Location: Pacific NW
Posts: 86,200
Originally Posted by VinVega
People who don't spend 100% of their income each year will get a nice break as the extra money they pull in will not be taxed and they can save more while the poor will have to spend more.
Save it up for what? Just for the sake of saving it? Most people save it so that they can spend it on something bigger. You could delay the taxes paid, but only get out of it if you only saved and never spent.

Venusian - You need to buy a rental or something. There are so many wonderful tax loopholes out there just waiting to be exploited. Kind of makes me wish I was making money when Carter was president....that was the loophole pinnacle.
kvrdave is offline  
Old 04-07-06, 11:07 AM
  #18  
DVD Talk Hall of Fame
 
Join Date: Aug 2002
Location: Triangle, NC, USA
Posts: 8,694
Definitely 'instead of'.

The FairTax proposal uses a rebate system where every household gets a 'prebate' check each month for the estimated amount they would pay on taxes for 'essentials'. So the 'poor' who only buy essentials would pay little to nothing, and might even 'make' money.
The prices on the products would not go up, the tax would. Compliance costs and hidden 'overhead'/corporate taxes would decrease, which should lower prices on products.
A lot of a product's cost already is tax; it's just hidden because the company rolls the taxes they pay into the product, instead of seeing that 7% line item on the receipt. Making visible would also make it a lot more visible if/when the government wants to increase the tax rate.

And most people who have money spend money. There are the exceptions, like Venusian, but in general, the 'rich' spend far more than the poor or middle class, and they're more likely to buy new. Your average sports figure or CEO probably spends more on new goods in a month than I do in a year, thus he would pay proportionately more in sales taxes. And lots of money that is currently 'tax free' would be taxed when spent; wages paid 'under the table' or ill-gotten gains, for instance.

If Bill Gates wants to turn into Uncle Scrooge and put all his gold in a giant safe to look at, well, so be it. Odds are that won't happen too much, and even if it did, odds are that same rich person took advantage of every loophole he could to save taxes under the current system.

Of course, for this to be truly 'simple' and 'fair' it would have to *not* allow loopholes, and apply the same rate to all goods/services. If one loophole gets in, that just opens the floodgates to the rest--don't forget, our current income tax system is less than 100 years old, was supposed to be temporary, and started with 50 pages or so--now it's millions.

Will it happen? I doubt it, unfortunately. There are too many lobbyists lobbying for their pet projects/taxes/areas, and too many politicians who use the tax system as class warfare and 'rewarding' certain constituents while 'punishing' others. Too many with a vested interest in the current system continuing, not for 'fairness' but because they profit.
tonyc3742 is offline  
Old 04-07-06, 11:23 AM
  #19  
bhk
DVD Talk Legend
 
Join Date: May 1999
Location: Right of Atilla The Hun
Posts: 19,749
The problem with a consumption tax is that it will be in addition to all the other taxes that we pay. I wouldn't mind a consumption tax as long as we got rid of the income tax first. Not the old: "Well, we'll get rid of it in a year or two."
bhk is offline  
Old 04-07-06, 11:27 AM
  #20  
DVD Talk Hero
Thread Starter
 
Join Date: Nov 1999
Posts: 36,980
Originally Posted by kvrdave
Venusian - You need to buy a rental or something. There are so many wonderful tax loopholes out there just waiting to be exploited. Kind of makes me wish I was making money when Carter was president....that was the loophole pinnacle.
i'm already thinking about this. my sister is a real estate agent and is supposed to let me know if she finds any decent houses
Venusian is offline  
Old 04-07-06, 11:27 AM
  #21  
X
Administrator
 
X's Avatar
 
Join Date: Oct 1987
Location: AA-
Posts: 10,684
Originally Posted by bhk
The problem with a consumption tax is that it will be in addition to all the other taxes that we pay. I wouldn't mind a consumption tax as long as we got rid of the income tax first. Not the old: "Well, we'll get rid of it in a year or two."
Yes, the Sixteenth Amendment would definitely have to be repealed before enacting any VAT/consumption tax.
X is offline  
Old 04-07-06, 11:28 AM
  #22  
DVD Talk Hero
Thread Starter
 
Join Date: Nov 1999
Posts: 36,980
Originally Posted by VinVega
Low income people who currently pay a small amount of taxes or who don't qualify to pay income taxes will increase the amount of taxes they pay as the goods and services they buy will go up in price. People who don't spend 100% of their income each year will get a nice break as the extra money they pull in will not be taxed and they can save more while the poor will have to spend more.
my roommate is "low income". he spends most of his income, but he doesn't need to. like i said, we have similar standards of living. actually his car is probably 5 years newer. well one of them, he has two cars and a motorcycle. he lives at or above his means because he's bought into the materialistic mindset.
Venusian is offline  
Old 04-07-06, 11:29 AM
  #23  
DVD Talk Hero
Thread Starter
 
Join Date: Nov 1999
Posts: 36,980
Originally Posted by X
You bought the house, didn't you? What would be the consumption tax on that?
yeah, that's where they'd get me...although would there be a tax on it? there is no sales tax on it so would there be a consumption tax on it?
Venusian is offline  
Old 04-07-06, 11:30 AM
  #24  
X
Administrator
 
X's Avatar
 
Join Date: Oct 1987
Location: AA-
Posts: 10,684
I would imagine. It's a nice big fat chunk of consumption that politicians won't long forget. For the children.
X is offline  
Old 04-07-06, 11:33 AM
  #25  
DVD Talk Hero
Thread Starter
 
Join Date: Nov 1999
Posts: 36,980
well i'm not really consuming the house. it can be resold...
Venusian is offline  

Thread Tools
Search this Thread

Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.