Real Estate Blog - Are you involved in the FriendFeed conversation

Are you involved in the FriendFeed conversation

A friendfeed-twitter debate on taxation theory

For those of you who aren't on friendfeed or twitter, you're missing some great debates, links, and conversation on issues. Here's one just this morning, with over 30 responses in an hour or so:

Soulhuntre posted a message on Twitter

“In 2006, the top 1% of earners in the US paid 40% of all income tax... the top 5% paid 60%. The "rich" pay more than their share.”

This message got pulled into his friendfeed stream where the bulk of the comments occurred. Though some commenters also chose to republish to twitter from friendfeed so the debate could go on in both places. This is one important problem to these great debates, they're hard to follow, because they jump platforms so quickly.

But do they pay their 'fair share'? By taxing the successful even more what is really being said is some are too successful. As if there could be such a thing. Such is the world when everyone gets a ribbon merely for showing up. - Peter Simard

Soulhuntre, what you're leaving out is that the top 1% make anywhere from 10-25% of the nation's income (depends on which source one chooses to quote). Even with a flat tax system these wealthy tax-payers would still be paying the larger portion of the total taxes taken (because 30% of 10M is always going to be larger than 30% of 100,000) - Stupid Blogger (aka Tina)

@Tina - hence why I support flat taxes :) - Soulhuntre

So how do we devise a system to tax the poor...or even better, how about taxing the unborn(wait they do that already)? Maybe we can cut the rich some slack and merely tax the dead? - Terence Washington

And now I get to be the rebel... exactly why we need a consumption tax (with some sort of rebate up to the poverty level) ... a system the encourages savings over spending.... the rich will always spend more then the middle class, and the poor. - Sean Reiser

However, when looking at wealth versus tax burden, the top 1% account for approximately 40% of all wealth and pay 40% of all income tax. - AJ Kohn

Peter, for the sake of argument define fair. Do we limit the success that individuals have (the fact that this runs counter to the American Dream notwithstanding)? Do we unilaterally deny them their success simply because they have the money that government need to make up its deficit( again, government irresposibility notwithstanding)? Are we going to apply that cut off to people of all income levels (even when they can't actually pay it)? Do discriminate against the rich by singling them out? - Roberto Bonini

@Sean - they call that a sales tax for the most part :) - Soulhuntre

Soulhuntre, mathematically a flat tax will have to be in the 30-40% range to match the take on the current revenue system. This means that everyone *except* the exorbitantly wealthy will be paying more. Moreover, from a livability standpoint someone making 30k is going to notice loosing 30% of their income a helluva lot more than someone making 3M. - Stupid Blogger (aka Tina)

Actually, I want to tax the rich more, and the poor less. The rich can afford it!! I think many of us make the common mistake of assuming that we're better off than we actually are. I don't know about you, Soul, but i'm not a millionaire. heck, i'm barely a thousand-aire. In todays economy, though, we're literally all in this together. - Chris Hollander

@sean: thats exactly the problem. The rich will *not* always spend more than the middle class, and more than the poor... in fact, its almost the opposite. the rich don't get rich by spending money, they get rich by saving it. the poor don't get poor because they save too much. The poor have greater need, and thus spend more. The rich have more privilege, and thus less need, and ultimately spend less. - Chris Hollander

@Tina: Exactly, the utility of each dollar has far more meaning for that person making 30K than it does to the one making 300K. - AJ Kohn

Punish people for creating wealth and eventually you will get to the point where it makes little sense for them to do so. Already I know a number of guys who could start companies that would employ others but they have not because it isn't worth dealing with the overburden. Even some of the progressive types in the Web 2.0 / startup world carefully avoid getting to big employee wise by using contractors to avoid regulatory / tax / oversight issues. We are stunting our own economic growth this way. - Soulhuntre

@Robert I believe a progressive tax system to be the fairest, to a point. When Reagan came in to office the top marginal tax rate was 70%. I don't think that could be considered fair by any definition. While I wouldn't like it I could live with allowing the expiration of the Bush tax cuts which would return the top marginal rate to 39%. Taxation is limiting of success by its very nature b/c it imposes an artificial premium on success equal to the level of taxation. I'd prefer BIG spending & tax cuts - Peter Simard

@Soulhuntre: Interesting, every report I read shows that small business are not decreasing in numbers and contribute essentially the same % of payroll to the economy as they did in the 1980s. - AJ Kohn

@Chris How do you tax the poor less than zero? Wealth redistribution perhaps? - Peter Simard

what percentage of the population do you think actually pays zero taxes? - Chris Hollander

In 2005, 134MM tax returns were filed. 44MM paid zero taxes. 32.6% http://www.ntu.org/main/page.p... - Brian Newman

wait. THERES A TAXPAYERS UNION? why didn't anyone tell me? where do i sign up? Do i get a free hat? - Chris Hollander

Yeah it's great! We are going to raise the dues on the top 5% so the rest of us don't have to do jack! Suckers! - Brian Newman

The way I look at it, the richer you are, the more you need the government's services to help you protect your wealth. - Victor Ganata

Sounds like a protection racket. - Brian Newman

@Brian: than you for pointing me to a link that suggests that almost 1/3 of those filing returns do not pay taxes. @Peter (or @brian?): Can you now show me the link that explains that that 1/3 is also the poorest? I should have asked, "what percentage of the poor pays zero taxes". - Chris Hollander

I think it's very enlightening that, on October 8th, I issued the challenge to people to define "fair" in such a way that it could be used for both taxes and football. *crickets* http://friendfeed.com/e/164a65... - Glen C

@AJ - given that it is much, much easier to sustain a small business now than before in many ways - the fact that there aren't more says something to me. I know many more people who are self employed now than in the 80's. They could be small businesses, but choose not to be... I am not sure that the reports you see exclude self employed but not incorporated folks, but I suspect so. - Soulhuntre

The issue of who notices their money more or who needs it more is only relevant if you believe that society has the right to take what they wish from you and that whether you deserve or need to keep your money is a morally relevant issue. I don't believe that.Whether someone needs their own property is irrelevant to whether others have a moral right to take it from them. - Soulhuntre

Again, % wealth to % tax burden is essentially even for top 1%. Also, we probably wouldn't be screaming about $70MM salary parachutes if we had a more progressive income tax. - AJ Kohn

@Chris: Some 92% of zero-tax filers earn less than $30,000 a year, according to the Tax Foundation, a non-partisan research group in Washington, D.C. That doesn't include another 15 million who earn too little to file in the first place. http://money.cnn.com/2008/03/2... - Brian Newman

but they make and control far more than that of the total % of wealth. - Morgan

@AJ - Whether or not someones wealth offends the sensibilities of the rest of society should not be the justification for confiscating it. I am all for not rewarding folks who broke the law by letting them profit - but for folks who make their money legally whether that wealth pisses others off shouldn't be relevant - but it does seem to drive lots of voters these days. - Soulhuntre

@Soulhuntre: It's not about pissing anyone off, it's simple statement that the rich, as defined by the % of wealth they have, pay a "fair" share. You choose to use income to tax ratio, others use wealth to tax ratio. You're simply choosing to be offended by the flip side of the equation. - AJ Kohn

Are you saying the rich already pay their fair share? Or their taxes need to be increased to pay their fair share? - Brian Newman

My contribution: The issue of rich v. poor is old fashioned class warfare, used for votes, but really not all that helpful in the discussion. A fairer and flatter tax would feature an eliminatin of special exeptions, a tax that's easy to understand, and hard to cheat. It's my opinion that consumption or sales taxes would fit this mold better than income or property. Daltonsbriefs