patrick.net

Paralithodes says

Your effective federal income tax rate was 25 to 33%?

Yes

SiO2 says

But, are you sure you paid 25-33% in total tax?

Yes, varying quite a bit over the years, but yes that was the range of my effective, not marginal, rate.

Single people with no kids get raped on taxes. Renters get raped on taxes. People with income from production rather than owning (capital gains) get screwed on taxes. I met all three criteria. And I had nothing to itemize.

All the deductions are for the married, parents, home owners, and business owners.

It might be a shock to those who are married with kids, but yes, single people with no kids do pay way the hell more in taxes than you do. Homosexual couples have experienced this kind of discrimination, which is why marriage equality is a big deal today, but single, childless people are discriminated against even more than gays by our tax codes.

Taxes comprise over half of my living expenses. I wouldn't mind so much if those taxes were used to do something good like
- rebuild New Orleans
- upgrade our nation's infrastructure
- build fiber to every house
- lower poverty
- nationalize the education system and ensure everyone had access to any education they are willing to work at
- exploring and developing space and space-related technologies

What pisses me off is that my tax dollars are used to
- fight illegal and unjustifiable wars on the behalf of corporations
- spy on Americans and our allies (NSA)
- violate the human and civil rights of people (TSA, FBI, local police)
- militarize local police
- war profiteering (big defense contracts)
- paying interest on a debt we should not even have
- bailing out banks by letting them create money and loaning it to our government
- bailing out too-big-to-fail corporations and housing speculators

SiO2 says

Dan, I agree with your later point that it's wrong that Mitt etc pay 14% tax
while workers pay more.

Your question to Dan is valid - it is what I was also questioning. But which "workers" actually pay more than 14% effective tax rate?

Dan8267 says

Yes, varying quite a bit over the years, but yes that was the range of my
effective, not marginal, rate.

You certainly did get, at the very minimum, the standard deduction. And then your income was taxed at various progressive marginal rates along the way. If your effective tax rate is what you say, then you are certainly "rich" compared to the vast, vast majority of the population.

Perhaps "rich" to you must be defined as those who have much more than you, despite your admission that you must certainly have been in the top 10% or so, if not closer to the dreaded "1%."

If you were really one of the 10,000 folks who built the Internet, I would be surprised if you weren't "rich" and I personally think you deserve to be.

But let's not play games. You are one of the "rich." And you are one of the "rich" who is whining about taxes.

(BTW, homosexual couples, where one is supporting the other, certainly do face the financia/tax discrimination you are talking about. Many homosexual couples, where both are working, can be faced with the "marriage penalty". Are you familiar with how that impacts some of the very things you complain about above?)

Paralithodes says

But which "workers" actually pay more than 14% effective tax rate?

Don't know.

Paralithodes says

If your effective tax rate is what you say, then you are certainly "rich" compared to the vast, vast majority of the population.

Rich has more to do with have much you have than how much income you have. The rich have acquired wealth over many years. In contrast, a young doctor may have a high income but that income goes to pay off medical school meaning the doctor lives a very materially conservative lifestyle, at least for the first 10 years of his career.

The NY Times has a nice app that shows what percentage you are in by income. I've vary between the top 15 to the top 6% during my career by this map. Granted, I was working two jobs at the time I made the top 6%, something that the rich do not do.

I consider being financially secure to mean that you can maintain a middle class standard of living without relying on having a job with any corporation. Financial Security is my goal, and it is a reasonable goal for middle class Americans.

I consider being rich to mean that you can maintain a luxurious lifestyle without getting in debt. As for what constitutes luxury? Things like yachts, mansions, country clubs, high end sports cars, and other things not readily available to the middle class. The economic system does not allow for the typical person to rich this level.

There's a big difference between rich and financial security. I'd be plenty happy with financial security.

I consider opulence to be the point at which you can maintain and even grow a luxurious lifestyle without doing any work. Few people reach opulence through producing. Those that do are almost certainly either entertainers (movie stars, professional athletes, etc.) or inventors (and that's usually not the case for inventors). Most people who reach opulence do so by finding a legal way to siphon wealth from multitudes of people. Such people never produce anything in their lives and do not deserve respect.

I don't have a problem with someone because he's rich or even opulent. I have a problem with how he became rich or opulent if he did so by taking wealth from others rather than by producing wealth.

Paralithodes says

If you were really one of the 10,000 folks who built the Internet, I would be surprised if you weren't "rich" and I personally think you deserve to be.

You shouldn't be surprised. The fundamental problem with capitalism is that it rewards one and only one thing: bargaining power. Capitalism does not reward productivity, wealth creation, or technological advancement. It's all about bargaining power.

Tim Berners-Lee created more wealth than all the billionaires in the world combined. He created more wealth than any other human being that has ever existed. He created the WWW. He made no money off of it and lives a middle class lifestyle with a middle class income (granted, years after inventing the WWW he did receive some prize money, but that's socialism, not capitalism).

Mark Zuckerberg has a net worth of $13 billion and he didn't create jack diddly shit. Facebook was just one of thousands of crappy "build your personal web presence" websites. There was nothing innovative about it. Zuckerberg simply stabbed his way to the top, manipulated people, and sold off their personal information. Why the fuck is he a billionaire and Tim Berners-Lee is not? Capitalism does not reward wealth production or technological advancement (which leads to greater wealth production in the future).

This story happens all the time in our economic system. Those who create the wealth do not control or distribute it. Those who control and distribute the wealth do not create it.

Paralithodes says

who is whining about taxes.

It is my right to complain about how taxes are raised and how they are used. It is also my right to advocate better mechanisms and distributions of taxes. I make no apology for trying to make my country better. Over half the ideas I propose go against my own interests. 'Nuff said.

Paralithodes says

can be faced with the "marriage penalty". Are you familiar with how that impacts some of the very things you complain about above?

The "marriage penalty" is utterly insignificant compared to the "single penalty". Just count up all the dollars for each penalty. And then consider that single, childless people use less than a tenth the services that married with kids people do.

We single and childless pay way more than our fair share of the tax burden and have way too little say. When was the last time you heard anyone say "Will somebody please think of the singles?"? Nope, never heard that. Government gives a big fuck-you to all single people, something that single women are starting to complain about now that they realize that they are paying a lot more in taxes over their lifetime than their married counterparts.

Call it Crazy says

You need a better accountant...

Like Mitt...

No, like Mitt's accountant.

But seriously, the tax code is set up to allow the rich to have tax loopholes not available to the middle class.

Blurtman says

Also consider the benefit of a two-tiered justice system. Sell drugs for the Mexican cartels - go to jail. Launder millions for the Mexican cartels - see you at the club this weekend.

When the wealthy are prosecuted for crimes, they just pass the costs onto consumers, and we end up paying more.

bgamall4 says

Mish is shilling for the 20 percent?

Why is that surprising? Approximately half the country has been convinced that their interests align with the 1% and vote accordingly...and the plutocrats laugh all the way to their off-shore accounts.

Dan8267 says

The "marriage penalty" is utterly insignificant compared to the "single penalty".

I think the balance of that has changed significantly since ACA ties health insurance costs to income. I've actually wondered (okay, I was a little tipsy at the time) if it's tipped the scales enough to consider divorcing my husband, on paper that is.

For example, he would pay me alimony (tax deductible to him, thus lowering his tax bracket), I would collect alimony as my income. I would rent him a room in my house. We would file separately. We would get back all of the deductions that get phased out at his income because I would claim everything on my taxes, and my alimony and rental income would be set at just the right amount to maximize all possible deductions. Then, I could go on the exchange and get insurance for me and the two kids. We'd qualify for all the credits so insurance for the three of us would be subsidized. Then, my husband would just have to insure himself. I think if you did it just right, you could save thousands each year. What could possibly go wrong with this plan? :)

Dan8267 says

Zuckerberg simply stabbed his way to the top, manipulated people, and sold off their personal information. Why the fuck is he a billionaire and Tim Berners-Lee is not? Capitalism does not reward wealth production or technological advancement (which leads to greater wealth production in the future).

Because Zuckerberg is at the center of a FED-enabled pump and dump scheme. Berners-Lee was on the payroll work hours of a government-funded entity (CERN) when expanded on hyper-card. Neither the FED nor the CERN were particularly capitalistic entities.

Dan8267 says

This story happens all the time in our economic system. Those who create the wealth do not control or distribute it. Those who control and distribute the wealth do not create it.

funny you got a downvote for that. Touchy millionaires on this site I guess.

marcus says

But is there any reason to think that the working poor would be better off ? (other than that they don't have to worry as much that they don't own their housing ?)

yeah, LVT isn't a cure-all. Still other systemic issues to deal with -- lack of labor collective bargaining power is becoming a big one.

http://research.stlouisfed.org/fred2/graph/?g=pXH

profits as % wages

Call it Crazy says

Dan8267 says

It might be a shock to those who are married with kids, but yes, single people with no kids do pay way the hell more in taxes than you do.

Well... There you have your answer....

Go get married and have like 8 kids....

Problem solved!!!

No way. No amount of unfair taxation is worth getting married to avoid. Why? Read below.

turtledove says

I think the balance of that has changed significantly since ACA ties health insurance costs to income. I've actually wondered (okay, I was a little tipsy at the time) if it's tipped the scales enough to consider divorcing my husband, on paper that is.

For example, he would pay me alimony (tax deductible to him, thus lowering his tax bracket), I would collect alimony as my income.

When women do that kind of math it scares me. And TurtleDove is actually one of the few women actually looking out for her husband's interests as well as her own. Image the math done by women who loathe their husbands.

Hell hath no fury like a woman scorned, especially when she hires a lawyer.

Reality says

Berners-Lee was on the payroll work hours of a government-funded entity (CERN) when expanded on hyper-card. Neither the FED nor the CERN were particularly capitalistic entities.

The World Wide Web went far beyond CERN. My question stands. If capitalism rewarded wealth creation and innovation, why isn't Tim Berners-Lee the richest man who ever lived?

Bellingham Bill says

Dan8267 says

This story happens all the time in our economic system. Those who create the wealth do not control or distribute it. Those who control and distribute the wealth do not create it.

funny you got a downvote for that. Touchy millionaires on this site I guess.

There's at least one person -- probably TommyWong or Homeboy -- who down votes everything I post. I posted a link to FAQs on Health Saving Accounts and that got a down vote.

If you aren't getting dislikes, you aren't saying anything worthwhile.

Dan8267 says

Mark Zuckerberg has a net worth of $13 billion and he didn't create jack diddly shit. Facebook was just one of thousands of crappy "build your personal web presence" websites.

Capitalism isn't just about creating something it's about providing something that people want/need. Obviously Zuckerburg provided something people want out of facebook.

Dan8267 says

Reality says

Berners-Lee was on the payroll work hours of a government-funded entity (CERN) when expanded on hyper-card. Neither the FED nor the CERN were particularly capitalistic entities.

The World Wide Web went far beyond CERN. My question stands. If capitalism rewarded wealth creation and innovation, why isn't Tim Berners-Lee the richest man who ever lived?

Well i don't know too much about Tim Berners but is the .www even patented? Can it even be patented? And if it could I don't think Tim Berners would be the owner of the .www I believe that ownership would go to CERN since I believe he was working for them at the time.

Dan8267 says

Taxes comprise over half of my living expenses. I wouldn't mind so much if those taxes were used to do something good like

- rebuild New Orleans

- upgrade our nation's infrastructure

- build fiber to every house

- lower poverty

- nationalize the education system and ensure everyone had access to any education they are willing to work at

- exploring and developing space and space-related technologies

there is no point rebuilding a city below the sea levels.. it should be abandoned.
if you want rebuilding infrastructure, get more people employed and tax revenue will increase
no need for fiber cable.. already obsolete.
you reduce poverty by getting jobs to people.. see lower tax policies and building factories.
fire all the union teachers.. just like Steve Jobs said..

want Space Tech.. build factories.. as we did before.. with all the nasty chemicals and metal forging.

Dan8267 says

When women do that kind of math it scares me. And TurtleDove is actually one of the few women actually looking out for her husband's interests as well as her own. Image the math done by women who loath their husbands.

Hell hath no fury like a woman scorned, especially when she hires a lawyer.

The commitment to my family has nothing to do with a piece of paper or some supposedly holy book. If it reaches a point that it harms my family financially to have that piece of paper then I would have absolutely no qualms with reorganizing things, a bit.

What's a shame here is that we have reached a point where we bend over backwards for single mothers to the point that I would even be thinking such things. ACA is just another straw on the camel's back.

As a family of four, we are harmed by the fact that my husband makes a bit over 250k/year of w-2 income. We pay the most for everything. By the time taxes and health insurance are paid, we are definitely at 50%. After the house is paid, there's not much left. So, despite being a supposed member of the 1%, I find it more than a bit galling when we are all portrayed as living in mansions overlooking the Long Island Sound, with yachts, and fleets of foreign cars. We are the weakest members of the 1%, and we are the ones they are going after. If a piece of paper changes that calculus, is it really such a terrible thought? (I'm not saying that you were saying it's a terrible thought, it's a rhetorical question.)

thomaswong.1986 says

fire all the union teachers.. just like Steve Jobs said..

Many teachers, unionized or not, make shite wages especially given the importance of their work to society. Why is the first impulse here to lash out at the ones who actually perform the core task? Why not clear out goldbricking administrators and others by measure of their usefulness toward actual teaching, pay teachers better, and still save money but turn out better students?

turtledove says

As a family of four, we are harmed by the fact that my husband makes a bit over
250k/year of w-2 income. We pay the most for everything.

This is a fine example of the fourth and much of the fifth quintile being screwed over by the tax code written to favor the upper single digit percents who can afford to manipulate the tax code in their own favor. The trope of "The rich pay all the taxes" has really been making the rounds this week. It usually lumps the upper 40% together. A finer breakdown would give a better picture. Remember the illustration of the L curve of wealth distribution.

turtledove says

We are the weakest members of the 1%, and we are the ones they are going after.

Clearly, it's not the top 1% that's the problem. It's the top 0.1%, and then only a subset of them. It's probably more like the top 0.01%, but that doesn't have the same ring as "we're the 99%".

The parasites are the rich who gained their riches, not by producing goods or services, but by siphoning off of others. It's the owner/controller class.

There's nothing wrong with rich doctors, inventors, actors, professional athletes, etc. They produce wealth, even those in the entertainment business. And they do not steal wealth from others.

The executives at Goldman Sachs, Bank of America, etc. are the ones who acquire their wealth by stealing from others using means that are legal because they bribed politicians to make those means legal.

People don't hate the rich. People hate some of the rich, and only then not because they are rich, but because of how they got rich.

Certainly people have it much harder than we do. It just pushes my buttons to be lumped in with multi-millionaire wallstreeters, when at the end of the day after taxes, health insurance, and house payment, we're left with a whopping $5k/month. Of course, we have yet to pay a single bill -- or eat, yet.... and yes, we chose to live in a high-cost area. However,

My husband is a pretty average earning employed doctor (specialist). So, we don't just get it from the side of tax policy (the rich aren't paying their fair share, etc....), we also get it from the masses who are under the impression that doctor's are super-rich and completely to blame for the rising healthcare costs in this country. Yes, there are some doctors out there who've scammed the system and profited from their profession in a way that violates the spirit of the oaths they've taken. But, I've never met one, personally. The "evil" doctors taking advantage of the system are hardly representative of the profession as a whole.

The point of all this is.... If a generally recognized higher paying profession has difficulty cutting the mustard, and 99% are in a worse situation than us -- then we've got a pretty f'ed up system.

turtledove says

Certainly people have it much harder than we do. It just pushes my buttons to be lumped in with multi-millionaire wallstreeters, when at the end of the day after taxes, health insurance, and house payment, we're left with a whopping $5k/month. Of course, we have yet to pay a single bill -- or eat, yet.... and yes, we chose to live in a high-cost area.

$5k/mo ain't bad! Your non-shelter related bills shouldn't amount to more than half that. That leaves you with at least $30k/yr

Do you work or is that all your husbands income?

Dan8267 says

There's nothing wrong with rich doctors, inventors, actors, professional athletes, etc. They produce wealth, even those in the entertainment business. And they do not steal wealth from others.

Well, there's something wrong with the medical sector since our costs are way out of line with the rest of the world.

Regulatory capture by the looks of it.

I don't have any (first-order) problem with the millionaires in sports and entertainment. Everyone parts with those dollars freely.

Health care is different. There are super-stars in medicine who earn their premium, but they're exceptional.

http://research.stlouisfed.org/fred2/graph/?g=pZC

per-capita (age 16+) health costs, US

Here's what Churchill said about professional fees back in 1909:

"If a doctor or a lawyer enjoys a better practice, it is because the doctor attends more patients and more exacting patients, and because the lawyer pleads more suits in the courts and more important suits.

"At every stage the doctor or the lawyer is giving service in return for his fees, and if the service is too poor or the fees are too high other doctors and other lawyers can come freely into competition. There is constant service, there is constant competition; there is no monopoly, there is no injury to the public interest, there is no impediment to the general progress."

He was comparing these fees to land rents, and he's correct as far as he goes, but clearly competition is not so "free" in the US currently.

We have a glut of lawyers and a lack of health professionals apparently.

Dan8267 says

Reality says

Berners-Lee was on the payroll work hours of a government-funded entity (CERN) when expanded on hyper-card. Neither the FED nor the CERN were particularly capitalistic entities.

The World Wide Web went far beyond CERN. My question stands. If capitalism rewarded wealth creation and innovation, why isn't Tim Berners-Lee the richest man who ever lived?

Because Berners-Lee was working for a socialist institution. In any case, even if he invented on his own time in his garage, there would be nothing preventing him from giving it away instead of patenting it. Free market capitalism is about freedom of personal choice.

turtledove says

It just pushes my buttons to be lumped in with multi-millionaire
wallstreeters, when at the end of the day after taxes, health insurance, and
house payment, we're left with a whopping $5k/month. Of course, we have yet to
pay a single bill -- or eat, yet.... and yes, we chose to live in a high-cost
area. However,

My husband is a pretty average earning employed doctor (specialist).

Holy crap - this is very hard for me to believe. What is your house payment? Must be very high. Do you live in a high tax state as well? California?

I am 99.99% certain you do not work if this is true. That right there puts you in a very elite class - single income families are very few and far between these days.

To have $60k after taxes and housing payments per year - you are probably in the top 5%. Especially when you consider this is done with one income.

Top 5% make $161,579+, collect 33% of the income and pay 60% of the taxes.

'course, they have 95% of the disposable income now, LOL.

http://taxfoundation.org/article/summary-latest-federal-income-tax-data-2012

"The 1%" starts at $369,691.

control point says

Top 5% make $161,579+, collect 33% of the income and pay 60% of the taxes.

Right - she says $60k after taxes, housing, and health insurance.

Total taxes are probably ~36% at $161k. 1.45% Medicare, 4.5% SS, 10% State income in Cali, 20% Fed Income.

64% of $161k is $103k. Take out $10k for health insurance and $2500/mo. mortgage. Bam, ~$63k left.

Bellingham Bill says

Top 5% make $161,579+, collect 33% of the income and pay 60% of the taxes.

'course, they have 95% of the disposable income now, LOL.

http://taxfoundation.org/article/summary-latest-federal-income-tax-data-2012

"The 1%" starts at $369,691.

Where is the disposable income number coming from? The poor has negative taxes due to government handouts . . . some of which translates into disposable income and unfortunately get spent on wasteful and harmful things like cigarettes. I see alcohol and cigarette use much more prevalent in poorer neighborhoods. Personally I don't even have a hobby that costs as much as a pack a day ($3-4k a year).

New Renter says

$5k/mo ain't bad! Your non-shelter related bills shouldn't amount to more than half that. That leaves you with at least $30k/yr

I agree--$5K/month after taxes, housing, health care is a LOT. If someone is crying about that, they need to have their head examined.

HydroCabron says

Blurtman says

Also consider the benefit of a two-tiered justice system. Sell drugs for the Mexican cartels - go to jail. Launder millions for the Mexican cartels - see you at the club this weekend.

When the wealthy are prosecuted for crimes, they just pass the costs onto consumers, and we end up paying more.

Agree but that is true for all crime.
Street crime costs the victim in loss and medical expenses which burdens the system
Ditto for the court fees and prison fees
The difference is while both types of crime add costs to society, corp crime goes unpunished

HydroCabron says

When the wealthy are prosecuted for crimes, they just pass the costs onto
consumers, and we end up paying more.

I thought that prices were determined by the market.

Reality says

I see alcohol and cigarette use much more prevalent in poorer neighborhoods.

This study says otherwise:

http://paa2010.princeton.edu/papers/101517

turtledove says

My husband is a pretty average earning employed doctor (specialist).

Most people don't realize that doctors pay a lot of money for malpractice insurance. And that eats away at their income.

But as I said before, even if a doctor is rich, that's ok because doctors produce wealth, they provide critical services. They literally save lives with their hands. Doctors should be rich. Bankers and those white collar criminals in the financial industry should not.

Bellingham Bill says

Dan8267 says

There's nothing wrong with rich doctors, inventors, actors, professional athletes, etc. They produce wealth, even those in the entertainment business. And they do not steal wealth from others.

Well, there's something wrong with the medical sector since our costs are way out of line with the rest of the world.

There are many things wrong with the health care industry, but doctors are not one of the problems. The real problems are:

1. Fraudulent billing and accounting by health care providers, particularly hospitals.

2. Corporate games and shenanigans used to convert a hospital, a single business, into various "independent on paper" businesses, so as to prevent legal accountability when something goes wrong.

3. Private health insurance -- this should not even exist. We should use a non-profit, nationalized health insurance paid by income tax. Side note: the graduation of the income tax should be a function of the rich-poor gap and far more graduated than it is today.

4. Administrative inefficiencies that can be solved by hiring a genius like me to streamline health care administration and automate all accounting. Yes, this is a big project, but good software engineers can do things that mediocre engineers simply cannot do.

Well, you can control this. The more democrats you elect, the more Fed Systems will be deployed.

turtledove says

The point of all this is.... If a generally recognized higher paying profession has difficulty cutting the mustard, and 99% are in a worse situation than us -- then we've got a pretty f'ed up system.

Reality says

Because Berners-Lee was working for a socialist institution.

If CERN is a "socialist institution" than so is the U.S. military and we should get rid of it.

Dan8267 says

Side note: the graduation of the income tax should be a function of the rich-poor gap and far more graduated than it is today.

While good in theory I do think just socking the rich with more taxes will result in higher home values and rents for everyone.

Cut taxes on the masses, and housing rents go up.

Hand out free money, housing rents go up.

http://research.stlouisfed.org/fred2/series/CUUR0000SEHA