45% of American households pay no federal income tax

Discussion in 'Politics Discussion' started by baudwalk, Feb 26, 2016.

  1. baudwalk

    baudwalk Senior Investor

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    You betcha. I already paid taxes on my wages and my small part time business. Because I chose to save/invest my net earned income for retirement, I should be penalized again? You do realize that corporations pay taxes on earnings, distribute some of what is left as dividends, and us shareholders are taxed again on that money. Our tax code is a festering cesspool of social engineering and tax loopholes run by an agency of questionable ethics twisted into knots by Congress. I don't mind helping those who really need help, but I challenge anyone to prove that 45% (77 million) households paying no federal income tax consists of those in true desperate need. The tax code and the executive branch screws up businesses who would otherwise grow their same, and we wind up with last month's labor participation rate of 62.9%.
     
  2. petesede

    petesede Guest

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    And oil companies, drug companies, Boeing and just about 99% of small business ( if they do research) get money from the gov´t. Wall St gets bailed out, the Auto industry gets bailed out. Warren Buffet and Mitt Romney pay lower tax rates than almost all of their employees because of tax breaks. When Exxon was the most profitable company in the USA for nearly a decade, they were still getting tax breaks.

    Who cares if some poor guy gets a $100 per month in food stamps when you had large corporations getting multi billions in corporate welfare. It is spitting in the ocean to think the $100 even matters.
     
  3. petesede

    petesede Guest

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    It is hard to follow what he is talking about because he is misusing the terminology.

    But yeah, Interest income should always be taxed, but I think dividend income should not be taxed since the corp is already paying taxes on it. I think everyone in congress, even the dems would agree with that. The problem is, and both dems and reps know this, if you remove the tax on dividends for individuals, then there will be a floodgate of corporations giving dividends, which leaves them less money to expand. If you follow the logic, cutting taxes on dividends would ultimately lead to less growth, less corporate spending and less job growth. Right now, the percentage of companies that pay dividends (to a significant degree) is pretty low and excludes most high growth areas. If there are no taxes on dividends, a lot of investors would push all companies to pay dividends.
     
  4. crimsonghost747

    crimsonghost747 Senior Investor

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    So I guess you shouldn't pay taxes on your business either because you started it with your own money that you were already taxed on? So why should any business pay taxes since they were all started with someone's money and that someone was already taxed on that income?

    I do agree with the problem of double taxation. The company getting taxed on profits and then you getting taxed on the dividend. Then again I buy a bottle of water from the store, I got taxed on the income I used to buy that bottle of water. And then the manufacturer of the bottle gets taxed on his earnings, the transporter of that product gets taxed on his earnings, the shop selling it gets taxed on it's earnings and on top of that I pay VAT for that product. And all those people involved in the activities of all those companies get taxed for the work they put in. So there goes the "just 1 tax" policy.

    The reason I haven't seen anyone remove this double taxation is... well I don't see how it could be done reasonably. Two options to do it so that the overall tax remains the same but it's only taxed on one side. Option 1: remove dividend tax. And for the effective tax percentage to remain the same the tax on company earnings would increase and voila, all the companies would move out of the country. Then they would pay their smaller corporate taxes into the neighbouring country and your citizens wouldn't pay any dividend tax. A pretty fast way to bring tax income to 0. Option 2: remove tax on company earnings and increase tax in dividends. Which would be all fine and dandy if you are just investing in domestic companies since the overall tax rate would remain the same. But try investing abroad and you'd get it dry up your #2 due to the foreign country taxing earnings of their companies and on top of that you would be paying a huge dividend tax to your country. A country I used to live in actually did option 2 a couple of years back. The effect for me was that about 10% of the companies I own had to pay less taxes while of course 100% of my dividend income was taxed at a higher rate.

    Also for some reason you seem to think the POINT of taxes is to penalize citizens. That is of course not the point, though I do agree that nowadays it can feel that way.
     
  5. baudwalk

    baudwalk Senior Investor

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    Hmm... your premise makes no sense. I said I paid taxes on wages from an employer and on my part-time business income. Two sources of income, taxes paid on both. Good grief.
     
  6. xTinx

    xTinx Active Member

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    America shouldn't have been a welfare state to begin with. People who know they can live off of the government, ergo people's taxes, if they expand their brood will do so without hesitation. And that is not fair to working singles and smaller families. They should be jailed for not thinking of their children's future.
     
  7. SteakTartare

    SteakTartare Senior Investor

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    You are claiming almost 99% of small businesses "get money from the gov't"? Show your data, please.

    You also claimed they paid no taxes and that has already been debunked. Of all the companies in the United States, despite whatever tax breaks they are receiving, they pay the most taxes.

    Almost two-thirds of all federal spending went to entitlement spending. Beyond the fact is another fine example of how poorly BHO has handled the economy, it is hardly a small part of the budget.

    [​IMG]
     
    Last edited by a moderator: Jul 8, 2016
  8. petesede

    petesede Guest

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    uff, you consider social security ´entitlement spending´? This is what happens when people get brainwashed by the Koch brothers. You realize that people actually pay into social security and that it is still profitable (more is collected than is withdrawn)?

    And yes, probably 99% of small business could (if they did the research) qualify for some type of financial support or perks from the gov´t. There are many programs available to get you started. If you are starting a business for the first time, one of the very first things you should do is find a local non-profit that supports small businesses, they will plug you into all the programs. You will be amazed at what you can get for free.

    I said oil companies and other big companies receive a large amount of corporate welfare in the form of tax breaks. The corporate tax rate is 35%, so when companies are only paying 15%, that means the other 20% is corporate welfare. This is the problem, people see the gov´t giving money to people as a welfare, but they don´t see the gov´t not taking taxes from people as welfare. Small businesses have to pay close to 35%, but yet the gov´t returns billions of dollars to big oil.
     
  9. SteakTartare

    SteakTartare Senior Investor

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    The Federal government does, hence it is grouped as such in the chart. How can someone not know that? For that matter, do you even pay US taxes? After all, your IP address is in León, Nicaragua, so it is at least possible you don't.

    "Probably" and "could" are not what you said in the post above. In other words, your statement is BS and you know it.
     
    Last edited by a moderator: Jul 8, 2016
  10. artyarson

    artyarson Active Member

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    45%? That's kinda crazy! Are they full-time employed or what? If so, it seems a little bit weird.
     

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