Uncle thinks that the estate tax is a bad issue for Democrats:
“If Southern Progressives want issues, they should avoid the ones based on class warfare. “
… “Paying their fair share? And somehow when you die you should be forced to make amends for, err, all those years you were in the higher tax brackets. Give me a break.”
If you look at the total of all taxes, our system is essentially flat. So, no, the richest among us don’t pay a significantly higher share of total taxes. And yet they do benefit disproportionably from the system that taxes pay for. They cannot make anything without the infrastructure that the government provides so I hardly think it unfair to ask those who benefit the most form it to pay a little more than those who don’t accurse such benefits.
There is no such tithing as a self made businessman. That is a lie the selfish tell themselves to convince themselves that the roads, the internet, the educated employees, the government r & d and r & d funds, the police, the fire department, the military etc, etc had nothing to do with their success. Without those things, they are nothing. If Bill gates had been born in Afghansistan he would not be the richest person in the world. If he did not have the services of the people educated almost entirel at government expense, if he did not have the government built roads, internet, and police and legal system, he would never have achieved anything near his current success.
Uncle then says this:
“Actually, no American dream I know of includes paying taxes”
The taxes that Uncle so disdains provides the infrastructure that we work upon and make sure — well, used to make sure — that the advantages of accumulated capital aren’t passed down from generation to generation until no one can compete against even the incompetent heirs. Since, for example, Paris Hilton is going to continue to benefit form the infrastructure that the government built that allowed her ancestors to make something out of their hard work (or does anyone think that a hotel tycoon would have been possible without the government creation of the highway system, the train system, and the airline system?), I hardly see the problem with taxing her to continue its upkeep. And since she doesn’t need to earn income, and any income she earns will be dwarfed by the size of her estate – -meaning that income only taxes cannot possibly pay her fair share of her benefits — the estate tax is a perfectly logical and fair place to do that taxing.
Or does Uncle believe in free rides for rich folks? Or maybe he believes that the infrastructure fairy will come along and make everything work with a wave of the wand.
leanleft
Kevin
tgirsch
Kevin T. Keith
Judd
Of course a flat tax means the rate is flat, not the amount. So if my income is 100X greater than yours, I pay 100X more tax. So, yes, the rich do pay a significantly higher share of taxes. They don’t pay a significantly higher percentage than the middle class, in general.
Only in tax discussions can someone paying 100X more than someone else be described as paying the same share. Bill Gates pays 1000X more tax than I do, and in some years when he is unloading a lot of stock, 100,000X more tax than I do. And, he plans to donate all his wealth to charity. I, for one, can’t argue with that.
As for Paris Hilton, her future inheritance is not particularly large (estimated at under $30 million), and believe it or not, her income is pretty significant. Apparently it pays well to be a bimbo.
Ted
But people with larger incomes benefit more form their tax dollars than people with poorer incomes. No one seriously argues agaisnt that notion.
And I always thought that anyone who could turn a life of nothingness into a mini-media empire, like Hilton has, actually cannot be all that dumb.
The Social Security taxes shift the taxes to the lower end. Corporations don’t pay at the same rate as small businesses and pay less for almost everything they buy.
Your tax bracket is reflected in your police and fire protection.
Upper income people can afford insurance that is out of reach for the poor and, based on value of the assets, the wealthy pay less for all of their insurance.
Almost all of the sheltered savings accounts are only available to the wealthy, as the poor need everything they make to pay their bills.
Kevin, I agree rich benefit more from government – and they pay more taxes. So we come to the rather esoteric question concerning the slope of the tax benefit / income curve. Is it constant, or does it increase? If you have twice the income that I do, do you derive more than twice as much benefit from US government that I do? Looking at where the bulk of our Federal tax dollars are spent (defense, debt service, entitlements, social security), I don’t believe the slope increases as income increases. In fact, I think a sociologist could make a pretty convincing argument that the slope decreases.
This ignores the “ability to pay” component of the discussion, which I believe is the most common rationalization for flat or progressive tax rates. But that is beyond the scope of this specific discussion.
Bryan: Corporations don’t pay at the same rate
Fred: Corporations don’t pay at any rate. The end consumer pays all expenses of producing or selling a product. Taxes are just one more expense that is passed on to the consumer.
So called conservatives use the word tax more often than any other most likely. And they use the word moral just as often perhaps. Is there a connection between taxes and morality? There sure is and it’s called tithing.
Tithes are taxes paid to God. Of course God is nowhere to be found even though God is advertised to be everywhere present. Because God is absent His taxes, tithes are collected by His representatives, vicars, attorneys in fact that represent God. So it is small wonder taxes and morality, degree to which God’s laws are obeyed, are lumped together.
Did you know that the tax laws, all levels in most places, impose tithing, taxes paid to God, on everyone. Tithes are known in religious circles as “gifts to God.” Gifts to God are tax free. God doesn’t pay taxes. And they are tax deductible to the gifter. Most folks think that if it’s volintary then it’s not tithes and they are correct. What they are failing to notice is the tax free, tax deductible nature of the situation. The tax burden is increased to all who do not gift to God and decreased to those that do gift to God. Therefore those who do not believe, have faith in God are tithed anyhow. It’s by force of law and therefore real tithing, forced payments to God.
In addition to gifts to God being subtle tithing on the entire country via the income tax laws there are the property tax laws that are local. Church property is not taxed. This is another form of tithing, forced payments by all to God. And the church has the choicest real estate and fanciest buildings in town, small wonder. All other property owners only “rent” their property from the government, property taxes being rents. No? Try not paying them and see what happens. They will kick you out and fine a renter who will pay. Only the church and state own real property outright.
The bottom line is simply that atheists are forced by law to pay for churches and contribute to the incomes of church operators. Some of the tithes they pay find their way all the way to Rome, the Vatican where serious tithing began about, 1,700 years ago.
Separation of church and state is far from complete is what the above says. The church still controls the part of government they cherish the most, taxing power. Of course this is unconstitutional, first ammendment, “no law shall establish religion..” As money is the primary ingredient in establishing anything then the tax laws clearly establish religion.
I hope this opens your mind to an archaeological discovery that proves beyond a reasonable shadow of a doubt that the Bible is a hoax. This was announced over a year ago. The media has so far ignored it although they are now seeming to “talk turkey” having examined the evidence themselves and their researchers not being able to discredit the information. You can get a head start like a few million others world wide via the Internet. Enough of the find for the average person is at: http://www.hoax-buster.org free and without registration.
Bryan, could you please explain your statement that tax rates vary depending on the corporate status of a company? Truth be told, taxes companies pay vary with the income (profit) level of the company. As I recall, rates start in the mid-teens and progress up to a max in the mid thirties. I’m less current on payroll taxes, but I believe they vary in direct proportion with the number of employees a company has.
Fred, I don’t know what business you are in, but a company can’t just “pass on” taxes to consumers. If all costs could just be passed on, then wouldn’t all companies make the same profit per unit sold? Clearly the market rewards companies that offer their products at a lower price. It’s called competition, and for most markets, it’s highly relevant in pricing decisions.
Bill, your “lack of payment (of taxes) equals payment (of tithes)” argument is an interesting one. Perhaps the same holds true for logic. As for real estate taxes, let’s look at the entire picture. Most people finance their homes. Interest payments are tax-deductible (as are real estate taxes). In most cases, the net effect of owning a home is the payment of less taxes, not more. Oh, and if you don’t pay the taxes on real estate, it doesn’t get rented out. It gets sold. I did appreciate hearing about your web site though. Why haven’t you mentioned it in the past?
Ted, there are many variables that determine profits. Taxes are an expense. Do you really deny that?
Also, renters do pay real estate taxes. Again, that’s part of the lessor’s expenses.
[...] Kevin tries to take me to task with the strawman. See, when I express opposition to some random tax (of which there are thousands), I am also required by, err, I dunno what to come up with a way to pay for crap that might otherwise be funded by the taxes I oppose. In other words, I should be glad to be taxed and thankful for our infrastructure. Or damn the taxes and the infrastructure. What Kevin doesn’t seem to grasp is that I oppose taxes only slightly more than I oppose a bunch of crap the .gov wastes money on. So, yes, kill a bunch of it. I could write a list and it would basically include most things that start with Department of, social security and a great many more. But there are things they do that I support. There is a potential for balance but we’re tilted in the wrong direction. [...]
Fred, technically, it depends on which earnings classification you are refering to. EBITDA obviously does not include taxes. But yes, in most discussions, taxes impact earnings and can be considered an expense. What I don’t understand is how this relates to the discussion so far. My point is that expenses can not simply be passed on to the customer. If this were the case, no business would fail. A can of Coke and a can of Pepsi cost the same amount in any given market. However, in any given year, the two companies pay vastly different amounts of tax.
Something I forgot to mention about estate taxes. Well, actually it’s about gift taxes, but the two are very closely related. I can only give my kids $12,000 a year (and my wife can give another $12,000) before we incur taxes. However, if I choose to give money to a political organization, I can give as much as I want without paying any tax. Can you imagine being a politician and passing a bill that favors transfer of wealth to you above transfer within one’s family? That takes a lot of gall.
Ted: My point is that expenses can not simply be passed on to the customer.
Fred: My point is that your point is not valid. If a business cannot pass on all expenses to the customer and make some profit, it will fail. I don’t know how anyone could argue otherwise. Certainly different businesses earn different profits because different businesses have different expenses (including taxes), different sales, different acceptable profit margins. The business has to decide if it is making enough profit to stay in business.
What I have said was in response to Bryan’s comments. That is how it applies to the discussion.
Fred, if you are implying that income taxes, which are a percentage of profits, must be passed on to the customer or a business will fail, then so be it. I’m tired of having to defend simple, basic economic principles that everyone, including you, know to be true.
Ted: I’m tired of having to defend simple, basic economic principles that everyone, including you, know to be true.
Fred: You haven’t stated any simple, basic economic principles. If you don’t understand that the consumer must pay all the expenses of a corporation if the corporation is to make a profit, your understanding of economics is flawed. As a businessman, I know that I don’t make anything until all expenses are paid. Do you deny that simple, basic economic principle? What business are you in? I may want to buy your product since I won’t have to pay as much as I should for it.
Fred, I don’t disagree with you. However, this discussion was about taxes. My position is taxes (income taxes, not payroll taxes) do not have to be passed on to the consumer for a company to be successful/profitable. That is the simple, basic principle I am tired of defending. In an effort to bring closure to this thread, I will offer an example of what I mean.
In your business, at the end of the year, you have total revenues of $5 million and total expenses of $4 million. This translates to $1 million income, before tax. At this income level, you pay 34% corporate tax, so your income, after tax, is $660,000. The next year, you do not raise prices to recoup your tax liability from the previous year, you leave prices alone, sell the same amount, and make another $660,000 after taxes. I characterize your business as profitable and successful.
You can accept my characterization of your business as valid, or you can refute it. In either case, that is my stance, and I feel confident it is sound.
You have a net $660,000 income, not a million dollar net income. If that is acceptable to you, fine. Where has the money to pay the $340,000 in taxes come from? The consumer.
Yes Fred, revenues come from the consumer. I doubt anyone disagrees with that observation. But that is not the point of contention in this thread.
My point is income taxes do not need to be passed on to the consumer for a business to be profitable/successful. I have stated this in each comment. This is in contradiction to your statement in comment #5 above (“Taxes are just one more expense that is passed on to the consumer.”)
Since your responses have transgressed to the point of being absurd, I’m going to move on. (Something I should have done several iterations ago.)
Ted: My point is income taxes do not need to be passed on to the consumer for a business to be profitable/successful.
Fred: Good grief. I guess a business can say they don’t pass on the expense of coffee in the breakroom, or toilet paper in the employee bathroom. However, it is impossible to make a profit without the consumers paying at least one cent over all expenses. I know you have said you won’t respond, but think about it.