Politicians love to promise tax cuts. Now, I don't like paying taxes, but I realize that they are

[raccoon]

necessary to provide certain services, such as public schools, roads, etc.

But it annoys me when that's all the politicians talk about. In SC, they've talked about getting rid of the tax on autos.

Well, you don't have to be John Kenneth Galbraith to know that if you cut taxes, you take in less revenue. Which means you'll have to (a) cut services, or (b) make up that revenue somewhere else.

Nobody ever talks about that part of it. :sigh:

[Nicholas D Wolfwood]

1. I don't understand why taxes are so toxic to people.

Especially income taxes. For the vast majority of people, it's very, very little and will make hardly any impact on their lives. For the others, they can afford it easily as well.

What I can't afford is to buy new cars constantly because roads suck.

What I can't afford is not having a nurse that knows how to do simple math because our schools suck.

What I can't afford is not having engineers because we cut science funding.

What I can't afford is not having a well-equipped police force or military (no problems on the latter, mind you).

What I can't afford is having half the country crippled with chronic illnesses because we can't afford to treat them.

Whatever happened to the maxim "you gotta spend money to make money"?

[notesdev]

2. Why they're toxic to me

Everyone else seems to get a boatload of exemptions and deductions, but because I lead a simple life I get nothing and am one of a small group of people who pay full price.

I'd be a lot less irritated about taxes if I thought I was getting an even remotely fair deal out of it. The guy making a million dollars a year with the Harvard-educated accountant pays a much smaller percentage of his income than I do, and that is a problem that seriously needs to be fixed. My effective tax rate is nearly three times that of Warren Buffett - WTF?

[Statistical]

3. Hardly.

Someone making a million is subject to AMT. They are paying a substantially larger portion of their income in taxes.

They should be, but to pretend otherwise is just disingenuous.

[Nicholas D Wolfwood]

5. If you're talking about eliminating tax incentives, I don't agree with you.

Encouraging people that have money to spend money is a very, very good thing for everyone. That's how we keep money moving around in this economy, and it's also why the current economy isn't doing very well (once the banks started clamming up on credit and investors stopped investing, in rippled through the whole system very quickly).

That said, I am in favor of raising the base rates for those millionaires you speak of. They can hack it, and if it leads them to spend more to avoid sending it back in taxes, that works out for all of us too.

[hfojvt]

6. that's another fine myth

even if it may be true of Buffet, but that only became true after the 2003 tax cuts. Tax cuts that were pushed through at least partly because of anti-tax sentiment. Still, according to IRS figures from 2005, the average tax rate for people making between 20,000 and 25,000 was 5.8% for people making between $75,000 and 100,000 it was 9.7%. For people making between $100,000 and 200,000 it was 13.3%. For those making between $1,500,000 and 2,000,000 it was 24.6% and for those making over $10,000,000 it was 20.9%.

Those are not IRS figures, they are my own calculations from IRS data. I take the total tax paid by an income group and divide that by the total AGI of that income group.

Take, for example, a single guy making $60,000 and assume he cannot itemize. His tax is $9,100. For a tax rate of 15.2%. A family of four with that income, OTOH, pays a tax of $2,466 for a tax rate of 4.11%.

[notesdev]

9. On what planet?

"Take, for example, a single guy making $60,000 and assume he cannot itemize. His tax is $9,100. For a tax rate of 15.2%."

I'd jump for joy if that was the case.

In 2005 I paid over $18,000 in federal taxes alone on an income of just over $66,000, which comes to over a 27% tax rate. Throw in state income tax, sales taxes, gas tax, phone taxes, car taxes, and a list of assorted other taxes and fees, and I ended up paying well over 1/3 of my total income to the government.

[Statistical]

10. Earth?

$18K income tax on $66K in income. You need to fire your tax agent. If you did your own taxes well you screwed something up.

In 2005 the std deduction + exemption = $8,200
So $66K gross = $57,800 taxable.

Tax brackets in 2005 were:
>$29,700 <$71,950 $4,090 plus 25% of the amount over $29,700
$4090 + 0.25*($57,800-$29,700)=$11,000

You max INCOME tax would be $11,000 on $66,000 (which is 16%) that is with $0 in deductions or credits.

Most people have at least something to reduce their gross income:
401K contribution?
IRA contribution?
Student Loan interest?

You couldn't itemize? If you could just the basics: mortgage interest + real estate taxes + sales taxes should be enough to bring your taxes down some.

http://www.1040.com/site/federaltaxes/prioryearinformation/2005taxrates/tabid/233/default.aspx

The good news if you screwed up you have until April 15, 2009 to file an amended tax return.

Now if you are self employed and are including FICA that isn't income tax. You aren't comparing apples to apples.

[notesdev]

11. I was self-employed

which honestly doesn't make a difference, in principle. If I had an employer paying the extra taxes then it would have come out of my pay, so regardless of whether I saw the extra number in my check or not, that amount of taxes would still be a direct hit to my income. It's not like the share the employer pays magically appears out of nowhere, an employer is going to have a budget for an employee and both the employer's share of the taxes and the salary paid come out of that budget. If the employer didn't have to pay those taxes, the employees would be able to get paid more.

And no, I didn't have any of those things at the time that reduce one's tax burden. No 401k, no IRA, no student loan interest, no mortgage interest. And I really don't see why a)whether or not I have any of those things is any of those things are the government's business, and b)why I should get reamed on taxes for not having them.

[leftyclimber]

4. How does SC tax autos?

Here in WV, we pay tax when we purchase a new or used car. Fine. This state has sales tax. No problem.

However, we also pay property tax on the blue book loan value of our car every year because cars were at some point designated a luxury. Well, when you live somewhere with limited or no mass transit (here in Morgantown, in the areas where we do have available transit, it generally doesn't start running until after people need to be at work, and most of the bus routes either go to the university or to shopping malls), a car is a necessity. In the rest of the state, particularly in the extremely rural areas, you can't get anywhere without a car. In those areas a car is an absolute necessity. More importantly, a reliable car is a necessity.

If you buy an old beater car, you are exempt from paying property tax. But then you are taxed a different way -- in all the parts you have to buy to keep it running, the pay or job you lose when your car won't run or you can't make it through the snow to work, the inability to go to the store or get to a doctor's appointment. In other words, the poor can get an "exemption" from the car property tax, but they frequently end up paying more than those of us who can qualify for a car loan and afford to make car payments.

We also pay 5% sales tax on food, but that's for another thread.

Are they talking about getting rid of sales tax when you purchase a car, or are they taxing automobiles as part of a property tax assessment on top of it? The first tax I'm fine with keeping. The latter tax I'm not.

[raccoon]

8. In SC, when you buy a car, you pay sales tax on it. The maximum sales tax is $300.

So if you buy a Jaguar you pay the same sales tax as if you bought a Camry.


Each year you pay property tax on the vehicle, based on the blue book loan value. When the car gets to a certain age--probably about 15 years old or so, the tax can't go any lower, but still every 2 years, you pay about $25-$35.

They were talking about getting rid of the annual property tax.

[MadHound]

7. Obama's emerging tax strategy is starting to piss me off

I don't mind a middle class tax break, that's not only deserved, but a real logical move to get money back into the hands of consumers and get the economy going. However his plan, mainly to assuage conservatives(and because he doesn't want the bill coming down to being a strictly party line matter(so much for using that Democratic majority for good, now everything is going to have be compromised away for the sake of bipartisanship)) is also going to include a nice fat tax cut for small businesses and corporations. Sorry, but these interest groups have already had their tax cuts, they've already had their interests met. Further tax cuts for them do nothing but drive up the deficit.

Furthermore, Obama's plan to let the tax cuts on the rich simply expire rather than rolling them back is going to cost us even more more, adding to our already staggering 11 trillion dollar debt. We've absolutely got start bringing that debt load under control, and that means raising taxes. Time that Obama did that is now, while he still has the political capital to do so. Instead, he's going to try and play nice, and in the process pass even more debt down to our children's children.