Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

News Should Everyone who is Able Pay Federal Income Tax?

  1. Yes.

    14 vote(s)
    87.5%
  2. No, the current distribution is fine.

    1 vote(s)
    6.3%
  3. No, some other percentage should pay (please specify).

    1 vote(s)
    6.3%
  1. Sep 18, 2012 #1

    russ_watters

    User Avatar

    Staff: Mentor

    I'd like to gain some clarity on part of the issue with the Romney "47%" statement. There are a lot of "yeah, but...." responses to it, but few people who give such responses ever make it clear on this point:

    Should everyone who is not elderly, poor, a student, or in some other hardship pay federal income tax?

    For the record, according to this CNN graphic, it is roughly 28% of the population that is currently able, by that criteria, who does not pay federal income tax (though it includes an imprecise poverty measure): http://money.cnn.com/galleries/2012/pf/taxes/1203/gallery.election.moneymag/index.html?hpt=hp_t1

    For the "other", what I'm looking for is another criteria for deciding who should and shouldn't pay federal income tax, For example:
    -Anyone over twice the poverty line.
    -Only the rich.
     
  2. jcsd
  3. Sep 18, 2012 #2
    Can you define "poor," please?
     
  4. Sep 18, 2012 #3

    russ_watters

    User Avatar

    Staff: Mentor

  5. Sep 18, 2012 #4
    If we can expand the definition of "poor" to the bottom 23% it would match up with the graphic found here:

    http://www.npr.org/blogs/money/2012...NPR&utm_medium=facebook&utm_campaign=20120903

    This website has another version of that graphic, breaking down the reasons the 47% don't pay taxes. So far, I've seen 3 definitions of poor. Your link specifies people making under 20k per year, which makes up 6.9% of the population. You say 15%, which is the government definition of poverty. The NPR link says 23% don't pay because of "low income."

    So, depending on the definition of "poor or other financial hardship" used, I'd argue that our current situation reflects a "Yes" answer to your question.

    Realistically, though, raising taxes on the people that fall in that grey area (say, making between 25k-35k per year), won't raise much revenue for the government as a percentage of GDP, but it will create a hardship on the middle class which is already riddled with hardships. I don't think raising taxes on the lower middle class will get anybody elected, either.
     
  6. Sep 18, 2012 #5

    Evo

    User Avatar

    Staff: Mentor

    I would vote that everyone who is not elderly, poor, a student, or in some other hardship pay federal income tax of the same percent. That someone like Romney with an annual income of ~$27 million would not be able to get away with only paying ~13-15% tax.
     
  7. Sep 18, 2012 #6
    This is dangerous, because this would be a massive tax increase on many members of the middle class, a tax decrease on some members of the upper middle class. It would obviously need to be higher than 15% to fit your criteria, so let's say it's 20%. That means the lower middle class person paying about 10% in income taxes has their tax bill double. The upper middle class person paying 22% gets a tax cut, and the super rich get an increase.

    I don't think the extra money from the super rich is worth raising taxes on the lower middle class, personally.

    I'd be interested in a form of Tobin Tax, where trades of financial instruments are taxed at a small rate, something like 0.1% per trade, which would completely pay for eliminating all income taxes for dollars earned under 100k per year. (I'm sorry I don't have a source for that handy, these numbers were true in 2004 when a local politican was running on this, and I had seen the report at that time. The numbers may be off now. Here's a BBC link about the tax: http://www.bbc.co.uk/news/business-15555812 )
     
  8. Sep 18, 2012 #7

    russ_watters

    User Avatar

    Staff: Mentor

    No, it wouldn't. "Low income" in that graphic is based on tax policy, not the poverty threshold. It just means low enough that they don't have to pay taxes. That's the group I'm referring to: too low by current policy to pay income tax, but not actually considered "poor" by government standards.
    Not exactly: it doesn't differentiate the fraction of the elderly that are poor. But you're right (and I acknowledged above) that it is an imperfect threshold (does not exactly match the official line.
    As said above, you misunderstood what that meant.
    So you're purposely sabotaging the poll? I gave you the definition and the threshold and you're choosing a different threshold. That's trolling.
     
  9. Sep 18, 2012 #8

    russ_watters

    User Avatar

    Staff: Mentor

    Fair enough, thanks for answering. I'm delaying responding to implications for a while, until more votes are corrected (or the thread gets flooded with responses).

    For clarity, the "Romney's" of the US are counted among that group in the stats I've listed.
     
  10. Sep 18, 2012 #9
    First of all, at no point did I sabotage the poll; I didn't even vote. Second, I have chosen no threshold, I was merely pointing out that your definition is not the only possible definition. Thirdly, it is against the rules to accuse members of trolling, particularly when I think my posts have been fairly reasonable and even had a link to NPR, which most would agree is a credible source.
     
  11. Sep 18, 2012 #10

    russ_watters

    User Avatar

    Staff: Mentor

    If you just misunderstood what NPR was saying, fine -- do you see that you were wrong in your description of NPR's stat? This post does not make it clear that you see your error.

    If you didn't vote yet, great: you incorrectly described a "yes" vote. I just hope no one else voted based on your incorrect description.
     
  12. Sep 18, 2012 #11

    Astronuc

    User Avatar
    Staff Emeritus
    Science Advisor

    I think " who is able" should be qualified. There is already an attempt to qualify that in the tax code - rightly or wrongly.

    To put things into perspective - Yes, 47% of Households Owe No Taxes. Look Closer (April 13, 2010).
    http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html

    Leonhardt points out that those who don't pay 'income' tax, do pay other taxes, which are actually at higher rates as a percentage of their income than those who can afford to pay 'income' tax. Many who don't pay income tax can still pay payroll taxes.

    Folks still pay state income taxes and various excise taxes.

    Also, those who cannot afford to maintain bank accounts and who must pay bills, e.g., utility, etc, must pay fees that can amount to several percent (2-5% depending) of their income. Those fees go into the pockets of the owners of those establishments (probably middle to upper middle income).

    I also seem to remember a statistic that a portion of those receiving EITC are military families - typically the families of enlisted personnel (specialists, privates, corporals, sergeants).
     
    Last edited: Sep 18, 2012
  13. Sep 18, 2012 #12

    russ_watters

    User Avatar

    Staff: Mentor

    While that's true, I would think a government agency specifically tasked with defining and measuring "poverty" would provide a more reliable definition of "poor" than politicians writing tax policy, no? Politicians aren't necessarily looking at the concept of poverty while creating their deductions. That said, it is fine to disagree with the idea that "poverty" should be the cutoff. I gave a sample "other" answer in the OP, of twice the poverty threshold.
    While that's true and fine, I find it very odd to single-out the federal income tax as being OK not to pay or saying that paying another tax negates the fact that many don't pay this one. I don't think my local tax collector would find it a compelling argument if I said "I'm not going to pay this tax, but don't worry, I pay a lot to Social Security, so I pay my share!" It also doesn't make sense to me to say that the Social Security's tax is too regressive, so lets make the federal income tax more progressive.

    Point being, if Social Security's tax structure is bad, that's a discussion for another thread -- fix it by fixing it, not by changing something else. I'd like to know what people think about the federal income tax itself.
     
  14. Sep 18, 2012 #13
    I think you've completely missed my point. I did not describe a "yes" vote at all in any sort of definitive terms. I just stated that if people define "poor or other financial hardship" as those currently excepted by the tax code, then "yes" and "no, what we have is fine" are the same.

    This is the point that Astronuc described better than I did. In the limit that "able to pay" goes to "what the tax code says," your first two vote options are the same.

    I don't have any particular stance on the topic, except maybe that Tobin Tax I talked about above.
     
  15. Sep 18, 2012 #14

    russ_watters

    User Avatar

    Staff: Mentor

    You said:
    Bottom line: It is my poll. I get to decide what a "yes" vote means, not you.
     
  16. Sep 18, 2012 #15
    If the distribution of income and wealth were more equal, I would support this. But given that the United States is afflicted by such high inequality, I can't in good conscience support it. The current taxes on the poor/middle class are pretty fair. I wouldn't reduce them or increase them. But I would vastly increase the tax on the upper class in order to facilitate some transfer of wealth from the top to the bottom. Once people have living wages and other comforts of a civilized society, I would be more willing to support everyone paying taxes.

    And since everyone's in such a tizzy over what a "yes" or "no" vote is, I think I'll just not participate in the actual poll.
     
  17. Sep 18, 2012 #16
    Wow, russ, that's low. You cut my sentence off in the middle and only posted the second half out of context. And this is from the author of the "political spin" thread. Let me post the whole thing.

    You're an intelligent man, russ, I know you can comprehend that full sentence. The point is, words don't have absolute meaning. When you say "able to pay," everybody has their own concept of what "able to pay" means. It is not up to you to decide what meaning others take from your words. Communication does not work that way.

    In a very broad way, I think everybody can agree that everybody "able to pay" taxes should, though everybody has their own threshold as to what "able to pay" means. Even if you "get to decide" what able to pay means in the context of this poll, I suspect phrasing it that way will still have people voting with their own opinion of what "able to pay" means.
     
  18. Sep 18, 2012 #17

    lisab

    User Avatar
    Staff Emeritus
    Science Advisor
    Gold Member

    Yes, I think everyone should pay some amount - that's fair.

    I think everyone should pay a fair share. I understand the attraction to a flat tax, but I bet most people who are for it have never been to-the-bone poor. So I don't think a flat tax is fair to very low wage earners, but they should pay something, even if it's just a token amount.
     
  19. Sep 18, 2012 #18

    russ_watters

    User Avatar

    Staff: Mentor

    The rest does not help you:
    There was no "depending": you specified a specific definition and called it a "yes" and I specified a different definition: there is no ambiguity for a "depending" here.

    Wow indeed. It also appears you also don't understand what "communication" is -- which is a pretty big problem. No matter how you try to twist my words, you're not inside my head. A person who reads my post and makes an honest effort to understand what I am saying will understand it. Even if they don't, it doesn't change my intent. Your disagreement about what "able to pay" means does not change my intent for the poll.

    The fact that you asked for a clarification and received it, but still won't stop pressing the point just makes it worse.

    I suspect from your posting that you are not yet in the professional world, where precision of wording matters. If you sign a contract and then later say you disagree with the way a word that is defined in the contract, you're out of luck. No, words do not have 100% agreed upon definitions; Definitions are a matter of consensus and specification. I've specified my definition -- heck, I even gave you an alternative choice if you didn't like it.

    Next time you go to a sandwich shop, ask for a tuna sandwich, then complain that it doesn't have turkey in it because by your definition of "tuna sandwich", it should include turkey. See how that works out for you.
    Not necessarily. We have a current tax structure that enables a handful of people with extremely high incomes/net worths' to pay no federal income tax. *Someone* wrote the law enabling that.
    If people don't read the poll before responding, it isn't my fault, but if you have a suggestion about how to more objectively title this thread, I'm all ears.
     
    Last edited: Sep 18, 2012
  20. Sep 19, 2012 #19
    I would say yes, but with a proviso- I would count all taxes paid to the federal government (including payroll taxes) as 'federal taxes' and count all payouts (social security/medicare,etc) as federal payouts.

    And I wouldn't set an income threshhold, I would set an income+dependents threshhold- after all someone making 30k a year with 6 kids is in a different situation than someone making 30k a year with no kids. I think my system would look much like the current system.

    Also- its weird to me that the republican party cut taxes as a poverty fighting measure and now Romney turns around and complains that a lot of people don't pay federal income of course they don't, Reagan and Bush cut their taxes down to nothing!
     
  21. Sep 19, 2012 #20

    BobG

    User Avatar
    Science Advisor
    Homework Helper

    So, in essence, earned income credit should be terminated?

    For earners with 3+ children with incomes between 12.5k and 16.5k, that would be a $5000+ tax increase.

    Not saying right or wrong, but just saying it's impossible to just charge a token amount relative to today's laws.
     
Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook




Similar Discussions: Should Everyone who is Able Pay Federal Income Tax?
Loading...