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

The more you earn the more they deserve?

  1. Nov 13, 2003 #1
    I ended up taking the 20 best paying jobs in the US thread off on a tangent.
    I would like to take this topic further without derailing the original thread, so I opened it up for discussion here.

    This is what transpired there so far....

    In the US, you reach the highest tax bracket at about $95,000.
    Strictly speaking, that is something like 40 - 45% of your income going back to the Federal, State and Local government.
    Of course there are tax breaks and other tircks dishonest people play to keep their money.

    Your definition of equal must be different than mine.
    If some people are more equal than others, equality does not exist.

    I am not filthy rich.
    I don't have yachts and tax shelters.
    I don't own several homes.
    Hell, I don't even own ONE home.
    I rent.
    I grew up poor, in a poor neigborhood.
    I drive a used Honda.
    I don't travel the world in a private jet.
    I work very hard for what I have.
    I have been working steadily since I was 13 years old (I am now 32).
    I have never had a leg-up from anybody in my life.
    But, I pay over $40,000 a year in taxes.
    That is almost HALF my paycheck.
    So I am being punished for working hard and sacrificing to pull myself up higher.
    But Joe Blow, working at the local convenience store to earn just enough money to keep him in weed and twinkies, pays 15 - 17% of his income.
    If we paid out the same percentage, I would still be contributing over $18,000 (which is more than he makes in a year).
    If EVERYONE paid 17% across the board (from single moms to billionaires) we would have so much more tax money coming in than we do now, we could fire most of the IRS and swindling cheat tax attorneys would have to get real jobs and actually contribute to something.
    I should pay more dollars, sure.
    But what is the justification for having to pay a higher %?
    Then there are people like my father, who feel it is below him to take a job at a gas station, collect unemployment and spend it all at the local bar.
    When I couldn't find a job in my field, I worked two full-time jobs at gas stations making less than I did when I was 17 years old, and didn't take a DIME from the government.

    No, I am not a cold hearted right-wing bastard who thinks the poor deserve what they get.
    I think health care should be government sponsored.
    I think the government should offer people a TEMPORARY leg-up when they truly need it.

    I think the ideal system would be a balance between:
    The Republican ideal of small unobtrusive government and personal freedom...
    The Democratic ideal of taking care of those who truly need it...
    The Socialist Democrat ideal that our basic needs should be taken care of...
    ...and my own personal ideal that if you CAN work, you WILL work (at whatever you do best) or you simply don't eat, and your children will be given to someone more responsible.
    You should have the right to not work, but if you make that choice, you made that choice.
    Be a part of the "society" (I hate that word) or fend for yourself.

    To be perfectly honest, I don't even agree with the capitalist system at all.
    The ideal, that people that work harder will be rewarded for that hard work, is quite obviously bull****.

    People who know and manipulate the tax laws get rewarded.
    People who lie, cheat, swindle and steal get rewarded.
    People who stay at home pretending they are looking for jobs are rewarded.
    People who decide they don't want to work are rewarded (if they know the system).
    Honest people who work hard...
    We foot the bill for everyone else.

    The biggest problem with "the land of opportuinty" is that the we have spoon fed everyone with our golden promises of freedom, opportuinity, entitlements and the all-mighty dollar since the 50's.
    We are told from the time we can walk that we have a right to this, and a right to that.
    We are free to do what we wish.
    Life, Libery and the Pursuit of the easy buck.
    But we are not taught that with great freedom comes even greater responsibility.
    We have managed to get more demanding and less responsible at the same time.
    We want all the luxuries, but no accountability.
    We complain that health care cost too much, but we sue doctors for billions of dollars ever year.
    We ***** that the public school system sucks, but we ***** when someone wants to spend money on it.
    We complain that our taxes are too high, but we vote for people who want to generate more government jobs, more government programs, more government spending.
    We complain that all politicians are dishonest, but not only do we vote them in, we allow them to pass the laws that allow them to BE corrupt.
    Besides, no one would ever vote for the guy who was honest, anyway.
    People don't want to hear the truth.
    They want someone to tell them that everything is going to be fine, and their taxes won't go up.

    Drugs should be legalized.
    However, if you do drugs so much that you can't afford to eat...
    Go ****ing hungry!

    I guess I got a little off on a tangent there.
    Bit of a passionate subject for me.
    Doesn't take much to set me off.
    I will let it go for now.

    I think we need to define "rich".
    Like I said, you reach the highest tax bracket at about $95,000.
    I hardly consider that "rich" if rich people can afford "very expensive accountants".
    Single people who earn between $45,000 and $125,000, have no children and do not own a home pay the most taxes.
    Them, and the struggling small business owners.

    Who has been feeding you that self-pitying, pathetic victim complex?
    My father was a raging alchoholic who dropped out of school in the 8th grade.
    My mother barely scraped by working ****-wage jobs to feed her 4 children.
    I never had, nor do I have now any connections.
    I don't have any degrees either.
    I worked my ass off, and earned what I have with long hours, dedication and work ethics.
    Which is exactly why I get so pissed off when people who have no right to what I have earned claim they "deserve" it.
  2. jcsd
  3. Nov 13, 2003 #2
    The following is my response to Monique's replies to the above......

    Why shouldn't they?
    If you remove the tax shelters, breaks and loopholes for corporations and people, and enforce more honest reporting of profits/earnings while instituting a flat tax:
    1.) The amount of tax revenue from the super-rich and from industry would greatly increase.
    2.) The amount of tax that the average hard-working citizen getting paid over $45,000/yr would decrease.
    3.) If the amount of taxes that married people/homeowners/parents (and all the others that qualify for "deductions") goes up at all, it will be just slightly on average.
    4.) The vast majority of people making under $100,000/yr would pay less taxes.
    5.) The overall tax revenue the government takes in would still be increased.

    "Why SHOULD a single mother be given a "break"?" is my question.
    Compare a professional executive single woman with me...
    If she has a child, she pays less in taxes.
    If she owns a home she pays less in taxes.
    If she is divorced, she likely gets child support (and possibly alimony).
    Finacially she is in much better shape than I am, but she deserves a "break" because she has a kid?

    You were probably just thinking about the single mother that is financially struggling to get by deserving a "break" right?
    Maybe the inner city woman with 2 kids, a "dead-beat dad" as an ex-husband, working as a waitress to make ends meet, unable to afford child care...
    Is that the woman you were referring to?
    If so...
    Yes, she DOES deserve a "break".
    What that "break" should be, is where we disagree, I think.
    With the increased Tax revenue from instituting a "flat-Tax", the government will be able to afford to give her that "break".
    Government paid child care for working parents who can't afford it.
    Government paid job training.
    Government paid health care.
    "Free" government sponsored Colleges and Universities.

    See, I believe in Social Welfare, but I don't beleieve in how it is set-up right now.
    Roosevelt's ideal was good intentions gone wrong. (Just like MANY Liberal Democrat's plans.)
    The goal of Social Welfare programs should be to offer the tools required to improve the lives of those who need it.
    To teach people how to fish, not hand fish out to people.
    To help those who help themselves.
    Social Welfare is one of those rights I was talking about that should require personal responsibility to redeem.

    First of all, minimum wage SHOULD be increased.
    Second, if you have a crap job that anyone can get with no or minimal training, the crap wages are what you pay for it.
    If you want to make more, get yourself a skill, and vacate your job so the next person that needs money so they can afford to better their situation can take it.

    Question is...
    ARE you kidding?
    Or do you believe that "pencil pushers" should get paid less?
    By taxing the higher paid a greater percentage you do two things:
    1.) You tell people that the harder you work and the higher you climb, the more you will be punished for your efforts.
    2.) You tell people that by the simple virtue of you being successful you are required to support those that are less successful than you.

    If you make $20,000 a year, 17% would be a mere $3,400. $384.62/wk before taxes 319.23/wk after taxes. That is only $65.39/wk in taxes.
    If you make $200,000 a year, the numbers would be: $34,000/yr taxed, $3,846.15/wk before taxes $3,192.31 after taxes that you will be paying $650.84 a week in taxes.
    The person getting paid $200,000/yr is paying more in taxes than the person making $20,000/yr earns in a year.
    Why doesn't that seem fair?
    (As a side note, as thing are now, when I was making $20,000/yr (being a single, childless, non-homeowner) I was paying closer to 32% in taxes, so instituting a flat-tax would have enabled me (an poor struggling person that you seem so concerned about) to pay almost 1/2 as much as I did in taxes.)

    Because the whole idea is to be rewarded for you hard work and sacrifice, not punished for it.
  4. Nov 13, 2003 #3
    You seem to be saying a very true, hard to argue with point (in this day, age, and place at least): People who work hard should be rewarded for their hard work. It is hard to argue with this point, and I wholly agree with it (I think it is pointless to bring up Marxist fantasies or anthropological data from other cultures - it should be clear to everyone we are talking about this culture). So far we are in agreement. Hard work should pay off, but this is just the undeniable fact that an economic incentive is pragmatic.

    However, you seem to take a non sequitur nose dive in reason after this point in trying to link this premise with laze fair capitalism and, most of all, a "flat tax". I do not see the connection. Just because we should want a society where hard work yields greater degrees of material comfort does not mean we must support unregulated markets. Just because "hard work" pays off in our society does not mean that "hard work" is directly related to wealth.

    I am having a hard time understanding your comments on taxation. Stratified taxation in the Western Democracies always leave the rich still rich. "Hard work" still pays off. You still are left with more money than those who make less than you. What is the problem? You are right to think that the tax code needs to be rewritten to close loopholes, but why a flat tax? Just because it is simpler? You may think that an equal percentage of everyone's income equates to equality in taxation. If you do, I would say that you are hypnotized by numbers. 15% percent of someone's income who makes 80k a year means a lot less to that person than 15% or someone who makes 20k a year. Hell, 40% is less of a burden on the 80k guy than 15% is on the 20k guy. You act like the rich are burdened by taxes - I don't see how. I understand that no one likes paying taxes, everyone wishes that they could keep more of their paycheck, but as far as burden goes, the rich are far less burdened than the lower middle class with taxes even if they do pay a greater percentage of their income. By the way, most poor people do work hard. How is someone supposed to live on minimum wage? It is impossible in most places, especially with kids. So, socially programs simply step in where capitalism fails to provide. Our capitalist society needs low wage workers. Even if poor people were poor because they didn't work hard (which is empirically false) this would say little. Let's explore this common conservative claim with a simple thought experiment: If everyone in America started working hard tomorrow (most already do), would everyone suddenly become well off? No, such an idea is proposterous.
  5. Nov 13, 2003 #4
    I agree that the rich are better able to handle a harsher tax. But at the same time should they be penalized for making more money? By taxing the rich more than the poor, you are in effect punishing them for being sucessful. If you say "oh well they do less work for thier money, etc" you're simply generalizing, and that is outside of the argument. What someone does to earn that money is a seperate arguement, and I could make a case against all professional athletes, movie stars, and musicians who are millionaires. And the work they do is not proportional to the salary.

    That aside, there has to be a reward system in place for being sucessful, otherwise no one would be motivated to be sucessful. If someone is making 20K /year, and it's rough, then they will be motivated to educate themselves or seek better employment. Rage you said it best. No one wants to have mroe money taken away from them. A flat tax would ensure equality in that aspect. Rich people shouldn't be penalized for having more income, and poor people shouldn't be rewarded by paying less taxes. Irregardlesss of the ability to live, or the actual monetary numbers, People should be viewed on a level playing field. That's like saying because you're working a lesser job, we will shoulder the burden for you. It's your job to work move up the ladder, not the government's job to make your rung easier to deal with. Extrenuating circumstances should be consider, but rewarding someone soley because they don't make a lot of money is favoritism.
  6. Nov 13, 2003 #5
    I very much disagree.
    I speak from experience in saying that $3,000 meant about as much to me when I was making $20,000 a year as $12,000 did when I was making $80,000 (actually, the $12,000 when I was making 80 probably meant more to me).
    Saying that $3000 means the same to someone that makes $20,000 is the same as $32,000 for someone that makes 80 is just absolutely absurd!
    And, as Zantra said, that's really beside the point anyway.
    $3,000 does not mean the same thing even to two people making the same amount of money, depending on how they live, where they live, what type of housing they live in and many other factors.

    I didn't say that they don't.
    Some poor people work hard, some are slackers.
    Some rich people work hard, some are slackers.
    What is your point?

    I adressed that already.
    I the part that begins with:
    I also said that minimum wage should be increased.

    You are right, that IS preposterous.
    But, again, I said nothing of the sort.
    Perhaps, though, we should aim for a system that WOULD help people to become more well off through hard work?
  7. Nov 14, 2003 #6


    User Avatar
    Science Advisor

    The top 10% of the US income wage earners pay 2/3 of the federal income tax dollars yearly.

    They pay their share.

    As one_ raven stated, if $95,000 US dollars is the cut off, a dual income household comprised of a fireman and nurse practioner is considered rich income tax bracket.

    If you look at the top Fortune 400, almost all got there from a standstill, not inheritance, or they took a small chain and build it up into a conglomerate.

    As for wether CEO's etc. work....they work their asses off. No one, with the exceptionally few, gets to such a level without blood,sweat, tears, luck, ingenuity and probably a dash of brutality. Many are being seen by physicians for stress related, sleep deprived illnesses so the medical establishment is privey to such knowledge. (Whether they deserve the salaries they get is another argument.)

    The irony is that the average Georgia physician's salary is about $90,000 a year and owe over $100,000 in student loans. No tax breaks given for student loans in people who make over $70,000 a year. They are by no means "rich" by the taxation bracket either and Georgia also has one of the highest malpractice rates in the country. Go figure.
  8. Nov 14, 2003 #7


    User Avatar
    Science Advisor

    These arguments, when presented by the well-to-do, invariably leave out payroll taxes. Incorporating those, and to be fair, estate taxes, levels things considerably. The poorest 10% pay about 7% of their income in federal taxes, the richest 15% pay about 21% of their income. In fact, the richest 35% pay about 21% of their income almost uniformly (independent of where they fall on the rich-poor axis). There is a spike for the wealthiest 1% up to about 27% of their income, due to inheritance taxes.

    State and local taxes are much less progressive than federal taxes in most areas. Sales taxes are always flat. Most, in practice, are actually regressive. The tax shelters, that the rich can use but the poor can not, wind up making the rich pay a lower percentage (always mor dollars though) of their true income than the poor despite the bracket structure.

  9. Nov 14, 2003 #8


    User Avatar

    Staff: Mentor

    Agreed. Its a strange world we live in when 0% = 50%.

    One thing on minimum wages: I hear people complaining all the time that its too low because it isn't a "living wage." Since when is the minimum wage SUPPOSED to be a "living wage?" I'm sorry, but by and large, if you are over 30 and still are trying to live on minimum wage, you've probably done something wrong. Sure, some people get unlucky. I'm not talking about them. We have millions of people who are just plain slackers.

    I have never once recieved a minimum wage paycheck. Even in high school you were considered a loser if you couldn't make 20% over minimum wage. Before I even got out of high school I made double minimum wage at a summer job. Its a piece of cake if you put a little effort into it.

    McDonalds: I laughed at the guys who worked at McDonalds (they made $6 an hour and I made $7.50 though my job was a messy one). But ya know what - even at a crappy job like McD's you can still succeed. McDonald's recently complained to Webster's about "McJob" being in the latest dictionary. They pointed out that a large number of their high execs including the CEO started off at the burger flipper level. So I don't want to hear any crap about minimum wage and lack of upward mobility.
  10. Nov 14, 2003 #9
    To give you a more accurate picture on doctors, they make anywhere from 100,000 to start for family practitioners. to 300,000+ for cariothurracic surgeons, radiologists, anasthesiologists, etc. HOWEVER, I would point out that thier loans average AT LEAST 150K. Someone with only 100K in loan debt either got a lot of scholarships, or has wealthy relatives.

    And for most specialties the hours range from 60 hours a week for an "easy" specialty, to over 120 hours a week(how many hours are there in a week again?) for demanding specialties. I believe they earn that money.
    Last edited: Nov 14, 2003
  11. Nov 14, 2003 #10
    In the UK in the late '70s, the top tax rate was 98%!!! This was to tax the 'undeserving rich' and to help sort out the welfare state. Our top earners left the country, popstars worked from tax havens and the country was in a right state.

    A few years later, under Margaret Thatcher, the tax rates were slashed. This caused the normal outcry about 'the rich getting richer' and was seen as an appaling idea by many. So what happened? The Tax revenue to the government soared, entrepreneurs were tempted back, tax avoidance fell (why bother if it is so much lower) and the country boomed.

    One_raven you speak a lot of sense - it is just a shame that too many people believe that the best way to improve society is to have a group of politicians take vast amounts of money from the hard working population and then spend it on grand schemes that cost a fortune and don't work.

    One_Raven for President!
  12. Nov 17, 2003 #11
    The real problem here isn't about personal incomes, it is about who pays how much tax.
    The way to fix that it to repair the fractures in the system.

    For example: Allowing corporations to include employee business travel as a cost of business, therfore not being taxed on it at all.
    If your new York Coproration wants that account in California, you pay to get it, or you don't get it.
    The money you, as an individual, pays in taxes is so high because the corporations are allowed to write off so many damned expenses and reduce the amount of taxable income they have generated.

    Take a look at this:
    In tax year 2000 of the 5,045,274 Corporations that filed tax returns:
    There was a total of 47,026,871,874,000 in Assets, and $47,026,871,874,000 in liabilities (coincidence, of course).
    Combined total gross income for those corporations was: $20,605,808,071,000
    Combined total deductions was :$19,691,591,726,000.
    That lowers their taxable income to: $914,216,345,000.00
    Then you factor in all the various tax credits and end up with $204,043,788,000 in taxes paid.
    So, with a net income of over 20 TRILLION DOLLARS, they pay 204 BILLION in taxes.
    That is less than 1%.
    In other words, more than 99% of the gross income of American Corporations (20.4 TRILLION dollars)is non-taxed income.

    Check it out for yourself if you want to:

    Fix that, and not only could we do a flat tax, but a flat tax at a much lower rate than 17%.
    Last edited by a moderator: Apr 20, 2017
  13. Nov 17, 2003 #12
    The key to having a successful business is lies in creative profit/cost analysis reporting.

    To make business more successful you don't MAKE money, you SAVE money on taxes.

    Ask any corporate tax attorney...
    Their whole job is to make a business appear to be running at a less than 1% profit on paper.

    Why do you think CEO's are so highly paid?
    Bacuse they HAVE to spend the money to keep their profits down or they will end up losing money on taxes.
  14. Nov 17, 2003 #13
    In 2001: $186.7 Billion dollars was collected from corporations in taxes.
    $1.86 Trillion was collected from individuals.

    Individuals paid ten times as much as corporations (in dollars) in taxes.
    Individuals paid an average of 15.2% of their Gross Adjusted Income.
    Corporations paid an average of .99% of their gross revenue.

    Corporations save money on taxes with these deductions and write-offs.
    If we increased the percentage that corporations pay in taxes to a mere 4.5% (which is still grossly less than they should pay) the we can institute a flat tax for individuals at 10% across the board and still have the same revenue.
  15. Nov 17, 2003 #14
    Just another thing for you to consider:
    Those numbers I quoted for Corporate taxes in 2000...

    When you read tax percentage numbers for corporations they will list it as percent of dollars paid of taxable income.

    In 2000, (like I pointed out) the average Corporation paid less than one percent of their gross income, the way the numbers are listed, taxable income is AFTER all those write-offs, helicopter trips even the rent they pay on the corporate apartments...

    So, the total gross income from all the corporations was:
    $20,605,808,071,000 (which is actually lower than reality due to padding the Liabilities)

    However, after the operating expenses and salaries and such the total taxable income was only $914,216,345,000.00.

    They paid $204,043,788,000 in taxes.
    With that, they legally[b/] (according to the tax attorney's papers and government statistics) paid a whopping 22.32% in taxes on average.
  16. Nov 17, 2003 #15
    Look at alimony.
    If two people get divorced, as a general rule, the judge will award alimony payments to be paid from the divorcee with the higher income to the divorcee with the lower income so the one with the lower income can maintain their standard of living.
    Double taxation is not allowed, so the way they work around it is to make the person receiving the payments (the poorer one) pays income tax on the alimony payments at the standard rate.
    Since that is considered income tax, they do not charge income tax on the money earned by the richer divorcee.
    So, the richer divorcee add the alimony payments as a pre-tax deduction, which brings their AGI down by that amount, which not only lets them pay less in taxes, but could concievably drop them to a lower tax bracket.
    Just another way to allow the rich to pay less taxes and the poor to pay more.
    A flat tax would remove all those pre-tax deductions.

    (sorry for the bombardment. I will not post anything on this for while. :smile:
  17. Nov 17, 2003 #16
    Simplicity is the key to taxes. If they are kept simple and low, everyone pays their bit. As soon as it gets complicated the no of beaurocrats needed goes up, they need paying, the tax goes up...etc
  18. Nov 17, 2003 #17
    You ain't kiddin'!

    The IRS budget for 2002 was over $9 Billion!
    More than $6.5 Billion of that went directly into employee paychecks and benefits.
  19. Dec 4, 2003 #18
    I've followed this thread and I agree with almost everything you have said except for some reasoning about flat taxes and stricter accounting rules regarding corporations. First, I require a clarifcation: is it a net income of $20 trillion or a gross income of $20 trillion, because it is quoted both ways above. I assume that you mean that it is a combined gross income of $20 trillion. I certainly don't think that gross income should be taxed! Under the 17% flat tax that you have proposed, all businesses would have to have a 17% revenue/expenses margin! This would be absolutely rediculous. This would drive thousands of corporations out of business! Rather than increasing tax revenues, the forclosures would be crippling. Unemployment would drastically rise and the economy would be in notably worse shape.

    Furthermore, the so-called dirty accounting measures assist fledgling businesses. Granted, in some cases they go too far with tax loopholes and some reform is required. However, incentives to increase new industry is absolutely essential. You seem to forget that although the business itself pays a relatively small tax with regard to its gross income, all of the employees are paying taxes based on their wages. The strict accouting rules and 17% flat tax applied to corparations does not seem practical.
    Last edited by a moderator: Apr 20, 2017
  20. Dec 4, 2003 #19
    There's a lot to read in this thread, so I'll just throw a little aphorism my CPA tells me when I ***** about paying too much in taxes:

    "You'll never lose money paying taxes."

    In other words, the more you make you'll still be ahead of where you were.
Share this great discussion with others via Reddit, Google+, Twitter, or Facebook