500,000 households making more than $100K per year
and 7,000 millionaires paid no income tax in 2011.
Do they consider themselves "victims" do we suppose?
Are they lost causes who will never "take personal responsibility and care for their lives"
Excerpt followed by link:
...consider the 76 million people who don't legally owe individual income taxes in 2011 (please, please note: does not include payroll, excise, state and local taxes). The vast majority didn't owe individual income taxes because they didn't owe a lot of money to start, and various exemptions, like the earned income tax credit, wiped out the rest.
But among families making more than $100,000, there were also half a million tax units -- enough to replace the population of Tucson, Arizona -- that also paid no income tax. Even more surprising, 7,000 millionaires also paid no individual income tax.
http://www.theatlantic.com/business/arc … 11/245469/
I feel so sorry for these poor "victims." It must be terrible for them to try and make ends meet. lol
Well, that is the American way in all its glory!
Make all you can. Keep all you make.
If anything she said was legit, as I presume you assume based on the majority responses, then if those folks in fact paid no taxes, could it be because they put their excess income, as in that beyond what it takes them to live, in to a new business, that in fact is generally a loss in the first few years? But, if successful, will continue to create JOBS (the new dirty word), and of course TAX revenue. Dang, should we be educating our electorate/our students on the fact that you can pay Uncle Sam and hope he creates a job . . . or you can roll the dice and try to create a lot of jobs yourself by following your own American Dream and stimulating the economy and creating jobs along the long road of enduring sleepless nights of risk with your own hard earned dollars . . . not someone else's? clearly a foreign concept to liberals........
the notion that taxing more and redistributing more will resolve any Dxxx thing in this country is "udder" nonsense, read the tax code, the average american who doesn't launch a business venture pays their full share, whether it be on wages or capital gains, and only the american who sinks hard earned money in to a new business gets a tax break on those early losses - that is a simple fact. Our media is worthless in conveying the real world issues that are helpful - not hurtful. Even the bozo who fails in his business effort has kept folks employed until he gives it up - and they paid taxes on his money that he already earned and rolled the dice on - get it? Any of you?
Didn't think so.
Americas WHOLE tax structure needs revamping.
1. Abolish all personal income tax.
2. Put all taxation on corporations.
3. Make all taxation due and payable on point of first sale, whether from importation (higher tax rate) or manufacture (lower tax rate)
Abolishing personal income tax means any individual can work and employ up to (say) 10 others without paying any taxation or even filing a return. This means that the income they earn will be used in one of three ways:
1. Consumer spending.
All three benefit the economy.
Putting all taxation on corporations, at source, makes it a simple tax to collect.
Assess the level of taxation on a corporation, those which are beneficial to the economy at one rate, those which are purely money makers at another.
Charge the tax on the total income of the corporation, paid as the income is received.
Trying to tax net profit allows too much 'creative' accounting, taxing the whole income does not, and corporations just need to allow that the tax is a part of their expenditure, it becomes a cost rather than a taxation to be paid on what we cannot hide in our books, and if the income is made the tax is paid.
Make all taxation due and payable on point of first sale, whether from importation (higher tax rate) or manufacture (lower tax rate)
Then everyone pays tax.
Take an example of a 'widget' that sell for $600, but costs $100 to make or import.
The taxation is assessed at (say) 20%, so the importer/manufacturer has a point of first sale total sale price of $220 which equates to $100 cost of product + $120 tax.
On first sale the person who buys the product (wholesaler/distributor/retailer) pays $220 and then adds their margin and resells onward until it reached the actual consumer/end purchaser.
The importer/manufacturer at point of first sale takes their $100 and pay $120 to the tax base immediately, in fact by direct automatic transfer from their bank as the invoice and funds are paid.
The rest of the supply chain just pass it forward, and have no additional paperwork to do as the tax has been paid.
Nobody escapes paying the tax, but equally, as taxation rates may vary on goods (lower tax on basic item and essential, higher tax progressively on and up to luxury items) the individual, rich or poor, can govern their taxation by choice of goods.
If the rich guy chooses to drive a basic car, he pays basic tax, if the rich guy chooses to buy a luxury car, he pays luxury tax.
As you may guess, I'm working up a hub about this, so if you have any questions, please ask, it will improve the hub, and perhaps if we start driving for a change, may improve the tax system!
I met one of those 'millionaires' recently, selling a vineyard he owns for $7m and with no tax to pay due to 'tax credits'... even he could not understand (or care) why he was not having to pay tax on a $7m sale....go figure!
Interesting proposition, aquasilver!
What about self-employed people?
What about non-profits, still tax free?
The most intriguing line in what you wrote is "those which are beneficial to the economy at one rate, those which are merely money makers at another."
Where would you place such industries as hedge fund managers?
"What about self-employed people?"
No personal taxation, all individuals are tax free from income at source!
"What about non-profits, still tax free?"
If they don't make a profit, yes... but at each year end they would need to allocate any income residue and carry out the proposed spending the next year or be taxed as a corporation.
Building better and bigger churches or employing more management staff would not count, and non profits would need to demonstrate that a minimum % of their income was used in legitimate assistance to those they proposed to assist, lets say 90% MUST be dispersed to those in need, and no more than 10% could be used for administration.
On the non-profits, I'm not sure about that.
Non-profits often have unexpected cash needs. Non-profits that provide legal help and animal shelters come first to mind. Not allowing them to set aside money that is not needed in year X or Y through year Z *would* interfere with their work.
Point taken, but that 'reserve' could also be allocated, they don't need it growing each year unaccounted for and hidden in the books.
If they can't manage to achieve their charitable aims, then step aside for those who can, no more professional Charity Fundraisers on high salaries... or Charity Marketing Companies on a %.....besides which if all individuals have more income after paying no personal tax, non profits will have a better chance of folk supporting them.
Why not just do away with any and all income tax and institute a sales tax on everything purchased or bartered. Services, food, doctor visits, stocks and bonds - everything.
It should be low enough that it won't bother the poor with such things as food or medical care, particularly if you tax the sale of every stock sold. Of course, it would throw the stock market into a tail spin, but I'm not so sure it doesn't need some of that anyway.
Agreed in principal, but by placing taxation on the source of first sale, we also do away with endless paperwork and whole legions of tax collectors and bureaucrats in the same action.
Plus placing ALL taxation on purchase would mean lower paid folk would pay more as the tax base would be spread on items sold, and the big money guys would simply move their 'sales' to lower tax areas, however when you tax the total income turnover of stock and bond houses.... the only way for them to escape is to totally go elsewhere, that is not practicable when American companies trade so many stocks daily.
Taxing Goldmann Sachs on turnover, rather than doctored 'profit' would be an interesting way of raising tax!
So how would you then make up for the billions lost in exports when the US is hit with retaliatory tarrifs from every country we trade with (most notably China).
The tax would be on corporations, not imports, it would be the corporations that dealt in imported goods, which would be taxed higher... not the imports, and in fact there would be no actual import tax, just a tax rate that penalised corporation that imported goods more than corporations that manufactured goods in the USA.
The higher tax would compensate for the loss of 'outsourced' jobs with the subsequent unemployment benefits needed to pay for the workers who lost their jobs to outsourcing (which in any case is only affected if the corporations who outsourced to cheaper labour markets then imported those low labour cost goods into the USA.
Most of what you import from China is made or processed for and by US companies anyway, they are taking advantage of slave labour costs. This balances the equation.
It may even encourage American Corporations to actually employ Americans to make the goods they sell to Americans.
Apple, please take note!
What would happen is that imported goods would be less attractive to US consumers, as they would either be less competitive with 'local' products, or the corporations who imported them would need to absorb the taxes they paid.
Currently the USA cannot balance their books, patently they either need to raise more taxation OR reduce expenditures.
Simply bring your armies back home and cutting military expenditure would solve the problem, and after all, when were you last invaded? so that should be a no brainer solution, but accepting that the US economy is based upon perpetual 'war' (even when you call it something else) then another solution needs to be considered as the Military/Industrial complex is obviously more important to Americans that a balanced budget that took care of your own people FIRST, and ONLY made allocations for defence against invasion.
But we digress.
Shows that clearly your country has NOT solved it's problems by the current methods, and that war is actually NOT good for your real economy either, as the biggest deficits were during war years.
So change HOW you raise taxation, liberate the actual workers, who exchange their labour and life for existence, and make it impossible for corporations to evade payment of their dues.
Yes EVERYBODY would pay more for the products they consumed, and yes maybe you would all consume less of the worlds resources in the desire for 'happiness' via gluttony.
But I bet the people would be happier when they were weaned off consumerism and back to building a better place for your children to live in.
or to put it another way....
Regardless of the semantics you use, it sill boils down to a tariff on Imports. You would be increasing the cost of imported goods, thereby decreasing their demand. That would be fine, except for the fact that the countries we export to will do the same in retaliation.
The problem there is, the increased cost of US labor would cause a sudden drastic raise in prices. Companies aren't going to just eat that increase in labor cost, it would get passed on to the consumer. The increase in prices wouldn't lead to outsourcing, it would lead to layoffs and downsizing.
It's not actually going to balance anything. Companies are still going to use overseas labor, they're just going to pass the increased import costs on to consumers, which will drive up prices and drive down demand.
In order to combat this, other countries will impose increased tariffs on the goods that they import from US, which will drive down foreign demand for US products. So it'll be a one-two blow to the economy: increased prices on foreign made goods, and a decrease in US exports (which is approx $183 Billion).
The only way your plan would work would be to reduce labor costs in the US, which would be fairly counterproductive.
Nothing is going to change, and I mean nothing until we have three things:
Term limits in Congress
Aggressive campaign finance reform
Cameras in every non-security hearing in both the House and Senate.
That I can agree with, it would be a good start, as to the rest, America has been living beyond it's means for too long, it needs radical reform, and if that starts with Americans paying the real cost of things, rather than printing dollars to defer the crash, then so be it, because as things are going, the US$ is liable to lose reserve currency status, which will crash the world economies.
Americans need to wake up to the truth.... their excesses are ruining the world.
This is the question to ask! Exactly where do the payments go for 40 trillion in debt? Let's tax the heck out of whomever it is.
Can you say Rothschild's.... just refuse to give it to them... simple!
I wonder what would happen if everyone realized that the global economy is nothing more than a giant bubble?
There is already a tax on goods and/or services in these countries: Australia, United Kingdom, New Zealand, Canada, Hong Kong, India & Singapore. Its called the Goods And Services tax or the Value Added Tax depending on country.
The amount of tax is between 10% - 20%, also dependent on country
Fine, just incorporate those rates into the new system.
My main thrust is to make corporation pay set taxes, with no ability to evade them by creative accounting,the exact amounts of taxation on corporations is an accounting operation
My second point is to let individuals be free from personal taxation on the fruits of their labour.
First, your friend who owns the winery, not to worry, he will e paying 3.8% tax on the sale as per Obamacare.
You want corporations to pay point of sale taxes. Your example of the widget you state the cost is $100, and you want to tax them $120? REALLY? Do you think the corporation will eat that expense, or do you think they will pass it on? So under your plan the price will go from $600 to $720. Who paid for the tax in the end, the consumer.
BTW, the are ways around not paying point of sales taxes.
A better idea is to eliminate all tax deductions, loopholes, on all taxpayers and all businesses. Instead, a tiered tax system makes more sense. You break tax payers down into groups sort of like the system is now based on income. Say people under 15,000 in income pay zero taxes. People making 15,000 to 35,000 pay 3%, 35,000 to 60,000 pays 5%, and so on. Businesses would pay taxes the same way, based on the businesses income after expenses. The percentages on each tier can always be tweeked at first to achieve the revenues needed. This makes everybody and every company taxpayers. Other than the poor, everyone in that 47% would now be kicking in. Getting those not paying to become payers would almost double the revenues we currently see, and that would bring us closer to a balanced budget. If they ever decide to trim the fat from the budget we being a surplus, they could take those monies pay the national debt off, and then over time when the debt is gone the to lower the tax rate to cover the budget.
Advantages to doing this way is those currently pay taxes will pay at a lower rate, we will be making taxpayers at of the people and corporations who are not paying currently, and that we will almost double our revenues hopefully bring us closer to ending our financial problems.
Agree with most of that as well, except the $100 widget factor is based upon a (imagined) 20% tax on the retail price of $600, i.e. the overall mark-up is $380 on the first sale price.
Obviously if middle men wanted to be greedy, either the price rises or they don't sell stock, either way the tax is paid and after that it's up to the supply chain to reach an acceptable price, the manufacturer/importer has made their sale, the only losers would be middle men who were greedy.
Like you said, tax rates could be adjusted to account for the reality of sales prices to consumers.
Also remember that if Mr Greedy on Main Street is selling the widget for $720 then you can be sure that Mr Smart is selling it on-line for $580... fact of life, free market will always stabilise prices.
The taxman is just like the Mafia, the know exactly how much any business should be making on the gross income, and like the Mafia they should get their cut from the gross, try telling Mr Don or his henchmen that you have had high expenses and cannot afford to pay him.... He will simply replace you with another who will pay the skim correctly.
Lets look at FACTS for a change. Don't miss a critical point in the discourse. There are roughly 47-50% of income earners in this nation who do not pay one dime in federal income tax. Anyone care to dispute that with FACTS? That means that that same group of people aren't contributing to the national defense of this nation and picking up a skinny dime of that cost. Anyone want to dispute that FACT?
The partisan jabbering heads around some of these forums need to at least attempt to be intellectually honest. That may be asking to much I reckon.
Okay, you want some facts.
The 47% (I believe it's actually 46%, but everyone's convinced it's 47% now so lets go with that) are people who have no liability for federal income tax.
You're taking this as 'they don't pay taxes'. This is simply not true.
Only 18% of households are not liable for federal payroll taxes (these taxes fund social security and medicare). Of these, 10.3% are retired seniors and 6.9 percent earn less than $20,000.
78% of households not liable for income tax are below the poverty line.
And, let's see.
We ALL have to pay sales tax. Even the few remaining subsistence farmers can't go through life never buying anything.
We all pay property tax. If you rent, your landlord takes the property taxes into account when setting your rent. I suppose somebody in rent controlled, affordable housing might be able to avoid them.
State income tax is assessed differently and often cuts in at a lower income level.
'Excise taxes' on stuff like alcohol, cigarettes and gasoline also apply to everyone unless you never drink, never smoke and don't drive a car. (I probably pay less in excise taxes than many poor people because I don't smoke, drink only in moderation and very rarely drive).
I dare you to go find somebody who is earning less than $10,000 a year and tell them they need to 'contribute to national defense'.
Spend a few minutes imagining how you would survive at that level of income...
Actually, Oregon does not have sales tax. Washington does not have income tax. The only deductions I have (in WA) are Social Security, Medicare and my 401K.
I can easily cross the state line and shop in Oregon, where I will also not be charged a sales tax. It really is nice to pay the price that's stamped on the ticket.
Huh. Interesting. I didn't know either of those...but that's an unusual situation. I have to pay federal income tax, payroll tax, sales tax, excise taxes when I feel like a drink...gas taxes on the rare occasion that I travel (Note that airline tickets also contain fuel taxes).
I also forgot to mention fees for services, such as the fee the DMV charges to renew a drivers' license, or the fee to renew a passport, etc. These are also a kind of tax, although they are paid only by the person seeking the service...they are still a means of funding the government.
I think it all evens out, though. WA has some of the highest sales tax, I think we're at 9.6% now, but varies between counties (can you blame a trip to Oregon?) WA also has the highest minimum wage. Oregon has very high property tax compared to Washington. It's very fair, though, for those who cannot afford a home; they don't pay as much in taxes. In Washington, it is actually more prudent to buy a home then to rent, because mortgage interest rates are tax deductable. It all varies, but people end up paying out about the same (I suspect), unless they find ways to cheat the system, like hopping state lines. I imagine there are similar reasons as to why a lot of people live in New Jersey, and work in New York City.
What makes you think renters don't end up paying property taxes? I doubt any landlord doesn't pass on those costs.
As for why people live in New Jersey and work in NYC, I'll bet that's not taxation related, it's property values related.
I would imagine that is the case, though I do not live in Oregon so I don't know for sure.
I know that in Washington, you cannot charge any more in rent than the monthly cost of the home (mortgage, interest, mortgage insurance). The property taxes aren't supposed to be included, because those are tax deductable if you are renting a property. The idea is, you are helping someone to have a home that wouldn't ordinarily be able to afford a home.
It could be very different for a multi-unit building; perhaps thats why apartments are much cheaper to rent than standalone homes.
Again, I don't know first-hand anything about Oregon homeownership, but I have heard that it is often more prudent to rent than to own, because of the high tax rates. Maybe landloard's taxes are tax deductable, like WA? I do not know this.
In Washington, it is often cheaper to buy a home than to rent an apartment; and you are investing in yourself, rather than the landloard. The renters don't technically pay property tax, even if the landloard uses a wad of cash they gave for rent to pay it. Also, as I said, they get a chunk of that money back when they file their taxes.
Also, I have lived in New York, and the property taxes are very high. I don't know anything about New Jersey's taxes, but just about everywhere in the country is cheaper than New York.
"I know that in Washington, you cannot charge any more in rent than the monthly cost of the home (mortgage, interest, mortgage insurance). The property taxes aren't supposed to be included, because those are tax deductable if you are renting a property. The idea is, you are helping someone to have a home that wouldn't ordinarily be able to afford a home."
That makes no sense. What if there was no mortgage or mortgage interest? Landlords charge whatever the traffic will bear, whatever the going market rate is for the unit in the neighborhood.
There's a really good reason to live in NJ instead of NYC!
Some of which were very wealthy and 78% of which are families under the poverty line but that's fine Frog lets tax them! Is it somehow wrong that we don't tax people who literally cannot "regularly afford food and/or shelter"? No wonder you guys are going to lose the election
Of course one of your "facts" is wrong at the end of the day everyone pays taxes and the number who give less than they get back is very small, only 18% of people did not pay either income or payroll tax for example, so no most of the people being discussed to contribute to the defense of the country. So yes it's not a "FACT" it's a LIE.
Show me a millionaire that didn't pay income taxes last year and I'll show you a millionaire that didn't have a taxable income.
It's really that simple folks.
I was about to post something very similar to this.
It's propaganda; people squeal that the rich don't pay taxes, but a lot of people don't have taxable income. They get income by means of investments, and also, many of them are tax exempt due to the amount they give away.
If we want these people to pay taxes, then we have to be fair and implement the same regulations on all income levels. It's not up to us to decide what people do with their income.
You can have $200,000,000 in the bank. But if you don't make a lick of income in any given year, you don't need to pay income tax. If we decide to tax them, then it would only be fair to tax those who have been unemployed and living off of the ~$5,000 in their savings for the past year.
But then you can't on the other side claim that everyone who does not pay income taxes is a "victim" or dependent on the government.
Because that's simply not true, either.
There are all kinds of legitimate reasons to not owe income tax in a given year -- especially the last few!
Or to have tax liability zeroed out by deductions. It's not unAmerican to have a good accountant (or tax attorney) is it?
Lumping all non-income tax payers into the same group is (as we have all found out this last week) is inappopriate and politically divisive. Not unlike lumping all Americans into the same category on just about anything!
I think as long as it is done legally, than any amount of tax paying (or avoiding) is perfectly fine. It doesn't bother me that some millionaires don't pay taxes, because the same laws that allow that are the ones that allow those who are struggling not to pay taxes, either. Lots of college students have money in the bank which isn't taxable income for whatever reason, and they aren't exactly in a financial position where extra taxes would help them.
I think the main difference here between this so-called 47%, and these millionaires that you speak of, is that the millionaires don't receive any form of federal aide. So, realistically, they really aren't any of the government's business because they aren't using government resources. Whether it's okay to comment on those tax exempt individuals who receive help is a whole different discussion.
I'm not sure we can categorically state that millionaires don't receive federal aid.
They could be millionaires who get Medicare or SS as retirees.
Any number of scenarios.
There are also a boatload of federal subsidies that go to industries (farms, for example).
But understand your point and agree about appopriateness of commenting or broad-brushing.
The whole issue has been blown up and taken on a life of its own.
I know, as I imagine do most, that when Romney said he didn't need to "worry about them" he specifically meant as pertains to trying to pull their support out of the Obama camp, not as president.
It's unfortunate that he didn't leave the remarks there and added a pretty harsh value judgment that took the comment above and beyond that.
SS is income-dependent, so if they're drawing anything in the form of interest, they won't be getting SS. And Medicare isn't free, although most millionaires probably have separate private insurance.
Farm subsidies are in exchange for telling the farmers they can't grow what they want on their own land. If farmers didn't listen - a loaf of bread could exceed $15 at the grocery store.
In come taxes only reflect what actually "comes in" in a fiscal year.
I beg your pardon, Social Security is completely income INDEPENDENT. It is based on each individual's contributions when they were working for wages. There have been recent proposals to add a means test to eligibility for SS. Unless a means test is adopted Romney will be eligible for a full SS benefit when he reaches the required age.
Thanks for the correction, Ralph. You were right and I was wrong.
Thanks for the acknowledgement! Somewhat unusual to get one in these forums when you disagree.
SS is not income dependent, though I suppose the amount you pay into it throughout your lifetime is dependent on your income.
Most retired people on SS don't have an income, or they work part time. It is not income dependent, at all.
I don't think making it means-based would be good, either. A lot of people would be mad to have paid into it their entire lives, then find out they have too much in their 401k to receive it. Of course, there is a double standard because non-retired special needs people receive it, too. That is means-based.
And Medicare is free for those who receive it (although they probably paid into it their entire lives, too).
What about these multimillon dollar corperations? Do they get a pass in paying taxes? I understand that General Electric among others paid no taxes last year.
If GE didn't pay taxes (as a corporation), then they did not have taxable profits at the end of their fiscal year. That doesn't mean that every executive that works for GE did not pay a crapload in income taxes. Most corporations do not sit on their money. They either reinvest it - or disperse it. When that money is spent to expand the business - buy new equip, whatever, it moves from Capital to Expense, which reduces taxable profits.
It's not rare for corporations not to pay taxes, because they reinvest in the company. The average person has no concept of what that means, so they think it means that the rich folks that sit on GEs board, and the stockholders did not pay income taxes. That's not true, however. Corporate profits have nothing to do with that.
The biggest problem with that argument isn't that people don't understand how corporations operate...
It's the fact that they still believe that GE paid no taxes, even though it has been thoroughly debunked. Just a perfect example of how media can royally mess up Americans' understanding.
GE paid, IIRC, 20% taxes last year.
In that case - it's simple dishonesty on their parts. Like Harry Reid saying Romney didn't pay income taxes for two years. Where do they get these guys?
It is dishonest, not ignorance. I used to think it was ignorance, but now I know better. Even here on HP, there have been people who have openly admitted to lying to make their side look better. Integrity, right?
As for Reid... we now have the trustee of Romney's finances on record as stating that the Romney's have paid at least 13.66 or whatever% taxes every single year. Who should we trust? The guy who does Romney's taxes, or the guy who heard from an anonymous source that Romney didn't pay taxes?
Furthering that, the anonymous source was supposedly an investor at Bain. How many investors do you think get to see the personal tax returns of the CEOs of the companies they are investing in?
I think there are a lot of people who still suspect Romney paid no income taxes for 2008 and 2009.
That's why he had to "average out" 20 years worth -- to bring the average up to 13%.
What about the pesky little line from the trustee?
"Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%."
Regarding the PWC letter covering the Romneys’ tax filings over 20 years, from 1990 – 2009:
•In each year during the entire 20-year period, the Romneys owed both state and federal income taxes.
•Over the entire 20-year period, the average annual effective federal tax rate was 20.20%.
•Over the entire 20-year period, the lowest annual effective federal personal tax rate was 13.66%.
•Over the entire 20-year period, the Romneys gave to charity an average of 13.45% of their adjusted gross income.
•Over the entire 20-year period, the total federal and state taxes owed plus the total charitable donations deducted represented 38.49% of total AGI.
During the 20-year period covered by the PWC letter, Gov. and Mrs. Romney paid 100 percent of the taxes that they owed.
Does not say they paid the full tax in the same year it was owed.
Manipulations, carry forwards, etc. are common.
As we've already seen with his 2011 returns where he overpaid (for now) in order to get his rate up above 13%.
It's all a smokescreen and will blow over by next week.
On to the next distraction.
http://www.washingtonpost.com/blogs/ezr … l-in-2009/
I guess you are all missing the point.
Stop ALL personal taxation.
Collect tax as a levy paid at first point of sale on any manufactured or imported product. This covers everybody paying that levy irrespective of who they are.
Charge corporations a levy on turnover... gross income, NOT nett profit, so ALL corporations contribute to the tax load according to how successful they are, at doing business, not on how well they can hide profits.
The key phrase in your point is "income tax". Perhaps 7,000 did not have any "earned income" per the payroll tax structure but that does not mean they did pay some taxes and most likely, capital gains taxes which come under a different tax structure. Under that code, the system takes into account that money is being earned on money which has already been taxed once so to tax it at levels above and beyond the payroll tax structure would do nothing but diminish the desire to invest which undermines economic growth and job creation in the long haul. That has been proven time and again when capital gains rates have reached the 50% level of taxation. I think the original point was that 47% of Americans pay no payroll taxes. ~WB
Interesting and I am not sure how to check the number of seniors who have other income sources.
I will use my mother-in-law as an example.
Between SS and 2 pensions (husband's career working for the county was the biggest payment per month) and his military pension, she made quite a nice income!
I would really hope that most retired people are not living solely on SS because it's not a huge amount of money.
Maximum benefit for someone retiring in 2012 at age 66 is like $2,500/month.
It's not easy to live off of Social Security. I worked with a couple of ladies in retail who were retired, but needed the 20-something hours to get healthcare from the company. One of them told me they made $1200/month on Social Security, and had no retirement plan. So, she was working in retail to supplement her income, and also put as much into 401K as she could (the company matched the 401K contribution, so it was an okay deal). A few years later, I have heard that she has finally been able to retire 100%.
Glad to hear a retirement story with a happy ending.
Imagine if she could not work and beef up her 401(k) plan.
Good for the retailer for offering health benefits and matching 401(k).
So many trends have changed how people work, spend, save and retire.
Who works cradle-to-grave jobs anymore?
What employers, besides governments, still offer defined benefit pension plans?
And those that do are going broke as a result. Big part of the deficit problem for states, counties and cities.
What about all those whose 401(k) plans were decimated in 2008?
What about those who thought their home was their single best investment?
With credit cards being a way of life (which they were not for previous generations), we have gotten used to spending beyond our means rather than saving.
Oh yes, and then there are the miniscule rates being paid for savings accounts for those who do manage to sock some money away.
Sorry for going a bit off topic here, but with a lot of attention today on EDUCATION, I feel we should include financial education as elementary for students. High school, for sure. Maybe as young as junior high.
Financial education is indeed lacking. Upon graduating college (college!) they handed me a little book entitled something along the lines of "Surviving in the Real World." This contained information on saving, using credit responsibly, how loans work, lines of credit, renting, etc... This was the ONLY financial information I can recall ever receiving at any point during school. Realistically, by the time someone graduates from college, they have already had to learn all this stuff first-hand. Perhaps if I had majored in economics or accounting, I would not have slipped through the cracks and missed all institutionalized information on finances. I am not certain that economics or accounting majors even delve too deep into personal finances, as it is. My parents are both fiscally responsible; I learned from them. Who knows where they learned it? Maybe first-hand experience. I could only imagine how much more difficult finances would be for somebody who grew up in a different situation.
By the time someone graduates from college they may already be 50K plus in debt with student loans.
Real World = real big wakeup!
I would like to see personal finance taught in schools. Below college level, because even those who don't go to college will need this information!
Right now, I think the best education available to a high school student is to get a job of their own. Or perhaps, encourage kids to babysit. Red Cross does a certification program which teaches safety/CPR, although I wonder if they have improved (since I took it as a kid) to include financial planning. Either way, I think working as a kid is a good way to get used to finances before you become liable. Learning how to save money is easy to do when you still live at home... It's unlikely that with schools struggling how they are today, with teacher strikes and budget cuts and all, that we would realistically be able to add a financial program.
Strangely enough, I think games like World of Warcraft, that contain a money system, may teach kids better finance skills.
+1! Having after school and/or summer jobs do gave young people a work ethic because since many of these jobs are minimum wage and/or lower, these young people learn the importance of majoring in something which would be socioeconomically feasible in the future. Furthermore, when one works in a minimum wage job while they attend school, they will be more serious about their education. They know that education is a way up out of such jobs and they are least likely to pick a frivilous major in college! Also, having after school and/or summer jobs teaching young people the importance and appreciation of the value of money.
We do not have time for such mathematical nonsense....there is too much social injustice in the world to focus the students minds upon! I am being sarcastic in a way but that is my point. We long since lost our practical approach to education with reading, writing, and math....trading the time for social conscience. Well,now we have a whole lot of kids grabbing majors in the social sciences only to find there is no significant job demand which pays relative to the debt they have accumulated. Young people have a lot more information sources at hand today than we did in years past to research careers. When we consciously choose a career path that does not pay well, one would hope that the love of that career is an offset to riches. ~WB
Wayne, I could not have said it better myself. When I attended college, my wise father advised me to major in accounting and/or subject in the hard sciences. He told me that to major in a subject which would make one a good living. No, I decided to major in sociology and history. Well, I did earn a good living from such subjects but it took a while! Now, that was in the 1970s.
Even in the middle to late 1970s, those who majored in the social and soft sciences had a difficult time finding employment in their field. Even those with advanced degree in such areas did not find jobs. However, those with business, accounting, majors in the hard and technical science, mathematics, and engineering did not have to worry about finding jobs. The jobs found them! One former classmate of mine who majored in Business Administration had a Wall Street job before she graduated from college. She is now doing fantastically!
Now forward to 2010, with the dearth of jobs, especially in the social sciences, for the life of me, why would any young person would even consider majoring in the social sciences. The main jobs are in computers, mathematics, medicine, health sciences, and other hard sciences. That is where the money is. Of course, there is business and accounting! Well, those who major in such subjects will LEARN A QUITE VALUABLE LESSON when they arrive in REAL WORLD 201!
Because we are brainwashed from a young age to believe that we can "do anything we put our minds to" and to "follow our dreams."
Now, I did a social science/technology hybrid major. I now work as a technical writer. So far, so good. Not enough time has passed since graduation to evaluate whether or not my social science background has helped or hindered me; but the technology aspect certainly looks good. Perhaps I am able to think differently than a lot of engineers, yet understand the concepts, and that's where my advantages exist.
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