I’d like to propose a modified version of the question posed.
Would you support a maximum tax of 33% for any individual? This would mean that local, state, federal, real estate, sales taxes together could total no more than 33%. Logistics could be tricky, like deciding which system has precedence for an individual, but could probably be worked out. But that’s not the point of this thread. Just the above question:
Would you support a maximum tax of 33% for any individual?
Do you mean a maximum effective tax rate each year on any individual of 33% of their AGI as defined for U.S. federal income tax purposes? If so, I’d say that very few people approach that effective tax rate, even considering all of the taxes you listed. Also, I don’t think that the logistics would be tricky, I think they’d be impossible practically and would probably require a Constitutional amendment.
I’d say that a great deal of people meet and far exceed it, provided that you count Social Security taxes. Social Security and Medicare take 15.3% of everybody’s pay, right off the top (unless you’re very high income). Half of that nominally comes from the employer, but it comes out of your salary just the same.
I pay almost exactly 20% of my income in state and federal income taxes. (I’m single.) I pay another five percent in property taxes. We have a 9% sales tax here, except on food, so I pay 0.09 * my ratio of non-food expense to income which is perhaps another three percent.
15% + 20% + 5% + 3% = 43%.
And that’s before you count indirect taxes. The United States has one of the highest corporate income taxes in the world, driving up the cost of everything I buy, and driving down my salary.
Yes, I would support a limit. I’m tired of being a cash cow so that liberals can demonstrate their compassion.
Technically, yes, but we have so many deductions that in practice it’s one of the lowest.
I agree with Rand; that would be practically impossible to manage, and would (I can’t believe I’m saying this) unfairly infringe upon the right of the states to manage their own taxation.
I think you need a better accountant. Your state and local taxes are deductable, so if you’re paying 43%, someone is very seriously screwing up your tax returns. As Rand Rover said, it is difficult to get to 33%, because of the deductability of so many things, and also that many people don’t understand how marginal rates actually work. Looking at CBO data on Federal tax burdens, you have to get up to the top 5% of earners to get an effective tax rate of 28%.
I think a 33% cap on taxation would probably be pretty popular, but really only effect those at the top. Except that it would probably encourage higher taxes on the middle class, who probably aren’t paying nearly that much.
I think you need a better calculator. The deductability of state income and property taxes saves me about .08 * .28 = 2.2% of income. That’s already accounted for in the 17% of income I spend on federal income taxes–otherwise, it would be higher.
And, as I’ve just demonstrated, even with a federal income tax burden far less than 28%, it’s easy to get to a total tax burden far greater than 33%.
If the US implemented that rule, and I was a state government, I would just start taxing everyone at 33%. Then the fed would get nothing, eh? And I’d get everything? I’m not sure how that would work.
But to answer the question, lots. More than the 0% plan, at least. Even after you ran the numbers and figured out just exactly how much less revenue all the respective governments would get, a lot of people would still be OK with it.
I have about 35% of my pay check deducted for taxes. But when I figure my tax return at the end the year that effective rate drops down to about 22%. Add in the stimulus check we all got and that takes off almost another percent. And hopefully I will live long enough to draw more in Social Security, Medicare and Medicaid than I paid in over my lifetime of working.
Another things a lot of folks don’t take into account is the economic benefit they recieve from their taxes. An example would be the road my daughter lives on. The road is about a mile long and there are 7 houses on this road. The county came in this past summer and ground down the old asphalt, added some curbing and repaved the whole street. Cost to do the whole project was about $95,000 according to the sign the construction company put up. Out of pocket costs to each homeowner? $0. Economic benefit to each homeowner? $13,571.43. Plus they all now live on a nice smooth road instead of the old one that was full of potholes. They also gained some benefit because the costs of repair and lower maintenance costs from living on a street that is not full of potholes. How many times do we used government provided services and consider what we are saving over not having to pay for that service out of pocket? Visit the local library. Drive on decent roads. Call 911. Educate our children. Deduct all the economic benefits we receive from out taxes and very few will ever reach that 33% plateau. And in my opinion something like a 33% cap on taxes sounds like a Republican way of transferring the tax burden from the wealthy to the middle class. Remember Reagonomics? Same principle.
I don’t own a house, you do. You get a cap on the property taxes you have to pay, but my rent isn’t capped. How is that fair?
I can’t afford to buy a new (fill in the blank), but I’m still paying sales taxes on my clothes and groceries. You can afford to buy a new car/sailboat/airplane, but because there’s a cap on your taxes, you effectively don’t have to pay sales tax on them. How is that fair?
You and I both pay income tax, but you also own stock. You get to deduct capital losses when your stock goes down, but I don’t get a break if my hours are cut. How is that fair?
Wouldn’t there be issues with the seperation of State and Federal rights in an inclusive cap? If the Fed taxes at 31%, that leaves very little room for the states to take action to govern.
And I agree with kunilou - if I’m right at 33% and live in a modest home and pay modest property taxes - is it fair that I can move into a huge home worth three times as much and pay the same property taxes? - property taxes are one of the few forms of wealth tax at our disposal.
All I can say is that I totalled up the actual amount I actually pay in taxes, not adding up rates, both Federal and DC, and with an income of $120 grand for a single guy, I pay about 24% in taxes. And I usually get a modest Federal and DC refund each year. Since DC is a fairly high tax area, I cannot understand how you pay nearly double the taxes I do.
I would also support a prohibition against deficit spending in order to force government to stop thinking it can provide for things other than basic societal and infrastructure needs.
Local, state and feds get a max of 33 percent of any individual or company’s income in a given year and have to make due with only that.
No thank you. The DC marginal income tax rate on incomes greater than $30,000 is 9.3%. :eek:
How do you avoid paying this? Do you have mammoth deductions that reduce your adjusted income to zero? How much is being withheld from your paycheck–nothing?
