Across the board tax rate...fair for all?

[ColoradoDisneyFreaks]

The estate would pay taxes on the stock and his heirs will receive it at the value at the time of his death.

If the stock increases in value after inheritance, the heirs would owe taxes on the capital gains when they sell the shares.

Also because up until that stock is sold, it's just a paper asset, Capital Gains is realized gains, meaning that something was sold for a profit and the gains are that profit. They don't tax you on unrealized Capital Gains.

 

[ColoradoDisneyFreaks]

Not to pick on LeBron james, but it says he made 71 million with salary and endorsements, so 17 million in taxes is 24%, not 35%. That is what I am saying. Everyone complains that 35% in taxes is too much. They are not paying 35%

Endorsement monies reporting is odd, it could also have been goods/travel/fees that were paid on behalf of James. When they talk about "income" from endorsements, that figure is usually not straight dollars. What he would report on his taxes is different, not because of deductions, but because you don't pay taxes on non-monetary income.

 

[Colleen27]

Only if you're included food and medicine as taxable goods. Remove that from your calculations and it changes drastically. At that point, the poorest family is paying taxes on their clothes and car repairs, while the middle class and well off families are spending a much larger percentage of their disposable income, and those items are what is taxed. Every fair tax program I've seen has always excluded food and medicine from the taxable goods categories.

But excluding those things breaks the financial model of the consumption tax because you're then excluding so much consumer activity that the rate has to be much higher to raise the needed revenue. I haven't seen a serious federal-level proposal that excludes those things. A few have offered a stipend/offset intended as a way of exempting subsistence-level essentials, which is somewhat better than an across-the-board sales tax but cuts into the simplicity of a consumption-tax plan, and even that has holes (esp. for those with medical needs).

 

[Hikergirl]

Not to pick on LeBron james, but it says he made 71 million with salary and endorsements, so 17 million in taxes is 24%, not 35%. That is what I am saying. Everyone complains that 35% in taxes is too much. They are not paying 35%

Ok, but you did say the rich usually have zero taxable income and that is alot different than saying that the actual tax rate they pay is below what their tax bracket is.
DH and I pay below what our tax bracket is, we have some deductions that bring his taxable income down, even people taking the standard deduction are able to bring their taxable income down.

 

[mummabear]

That makes no sense, frankly. I can't even imagine how it would work... My inlaws would pay less for their custom-built waterfront home than I would on my century-old fixer upper that is half the size because they have 3 bedrooms (plus a den, family room, bonus room, etc.) and I have 4 (with none of those extras)? It seems like that would quickly make owning homes in older and less affluent areas not worth the taxes you'd pay, while allowing those building new homes to keep their taxes artificially low by choosing floor plans with a lot of extra rooms that aren't bedrooms.

It makes more sense as charging based on value. Property taxes (again at least here) are used by the local council to run the city. In the absence of a user pays system for everything (which would be impossible) it makes sense to tax houses more on the number of people in them, and r number of bedrooms is a better indication of that than value.

Why should I pay more for my 4 bedroom house in our suburb than someone 2 suburbs over? We use the same roads, pools and parks, water and sewage, the same tip. Why should I carry a larger burden of that just because my house is worth more.

 

[mummabear]

Like window tax in the UK

Err, I don’t agree btw, rates need to be based on the value of a property.

Why?

 

[Hikergirl]

It makes more sense as charging based on value. Property taxes (again at least here) are used by the local council to run the city. In the absence of a user pays system for everything (which would be impossible) it makes sense to tax houses more on the number of people in them, and r number of bedrooms is a better indication of that than value.

Why should I pay more for my 4 bedroom house in our suburb than someone 2 suburbs over? We use the same roads, pools and parks, water and sewage, the same tip. Why should I carry a larger burden of that just because my house is worth more.

But that really isn't paying by person, you could could have 2 people living in a 4 bedroom house, or 4 people living in a 2 bedroom house.
It is an interesting way to do it, but I prefer our method by value. It is all in the eye of the beholder I guess.

 

[Colleen27]

It makes more sense as charging based on value. Property taxes (again at least here) are used by the local council to run the city. In the absence of a user pays system for everything (which would be impossible) it makes sense to tax houses more on the number of people in them, and r number of bedrooms is a better indication of that than value.

Why should I pay more for my 4 bedroom house in our suburb than someone 2 suburbs over? We use the same roads, pools and parks, water and sewage, the same tip. Why should I carry a larger burden of that just because my house is worth more.

Maybe it is different there, but here, quality of services has a lot to do with tax base/property values and varies widely from place to place. Someone in the cheaper suburb doesn't have the same quality of schools, the same number of parks, the same police & fire response times, even potentially less-well-maintained roads and water infrastructure. Pools and parks are often limited to residents of the suburb that funds them, or charge additional fees for non-resident use.

Also, number of bedrooms isn't a good correlation to family size. Lots of couples buy a home with extra bedrooms in anticipation of starting a family someday, though they don't have children yet. Lots of people want an extra bedroom for a home office, guest room, computer room, crafting room, den, etc. And lots of people hold on to that big house long after the kids leave the nest.

 

[soccerdad72]

Endorsement monies reporting is odd, it could also have been goods/travel/fees that were paid on behalf of James. When they talk about "income" from endorsements, that figure is usually not straight dollars. What he would report on his taxes is different, not because of deductions, but because you don't pay taxes on non-monetary income.

I'm sure that a lot of his endorsement income is in other non-monetary things, like stock and options. His stake in Beats headphones is a good example - I'm sure most of that was earned as payment for endorsements.

I'm not surprised he's in the 20ish% in tax rate. It'll probably get lower as he gets closer to retirement, as more and more of his net worth is in other assets other than paychecks.

 

[LSUmiss]

if only Bill was willing to paid Joe more...

He would if only his taxes were lower. That’s what they say...right??

 

[LSUmiss]

While I think a flat tax rate is more fair, unless everyone can make a living wage and government spending gets under control I don’t think it is feasible. I do feel like my husband and I get punished for having good jobs. But I understand the arguement that low wage earners feel an impact when such a large portion of their check goes to taxes. However, part of the taxes I pay go to programs available for low income families that I don’t qualify for. So it’s a complicated issue that won’t be solved by one action alone. It would take several changes in society and tax reform.

My issue is that very high wage earners are also more likely have access to tax rules that benefit them more so they usually pay a lower percentage of their income than the middle to lower middle class. A flat tax fixes that too.

 

[longboard55]

flat tax means no charitable deductions, churches would never go for it.

 

[Colleen27]

My issue is that very high wage earners are also more likely have access to tax rules that benefit them more so they usually pay a lower percentage of their income than the middle to lower middle class. A flat tax fixes that too.

But that's like "fixing" speeding by eliminating speed limits. It doesn't ensure top earners pay their share, it just reduces their share in hopes that it will be agreeable enough that they won't expend the effort to reduce it further. And it does so at a steep cost to the middle and lower classes.

 

[georgina]

It is better than what we have in Washington State where the lower income residents pay 20% and the high income residents pay around 5% in local and state taxes.

where in Washington state does this apply? in our experience local and state taxes (sales, property...since there is no personal income tax) is strictly driven by city/county a person lives in and to some extent (certain types of sales) where (city/county) a person makes a purchase in.

I am wondering about that comment too, as my DS lives in Washington and as far as I know there is NO state income tax.

 

[cobright]

There's two things to consider when deciding a "fair" tax rate. One is how much does the person being taxed benefit from government spending. This isn't always intuitive. Like military spending, seems like we all benefit from that security but in reality, if the nation were taken over tonight, the poorest and working class would continue doing there thing much the same. Like guards at the bank, our military is largely there to protect the treasure of the wealthy.

The other consideration is less about what's fair as what is best for the health our economy. Our economy grows based in large part on innovation. The next steam engine, the next electricity generator, internet, etc... Innovation requires people with the spark of genius who are also able to express it. Meaning education and the basics of living. When people are taxed into poverty, we lose them as innovators. This happen when you take 20% of a minimum wage but not when you take 40% of a $400k salary.

 

[tex1989]

Late to comment on this but I agree with prior posters that say the real starting point is what does the government need to operate. Case in point, in Texas we have no income tax but high property taxes based on market value of the real estate and it goes up almost every year. No Income tax in Washington State but they have a business tax that manifests itself in higher costs of goods and services. No easy solution especially when Congress thinks it can make the economy dance on a string by tweeking the tax code, ie first time house buyer credits, alternative fuel credit etc. the list goes on.

As far as pro atheletes earnings go I am always reminder of the year Phil Mikileson won the Scottish Open and the British Open the following week. He was not allowed to leave the country until he paid the British government the taxes he owed on the winnings. In addition since he was there for 2 weeks he also had to pay taxes on 2/52 of his annual endorsement deals as well since he had been in the British Empire for those two weeks. Then when he got back home California and The US governments taxed him on his winnings because as a US and California resident you are taxed on you "global" earnings. All told he paid something like 55% and while he got a credit for taxes paid on his federal return apparently california does not allow that deduction. OUCH!

 

[mummabear]

But that really isn't paying by person, you could could have 2 people living in a 4 bedroom house, or 4 people living in a 2 bedroom house.
It is an interesting way to do it, but I prefer our method by value. It is all in the eye of the beholder I guess.

Is it perfect? No. But it is more realistic than the value. What does the value have to do with the number of people being serviced?

Maybe it is different there, but here, quality of services has a lot to do with tax base/property values and varies widely from place to place. Someone in the cheaper suburb doesn't have the same quality of schools, the same number of parks, the same police & fire response times, even potentially less-well-maintained roads and water infrastructure. Pools and parks are often limited to residents of the suburb that funds them, or charge additional fees for non-resident use.

Also, number of bedrooms isn't a good correlation to family size. Lots of couples buy a home with extra bedrooms in anticipation of starting a family someday, though they don't have children yet. Lots of people want an extra bedroom for a home office, guest room, computer room, crafting room, den, etc. And lots of people hold on to that big house long after the kids leave the nest.

Yes it is very different here.
The city councils parks, pools, some of the reading.
The national government provides schools, other roads. Police, fire etc are all provided nationally.
You pay the same to enter a pool whether you are from that city or not.
Again for sure people have more or less bedrooms than people, but it is more reflective than value. What does the value of my home have to do with services provided?

 

[3 MEN AND A BOAT]

I’m just for lower taxes, the government can make do with less, they keep expecting me to.

 

[barkley]

I am wondering about that comment too, as my DS lives in Washington and as far as I know there is NO state income tax.

yup, no state income tax here so I don't know how anyone, based solely on income is taxed any differently than anyone else. different places charge different sales tax rates but depending on what a person is buying they can opt to buy it in a lower sales tax area (it's coded to where the customer RECIEVES it).

No Income tax in Washington State but they have a business tax that manifests itself in higher costs of goods and services

people who have lived here all of their lives complain about the costs but when I compare services with what I paid for the same in California 15 years ago (where I paid high state income taxes) it's still lower. goods prices aren't any higher than I see charged in other states, and much lower than in some. granted, we do have high 'sin taxes' on alcohol, cannibus and tobacco-but those aren't basic needs for anyone (and those that live near the boarding states just go there to buy their alcohol and tobacco just like Idaho residents come here for larger grocery trips since their state taxes groceries)

 

[lifesavacation]

yup, no state income tax here so I don't know how anyone, based solely on income is taxed any differently than anyone else. different places charge different sales tax rates but depending on what a person is buying they can opt to buy it in a lower sales tax area (it's coded to where the customer RECIEVES it).



people who have lived here all of their lives complain about the costs but when I compare services with what I paid for the same in California 15 years ago (where I paid high state income taxes) it's still lower. goods prices aren't any higher than I see charged in other states, and much lower than in some. granted, we do have high 'sin taxes' on alcohol, cannibus and tobacco-but those aren't basic needs for anyone (and those that live near the boarding states just go there to buy their alcohol and tobacco just like Idaho residents come here for larger grocery trips since their state taxes groceries)

Seattle actually did approve an income tax on the wealthy. It was just ruled illegal by the King County Supreme Court. They expect it will get appealed to the State Supreme Court.

https://www.seattletimes.com/seattl...me-tax-on-the-wealthy-is-illegal-judge-rules/