Comments on: Effective Federal Tax Rate: Effects of Social Security Tax http://www.moneyandinvesting.net/2007/01/26/effective-federal-tax-rate-effects-of-social-security-tax/ Making you richer every day. Tue, 22 Dec 2009 00:16:54 -0700 http://wordpress.org/?v=2.8.6 hourly 1 By: car games online - Uttaruk.com » Carnival of the Capitalists 01-29-07 http://www.moneyandinvesting.net/2007/01/26/effective-federal-tax-rate-effects-of-social-security-tax/comment-page-1/#comment-10 car games online - Uttaruk.com » Carnival of the Capitalists 01-29-07 Mon, 29 Jan 2007 14:43:54 +0000 http://www.moneyandinvesting.net/?p=14#comment-10 [...] Moneyandfinance talks about the Social Security tax in the context of tax brackets: By looking at hard numbers we can try to remove politics from it and see its effect on people and society. Increasing the social security tax rates will burden even more our lower income people and will create an ever flatter curve. Not doing something to fix social security now will create bigger issues to solve that will make society do hard decisions: like increasing retirement age or increasing social security tax, burdening people even more. [...] [...] Moneyandfinance talks about the Social Security tax in the context of tax brackets: By looking at hard numbers we can try to remove politics from it and see its effect on people and society. Increasing the social security tax rates will burden even more our lower income people and will create an ever flatter curve. Not doing something to fix social security now will create bigger issues to solve that will make society do hard decisions: like increasing retirement age or increasing social security tax, burdening people even more. [...]

]]> By: Long or Short Capital http://www.moneyandinvesting.net/2007/01/26/effective-federal-tax-rate-effects-of-social-security-tax/comment-page-1/#comment-9 Long or Short Capital Mon, 29 Jan 2007 13:51:31 +0000 http://www.moneyandinvesting.net/?p=14#comment-9 <strong>Carnival of the Capitalists 01-29-07</strong> “Capitalist” is a loaded word. Some people think a “capitalist” is a pig. Some think a “capitalist” is someone who takes advantage of others and exploits any resource he can to get wealthy. Some people think a &#82... Carnival of the Capitalists 01-29-07

“Capitalist” is a loaded word.
Some people think a “capitalist” is a pig. Some think a “capitalist” is someone who takes advantage of others and exploits any resource he can to get wealthy. Some people think a &#82…

]]> By: Bill Woessner http://www.moneyandinvesting.net/2007/01/26/effective-federal-tax-rate-effects-of-social-security-tax/comment-page-1/#comment-5 Bill Woessner Fri, 26 Jan 2007 18:33:31 +0000 http://www.moneyandinvesting.net/?p=14#comment-5 In principle, I agree with what you're saying. Social Security is a regressive tax and Medicare is a flat tax. When you take them together with the income tax, they have a flattening effect. Agreed 100%. But you can't really look at our tax system without considering the whole. The income tax is not as strictly progressive as you make it out to be. Thanks to the convoluted system of deductions and credits, many high wage earners end up paying very little in taxes. My wife and I are a prime example. Nearly HALF of our gross income is not taxed because of one deduction or another. For 2006, I estimate our federal income tax rate at 5.8%. Not what you'd expect from a doctor and a mathematician with no children. And then there's Warren Buffet. He recently did a tax rate exercise in his own office. All he did was ask his office staff to compute individual tax rates. He discovered, quite to his amazement, that his tax rate is substantially lower than anyone in his office. This is <b>Warren Buffet</b>: the 2nd richest man in the world. So much for progressive income taxes... Then there are excise taxes. I don't know of all the federal excise taxes, but I know that, at the very least, gasoline and cigarettes are taxed. I firmly believe (though I have no evidence to back it up) that these are HIGHLY regressive taxes. The poor can't live where they work, so they commute and end up paying more gasoline taxes. I believe the poor are also more likely to smoke, though again, I have no numbers on the matter. If you consider ALL the taxes that individuals pay, I wouldn't be surprised to find that our tax system is actually regressive. I don't know of any studies on the matter, but I would be interested to find some. Our tax system is an abomination. We need to throw it out and start from scratch. If we actually <i>design</i> it, instead of letting it evolve on the whims of legislators, I'm sure we could build a fair and simple tax system. In principle, I agree with what you’re saying. Social Security is a regressive tax and Medicare is a flat tax. When you take them together with the income tax, they have a flattening effect. Agreed 100%. But you can’t really look at our tax system without considering the whole.

The income tax is not as strictly progressive as you make it out to be. Thanks to the convoluted system of deductions and credits, many high wage earners end up paying very little in taxes. My wife and I are a prime example. Nearly HALF of our gross income is not taxed because of one deduction or another. For 2006, I estimate our federal income tax rate at 5.8%. Not what you’d expect from a doctor and a mathematician with no children.

And then there’s Warren Buffet. He recently did a tax rate exercise in his own office. All he did was ask his office staff to compute individual tax rates. He discovered, quite to his amazement, that his tax rate is substantially lower than anyone in his office. This is Warren Buffet: the 2nd richest man in the world. So much for progressive income taxes…

Then there are excise taxes. I don’t know of all the federal excise taxes, but I know that, at the very least, gasoline and cigarettes are taxed. I firmly believe (though I have no evidence to back it up) that these are HIGHLY regressive taxes. The poor can’t live where they work, so they commute and end up paying more gasoline taxes. I believe the poor are also more likely to smoke, though again, I have no numbers on the matter.

If you consider ALL the taxes that individuals pay, I wouldn’t be surprised to find that our tax system is actually regressive. I don’t know of any studies on the matter, but I would be interested to find some. Our tax system is an abomination. We need to throw it out and start from scratch. If we actually design it, instead of letting it evolve on the whims of legislators, I’m sure we could build a fair and simple tax system.

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