I honestly wonder what it means to be 'overtaxed'. We're running a sharp deficit. Should we cut services? Should we cut the armed forces? http://voices.washingtonpost.com/44/2010/04/obamas-17-minute-2500-word-res.html CHARLOTTE - Even by President Obama's loquacious standards, an answer he gave here on health care Friday was a doozy. Toward the end of a question-and-answer session with workers at an advanced battery technology manufacturer, a woman named Doris stood to ask the president whether it was a "wise decision to add more taxes to us with the health care" package. "We are over-taxed as it is," Doris said bluntly.
This is what I don't understand. It costs X dollars to run a 1st world country. There are roads, police, fire, health, military, schools, etc etc etc. Some things can be run in the private sector, such as health care, but that doesn't mean you don't pay for it. All these things come out of your paycheck one way or another.
I posted this article in the brotherfish thread: The Misinformed Tea Party Movement For an antitax group, they don't know much about taxes. The point isn't to justify any tax. It's to dispel the notion that we're overtaxed.
I cannot say whether we are "overtaxed." What I can say is when you look at Federal income tax, SS, Medicare plus car registration fees, taxes added to telecommunication bills, gas taxes, sales taxes, property taxes, etc etc, it sure does seem like a pretty good percentage of somebody's salary ends up at some level of government.
Yes and no. I'm going to focus on income taxes more than anything, since it is the most identifiable and it comes from personal earnings. No, because if you compare our rates to Sweden, Great Britain, Australia, Turkey, and a number of countries. http://en.wikipedia.org/wiki/File:Income_Taxes_By_Country.svg We might paid the most in corporate taxes, outside of Japan (maybe). Yes, in correspondences to past decades, the percentage has greatly varied. http://en.wikipedia.org/wiki/Income_tax_in_the_United_States 91% for top bracket (WOW!!!), since in my lifetime it has consistently been under for 40%. As far as the other taxes, some of them are probably unnecessary to a point, while others are only a product of a society that has 1st class infrastructure. http://www.goodcitizen.org/WWLA Book/Chapters/1-Issues/Economic Issues - List of Taxes email.htm <object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/1-eqG7tvrzk&hl=en_US&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/1-eqG7tvrzk&hl=en_US&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object>
What The Top U.S. Companies Pay In Taxes HOUSTON -- As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all. The most egregious example is General Electric ( GE - news - people ). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion. Avoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%. In Pictures: What The 25 Top U.S. Companies Pay In Taxes How did this happen? It's complicated. GE's tax return is the largest the IRS deals with each year--some 24,000 pages if printed out. Its annual report filed with the Securities and Exchange Commission weighs in at more than 700 pages. Inside you'll find that GE in effect consists of two divisions: General Electric Capital and everything else. The everything else--maker of engines, power plants, TV shows and the like--would have paid a 22% tax rate if it was a standalone company. It's GE Capital that keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain). Not only do the U.S. losses balance out the overseas gains, but GE can defer taxes on that overseas income indefinitely. The timing of big deductions for depreciation in GE Capital's equipment leasing business also provides a tax benefit, as will loan losses left over from the credit crunch. But it's the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us. It only makes sense that multinationals "put costs in high-tax countries and profits in low-tax countries," says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. "When you add in state taxes, the U.S. has the highest tax burden among industrialized countries," says Hodge. In contrast, China's rate is just 25%; Ireland's is 12.5%. Corporations are getting smarter, not just about doing more business in low-tax countries, but in moving their more valuable assets there as well. That means setting up overseas subsidiaries, then transferring to them ownership of long-lived, often intangible but highly profitable assets, like patents and software. As a result, figures tax economist Martin Sullivan, companies are keeping some $28 billion a year out of the clutches of the U.S. Treasury by engaging in so-called transfer pricing arrangements, where, say, Microsoft's ( MSFT - news - people ) overseas subsidiaries license software to its U.S. parent company in return for handsome royalties (that get taxed at those lower overseas rates). full article
The listed rate is high, but in terms of "effective rate" (i.e. the rate that actually gets paid after deductions, write downs, loopholes, etc.) the USA is about right on average for the developed world. According to the GAO, 66% of all corporations paid no tax whatsoever between 1998 and 2005, while 25% of the largest 1000 US companies paid none. (source) But the pro-corporate talking heads ignore this because saying we have the highest tax rate sounds very sinister. Saying we are about average won't get anybody excited. Even so, Germany, Italy, Japan, and Canada (not just Japan) all have a higher base rate.
Overall I don't think we are overtaxed but I think our tax code and system is pretty messed up, as the GE article illustrates. I think that if we simplified our tax code greatly we could greatly improve tax collection.
Me and my Canadian friend compared how much we're taxed. I'm taxed more, yet he gets universal healthcare. What gives?
are you in houston? this would certainly debunk the whole "benefit to move to texas where there's no state income tax" argument.
Yes we are over-taxed. Yes we should cut services. Yes we should cut a good portion of the military budget.
It's not nice to post factual tax information. You're supposed to believe any tea partier, Republican, conservative, Joe the plumber with a mic that says American companies have the highest tax rates in the world.
This is one way to look at tax. The other way is to look at average American family, how much income and how much tax in relation. Could an average American family maintain a reasonable living style compared with the rest of developed nations and historically with itself.
Most full-time working people pay nearly 50% of our income to taxes, directly and indirectly. That total could be cut in half easily.
Through what avenues? Sales tax where I am is 6%, and my taxable income is around 25%. What am I missing?
Look at your phone bill, cell bill, cable bill, property taxes, car registration fees, car inspection fees, taxes included in the price of gasoline, other exise taxes. It adds up pretty quickly.
The tax on my phone is 10% because of local taxes, not federal. My car fee was about 1% making it 7% after sales tax. Federal gasoline tax is 5% and state is 5%. All in all, these taxes are rarely doubly applied. So my loss to tax would be 94% of 85% in the 25% tax bracket (turns out I am in 15%, but 25% is middle class) leaving me about 80% of my income. That's 20% lost to taxes, not close to 50%.
