Obama won re election

**ryanjewell** · 11-07-2012, 07:42 PM

Originally Posted by OCDshaver

I don't think DaveW was that far off. While his explanation might not cover all of it, he's definitely on to something.

"...more than half of all Americans paid no Federal income tax in the tax year 2009, and the number of people who did pay taxes was even lower -- 51 percent, not 53 percent. For tax year 2011, the non-partisan Tax Policy Center estimates that only 54 percent of Americans will pay Federal income tax."

All of those numbers sound very scary, but you are just taking about income tax...not including payroll tax to the federal government.

TPC Tax Topics | Who Doesn't Pay Federal Taxes?

when people just exclude payroll taxes...i find that a bit disingenuous. the actual number is closer to 18%...a lot of which are elderly and students. i guess i just need to make a bunch more money per year or have a bunch of deductions so i can pay income tax at the end of the year.

**DaveW** · 11-07-2012, 07:51 PM

It's not disingenuous at all. The deficit that has occurred over the last 4 years has been caused very little by social security and medicare. They are viewed separately, and though social security may have dipped into slight deficit for now, it's not going to be a cash flow problem (for deficit purposes) for a couple of decades.

The rest of the issues that are coming out of general revenue are funded by several things, but payroll taxes for social programs are not one of them.

Besides, the individuals at the lowest level of the spectrum for the social programs benefits the most from them per dollar of tax revenue *by far*. Take a look at the social security formula. The first bend point in it is 90%, the second 32% and the third 15% meaning individuals that are poor poor will get 90% of their indexed earnings as a benefit, and it will be adjusted so that in a matter of years they'll get more from social security than they made in any earnings years.

Those who are closest to or over the social security wage base will get the lowest % of their contributions back. Anyone with higher medicare earnings is already just paying more for the same benefits, and they'll be paying even more starting next year.

Anyway, it's not disingenuous at all to exclude those allocated taxes because they are already allocated to benefits that the individuals not paying federal inncome tax will get a higher value return from, anyway (i.e., they are pay as you go wealth redistribution programs, you do better if you have lower income), and because those benefits are not what's causing current or past deficit issues of any significance in the big picture. Cap gains tax, income tax, death taxes, tariffs, etc are all allocated toward the deficit. If someone is in the 47% group paying large amounts of cap gains tax, they get a bye.

**ryanjewell** · 11-07-2012, 08:04 PM

Originally Posted by DaveW

It's not disingenuous at all. The deficit that has occurred over the last 4 years has been caused very little by social security and medicare. They are viewed separately, and though social security may have dipped into slight deficit for now, it's not going to be a cash flow problem (for deficit purposes) for a couple of decades.

The rest of the issues that are coming out of general revenue are funded by several things, but payroll taxes for social programs are not one of them.

Besides, the individuals at the lowest level of the spectrum for the social programs benefits the most from them per dollar of tax revenue *by far*. Take a look at the social security formula. The first bend point in it is 90%, the second 32% and the third 15% meaning individuals that are poor poor will get 90% of their indexed earnings as a benefit, and it will be adjusted so that in a matter of years they'll get more from social security than they made in any earnings years.

Those who are closest to or over the social security wage base will get the lowest % of their contributions back. Anyone with higher medicare earnings is already just paying more for the same benefits, and they'll be paying even more starting next year.

Anyway, it's not disingenuous at all to exclude those allocated taxes because they are already allocated to benefits that the individuals not paying federal inncome tax will get a higher value return from, anyway (i.e., they are pay as you go wealth redistribution programs, you do better if you have lower income), and because those benefits are not what's causing current or past deficit issues of any significance in the big picture. Cap gains tax, income tax, death taxes, tariffs, etc are all allocated toward the deficit. If someone is in the 47% group paying large amounts of cap gains tax, they get a bye.

I make a middle class salary, claim 0 exemptions on my tax returns, no investment income...on average I pay 20-25% in payroll taxes...so basically what you are saying, those taxes I pay are rightfully thrown out because of what they are allocated to? That they are basically invalid and I am non-tax paying person...one of the infamous 47%? I might take some exception to that...

**Bruno** · 11-07-2012, 08:16 PM

Originally Posted by OCDshaver

If you gain cost efficiency from your gov't, I tip my hat to your gov't. In the US, there is no possible way that you will send $5 of tax into the government and spit out $10 of services. I am highly suspect that you can either but I will concede not be an authority on your political system.

We can't. 5$ is 5$.

However, in your healthcare system, 5$ is 1$ for the doctor, 2$ for the insurance company, and 2$ for the lawyers. The cost of healthcare in the US is ludicrous because so much money sticks to hands that have nothing to do with healthcare.

Administrative overhead here is very little. Additionally, there are no lawyers involved.
So my 5$ gets me 4$ worth of care.
Your 5$ gets you 1$ worth of care.

But since the actual care is as expensive, you need to pay 20$ to get 4$ of care where I pay only 5$ to get 4$ worth of care.

**DaveW** · 11-07-2012, 08:23 PM

Originally Posted by ryanjewell

I make a middle class salary, claim 0 exemptions on my tax returns, no investment income...on average I pay 20-25% in payroll taxes...so basically what you are saying, those taxes I pay are rightfully thrown out because of what they are allocated to? That they are basically invalid and I am non-tax paying person...one of the infamous 47%? I might take some exception to that...

Are you self employed? If you aren't, the fed payroll taxes you pay are 7.65%.

And yes, I'm throwing the group of folks out who pay no income tax and 7.65% for entitlements, because the entitlements are:
1) not subject to any of the discussions by either candidate about what will be raised, ...well, except for the 0.9% medicare tax on high incomes under obama, but nobody in the 47% group will be included in that
2) they are not the source of the deficit.

So the discussion becomes, spending and taxation reflected in decision making is non-entitlement spending (neither candidate had any realistic plan for near-term entitlement changes), and non-entitlement taxes. You are not voting based on those tax rates because neither candidate is threatening to change them one way or another.

**Jimbo** · 11-07-2012, 08:24 PM

That Mitchell and Webb Look - Send us your reckons - YouTube

**DaveW** · 11-07-2012, 08:29 PM

Originally Posted by Bruno

We can't. 5$ is 5$.

However, in your healthcare system, 5$ is 1$ for the doctor, 2$ for the insurance company, and 2$ for the lawyers. The cost of healthcare in the US is ludicrous because so much money sticks to hands that have nothing to do with healthcare.

Administrative overhead here is very little. Additionally, there are no lawyers involved.
So my 5$ gets me 4$ worth of care.
Your 5$ gets you 1$ worth of care.

But since the actual care is as expensive, you need to pay 20$ to get 4$ of care where I pay only 5$ to get 4$ worth of care.

The breakdown is a little different than that. About 7% of monies in the US go for taxes, profits, etc. The rest looks like this:

U.S. Health Care Costs: Issue Modules, Background Brief - KaiserEDU.org, Health Policy Education from the Henry J. Kaiser Family Foundation is the U.S. health care dollar spent?

There is a mandate in PPACA ("obamacare") that private insurance loss ratios need to be 85% (i.e., at least 85% of a premium collected needs to be spent on losses, or actual costs of benefits).

What is true is that we do have more excessive utilization of health care here, and we are willing to pay more per service and per drug than most places in the rest of the world.

We're users...hooked, you know? We like to go to the doctor and get pushed to a specialist and see the specialist without wait and get everything done that we can get done..."just to make sure". We never want to hear "no" or "nothing to do but sit and wait to see if it gets worse" when we go to a doctor. As americans, we like to believe that without immediate attention and chemical compound intervention, we're going to be dead the next day (and then, we go home and drink sugar drinks and eat burgers and fries for dinner....).

The issues that cause us to spend so much on care and go so often, I don't know if we'd figure that out in this thread, but rest assured, most of the money spent is actually going to medical costs.

The news and politicians do like to make grandiose claims about how our money is spent, or invisible monsters that are siphoning off huge amounts of money for evil rich purposes, reality is a bit different.

The Kaiser foundation, by the way, is a fantastic non-partisan excellent source of health care information for anyone who wants to read about it. I don't know how much global information they provide, but their domestic information is something I rely on for work quite a lot.

**DaveW** · 11-07-2012, 08:35 PM

This has turned into a nice factual productive discussion (I won't claim any of us have suddenly become unbiased, nobody is unbiased).

Maybe we drove off the folks just looking for a fight with no facts, but that happens sometimes.

**OCDshaver** · 11-07-2012, 08:37 PM

Originally Posted by ryanjewell

All of those numbers sound very scary, but you are just taking about income tax...not including payroll tax to the federal government.

TPC Tax Topics | Who Doesn't Pay Federal Taxes?

when people just exclude payroll taxes...i find that a bit disingenuous. the actual number is closer to 18%...a lot of which are elderly and students. i guess i just need to make a bunch more money per year or have a bunch of deductions so i can pay income tax at the end of the year.

Its only disingenuous if you don't know the difference between them. But what of it? Should we feel better knowing that many of those people are paying into Social Security, Medicare, and unemployment? If that makes you feel better about the statistics, ok. But I don't feel any better about it. While these taxes add up, its the income tax that hurts the most. Its the equivalent of saying that they didn't pay the bill but left a tip.

Understanding Taxes - Tax Tutorial: Payroll Taxes and Federal Income Tax Withholding

**OCDshaver** · 11-07-2012, 08:40 PM

Originally Posted by Bruno

We can't. 5$ is 5$.

However, in your healthcare system, 5$ is 1$ for the doctor, 2$ for the insurance company, and 2$ for the lawyers. The cost of healthcare in the US is ludicrous because so much money sticks to hands that have nothing to do with healthcare.

Administrative overhead here is very little. Additionally, there are no lawyers involved.
So my 5$ gets me 4$ worth of care.
Your 5$ gets you 1$ worth of care.

But since the actual care is as expensive, you need to pay 20$ to get 4$ of care where I pay only 5$ to get 4$ worth of care.

Exactly. The point being, that you're better off paying it yourself than sending it through the gov't before you take your benefit. That way you get $5 of service for $5.

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