Taxes
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27-03-2017, 07:35 AM (This post was last modified: 27-03-2017 07:52 PM by Full Circle.)
RE: Taxes
Next for the Trump kakistocracy is tax reform. The Freedom Caucus that stopped the ACHA wants to reduce taxes for everyone and get rid of all loopholes https://www.washingtonpost.com/news/wonk...4dfeef8757.

After creating my little spreadsheet I realize now why those who make a lot of money ($1,000,000+/yr) want a flat tax and that is because once above that income you are effectively paying the highest rate, currently 39.6%. (The top 0.1% of all earners pay on average 37.9% and the 0.01% pay 39.5%).

Since there is no way tax payers paying between 12.0% and 21.8%, the bottom 9,900 out of 10,000 would ever agree to pay that much, any rate below 39.6% would be a bonanza for the top 1%. The only possible balance I see is if capital gains are then taxed at that flat tax rate as well. Consider

They talk about getting rid of loopholes except for deductions on home loan interest and charitable donations. Say goodbye to Earned Income Tax Credit, Education Tax Credit, Child Tax Credit, Adoption Credit, Saver’s Credit, Standard deductions and on and on https://www.irs.gov/credits-deductions that are geared towards alleviating the tax burden on those making less than $100,000/yr.

Say they passed a flat tax of 19% (I use this figure because it would bring in the same amount of Federal Taxes into US coffers as the current one does). Here is what it would look like:

   

The bottom 9000 earner’s taxes (90% of the households) would see an increase of 57.9%!

The next 500 will see a 3.5%% increase so it makes little difference to this group.

Everyone else’s taxes go down. Basically the folks who can most afford to pay are getting bailed out by those than can least afford it.

But then it gets obscene:
The next 400 will see a 13.0% decrease in income taxes
The next 50 will see a 31.1% decrease
The next 40 will see a 43.1% decrease
The next 9 will see a 49.9% decrease
And the very top 1 will see a 51.9% decrease!

Keep this in mind next time you hear about a flat tax.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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27-03-2017, 07:49 AM
RE: Taxes
(27-03-2017 07:20 AM)mordant Wrote:  
(26-03-2017 07:33 PM)earmuffs Wrote:  This is seriously doing my head in.
It also explains why you guys react the way you did in the past to some of my views, because my views make sense in the NZ point of view but most certainly not when it comes to the US. Homelessness for example. Fucking stupid here, there's no reason why you should be homeless here there's just far too many steps in place to prevent it. BUT in the States.. totally get it. New found sympathy for US homeless people. They are getting/got fucking SCREWED by your system hard.
Complete new understanding for poor people in your country. This whole healthcare thing in the past couple weeks, especially when I hear how much it costs like actual numbers, coupled with your low wages etc.. Completely different perspective for people living in your country.
Another point is that a lot of our homeless people (and a lot of the people in our prisons) are there because they are mentally ill. JFK emptied out the mental hospitals in 1963 in a well-meaning but totally misguided belief that the new pharmacological approach to mental health management would be totally satisfactory and effective (this was even before SSRIs, I think Thorazine was one of the drugs concerning which there was a lot of unjustified euphoria and hype at the time). The idea was to build community mental health centers where people would receive medication and treatment, but they ran out of money and couldn't build them nearly fast enough and, of course, drugs just weren't that terrific of a slam-dunk answer. Most of those people ended up on the street, and the ones that were particularly dysfunctional / delusional ended up in jail.

This is widely considered one of the more spectacularly awful policy decisions of that decade; it was so far-reachingly bad that I remember it registered on my radar even as a child because I noticed odd-acting people in public places frequently and heard adults freaking out about how Uncle Fred was off his meds again and running wild in the streets.

We Americans really know how to screw up health care, let me tell you.

Heck it isn't even just the US. The detention centre where I work is so inundated with inmates suffering from mental health related problems, whom (ideally) shouldn't have ended up here in the first place, that we're in the planning phase of building an extension designed solely to house them.

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27-03-2017, 07:55 AM
RE: Taxes
(27-03-2017 07:35 AM)Full Circle Wrote:  Keep this in mind next time you hear about a flat tax.

Yup. Flat tax is about as regressive you can get without actually blatantly making the upper income tax rates lower than the lower income ones.

There is only one really serious philosophical question, and that is suicide. -Camus
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27-03-2017, 08:15 AM
RE: Taxes
(27-03-2017 07:55 AM)GirlyMan Wrote:  
(27-03-2017 07:35 AM)Full Circle Wrote:  Keep this in mind next time you hear about a flat tax.

Yup. Flat tax is about as regressive you can get without actually blatantly making the upper income tax rates lower than the lower income ones.

It’s funny how not until I did this exercise did it sink in.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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27-03-2017, 11:54 AM
RE: Taxes
(26-03-2017 12:24 PM)Full Circle Wrote:  
(26-03-2017 10:11 AM)Popeyes Pappy Wrote:  I'll play with it if you'll share the spreadsheet as opposed to a screenshot.

I put it in a Dropbox named TTA Tax, anyone can access it. Let me know if you have a problem with it.

https://www.dropbox.com/s/77nfqo866tsnhn....xlsx?dl=0

I kept running into issues similar to the one I ran into earlier with cell I38 when trying to modify the tax brackets. So I changed all the formulas in D31:J39 to fix that. I dropped the file at https://www.dropbox.com/s/ezjh8hu7lsweyi....xlsx?dl=0 if you're interested.

BTW I'm mostly self taught on Excel. If you know an easier way to do what I did please share. That was a PITA...

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27-03-2017, 12:11 PM
RE: Taxes
(27-03-2017 11:54 AM)Popeyes Pappy Wrote:  
(26-03-2017 12:24 PM)Full Circle Wrote:  I put it in a Dropbox named TTA Tax, anyone can access it. Let me know if you have a problem with it.

https://www.dropbox.com/s/77nfqo866tsnhn....xlsx?dl=0

I kept running into issues similar to the one I ran into earlier with cell I38 when trying to modify the tax brackets. So I changed all the formulas in D31:J39 to fix that. I dropped the file at https://www.dropbox.com/s/ezjh8hu7lsweyi....xlsx?dl=0 if you're interested.

BTW I'm mostly self taught on Excel. If you know an easier way to do what I did please share. That was a PITA...

I'm self taught as well. I'll pull it up when I get to my computer, on phone now.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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27-03-2017, 06:36 PM
RE: Taxes
(27-03-2017 11:54 AM)Popeyes Pappy Wrote:  
(26-03-2017 12:24 PM)Full Circle Wrote:  I put it in a Dropbox named TTA Tax, anyone can access it. Let me know if you have a problem with it.

https://www.dropbox.com/s/77nfqo866tsnhn....xlsx?dl=0

I kept running into issues similar to the one I ran into earlier with cell I38 when trying to modify the tax brackets. So I changed all the formulas in D31:J39 to fix that. I dropped the file at https://www.dropbox.com/s/ezjh8hu7lsweyi....xlsx?dl=0 if you're interested.

BTW I'm mostly self taught on Excel. If you know an easier way to do what I did please share. That was a PITA...

Pappy, your ability to write formula far surpasses mine but I see that the numbers are the same.

I thought you might come up with your own brackets and percentages.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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27-03-2017, 06:54 PM
RE: Taxes
(27-03-2017 06:36 PM)Full Circle Wrote:  
(27-03-2017 11:54 AM)Popeyes Pappy Wrote:  I kept running into issues similar to the one I ran into earlier with cell I38 when trying to modify the tax brackets. So I changed all the formulas in D31:J39 to fix that. I dropped the file at https://www.dropbox.com/s/ezjh8hu7lsweyi....xlsx?dl=0 if you're interested.

BTW I'm mostly self taught on Excel. If you know an easier way to do what I did please share. That was a PITA...

Pappy, your ability to write formula far surpasses mine but I see that the numbers are the same.

I thought you might come up with your own brackets and percentages.

Thank you. Still be nice if some Excel whiz out there could show us how to do those calculations in a less labor intensive format...

As I said when I was manipulating the brackets I kept on getting errors like the first one where the tax was being calculated on the maximum amount of the bracket instead of the actual taxable income. Instead of checking each final cell for errors and manually changing the formula I fixed it so it would figure all that out automatically. I thought you might like the new formulas with your numbers for the same reason I do.

I've got one with my own brackets and rates, but I'm not happy with it yet. I spent most of time with the spreadsheet today working on those formulas. Wink I'll spend some more time with the brackets and rates later and post anything interesting I find.

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27-03-2017, 07:50 PM
RE: Taxes
(27-03-2017 06:54 PM)Popeyes Pappy Wrote:  
(27-03-2017 06:36 PM)Full Circle Wrote:  Pappy, your ability to write formula far surpasses mine but I see that the numbers are the same.

I thought you might come up with your own brackets and percentages.

Thank you. Still be nice if some Excel whiz out there could show us how to do those calculations in a less labor intensive format...

As I said when I was manipulating the brackets I kept on getting errors like the first one where the tax was being calculated on the maximum amount of the bracket instead of the actual taxable income. Instead of checking each final cell for errors and manually changing the formula I fixed it so it would figure all that out automatically. I thought you might like the new formulas with your numbers for the same reason I do.

I've got one with my own brackets and rates, but I'm not happy with it yet. I spent most of time with the spreadsheet today working on those formulas. Wink I'll spend some more time with the brackets and rates later and post anything interesting I find.

Thanks again. Thumbsup

Interesting exercise isn’t it? The issue is that since there is such a large number of households on the one end any small change there is magnified tremendously.
No matter how I fooled with the % or the bracket there is a bottom limit to how little the government can tax the bottom 95% and raise the top 5% without reducing the total paid in dollars.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
“Ocean: A body of water occupying about two-thirds of a world made for man - who has no gills.”~ Ambrose Bierce
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28-03-2017, 05:24 AM
RE: Taxes
Yea there's a definitely a limit, but you can still give the bottom 99.9% a tax break by shifting the burden to the top 0.1% while keeping the rates well below what they were pre Regan. In 1981 the top bracket was 70%, and that was on everything over $215,400. According to this calculation we could keep everything below $800K lower than the current top rate.

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Where did you get your original income figures?

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