patrick.net

Control Point knows the difference between Average Income vs. Median Income.

Control Point knows that when the payroll tax was temporarily reduced a few years ago, the workers' take-home pay literally went up by the corresponding amount overnight. So the "if the payroll tax disappeared tomorrow" counter-factual argument was literally proven. Payroll tax portion is what the employers are already paying out of the operation, but intercepted by government therefore not received by workers.

Control Point can do the simple math that all the items in my previous list: 25% + 15% + 7% + 8% + 4% is close to 60%; therefore the "close to 50%" comment already took into account some overlaps and deductions, in fact very generously.

Control Point also knows that people in the 30k-50k income range typically do not itemize deduction when filing, so the state taxes are not deducted from income.

control point says

It is acceptable to me for one to make a factually incorrect argument due to ignorance. One can make an argument that I disagree with and is based on a differing opinion. One can make an argument based on a different interpretation of known history or law. Any of these things can be justified. But for one who knows better to purposely distort truths in order to make an argument, this is the worst kind of deceit. Using your intelligence to knowingly deceive is evil and makes you worse than politicians, who at least do it for measurable personal gain. You win nothing of value by deceiving on an internet message board.

Lying is for sociopaths and children. Which are you?

Look in the mirror and ask yourself those questions, please.

Reality says

You are not paying sales tax. See how absurd your standard is.

Not at all--sales tax is money withheld for you. If I didn't buy the merchandise, no tax is due.

Contrast that with property tax--it's due whether anyone rents the place or not.

Reality says

LOL. Goes to show how clueless you are. The gasoline tax is assessed on the gallon: about 50 cents per gallon. Sure, theoretically some idiot like you might sell me gasoline for 40 cents a gallon. How long do you think you would stay in business? Like I said, the collection of property tax is just like gasoline tax: the vendor is forced to be the agent, and the customer pays a price with all taxes and fees included.

And like I said--you are wrong. Gas tax is due only if the gas is sold. It is a tax that is withheld. Property tax is not due upon rental. As Bill said--it is a sunk cost. Not at all the same thing.Reality says

Analogous but not a tax issue. The customer does ultimately pay for the cost of hiring an employee as well as paying for the taxes included in the price. Glad you finally agree.

The customer pays for the product or service. Whether it be a house rental or a haircut or a new TV. And the price is set by supply and demand--not supplier cost. Unless you're saying we're in the long run where companies are making only economic profits. And if you are saying that, you are even more disingenuous than control point said.Reality says

LOL. So you still believe in the Insurance Fairy or Boss Fairy. What "shared"?

It's pretty simple. The company literally pays for part of the cost and the employee pays part. Is that hard for you to understand?

Bellingham Bill says

Landlords are not selling an actual physical product, what they sell has no embedded labor cost to pass on, other than the property management expense of processing the monthly rent checks, and tenant maintenance requests.

That's like saying the home builders have no labor cost to pass on, other than the cost of putting building material together into livable housing. LOL. No sh*t shylock, the home builder would charge whatever the market can bear, but "whatever the market can bear" is very dependent on the cost of labor and cost of capital, just like any other business, because there are competitions!

What LLs sell by the month is the ephemeral right of legal tenancy in a dwelling and its land itself, and the price is always set by the market at what the renter is willing and able to pay.

What the LLs sell by the month is the right to use dwelling or commercial space while excluding others from occupying the same space. Most people do not wish to have other people being too close to their own living space. The market place provides a mechanism for giving limited space to those who can put the space to most efficient use; efficiency as defined by what value the renter can make of the limited space resource and deliver to the enjoyment by humanity as expressed by willing purchases and income to pay for rent. The process is little different from running a restaurant or any other business that needs a physical location. All the landlords and business owners provide the city/town a steady tax stream in order to enable services from the city/town, while adding their own service on top of it. Customers and tenants get too choose which vendor to buy from, the ultimate form of Consumer Sovereignty.

Tax or no tax. In fact, if income taxes were to double tomorrow, rents would fall tremendously (but not dollar for dollar, as that's how bad supply/demand imbalance has gotten in all popular and populous places to live).

As would happen to the revenues of restaurants, dry cleaners, etc.. Raising taxes is deflationary. We already know that. What's your point?

tatupu70 says

Not at all--sales tax is money withheld for you. If I didn't buy the merchandise, no tax is due.

Contrast that with property tax--it's due whether anyone rents the place or not.

There are plenty tax foreclosed properties in Detroit proving the pointlessness of the point that you are trying to make. If rental income does not cover property tax, the landlords would simply walk away. That's how high property taxes kill neighborhoods.

tatupu70 says

And like I said--you are wrong. Gas tax is due only if the gas is sold. It is a tax that is withheld. Property tax is not due upon rental. As Bill said--it is a sunk cost. Not at all the same thing

No, it is not a sunk cost. It is a business decision re-visited every quarter: whether it is worthwhile to run a business between the cost of property tax + maintenance + insurance vs. revenue of rent. When the net is negative and can not be expected to turn around, the business ceases to make business sense.

tatupu70 says

The customer pays for the product or service. Whether it be a house rental or a haircut or a new TV. And the price is set by supply and demand--not supplier cost. Unless you're saying we're in the long run where companies are making only economic profits. And if you are saying that, you are even more disingenuous than control point said

Of course price is set by supply vs. demand. However, the cost that everyone else has to face too at the same time has direct impact on the volume and pricing of competition.

tatupu70 says

It's pretty simple. The company literally pays for part of the cost and the employee pays part. Is that hard for you to understand?

The company can choose to go out business if it can not cover "its part" out of the productivity of the employee. There is no Company Fairy either.

Reality says

Control Point knows that when the payroll tax was temporarily reduced a few years ago, the workers' take-home pay literally went up by the corresponding amount overnight.

Haha. So I made an argument with a basic premise "I know Reality is not stupid, so he must be a liar." You respond with, "No I'm not a liar, I'm really just stupid."

Obviously we are talking about the employer paid portion of payroll taxes, and whether or that is a tax paid by the employee or not. Your counter "when payroll taxes were reduced" - this is referring to the FICA reduction under Tax Relief Act of 2010, where the total FICA tax (both employee and employer rate) was reduced from 12.4% to 10.4%. This was reflected on an workers paycheck, LITERALLY, because the EMPLOYEE rate was reduced from 6.2% to 4.2%. The employer rate was unchanged. The change in the workers take home check was a direct result of a change in a direct tax to the worker.

Reality says

Control Point can do the simple math that all the items in my previous list: 25% + 15% + 7% + 8% + 4% is close to 60%; therefore the "close to 50%" comment already took into account some overlaps and deductions, in fact very generously.

I can do simple math, and by easily challenging 2 of your disingenuous assumptions, show how silly you are being. Even using average wages ($43k) for a single worker less the standard deduction and one personal exemption (and no other reductions to taxable income) puts 43k worker in the 15% bracket. Even in California, the highest tax state, with exemption and credit, this workers marginal tax bracket is 6%.

These two factual challenges ALONE make your premise incorrect. You cannot get to 50% when the combined state and federal income tax burden is only 21% - Even if you can make the argument he "pays" property taxes when he rents and even if he is self employed. You already knew this - which is why I am calling you out on lying.

Your are either stupid or a liar - I gave you credit for at least being competent. Thanks for countering with your "no I'm just stupid" response.

control point says

This was reflected on an workers paycheck, LITERALLY, because the EMPLOYEE rate was reduced from 6.2% to 4.2%. The employer rate was unchanged. The change in the workers take home check was a direct result of a change in a direct tax to the worker.

Whether the 2% was taken from the employee or "employer's contribution" would have made no difference. Both are cost of employment to the employer. The reduction was clearly passed onto the worker.

I said $40-50k, not necessarily exactly at $43k. Income is a spectrum. It's ridiculous to think all the middle income people make exactly $43k. Even taking your 21% as starting point for a Californian, we add:

15.3% payroll tax (both sides, or self-employed)
2% of 5x income in California as property tax, i.e. 10%
7.5%-10% sales tax on non-food, non-housing, non-medical, non-educational expense, say 9% of 30% of income, or 2.7%
Obamacare "insurance" premium $2500 a year (even assuming ridiculously cheap plan at only $200 a month; most plans are $350+ !), 5.8%
Gasoline tax on about 800-1000 gallons of gas, 1% of income

The tally is already standing at 55.8%! So my earlier statement of "close to 50%" was being very conservative and generous.

You cannot get to 50% when the combined state and federal income tax burden is only 21%

Your are either stupid or a liar - I gave you credit for at least being competent. Thanks for countering with your "no I'm just stupid" response.

I said "close to 50%" in my earlier post. Since we are now reaching 55.8% even with your low 21% starting point, you are proving yourself a liar and stupid and incompetent. Resorting to pointless personal attacks is not helping your case.

The point that is being made on this thread is that Americans have been turned into slaves to the government.

You mutts falsely believe that democracy is God. Democracy does not work. All government is going to have the incentive to grow, think self preservation. A cancer is fatal to the organism, but it is good for the cancer cells as they take over the body, right up to the point of death.

You mutts want to view this subject from an I'm the only one, or a cancer cells view point, the body/nation is diseased. You only want to know what is in it for me, this narcissistic view is irrational, as it only focuses on what is in it for me.

And the truth is less and less, not to mention what it does to your integrity.

"Democracy does not work."

vs.

“Democracy is the worst form of government except for all those others that have been tried from time to time.”

Democracy can only be as intelligent as its electorate, but its signal virtue is its negative feedback of its majoritarian dynamic being able to push back against abuses of any minority vs the majority.

In the economic sphere, democracy eventually freed our English ancestors after they had been enslaved by their Norman conquerors.

We're getting to a tipping point here in the US, but our democracy is hobbled by the 25% of the active electorate that puts their social conservatism ahead of any economic issues.

the austrian here is forgetting that slaves didn't get to pocket the full value of their labor.

hey, I wonder how our current system compares to that system.

having said that, it is true that government is leviathan:

real monthly per-capita cost of government

that is a big footprint on the necks of working americans, even though so many Americans are dependent on this spending.

Bellingham Bill says

that is a big footprint on the necks of working americans, even though so many Americans are dependent on this spending.

No they are not.

Bellingham Bill says

Democracy can only be as intelligent as its electorate, but its signal virtue is its positive feedback of its majoritarian dynamic being able to push back against abuses of any minority vs the majority.

Democracy, Oligarchy and Monarchy each has its own degenerate form. Historically, Democracy was born from the Ancient Greek farmer-infantry Hoplite domination of the battle field, and died when Roman infantry was systematically defeated by cavalry from German frontier. Then reborn again 1000+ years later when the musket enabled the draft infantry defeat the knight's armor.

There is nothing mysterious about any -cracy. All -cracy is about controlling people by force, therefore susceptible to severe corruption and abuse. What really makes people content is liberty; i.e. that small space left untouched by whatever-cracy.

In the economic sphere, democracy eventually freed our English ancestors after they had been enslaved by their Norman conquerors.

The Norman conquerors never enslaved anyone. The tax rate on English serfs was always much lower than tax rates we have today. The "divine right" of the English/Norman kings were first limited by Barons imposing Mangna Carta; then those baronial rights were gradually expanded to adult male population meeting property ownership requirements. Democracy in Anglo-America came long after the king was either only titular or non-existent.

We're getting to a tipping point here in the US, but our democracy is hobbled by the 25% of the active electorate that puts their social conservatism ahead of any economic issues.

The ratio was much lower as percentage of the overall population in the fastest economic growth period of the Anglo-American history. Not saying anyone should be denied sufferage, but a system of allowing donations in exchange for additional votes would go a long way towards responsible citizenship: say, one person one vote, and every $10,000 donation to the government buys another vote. All taxes and the FED can be abolished as a result.

Reality says

Since we are now reaching 55.8% even with your low 21% starting point, you are proving yourself a liar and stupid and incompetent. Resorting to pointless personal attacks is not helping your case.

CP: This is funny, we can go on acting like you haven't resorted to this type of belittlement with myself (and others) in the past if you'd like, but you and I know full well you dish out as least as much as your are getting, so quit crying.

CP: Anyway, to show everyone else how disingenous (or foolish) you are being - I will refute every single one of your points.

Reality says

I said $40-50k, not necessarily exactly at $43k. Income is a spectrum. It's ridiculous to think all the middle income people make exactly $43k.

CP: I went to average income because this is where you wanted to take the argument, and I knew my points would still hold even at $43k. Now we are talking about "middle income people" - a middle income person clearly implies median income - which as I said is $30k (actually $28k). Which is it? A person with an income of $43k is above the "middle" of the middle, therefore he is on the upper end of the middle. Want to talk about someone on the lower end of the middle? Lets look slightly under $28k...

Reality says

Whether the 2% was taken from the employee or "employer's contribution" would have made no difference. Both are cost of employment to the employer. The reduction was clearly passed onto the worker

CP: Because it was a reduction of a direct tax on the worker. The example means nothing vis a vis whether or not the employer portion of FICA would be passed onto the worker if eliminated. It certainly would not be, as wages RECEIVED by the worker are driven by the market. The tax is a deadweight loss (a term, again, I know you are familiar with) - without it there would be some recovery by both the employer and employee - but certainly ALL of it would not pass to the employee. UNtil we reach effect unemployment rate of zero, most if not all of the deadweight loss would go to the emplyer as additional profit.

Reality says

15.3% payroll tax (both sides, or self-employed)

CP: See above, 7.65% FICA tax.

Reality says

2% of 5x income in California as property tax, i.e. 10%

CP: This one isn't even really worth arguing - Bill has pretty much blown it to bits above, but I'll address it in a slightly different way...Lets say you are correct with 2% of a house that is valued at 5x income. That means at 43k income, we are looking at a house valued at $215k. Mortgage amount with 20% down is $172k. P&I on a 30 year loan at 3.5% is $772. Add in the $4300 annual taxes, and $1000 insurance, and we are looking at break even cash flow (tax credit for LL excluded) of about $1215. Lets just assume the landlord is happy to earn cash flow profit only equal to his tax write off. So the tenant in renting for $1215 monthly, ($14,580 annually)....more to come.

Reality says

7.5%-10% sales tax on non-food, non-housing, non-medical, non-educational expense, say 9% of 30% of income, or 2.7%

CP: So 30% of income on non-food, non-housing, non-medical, non-educational expenses. Ok, using our $43k example, we are talking 13k total less 9% sales tax = 11.8% . Taxes, as you are trying to argue, take at least 50% of $43k. That leaves $21.5k after taxes. Minus $11.8k for this category, $9.7k...minus $10.2k for housing above less taxes...uh oh...That is negative 500 bucks...without food, medical expenses($2500 below), gasoline($1700 below), (that one is below) educational expenses, car insurance, utilities....etc. Now I know we are talking marginal tax rates for both federal and state income taxes, and if you would like to switch this argument to one in which we start taking average income tax rates, lets do it. Not going to get to 50% though and you know that.

Reality says

Obamacare "insurance" premium $2500 a year (even assuming ridiculously cheap plan at only $200 a month; most plans are $350+ !), 5.8%

CP: Well, what the Supreme Court said is the individual Mandate is constitutional because it is a tax. That is correct. The tax, however, is not the insurance premiums. By paying insurance premiums in a qualified plans, you are given a credit for the exact amount for the tax. For this single fellow in California with $43k income, the tax payment would be $655. Also known as the penalty tax. $655 is 1.5% of income. Health insurance premiums are paid to private companies who provide a private service, which could never be considered a tax

Reality says

Gasoline tax on about 800-1000 gallons of gas, 1% of income

CP: Notwithstanding the fact that given he doesn't have the money to buy gasoline as shown above, California has the 3rd highest gasoline tax rate in the country at 63.8 cents per gallon. The average driver drives 13,500 miles per year, and the average fuel economy for a 10 year old passenger car according to DOT table 4-23 is 30 MPG. So that means average driver driving average 10 year old car is buying about 450 gallons of gasoline per year. That is $287 per year in gasoline taxes, or .6% of income.

So, we have $15% marginal plus 6% state plus 7.65% FICA plus 1.5% obamacare plus .6% gasoline = 30.75%.

Lets go back and examine further the sales tax and property tax arguments. Operating under the assumption that every after tax penny earned is probably spent at this income level, lets start with housing costs. Even though I vehemently disagree that a renter pays property taxes - moving the property tax portion of rent to 2% of a 3x income rental value, (6% total) would make a $129k rental value, 80% LTV 30 year 3.5% is $465, taxes $2580 annually(6%), insurance $700 = $740 monthly\$8880 annually for housing.

Now going back to our $43000 income, less 30.75% taxes is $29,778 after taxes. Less $8880 for housing & $1125 for gasoline (450 gallons at $2.50 per gallon) leaves $19,773. Let me grant you back your employer payroll tax even though it is silly, another $3290 off, leaves $16,483. Roughly 38% of income. And lets go with 9% sales tax on consumption of that entire 38% of income, even though a significant portion of it would be at a lower sales tax rate for food, car insurance, etc. we have less than 3.5% of income.

So even using your ridiculous double payroll tax AND silly property tax as renter arguments, we have 15% federal plus 15.3% payroll plus 6% state plus 1.5% obamacare plus .6% gasoline plus 6% property plus 3.5% sales = 47.9% of income going to taxes.

Still less than 50% of income, taking WORST case assumptions and accepting all of your ludicrous arguments for who actually pays property/employer payroll taxes.

I'm pretty surprised you decided to double down on stupid, but it is what it is. Maybe someone has hacked your account, but I'd think someone with a 141+ IQ wouldn't allow himself to make such a monumental math error by linearly adding tax burden on purchases, transportation, and housing that exceeded total after tax income by over 10%.

Even though I dont need to prove the point about including employer FICA and property taxes in this argument because you STILL cant get to 50% marginal tax burden for an "average" worker:

Really quick, who must pay the back taxes in each of the following scenarios:
1.) Your employer does not withhold nor pay your federal income taxes.
2.) Your employer does not pay the employer portion of FICA.
3.) Your landlord does not pay the property taxes on your apartment.

control point says

Reality says

I said $40-50k, not necessarily exactly at $43k. Income is a spectrum. It's ridiculous to think all the middle income people make exactly $43k.

CP: I went to average income because this is where you wanted to take the argument, and I knew my points would still hold even at $43k. Now we are talking about "middle income people" - a middle income person clearly implies median income - which as I said is $30k (actually $28k). Which is it? A person with an income of $43k is above the "middle" of the middle, therefore he is on the upper end of the middle. Want to talk about someone on the lower end of the middle? Lets look slightly under $28k...

In my original post, I said "average income $40-50k." In case it is not obvious to you, we have been in a "recovery" of sorts in the past few years, you can't apply some 2011 income number to 2014 tax brackets or even assume 2015 income will be the same as 2011 income. No, not interested in talking about low income individuals or welfare queens who are net tax recipients; my original post was talking about "average income $40-50k" If you want to change topic in order to insult me, you will have to find someone else for your entertainment.

control point says

Because it was a reduction of a direct tax on the worker. The example means nothing vis a vis whether or not the employer portion of FICA would be passed onto the worker if eliminated. It certainly would not be, as wages RECEIVED by the worker are driven by the market. The tax is a deadweight loss (a term, again, I know you are familiar with) - without it there would be some recovery by both the employer and employee - but certainly ALL of it would not pass to the employee. UNtil we reach effect unemployment rate of zero, most if not all of the deadweight loss would go to the emplyer as additional profit.

Yet, that is exactly equivalent to how normal tax rates are described . Saying the tax rate is 25% does not mean the worker would get 33% after-tax income increase if the tax were removed. Instead, it means 25% of what the employers pays out for hiring is intercepted by the tax collection and not received by the employee. How that "dead loss" would be divided between the two parties is never part of the description of tax rate; why should it now? Do you argue that a 25% income tax is really 12.5% because the employer would otherwise pocket half of it? What kind of silly logic is that?

control point says

So 30% of income on non-food, non-housing, non-medical, non-educational expenses. Ok, using our $43k example, we are talking 13k total less 9% sales tax = 11.8% . Taxes, as you are trying to argue, take at least 50% of $43k. That leaves $21.5k after taxes. Minus $11.8k for this category, $9.7k...minus $10.2k for housing above less taxes...uh oh...That is negative 500 bucks...without food, medical expenses($2500 below), gasoline($1700 below), (that one is below) educational expenses, car insurance, utilities....etc. Now I know we are talking marginal tax rates for both federal and state income taxes, and if you would like to switch this argument to one in which we start taking average income tax rates, lets do it. Not going to get to 50% though and you know that.

Which part of Marginal Tax Rate don't you understand? Marginal tax rate is certainly not overall tax rate. Also, for someone making only $43k a year, the overall monthly cash flow may well be negative! Requiring the burning of previous savings (which has been happening consistently for US consumers overall since 2008), getting gifts from family and friends, living off creditcards, and periodical bankruptcy. The average American is actually spending more than he/she earns! That's just a statistical fact.

control point says

CP: Well, what the Supreme Court said is the individual Mandate is constitutional because it is a tax. That is correct. The tax, however, is not the insurance premiums. By paying insurance premiums in a qualified plans, you are given a credit for the exact amount for the tax. For this single fellow in California with $43k income, the tax payment would be $655. Also known as the penalty tax. $655 is 1.5% of income. Health insurance premiums are paid to private companies who provide a private service, which could never be considered a tax

The 2015 penalty is 2%, rising to 2.5% in 2016. Insurance mandated by government, and one that the user is not likely to ever use (due to huge deductibles that the average person making $40-50k can afford to pay out of savings), is effectively a tax.

control point says

Notwithstanding the fact that given he doesn't have the money to buy gasoline as shown above, California has the 3rd highest gasoline tax rate in the country at 63.8 cents per gallon. The average driver drives 13,500 miles per year, and the average fuel economy for a 10 year old passenger car according to DOT table 4-23 is 30 MPG. So that means average driver driving average 10 year old car is buying about 450 gallons of gasoline per year. That is $287 per year in gasoline taxes, or .6% of income.

The average person will go into debt to keep his car gassed up so he can go to work and buy food. 30mpg is perhaps high way rating when the car is new and fully warmed up. The actual consumption due to cold engine and being stuck in traffick is probably closer to 20mpg. The wealthier living close to SFBA probably drive less, whereas the person making only $40-50k can find $200k-$250k homes only in areas farther away from the city, therefore would have to drive more than average.

control point says

So even using your ridiculous double payroll tax AND silly property tax as renter arguments, we have 15% federal plus 15.3% payroll plus 6% state plus 1.5% obamacare plus .6% gasoline plus 6% property plus 3.5% sales = 47.9% of income going to taxes.

Still less than 50% of income, taking WORST case assumptions and accepting all of your ludicrous arguments for who actually pays property/employer payroll taxes.

In my original post, I said "close to 50%." I'm sure you are surprised to arrive at 47.9%. Frankly, I'm surprised myself to see 47.9% even with your ridiculously low 15% federal marginal rate as starting point, illegally low rate for Obamacare penalty (2% this year, and 2.5% next year, not 1.5%), unrealistically low gasoline tax and property tax. For anyone in the $40-50k that gets the 25% federal marginal rate, the overall marginal is well over 50%! That's actually higher than I even thought originally when I wrote "close to 50%"

I'm pretty surprised you decided to double down on stupid, but it is what it is. Maybe someone has hacked your account, but I'd think someone with a 141+ IQ wouldn't allow himself to make such a monumental math error by linearly adding tax burden on purchases, transportation, and housing that exceeded total after tax income by over 10%.

The personal insult is quite unnecessary. You are arriving at net cash flow negativity by conflating marginal tax rate and overall tax rate. In any case, many (if not most) households in the $40-50k range have been spending more than their income since 2008. The overall savings rate in the US has gone negative, and the $100k+ households are probably the ones far more likely to be still having positive savings. Consumer debt bankruptcy rates have been high as well. The average $40-50k household may well have to tag on additional tax for debt forgiven as income!

Let's not forget, this is Patnet, where we used to decry people using home equity loans to buy cars and boats; now they are just using home equity loans to pay kids' schools, grocery and utility bills. People spending more than their income should not be a surprise.

control point says

Really quick, who must pay the back taxes in each of the following scenarios:

1.) Your employer does not withhold nor pay your federal income taxes.

2.) Your employer does not pay the employer portion of FICA.

3.) Your landlord does not pay the property taxes on your apartment.

4.) Your vendor fails to pay sales tax or gasoline tax . . . Are you going to then tell us that you do not pay sales tax or gasoline tax?

See, the distinction you are seeking is meaningless.

Reality says

There are plenty tax foreclosed properties in Detroit proving the pointlessness of the point that you are trying to make. If rental income does not cover property tax, the landlords would simply walk away. That's how high property taxes kill neighborhoods.

No, they are actually proving my point. Landlords sell because THEY are responsible for the tax, not renters.Reality says

No, it is not a sunk cost. It is a business decision re-visited every quarter: whether it is worthwhile to run a business between the cost of property tax + maintenance + insurance vs. revenue of rent. When the net is negative and can not be expected to turn around, the business ceases to make business sense.

OK good--you agree it's a business cost then and NOT a tax on the customer?

Reality says

The company can choose to go out business if it can not cover "its part" out of the productivity of the employee. There is no Company Fairy either.

wtf are you talking about--try to stay on subject. The fact that you cannot refute any of my arguments but must change the subject to companies going out of business indicates you are giving up, huh?

control point says

I can do simple math, and by easily challenging 2 of your disingenuous assumptions, show how silly you are being. Even using average wages ($43k) for a single worker less the standard deduction and one personal exemption (and no other reductions to taxable income) puts 43k worker in the 15% bracket. Even in California, the highest tax state, with exemption and credit, this workers marginal tax bracket is 6%.

And even more--the original post was taxes paid, not marginal tax rates. Certainly reality knows that taxes paid are much less than marginal rate, even if his buddy indigenous doesn't.

Reality says

Whether the 2% was taken from the employee or "employer's contribution" would have made no difference. Both are cost of employment to the employer. The reduction was clearly passed onto the worker.

bwahahahahahaha. You're kidding, right? You think companies would have raised employee's checks out of the goodness of their hearts when their portion of the payroll tax was reduced? Talk about believing in the employer fairy. Have rising corporate profits taught you nothing?

@Tat

tatupu70 says

control point says

I can do simple math, and by easily challenging 2 of your disingenuous assumptions, show how silly you are being. Even using average wages ($43k) for a single worker less the standard deduction and one personal exemption (and no other reductions to taxable income) puts 43k worker in the 15% bracket. Even in California, the highest tax state, with exemption and credit, this workers marginal tax bracket is 6%.

And even more--the original post was taxes paid, not marginal tax rates. Certainly reality knows that taxes paid are much less than marginal rate, even if his buddy indigenous doesn't.

Marginal Tax Rate is what influences individual's decision to whether work more to earn more vs. leisure, which is not taxed.

tatupu70 says

Reality says

Whether the 2% was taken from the employee or "employer's contribution" would have made no difference. Both are cost of employment to the employer. The reduction was clearly passed onto the worker.

bwahahahahahaha. You're kidding, right? You think companies would have raised employee's checks out of the goodness of their hearts when their portion of the payroll tax was reduced? Talk about believing in the employer fairy. Have rising corporate profits taught you nothing?

That 2% was indeed passed onto the workers. In any case, how much of a tax cut would pass onto the workers has no relevance on describing what a tax rate is. A 25% income tax is a 25% income tax, even if abolishing it would only give the employee and the employer each 12.5%.

Another factor is that employers compete for employees which means they are going to pay as much as they can and still stay competitive.

Unless of course it is a government agency in which case they only hire the unemployable.

The reason the board of directors, politics aside, pay mega bucks to CEOs is competition for someone who is a rainmaker or perceived as a rainmaker.

Reality says

Marginal Tax Rate is what influences individual's decision to whether work more to earn more vs. leisure, which is not taxed.

Thanks--care to share any other completely irrelevant statements?

The original statement was % of taxes PAID--not marginal tax rate. You can distort, distract, and lie all you want, but you can't change the original statement.

Reality says

That 2% was indeed passed onto the workers. In any case, how much of a tax cut would pass onto the workers has no relevance on describing what a tax rate is. A 25% income tax is a 25% income tax, even if abolishing it would only give the employee and the employer each 12.5%.

It wasn't passed on to anyone. It wasn't taken out of the employee portion of the FICA tax.

indigenous says

Another factor is that employers compete for employees which means they are going to pay as much as they can and still stay competitive.

lol--you're kidding, right? You can't literally be this dense.

Employers pay the LEAST possible. Period.

tatupu70 says

Reality says

Marginal Tax Rate is what influences individual's decision to whether work more to earn more vs. leisure, which is not taxed.

Thanks--care to share any other completely irrelevant statements?

The original statement was % of taxes PAID--not marginal tax rate. You can distort, distract, and lie all you want, but you can't change the original statement.

% of tax PAID for each additional piece of work. That's how people decide whether to work more or not.

tatupu70 says

Reality says

That 2% was indeed passed onto the workers. In any case, how much of a tax cut would pass onto the workers has no relevance on describing what a tax rate is. A 25% income tax is a 25% income tax, even if abolishing it would only give the employee and the employer each 12.5%.

It wasn't passed on to anyone. It wasn't taken out of the employee portion of the FICA tax.

And what's left after the (reduced) tax was passed to the employee's paycheck.

In any case, it doesn't even matter, because tax rate by definition is the rate of what employer pays and what employee doesn't get.

tatupu70 says

indigenous says

Another factor is that employers compete for employees which means they are going to pay as much as they can and still stay competitive.

lol--you're kidding, right? You can't literally be this dense.

Employers pay the LEAST possible. Period.

Only if there is no competing employer. Perhaps in your case, there are no employer competing to hire you. That's why you are unemployed and paid nothing, which is indeed the LEAST possible. Period.

"Employers pay the LEAST possible. Period."

Tru Dat, it would be much cheaper to hire workers in Ethiopia to program this forum right?

Well no it wouldn't, Ethiopians don't know how to program.

The ratonal way to look at it is what is the unit cost for the product.

indigenous says

Tru Dat, it would be much cheaper to hire workers in Ethiopia to program this forum right?

Well no it wouldn't, Ethiopians don't know how to program.

The ratonal way to look at it is what is the unit cost for the product.

Since Ethiopians couldn't program this forum, it's not possible to pay them to do it. So, like I said--they pay the least POSSIBLE.

Reality says

% of tax PAID for each additional piece of work. That's how people decide whether to work more or not.

Great--why don't you start a new thread to talk about how marginal tax rates affect the economy and people's purchasing decisions. The question being discussed here is what % of the average person's income gets paid in taxes. Not marginal. Actual.

Reality says

And what's left after the (reduced) tax was passed to the employee's paycheck.

In any case, it doesn't even matter, because tax rate by definition is the rate of what employer pays and what employee doesn't get.

Whose definition is that?

Reality says

Only if there is no competing employer. Perhaps in your case, there are no employer competing to hire you. That's why you are unemployed and paid nothing, which is indeed the LEAST possible. Period

Wrong again--no matter how many employers there are, they will each pay the least amount possible.

Reality says

The 2015 penalty is 2%, rising to 2.5% in 2016.

Tripling down I see. Nice Mr. 141+. Just to illustrate how you are wrong again I'll address this one, and one other.

The 2015 penalty is 2%, you are correct. However when you are going to challenge a factual point with me, you'd better be sure. You didn't dig deep enough into it to understand that it is 2% of income above the minimum tax filing threshold. Which happens to be $10,300 in 2015. 43000-10300 = 32700. 2% of that is $654, just like I said. That also happens to be 1.5% of $43k income, just as I said.

Reality says

Consumer debt bankruptcy rates have been high as well. The average $40-50k household may well have to tag on additional tax for debt forgiven as income!

Sure, any debt forgiven, or personal gift, etc. that you mentioned are exactly that, INCOME. Which would increase the denominator, lowering the percentage of the (now higher) income paid in taxes. Seems you left that part out.

This is a waste of my time, you are so far over your head yet you dont even know it. I feel bad for you, I really do. You're wrong, you know it, and your ego won't let you admit it. Now you can sit around here all you want and act like you know something, but at least now I know beyond a shadow of a doubt you don't. Too bad I thought you were better than the others around here.