Prop 30: Southern California vs Texas

[UCGal]

[quote=ctr70]I just went on a tax calculation web site and compared what someone living in CA making $400k a year vs. someone making $40k pays in total taxes. The assumption for sake of discussion is single person:

$40k income
-$5,484 federal taxes
-$1,680 social security
-$576 Medicare
-$396 SDI
-$1,320 CA state income taxes
Total:$9,456 – 23% of income

$400k income
-$116,400 federal taxes
-$16,800 social security
-$5,796 medicare
-$3,996 SDI
-$40,608 CA state income taxes
Total:$183,600 – 46% of income

So the person making $400k pays 20 times more in taxes as a total dollar amount! And the liberals want them to pay more!!! $183,600 is not enough blood for the parasites! What would be fair if it was a flat tax and the person making $400k also paid a total of 23% out of their paycheck. They would still be contributing $92,000 vs. $9,456 for the person making $40k. Still 10 times as much!

I personally think the whole escalating tax brackets are total BS. It is basically a legal means for the lower income to steal from the higher income because they outnumber them in the electorate & will always vote for the candidate who taxes “the rich” more. The ONLY guy who EVER got it right was Steve Forbes with the flat tax plan. Why should a person making $400k have to pay out double the % of his income as a guy making $40k? There has never been a good reason for it. It is totally unjust and unfair and IMO a Governmental form of theft, a form of stealing. A much better plan is the RADICAL shrinking of the size and scope of Government and more frugality with tax dollars collected, so our citizens can keep more of their money & choose to spend it how they wish.

I do not want to live in a Euro-style quasi socialist society where the Gov takes 60% of my income and re-distributes it. I don’t want to live in a place with chronic high unemployment and stagnant economies with no decent jobs like Greece, Spain, Italy, France, Portugal, etc… I would rather personally choose how I spend my money.[/quote]

Your numbers for SS and medicare are off.
Assuming worst case (highest tax) – which is for someone self employed. Self employed folks pay both employer and employee side of SS payroll tax.

Your 40k earner would pay:
10.4% * $40k = $4760 SS tax.
Your 400k earner would pay:
10.4% * $106,800 = $11,107.20 SS tax.
(ss payroll taxes are capped at the first 106,800 of payroll income)

Medicare also seemed off.
Your 40k earner would pay
2.9% * 40k = $1160 medicare taxes
Your 400k earner would pay
2.9% * 400k = $11,600 medicare taxes

source: http://www.ssa.gov/pubs/10003.html#a0=0

If they are an employee – it will be less since the employer will pay a big percentage of the SS tax.

Medicare is a flat tax – so you can’t make any argument about the high earners being unfairly taxed. Flat is flat. 2.9% on all earned income.

SS is a regressive tax – higher earners pay a lesser overall percentage because only the first $106k is taxed… People making less than $106,800 pay the tax on their entire income.

[EconProf]

In response to Itsdd:

Your last line contradicts some of your other numbers. And we’d love to have that 7% or 5% growth in US GDP that you show.
I also googled Mexico GNP and got a confusing array of results, so what should be easy–determining Mexico’s GNP growth rate over the years is not easy. Nominal or inflation-adjusted? Per capita or total? Adjusted for PPP (purchasing power parity) with US dollar or not?
But by the fairest measurement, and by the most sources, it has been running about twice ours in recent years, about 4% vs. 2%.

[CA renter]

[quote=paramount]George Carlin: You have no Rights!

More Carlin for you, paramount. The Illusion of Choice:

[Veritas]

“Nothing terrifies investors or entrepreneurs as much as the concept of expropriation. When governments decide to expropriate legally obtained assets, entrepreneurs who worked tirelessly to build businesses and investors who risked scarce capital end up with little to nothing for their troubles.”

http://allthingsd.com/20121204/what-proposition-30-means-for-californias-entrepreneurs/

[SK in CV]

[quote=Veritas]”Nothing terrifies investors or entrepreneurs as much as the concept of expropriation. When governments decide to expropriate legally obtained assets, entrepreneurs who worked tirelessly to build businesses and investors who risked scarce capital end up with little to nothing for their troubles.”

http://allthingsd.com/20121204/what-proposition-30-means-for-californias-entrepreneurs/%5B/quote%5D

That might be the most hyperbolic silliness I have ever read.

[ctr70]

[/quote]
Your numbers for SS and medicare are off.
Assuming worst case (highest tax) – which is for someone self employed. Self employed folks pay both employer and employee side of SS payroll tax.

Your 40k earner would pay:
10.4% * $40k = $4760 SS tax.
Your 400k earner would pay:
10.4% * $106,800 = $11,107.20 SS tax.
(ss payroll taxes are capped at the first 106,800 of payroll income)

Medicare also seemed off.
Your 40k earner would pay
2.9% * 40k = $1160 medicare taxes
Your 400k earner would pay
2.9% * 400k = $11,600 medicare taxes

source: http://www.ssa.gov/pubs/10003.html#a0=0

If they are an employee – it will be less since the employer will pay a big percentage of the SS tax.

Medicare is a flat tax – so you can’t make any argument about the high earners being unfairly taxed. Flat is flat. 2.9% on all earned income.

SS is a regressive tax – higher earners pay a lesser overall percentage because only the first $106k is taxed… People making less than $106,800 pay the tax on their entire income.[/quote]

***************************************************
I got my numbers off this site directly:

http://www.paycheckcity.com/calculator/netpay/us/california/calculator.html

Regardless, people who make over $250k ALREADY pay way too much tax IMO as it is, and they shouldn’t have to pay more. They already pay WAY more then their share. The Fed and State Governments shouldn’t heap all the burden of our current debt & entitlement woes on this small group of financially successful people. If Obama raises the top bracket to 40% federal & you combine fed + state income taxes post prop 30, CA high income earners are going to be paying taxes close to European countries. And for all that tax we don’t get sh*t for services in the U.S. or Ghettofornia. At least in Europe you get something for being skinned alive by the Government.

Chuck Schumer one of the moderate democrats (and often voices of reason) in congress even said Obama should not consider $250k rich, he said it should be $1 millon+. Wow, someone with some common sense in congress!

[scaredyclassic]

chuck schumer spoke at my junior high school graduation in 1978. he was the assemblyman or whatever they were called for my little district. i still remember him. the parents loved him. he was good on the stage.

[ltsddd]

[quote=EconProf]In response to Itsdd:

Your last line contradicts some of your other numbers. And we’d love to have that 7% or 5% growth in US GDP that you show.
I also googled Mexico GNP and got a confusing array of results, so what should be easy–determining Mexico’s GNP growth rate over the years is not easy. Nominal or inflation-adjusted? Per capita or total? Adjusted for PPP (purchasing power parity) with US dollar or not?
But by the fairest measurement, and by the most sources, it has been running about twice ours in recent years, about 4% vs. 2%.[/quote]

My bad. The last line should look more like below:
YOY Growth (Mex vs US): 7.2% vs 5.2% & 5.5% vs 4.1%

After further examining the charts, I agree that since 2006 (except for 2009) Mexico has a better growth rate than that of the U.S.

That said, do you really believe what you have seen is enough for the migrants flow to reverse?

[CA renter]

[quote=ctr70]I got my numbers off this site directly:

http://www.paycheckcity.com/calculator/netpay/us/california/calculator.html

Regardless, people who make over $250k ALREADY pay way too much tax IMO as it is, and they shouldn’t have to pay more. They already pay WAY more then their share. The Fed and State Governments shouldn’t heap all the burden of our current debt & entitlement woes on this small group of financially successful people. If Obama raises the top bracket to 40% federal & you combine fed + state income taxes post prop 30, CA high income earners are going to be paying taxes close to European countries. And for all that tax we don’t get sh*t for services in the U.S. or Ghettofornia. At least in Europe you get something for being skinned alive by the Government.

Chuck Schumer one of the moderate democrats (and often voices of reason) in congress even said Obama should not consider $250k rich, he said it should be $1 millon+. Wow, someone with some common sense in congress![/quote]

How do you figure they pay “way more” than their share when compared to people who earn between ~$100K and $250K?

You do realize that we’re talking about *marginal* rates, right? Too many people seem to think that a “~39% tax rate” means that all of their income is taxed at that level. For most people who earn around $250K-$300K, they will not even notice the tax increase. How many people do you think earn that much? And of those who do earn that much, how much of it is earned income?

[CA renter]

[quote=EconProf]Amen Ctr70.
Reminds me of one definition confirmed by the recent election: majority rule democracy is when two wolves and a lamb vote on what to eat for lunch.[/quote]

Seems to me that the thousands of sheep got sick and tired of the small (but very powerful) pack of fat, rapacious wolves that have been decimating their herd…and they finally voted to do something about it.

[CA renter]

[quote=The Truth][quote=CA renter]
If you think that YOU are responsible for all of your success, try to duplicate it from scratch in a country with no taxes; let’s see how you do.[/quote]

Oh I get it… ‘I didn’t build that…’

What’s next, ‘From each according to his abilities…’?

And I am not advocating no taxes or a Somalia-like state. Using that as an example is hyperbolic, childish, and ignorant.

And I would do just fine in a county or era of lower/less confiscatory tax policy.

BTW, the ‘government’ doesn’t provide infrastructure; the ‘government’ didn’t build that. I did with my tax dollars, along with every other net producer and those that came before me; and no thanks to the net consumers.

[quote=CA renter]Additionally, people who make the most tend to receive a greater benefit, per capita, from the government.[/quote]

Bullshit. What’s your basis for that? It’s easy to just make garbage like that up.

[quote=CA renter] BTW, YOUR wages aren’t going to ME. I simply know that there is a cost — both to you and me — for living in a civilized, democratic society, and I’m more than willing to pay for it.[/quote]

If I’m paying a higher percentage of taxes, then my wages ARE going to YOU on a relative basis.

And you still didn’t answer my question? How much/what percentage of my wages do you consider your fair share?[/quote]

That’s right, you DIDN’T build that (and I was saying this long before Warren/Obama started saying it). Without all of the social, legal, physical, and military, etc. infrastructure provided by the government, it would be far, far more difficult to make money.

And yes, the government built the infrastructure, not you, and not other “taxpayers.” If not for the ability of the government to tax and use that money to build up the infrastructure, private individuals would not have built anything near what we have today. For the most part, private individuals use their money for things that can benefit themselves, and usually only focus on the short-medium term; they do not sacrifice for the greater good of society and will very rarely invest in things that will only pay off (for society, not for themselves) many decades into the future.

——-

As for the net, per capita benefit of govt services going to the rich vs the poor, I just stated above why that’s the case. Joe Sixpack, the lowly worker/welfare recipient, is not reaping nearly the same monetary benefit as someone who makes huge sums as a result of our military operations, infrastructure, intellectual property protection, well-regarded financial markets (because of our regulations, not in spite of them), etc.

If you doubt this, we can go through a list of the wealthiest people to see how they personally benefit from government-provided infrastructure, education, military/police protection, regulations, etc. I’m willing to bet that the vast majority of them would not be nearly as wealthy if they didn’t have the U.S. govt behind them.
————–

You’re also wrong about your taxes necessarily going to someone who pays a lower tax rate. You can have someone who pays a rather high tax rate (say 40%) and another who pays a much lower tax rate (say 10%), but the second person might be getting far fewer benefits, per dollar paid, than the one who pays the higher rate. You can pay a 10% rate (or whatever random lower rate), but use very few govt-provided goods and services. The person paying a 40% rate might be a much heavier burden on the govt.

It’s not necessarily true that the person paying higher taxes is subsidizing the poorer person; to the contrary, it’s entirely possible that the person paying a lower tax rate (and fewer total tax dollars) is subsidizing the person paying higher taxes if the person paying the higher rate is a heavier user of taxpayer-funded goods and services.

An entity/individual can pay high tax rates, but use govt services that exceed what they pay in taxes. Walmart, for instance, benefits greatly from our military operations because our navy guards the sea lanes that they use to transport almost all of their goods. The government also — directly or indirectly — provides, maintains, and protects the ports, roads, railways, etc. that Walmart relys on in their daily operations. The government also provides benefits for the Walmart employees who are paid so little that they have to rely on “welfare” in order to get by…all so that the owners and “shareholders” (some of the wealthiest people on the planet) can make more money. Who is really paying for their profits?

BTW, I’m willing to bet that my family pays an overall higher tax rate than most of the people who are complaining here.

[scaredyclassic]

it is impossible to know the true cost of anything.

Still, I am always on the lookout for a coupon.

[UCGal]

[quote=ctr70]
***************************************************
I got my numbers off this site directly:

http://www.paycheckcity.com/calculator/netpay/us/california/calculator.html

Regardless, people who make over $250k ALREADY pay way too much tax IMO as it is, and they shouldn’t have to pay more. They already pay WAY more then their share. The Fed and State Governments shouldn’t heap all the burden of our current debt & entitlement woes on this small group of financially successful people. If Obama raises the top bracket to 40% federal & you combine fed + state income taxes post prop 30, CA high income earners are going to be paying taxes close to European countries. And for all that tax we don’t get sh*t for services in the U.S. or Ghettofornia. At least in Europe you get something for being skinned alive by the Government.

Chuck Schumer one of the moderate democrats (and often voices of reason) in congress even said Obama should not consider $250k rich, he said it should be $1 millon+. Wow, someone with some common sense in congress![/quote]
That site is accurate (from what I can tell) on a per-paycheck basis – not on an annual basis, for SS. Once you hit the 106,800 annual income, they stop withholding.

It’s kind of like if you have large 401k percentages early in the year – then when you hit the cap you get bigger net paychecks. Same happens with SS taxes… once you hit the cap – they stop withholding and you get a bigger net paycheck.

It gets messier if you change employers – your new employer continues to withhold based on your earnings with them. So the income you earned earlier in the year, under a different employer doesn’t trigger a cap when you hit YOUR cap YTD… because the new employer doesn’t have your income info from the previous employer.
(this happened to me many years ago. – a much unexpected LARGE refund.)

As far as your link. I understand how you got your info… but I’ll trust the actual Social Security website over an online paycheck withholding calculator for what the rules are. And the rules are that the cap is for income up to $106,800 for 2012.

[Allan from Fallbrook]

[quote=CA renter][quote=EconProf]Amen Ctr70.
Reminds me of one definition confirmed by the recent election: majority rule democracy is when two wolves and a lamb vote on what to eat for lunch.[/quote]

Seems to me that the thousands of sheep got sick and tired of the small (but very powerful) pack of fat, rapacious wolves that have been decimating their herd…and they finally voted to do something about it.[/quote]

CAR: Except that a vote for Obama does nothing to change the status quo ante. You’ll recall that in 2008, Obama received the lion’s share of Wall Street donations (more than any presidential candidate in history, if I recall correctly) and since his election has done virtually nothing to hold those responsible for the financial meltdown accountable, let alone bring them to justice. If anything, things are largely the way they were before, in spite of Frank-Dodd and all of the promises to “clean up Wall Street”.

While Romney was not my cup of tea, he certainly wasn’t the mustache twirling plutocratic villain the Obama campaign made him out to be. If anything, the GOP and the Dems are aligned closely, fiscally-speaking. Yeah, there are differences on social issues, but when it comes to major policies on defense, spending, entitlements, etc, they’re more alike than different.

Wall Street is still pulling their shit, subprime is back (you didn’t think those inflated auto sales had anything to do with well qualified buyers, did you?) and it seems like everyone in power is hoping that the great mass of Americans will simply forget and move on, rather than demand action.

I don’t think this election represented some massive electoral movement from the populace, nor was it a collective call to action. People either don’t give a shit, are too ignorant to give a shit, or are simply looking to get over on Mommy Gubment and keep the gravy train rolling.

[SK in CV]

[quote=Allan from Fallbrook]
CAR: Except that a vote for Obama does nothing to change the status quo ante. You’ll recall that in 2008, Obama received the lion’s share of Wall Street donations (more than any presidential candidate in history, if I recall correctly) and since his election has done virtually nothing to hold those responsible for the financial meltdown accountable, let alone bring them to justice. If anything, things are largely the way they were before, in spite of Frank-Dodd and all of the promises to “clean up Wall Street”.

While Romney was not my cup of tea, he certainly wasn’t the mustache twirling plutocratic villain the Obama campaign made him out to be. If anything, the GOP and the Dems are aligned closely, fiscally-speaking. Yeah, there are differences on social issues, but when it comes to major policies on defense, spending, entitlements, etc, they’re more alike than different.

Wall Street is still pulling their shit, subprime is back (you didn’t think those inflated auto sales had anything to do with well qualified buyers, did you?) and it seems like everyone in power is hoping that the great mass of Americans will simply forget and move on, rather than demand action.

I don’t think this election represented some massive electoral movement from the populace, nor was it a collective call to action. People either don’t give a shit, are too ignorant to give a shit, or are simply looking to get over on Mommy Gubment and keep the gravy train rolling.[/quote]

Done nothing to change the status quo is an exaggeration. (or reverse exaggeration?) I haven’t checked lately, but I’m pretty sure wall street did a complete turn around on who they liked better this election. He hasn’t been near as tough on wall street as many hoped he would be. He’s been pretty much exactly who I thought he was in that regard, even though I had also hoped for more.

Dodd Frank, as minimal as it is, is something Wall Street doesn’t like. Those fuckers will whine about anything. I have little expectations of any improvement. But DF won’t be repealed, which is something Romney wanted.

[Author]

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