Forum Post: The Poor Pay the Highest Tax
Posted 12 years ago on Dec. 28, 2011, 8:45 p.m. EST by jrhirsch
(4714)
from Sun City, CA
This content is user submitted and not an official statement
Did you know that a loaf of bread that is supposedly tax free, has hidden in it's price every tax paid by the companies involved in it's manufacture, distribution, and sales. Corporate taxes, property taxes, payroll taxes, unemployment taxes, gasoline taxes, and many more are all ultimately passed down and paid by the customer. In addition to the flour and other ingredients, when a poor person buys that loaf of bread, he also pays for part of the CEO's salary, his company car, his bonus, his health insurance, his vacation, and his retirement. The rich man who buys that loaf of bread doesn't pay a penny more in taxes than the poor person does. A rich man pays tax from the excess of his wealth, the poor man pays tax out of the essential part of his. To think the poor don't pay their fair share of taxes based solely on income tax shows a complete lack of understanding. Both economically and on a human level as well.
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Couldn't agree more! I would also favor complete removal of all income tax, property tax, Etc. and have a single unified consumption tax paid by the end user. Basic necessities would be tax free which would create a built in progressive tax.
I agree with most of your comment, American tax on American corporations and companies including small businesses stationed in America should not be taxed, Illegal cigarette taxation should be banned along with sales tax, income tax, and a dramatic cut in county, state, and federal tax. A Higher tax on foreign corporations conducting business in the US need to apply.
For being a tobacco smoker I in fact pay the most tax. Just this year alone I've forked out $3,000 on cigarettes, since it's $8.00 tax hike per pack since it's $10.00s per pack and each pack without tax should cost $2.00. That's Government legislation for robbery to the American consumer
It makes sense. The fewer expenses American producers have, the lower their prices will be to keep up the competition. Unless some big conspiracy goes down, and all of the producers agree not to lower their prices so that they can all make more money.
I've never been one for conspiracy theories, though.
Excellent post! Thank you --
Another excellent post.
I'm a drunk - I pay more taxes than any of you. Please help me!!
So If you worked hard and became CEO of a large company with a little luck would you want to just give your money away to everyone else?
The richest 53% pay federal income taxes. Everyone else either does not pay or gets a refund. This post does not make sense at all.....
Taxes are a business expense. The end user pays all business expenses required to produce a product. Where does the business owner get the money to pay business taxes? From the buyer of his product.
I think what the poster is saying is that even though the rich pay corporate taxes, they simply raise the cost of their wares to cover those taxes, essentially pushing those taxes onto their customers rather than paying it themselves.
The government taxes the corporations, but the corporations pay their money by charging more. So basically, according to the poster, the consumers pay their income taxes and the corporate taxes.
The title of the post is a bit misleading if you don't read the post, though.
Truth
I don't think I've ever been "Truth'd" before. I feel kind of like I just won something.
Lol
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Not to mention all the think tanks, foundations and lobbyists.
Don't forget the $1,000, tax deductable "business" luncheons.
So if a poor person is subsidized by the government is he/she really paying any tax?
And if that person has a job and is still being subsidized by the government is he/she really paying any tax?
Where does the government money for "subsidizing individuals" come from?
If the working poor person is receiving food stamps, housing subsidies, medical, their net tax might be zero or even a net gain. Some poor benefit greatly, some not at all. The government money for "subsidizing individuals" comes from collected taxes from people of all economic levels.
It comes from those of us who DO PAY TAXES.
There you go, so a poor person doesn't pay any taxes from that perspective - right?
Well they don't pay income taxes. They are still subject to sales taxes.
So what if they are subject to sales taxes. The money was given to them so they could pay the sales tax - it didn't cost them anything as a matter of fact, they received a gain from the handout.
So, if they receive $300 a month from the government it doesn't cost them anything when they pay a sales tax.
True,very true.Thanks for giving me that perspective.
You're quite welcome. It's refreshing having a dialogue with people who disagree but can come to agreement in end the without personal attacks or name calling.
So, is there a range of income where a person isn't getting the money from the government, but is still paying for the corporate taxes through price raises?
Low income people are subsidized by the government - People can make up to $30,000 a year and still get a handout from the government.
In some instances their total income can be up to $60,000 inclusive of government handouts.
There are so many free government programs out it will make your head spin.
Really? I had no idea there were so many handouts.
At the risk of being accused of pursuing one, where could I find information like what you have about them?
Do a search for "federal grants" or low income tax credit. Also search for "energy credits" - the list goes on and on.
Here in Atlanta near the airport they are giving people who live there new low noise appliances, house insulation, double paine glass windows for free - another government handout because these people live near the airport.
Hud receives millions for low housing income people.
Yeah SteveKHR and most of these programs contribute to the middle class and working, very little is given to real poor families that need it, since welfare at least in my state is crazy with regulations.
http://www.pbs.org/newshour/rundown/2011/12/whats-a-top-marginal-tax-rate.html
What's a 'Top Marginal Tax Rate'?
By: Elizabeth Shell
This blog has been updated to clarify that the top table refers to single household incomes in 2012, and the interactive tax calculator below reflects 2010 data for most countries.
The amount taxpayers owe Uncle Sam every year depends on many factors, especially the amount of income they earn. The United States, along with many other countries, has what's known as a marginal tax rate system -- different levels of our income are taxed at different rates. There are only a handful of brackets folks can fall into. Those who pass certain income thresholds pay higher rates on the income ABOVE those thresholds.
The IRS has a surprisingly handy example. For 2012, unmarried individuals can generally expect their federal tax bill to look like this:
A Marginal Tax Bracket Example from the IRS.
Currently, the top rate is sitting at that 35 percent you see above. On Monday's NewsHour, we examine the history of what America's richest have paid over the years. Right now a debate is raging in Washington over exactly how much the wealthiest -- those earning enough to be at or above the top marginal tax rate -- should pay. President Obama would like to let the Bush-era tax cuts expire, thereby raising taxes on the top bracket to the 39.6 that prevailed under Presidents George H.W. Bush and Bill Clinton. Republicans have almost universally proposed keeping the top marginal income tax rate at 35 percent, if not lowering it.
The OECD compiles all sorts of tax data for its nearly three dozen member countries. We thought it would be interesting to see how an American income would be taxed at different countries' marginal tax rates. Simply enter an income and select a country from the list, and you'll see a breakdown of how your income would be taxed.
Keep in mind that our purpose here is to illustrate marginal tax rates, not to provide tax advice. Also, marginal tax brackets in the United States change as filing types change -- from single to married filing jointly, for example. This interactive neither takes into account state and local taxes, nor tax credits, such as for children and education. And Matthias Rumpf of the OECD office in Washington, D.C. adds a word about how these comparisons should be interpreted:
"In many countries, other things are included in these taxes. Universal health insurance, for example, is paid for by these taxes in the UK and Denmark, but that's not exactly the case in the U.S.," he told us.
If you find yourself surprised by the top rates taxpayers are asked to cough up, here's a preview of Monday's piece with some provocative bits from Columbia Law School Tax Professor Alex Raskolnikov.
Herbert Hoover presided over the largest tax increase in peace time history of the United States. For top earners the rate went up from 25 percent to 63 percent. But not everyone in top 1 percent was paying 63 percent. In fact after the Hoover tax increase, there was a very wide range in rates between people who just barely made the top 1 percent and people who were like Andrew Mellon, like really, really the richest Americans. The range was from 8 to 63 percent. So people who just made it into the top 1 percent were facing the 8 percent rate -- that was not particularly high. The wealthiest of the wealthy of the wealthy were facing 63 percent. And this is 1931!
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So what you are saying is if we increase taxes on corporations the taxes will just end up being paid by the poor because taxes are always passed on to the consumer? What a concept.
Yes. They will always be paid by the end user, rich and poor.
So when people are screeching to increase taxes on corporations they are showing themselves to be economic idiots?
Exactly.
So it would be comically idiotic to support and/or pass a "windfall profits" tax on the oil industry as there is no more direct pass through to the poor than that?
It depends on the windfall tax rate. If it was 100%, there would be no incentive to increase prices because any increase in profit would be completely taken. If it was 50% there would still be an incentive to pass on the tax, but transparent price increases, ones that are clearly visible as to their cause, are harder to pass on. Any money the government receives is only beneficial to an economy if it is spent more wisely than by the people it was taken from.
So how much out of a $4.00 loaf of bread is the hidden taxes?
Not sure exactly, but in the U.S., local, state, and federal government takes about 25% or more of all wealth produced. Some scandinavian countries take nearly 50%!
You are talking about potential taxes that are paid on top of the $4 price. I was asking how much of the $4 price already includes the taxes the original poster is talking about.
The shorter version of the Original Poster's response reads like this; "I don't know, but my best guess is that it hovers somewhere inside of 25%."
I am the original poster. The 25% (may actually be higher) amount is the total of taxes collected by local, state, and local governments from all forms of taxation. Sales tax, income tax, property tax, etc. In the case of a loaf of bread I couldn't say with certainty what portion of hidden tax it contains. On average though, goods and services carry a 25% tax, some of it hidden, some of it obvious. So a poor person actually pays a much higher tax rate than most would assume.
"So a poor person actually pays a much higher tax rate than most would assume." Based upon what? If you don't know how much of hidden taxes are in a loaf of bread, your entire premise is faulty.
Plus, some goods are cheaper than others. You can buy bread, for example, anywhere from $1.99 a loaf to over $5 a loaf. You have a choice.
A poor person is almost always guaranteed a tax refund at the end of the year, both state and federal. Whatever taxes that are paid during the year come back to them on April 15. Most middle class and upper class don't get a refund, I know i don't.
Some poor receive more in benefits than they pay in taxes, some break even, and some receive less in benefits than they pay in taxes. I don't know the exact amount of taxes a loaf of bread contains. Do you expect me to audit a bakery and every business associated with it's product to find out exactly the percentage they pay? But I do know that all business expenses are passed down. If they were not, the business would surely fail. Can you tell me what was the percentage of all taxes you paid last year? Income tax, sales tax, property tax, fuel tax, Etc. Did you pay any hidden taxes as well?
It makes sense, if it works like raising minimum wage does.
When I worked at DQ, last time they raised minimum wage, we had to put out a sign that said our prices had gone up to cover the cost of a higher minimum wage. Every expense is thrown into the price of the goods somewhere along the way, because who's going to give up some of their profit if they can find a way around it?
You got it!
Poor pay the highest tax!? Hell there shouldn't even be taxes, Why?
To pay for roads? That's what dirt is for.
Water? That's what a Lake is for.
Healthcare? Shit that's what a pharmacy is for.
Protection? That's what my shotgun is for.
When will people start realizing this is the 21st century, we the people don't need no Government.
I used to live about 15 minutes from Kentucky Lake. I can assure you that any one who drinks that water over a long period of time will greatly decrease their life span. And I have neither the money nor the knowledge to purify that mess alone.
If every one is in that area should be drinking from that lake, as you suggest, it only makes sense for every one in that area to pool their resources to make it drinkable, which is functionally the same as a tax, even if it's enforced/implemented differently.
Here is a bit of survival information for you. To purify drinking water of any kind a boiling process needs to occur. This means you take a bucket of water from a lake or well, you boil it on your stove than drink it without receiving the runs.
Simple science really, unfortunately the average American city pays out millions or billions of dollars a year to chemicalized reserve water. In fact my scenario is more healthier to drink boiled water from a lake or well than city tap water. It's been known that city tap water will give you cancer and your children autism.
Dude, if you boil Kentucky Lake water, you don't get boiled water. You get sludge stew.
Maybe it won't give you the runs by that point, but drinking it will be kind of like drinking Campbell's Chunky soup. At some point, you either chew or choke.
Granted, there may be better ways to purify water than chemical means.
I suggest you read survival topics and books laid out from military advisers from the 1950's a lot of How to Army instruction books have been released on sites like Amazon costing only a few dollars.
I believe there will be a big natural event happening in the next few years and it would be good to touch up on your survival level other than what the government tells you to do these days like stocking up on food and duct tap which is a laugh.
When I was 19 I left home and traveled I of course became homeless because of this, and at one point was stuck in a stagnant situation, in stead of depending on food banks and shelters in bad area's among the worst kind of people, I decided to take my chances outside the city in the wilderness of Los Angeles nature park where I lived for 4 months going into near by small towns looking for small work to collect up enough money to leave.
The first thing I did was make a well within a mile from a stream which I did not go to because of dangerous wildlife activity. I made it out of plastic tubing and a home made foot pump that I got the parts for from dumpster diving and hardware stores.
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