What do you think of the federal income tax (FICA)?

[Verisimilitude]

Was it intended to fund social programs like medical coverage, public schools, interstate highways, the military, and/or other social improvements?

Beyond the establishment of the IRS and it’s enforcment of collecting this tax do you feel morally obligated and morally satisfied to pay it each year knowing that it goes toward funding some evil (abortion and foreign dictators) even if it funds some supposed good?

Should it be increased, decreased or eliminated?

What do you think would happen if it was eliminated?

Personally I think it is an unnecessary evil. I question it’s intent and its legitimate ratification as the 16th Amendment in 1913. The fact that an Amendment was required to levy it means it was not intended to be at all. I am not against all taxes and tariffs, but I am against the income tax. I think more good would be realized with its elimination than any benefit promised by keeping it. If you don’t think so, why not?

 

[LCMS_No_More]

Was it intended to fund social programs like medical coverage, public schools, interstate highways, the military, and/or other social improvements?

Beyond the establishment of the IRS and it’s enforcment of collecting this tax do you feel morally obligated and morally satisfied to pay it each year knowing that it goes toward funding some evil (abortion and foreign dictators) even if it funds some supposed good?

Should it be increased, decreased or eliminated?

What do you think would happen if it was eliminated?

Personally I think it is an unnecessary evil. I question it’s intent and its legitimate ratification as the 16th Amendment in 1913. The fact that an Amendment was required to levy it means it was not intended to be at all. I am not against all taxes and tariffs, but I am against the income tax. I think more good would be realized with its elimination than any benefit promised by keeping it. If you don’t think so, why not?

First, FICA is the Federal Insurance Contributions Act. It’s how Social Security and Medicare are funded and is not an income tax. It’s a payroll tax. Different animals for different purposes.

As to the Federal Income Tax, I have no problem with it as long as it’s progressive in nature and taxes every kind of income the same way with some exceptions to encourage investment (i.e., income from labor and capital gains should be taxed equally unless a capital gain is actually reinvested).

 

[vern_humphrey]

The Federal Insurance Contributions Act (FICA) tax is not the income tax. It is a completely separate system of taxation.

I believe the FICA tax should be retained by the worker, in a Personal Savings Account to fund retirement.

I also believe, and have said many times, that we cannot talk intelligently about taxes until we talk about spending. When the government squanders the people’s money, no tax is fair. Find a way to limit wasteful spending and then I can give you an opinion on taxes.

 

[YADA]

FICA deals with social security taxes not federal income taxes … see this web site ssa.gov/mystatement/fica.htm

And many people have argued that the 16th Amendment [that created the federal income tax] is unconstitional … none of whom have been successful [despite claims] and many of whom have been jailed for tax fraud or failure to pay their taxes …

Not sure what you are arguing …

If you want to pay less taxes … stay away from liberal politics and do not vote for those who advocate government solutions to social problems …

And there is no “Social Security Lock Box” never was and never will be … it always has been a type of “pyramid scheme” … where todays income earnerspay todays recipients…

It fails when there are fewer persons paying in then are receiving benefits … from its beginnings there has always been social security funds diverted to the general funds with that money spent on a host of programs unrelated to “Social Security” payments …

Also note: Social Security payments were never meant to be a person’s sole retirement pllan … and yet that is exactly what it is for many retirees … and the implementation [a program to provide a “supplement” to retirement] was a noble idea … human nature being what it is … it quickly became much more … like college support for any child until age 23 [whether they receive passing grades, attend classes or do more than smoke pot at college], a reason not to save for retirement …

 

[vern_humphrey]

Also note: Social Security payments were never meant to be a person’s sole retirement pllan … and yet that is exactly what it is for many retirees … and the implementation [a program to provide a “supplement” to retirement] was a noble idea … human nature being what it is … it quickly became much more … like college support for any child until age 23 [whether they receive passing grades, attend classes or do more than smoke pot at college], a reason not to save for retirement …

Actually, since the total FICA tax is 15.3% of your income (including the “employer’s contribution” which is your money, you earned it) it ought to provide a full retrirement very nicely.

Let’s assume you make $5.00 an hour, or $800 a month. Fifteen point 3 percent of that is $122.40 a month. We will keep your pay at $5.00 in constant dollars for the next 40 years – thus over-compensating for inflation.

If you worked at that salary steadily from age 20 to age 65, and got 10% average return from your investments (which is one standard deviation below the average return for mutual funds in existance for more than 10 years), you’d have $1,280,000 at retirement. A couple would have about $2.5 million.

Imagine how much people who made $6.00 an hour would have!!

 

[RWMorris]

… Find a way to limit wasteful spending and then I can give you an opinion on taxes.

The only way to limit wasteful spending is to limit taxes and take away government’s ability to borrow.

 

[RWMorris]

…Imagine how much people who made $6.00 an hour would have!!

Man, I think I messed up somewhere along life’s highway!!

 

[vern_humphrey]

Man, I think I messed up somewhere along life’s highway!!

But you had the whole US government to help you mess up. They took the money you could have saved.

 

[rpp]

Actually, since the total FICA tax is 15.3% of your income (including the “employer’s contribution” which is your money, you earned it) it ought to provide a full retrirement very nicely.

Let’s assume you make $5.00 an hour, or $800 a month. Fifteen point 3 percent of that is $122.40 a month. We will keep your pay at $5.00 in constant dollars for the next 40 years – thus over-compensating for inflation.

If you worked at that salary steadily from age 20 to age 65, and got 10% average return from your investments (which is one standard deviation below the average return for mutual funds in existance for more than 10 years), you’d have $1,280,000 at retirement. A couple would have about $2.5 million.

Imagine how much people who made $6.00 an hour would have!!

Compound interest is so cool.

 

[Dale_M]

Imagine how much people who made $6.00 an hour would have!!

I won’t quibble with your math, but since FICA went into the federal government’s general revenues, that money kept income taxes lower than they would have been. Raiding Social Security is one of the great shames of the US Congress, but politically popular since it kept taxes down.

Assuming the federal government was deprived of the 15% FICA, it would have to increase its tax revenue by an equal amount.

 

[RWMorris]

But you had the whole US government to help you mess up. They took the money you could have saved.

Yeah, I probably helped build a bridge to nowhere (or worse).

I tend to think that there is an optimum tax rate; one that is low enough to not diminish personal ambition or individual liberty, but high enough to maintain a minimal national infrastructure (national defense, federal court system, interstate highway system, the State Dept, immigration). Everything else, I said everything else (education, energy, social security, health care, etc.) should belong to the states, local government, or the citizens. With that in mind, I see no reason for a federal income tax. Our federal government should be able to function very well, and maybe even frugally, on about 5% of our GDP. A quick calculation based on 2006 GDP results in a Federal Budget of roughly $625 Billion. Then again, our royalty (congressmen) might have to fly coach; what a bummer.

 

[Verisimilitude]

First, FICA is the Federal Insurance Contributions Act. It’s how Social Security and Medicare are funded and is not an income tax. It’s a payroll tax. Different animals for different purposes.

Ok. true.

As to the Federal Income Tax, I have no problem with it as long as it’s progressive in nature and taxes every kind of income the same way with some exceptions to encourage investment (i.e., income from labor and capital gains should be taxed equally unless a capital gain is actually reinvested).

Please define progressive. What if I didn’t want to invest it? Maybe I need to buy a tractor now and not a condo when I am 90?

The Federal Insurance Contributions Act (FICA) tax is not the income tax. It is a completely separate system of taxation.

Got it. Silly me.

I believe the FICA tax should be retained by the worker, in a Personal Savings Account to fund retirement.

I would support that, but still wonder why I should be mandated to use the federal government as my investor. As little as it is it is my money. I am happy to share it with those in need but the decision to give to a cause or not is mine to choose.

I also believe, and have said many times, that we cannot talk intelligently about taxes until we talk about spending. When the government squanders the people’s money, no tax is fair. Find a way to limit wasteful spending and then I can give you an opinion on taxes.

End the US military presence based in non-US territory i.e. Germany, Italy, Japan, UK, and Iraq to name a few in order to cut spending. The ‘peace dividend’ is not paying off and we don’t need to be there…anywhere but our own country with our military. Stop sending foreign aid to foreign countries/dictators in places like Pakistan, Egypt, and any nation on the Arabian peninsula in the WOT as an example. Stop giving money to our ‘friends’ like Mexico and many South/Central American nations to fight the WOD.

It isn’t only wasteful it gains us no goodwill.

FICA deals with social security taxes not federal income taxes … see this web site ssa.gov/mystatement/fica.htm

I confused them. My apologies to all for looking stupid. I was thinking of that joke when a kid gets his first paycheck and asks why some guy named FICA takes all his money. It just stuck.

And many people have argued that the 16th Amendment [that created the federal income tax] is unconstitional … none of whom have been successful [despite claims] and many of whom have been jailed for tax fraud or failure to pay their taxes …

I found this interesting.
thelawthatneverwas.com/new/home.asp

Not sure what you are arguing …

Anything and everything.

If you want to pay less taxes … stay away from liberal politics and do not vote for those who advocate government solutions to social problems …

Both DNC/RNC candidates advocate government solutions in some form or fashion as they have for decades. It’s not the tax as much as what it is spent on.

And there is no “Social Security Lock Box” never was and never will be … it always has been a type of “pyramid scheme” … where todays income earnerspay todays recipients… from its beginnings there has always been social security funds diverted to the general funds with that money spent on a host of programs unrelated to “Social Security” payments …

Good reason not to continue it.

Also note: Social Security payments were never meant to be a person’s sole retirement pllan … and yet that is exactly what it is for many retirees … and the implementation [a program to provide a “supplement” to retirement] was a noble idea … human nature being what it is … it quickly became much more … like college support for any child until age 23 [whether they receive passing grades, attend classes or do more than smoke pot at college], a reason not to save for retirement …

Good intentions…

 

[LCMS_No_More]

Please define progressive.

The rate changes in about three brackets depending on how much one makes. After a certain amount, say $1,000,000.00, a surcharge on any amount over and above said amount is taxed at a much higher rate.

This is the tax system that existed in this country for decades and the economy was strong as was the middle class.

What if I didn’t want to invest it? Maybe I need to buy a tractor now and not a condo when I am 90?

Savings is a form of investment.

 

[Verisimilitude]

The rate changes in about three brackets depending on how much one makes. After a certain amount, say $1,000,000.00, a surcharge on any amount over and above said amount is taxed at a much higher rate.

This is the tax system that existed in this country for decades and the economy was strong as was the middle class.

Ok. I don’t agree with progressive. What are you going to spend it on?

Savings is a form of investment.

I said i didn’t want to save it. I need to buy a tractor now.

 

[LCMS_No_More]

Ok. I don’t agree with progressive. What are you going to spend it on?

Services, roads, etc.

I said i didn’t want to save it. I need to buy a tractor now.

A tractor is an investment as well. You use it to…um…farm?

 

[YADA]

Actually, since the total FICA tax is 15.3% of your income (including the “employer’s contribution” which is your money, you earned it) it ought to provide a full retrirement very nicely.

Let’s assume you make $5.00 an hour, or $800 a month. Fifteen point 3 percent of that is $122.40 a month. We will keep your pay at $5.00 in constant dollars for the next 40 years – thus over-compensating for inflation.

If you worked at that salary steadily from age 20 to age 65, and got 10% average return from your investments (which is one standard deviation below the average return for mutual funds in existance for more than 10 years), you’d have $1,280,000 at retirement. A couple would have about $2.5 million.

Imagine how much people who made $6.00 an hour would have!!

I do not isagree with your math

But the government does not “invest” the money taken from you into an account for you … it takes the money to spend on whatever it wants and then pays the retirees with someone else’s money - thats the pyramid part of the scheme …

And the government [via municipal bonds and other government ‘investment’ vehicles like the US Savings Bonds] has never paid your 10% return … in fact - it is much less [just look at US Savings Bonds from 30 years ago and older] …

Your mutual funds are those that are in the private market place … though I am sure they are regulated in some manner … and not all mutual funds return a 10% rate … averages are just that averages … some higher and some lower …

And in there is the rub there is no equality of out comes … not even with social security … ever heard the phrase “Notch Baby”? It relates to scoial security recipients who received less compensation than those who retired earlier … something about an error that gave some individuals more than they really had coming … a correction of the mistake … then a rate increase for later recipients … that left a group of receivers who get less than those who came before and after - hence the term “Notch” … and they are an unhappy bunch

There will always be those who make more and those who make less …

 

[Verisimilitude]

Services, roads, etc.

What services? Roads are funded by a fuel tax and other local sources like tolls and city and state taxes. Schools and such are funded by property and use taxes/fees. Why tax my income at all?

A tractor is an investment as well. You use it to…um…farm?

Not according to the IRS it isn’t. No, I don’t like to have to borrow my neighbors. I moved and spread nearly 100 ton of gravel and about 45 cubic yards of mulch a few weeks ago. I have alot of big home projects. I usually do stuff by hand/shovel. What does it matter? It is my money.

 

[RWMorris]

Your mutual funds are those that are in the private market place … though I am sure they are regulated in some manner … and not all mutual funds return a 10% rate … averages are just that averages … some higher and some lower …

Actually, it is quite easy to earn the market average. There are many so called indexed funds that earn the market average. It is those who go for 15, 20%, and higher rates, and lose, that bring up the rear. And, of course those of us who depend on Social Security are still behind those “losers”.

 

[YADA]

I confused them. My apologies to all for looking stupid. I was thinking of that joke when a kid gets his first paycheck and asks why some guy named FICA takes all his money. It just stuck…

Yes, I have heard that joke, too

I found this interesting.
thelawthatneverwas.com/new/home.asp …

It may be interesting but … I would not stop paying taxes based upon this … I have seen many similar claims through the years …And I don’t know anyone who has ever prevailed and not had to pay taxes …

Anything and everything.

I like a good discussion about taxes and government, too

Both DNC/RNC candidates advocate government solutions in some form or fashion as they have for decades. It’s not the tax as much as what it is spent on. …

Sure both do - and I never identified any party affilliation … it is the policies that advocate government solutions to every problem I was addressing … I do not think that government is the best solution to mcuh of the social ills and IMHO, government policies cause more harm …

The idea that most problems can be solved by sending money to Washington and then be filtered back to Hometown USA to get the job done is fool hardy…

Common sense would tell you that if people are hungry in Hometown USA … then you don’t need to send taxes from Hometown USA to Washington DC and back to get the job done … a dollar cannot pass through the bureaurcracy and come back whole … Unless you think that someone else will pay and you won’t … and that is called “Income Redistribution” …

Good intentions…

The Road to H___ is paved with these …

 

[LCMS_No_More]

What services? Roads are funded by a fuel tax and other local sources like tolls and city and state taxes. Schools and such are funded by property and use taxes/fees. Why tax my income at all?

How about the military? Oh, and let’s not forget corporate welfare?

Seriously…you may not like it (I’m getting an anti-public services vibe from your posts), but there are laws on the books requiring things like safe and healthy workplaces, people actually, oh, I dunno, get PAID for their work in a form that can be converted to cash and on a regular basis. Now, perhaps you think that it’s acceptable for construction projects to have a “standard of 1 or 2 deaths per project” or people to be paid in scrip that can only be used to buy things at the company store, I dunno, but the rest of the country does not.

Taxation is the price for living in society.

Not according to the IRS it isn’t. No, I don’t like to have to borrow my neighbors. I moved and spread nearly 100 ton of gravel and about 45 cubic yards of mulch a few weeks ago. I have alot of big home projects. I usually do stuff by hand/shovel. What does it matter? It is my money.

Then your capital gains that are not reinvested are taxed at the full rate. Sorry.

Maybe you should have started out saying that you hate taxation. Then I would have just not responded. Some ideologies are nearly impossible to speak to and one based on an absolute hatred of government, public services and taxation is one of them.