The Buffett Rule, 6/100ths of one percent.

[soonerwings]

I was significantly more specific than that. Please see my last post.

I was referring to your last post. It's the one where you Romneyed.

Income tax withholding is a payroll tax. Now on to those finer points.

Perfectly true. Income tax withholding is a PAYG payroll tax. FICA is plain old payroll tax.

There are many types of income taxes: Corporate, Individual, Payroll, Inheritance, etc.

See how in the first two quotes you are saying that income tax is a type of payroll tax but in the third one you're saying that payroll tax is a type of income tax?

 

[LightningCrash]

I was referring to your last post. It's the one where you Romneyed.

See how in the first two quotes you are saying that income tax is a type of payroll tax but in the third one you're saying that payroll tax is a type of income tax?

I referred to three different things there. Then you go on to add a fourth("income tax") that wasn't quoted.

 

[soonerwings]

I referred to three different things there. Then you go on to add a fourth("income tax") that wasn't quoted.

But it is there...I even bolded it in your quotes for easy identification.

 

[LightningCrash]

But it is there...I even bolded it in your quotes for easy identification.

I have been very specific in order to disambiguate the broad terms from the individual tax types of the US Tax Code. If you read again with that in mind, it should answer any questions you may have.

 

[mhphoto]

Most everyone with a legitimate job who's not self employed pays 7.65% rate on everything they earn. If they don't earn it, they don't get taxed. That kind of my definition of an "income" tax. There are, however, refundable tax credits that make that 7.65% turn into a profitable negative income tax.

 

[SoonerBolt]

The flaw in LightningCrash's logic is he's equating FICA to income tax. FICA is absolutely not an income tax just because it's a withholding from the paycheck.
FICA = Federal Insurance Contributions Act collections which goes straight to Social Security and Medicare.
This money goes directly to insurance programs that the worker should have the right to later...assuming they survive in some form. Most likely our tax dollars will have to bail out those programs at some point.

Income tax goes to the general budget is would have an impact on the balanced budget we're all hoping to see. 47% of the people who file tax returns pay nothing into that budget...Which was the point of this thread and the post LightningCrash replied to originally. Just over 20% actually make money from filing their tax returns over and above what they paid into the tax collection system. Of course a lot of people avoid the system completely and don't even file returns. They aren't included in that 47% that pay no income taxes.

Now, that said. If LightningCrash wanted to change up his argument he could have a point. All those people do indirectly pay income taxes. Any tax a corporation pay they build that tax into their product to make sure the sales cover all costs and provide an acceptable profit margin. So the 47% do pay income taxes indirectly when they buy food, clothes, iphones, whatever. Corporations don't pay taxes. In reality they collect taxes from their customers.

FICA is just not an income tax. It's a mandatory contribution to a retirement plan (lol) and old-age health insurance.

 

[soonerwings]

Now, that said. If LightningCrash wanted to change up his argument he could have a point. All those people do indirectly pay income taxes. Any tax a corporation pay they build that tax into their product to make sure the sales cover all costs and provide an acceptable profit margin. So the 47% do pay income taxes indirectly when they buy food, clothes, iphones, whatever. Corporations don't pay taxes. In reality they collect taxes from their customers.

FICA is just not an income tax. It's a mandatory contribution to a retirement plan (lol) and old-age health insurance.

This is a great argument for a retail sales tax (RST). The embedded taxes are eliminated and the 53% that directly pay income taxes now aren't getting hosed since everyone will have the same tax rate on consumption.

 

[mhphoto]

I understand the argument that FICA taxes aren't strictly income tax, but it seems that some people claim it's not just to be able to say people don't pay "income taxes".

But like I said, refundable tax credits make a big difference, even though FICA is paid.

 

[LightningCrash]

The flaw in LightningCrash's logic is he's equating FICA to income tax. FICA is absolutely not an income tax just because it's a withholding from the paycheck.

The flaw in your logic is claiming that I equated FICA to income tax. FICA is not our Income Tax, in the sense of the US Individual Income Tax, but FICA is an income tax nonetheless. When someone says "I paid income tax," they obviously refer to the former, but if they say "This is an income tax," they obviously are not referring to the former.

FICA = Federal Insurance Contributions Act collections which goes straight to Social Security and Medicare.
This money goes directly to insurance programs that the worker should have the right to later...assuming they survive in some form. Most likely our tax dollars will have to bail out those programs at some point.

Income tax goes to the general budget is would have an impact on the balanced budget we're all hoping to see. 47% of the people who file tax returns pay nothing into that budget...Which was the point of this thread and the post LightningCrash replied to originally. Just over 20% actually make money from filing their tax returns over and above what they paid into the tax collection system. Of course a lot of people avoid the system completely and don't even file returns. They aren't included in that 47% that pay no income taxes.

FICA is just not an income tax. It's a mandatory contribution to a retirement plan (lol) and old-age health insurance.

You appear to have a bit of misunderstanding about the functionality of FICA. FICA taxes collected go direct into general revenue as cash and other balance sheets are loaded with bonds for later redemption. The taxes collected with FICA contribute to the budget bottom-line for that year, and are a huge reason why we had an on-budget surplus in the 90s. It's a tax against the net income of persons, making it meet the definition of an income tax.

 

[soonerwings]

You appear to have a bit of misunderstanding about the functionality of FICA. FICA taxes collected go direct into general revenue as cash and other balance sheets are loaded with bonds for later redemption. The taxes collected with FICA contribute to the budget bottom-line for that year, and are a huge reason why we had an on-budget surplus in the 90s.

SSA.gov says that "The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

"Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no affect on the actual operations of the Trust Fund itself."