Income tax: Ever calculated how wealthy you'd be without it?

[oyarde]

In answer to the original question , I would easily have accumulated enough wealth to not work my regular job anymore , which , dang sure would have been nice !

 

[Zippyjuan]

The catch is that people seem to be assuming that they would be doing something different with their money than they currently do. If you never had to pay income taxes you would be allocating your money in the same percentges as you currently do- buying things, saving, investing. If you haven't saved a ton of money already, you would not have saved a ton more if you never paid any taxes (and again, about half of all income tax filers don't pay any income tax already anyways. Unless your income level is very high, you woldn't have earned much money than you have already. Unless, as Melissa points out, you were given back all of the income tax dollars you have already paid on one fell swoop. Then and only then would you have much more of anything than you currently do.

 

[idiom]

Have you ever calculated how wealthy you would be without federal deficit spending?

 

[oyarde]

Have you ever calculated how wealthy you would be without federal deficit spending?

Think about oil , then gas prices ...

 

[MelissaWV]

It's not really about how wealthy you'd be.

It's about how much smaller Government would be.

 

[Liberty74]

If you - a $12 hour earner today - take your payroll tax of 7.65% and invest it each month at 20 until age 70 or about $160 a month, you will retire with over $5 million assuming a 10% yearly gain which is doable over 50 years. That number occurs without you increasing that $160 and even with the ups and down of the market. If you only get half the return, it's still not a bad number to retire on. But the later you start investing in life the harder it becomes to make a sufficient amount to retire.

So in general, yes, I would be wealthy. I would also own the asset unlike now with SS. If you make it to that age, you get thrown on a fixed income that doesn't even pay the basic bills. And if you die before retirement, the govt simply says sorry about your luck. Isn't it Pesoli wonderful?

Side Note: I don't have kids or any mortgage deduction so the income tax definitely hurts me because I actually pay it and never receive a refund or welfare check like most families with kids.

 

[Kluge]

If you - a $12 hour earner today - take your payroll tax of 7.65% and invest it each month at 20 until age 70 or about $160 a month, you will retire with over $5 million assuming a 10% yearly gain which is doable over 50 years. That number occurs without you increasing that $160 and even with the ups and down of the market. If you only get half the return, it's still not a bad number to retire on. But the later you start investing in life the harder it becomes to make a sufficient amount to retire.

So in general, yes, I would be wealthy. I would also own the asset unlike now with SS. If you make it to that age, you get thrown on a fixed income that doesn't even pay the basic bills. And if you die before retirement, the govt simply says sorry about your luck. Isn't it Pesoli wonderful?

Side Note: I don't have kids or any mortgage deduction so the income tax definitely hurts me because I actually pay it and never receive a refund or welfare check like most families with kids.

That's the sort of information I was interested in. Thanks.

 

[Weston White]

why use 4%? Where do you get a 4% guaranteed return? But forget that, so you came up with an impressive $30K after 40 years. Congratulations, you get a new car after 40 years. Or do you? Will the car cost the same if you had an extra $30K?

Personally, I am done with your idiotic posts and until further notice, I will no longer be responding to them. Please, do yourself a favor and use your brain-power to think on your own, at least give it a go every now and then.


And to Zippy, deductions, exemptions, credits, etc., are entirely another issue all on their own, varying entirely from one person onto the next. Deductions and the like, are designated really to serve as candy for the babes, thereby propagating the whole of the income tax scheme as its sort of virtual enabler.

Those sums were intended to serve as a basic example of what really is; however for a bit more clarification: Filing as single for TY-2011 while earning $52,000-$9,500=$42,500; for which the taxable portion is $6,756, equaling 12.99% of the originating $52,000. Clearly, a bit larger than the above mentioned 5%.

 

[furface]

The biggest cost to the individual of the income tax isn't the nominal amount that individuals pay for the tax. It's the problems associated with compliance, the invasion of privacy, the fact that it rewards cheats like Romney, the fact that despite claims to the contrary it is massively regressive, rewarding the wealthy and penalizing the middle class.

 

[Zippyjuan]

Personally, I am done with your idiotic posts and until further notice, I will no longer be responding to them. Please, do yourself a favor and use your brain-power to think on your own, at least give it a go every now and then.


And to Zippy, deductions, exemptions, credits, etc., are entirely another issue all on their own, varying entirely from one person onto the next. Deductions and the like, are designated really to serve as candy for the babes, thereby propagating the whole of the income tax scheme as its sort of virtual enabler.

Those sums were intended to serve as a basic example of what really is; however for a bit more clarification: Filing as single for TY-2011 while earning $52,000-$9,500=$42,500; for which the taxable portion is $6,756, equaling 12.99% of the originating $52,000. Clearly, a bit larger than the above mentioned 5%.

The average tax rate is critical since that determines just what you are really paying in income taxes - and thus would have if the income tax did not exist. Let's try a tax calculator- I used this one here- http://www.calcxml.com/calculators/...9E1DFC5BC18217E3DC4418904FADD?skn=#calcoutput and used only the standard deduction. For a family of two filing jointly, the estimated tax liability came out to be $$4,005 or 7.7%. For single, one exemption it came back with $6,592 or yes, over 12%. $52,000 is above the figure posted for incomes of "below $50,000". For income levels of $50,000 to $74,000 it indicates an average tax rate of 7%. Our 12% assumes no deductions taken so that would be the maximum paid by somebody in that bracket- others will have more dedictions reducing the average.

If you - a $12 hour earner today - take your payroll tax of 7.65% and invest it each month at 20 until age 70 or about $160 a month, you will retire with over $5 million assuming a 10% yearly gain which is doable over 50 years. That number occurs without you increasing that $160 and even with the ups and down of the market. If you only get half the return, it's still not a bad number to retire on. But the later you start investing in life the harder it becomes to make a sufficient amount to retire.

So in general, yes, I would be wealthy. I would also own the asset unlike now with SS. If you make it to that age, you get thrown on a fixed income that doesn't even pay the basic bills. And if you die before retirement, the govt simply says sorry about your luck. Isn't it Pesoli wonderful?

So are you investing at that rate? (that percent of your income every month- I highly doubt you can find something consistantly yielding 10% for an investment though).

 

[Liberty74]

That's the sort of information I was interested in. Thanks.

It must also be noted that prices of goods and services that people buy are 17 to 23% HIGHER (depending on the study) because of the income tax system. So imagine if you were able to keep 10% or 20% more of your income if you were able to opt out of SS/Medicare and not pay the payroll tax AND imagine prices being somewhat cheaper making living more affordable. It would be up to the individual to build wealth. I sure would be able to save for a big down payment on a house/condo reducing my interest payments (wealth destruction) and/or save for retirement. I would be able to not have to use a credit card for emergencies or when booking vacation hotels because I would be able to afford it upfront.

The income tax system also includes an interest mortgage deduction which every homeowner loves yet has proven to really benefit the top income earners. However, this deduction drives the cost of homes up by 20%. Your monthly payment becomes higher and your interest becomes a lot more. Both destroy your ability to create wealth.

 

[oyarde]

The average tax rate is critical since that determines just what you are really paying in income taxes - and thus would have if the income tax did not exist. Let's try a tax calculator- I used this one here- http://www.calcxml.com/calculators/...9E1DFC5BC18217E3DC4418904FADD?skn=#calcoutput and used only the standard deduction. For a family of two filing jointly, the estimated tax liability came out to be $$4,005 or 7.7%. For single, one exemption it came back with $6,592 or yes, over 12%. $52,000 is above the figure posted for incomes of "below $50,000". For income levels of $50,000 to $74,000 it indicates an average tax rate of 7%. Our 12% assumes no deductions taken so that would be the maximum paid by somebody in that bracket- others will have more dedictions reducing the average.



So are you investing at that rate? (that percent of your income every month- I highly doubt you can find something consistantly yielding 10% for an investment though).

I think I could have up to 2007 ... I think. I still will going forward ... it will just be a bit irregular ...

 

[Zippyjuan]

Could have. Seems to support my theory that unless people are already saving money, if you never had the income tax they would somehow be saving money now. They wouldn't and so would not be in any better position today. But keep putting some away. Don't give up on that.

It must also be noted that prices of goods and services that people buy are 17 to 23% HIGHER (depending on the study) because of the income tax system. So imagine if you were able to keep 10% or 20% more of your income if you were able to opt out of SS/Medicare and not pay the payroll tax AND imagine prices being somewhat cheaper making living more affordable. It would be up to the individual to build wealth. I sure would be able to save for a big down payment on a house/condo reducing my interest payments (wealth destruction) and/or save for retirement. I would be able to not have to use a credit card for emergencies or when booking vacation hotels because I would be able to afford it upfront.

If the money was being spent by people and not by the government, it would still be getting spent- and those dollars competing for goods would still drive up the prices of things you buy. If you give people more money to spend, it won't make things somehow cheaper.

 

[osan]

The catch is that people seem to be assuming that they would be doing something different with their money than they currently do. If you never had to pay income taxes you would be allocating your money in the same percentges as you currently do- buying things, saving, investing. If you haven't saved a ton of money already, you would not have saved a ton more if you never paid any taxes (and again, about half of all income tax filers don't pay any income tax already anyways. Unless your income level is very high, you woldn't have earned much money than you have already. Unless, as Melissa points out, you were given back all of the income tax dollars you have already paid on one fell swoop. Then and only then would you have much more of anything than you currently do.

I cannot speak for anyone else, but in my case you are dead wrong. Had I not felt a need to deny the tax man his loot, I would have proceeded VERY differently in terms of my personal and professional finances.

 

[Zippyjuan]

I cannot speak for anyone else, but in my case you are dead wrong. Had I not felt a need to deny the tax man his loot, I would have proceeded VERY differently in terms of my personal and professional finances.

I think I would agree with you about the details but in general terms would disagree. Let me explain. In my own situation (the only one I can truely comment on) I have purchased a home. That offered me a tax reduction of a portion of the interest I was paying. But for me, I would have bought a home anyways. I will use the tax benefit but that was not the (or even part of the) reason for buying it.

I also have an IRA. Without the tax benefit, I would probably not have one. This is where I would agree with you. BUT... I would have still invested into something- just not this particular tool. I would still have invested the money. If a person is not a saver or investor with their money already, there is no reason to think that they would have somehow saved more money if they did not have any income taxes to pay. I suspect that you too would have still made investments- just possibly different ones. No- I cannot speak for you- only you can.

 

[Steven Douglas]

If a person is not a saver or investor with their money already, there is no reason to think that they would have somehow saved more money if they did not have any income taxes to pay.

The problem with that observation is that it sounds like you're saying, in effect, "Many would have wasted/spent it on the usual shit anyway, so what's the difference?", which I suppose is in response to the "how wealthy would you be without paying it" question of the OP. I think that the assumption here is that "wealthier" automatically equates to "saved more money", or has an enlarged estate, on net. As you said, only individuals can answer and speak for themselves, but let's stipulate that at least one person would do exactly as you said.

For those who actually did pay taxes (did not get it back, no zero-sum game), but would have squandered the extra non-confiscated income not paid in taxes, I think it can be argued that whether or not they would have been wealthier on net (have more on their balance sheet to show for it in the end) is irrelevant. Having more wealth to spend, even if on consumables, perishables, or intangibles, like education, vacations or experiences, counts as another kind of wealth altogether. Just as importantly, the market hasn't been distorted by stealing economic votes from others (broken window fallacy), who would certainly have allocated their funds differently than the state. That's not a six of one, half dozen of the other equivocation, where we ask, "What's the difference if the government squanders it or they do, because it's gone either way." It's a no-brainer if someone is given a choice between taking their kids on an extra trip to Disneyland, or sending a group of government employees anywhere else in the world for the same amount instead.

As for those who we say did not pay taxes, on net, due to their 'refund' they got in the end, that is not a zero-sum game at all; not unless the state is offering to pay interest for that loan, as those people DID pay taxes when they lost the use of their ever-depreciating currency for any amount of time.

 

[Weston White]

I find many of the above assertions misleading, for the following:

1. Values in precious metals reciprocate monetary inflation; ergo, investing in such tangible commodities (as opposed to income taxation), in the long-term, is truly wiser option.
2. Up until a few years ago banks commonly offered high yielding termed interest bearing accounts, e.g., 18% fixed for 18-months on deposits totaling at least $25,000.
3. Due to the present misapplication of the federal income tax, it effects a double whammy loss, taxing you at both the front-end and the back-end, while also in the short-term as well as the long-term, i.e., (1) what you take in is seized before you even realize it; (2) whatever remains is taxed moreover (regardless of what you do with it, be it to save it, spend it, lose it, donate or gift it, etc.); (3) whatever is removed from liabilities of taxation at the time due to deferment is still to be taxed upon receipt; (4) the loss incurred from the initial seizure as by the above (1), renders that individual less than whole, while obligating them to otherwise capitulate through lines of private loans and credit in order to compensate for that sustained loss, which then subjugates them into what amounts to a method of unyielding private taxation due to accruing interest rates; and (5) the ultimate “endgame” result of this entire process is that it serves to strip away the individual’s right to arrange for their own financial affairs, while also perpetually demeaning them and converting their liquidity to the benefit of others, and instead relegates those powers to the government and to whatever private entities that are favored by the government at the time.
4. Regardless, as to state that in any case, such a tax upon individuals is blatantly unconstitutional.

 

[Weston White]

The problem with that observation is that it sounds like you're saying, in effect, "Many would have wasted/spent it on the usual shit anyway, so what's the difference?", which I suppose is in response to the "how wealthy would you be without paying it" question of the OP. I think that the assumption here is that "wealthier" automatically equates to "saved more money", or has an enlarged estate, on net. As you said, only individuals can answer and speak for themselves, but let's stipulate that at least one person would do exactly as you said.

For those who actually did pay taxes (did not get it back, no zero-sum game), but would have squandered the extra non-confiscated income not paid in taxes, I think it can be argued that whether or not they would have been wealthier on net (have more on their balance sheet to show for it in the end) is irrelevant. Having more wealth to spend, even if on consumables, perishables, or intangibles, like education, vacations or experiences, counts as another kind of wealth altogether. Just as importantly, the market hasn't been distorted by stealing economic votes from others (broken window fallacy), who would certainly have allocated their funds differently than the state. That's not a six of one, half dozen of the other equivocation, where we ask, "What's the difference if the government squanders it or they do, because it's gone either way." It's a no-brainer if someone is given a choice between taking their kids on an extra trip to Disneyland, or sending a group of government employees anywhere else in the world for the same amount instead.

As for those who we say did not pay taxes, on net, due to their 'refund' they got in the end, that is not a zero-sum game at all; not unless the state is offering to pay interest for that loan, as those people DID pay taxes when they lost the use of their ever-depreciating currency for any amount of time.

This I think sums the issue up very well. Also to note, that is exactly how the federal income tax withholding scheme, i.e., stoppage at the source, was marketed during legislative committee meetings, as a "forced loan".

 

[oyarde]

Reminds me of a post card I sent my Uncle in Pheonix , something to the effect that I spent most of my money on beer and women , the rest I just wasted

 

[helmuth_hubener]

Without the income tax, and the rest of gov't wealth consumption/destruction, we would be a lot wealthier. A *LOT* wealthier.

To put it in everyday, more practical terms: half of everything we make -- to be precise, 47% or our income -- is taken from us in the form of income taxes, sales taxes, property taxes, and so forth. To add insult to injury, half of what we spend evaporates the same way, not spent on the quantity or quality of the goods and services we think we're paying for, but wasted on corporate taxes, inventory taxes, and that sort of thing.

What's even worse, according to economist Arthur Laffer, the burden of complying with socialist regulations doubles the price of everything again, so that we're spending eight times as much as we should need to, to acquire life's necessities and luxuries. Every day, we run on one eighth of our real capacity, while right-wing and left-wing socialists greedily gobble up the remaining seven eighths of our substance, not to mention our opportunities, our futures, and our children's futures.

To get the merest glimmering of what it would be like were that not so, in a tax-free, regulation-free civilization, without changing anything else, we would immediately have eight times the real wealth that we presently enjoy. In the most direct of terms, this means that the Rocky Mountain News I used, in part, to write this speech would have cost me 4 cents instead of 35 cents (6 cents "in designated areas" instead of 50 cents), or for the same 4 cents I could have bought a package of Jell-o or a can of Bush's Baked beans -- he may have been a lousy President, but his beans are terrific.

I could have had a Klondike bar for 6 cents, two liters of Coke to wash it down for 11 cents, 32 ounces of Gatorade for 12 cents, two rolls of paper towels to tidy up (I'm a messy eater, what can I say?) for 13 cents, and almond cookies for dessert, eighteen for 16 cents.

In a tax-free, regulation-free civilization, a Budget Gourmet dinner costs 19 cents, Eggo waffles are 22 cents a box, hamburger is 23 cents a pound, and bacon is 24 cents. Coke products -- a 12-pack is 35 cents, Tyson boneless chicken is 36 cents, a 64-ounce carton of orange juice is 36 cents, Oscar Mayer wieners are two packages for 38 cents, and top sirloin steak is 49 cents a pound. Tylenol caplets are 24 for 55 cents.

A little more generally, in a tax-free, regulation-free civilization, an electronic telephone beeper will cost you 62 cents, a disposable 35mm camera, 75 cents, .45 automatic ammunition is $1.28 per box. Disposable diapers are 72 for $1.49, just like the latest CD album. Unlimited internet access is $1.50 a month, the latest VHS cassette [this was written in the 90s] is $1.87, and a pair of mink earmuffs are on sale today at Dick Kaye's for $1.88.

In a tax-free, regulation-free civilization, ski lift tickets are $2.63, golf shoes are $3.63 a pair, cell phone service is $3.74 a month. A four drawer chest from American Furniture goes for $4.75, orchestra tickets to Miss Saigon for $5 (front balcony seats are $2.50) and a glass-top dinette, 5 pieces, costs $12.38. A white metal daybed and mattress are $17.38, a round-trip ticket from Denver to Mazatlan is $18.63, and a complete set of golf clubs (to go with those shoes) is $22.38. A Remington Model 870 shotgun is $27.48, a "traditional" sofa goes for the very untraditional price of $36, and a Glock 21 9mm pistol is $53.74.

In a tax-free, regulation-free civilization, a 133 mhz Pentium w/color monitor, 1.6 Gbyte hard-drive and 6X CD ROM will cost you $299, a '96 Neon, $1112.25, and a '96 Plymouth Voyager is $2111. The average American home goes for $12,500, and that Winnebago -- a 37' '96 "Luxor" you thought you could never afford -- will set you back $19,862. (I had no idea those things were so expensive!)

Some items, in a tax-free, regulation-free civilization, beer, for example, or whiskey or cigarettes, are harder to calculate because of the excise taxes levied against them. For Japanese cars, for example, you'd have to subtract an average of $4000 import duty before dividing what's left over by eight. I think gasoline would cost about 11 cents a gallon, in a tax-free, regulation-free civilization.

Another way to look at this is to take your present income, multiply it by eight, and think about the lifestyle that would make possible. (Within the constraints of an action-adventure plot, I tried doing this in 1979 with my first novel, The Probability Broach and will make rather more of it in 1999 with The American Zone. ) If you earn, say, $20,124, which is what the average Coloradoan makes, that will give you the real-wealth equivalent of $160,992 to spend every year. If you make $35,306, which is what the average federal bureaucrat in Colorado makes, think about an equivalent income of $282,448. I have friends who make about half that, and (at least from the viewpoint of an impecunious novelist) in terms of their houses, their cars, vacations, and other everyday concerns, they might as well live on another planet.

I'd like to try living on that planet, myself. How would you like to make more than a quarter of a million dollars a year? How would you like to live in a civilization where everybody does, and as a result, splendid new things happen every day, and nobody can predict what wonders tomorrow will bring? Space elevators, nerve and limb regeneration, a cure for cancer, a transatlantic tunnel (hurrah!), anything. The possibilities are absolutely endless.

This is not speculation.

This is not wishful thinking.

This is not fantasy.

It is an absolute, pragmatic certainty, securely rooted beyond the power of anybody's reasonable ability to doubt it, in the principles of individual liberty, the laws of economics, and the history of America's first 200 years.

From an article at http://www.ncc-1776.org/tle1996/le960509.html . Long-term, Smith's calculation underestimates the impact of the state significantly, because it's the growth trajectory that really counts, that really determines how wealthy a society is. Without the state engaging in the massive destruction of massive amounts of wealth and resources every single year, the economy might be growing, say, eight times faster than it was in the 1990s (right now of course, it's not growing at all). And that difference in growth rates compounds and compounds and compounds, until after 30 years we enjoy a living standard 100 times higher than that which we would have had if we hadn't scrapped the state. In 100 years the difference would be a factor of about 50 million.

So yeah, I would be a lot richer. The bum on the street would be a lot richer. We all would be dizzyingly, radically, empoweringly rich.