Political Forums  

Go Back   Defending The Truth Political Forum > Political Issues > Money and Finance > Economics


Reply
 
LinkBack Thread Tools Display Modes
Old October 15th, 2017, 08:16 PM   #1
Senior Member
 
Join Date: Oct 2009
Location: Cliffside Park, NJ
Posts: 429
FICA and SECA are our most regressive taxes.

FICA and SECA are our most regressive federal taxes.

The huge plurality of USA's poorest income earners are wage earners.
We all pay the taxes embedded within the prices we pay; but wage earners are the only individual persons upon which the FICA tax based upon payrolls is levied. Additionally individual's annual FICA taxes are capped; higher wage earners are taxed upon a lesser portion of their gross wages. FICA is in effect the most regressive of our federal taxes.

[FICA taxes are 15.3% of payrolls, equally paid by enterprises and their employees; 12.4% of payroll is earmarked for Social Security retirement, the remainder contributes to Medicare funding].

I'm a proponent of reducing the total FICA tax to effectively 6.2% and enacting a federal general sales tax of effectively 4.55%.

Due to sales transactions being a greater than payroll tax base, this would net increase tax revenues for funding Social Security and Medicare, and purchasing power of wages spent by employees and their dependents. The 4.55% reduction of taxes levied only upon wages and payrolls would enable USA products more (than would a similar effective reduction of corporate taxes) be price competitive to foreign products both within and beyond USA borders.

Social Security and Medicare are net reducers of poverty; they're net beneficial to our economy. All individuals rather than only employees should more fully contribute to funding those programs.

Respectfully, Supposn
Supposn is offline  
Old June 12th, 2018, 12:42 PM   #2
Senior Member
 
Join Date: Oct 2009
Location: Cliffside Park, NJ
Posts: 429
In post #41, within the thread, “ Sales taxes are not a regressive tax. ”, Right to Left questions why I propose reducing employer's FICA and SECA taxes upon payrolls. (He does not question why I propose those taxes should be equally reduced for both employers and employees.)

Beyond what the federal minimum wage or any other expenditures that an enterprise is legally required to pay, (such as the federal minimum wage rate), the distribution of their revenues is to their managements' discretions.
Enterprises directly and indirectly participate within competitive markets. They consider their prices within sales markets and their costs within their labor or other supply markets.

I suppose enterprise's “normal” expenditures are generally passed on to customers, but there can be limits to their ability to do so. Enterprises try to pay no more than the wages they consider as needed to recruit and retain their labor forces. If there was no corporate income tax, it would be much more difficult to enforce our taxes upon individuals personal incomes. It is for that, and only that reason, I'm opposed to eliminating corporate income taxes.
I suppose effectively the entire taxes levied upon employers that are based upon their payrolls, are actually passed on to the employers' customers. They behave effectively as a sales tax.

It would be politically much less feasible to reduce employees FICA taxes and not similarly reduce those taxes levied upon employers. Because half of the combined rate of payroll tax reduction is transferred as a sales tax, and employers reduce their taxable income for any kind of business expenses, and the remainder of their “normal” expenses are generally passed on to their customers, there's admittingly little net direct benefit to employees or to employers;
BUT tax revenues have been somewhat increased for funding Social Security and Medicare.
Employees are the greater beneficiaries of those programs; proportional to their incomes, the working-poor are the greatest beneficiaries of those programs.

Respectfully. Supposn
Supposn is offline  
Old June 12th, 2018, 12:44 PM   #3
RNG
Senior Member
 
RNG's Avatar
 
Join Date: Apr 2013
Location: Between everywhere
Posts: 30,201
No. Sales taxes unless they are applied to all transactions including all financial transactions are the most regressive.
RNG is offline  
Old June 12th, 2018, 05:33 PM   #4
Senior Member
 
Join Date: Oct 2009
Location: Cliffside Park, NJ
Posts: 429
Quote:
Originally Posted by RNG View Post
No. Sales taxes unless they are applied to all transactions including all financial transactions are the most regressive.
RNG, other than another sales tax, more regressive than what, and to whom? Respectfully, Supposn
Supposn is offline  
Old June 12th, 2018, 05:49 PM   #5
RNG
Senior Member
 
RNG's Avatar
 
Join Date: Apr 2013
Location: Between everywhere
Posts: 30,201
Quote:
Originally Posted by Supposn View Post
RNG, other than another sales tax, more regressive than what, and to whom? Respectfully, Supposn
I said most regressive so your question is nonsensical.
RNG is offline  
Old June 12th, 2018, 06:24 PM   #6
Senior Member
 
Join Date: Oct 2009
Location: Cliffside Park, NJ
Posts: 429
Quote:
Originally Posted by Supposn View Post
RNG, other than another sales tax, more regressive than what, and to whom? Respectfully, Supposn
Quote:
Originally Posted by RNG View Post
I said most regressive so your question is nonsensical.
RNG, No; you're evading a valid question.

Would a general sales tax be more regressive than our current federal taxes upon individuals' net incomes? If so, upon all individuals or some individuals, and which individuals?
Respectfully, Supposn
Supposn is offline  
Old June 12th, 2018, 06:41 PM   #7
RNG
Senior Member
 
RNG's Avatar
 
Join Date: Apr 2013
Location: Between everywhere
Posts: 30,201
Quote:
Originally Posted by Supposn View Post
RNG, No; you're evading a valid question.

Would a general sales tax be more regressive than our current federal taxes upon individuals' net incomes? If so, upon all individuals or some individuals, and which individuals?
Respectfully, Supposn
A sales tax on goods and services depending on how services are defined.

A sales tax on goods only definitely.

Let it be on all individuals. It is still regressive. A poor person pays X% on virtually his entire disposable income, a rich person pays X% on some miniscule fraction of his disposable income.
RNG is offline  
Old June 12th, 2018, 06:49 PM   #8
#freetommy
 
Sabcat's Avatar
 
Join Date: Dec 2013
Location: Earth
Posts: 26,993
Quote:
Originally Posted by RNG View Post
A sales tax on goods and services depending on how services are defined.

A sales tax on goods only definitely.

Let it be on all individuals. It is still regressive. A poor person pays X% on virtually his entire disposable income, a rich person pays X% on some miniscule fraction of his disposable income.
Remove necessities like unprepared food and clothing.
Sabcat is offline  
Old June 12th, 2018, 10:58 PM   #9
Senior Member
 
Join Date: Oct 2009
Location: Cliffside Park, NJ
Posts: 429
Quote:
Originally Posted by RNG View Post
A sales tax on goods and services depending on how services are defined.

A sales tax on goods only definitely...
Quote:
Originally Posted by Sabcat View Post
Remove necessities like unprepared food and clothing.
RNG and Sabcat, sales taxes purpose is not to punish the payer but to provide the tax revenue necessary for governing. If we don't tax services, well have to more than double the sales tax rate to harvest sufficient tax revenue. Furthermore, all bills will greatly exaggerate the prices of services and greatly diminish the prices of goods. This will further reduce tax revenues and is likely to create some other problems in our markets.

If a general sales tax is to accomplish the purpose of providing sufficient tax revenue then almost all general goods and services must be subject to the tax. The selection of items for which sales taxes are waived must be done judiciously. Sales tax rate must be increased to compensate for tax revenues lost due to waivers for selected goods or service products.

Sabcat, I agree with you regarding unprepared food. Waive the sales tax on food but not restaurant food. If we can't draft an effective regulation to waive the tax for places like McDonald's or hot-dog stands, so be it. It's preferable that those places should cost a few quarters or dollars more, rather than waiving the taxes for all restaurants and caterers.

For lower-income families, clothing is among their lesser expenses. Proportional to personal (rather than business) expenditures, clothing is a greater amount and proportion of wealthier families, rather than for lesser income families' spending. Sales taxes should not be waived for clothing.

Respectfully, Supposn
Supposn is offline  
Old June 12th, 2018, 11:07 PM   #10
Senior Member
 
Join Date: Oct 2009
Location: Cliffside Park, NJ
Posts: 429
RNG and Sabcat, we should consider waiving taxes on things that are a greater proportion of lower income families budgets. I suggest not collecting sales taxes on mass transportation trips of lesser numbers of miles; (i.e. commuter fares). Waive sales taxes for “capped” amounts of utility services that are delivered to a specific residence, and for residence's rent itself. Those caps should be annually adjusted to stay abreast with the changing purchasing power of the U.S. dollar. (We've been successfully retaining the purchasing power of Social Security retirement benefits by that method).

Respectfully, Supposn
Supposn is offline  
Reply

  Defending The Truth Political Forum > Political Issues > Money and Finance > Economics

Tags
fica, medicare, regressive, seca, social security, tax, taxes, working-poor



Thread Tools
Display Modes


Similar Threads
Thread Thread Starter Forum Replies Last Post
Regressive left coke Political Ideologies 16 June 16th, 2016 03:29 PM
regressive taxes from liberals webguy4 Taxes 6 December 30th, 2014 04:31 PM
FICA payroll tax; our most regressive tax. Supposn1 Economics 1 February 12th, 2014 06:13 PM
Employers’ Fica Taxes Are Equivalent To A Federal Sales Tax. Supposn Taxes 4 April 6th, 2011 07:04 AM
FICA payroll tax Supposn Money and Finance 15 January 20th, 2010 03:44 AM


Facebook Twitter RSS Feed



Copyright © 2005-2013 Defending The Truth. All rights reserved.