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Can anyone defend a negative tax liability?

Khaos_Mage
Posts: 23,214
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4/26/2014 10:08:51 PM
Posted: 2 years ago
Is there anyone out there that can defend the current tax code in regards to negative tax liabilty?
The fact that people can have zero money withheld on their paychecks (outside of payroll taxes), and still get a check from the IRS in the form of a "refund" is frustrating to me.

This is not the same as paying zero taxes; it is literally having the IRS take money from someone else to give to someone else (as opposed to taxes being collected, dolled out to an agency, and given from there).

This is not the same as welfare.

Can anyone defend this?

And, yes, we are talking about thousands of dollars each year for some people. And, like their welfare, it is tax-free.
My work here is, finally, done.
jimtimmy3
Posts: 189
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4/26/2014 10:17:23 PM
Posted: 2 years ago
It's only negative when you only look at federal income tax. There are more regressive taxes like payroll and state and local.

On net, virtually everybody pays taxes. Face it, we're all overtaxed... rich and poor.
Jifpop09
Posts: 2,243
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4/27/2014 6:28:26 AM
Posted: 2 years ago
At 4/26/2014 10:08:51 PM, Khaos_Mage wrote:
Is there anyone out there that can defend the current tax code in regards to negative tax liabilty?
The fact that people can have zero money withheld on their paychecks (outside of payroll taxes), and still get a check from the IRS in the form of a "refund" is frustrating to me.

This is not the same as paying zero taxes; it is literally having the IRS take money from someone else to give to someone else (as opposed to taxes being collected, dolled out to an agency, and given from there).

This is not the same as welfare.

Can anyone defend this?

And, yes, we are talking about thousands of dollars each year for some people. And, like their welfare, it is tax-free.

I believe you questioned me about this a couple of weeks ago. I really didn't know that taxes were being negated, so before I can respond, I'm going to need some sources of this happening.

The way you put it, anyone can easily agree with you, but I need to see the whole story.
Leader of the DDO Revolution Party
Khaos_Mage
Posts: 23,214
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4/27/2014 8:51:04 AM
Posted: 2 years ago
At 4/27/2014 6:28:26 AM, Jifpop09 wrote:
At 4/26/2014 10:08:51 PM, Khaos_Mage wrote:
Is there anyone out there that can defend the current tax code in regards to negative tax liabilty?
The fact that people can have zero money withheld on their paychecks (outside of payroll taxes), and still get a check from the IRS in the form of a "refund" is frustrating to me.

This is not the same as paying zero taxes; it is literally having the IRS take money from someone else to give to someone else (as opposed to taxes being collected, dolled out to an agency, and given from there).

This is not the same as welfare.

Can anyone defend this?

And, yes, we are talking about thousands of dollars each year for some people. And, like their welfare, it is tax-free.

I believe you questioned me about this a couple of weeks ago. I really didn't know that taxes were being negated, so before I can respond, I'm going to need some sources of this happening.

The way you put it, anyone can easily agree with you, but I need to see the whole story.

http://www.debate.org...
My work here is, finally, done.
Jifpop09
Posts: 2,243
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4/27/2014 8:52:40 AM
Posted: 2 years ago
At 4/27/2014 8:51:04 AM, Khaos_Mage wrote:
At 4/27/2014 6:28:26 AM, Jifpop09 wrote:
At 4/26/2014 10:08:51 PM, Khaos_Mage wrote:
Is there anyone out there that can defend the current tax code in regards to negative tax liabilty?
The fact that people can have zero money withheld on their paychecks (outside of payroll taxes), and still get a check from the IRS in the form of a "refund" is frustrating to me.

This is not the same as paying zero taxes; it is literally having the IRS take money from someone else to give to someone else (as opposed to taxes being collected, dolled out to an agency, and given from there).

This is not the same as welfare.

Can anyone defend this?

And, yes, we are talking about thousands of dollars each year for some people. And, like their welfare, it is tax-free.

I believe you questioned me about this a couple of weeks ago. I really didn't know that taxes were being negated, so before I can respond, I'm going to need some sources of this happening.

The way you put it, anyone can easily agree with you, but I need to see the whole story.

http://www.debate.org...

Yup, thats where you brought this up. Do you have a non bisaed of negative liability?
Leader of the DDO Revolution Party
Khaos_Mage
Posts: 23,214
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4/27/2014 8:58:44 AM
Posted: 2 years ago
At 4/27/2014 8:52:40 AM, Jifpop09 wrote:
At 4/27/2014 8:51:04 AM, Khaos_Mage wrote:
At 4/27/2014 6:28:26 AM, Jifpop09 wrote:
At 4/26/2014 10:08:51 PM, Khaos_Mage wrote:
Is there anyone out there that can defend the current tax code in regards to negative tax liabilty?
The fact that people can have zero money withheld on their paychecks (outside of payroll taxes), and still get a check from the IRS in the form of a "refund" is frustrating to me.

This is not the same as paying zero taxes; it is literally having the IRS take money from someone else to give to someone else (as opposed to taxes being collected, dolled out to an agency, and given from there).

This is not the same as welfare.

Can anyone defend this?

And, yes, we are talking about thousands of dollars each year for some people. And, like their welfare, it is tax-free.

I believe you questioned me about this a couple of weeks ago. I really didn't know that taxes were being negated, so before I can respond, I'm going to need some sources of this happening.

The way you put it, anyone can easily agree with you, but I need to see the whole story.

http://www.debate.org...

Yup, thats where you brought this up. Do you have a non bisaed of negative liability?

So, the IRS fact sheets, where they specifically state the number and value of refundable credits, is bias to you?
Tell me, what would be the better source to use, if not from the agency that collects the revenue?
My work here is, finally, done.
Jifpop09
Posts: 2,243
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4/27/2014 9:00:09 AM
Posted: 2 years ago
At 4/27/2014 8:58:44 AM, Khaos_Mage wrote:
At 4/27/2014 8:52:40 AM, Jifpop09 wrote:
At 4/27/2014 8:51:04 AM, Khaos_Mage wrote:
At 4/27/2014 6:28:26 AM, Jifpop09 wrote:
At 4/26/2014 10:08:51 PM, Khaos_Mage wrote:
Is there anyone out there that can defend the current tax code in regards to negative tax liabilty?
The fact that people can have zero money withheld on their paychecks (outside of payroll taxes), and still get a check from the IRS in the form of a "refund" is frustrating to me.

This is not the same as paying zero taxes; it is literally having the IRS take money from someone else to give to someone else (as opposed to taxes being collected, dolled out to an agency, and given from there).

This is not the same as welfare.

Can anyone defend this?

And, yes, we are talking about thousands of dollars each year for some people. And, like their welfare, it is tax-free.

I believe you questioned me about this a couple of weeks ago. I really didn't know that taxes were being negated, so before I can respond, I'm going to need some sources of this happening.

The way you put it, anyone can easily agree with you, but I need to see the whole story.

http://www.debate.org...

Yup, thats where you brought this up. Do you have a non bisaed of negative liability?

So, the IRS fact sheets, where they specifically state the number and value of refundable credits, is bias to you?
Tell me, what would be the better source to use, if not from the agency that collects the revenue?

No. I didn't look through that forum. I thought you were just pointing out the place where we argued. Could you relink them. I honestly want an article that may provide more insight. People might get tax refunds for other reasons.
Leader of the DDO Revolution Party
Khaos_Mage
Posts: 23,214
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4/27/2014 9:13:23 AM
Posted: 2 years ago
At 4/27/2014 9:00:09 AM, Jifpop09 wrote:
At 4/27/2014 8:58:44 AM, Khaos_Mage wrote:
At 4/27/2014 8:52:40 AM, Jifpop09 wrote:
At 4/27/2014 8:51:04 AM, Khaos_Mage wrote:
At 4/27/2014 6:28:26 AM, Jifpop09 wrote:
At 4/26/2014 10:08:51 PM, Khaos_Mage wrote:
Is there anyone out there that can defend the current tax code in regards to negative tax liabilty?
The fact that people can have zero money withheld on their paychecks (outside of payroll taxes), and still get a check from the IRS in the form of a "refund" is frustrating to me.

This is not the same as paying zero taxes; it is literally having the IRS take money from someone else to give to someone else (as opposed to taxes being collected, dolled out to an agency, and given from there).

This is not the same as welfare.

Can anyone defend this?

And, yes, we are talking about thousands of dollars each year for some people. And, like their welfare, it is tax-free.

I believe you questioned me about this a couple of weeks ago. I really didn't know that taxes were being negated, so before I can respond, I'm going to need some sources of this happening.

The way you put it, anyone can easily agree with you, but I need to see the whole story.

http://www.debate.org...

Yup, thats where you brought this up. Do you have a non bisaed of negative liability?

So, the IRS fact sheets, where they specifically state the number and value of refundable credits, is bias to you?
Tell me, what would be the better source to use, if not from the agency that collects the revenue?

No. I didn't look through that forum. I thought you were just pointing out the place where we argued. Could you relink them. I honestly want an article that may provide more insight. People might get tax refunds for other reasons.

The link should take you to my post, which gives you my source.
And, yes, refunds are given for other reasons, but "refundable credits" are given only after all taxes are paid. (i.e. it is refundable)
Non-refundable credits, like the green energy credits of a few years back, only applied if you owed tax. If you didn't owe tax, then you received no benefit.
EIC is broken down by the IRS, as it is considered a payment, like any other refundable credit, so you have to find their breakdown.
However, additional child tax credit is due to zero tax liability, and the "refundable portion of American Opportunity Credit" is likely negative, but not necessarily.
My work here is, finally, done.
Khaos_Mage
Posts: 23,214
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4/27/2014 9:34:59 AM
Posted: 2 years ago
At 4/26/2014 10:17:23 PM, jimtimmy3 wrote:
It's only negative when you only look at federal income tax. There are more regressive taxes like payroll and state and local.

On net, virtually everybody pays taxes. Face it, we're all overtaxed... rich and poor.

1. Don't give me that regressive tax crap. There is no way to prove that one person pays more than another when all is said and done. You would have to compare two people who live in the same city, which people often don't.
2. Payroll taxes may be "regressive", but the benefits are progressive. Look at ssa.gov or whatever the government site is with a SS benefit calculator is, and use $20K and $90K for your base. Paying 4.5x in taxes, yields only 2.5x the benefit.

3. And, can you tell me, honestly, that there couldn't be a negative tax overall? Are you sure about that?

Payroll tax on $30K is $2,295. And assume no welfare.
Single mother with two kids making $30K receives "refund" of $3,903
http://www.debate.org...
In MN, there would also be a negative tax liability. Let's assume most states would be zero.
Property tax, is not actually owed by the renter, and difficult to ascertain. Also, there are property tax refunds in my state.
So, let's assume $1,000 rent, $1200 rent, and own property taxed at $2400 (my tax on a $188K house)
In MN, taxable property tax is $19.470
Property tax owed in each example is:
$2040 - 1405 = $635
$2448 - 1700 = $748
$2400 - 1529 = $871

So, using the $1200 rent, taxes are:
Federal income = (3903)
State income = 0 (in MN, it would be negative as well)
Payroll tax = 2295
Property tax = 748
Net tax effect = (860)

Disposable income after rent and $100/month for utilities = $14,400
Assuming everything she bought had a sales tax of an average of 8%, sales tax would be $1152.

So, this hypothetical person pays a total tax of $292, assuming EVERYTHING she buys is taxed, and state income tax is zero (not negative). This is unlikely, since clothes and most food is not taxed.

So, it is safe to say, that in MN, there are people who pay less than zero in total taxes.
My work here is, finally, done.
Jifpop09
Posts: 2,243
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4/27/2014 9:45:47 AM
Posted: 2 years ago
At 4/26/2014 10:08:51 PM, Khaos_Mage wrote:
Is there anyone out there that can defend the current tax code in regards to negative tax liabilty?
The fact that people can have zero money withheld on their paychecks (outside of payroll taxes), and still get a check from the IRS in the form of a "refund" is frustrating to me.

This is not the same as paying zero taxes; it is literally having the IRS take money from someone else to give to someone else (as opposed to taxes being collected, dolled out to an agency, and given from there).

This is not the same as welfare.

Can anyone defend this?

And, yes, we are talking about thousands of dollars each year for some people. And, like their welfare, it is tax-free.

The only explanation for high tax refunds for low paying families, is if they participated in a mass amount of tax break programs,or fulfilled a lot or requirements to lower taxes. Like charity?
Leader of the DDO Revolution Party
Khaos_Mage
Posts: 23,214
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4/27/2014 10:01:27 AM
Posted: 2 years ago
At 4/27/2014 9:45:47 AM, Jifpop09 wrote:


The only explanation for high tax refunds for low paying families, is if they participated in a mass amount of tax break programs,or fulfilled a lot or requirements to lower taxes. Like charity?

You don't know much about taxes, do you?
That's alright, most don't.

Read this: I break it down.
http://www.debate.org...

If you consider tax credits and/or deductions a program, then I suppose it is. I consider them tax credits and programs, as they are a means of calculation, not anything with oversight and reporting (like welfare).

The charity deduction does not apply to federal tax returns for the poor. They get a bigger deduction using the standard one over itemizing 9 times out of 10.
The only exception is if they own property (or rather a mortgage, and not even then) or have employee related expenses, like using your car for business, like a pizza delivery boy.
My work here is, finally, done.
Jifpop09
Posts: 2,243
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4/27/2014 10:04:54 AM
Posted: 2 years ago
At 4/27/2014 10:01:27 AM, Khaos_Mage wrote:
At 4/27/2014 9:45:47 AM, Jifpop09 wrote:


The only explanation for high tax refunds for low paying families, is if they participated in a mass amount of tax break programs,or fulfilled a lot or requirements to lower taxes. Like charity?

You don't know much about taxes, do you?
That's alright, most don't.

Read this: I break it down.
http://www.debate.org...

If you consider tax credits and/or deductions a program, then I suppose it is. I consider them tax credits and programs, as they are a means of calculation, not anything with oversight and reporting (like welfare).

The charity deduction does not apply to federal tax returns for the poor. They get a bigger deduction using the standard one over itemizing 9 times out of 10.
The only exception is if they own property (or rather a mortgage, and not even then) or have employee related expenses, like using your car for business, like a pizza delivery boy.

I'll research it further, but currently, I agree with you. The cost of offsetting these liabiklities are pretty high, and this should be situated more along the lines of welfare.
Leader of the DDO Revolution Party