Total Posts:24|Showing Posts:1-24
Jump to topic:

Eliminate Tax Withholding from Paychecks

KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/5/2015 11:09:21 AM
Posted: 1 year ago
In America, we pay a variety of taxes that the IRS collects. However, a good chunk of this money is forced by law to be collected on every paycheck, including payroll taxes and state and federal (and maybe local) income taxes. To determine the amount of income taxes withheld, upon employment, you file a W-4, and at the end of the year, your employer issues you a W-2, which states your income for the year, the various taxes withheld, and a few other tax related info.

W-2:
http://www.irs.gov...

W-4:
http://www.irs.gov...

Notice on the W-4, there is a worksheet for the number of allowances you may take on line 5. You cannot take more than that number, I've been told by the IRS, but I am not sure why not (except for a penalty for underpayment throughout the year). The higher the number on line 5, the less is taken out.
Notice, too, that you can take less for line 5 (more taxes withheld, not less) and line 6 is for an ADDITIONAL withholding. So, you can have more withheld, just not less.

Okay, background info done.
The reason withholding from paychecks should be eliminated is for a few reasons:
1. People have no idea how much they pay in taxes. This is especially acute when you have people who get a "refund" of thousands of dollars, of which none of it is theirs.
2. There is already a system in place for estimated payments. It is a simple voucher every three months.
http://www.irs.gov...
3. By actually writing a check, taxpayers might actually care more about how government spends money.
4. It gives control to the taxpayer to pay what they require. This is especially acute to those who work two jobs, or have substantial deductions that materially alter the tax return.

What are your thoughts?
Ultimately, this is coming out of frustration about just how clueless many people are about taxes. "Khaos," they'll say, "how much will I get back?"
"I don't know".
"Well, I made this much."
"Okay. I don't know."
"Last year I got back this much."
"Okay, well, I can tell you your tax liability is about $1,800 (federal income tax on $25K)"
"What?!? Why will I owe?"
"I didn't say you would. That is how much you will have had to pay. It depends on your withholdings. You know, if you overpaid, you get money back, hence the term refund."
gingerbread-man
Posts: 301
Add as Friend
Challenge to a Debate
Send a Message
2/5/2015 2:11:59 PM
Posted: 1 year ago
At 2/5/2015 11:09:21 AM, KhaosMage wrote:
In America, we pay a variety of taxes that the IRS collects. However, a good chunk of this money is forced by law to be collected on every paycheck, including payroll taxes and state and federal (and maybe local) income taxes. To determine the amount of income taxes withheld, upon employment, you file a W-4, and at the end of the year, your employer issues you a W-2, which states your income for the year, the various taxes withheld, and a few other tax related info.

W-2:
http://www.irs.gov...

W-4:
http://www.irs.gov...

Notice on the W-4, there is a worksheet for the number of allowances you may take on line 5. You cannot take more than that number, I've been told by the IRS, but I am not sure why not (except for a penalty for underpayment throughout the year). The higher the number on line 5, the less is taken out.
Notice, too, that you can take less for line 5 (more taxes withheld, not less) and line 6 is for an ADDITIONAL withholding. So, you can have more withheld, just not less.

Okay, background info done.
The reason withholding from paychecks should be eliminated is for a few reasons:
1. People have no idea how much they pay in taxes. This is especially acute when you have people who get a "refund" of thousands of dollars, of which none of it is theirs.
2. There is already a system in place for estimated payments. It is a simple voucher every three months.
http://www.irs.gov...
3. By actually writing a check, taxpayers might actually care more about how government spends money.
4. It gives control to the taxpayer to pay what they require. This is especially acute to those who work two jobs, or have substantial deductions that materially alter the tax return.

What are your thoughts?
Ultimately, this is coming out of frustration about just how clueless many people are about taxes. "Khaos," they'll say, "how much will I get back?"
"I don't know".
"Well, I made this much."
"Okay. I don't know."
"Last year I got back this much."
"Okay, well, I can tell you your tax liability is about $1,800 (federal income tax on $25K)"
"What?!? Why will I owe?"
"I didn't say you would. That is how much you will have had to pay. It depends on your withholdings. You know, if you overpaid, you get money back, hence the term refund."

In many countries, probably the US as well you can apply to vary the amount of tax that is deducted from your paycheck by estimating your total taxable income for the year. EG you may have tax losses from a business. So as long as you can accurately estimate your yearly income in advance there is no need to get a big bill, or big refund at the end of the year.
Not my gumdrop buttons!

Debates currently in voting period:

http://www.debate.org...
Chang29
Posts: 732
Add as Friend
Challenge to a Debate
Send a Message
2/5/2015 7:15:27 PM
Posted: 1 year ago
At 2/5/2015 11:09:21 AM, KhaosMage wrote:
In America, we pay a variety of taxes that the IRS collects. However, a good chunk of this money is forced by law to be collected on every paycheck, including payroll taxes and state and federal (and maybe local) income taxes. To determine the amount of income taxes withheld, upon employment, you file a W-4, and at the end of the year, your employer issues you a W-2, which states your income for the year, the various taxes withheld, and a few other tax related info.

W-2:
http://www.irs.gov...

W-4:
http://www.irs.gov...

Notice on the W-4, there is a worksheet for the number of allowances you may take on line 5. You cannot take more than that number, I've been told by the IRS, but I am not sure why not (except for a penalty for underpayment throughout the year). The higher the number on line 5, the less is taken out.
Notice, too, that you can take less for line 5 (more taxes withheld, not less) and line 6 is for an ADDITIONAL withholding. So, you can have more withheld, just not less.

Okay, background info done.
The reason withholding from paychecks should be eliminated is for a few reasons:
1. People have no idea how much they pay in taxes. This is especially acute when you have people who get a "refund" of thousands of dollars, of which none of it is theirs.
2. There is already a system in place for estimated payments. It is a simple voucher every three months.
http://www.irs.gov...
3. By actually writing a check, taxpayers might actually care more about how government spends money.
4. It gives control to the taxpayer to pay what they require. This is especially acute to those who work two jobs, or have substantial deductions that materially alter the tax return.

What are your thoughts?
Ultimately, this is coming out of frustration about just how clueless many people are about taxes. "Khaos," they'll say, "how much will I get back?"
"I don't know".
"Well, I made this much."
"Okay. I don't know."
"Last year I got back this much."
"Okay, well, I can tell you your tax liability is about $1,800 (federal income tax on $25K)"
"What?!? Why will I owe?"
"I didn't say you would. That is how much you will have had to pay. It depends on your withholdings. You know, if you overpaid, you get money back, hence the term refund."

If taxpayers understand exactly how much tax they pay each pay period, many politicians would be unemployed.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/6/2015 10:36:36 AM
Posted: 1 year ago
At 2/5/2015 2:11:59 PM, gingerbread-man wrote:

In many countries, probably the US as well you can apply to vary the amount of tax that is deducted from your paycheck by estimating your total taxable income for the year. EG you may have tax losses from a business. So as long as you can accurately estimate your yearly income in advance there is no need to get a big bill, or big refund at the end of the year.

There is a way to do this by paying estimated taxes. However, if you are an employer, you must file a W-4, and you must follow the rules of the worksheet, which means, a single person must file "1", which may be more than necessary.
I have been told by the IRS that I must use the figure the worksheet tells me. However, I am not sure how they would know what I claimed is wrong, but that is not the point.

The only issue I have found is an underpayment penalty, which is a 1.995% of underpayment.
gingerbread-man
Posts: 301
Add as Friend
Challenge to a Debate
Send a Message
2/6/2015 2:31:09 PM
Posted: 1 year ago
At 2/6/2015 10:36:36 AM, KhaosMage wrote:
At 2/5/2015 2:11:59 PM, gingerbread-man wrote:

In many countries, probably the US as well you can apply to vary the amount of tax that is deducted from your paycheck by estimating your total taxable income for the year. EG you may have tax losses from a business. So as long as you can accurately estimate your yearly income in advance there is no need to get a big bill, or big refund at the end of the year.

There is a way to do this by paying estimated taxes. However, if you are an employer, you must file a W-4, and you must follow the rules of the worksheet, which means, a single person must file "1", which may be more than necessary.
I have been told by the IRS that I must use the figure the worksheet tells me. However, I am not sure how they would know what I claimed is wrong, but that is not the point.

The only issue I have found is an underpayment penalty, which is a 1.995% of underpayment.

Why charge someone 2 percent when you can charge them 1.995 per cent? The US tax system appears so unnecessarily complicated..
Not my gumdrop buttons!

Debates currently in voting period:

http://www.debate.org...
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/6/2015 2:34:56 PM
Posted: 1 year ago
At 2/6/2015 2:31:09 PM, gingerbread-man wrote:
At 2/6/2015 10:36:36 AM, KhaosMage wrote:
At 2/5/2015 2:11:59 PM, gingerbread-man wrote:

In many countries, probably the US as well you can apply to vary the amount of tax that is deducted from your paycheck by estimating your total taxable income for the year. EG you may have tax losses from a business. So as long as you can accurately estimate your yearly income in advance there is no need to get a big bill, or big refund at the end of the year.

There is a way to do this by paying estimated taxes. However, if you are an employer, you must file a W-4, and you must follow the rules of the worksheet, which means, a single person must file "1", which may be more than necessary.
I have been told by the IRS that I must use the figure the worksheet tells me. However, I am not sure how they would know what I claimed is wrong, but that is not the point.

The only issue I have found is an underpayment penalty, which is a 1.995% of underpayment.

Why charge someone 2 percent when you can charge them 1.995 per cent? The US tax system appears so unnecessarily complicated..

I think it has to do with the prime rate or something. Either way, a figure is a figure, and the figure does not make it more complicated, just the computation. It does seem unnecessary, but there is few tax rules that I am confused about.
But, it is 1.995% of the underfunded amount, MINUS some other figure per day you pay before the April 15th deadline.
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/6/2015 5:21:51 PM
Posted: 1 year ago
At 2/5/2015 11:09:21 AM, KhaosMage wrote:
In America, we pay a variety of taxes that the IRS collects. However, a good chunk of this money is forced by law to be collected on every paycheck, including payroll taxes and state and federal (and maybe local) income taxes. To determine the amount of income taxes withheld, upon employment, you file a W-4, and at the end of the year, your employer issues you a W-2, which states your income for the year, the various taxes withheld, and a few other tax related info.

W-2:
http://www.irs.gov...

W-4:
http://www.irs.gov...

Notice on the W-4, there is a worksheet for the number of allowances you may take on line 5. You cannot take more than that number, I've been told by the IRS, but I am not sure why not (except for a penalty for underpayment throughout the year). The higher the number on line 5, the less is taken out.

It's a very, very easy way to dodge paying taxes. It forces the IRS to spend much more care and attention on audits whereas it's relatively easy to just say, look, just put down "X" number of people in your family and we'll do the rest.

Notice, too, that you can take less for line 5 (more taxes withheld, not less) and line 6 is for an ADDITIONAL withholding. So, you can have more withheld, just not less.

Okay, background info done.
The reason withholding from paychecks should be eliminated is for a few reasons:
1. People have no idea how much they pay in taxes. This is especially acute when you have people who get a "refund" of thousands of dollars, of which none of it is theirs.
2. There is already a system in place for estimated payments. It is a simple voucher every three months.
http://www.irs.gov...
3. By actually writing a check, taxpayers might actually care more about how government spends money.
4. It gives control to the taxpayer to pay what they require. This is especially acute to those who work two jobs, or have substantial deductions that materially alter the tax return.

What are your thoughts?
Ultimately, this is coming out of frustration about just how clueless many people are about taxes. "Khaos," they'll say, "how much will I get back?"
"I don't know".
"Well, I made this much."
"Okay. I don't know."
"Last year I got back this much."
"Okay, well, I can tell you your tax liability is about $1,800 (federal income tax on $25K)"
"What?!? Why will I owe?"
"I didn't say you would. That is how much you will have had to pay. It depends on your withholdings. You know, if you overpaid, you get money back, hence the term refund."

This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Imagine people earning minimum wage getting billed for FICA taxes end of year instead of automatically pulling them out...I doubt most of those people would have the thousands of dollars on hand to pay those taxes annually. Compound that with income taxes and etc and you may get a serious problem.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/6/2015 10:20:58 PM
Posted: 1 year ago
At 2/6/2015 5:21:51 PM, wrichcirw wrote:
At 2/5/2015 11:09:21 AM, KhaosMage wrote:
In America, we pay a variety of taxes that the IRS collects. However, a good chunk of this money is forced by law to be collected on every paycheck, including payroll taxes and state and federal (and maybe local) income taxes. To determine the amount of income taxes withheld, upon employment, you file a W-4, and at the end of the year, your employer issues you a W-2, which states your income for the year, the various taxes withheld, and a few other tax related info.

W-2:
http://www.irs.gov...

W-4:
http://www.irs.gov...

Notice on the W-4, there is a worksheet for the number of allowances you may take on line 5. You cannot take more than that number, I've been told by the IRS, but I am not sure why not (except for a penalty for underpayment throughout the year). The higher the number on line 5, the less is taken out.

It's a very, very easy way to dodge paying taxes. It forces the IRS to spend much more care and attention on audits whereas it's relatively easy to just say, look, just put down "X" number of people in your family and we'll do the rest.

Tax returns would still be filed annually, just as they are now. W-2s will still be reported annually (or maybe quarterly).
Nothing would change, except when you pay.


This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.
Also, keep in mind that 47% of Americans (or so) don't pay federal income taxes, so they would only be in trouble for the FICA, and many of these people would actually be "paid" enough to cover this anyway.

Imagine people earning minimum wage getting billed for FICA taxes end of year instead of automatically pulling them out...I doubt most of those people would have the thousands of dollars on hand to pay those taxes annually. Compound that with income taxes and etc and you may get a serious problem.

Let's say $10/hr for 40 hrs a week at 50 weeks.
That is $20K.
Total taxes paid (federal income and FICA) would be - 1028 in income tax and 1530 in fica - 2558 or 639 each quarter.
However, using Publication 15, you can only file 0 or 1 on your w-4, so that means you MUST pay either $45 or $34 per week, for a total of $540 or 408 for the quarter (plus payroll).
This means that I am forced to overpay my tax liability over the course of the entire year to the tune of at least $40/month.
Claiming 2 would actually be almost right, only overpaying about $7 per quarter.

(used 12 weeks for quarter since I used 50 weeks for year)
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 5:02:25 AM
Posted: 1 year ago
At 2/6/2015 10:20:58 PM, KhaosMage wrote:
At 2/6/2015 5:21:51 PM, wrichcirw wrote:
At 2/5/2015 11:09:21 AM, KhaosMage wrote:
In America, we pay a variety of taxes that the IRS collects. However, a good chunk of this money is forced by law to be collected on every paycheck, including payroll taxes and state and federal (and maybe local) income taxes. To determine the amount of income taxes withheld, upon employment, you file a W-4, and at the end of the year, your employer issues you a W-2, which states your income for the year, the various taxes withheld, and a few other tax related info.

W-2:
http://www.irs.gov...

W-4:
http://www.irs.gov...

Notice on the W-4, there is a worksheet for the number of allowances you may take on line 5. You cannot take more than that number, I've been told by the IRS, but I am not sure why not (except for a penalty for underpayment throughout the year). The higher the number on line 5, the less is taken out.

It's a very, very easy way to dodge paying taxes. It forces the IRS to spend much more care and attention on audits whereas it's relatively easy to just say, look, just put down "X" number of people in your family and we'll do the rest.

Tax returns would still be filed annually, just as they are now. W-2s will still be reported annually (or maybe quarterly).
Nothing would change, except when you pay.


This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.

That's exactly what the government is forcing upon people through withholdings - responsibility.

Also, keep in mind that 47% of Americans (or so) don't pay federal income taxes, so they would only be in trouble for the FICA, and many of these people would actually be "paid" enough to cover this anyway.

Savings isn't necessarily a function of how much you're paid. That's the crux of the problem...that it doesn't matter how much people are paid, they're going to be spendthrift with the money anyway. It's not an issue of being poor, but an issue of spending whatever money they get your hands on.

Imagine people earning minimum wage getting billed for FICA taxes end of year instead of automatically pulling them out...I doubt most of those people would have the thousands of dollars on hand to pay those taxes annually. Compound that with income taxes and etc and you may get a serious problem.

Let's say $10/hr for 40 hrs a week at 50 weeks.
That is $20K.
Total taxes paid (federal income and FICA) would be - 1028 in income tax and 1530 in fica - 2558 or 639 each quarter.
However, using Publication 15, you can only file 0 or 1 on your w-4, so that means you MUST pay either $45 or $34 per week, for a total of $540 or 408 for the quarter (plus payroll).
This means that I am forced to overpay my tax liability over the course of the entire year to the tune of at least $40/month.

According to your calculations above, you're actually underpaying by about $100 per quarter, not overpaying.

Claiming 2 would actually be almost right, only overpaying about $7 per quarter.

(used 12 weeks for quarter since I used 50 weeks for year)
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 8:32:49 AM
Posted: 1 year ago
At 2/7/2015 5:02:25 AM, wrichcirw wrote:

This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.

That's exactly what the government is forcing upon people through withholdings - responsibility.
In my view, if I followed the rules, the government is forcing me to give them an interest free loan. I don't know about you, but overpaying $10 month is a big deal to me right now, and could be for others, too.

Also, keep in mind that 47% of Americans (or so) don't pay federal income taxes, so they would only be in trouble for the FICA, and many of these people would actually be "paid" enough to cover this anyway.

Savings isn't necessarily a function of how much you're paid. That's the crux of the problem...that it doesn't matter how much people are paid, they're going to be spendthrift with the money anyway. It's not an issue of being poor, but an issue of spending whatever money they get your hands on.

And the cost for doing this is government is seen as the piggy bank and/or April 15th is viewed as "payday", which for some people, it is, to the tune of thousands of dollars that is not their money to begin with.

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

Imagine people earning minimum wage getting billed for FICA taxes end of year instead of automatically pulling them out...I doubt most of those people would have the thousands of dollars on hand to pay those taxes annually. Compound that with income taxes and etc and you may get a serious problem.

Let's say $10/hr for 40 hrs a week at 50 weeks.
That is $20K.
Total taxes paid (federal income and FICA) would be - 1028 in income tax and 1530 in fica - 2558 or 639 each quarter.
However, using Publication 15, you can only file 0 or 1 on your w-4, so that means you MUST pay either $45 or $34 per week, for a total of $540 or 408 for the quarter (plus payroll).
This means that I am forced to overpay my tax liability over the course of the entire year to the tune of at least $40/month.

According to your calculations above, you're actually underpaying by about $100 per quarter, not overpaying.
I was talking about the income taxes. The payroll taxes would be withheld in addition to those weekly figures. Payroll taxes are only overpaid in one specific instance, which is does not affect those making less than $100K.

The $540 is referring to only the federal income tax withholding, while the $639 is total tax liability (federal income and payroll). The income tax portion of the $639 is $254. So, claiming 1 is overpaying about $600/yr. Your refund would be about $600.
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 8:40:38 AM
Posted: 1 year ago
At 2/7/2015 8:32:49 AM, KhaosMage wrote:
At 2/7/2015 5:02:25 AM, wrichcirw wrote:


This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.

That's exactly what the government is forcing upon people through withholdings - responsibility.
In my view, if I followed the rules, the government is forcing me to give them an interest free loan. I don't know about you, but overpaying $10 month is a big deal to me right now, and could be for others, too.

I agree with your logic here but IMHO it's the lesser of two evils. Yes, you do lose out on the interest your money could otherwise earn and perhaps you would spend less than you would otherwise had your withholding been more accurate, but the flip side is what if the government was faced with the task of collecting back taxes on tens of millions of people? My understanding of how it works currently is that audits are much more about setting an example to scare people into compliance...audits are simply not a cost-effective way to actually go about collecting on actual tax delinquencies.

Bottom line, if the problem got bad enough, it would cost the government more to collect on back taxes than to just let people slide on tens if not hundreds of billions of dollars the government would be due.

Also, keep in mind that 47% of Americans (or so) don't pay federal income taxes, so they would only be in trouble for the FICA, and many of these people would actually be "paid" enough to cover this anyway.

Savings isn't necessarily a function of how much you're paid. That's the crux of the problem...that it doesn't matter how much people are paid, they're going to be spendthrift with the money anyway. It's not an issue of being poor, but an issue of spending whatever money they get your hands on.

And the cost for doing this is government is seen as the piggy bank and/or April 15th is viewed as "payday", which for some people, it is, to the tune of thousands of dollars that is not their money to begin with.

You get the money back, and at most you lose out on a bit of interest.

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

The idea behind the EITC is that those who are dependent upon it aren't in a position to "waste" any money at all.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 9:05:52 AM
Posted: 1 year ago
At 2/7/2015 8:40:38 AM, wrichcirw wrote:
At 2/7/2015 8:32:49 AM, KhaosMage wrote:
At 2/7/2015 5:02:25 AM, wrichcirw wrote:


This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.

That's exactly what the government is forcing upon people through withholdings - responsibility.
In my view, if I followed the rules, the government is forcing me to give them an interest free loan. I don't know about you, but overpaying $10 month is a big deal to me right now, and could be for others, too.

I agree with your logic here but IMHO it's the lesser of two evils. Yes, you do lose out on the interest your money could otherwise earn and perhaps you would spend less than you would otherwise had your withholding been more accurate, but the flip side is what if the government was faced with the task of collecting back taxes on tens of millions of people? My understanding of how it works currently is that audits are much more about setting an example to scare people into compliance...audits are simply not a cost-effective way to actually go about collecting on actual tax delinquencies.

Bottom line, if the problem got bad enough, it would cost the government more to collect on back taxes than to just let people slide on tens if not hundreds of billions of dollars the government would be due.
Bottom line, they could easily just garnish people's wages. Easy peasy.
These people would be in the same boat we are currently in.

Also, keep in mind that 47% of Americans (or so) don't pay federal income taxes, so they would only be in trouble for the FICA, and many of these people would actually be "paid" enough to cover this anyway.

Savings isn't necessarily a function of how much you're paid. That's the crux of the problem...that it doesn't matter how much people are paid, they're going to be spendthrift with the money anyway. It's not an issue of being poor, but an issue of spending whatever money they get your hands on.

And the cost for doing this is government is seen as the piggy bank and/or April 15th is viewed as "payday", which for some people, it is, to the tune of thousands of dollars that is not their money to begin with.

You get the money back, and at most you lose out on a bit of interest.
First, there is the psychological effect (both good and bad).
Second, more than the interest (what is interest on $600, no much), but the benefit of using it at my discretion. Whether that is paying $10 extra a month on a credit card or using it towards retirement (compounded interest applies here), or just having a bit of breathing room every month, or maybe enriching my life a bit more by having Netflix.

Keep in mind, my example was very basic (and probably common), but for others, it can be much different. For example, last year (2013), I paid zero taxes IIRC, and, yes, that $80/month could have made a huge difference. That's my grocery money for the month.

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

The idea behind the EITC is that those who are dependent upon it aren't in a position to "waste" any money at all.

Oh, HOHOHO!!!
I assure you, many of them do waste it.
People are often poor for a reason, and when you literally hand them a check for $5,000, people do stupid things. Casino and drugs are things I've seen firsthand.
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 9:10:16 AM
Posted: 1 year ago
At 2/7/2015 9:05:52 AM, KhaosMage wrote:
At 2/7/2015 8:40:38 AM, wrichcirw wrote:
At 2/7/2015 8:32:49 AM, KhaosMage wrote:
At 2/7/2015 5:02:25 AM, wrichcirw wrote:


This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.

That's exactly what the government is forcing upon people through withholdings - responsibility.
In my view, if I followed the rules, the government is forcing me to give them an interest free loan. I don't know about you, but overpaying $10 month is a big deal to me right now, and could be for others, too.

I agree with your logic here but IMHO it's the lesser of two evils. Yes, you do lose out on the interest your money could otherwise earn and perhaps you would spend less than you would otherwise had your withholding been more accurate, but the flip side is what if the government was faced with the task of collecting back taxes on tens of millions of people? My understanding of how it works currently is that audits are much more about setting an example to scare people into compliance...audits are simply not a cost-effective way to actually go about collecting on actual tax delinquencies.

Bottom line, if the problem got bad enough, it would cost the government more to collect on back taxes than to just let people slide on tens if not hundreds of billions of dollars the government would be due.
Bottom line, they could easily just garnish people's wages. Easy peasy.
These people would be in the same boat we are currently in.

Well, no, right? If wages were garnished, you wouldn't have the chance to get them back via refund.

Taxes are complicated because people are complicated. What would seem like underpayment for someone earning the exact same amount as someone else would seem like overpayment for that other person.

Also, keep in mind that 47% of Americans (or so) don't pay federal income taxes, so they would only be in trouble for the FICA, and many of these people would actually be "paid" enough to cover this anyway.

Savings isn't necessarily a function of how much you're paid. That's the crux of the problem...that it doesn't matter how much people are paid, they're going to be spendthrift with the money anyway. It's not an issue of being poor, but an issue of spending whatever money they get your hands on.

And the cost for doing this is government is seen as the piggy bank and/or April 15th is viewed as "payday", which for some people, it is, to the tune of thousands of dollars that is not their money to begin with.

You get the money back, and at most you lose out on a bit of interest.
First, there is the psychological effect (both good and bad).
Second, more than the interest (what is interest on $600, no much), but the benefit of using it at my discretion. Whether that is paying $10 extra a month on a credit card or using it towards retirement (compounded interest applies here), or just having a bit of breathing room every month, or maybe enriching my life a bit more by having Netflix.

Keep in mind, my example was very basic (and probably common), but for others, it can be much different. For example, last year (2013), I paid zero taxes IIRC, and, yes, that $80/month could have made a huge difference. That's my grocery money for the month.

Would $80/mo or $1000 at the end of the year make a bigger difference to you?

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

The idea behind the EITC is that those who are dependent upon it aren't in a position to "waste" any money at all.

Oh, HOHOHO!!!
I assure you, many of them do waste it.
People are often poor for a reason, and when you literally hand them a check for $5,000, people do stupid things. Casino and drugs are things I've seen firsthand.

People who aren't poor do the same stupid crap.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 9:30:15 AM
Posted: 1 year ago
At 2/7/2015 9:10:16 AM, wrichcirw wrote:
At 2/7/2015 9:05:52 AM, KhaosMage wrote:
At 2/7/2015 8:40:38 AM, wrichcirw wrote:
At 2/7/2015 8:32:49 AM, KhaosMage wrote:
At 2/7/2015 5:02:25 AM, wrichcirw wrote:


This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.

That's exactly what the government is forcing upon people through withholdings - responsibility.
In my view, if I followed the rules, the government is forcing me to give them an interest free loan. I don't know about you, but overpaying $10 month is a big deal to me right now, and could be for others, too.

I agree with your logic here but IMHO it's the lesser of two evils. Yes, you do lose out on the interest your money could otherwise earn and perhaps you would spend less than you would otherwise had your withholding been more accurate, but the flip side is what if the government was faced with the task of collecting back taxes on tens of millions of people? My understanding of how it works currently is that audits are much more about setting an example to scare people into compliance...audits are simply not a cost-effective way to actually go about collecting on actual tax delinquencies.

Bottom line, if the problem got bad enough, it would cost the government more to collect on back taxes than to just let people slide on tens if not hundreds of billions of dollars the government would be due.
Bottom line, they could easily just garnish people's wages. Easy peasy.
These people would be in the same boat we are currently in.

Well, no, right? If wages were garnished, you wouldn't have the chance to get them back via refund.

Taxes are complicated because people are complicated. What would seem like underpayment for someone earning the exact same amount as someone else would seem like overpayment for that other person.

No, because these are past due amounts, so overpayment isn't the issue, it is simply nonpayment.

Also, keep in mind that 47% of Americans (or so) don't pay federal income taxes, so they would only be in trouble for the FICA, and many of these people would actually be "paid" enough to cover this anyway.

Savings isn't necessarily a function of how much you're paid. That's the crux of the problem...that it doesn't matter how much people are paid, they're going to be spendthrift with the money anyway. It's not an issue of being poor, but an issue of spending whatever money they get your hands on.

And the cost for doing this is government is seen as the piggy bank and/or April 15th is viewed as "payday", which for some people, it is, to the tune of thousands of dollars that is not their money to begin with.

You get the money back, and at most you lose out on a bit of interest.
First, there is the psychological effect (both good and bad).
Second, more than the interest (what is interest on $600, no much), but the benefit of using it at my discretion. Whether that is paying $10 extra a month on a credit card or using it towards retirement (compounded interest applies here), or just having a bit of breathing room every month, or maybe enriching my life a bit more by having Netflix.

Keep in mind, my example was very basic (and probably common), but for others, it can be much different. For example, last year (2013), I paid zero taxes IIRC, and, yes, that $80/month could have made a huge difference. That's my grocery money for the month.

Would $80/mo or $1000 at the end of the year make a bigger difference to you?
What's more likely to be abused - $80/mo on a tight budget, or $1K in one shot?
That money is either going to be pissed away or spend on a big purchase, like a repair of big payment on debt.
It really depends on the circumstances.

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

The idea behind the EITC is that those who are dependent upon it aren't in a position to "waste" any money at all.

Oh, HOHOHO!!!
I assure you, many of them do waste it.
People are often poor for a reason, and when you literally hand them a check for $5,000, people do stupid things. Casino and drugs are things I've seen firsthand.

People who aren't poor do the same stupid crap.
Not with taxpayer money, no.

If memory serves when I did these calculations last, a single mother with two kids making $30K and having zero withholding for federal income taxes, would still receive a check for about $3200 from the IRS.
The EIC is a big reason why poor people don't get married. Assuming the father also made $30K, not only would they not get that $3200, but they would actually owe taxes.

The hypocrisy I am trying to highlight is: if poor people aren't good with their money, then handing them a grip of cash in one shot is equally a bad idea.
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 9:36:09 AM
Posted: 1 year ago
At 2/7/2015 9:30:15 AM, KhaosMage wrote:
At 2/7/2015 9:10:16 AM, wrichcirw wrote:
At 2/7/2015 9:05:52 AM, KhaosMage wrote:
At 2/7/2015 8:40:38 AM, wrichcirw wrote:
At 2/7/2015 8:32:49 AM, KhaosMage wrote:
At 2/7/2015 5:02:25 AM, wrichcirw wrote:


This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.

That's exactly what the government is forcing upon people through withholdings - responsibility.
In my view, if I followed the rules, the government is forcing me to give them an interest free loan. I don't know about you, but overpaying $10 month is a big deal to me right now, and could be for others, too.

I agree with your logic here but IMHO it's the lesser of two evils. Yes, you do lose out on the interest your money could otherwise earn and perhaps you would spend less than you would otherwise had your withholding been more accurate, but the flip side is what if the government was faced with the task of collecting back taxes on tens of millions of people? My understanding of how it works currently is that audits are much more about setting an example to scare people into compliance...audits are simply not a cost-effective way to actually go about collecting on actual tax delinquencies.

Bottom line, if the problem got bad enough, it would cost the government more to collect on back taxes than to just let people slide on tens if not hundreds of billions of dollars the government would be due.
Bottom line, they could easily just garnish people's wages. Easy peasy.
These people would be in the same boat we are currently in.

Well, no, right? If wages were garnished, you wouldn't have the chance to get them back via refund.

Taxes are complicated because people are complicated. What would seem like underpayment for someone earning the exact same amount as someone else would seem like overpayment for that other person.

No, because these are past due amounts, so overpayment isn't the issue, it is simply nonpayment.

Don't you think it would be much, much more preferable to withhold wages at a manageable rate than to garnish ungodly amounts of back taxes in one go?

Would $80/mo or $1000 at the end of the year make a bigger difference to you?
What's more likely to be abused - $80/mo on a tight budget, or $1K in one shot?
That money is either going to be pissed away or spend on a big purchase, like a repair of big payment on debt.
It really depends on the circumstances.

You're making my argument for me. It's much easier to piss away $1k, so the govt anticipates this and doesn't make people set up a large piggy bank to pay their taxes...a piggy bank people are liable to break on a whim.

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

The idea behind the EITC is that those who are dependent upon it aren't in a position to "waste" any money at all.

Oh, HOHOHO!!!
I assure you, many of them do waste it.
People are often poor for a reason, and when you literally hand them a check for $5,000, people do stupid things. Casino and drugs are things I've seen firsthand.

People who aren't poor do the same stupid crap.
Not with taxpayer money, no.

So you'd rather see these people starve...

If memory serves when I did these calculations last, a single mother with two kids making $30K and having zero withholding for federal income taxes, would still receive a check for about $3200 from the IRS.
The EIC is a big reason why poor people don't get married. Assuming the father also made $30K, not only would they not get that $3200, but they would actually owe taxes.

The hypocrisy I am trying to highlight is: if poor people aren't good with their money, then handing them a grip of cash in one shot is equally a bad idea.

I didn't say anything about poor people not being good with money...my point was this country as a whole not being good with money...all the way up to the top.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 9:50:03 AM
Posted: 1 year ago
At 2/7/2015 9:36:09 AM, wrichcirw wrote:
At 2/7/2015 9:30:15 AM, KhaosMage wrote:
At 2/7/2015 9:10:16 AM, wrichcirw wrote:
At 2/7/2015 9:05:52 AM, KhaosMage wrote:
At 2/7/2015 8:40:38 AM, wrichcirw wrote:
At 2/7/2015 8:32:49 AM, KhaosMage wrote:
At 2/7/2015 5:02:25 AM, wrichcirw wrote:


This country has an acute problem when it comes to saving money for any reason. Eliminate withholding, and there's no guarantee whatsoever they'd apply for that voucher system you brought up, meaning that more than likely come tax season, there are going to be a lot of people owing money to the federal government that they wouldn't be able to pay.

Who's fault is that?
Maybe society would be better if people had to be responsible.

That's exactly what the government is forcing upon people through withholdings - responsibility.
In my view, if I followed the rules, the government is forcing me to give them an interest free loan. I don't know about you, but overpaying $10 month is a big deal to me right now, and could be for others, too.

I agree with your logic here but IMHO it's the lesser of two evils. Yes, you do lose out on the interest your money could otherwise earn and perhaps you would spend less than you would otherwise had your withholding been more accurate, but the flip side is what if the government was faced with the task of collecting back taxes on tens of millions of people? My understanding of how it works currently is that audits are much more about setting an example to scare people into compliance...audits are simply not a cost-effective way to actually go about collecting on actual tax delinquencies.

Bottom line, if the problem got bad enough, it would cost the government more to collect on back taxes than to just let people slide on tens if not hundreds of billions of dollars the government would be due.
Bottom line, they could easily just garnish people's wages. Easy peasy.
These people would be in the same boat we are currently in.

Well, no, right? If wages were garnished, you wouldn't have the chance to get them back via refund.

Taxes are complicated because people are complicated. What would seem like underpayment for someone earning the exact same amount as someone else would seem like overpayment for that other person.

No, because these are past due amounts, so overpayment isn't the issue, it is simply nonpayment.

Don't you think it would be much, much more preferable to withhold wages at a manageable rate than to garnish ungodly amounts of back taxes in one go?
No. It is preferable that people have control over their finances.

Would $80/mo or $1000 at the end of the year make a bigger difference to you?
What's more likely to be abused - $80/mo on a tight budget, or $1K in one shot?
That money is either going to be pissed away or spend on a big purchase, like a repair of big payment on debt.
It really depends on the circumstances.

You're making my argument for me. It's much easier to piss away $1k, so the govt anticipates this and doesn't make people set up a large piggy bank to pay their taxes...a piggy bank people are liable to break on a whim.

Um...except, in my case, I never pay that $1K, so that isn't pissed away. Further, we are talking about $639 for a $10/hour job, with basic tax situation. This is currently less than 25% of people.
Also, employers could still set this up for them and withhold it, or banks could.

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

The idea behind the EITC is that those who are dependent upon it aren't in a position to "waste" any money at all.

Oh, HOHOHO!!!
I assure you, many of them do waste it.
People are often poor for a reason, and when you literally hand them a check for $5,000, people do stupid things. Casino and drugs are things I've seen firsthand.

People who aren't poor do the same stupid crap.
Not with taxpayer money, no.

So you'd rather see these people starve...
The EIC is to give people food? Strawman, much?
Well, then I say get rid of EIC and use that money for food stamps. Why do we have two separate programs addressing the same problem?
And, if starvation is the issue, then this large sum of money needs to last the whole year, which you say is not likely to happen.

If memory serves when I did these calculations last, a single mother with two kids making $30K and having zero withholding for federal income taxes, would still receive a check for about $3200 from the IRS.
The EIC is a big reason why poor people don't get married. Assuming the father also made $30K, not only would they not get that $3200, but they would actually owe taxes.

The hypocrisy I am trying to highlight is: if poor people aren't good with their money, then handing them a grip of cash in one shot is equally a bad idea.

I didn't say anything about poor people not being good with money...my point was this country as a whole not being good with money...all the way up to the top.

You are missing the point. The point is, some people, a good chunk actually (I think about 15% of taxfilers), actually would only owe the payroll tax and nothing more, and frankly, this could come out of any tax credits they file for.
Don't forget, taxes are still being filed every year, too.
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 9:59:07 AM
Posted: 1 year ago
At 2/7/2015 9:50:03 AM, KhaosMage wrote:
At 2/7/2015 9:36:09 AM, wrichcirw wrote:
At 2/7/2015 9:30:15 AM, KhaosMage wrote:

Don't you think it would be much, much more preferable to withhold wages at a manageable rate than to garnish ungodly amounts of back taxes in one go?
No. It is preferable that people have control over their finances.

You don't have control in either scenario. If the government had reasonable assurances that people would pay their taxes, then we wouldn't be having this conversation.

Would $80/mo or $1000 at the end of the year make a bigger difference to you?
What's more likely to be abused - $80/mo on a tight budget, or $1K in one shot?
That money is either going to be pissed away or spend on a big purchase, like a repair of big payment on debt.
It really depends on the circumstances.

You're making my argument for me. It's much easier to piss away $1k, so the govt anticipates this and doesn't make people set up a large piggy bank to pay their taxes...a piggy bank people are liable to break on a whim.

Um...except, in my case, I never pay that $1K, so that isn't pissed away. Further, we are talking about $639 for a $10/hour job, with basic tax situation. This is currently less than 25% of people.

sigh...you owe $1k in taxes...why wouldn't you pay it?

Also, employers could still set this up for them and withhold it, or banks could.

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

The idea behind the EITC is that those who are dependent upon it aren't in a position to "waste" any money at all.

Oh, HOHOHO!!!
I assure you, many of them do waste it.
People are often poor for a reason, and when you literally hand them a check for $5,000, people do stupid things. Casino and drugs are things I've seen firsthand.

People who aren't poor do the same stupid crap.
Not with taxpayer money, no.

So you'd rather see these people starve...
The EIC is to give people food? Strawman, much?
Well, then I say get rid of EIC and use that money for food stamps. Why do we have two separate programs addressing the same problem?
And, if starvation is the issue, then this large sum of money needs to last the whole year, which you say is not likely to happen.

sigh...EIC is meant to cover "necessary" expenses. Food is just one of these expenses.

You are missing the point. The point is, some people, a good chunk actually (I think about 15% of taxfilers), actually would only owe the payroll tax and nothing more, and frankly, this could come out of any tax credits they file for.
Don't forget, taxes are still being filed every year, too.

Why cater the tax code to 15% of the population and not 85-100% of the population?
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 10:06:38 AM
Posted: 1 year ago
At 2/7/2015 9:59:07 AM, wrichcirw wrote:
At 2/7/2015 9:50:03 AM, KhaosMage wrote:
At 2/7/2015 9:36:09 AM, wrichcirw wrote:
At 2/7/2015 9:30:15 AM, KhaosMage wrote:

Don't you think it would be much, much more preferable to withhold wages at a manageable rate than to garnish ungodly amounts of back taxes in one go?
No. It is preferable that people have control over their finances.

You don't have control in either scenario. If the government had reasonable assurances that people would pay their taxes, then we wouldn't be having this conversation.
Would saying "be responsible with" their finances have made more sense?

Further, the cynical reason government is withholding taxes is that people are less likely to notice the small payments, while they would be outraged about the overall picture.

Would $80/mo or $1000 at the end of the year make a bigger difference to you?
What's more likely to be abused - $80/mo on a tight budget, or $1K in one shot?
That money is either going to be pissed away or spend on a big purchase, like a repair of big payment on debt.
It really depends on the circumstances.

You're making my argument for me. It's much easier to piss away $1k, so the govt anticipates this and doesn't make people set up a large piggy bank to pay their taxes...a piggy bank people are liable to break on a whim.

Um...except, in my case, I never pay that $1K, so that isn't pissed away. Further, we are talking about $639 for a $10/hour job, with basic tax situation. This is currently less than 25% of people.

sigh...you owe $1k in taxes...why wouldn't you pay it?
In my example, I owed nothing in that tax year, but was forced to have withholdings. My taxable income was negative.

Also, employers could still set this up for them and withhold it, or banks could.

Tell me, do you have a problem with the earned income tax credit? If people are spendthrifts, aren't they just going to waste those thousands, instead of putting it to good use?

The idea behind the EITC is that those who are dependent upon it aren't in a position to "waste" any money at all.

Oh, HOHOHO!!!
I assure you, many of them do waste it.
People are often poor for a reason, and when you literally hand them a check for $5,000, people do stupid things. Casino and drugs are things I've seen firsthand.

People who aren't poor do the same stupid crap.
Not with taxpayer money, no.

So you'd rather see these people starve...
The EIC is to give people food? Strawman, much?
Well, then I say get rid of EIC and use that money for food stamps. Why do we have two separate programs addressing the same problem?
And, if starvation is the issue, then this large sum of money needs to last the whole year, which you say is not likely to happen.

sigh...EIC is meant to cover "necessary" expenses. Food is just one of these expenses.
Is it? And if so, then why the ad hom?
There are already welfare programs. Why is the tax code one of them?

You are missing the point. The point is, some people, a good chunk actually (I think about 15% of taxfilers), actually would only owe the payroll tax and nothing more, and frankly, this could come out of any tax credits they file for.
Don't forget, taxes are still being filed every year, too.

Why cater the tax code to 15% of the population and not 85-100% of the population?
It sounds like you are catering to a minority as well - the people who don't have the ability, money, discipline, to save money for a foreseen expense only three months out, while keeping in mind that nearly half the population don't pay income taxes at the federal level, so the only issue is payroll, which, since the employer is still paying half of, they could collect it for the employees behalf still.
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 10:14:01 AM
Posted: 1 year ago
At 2/7/2015 10:06:38 AM, KhaosMage wrote:
At 2/7/2015 9:59:07 AM, wrichcirw wrote:
At 2/7/2015 9:50:03 AM, KhaosMage wrote:
At 2/7/2015 9:36:09 AM, wrichcirw wrote:
At 2/7/2015 9:30:15 AM, KhaosMage wrote:

Don't you think it would be much, much more preferable to withhold wages at a manageable rate than to garnish ungodly amounts of back taxes in one go?
No. It is preferable that people have control over their finances.

You don't have control in either scenario. If the government had reasonable assurances that people would pay their taxes, then we wouldn't be having this conversation.
Would saying "be responsible with" their finances have made more sense?

Further, the cynical reason government is withholding taxes is that people are less likely to notice the small payments, while they would be outraged about the overall picture.

I think that pales in comparison to people receiving a tax bill they weren't prepared to pay. "Outrage" would be the least of your concerns in such a scenario...you'd be looking at mass garnishments/incarceration for huge swaths of the population.

Would $80/mo or $1000 at the end of the year make a bigger difference to you?
What's more likely to be abused - $80/mo on a tight budget, or $1K in one shot?
That money is either going to be pissed away or spend on a big purchase, like a repair of big payment on debt.
It really depends on the circumstances.

You're making my argument for me. It's much easier to piss away $1k, so the govt anticipates this and doesn't make people set up a large piggy bank to pay their taxes...a piggy bank people are liable to break on a whim.

Um...except, in my case, I never pay that $1K, so that isn't pissed away. Further, we are talking about $639 for a $10/hour job, with basic tax situation. This is currently less than 25% of people.

sigh...you owe $1k in taxes...why wouldn't you pay it?
In my example, I owed nothing in that tax year, but was forced to have withholdings. My taxable income was negative.

So again, all you're missing out on is just a bit of interest. If you want to blow an extra $80/month, you're more than welcome to charge it on your credit card or whatever constitutes credit for you.

sigh...EIC is meant to cover "necessary" expenses. Food is just one of these expenses.
Is it? And if so, then why the ad hom?

What ad hom?

There are already welfare programs. Why is the tax code one of them?

Because it's the one people are discovering works best.

You are missing the point. The point is, some people, a good chunk actually (I think about 15% of taxfilers), actually would only owe the payroll tax and nothing more, and frankly, this could come out of any tax credits they file for.
Don't forget, taxes are still being filed every year, too.

Why cater the tax code to 15% of the population and not 85-100% of the population?
It sounds like you are catering to a minority as well - the people who don't have the ability, money, discipline, to save money for a foreseen expense only three months out, while keeping in mind that nearly half the population don't pay income taxes at the federal level, so the only issue is payroll, which, since the employer is still paying half of, they could collect it for the employees behalf still.

It's not a minority...it's a vast majority of America that doesn't save worth sh!t.

http://ycharts.com...

In China, it's about 10x this figure.

1/3 of America has nothing saved for retirement. Nothing.

http://www.usatoday.com...
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
KhaosMage
Posts: 1,475
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 10:39:00 AM
Posted: 1 year ago
At 2/7/2015 10:14:01 AM, wrichcirw wrote:
At 2/7/2015 10:06:38 AM, KhaosMage wrote:
At 2/7/2015 9:59:07 AM, wrichcirw wrote:
At 2/7/2015 9:50:03 AM, KhaosMage wrote:
At 2/7/2015 9:36:09 AM, wrichcirw wrote:
At 2/7/2015 9:30:15 AM, KhaosMage wrote:

Don't you think it would be much, much more preferable to withhold wages at a manageable rate than to garnish ungodly amounts of back taxes in one go?
No. It is preferable that people have control over their finances.

You don't have control in either scenario. If the government had reasonable assurances that people would pay their taxes, then we wouldn't be having this conversation.
Would saying "be responsible with" their finances have made more sense?

Further, the cynical reason government is withholding taxes is that people are less likely to notice the small payments, while they would be outraged about the overall picture.

I think that pales in comparison to people receiving a tax bill they weren't prepared to pay. "Outrage" would be the least of your concerns in such a scenario...you'd be looking at mass garnishments/incarceration for huge swaths of the population.

This ignores all the people who currently aren't prepared for the huge tax bill they have. Some of these very same people are the EIC recipients whose child no longer qualifies.
Others include:
Independent contractors (those who receive 1099 misc, as they, in fact, do have nothing withheld as they are self-employed)
IRA/401k early distributions (although I think there is an automatic HUGE withholding, 25%)
Cancellation of debt
Receipt of alimony


Would $80/mo or $1000 at the end of the year make a bigger difference to you?
What's more likely to be abused - $80/mo on a tight budget, or $1K in one shot?
That money is either going to be pissed away or spend on a big purchase, like a repair of big payment on debt.
It really depends on the circumstances.

You're making my argument for me. It's much easier to piss away $1k, so the govt anticipates this and doesn't make people set up a large piggy bank to pay their taxes...a piggy bank people are liable to break on a whim.

Um...except, in my case, I never pay that $1K, so that isn't pissed away. Further, we are talking about $639 for a $10/hour job, with basic tax situation. This is currently less than 25% of people.

sigh...you owe $1k in taxes...why wouldn't you pay it?
In my example, I owed nothing in that tax year, but was forced to have withholdings. My taxable income was negative.

So again, all you're missing out on is just a bit of interest. If you want to blow an extra $80/month, you're more than welcome to charge it on your credit card or whatever constitutes credit for you.
Stop talking like you know what my situation was.
I started a business, which failed. I poured everything into it financially. You bet your @ss $80 could have been better spent for advertising or buying food.

sigh...EIC is meant to cover "necessary" expenses. Food is just one of these expenses.
Is it? And if so, then why the ad hom?

What ad hom?
Saying I want people to starve.

There are already welfare programs. Why is the tax code one of them?

Because it's the one people are discovering works best.
Except it doesn't, as it is easily abused and manipulated.

You are missing the point. The point is, some people, a good chunk actually (I think about 15% of taxfilers), actually would only owe the payroll tax and nothing more, and frankly, this could come out of any tax credits they file for.
Don't forget, taxes are still being filed every year, too.

Why cater the tax code to 15% of the population and not 85-100% of the population?
It sounds like you are catering to a minority as well - the people who don't have the ability, money, discipline, to save money for a foreseen expense only three months out, while keeping in mind that nearly half the population don't pay income taxes at the federal level, so the only issue is payroll, which, since the employer is still paying half of, they could collect it for the employees behalf still.

It's not a minority...it's a vast majority of America that doesn't save worth sh!t.

http://ycharts.com...

This is not a rate of people, but how much in relation to income.
It does not suggest that people are incapable of saving.
In China, it's about 10x this figure.


1/3 of America has nothing saved for retirement. Nothing.
So?
This isn't an issue of saving for retirement, which, for the record, ignores certain assets, like pensions and homes. I don't save for retirement, as I don't have the money to (many bad choices), but I do own property, which is something.

The issue is saving for a 100% foreseen expense for three months.

http://www.usatoday.com...
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 10:39:46 AM
Posted: 1 year ago
Basically, this is how I see your argument:

You're upset that the government withholds money from your paycheck given you don't have to pay taxes.

My argument is that the government does this because IF you did have to pay taxes, you wouldn't be paying them if they weren't withheld. Why? Because America simply does not save, period.

I mean, if you were saving, then what I've been saying would hold...that all it amounts to is a minor inconvenience in that you'd dip into your savings a bit every month and lose out in a bit of interest. However, for you this does not seem to be the issue, which implies that you, like most of America, have little to nothing saved up.

America's personal savings rate is less than 5% of their income - for comparison, China saves anywhere from 25-65% of their personal income. Given that the vast majority of American savings is done by the top quintile, that means the bottom 4 quintiles (80% of America) saves far less than 5%, meaning that if they were faced with any sort of significant year-end tax bill, a lot of Americans would be hard-pressed to pay it and it would constitute a significant negative shock to their lifestyle come April 15.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 10:46:39 AM
Posted: 1 year ago
At 2/7/2015 10:39:00 AM, KhaosMage wrote:
At 2/7/2015 10:14:01 AM, wrichcirw wrote:

Would $80/mo or $1000 at the end of the year make a bigger difference to you?
What's more likely to be abused - $80/mo on a tight budget, or $1K in one shot?
That money is either going to be pissed away or spend on a big purchase, like a repair of big payment on debt.
It really depends on the circumstances.

You're making my argument for me. It's much easier to piss away $1k, so the govt anticipates this and doesn't make people set up a large piggy bank to pay their taxes...a piggy bank people are liable to break on a whim.

Um...except, in my case, I never pay that $1K, so that isn't pissed away. Further, we are talking about $639 for a $10/hour job, with basic tax situation. This is currently less than 25% of people.

sigh...you owe $1k in taxes...why wouldn't you pay it?
In my example, I owed nothing in that tax year, but was forced to have withholdings. My taxable income was negative.

So again, all you're missing out on is just a bit of interest. If you want to blow an extra $80/month, you're more than welcome to charge it on your credit card or whatever constitutes credit for you.
Stop talking like you know what my situation was.

Then stop talking about yourself, lol. You keep talking about yourself and your own situation, and then get offended when people start talking about you? Ridiculous and hypocritical.

sigh...EIC is meant to cover "necessary" expenses. Food is just one of these expenses.
Is it? And if so, then why the ad hom?

What ad hom?
Saying I want people to starve.

It's a paraphrase of your advocacy. It's not "you're a bad person for wanting to deny people the necessities of life" but you have to realize that that's exactly what you're doing by denying people who need welfare welfare.

There are already welfare programs. Why is the tax code one of them?

Because it's the one people are discovering works best.
Except it doesn't, as it is easily abused and manipulated.

It's harder to manipulate than others. It actually ties welfare to a way to get yourself out of welfare, i.e. a job. It's not at all perfect, but it's better than most alternatives that reward failure.

This is not a rate of people, but how much in relation to income.
It does not suggest that people are incapable of saving.

See my other comment.

1/3 of America has nothing saved for retirement. Nothing.
So?
This isn't an issue of saving for retirement, which, for the record, ignores certain assets, like pensions and homes. I don't save for retirement, as I don't have the money to (many bad choices), but I do own property, which is something.

The issue is saving for a 100% foreseen expense for three months.

Most people don't have even that and rely on UI and credit cards to get themselves through a rough patch.

Just 38 percent of Americans said they could cover an unexpected emergency room visit or even a $500 car repair with cash on hand in a checking or savings account, according to Bankrate, which commissioned the study.
http://www.cnbc.com...
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
Add as Friend
Challenge to a Debate
Send a Message
2/7/2015 3:07:29 PM
Posted: 1 year ago
I don't mean to be an @sshole, BTW...it's just that America's savings rate is absolutely atrocious. I used to hold financial seminars while in the military, and I first had high aspirations about holding classes on stock market analysis, only to discover that a lot of people had no idea how bank CDs work.

You can look at the chart here:

http://www.theatlantic.com...

The top 1% saves around 40% of their income...the bottom 90% have a negative savings rate.

Your circumstances, while unfortunate, are not at all unique, and given you own property, you're probably better off than a lot of people.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?