Isn't it true that wages earned are double taxed just like capital gains?


#1

If I am earning a salary or a hourly wage, isn’t the money I earn double taxed through payroll tax and income tax? Thats a double tax. Why should those who live off of passive, capital gains income, complain when their income is double taxed? Why should they therefore get taxed less on passive income then those earning a salary or hourly wage if both forms of incomes are double taxed? Doesn’t this kind of shoot a hole in the argument that capital gains is double taxed already therefore should be taxed at a lower rate then salaries and hour wage earners?


#2

Isn’t it true that the money invested was taxed when earned, your double tax if it was from income, then taxed coming out too. So they are triple taxed.


#3

Payroll taxes are deducted from the gross before income taxes are calculated, that is not “double taxation”.

You are however “double taxed” all the time.

Your “after tax dollars” are then taxed again when you;
Purchase general commodities (sales tax)
When you pay your phone bill (Universal lifeline tax)
When you pay your electric/gas utility (for subsidies to the “poor”)
When you pay your cable/satellite TV bill (standard usury taxes)
When you pay your rent/house payment (property taxes)
When you buy gasoline (Average of 60 cents per gallon in the U.S.)
When/If you buy alcohol or tobacco (sin taxes)
When you register your car (they call these “fees”)
When you drive on a toll road/bridge (they call these “tolls”)
When you try to build or remodel something on your own property (they call these “permits”)
When you try to start a business (they call this a “License”)

Not to mention the enormous cost of all the bogus regulations that are placed on every business you utilize for every good and service because all these costs are incorporated into the retail sales price*** before the sales tax is applied.


All of the taxes and regulations that the Left wants to drop on the heads of the productive class either get passed right down to consumers or end up resulting in lost jobs as the businesses leave for more friendly environments that enable them to compete more effectively.


#4

“Amounts withheld for taxes, including but not limited to income tax, social security and Medicare taxes are considered “received” and must be included in gross income in the year they are withheld.” – Tax Topics - Topic 401 Wages and Salaries

“Self-Employment Tax. When figuring your adjusted gross income on Form 1040, you can deduct the employer’s equivalent portion of tax.” – Tax Topics - Topic 554 Self-Employment Tax

“Ordinary dividends are the most common type of distribution from a corporation. They are paid out of the earnings and profits of the corporation. Ordinary dividends are taxable as ordinary income unless they are qualified dividends. Qualified dividends are ordinary dividends that meet the requirements to be taxed as net capital gains… Capital gain distributions may be paid by regulated investment companies (mutual funds) and real estate investment trusts (REITs). Capital gain distributions are always reported as long-term capital gains.” – Tax Topics - Topic 404 Dividends

“Almost everything you own and use for personal or investment purposes is a capital asset. Examples include a home, household furnishings, and stocks or bonds held in a personal account. When a capital asset is sold, the difference between the basis in the asset and the amount it is sold for is a capital gain or a capital loss.” – Tax Topics - Topic 409 Capital Gains and Losses

cf. Tax Topics
FICA & SECA Tax Rates
Contribution and Benefit Base

Shameless plug: Eliminate the taxable maximum for OASDI (Social Security) as was done for HI (Medicare Part A) in 1993. That will assist OASDI to become solvent. Employers and high income earners can share that they do not get benefits commensurate with their contributions. Disability Insurance, Hospital Insurance and Old-Age and Survivors Insurance become insolvent in 2016, 2024 and 2035, respectively.


#5

This is not true. I believe it was originally, but is no longer. If you work for someone other than yourself, look at your w2, you will see that the amount taxed for payroll taxes is the exact same amount as is taxed for income.


#6

Even then it would not be “double taxation” but an additional tax percentage unless I am missing something right?

I have not worked for wages in many years but if the gross earnings are used to calculate both the Payroll tax and the inevitable income tax (if any) it would seem that these two rates would be combined and the result would be the total tax rate on the gross.

As an example;
If the payroll tax was 8.5 percent of the Gross and the income tax bracket came to 15 percent of the Gross wouldn’t that be the same as taxing the Gross 23.5 percent?


#7

If Americans knew exactly what they pay in taxes, double taxes, triple taxes at the federal, state, county and city level they would REVOLT!!! Many taxes are hidden such as corp taxes which are just passed on to the consumer. I own a business and so do you, if I am taxed I have no choice but to raise my pricing.

This is why I strongly advocate NO federal taxes on corps…


#8

To answer your question very simply, yes. If capital gains are double taxation, then so are wages. But that ends up spiraling into endless taxation, because it then becomes triple at point of purchase and then quadruple on the business tax and quintuple on wages again, etc.

Taxes occur at every point of transfer. It’s not a complicated concept, but seems to elude a lot of very smart people.


#9

That is true enough. Let me give you an example of “real” - that is, highly visible - double taxing. I started collecting SS while I was still working; this was not terribly long after the government decided that if my income was over a certain amount that I would have to pay income tax on my SS, on up to 85% of it. But I already paid income tax on that before the feds deducted from my paycheck, so I’m (was) paying taxes on it a second time.

BTW, those of you who say you won’t take your SS right away, you may as well. I started collecting it several months after I was eligible, and I was given a lump sum of “back pay.” If you have several years of it accumulated, just think what a nice packet that will be for Uncle Sam when he double-taxes you for 85% of that. You won’t get retro medicare, though, although your part B will be increased by 10% for every year that you didn’t get it.


#10

SS is the best of example of double tax. You paid the tax on it once already, now you pay on it again, albeit there is some allowance, but the threshold is so low that its hard to qualify…if you make any money at all you pay taxes on SS.

Originaliy I no intention of drawing SS until I could draw my full amount which was at age 66. But bammy got elected and after a bit I figured I better or he was gonna do something…suggest all of you do same.

On a side note there is ever the question of “when” do I draw. After talking to about a jillon folks and doing a bunch of research I came to this conclusion:

Based upon my current age, my life expectancy was 76 average. I then calculated drawing then vs waiting later to draw. I compared the numbers till I hit a point that I was a break even till age 76. Worked for me


#11

You can say that again. Which is why I’m in favor of the FAIRTax.
If there were NO PAYROLL DEDUCTIONS, and people SAW, with their own 2 eyes, just exactly what was being taxed, there’d be a revolt so hard and fast…

Yes, people look at their paychecks; go into shock…for all of about 2 minutes, and come Monday, forget all about it, and do it all over again. But if they saw it all in one lump sum, life would suck for the IRS.
And maybe not so much for us.

But, as people are too skeert, or too lazy, and the feds not willing to spend that much on Kaopectate, the likelihood of that happening is slim to none.

Damned fools!


#12

Agreed, that would be “double taxation” up to the point that what is received equals what was paid in when indexed for inflation plus some interest rate factored in.


#13

YES!!!


#14

Oh, thank you, Oaks!
I don’t jump on too many bandwagons, but I’ve been MORE than happy to jump on this one since Cong. Bill Archer came up with in…1999? or so.

God BLESS, he had/has it so right!
Why people can’t see it, I don’t know.
It’s been proven, time and again, that the federal government would not be short-shrifted of its obligations.
People, of every bent and ability to contribute, would be able to choose whether to contribute or not; some basing their decisions on the current climate of governance, others on their purses, and yet others, (of whom there will never be a shortage), wanting the newest and best innovations the market has to offer.

What the blazes is WRONG WITH PEOPLE???!!


#15

Well, I qualified for full SS at 65, and started collecting it after about 5 months (you actually lose a month of SS, you get your first payment a month after you qualify, but they ain’t giving that last month after you die do your heirs), but I worked until I was almost 68. I work a few hours a year, but not enough to amount to anything. In fact, I’ll probably be done after this February or March. I’m a township auditor, and my term is up next year. But I only make about 300/year.


#16

[quote=“Susanna, post:15, topic:37398”]
Well, I qualified for full SS at 65, and started collecting it after about 5 months (you actually lose a month of SS, you get your first payment a month after you qualify, but they ain’t giving that last month after you die do your heirs), but I worked until I was almost 68. I work a few hours a year, but not enough to amount to anything. In fact, I’ll probably be done after this February or March. I’m a township auditor, and my term is up next year. But I only make about 300/year.
[/quote]True if you pass away and get a ss check after that date your executor has to return it. I know the first thing I had to do after a person died was to get a death certificate and bring it to social security so they coud record it.


#17

Its not what is wrong with people albeit they could demand we go to it. **But the current system now is based 100% upon traceable income. ** The only people in the US that pay taxes have traceable income, generally W-2 income. The rest of the US pay little or no taxes, in fact the underground economy which is thriving is estimated at about $1 Trillion dollars. We all are involved, with many folks living and living well, VERY well off drug money, gambling, e bay, garage sales etc.

So if this is so beneficial why not run to it as fast as we can?

Simple, see my bolded sentence on TRACEABLE income. Can you imagine a federal govt that does NOT have control over you? No payroll taxes, no SS taxes…the biggest FEAR of GOVT and Liberals is the LACK OF CONTROL!

See Texas and Flordia for excellent examples of how to run a govt on nothing but sales taxes.


#18

Sadly, you are, of course, correct.
Had the Republicans jumped on this back in the Bush years when they held both Houses…

Nevermind. I’m asking much.