Who is the middle class?

[Zebedee DuBois]

One of the other threads started me thinking "just who is the middle class? I think I'm in it, but maybe I'm deluded.
Here are some statistics to start discussions at an even start. I assume a "traditional" family of four:
The household median income is $42,500 ( [url]http://www.census.gov/hhes/income/income99/incxrace.html[/url] )
The poverty threshold for a family of four (two adults, two kids) is $17,463 ( [url]http://www.census.gov/hhes/poverty/threshld/thresh00.html[/url] )
The Minimum Wage is $5.15/hr ($10,712/year) ( [url]http://www.dol.gov/dol/esa/public/minwage/main.htm[/url] ) or if both adults work, $21,424. Of course we haven't yet deducted taxes, or paid for babysitting to allow both to work (Even at a $1/kid/hour, that comes to $4,160/yr for 2 kids).

So, what income range do you guys think is middle class?
Please, don't you conservatives and liberals tell me what the other guy thinks, tell me what you think.

What do you think is a "fair" tax rate? None of us wants to pay them, but we do have some overhead to pay for.

[Gaz]

The only “fair” taxation system is a straight percentage of income.

xoxo~
gaz
willing to pay his share, but feels he is overtaxed now.

[NaptownChief]

As Gaz said, the only fair tax system is a flat tax or a national sales tax...And the rate should be set to make sure the government get the revenue that they "NEED" not the amount that they "WANT"...

[MrBlond]

A man works hard all his life. Every paycheck his company takes out taxes. He takes what is left and buys food for his family. More taxes. He buys a house. More taxes. He scrimps and manages to save some. He pays taxes on the interest he earns. Dies and leaves the money he has EARNED and already paid taxes on to his kids. Goverment gets half. Kids take what is left and buys a house, food, a car, clothes, a Playstation 2, or anything else a pays more taxes. Or maybe the kids put it into the bank to pass on to the grandchildren after they die. What do they get in return? (hint: more taxes) Income tax, sales tax, property tax, luxury tax, estate tax.

A flat-rate income tax is the only fair system I can imagine.

[Raiderhater]

You know what they say, the only sure things in life are death and taxes. And with the stupid system we have now, we get to combine the two.

Zeb ask to help clarify what is middle class and all we do is complain about taxes (tells you how bad it is). Sorry Zeb, I don't know what the brackets are.

[bishop_74]

I just want to pose a question... Does anyone know why we fought for independance from GB? How about the tax rate, was it higher or LOWER than it is now? Isn't it amazing that we just let the govt' lead us around by the nose ring now, but actually rebelled against a country that was imposing less on us in the past? Hmmmmmm.....

[Gaz]

Bishop_74-

There were many causes/justifications for rebellion. The main complaint was that we were taxed from afar by Britain yet had no voice in the decisions of the mother country. Britain considered the colonies as simply a source of income. Separation forced the colonists to rule themselves in day-to-day matters. That taste of self-determination only led to a hunger for more. The colonies demanded more say in the taxation issue and the monarchy in Britain refused. The colonies [misfits and radicals to start with] then rebelled.

In short, it was not the size of the tax burden, it was the lack of input.

Or it was a naked grab for power by radicals who were far enough from the seat of power to feel themselves beyond retribution.

xoxo~
gaz
allowing for either possibility.

[Logical]

I would say that rough boundaries are $25K to $90K for a family of 4 depending on what part of the country you live in.

[KCWolfman]

Zebedee - A fair tax rate is actually very simple, 16-20% across the board. The flat tax would insure equal payments, no loopholes, and a monstrous savings as the octopus out of control known as the IRS would be totally eliminated. Take it straight from your paycheck and send it straight to your govt.

[KCWolfman]

Jim- I would increase your range from the lower end a little. I would say anywhere from 35-90k/yr.

[Zebedee DuBois]

My guess is 35K to 150K. I know several families that earn over 100k. Upper middle class may extend to $250k

[Zebedee DuBois]

As for taxes, I see nothing wrong with a sliding scale. I don't care so much if those people making less than me are taxed at a lower rate - I just don't want to pay more taxes than someone making more than me.
Maybe something like:
0-25K no tax
25-75K tax at 15%
75-200K tax at 20%
250K&up tax at 25%
All income should be taxable including interest and capital gains.
No deductions for interest (why should I subsidize your loan?)
Deductions for medical or property loss (after a 5% threashold)

I agree that the current IRS mishmash is a mesh.

[Logical]

I sure am happy that you people do not write tax law. With an income well into six figures, and only the interest on my house as my tax write-off my Federal income tax was only 13% with a family of 5. You people would be killing me, and again that is without any fancy write-offs.

I think most of you should try this simple exercise write down your gross income and then take the amount of tax you actually owed on your 1040, 1040A or 1040EZ (not what was deducted). Now divide the amount actually owed by the Gross income, that is your actual Federal tax burden. Most likely if you are paying more than 15% of real Federal Tax (does not include SS, State, Local, or Sales taxes: they will not be affected by Federal Tax Reform) you are paying way too much and need to learn how to do your taxes properly or need to buy a home. I did this for several colleagues and neighbors who thought as you did, and almost all of them paid between 9 and 14% Federal Income Tax. Their incomes ranged from as little as 45K to 140K, on average they were 3 individual families.

For the two who were over 15% I offered to do their income tax and pay the local equivalent of HR Block to verify it for them. Both were done with no gimmick tax deductions and they both were under 15%, The local eqivalent of HR Block verified that I was correct by having almost identical results (they actually took an additional deduction for college expense of a 1st year student and lowered one of the parties by an additional percent.

So if you think a real flat tax at 15% or greater is fair you have not done your homework.

[Edited by Logical on 02-10-2001 at 11:04 PM]

[donkhater]

Logical--

I think the flat tax rate that most people propose include eliminating all deductions, except for dependents. All morgage interest, student loan interest and other write offs would be eliminated. I know that without those deductions, my tax rate would be close to 15%. With them though, I ended up paying only 7%. I should mention that I am close to earning six figures.

Many people get in a uproar over tax cuts because it is perceived that the rich get the biggest tax break (a successful ploy by the Dems). Well guess what? If I make close to 6 figures and I only pay ~7%, the super rich are the only ones paying a significant amount of income taxes. ANY tax cut would benefit them the most.

[NaptownChief]

Logical,

What you say is true for most but not for all...If you have a six figure salary and no kids, you get kicked in the shorts much harder...Given a $2800 credit per child allows a most families with 100K or less income to drop their tax burden by about 10%....Plus there are some simple tax deductions that you are not allowed to participate in such as student loan interest and a few others if you exceed 75K. Even with mortgage interest decductions and putting the max. 15% in my 401K, federal tax burden exceeds 25%.