I think taxes should be based on a 5-year rolling average, to ease the burden for people who have high income only once in their life. Winning the lottery or patenting an invention that makes you rich is the American dream. Let’s tax high earners but show some lenience for folks who have a once in a lifetime windfall.
Companies do it, so why not.
Where I live, we do have the option to register a longer tax form for this. It’s mostly used by farmers who are not really businesses, but also not salaried. Most of their income comes from “secondary income”, such as sales. It gives private persons the option to deduct expenses from their secondary income and to postpone the taxes over 3 years, so they can utilize losses from one year in the next or hold back some taxable income for potential future losses. Just like businesses, except businesses can postpone taxes for more years and have more deductible costs.
Specifically for lottery winnings, these are “tax free”, so it doesn’t fuck people’s regular income statements. The lottery instead pays a tax based on all their payouts, so the tax man still gets his share, but it makes no difference to the individual winners. Much easier to handle for everyone. You win a million, you get a million. That it cost the lottery 1.2 million to pay out is irrelevant for the players.
Upvote because the opinion is unpopular. And I disagree.
If you haven’t noticed why the world is shitty right now, look up and learn about what 1% are doing with their money and wealth.
Definitely unpopular. The trouble is, why not just leave the country the year of the windfall?
By the time the heavier tax is due, you’re nowhere to be found.
A rolling 5 year average would mean you’d be taxed overly heavily for years after a windfall.
Given that winning the lotto is often financially disasterous, getting taxed heavily after you’ve already blown the cash could cripple people at their weakest point. Making the lottery more appealing is also a net loss to society.
It opens another potential avenue for tax avoidance schemes to game.
Getting rich quick almost always requires doing something awful. If it just required hardwork or smarts, plenty people got that. We should absolutely not encourage people to aim for once in a lifetime “get rich quick” payoffs.
You’d be in a lower tax bracket for the year that you won. If it bumped up your tax bracket the following few years, it would still be beneficial because you’d have saved a lot the first year. I don’t know though, this isn’t really an idea about finance or taxes, I just don’t think it’s right that someone who makes a million once gets taxed the same as someone who makes a million every year for 40 years.
still be beneficial because you’d have saved a lot the first year
You’d be taxed less when you already have a lot, but it’s common for people to blow a windfall and end up much worse off, so being taxed more heavily years later could be really devasting for many.
just don’t think it’s right
I can understand wanting to see some lucky shmuck maximize their winnings. But i think it would seem almost cruel to adjust for this one rare situation when so many more significant financial injustices exist.
Yeah agree
They don’t get taxed the same. The person making that money for 40 years is paying 40 times as much.
Lottery winnings in Canada are tax free. Only the earnings from investing it is taxed according to standard laws. It makes a lot of sense because the lottery itself is a form of taxation. The government already got their cut from the tickets purchased by everyone.
In the US you pay the players tax, then you get taxed on the winnings, then you get taxed on income earned from investments.
Meanwhile American billionaires pay next to nothing. What an uncivilized country.
only for loterry winners, get rich quick schemes involve other things besides lotteries.
Yes, let’s complicate taxes even more.
It shouldn’t matter how complicated they are because the government should just bill me.
They should know how much I owe and just tell me
They should know how much I owe
Oh, they do. If you get the amount wrong, they’ll demonstrate it real quick.
Precisely.
I already pay an estimated amount every paycheck, tell HR to adjust it.
I for one am looking forward to those people that get lucky once having much higher tax rates for years afterwards, instead of just paying once up front. There’s no way that’ll have negative consequences and leave people with hard feelings about the whole thing.
If you have a lower tax rate on a million and a higher tax rate on years where you earn, say $20,000 you keep a lot more than if you have a higher tax rate on the million and lower on the years you earn $20,000
And people with sudden windfalls of cash, like from winning the lottery, are famously good at math and make wonderful financial decisions.
Tax really isn’t the issue here, tax is only significant to you because of wage theft. If the rich weren’t hoarding wealth and people had adequate income, you would be earning a lot more and the tax you pay you’d care less about. Unless you’re one of them greedy treasure dragons
Two questions in this thread asked the same thing and got the same number back.
“How much is that in percentages of their income, disregarding artificially deflated incomes of the rich?” Later, why brackets exist at all: “the bottom 50% couldn’t pay 40% of all income tax, they’d have a negative net income.”
Both times the answer was: “Top 1% in the US pays 40% of all income tax and top 10% pays 70% while the bottom 50% pays 3.3%.”
That is a share of the total bill. The question was a rate on somebody’s own income. The same word, percent, doing two jobs, and the number never gets checked against the question that asked for it.
When it came back a third time it was called a different argument: “The implicit narrative here is that the rich don’t pay taxes.” The comment it was replying to did not say that. Neither did the question before it.
The move: answer with the statistic you already have, and when the question survives, answer the opponent who is easier to beat. The numbers stay true. They just stop answering what is on the table.
If you are in an argument like this and cannot see the move from inside it, that is the one thing I do. One fight, lines exact, names off, $15. Another one cut the same way: https://telegra.ph/Nothing-she-says-would-have-counted-10-27
The top end high earners will just restructure their pay so that they get paid a big bonus once a decade or longer.
But similarly if you earn a lot in one year you could restructure it to spread it across several years. I just don’t think you should have to do that.
I believe the Australian tax code already allows that to some degree, its never applied to me though. I think its meant for sports people, who will earn lots in 5-10 years, but then not earn anything after that.
Rich people already pay less tax (through shenanigans). The source of the wealth is irrelevant.
Top 1% in the US pays 40% of all income tax and top 10% pays 70% while the bottom 50% pays 3.3%
The bottom 50% holds 2.3% of the wealth. So if your 3.3% is correct then that would say they are paying at least 43% to much.
We shouldn’t be taxing basic necessities, we should be taxing things that accrue wealth.
If someone owns a shabby house and their income only makes ends meet they should be paying nothing in taxes.
If you want those people to pay more taxes, the wealth needs to be spread to those groups so that wealth can be taxed.
Different argument. The implicit narrative here is that the rich don’t pay taxes when in reality they pay almost all the taxes. If you want them to pay even more then that’s fair but the reality is that most people don’t have the faintest clue what the actual numbers are to begin with.
How much is that in percentages of their income, disregarding artificially deflated incomes of the rich?
Why do you think that matters more than how much they contribute?
Your question is tied to the idea that their contribution is only contrived of their income taxes, and ignores the fact that 2 people working the same hours contributing the same amount don’t receive the same income.
If you want equal contributions from all income taxes them you would have to have equal pay for all jobs.
“But my job contributes more to society”. No it doesn’t.
The doctor needs a roof just like the roofer needs a colonoscopy.
Because the bottom 50% couldn’t pay 40% of all income tax, they’d have a negative net income. That’s why tax brackets exist, once your basic needs are met you can contribute more to society as a whole. It sucks to pay more if you’re earning above median, but it’s the cost of living in a society.
Because if you could contribute more, you should.
Winning the lottery is not the American dream. Stop playing if you want to win.
No.
Nope! Pay for a good tax accountant or pay up.
I bet you go to one of those fancy places like H&R Block
Lottery isn’t taxed in Canada.
And even if it was, that’s good.
Anyone who gets rich should pay more taxes. Period. The richer, the more taxes you pay. That’s it.
Give back to the society that allowed you to get rich quick.
So if someone earns a million dollars once in their life, that million should be taxed at the same rate as a person who earns a million dollars every year of their life? I disagree
Yes. And that’s normally why jackpots in the US are usually bigger. To account for the taxes.
Good for you, I’m glad you aleady recognize your opinion is unpopular. Maybe you’d be happier with a wealth tax instead of an income tax, where they look at the grand total of everything you own instead of what you brought in recently.
