The budget battles

[blackshoe]

Interesting questions. Take these two: "Should people be allowed to own a company that big? is that fundamentally unfair?" First, I don't think it's fundamentally unfair. Second, what's the alternative? Spend a lifetime building up an Apple or a Microsoft, only to have some State bureaucrat come along and say "sorry, you're not allowed to own something this big, we're taking it over"?

 

As to what word conservatives (or liberals for that matter) use to describe the funding of whatever project they're talking about, well, if a politician opens his mouth, he's lying. Check the facts for yourself.

[PassedOut]

Everyone agrees that people should pay their "fair share", its just not at all clear what that means in practice.

Maybe true in the UK but, alas, not in the US. Here we have a powerful group of free lunchers dedicated to receiving benefits -- from the government and from their more responsible neighbors -- without raising the taxes or paying the insurance premiums necessary to pay for those benefits.

 

Some history: In 1995, the 400 US taxpayers who earned the most money paid an average of 30% of their income in taxes. The unemployment rate was 5.6%. Now the top 400 earners average less than 17% in taxes and unemployment is 9.2%. And today in Germany, where taxes are much higher than in the US and where the social safety net is much stronger, unemployment is just 6.1%.

 

The 47% in the US today whose taxes consist only of social security, medicare, and sales taxes lack the income to pay anything more. You can't get blood from a turnip. The government could confiscate their total incomes along with everything that those folks own and still not fix the US debt problem. It's just math.

 

A good part of the reason for that is that the successful war against the middle class has reduced the tax base while it pushed folks down the ladder. People like the Koch brothers seek that outcome. People like Warren Buffett seek the restoration of a strong middle class.

 

I agree with Warren Buffett on that. Others agree with the Koch brothers. People who think that things are better now than under Clinton want the Bush tax cuts continued. Those who prefer the Clinton years disagree. I guess it just depends upon your world view.

[phil_20686]

Maybe true in the UK but, alas, not in the US. Here we have a powerful group of free lunchers dedicated to receiving benefits -- from the government and from their more responsible neighbors -- without raising the taxes or paying the insurance premiums necessary to pay for those benefits.

 

Some history: In 1995, the 400 US taxpayers who earned the most money paid an average of 30% of their income in taxes. The unemployment rate was 5.6%. Now the top 400 earners average less than 17% in taxes and unemployment is 9.2%. And today in Germany, where taxes are much higher than in the US and where the social safety net is much stronger, unemployment is 6.1%.

 

In the UK the concept of social satey nets are well established - you are not necessarily expected to contribute the full cost of the medical and social benefits you receive, as they are funded disproportionately by the wealthy, and in practice this is true even in the US.

 

I'm pretty sure that the numbers in your post refer to how much federal income tax was paid on their income, one could easily argue that the incidence of corporation tax falls (at least partly) on shareholders, and should be included in their total tax burden. looking only at income tax is definitely a wrong way of looking at tax incidence. All corporation taxes are paid either by the consumer through higher prices, or by the shareholders through reduced profits, and working it out can be difficult. Attempts to do so can be found at institutes like the Tax Policy Centre, which suggest that the very wealthy still pay about 30% of their income in taxes. Just not in the same taxes as they did before. Obviously such things are fraught with difficulty.

[luke warm]

I agree with Warren Buffett on that.

do you personally feel that you pay too little in taxes?

[helene_t]

I find it all a little mad. [....]

What is a "fair" level of inequality in a society?

Of course she didn't provide an argument for a particular level of progressiveness/regressiveness of the tax system. Heck, I suppose it is possible to agree with her and still think that the current tax system is not too regressive.

 

She just said that rich people should pay "a chunk" of their wealth back in return for the fact that the government facilitated their wealth accumulation by providing infrastructure etc. Shouldn't be too controversial in itself. Of course it is controversial what exactly a "chunk" is.

[blackshoe]

It seems to me that talking about how much some individual, rich or otherwise, should pay to fund the government is putting the cart before the horse. Let's talk about the horse: what, exactly, do we want government to do? My personal opinion is "as little as possible".

[PassedOut]

do you personally feel that you pay too little in taxes?

You asked this before and my answer is the same: I would be perfectly happy to have tax rates restored to the levels of the Clinton years (and even earlier). I would live just as well. I'd still eat what I wished, live where I wished, travel where I wished, do what I wished.

 

I'm thankful to live in a place where one can start and run businesses without paying bribes to every two-bit official around, and to operate within the domestic framework of the strong, but benign and helpful government that we have in the US. Elizabeth Warren has it right.

[PassedOut]

It seems to me that talking about how much some individual, rich or otherwise, should pay to fund the government is putting the cart before the horse. Let's talk about the horse: what, exactly, do we want government to do? My personal opinion is "as little as possible".

No one agrees with everything that the government does. That's universal.

 

But we have a group of elected representatives who have already decided much of what the government has done, is going to do now, and will do in the immediate future. If you don't like roads, bridges, police and fire protection, public education, national defense, and a social safety net, you are free to try to convince others to change that over time.

 

So long as our borders are still unfenced, you still have the right to leave and establish yourself in a place more to your liking.

 

But while you enjoy the benefits of living here, it's small to begrudge the taxes required to pay for the benefits you receive.

[awm]

I'm pretty sure that the numbers in your post refer to how much federal income tax was paid on their income, one could easily argue that the incidence of corporation tax falls (at least partly) on shareholders, and should be included in their total tax burden. looking only at income tax is definitely a wrong way of looking at tax incidence. All corporation taxes are paid either by the consumer through higher prices, or by the shareholders through reduced profits, and working it out can be difficult. Attempts to do so can be found at institutes like the Tax Policy Centre, which suggest that the very wealthy still pay about 30% of their income in taxes. Just not in the same taxes as they did before. Obviously such things are fraught with difficulty.

 

This sort of calculation seems very suspect for a number of reasons. First, it seems to assume that investment income is effected by the corporate tax rate. While some such link probably exists, it is tenuous at best because few companies pay out a significant proportion of their profits in dividends (in fact some very lucrative investments like Apple pay no dividend at all). Second, it ignores the fact that virtually everyone's income might be effected by corporate tax rates; for example a company which had less tax burden (and more profits) could more easily give its employees a raise, so middle class people may well see their wages suppressed by the corporate rate. Third, virtually all money in the economy is taxed "multiple times" -- every time the money changes hands (from person to company to employee to another company to an investor etc) and the choice of who to "charge" this tax burden to is pretty arbitrary. Percentage of income seems like a more legitimate way to calculate tax burden than trying to calculate indirect impacts of taxes on people's income into the equation.

 

I'd also be curious how the very wealthy are paying just as much now as before "because of corporate tax" when corporate tax is also at record lows. Is it baked in now and not thirty years ago? And if so, why?

[PassedOut]

I'd also be curious how the very wealthy are paying just as much now as before "because of corporate tax" when corporate tax is also at record lows. Is it baked in now and not thirty years ago? And if so, why?

Federal revenue from all sources fell from 20% of GDP to 14% of GDP between 2000 and 2010. Although many folks pay less today than in 2000, by far the largest portion of the revenue crater is due to reduced contributions by the wealthy. No amount of obfuscation changes that.

[hrothgar]

Federal revenue from all sources fell from 20% of GDP to 14% of GDP between 2000 and 2010. Although many folks pay less today than in 2000, by far the largest portion of the revenue crater is due to reduced contributions by the wealthy. No amount of obfuscation changes that.

 

Not sure if this is an apples to apples comparison...

 

Neither the stock market nor the real estate market are appreciating at nearly the same rate as they did a decade ago.

Even if rates were precisely the same, tax revenue would be a LOT smaller.

[blackshoe]

If you don't like roads, bridges, police and fire protection, public education, national defense, and a social safety net, you are free to try to convince others to change that over time.

 

This is the kind of asinine "argument" that makes it impossible to discuss these things. But then I suppose you can now play the "I win!" card and strut around as if you've actually accomplished something. Me, I'm not playing that game.

[hrothgar]

This is the kind of asinine "argument" that makes it impossible to discuss these things. But then I suppose you can now play the "I win!" card and strut around as if you've actually accomplished something. Me, I'm not playing that game.

 

Funny, I had exactly the same attitude when you stated

 

what, exactly, do we want government to do? My personal opinion is "as little as possible".

[luke warm]

You asked this before and my answer is the same: I would be perfectly happy to have tax rates restored to the levels of the Clinton years (and even earlier). I would live just as well. I'd still eat what I wished, live where I wished, travel where I wished, do what I wished.

but that answers a question i did not ask... is it safe to assume your answer is "yes" to the question i did ask?

 

But while you enjoy the benefits of living here, it's small to begrudge the taxes required to pay for the benefits you receive.

america, love it or leave it eh?

 

I'd also be curious how the very wealthy are paying just as much now as before "because of corporate tax" when corporate tax is also at record lows.

funny eh? record lows and still the second highest rate (2nd to japan) in the world... and speaking of income taxes (though richard will probably accuse me of spouting talking points), the top 5% in the u.s. pay right at 97% of the tax (if these figures are correct)... and the bottom 50% of wage earners pay about 3% of the taxes... how fair do you want it?

[PassedOut]

and speaking of income taxes (though richard will probably accuse me of spouting talking points), the top 5% in the u.s. pay right at 97% of the tax and the bottom 50% of wage earners pay about 3% of the taxes... how fair do you want it?

What do the people between the top 5% and the bottom 50% pay? Nothing?

[hrothgar]

and speaking of income taxes (though richard will probably accuse me of spouting talking points), the top 5% in the u.s. pay right at 97% of the tax (if these figures are correct)... and the bottom 50% of wage earners pay about 3% of the taxes... how fair do you want it?

 

Comment one:

 

The main thing that your link shows is that you're too stupid to read a table properly

 

Looking at the 2008 numbers, the top 1% pay 38.02% of incomes taxes.

The top 5% pay 58.72%.

Add these two numbers and you get something very close to 97%

 

Here's the rub... The top 5% includes the top 1%

Your 97% percent estimate is double counting.

 

This is blatantly obvious (look at the top 50% / bottom 50% split)

 

 

Comment 2:

 

Your "analysis" focus on income tax... One of the few parts of the tax code that isn't highly regressive.

The part of the tax code that is designed to help balance out payroll taxes and sales taxes, and all the other taxes that hit the poor so much more than the rich.

 

For what its worth, the CBO has put out some good charts that give a stratified view of tax income and tax burden.

 

According to the 2006 figures (the latest that I found) the highest quintile of income earners look to capture about 58% of income while paying 70-75% of taxes.

http://www.cbo.gov/publications/collections/taxdistribution.cfm

 

So yes, Virginia, the tax code taken as a whole is slightly progressive but nowhere near to the extent that you're claiming...

[PassedOut]

the bottom 50% of wage earners pay about 3% of the taxes... how fair do you want it?

Given that the bottom 50% have only 2.5% of the wealth in the US, their paying 3% of the income tax doesn't strike me as unfair to the rest of us. Depends upon your world view, I guess. What percentage would you consider fair?

 

And the lowest earners never reach the cap on social security payments either, so they are stuck with those payments regardless.

[awm]

funny eh? record lows and still the second highest rate (2nd to japan) in the world

 

This is a sort of standard talking point too. Yes, the United states has one of the highest statutory corporate tax rates in the world. However, we also have massive numbers of potential deductions. You have to measure the percentage that companies actually pay... which is much less than what's on the books. In fact there are many highly publicized examples of companies like GE, Bank of America, and Exxon which are paying virtually nothing in corporate tax (or even getting a refund) while making billions in profits.

 

Here's a link.

[hrothgar]

What do the people between the top 5% and the bottom 50% pay? Nothing?

 

I'm sure Plantinga has some bearing on this...

[blackshoe]

"Profits" is not an obscenity, whatever some may think.

[PassedOut]

"Profits" is not an obscenity, whatever some may think.

Couldn't agree more! I've been in business all of my life, and profits are the lifeblood of our family's businesses.

[Winstonm]

"Profits" is not an obscenity....

 

Neither is "taxes".

[luke warm]

Neither is "taxes".

no offense, but you can't use language like that on a family site

[PassedOut]

No wonder some folks believe claims that the wealthy in the US carry more than their share of the tax burden. Seems that many do not know how skewed the distribution of wealth here actually is:

 

http://assets.motherjones.com/politics/2011/inequality-page25_actualdistribwithlegend.png

 

You can read the paper upon which this chart is based here.

[Winstonm]

no offense, but you can't use language like that on a family site

 

I said "taxes", not "Texas".