More on taxes

[HRoark]

rbw1966 said:

HRoark=mtngoat

 

As for law not being subjective: you are incrrect. Laws are HIGHLY subjective and NOT always based on logic.

 

How so. I'm interested in examples.

[HRoark]

j_b said:

folks in this country overwhelmingly decided that a progressive tax was needed to attend to societal needs. end of story.

 

Don't you think "overwhelmingly" is taking it a bit too far? Plus, let's look at the origin of income taxes in this country. Weren't they initially to fund wars?

 

End of story? Wow, glad you cleared that up.

[Dru]

how about this?

 

the government sets the overall level of taxation.

 

the taxpayer checks boxes on the tax form indicating what his/her tax dollars can be spent ON

 

greenies & democrats can choose to have tax dollars spent on health care and national parks

 

rednex & repubs can spend tax dollars on presidential salary and the military.

 

geeks can spend it on NASA and DARPA.

 

[Peter_Puget]

Jim said:

A recent report:

....snip snip....

 

A side note - I notice PP didn't cite any source, just curious. Gotta get some work done, then 20 mi bike ride home. It's raining, ugh.

 

Source for what?

 

If you mean link to the table, I sure did - in my second post to this thread. How can you be so wrong so often? Here it is again: Table Link

 

 

PP

 

 

[Peter_Puget]

One more thing:

"Overall, these results indicate that upward mobility remains an attainable goal for the majority of working age individuals. The presence of mobility implies that yearly measures of earnings inequality likely overstate the permanent earnings differences between individuals."

 

link: I posted this a few weeks back

 

PP

 

 

[CraigA]

Peter_Puget said:

 

 

...Schaffhausen, is doing something about...

 

mmmmmm, awful close to Snafflehound

 

Coincidence?

 

Craig

[JayB]

Jim said:

JayB said:

Jim:

 

I would have to go searching for documentation to back it up - don't have time to google at the moment - but I recall reading a few papers which demonstrated that every time the top marginal tax rates have been lowered, the percentage of all taxes paid by the wealthiest Americans has increased, rather than decreased (maybe PP has a link).

 

What!!??

 

Oh so you drop the capital gains tax, the inheritance tax, and the tax on the upper 10% (which bushie has done) and they pay more?? Yes, I would like to see documentation on that magic.

 

Maybe it's the folks that are making $30K or less that are weasling out of the inheritance tax and capital gains?

 

Link with figures that back this claim up...

 

Highlights:

 

" Since 1984 the JEC has provided factual information about the impact of the tax cuts of the 1980s. For example, for many years the JEC has published IRS data on federal tax payments of the top 1 percent, top 5 percent, top 10 percent, and other taxpayers. These data show that after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase."

 

 

"The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.

 

A middle class of taxpayers can be defined as those between the 50th percentile and the 95th percentile (those earning between $18,367 and $72,735 in 1988). Between 1981 and 1988, the income tax burden of the middle class declined from 57.5 percent in 1981 to 48.7 percent in 1988. This 8.8 percentage point decline in middle class tax burden is entirely accounted for by the increase borne by the top one percent.

 

Several conclusions follow from these data. First of all, reduction in high marginal tax rates can induce taxpayers to lessen their reliance on tax shelters and tax avoidance, and expose more of their income to taxation. The result in this case was a 51 percent increase in real tax payments by the top one percent. Meanwhile, the tax rate reduction reduced the tax payments of middle class and poor taxpayers. The net effect was a marked shift in the tax burden toward the top 1 percent amounting to about 10 percentage points. Lower top marginal tax rates had encouraged these taxpayers to generate more taxable income.

 

The 1993 Clinton tax increase appears to having the opposite effect on the willingness of wealthy taxpayers to expose income to taxation. According to IRS data, the income generated by the top one percent of income earners actually declined in 1993."

 

 

[Luna]

Jim said:

Let's look at it this way. If the total wealth in the country was $100, this is the way it would be distributed:

 

1 person gets $38.10

 

4 people get $5.32 each

 

5 people get $2.30 each

 

10 people get $1.25 each

 

20 people get .60 each

 

20 people get .23 each

 

40 people get 1/2 cent each

 

 

Given the current marginal tax rates I'd say the upper incomes are getting a deal.

 

Hmm. Given this and pp's chart I'd say the upper 1% are getting a good deal

 

 

[Luna]

Sorry for the double post but pp, so the fuck what? This aggregating of the data is a great right wing ploy to make it look like the poor little rich guys are oh so burdened.

 

That's rich (pun intended). They have plenty to live on after their recent tax breaks for god sake. Give the rush line a rest already.

[Billygoat]

Dru said:

how about this?

 

the government sets the overall level of taxation.

 

the taxpayer checks boxes on the tax form indicating what his/her tax dollars can be spent ON

 

greenies & democrats can choose to have tax dollars spent on health care and national parks

 

rednex & repubs can spend tax dollars on presidential salary and the military.

 

geeks can spend it on NASA and DARPA.

 

 

I've been saying this for years! Only I try to be a little more realistic: We get to indicate where 1/2 of our taxes are spent. Still a shitload of $$$$ and a true vote

[rbw1966]

HRoark said:

rbw1966 said:

HRoark=mtngoat

 

As for law not being subjective: you are incrrect. Laws are HIGHLY subjective and NOT always based on logic.

 

How so. I'm interested in examples.

 

Examples of subjective laws:

 

1. Abortion

2. Death with dignity

3. drug laws

 

Need I go on? Furthermore, the very nature of the Supreme Court system is highly subjective: they pick and choose what cases are heard. Also, legislation is proposed in mostly arbitrary ways. To think that "Law" with a capital "L" is objective and universal shows a naivete that undercuts many of your libertarian arguments.

 

I think a person has a right to his or her own labor and the ability to aquire wealth. However, we live in an environment where participation is an implicit acceptance of the ideals our social organization (for example public education, police and other social services). If you don't want your money funding them you have two choices: you can use your vote to change that which you dont agree with or you can move elsewhere.

 

I think the disparity in wealth speaks ill of our culture.

[Luna]

While PP's table is interesting, it is a cleverly simplistic tool used by the conservative right to show how burdened the upper income levels are taxed. So here's what I say. It's a complicated issue.

 

1) One ploy often used to play down growing inequality is to rely on rather coarse statistical breakdowns - dividing the population in to quintiles. From there it's a short step to deny that we're really talking about the rich at all. PP's table comes from a Republican committee (aren't they all now) and bears a striking resemlence to info put out by the right-wing conservative Heritage Foundation. You can present data that show there has been some increase in the share of income (and tax burden) to the top 10% of taxpayers and then point out that anyone with income over $81K is in that top 10%, which is middle class - right?

 

Wrong: the top 10% contains a lot of people whom we would still consider middle class, but they aren't the big winners in the last 30 years of tax reduction. Most of the gains in the share of the top 10% were actually gains in the top 1%. In 1998 the top 1% started at $230K. In turn, 60% of the gains of that top 1% went to the top 0.1%, those earning more than $790K. And almost half of those gains went to a mere 13,000 tax payers, the top 0.1%, who had an average income of $17 million. (Pikety-Saez research institute and non-partisan Congressional Budget Office data).

 

In 1970 the top .01% of taxpayers had 0.7% of total income, that is they earned only 70 times that of the average. But in 1998 the top .01% received more than 3% of all income. The 13,000 richest families had almost as much income as the 20 million poorest. And the trend continues more so in the Bushie Admin, Hmmm, who needs tax relief?

 

 

2) Taxes in the US are lower than they have been in a long time. Middle income Americans are paying about 26% of their income in taxes, which has been roughly the same since the early '70s (including state and local - varies by state of course). Meanwhile, wealthy Americans have seen a sharp drop in their tax burden. The top tax rate is now 35%, half of what it was in 1970. And with the exception of a brief period between 1988 and 1993, that's the lowest rate since 1932 (CBO). The effective rate on corporate profits has been cut in half since the 1960s. The 2001 tax cut phases out the inheritance tax, which is overwhelmingly a tax on the extremely wealthy; in 1999 only 2% of estates paid the tax, only 3.300 estates worth at least $5 million. The 2003 Bushie tax act sharply cuts taxes on dividend income, another boon to the very wealthy. By the time the Bushie tax cuts have taken effect, people with really high incomes will face their lowest average tax rate since the Hoover Administration.

 

By 2002 the US take in taxes was 26.3% of GDP, and will be lower in coming years. This is a low number compared with almost every other advanced country. In 1999 Canada collected 38.2% of GDP in taxes, France collected 45% in taxes and Sweden, 52.2%. In the US, taxes, as a percentage of GDP are at their lowest rate since the Eisenhower administration.

 

I know - you thinking our economy and life is still better here. Canadians can expect to live about 2 yrs longer than Americans. In fact live expectancy in the US is well below Canada, Japan, and every major nation in Western Europe. Male life expectancy is lower in the US than Costa Rica.

 

3) So here's the picture. Americans pay low taxes by interntional standards. Most people's taxes haven't gone up in the past generation, the wealthy have had their taxes cut to historic levels. Even before the recent round of tax cuts, when compared to a generation ago or international tax levels we had nothing to complain about, and higher incomes have reason to celebrate. Yet we see the rage about being "enslaved" to taxes.

 

These days 1% of families receive about 16% of total pretax income and about 14% after tax income. Not trivial. That share has roughly doubled in the past 30 years.

 

So what gives?

 

Neo conservatives vision to make smaller government, reduce social benefits including SS and medicare and create a greater dog-eat-dog society. Oh except the military spending of course.

 

 

 

 

 

[ChrisT]

but have you factored in state and local taxes? For example, here in Oregon, they seem forever on the rise (preying on liberal voters such as those in Mult. County) w/o significant increase in benefits to schools...or social services...which continue to be cut.

[Jim]

Chris - I think she mentions that in the first para. I would be interesting to calculate exactly what your taxes are. My guess is that your around 26-28%.

 

I haven't lived in a state tax state for a while - but don't you get to deduct your state taxes off the federal income tax calculation?

 

Interesting discussion.

[Peter_Puget]

Luna just wrote another Finnagin’s Wake! Like that famous tome it says a lot but just what it means is hard to decipher but let’s try to figure it out. Although I usually do not think the “point by point” method is a proper response, since Luna’s post is so long I am going to respond in that manner.

 

 

While PP's table is interesting, it is a cleverly simplistic tool used by the conservative right to show how burdened the upper income levels are taxed. So here's what I say. It's a complicated issue.

 

Well we agree it’s a complicated issue but I must say that I have made no claims based on fairness or equity. In fact I believe that I have expressly rejected such claims. Luna’s mention of conservative right and use of terms clever simplistic are attacks not against any argument I have put forth or even directly against me but against an evil third party! Is he/she trying to use guilt by association? I think so, the silly devil!

 

1) One ploy often used to play down growing inequality is to rely on rather coarse statistical breakdowns - dividing the population in to quintiles. From there it's a short step to deny that we're really talking about the rich at all. PP's table comes from a Republican committee (aren't they all now) and bears a striking resemlence to info put out by the right-wing conservative Heritage Foundation. You can present data that show there has been some increase in the share of income (and tax burden) to the top 10% of taxpayers and then point out that anyone with income over $81K is in that top 10%, which is middle class - right?

 

Luna never says the data is wrong but casts a shadow on it by saying the table comes from a “republican committee” and a similar one has been used by the “right wing heritage foundation”. Of course if the information is correct, all tables of a similar structure would be similar. Where does the structure come from? The IRS. (http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls) Perhaps that is why this table was chosen. Note also that Luna claimed only that the table came from a republican committee but made no comment regarding the data! Was Luna trying to avoid admitting the data come from the IRS?

 

I expressly showed the income levels for each grouping in my first post – nothing was hidden. The data I presented shows that the AGI floor for the top 10% is in fact $92,754 not the $81 income as presented by Luna. I’ll assume that Luna meant AGI when he/she used the term “income” if not his/her error is even greater.

 

Wrong: the top 10% contains a lot of people whom we would still consider middle class, but they aren't the big winners in the last 30 years of tax reduction. Most of the gains in the share of the top 10% were actually gains in the top 1%. In 1998 the top 1% started at $230K. In turn, 60% of the gains of that top 1% went to the top 0.1%, those earning more than $790K. And almost half of those gains went to a mere 13,000 tax payers, the top 0.1%, who had an average income of $17 million. (Pikety-Saez research institute and non-partisan Congressional Budget Office data).

 

In 1970 the top .01% of taxpayers had 0.7% of total income, that is they earned only 70 times that of the average. But in 1998 the top .01% received more than 3% of all income. The 13,000 richest families had almost as much income as the 20 million poorest. And the trend continues more so in the Bushie Admin, Hmmm, who needs tax relief?

 

Wrong? What claim have I made that is wrong? What assertion? Earth to Luna: come in please! This is non-responsive to any argument I have made so I will let it pass with only a few small comments. Luna mentioned that people present data in a manner that best shows what they want to show. For example, see the argument presented above. Now Luna has done the same darn thing here! The scoundrel! Look he is using five year old data! Any reader interested in more recent data would find that the higher income levels have suffered disproportionately during the current downturn. Hmm maybe somewhere on this site PP has posted some data regarding this some time ago (hint: it was from the IRS!)

 

Ok I’ll admit it I am pretty much bored with this. I believe my argument is clear to someone willing to put aside their rejoinder until they finish reading my posts. Suffice to say that Luna has missed it by a mile. Luna was getting close with the dividend tax change put missed the point my argument would suggest was important.

 

Even worse Luna has resorted to the very tactics decried in his/her post. What gives?

 

PP

 

[Jim]

PP - I think Luna's point is similar to mine (Luna?). The upper incomes are doing quite well, their taxes have been drastically cut over the past couple decades, especially recently, and they own a much larger percentage of the income and wealth pie.

 

So they need tax relief?

 

Is your point that a flat tax is what is needed to revise this?

 

People who make more money pay more taxes. So what?They're at historic lows - they should go lower?

[ChrisT]

Jim said:

Chris - I think she mentions that in the first para. I would be interesting to calculate exactly what your taxes are. My guess is that your around 26-28%.

 

I haven't lived in a state tax state for a while - but don't you get to deduct your state taxes off the federal income tax calculation?

 

Interesting discussion.

 

you are correct Jim... however liberal voters approved a special income tax just for Mult. County (Portland Metro Area) residents making it the highest in the state. I think some clever people knew it wouldn't fly elsewhere in the state....and yes there are beautiful libraries in Portland but the schools still whine about not having enough $$$$, prisoners are being let loose, and health care benefits for poor are cut, on and on, etc.

[Peter_Puget]

Jim

 

Luna's point was more than that he/she attacked others as misrepresenting information. That while making that point he/she engaged in the same tactics he/she decried is amazing.

 

PP

[Jim]

Well now that we've fully aired both positions, what is your solution to this problem of the percieved "burden" put on higher tax brackets?

[JayB]

I think its important to separate the rhetoric and symbolism from the reality.

 

If the figures show that lowering the top marginal rate and the capital gains rate actually increase the percentage of the overall tax burden borne by the wealthiest Americans (see above) then one would think that those in favor of progressive taxation would support such a move.

[Jim]

JayB said:

I think its important to separate the rhetoric and symbolism from the reality.

 

If the figures show that lowering the top marginal rate and the capital gains rate actually increase the percentage of the overall tax burden borne by the wealthiest Americans (see above) then one would think that those in favor of progressive taxation would support such a move.

 

Oh gimme a break with the percentage of tax burden already. If you look at the group that is recieving the benifits of the recent tax cuts - the upper 1%, they'er making out like bandits.

 

Of course they quintile will show an increase because the tax revenue total is decreasing!!

 

This strays from the issue again. The upper income rates are at their lowest in 30 years! I assume your also advocating flat tax?

[rbw1966]

ChrisT said:

you are correct Jim... however liberal voters approved a special income tax just for Mult. County (Portland Metro Area) residents making it the highest in the state. I think some clever people knew it wouldn't fly elsewhere in the state....and yes there are beautiful libraries in Portland but the schools still whine about not having enough $$$$, prisoners are being let loose, and health care benefits for poor are cut, on and on, etc.

 

Chris--prisons are not funded by tax dollars, unless you refer to Mult county jail which is. Health Care benefits for the poor (Oregon Health Plan, I presume) is funded by state dollars, not the county. The Mult County tax passed by the voters (and I presume you are one) is earmarked specifically for schools and other services that benefit Multnomah County. Highest in the state? True, but no one else has a county tax. Its not permanent which is a good thing. Oregon needs a complete overhaul of its tax structure, but for that matter so does the entire US.

 

Jim--you can deduct fed tax from state income tax but not vice versa.

[ChrisT]

Rob - I was wondering when you were going to pipe in on this subject - and set me straight!

 

as for school funding, all Oregon need do is look to the north and the state of Washington which has dedicated budget funds for education (unlike Oregon)! and no, I did not vote for the tax increase...wasn't an Oregon resident at the time

[rbw1966]

I couldn't agree more on the subject of dedicated tax funds for the schools. They should be one of our biggest priorities.

 

 

Now stop your

[Al_Pine]

OK all you Flat-taxers, let's move away from Mr. Rourke's fantasy island, and see how the flat tax would affect you! Using PP's data on post 1, I've calculated some figures and put them in the table below. It allows you to look up how much it will cost/save you to make everything much more "fair" to those poor high-incomers. For example, if you are currently below the median (less than 28K per PP's post) then the cost of "fairness" to your brothers across the tracks is only paying 3.5 times more income tax. If you make between 29 and 56K$ then you have to pay 1.6 times more to Uncle Sam. But the bright side is, those people who make 300K$/year only have to pay half!!!!

 

 

The system seems to be working(?), but hey, let's fuck with it and volunteer to pay more so those wealthier type people won't be unfairly burdened.

 

As for you national sales tax people, that's even better! The lower your income, the greater percentage of your income you'll be spending on taxable goods, thus the lower income folks will be taxes at a higher rate (with respect to their income) from those in the upper end of the economic strata. Oooooh, sounds like a good idea. All you plebes go vote for it. At least it'll make those horribly complictated 1040EZ forms go away.