I wish I paid a 17% tax rate

[JaneBlow]

I thought I would just post this as food for thought.


America's most affluent 1 percent—taxpayers who averaged $1.3 million in income in 2006, the latest year with IRS data—paid 22.79 percent of their incomes that year in federal income tax. In 1986, the top 1 percent of taxpayers averaged $507,520 in income in inflation-adjusted dollars, and paid taxes at a 33.13 percent rate.

The top 1 percent of taxpayers have seen their tax burden shrink by one-third since 1986. Over those same years, the top 1 percent of taxpayers doubled their share of the nation's income, from 11.3 percent of the total in 1986 to 22.1 percent in 2006.

THE WEALTHIEST 400
Since 1955, our nation's top 400 taxpayers have seen their incomes, after inflation, soar by a factor of more than 20. Yet these super wealthy are paying taxes at a rate three times less than the top 400 paid in 1955. In 1955, the top 400 averaged $12.3 million (in 2006 dollars) and paid, after exploiting every possible loophole they could find, 51.2 percent of that in federal income tax.

In 2006, a half-century later, the richest 400 taxpayers in the United States averaged $263.3 million each and paid 17.2 percent of their incomes in federal income tax.

If the top 400 of 2006 paid as much of their incomes in taxes as the top 400, the federal treasury would have collected in 2006—$35.9 billion more in revenue—just from these 400 taxpayers.

http://www.ips-dc.org/reports/#1207

[J.Q. Citizen]

I thought I would just post this as food for thought.


America's most affluent 1 percent—taxpayers who averaged $1.3 million in income in 2006, the latest year with IRS data—paid 22.79 percent of their incomes that year in federal income tax. In 1986, the top 1 percent of taxpayers averaged $507,520 in income in inflation-adjusted dollars, and paid taxes at a 33.13 percent rate.

The top 1 percent of taxpayers have seen their tax burden shrink by one-third since 1986. Over those same years, the top 1 percent of taxpayers doubled their share of the nation's income, from 11.3 percent of the total in 1986 to 22.1 percent in 2006.

THE WEALTHIEST 400
Since 1955, our nation's top 400 taxpayers have seen their incomes, after inflation, soar by a factor of more than 20. Yet these super wealthy are paying taxes at a rate three times less than the top 400 paid in 1955. In 1955, the top 400 averaged $12.3 million (in 2006 dollars) and paid, after exploiting every possible loophole they could find, 51.2 percent of that in federal income tax.

In 2006, a half-century later, the richest 400 taxpayers in the United States averaged $263.3 million each and paid 17.2 percent of their incomes in federal income tax.

If the top 400 of 2006 paid as much of their incomes in taxes as the top 400, the federal treasury would have collected in 2006—$35.9 billion more in revenue—just from these 400 taxpayers.

http://www.ips-dc.org/reports/#1207
Quite the interesting website you've given us Jane.

I could not find this particular article so I'm not sure how they derived some of their numbers or came to some of their conclusions. In 1955, the top marginal tax rate was 91.0% so I'm not exactly sure how they arrived at a 51.2% rate unless they're claiming that those taxpayers found 40% worth of deductions. Not impossible but like I said, I couldn't find that article.

However, just using their numbers and basically assuming the method they used, I determined that relative to 1955, in 2006 the 400 top taxpayers paid approximately $15.6 billion more than their counterparts. To arrive at this number, I calculated the dollar amounts the average top taxpayer would pay and then multiplied that amount by 400. So basically, even with a dramatically reduced tax rate, according to this study, the Treasury still collected around half of what you believe they should have.

I would submit, that without the tax cuts that those people received, it's entirely possible that their incomes would not have risen as much as they did and that the Treasury could very well have ended up collecting much LESS than they did in 2006. In other words, without the tax cuts, our economy may not have prospered as much as it and therefore, may not have provided that boost to those incomes.

Now, of course, it's impossible to know that for sure but that pretty much follows the philosophical reasons for cutting taxes to which conservatives adhere. Of course, I suppose that it's always possible to just implement such a confiscatory tax policy now. But in my mind that would be the equivalent of saying "Thanks for getting us here guys, we really appreciate it. Now give us half of your money."

[JaneBlow]

Quite the interesting website you've given us Jane.

I could not find this particular article so I'm not sure how they derived some of their numbers or came to some of their conclusions.

When you click on the link I provided, the title of the report appears at the top of the page. It is, "Reversing the Great Tax Shift: Seven Steps to Finance Our Economic Recovery Fairly". Look to the right of the title and click on the link that says, "Download/Open this Report". Or if that is too much trouble, you can click here: http://www.ips-dc.org/getfile.php?id=356

I didn't want to provide that link originally, because I knew you would question the source, which is easier to determine with the first link I provided.

In 1955, the top marginal tax rate was 91.0%
so I'm not exactly sure how they arrived at a 51.2% rate unless they're claiming that those taxpayers found 40% worth of deductions. Not impossible but like I said, I couldn't find that article.

The article states, "In 1955, the top 400 averaged $12.3 million (in 2006 dollars) and paid, after exploiting every possible loophole they could find, 51.2 percent of that in federal income tax." The phrase "after exploiting every possible loophole they could find", means that the bottom line tax rate paid was 51.2%.

However, just using their numbers and basically assuming the method they used, I determined that relative to 1955, in 2006 the 400 top taxpayers paid approximately $15.6 billion more than their counterparts. To arrive at this number, I calculated the dollar amounts the average top taxpayer would pay and then multiplied that amount by 400. So basically, even with a dramatically reduced tax rate, according to this study, the Treasury still collected around half of what you believe they should have.

I believe that in 2006, the top earners should have paid the same percentage of their income as the middle class paid. They paid 17.2%, while the middle class paid closer to 30%.

I would submit, that without the tax cuts that those people received, it's entirely possible that their incomes would not have risen as much as they did and that the Treasury could very well have ended up collecting much LESS than they did in 2006. In other words, without the tax cuts, our economy may not have prospered as much as it and therefore, may not have provided that boost to those incomes.

So if we let the ultra-rich pay at a lower rate than the middle class, they will return the favor by growing their fortunes and we will be rewarded with the ability to tax those larger fortunes later. First of all, there is no proof of this theory. Second, even if it were true, it would be an insufficient reward - especially when these very people drive their companies into the ground and the middle class loses jobs, their life savings and still have to bail out the wrecked companies. Finally, if we tax a fair rate in the first place, we can use the revenue to invest in energy, education and healthcare -- those are REAL rewards that aren't left to chance.

Now, of course, it's impossible to know that for sure but that pretty much follows the philosophical reasons for cutting taxes to which conservatives adhere. Of course, I suppose that it's always possible to just implement such a confiscatory tax policy now. But in my mind that would be the equivalent of saying "Thanks for getting us here guys, we really appreciate it. Now give us half of your money."

So you argue that the tax cuts are what allowed the ultra rich to grow their fortunes, then you get upset if they are asked to pay some of it back?

[J.Q. Citizen]

When you click on the link I provided, the title of the report appears at the top of the page. It is, "Reversing the Great Tax Shift: Seven Steps to Finance Our Economic Recovery Fairly". Look to the right of the title and click on the link that says, "Download/Open this Report". Or if that is too much trouble, you can click here: http://www.ips-dc.org/getfile.php?id=356

I didn't want to provide that link originally, because I knew you would question the source, which is easier to determine with the first link I provided.



The article states, "In 1955, the top 400 averaged $12.3 million (in 2006 dollars) and paid, after exploiting every possible loophole they could find, 51.2 percent of that in federal income tax." The phrase "after exploiting every possible loophole they could find", means that the bottom line tax rate paid was 51.2%.



I believe that in 2006, the top earners should have paid the same percentage of their income as the middle class paid. They paid 17.2%, while the middle class paid closer to 30%.



So if we let the ultra-rich pay at a lower rate than the middle class, they will return the favor by growing their fortunes and we will be rewarded with the ability to tax those larger fortunes later. First of all, there is no proof of this theory. Second, even if it were true, it would be an insufficient reward - especially when these very people drive their companies into the ground and the middle class loses jobs, their life savings and still have to bail out the wrecked companies. Finally, if we tax a fair rate in the first place, we can use the revenue to invest in energy, education and healthcare -- those are REAL rewards that aren't left to chance.



So you argue that the tax cuts are what allowed the ultra rich to grow their fortunes, then you get upset if they are asked to pay some of it back?

Good points. I agree.

[JaneBlow]

Good points. I agree.

Wow! Thank you!

[kmcgraw5]

Good points. I agree.

Yeah, me too...

[kmcgraw5]

"Taxpayers to Get Rude Surprise:

http://finance.yahoo.com/news/INSIDE-WASHINGTON-Rude-apf-15091434.html?.v=1

Typical government efficiency for you. The emperor giveth, and the emperor taketh away... :rolleyes:

Funny thing is, I don't think the "rich" are getting the benefit of these tax credits. So the middle class apparently gets screwed again!?! I thought only Republicans did that...

[JaneBlow]

"Taxpayers to Get Rude Surprise:

http://finance.yahoo.com/news/INSIDE-WASHINGTON-Rude-apf-15091434.html?.v=1

Typical government efficiency for you. The emperor giveth, and the emperor taketh away... :rolleyes:

Funny thing is, I don't think the "rich" are getting the benefit of these tax credits. So the middle class apparently gets screwed again!?! I thought only Republicans did that...

Obama gives a tax break to the middle class -- the Republicans don't like it and didn't vote for it, then they complain that it's not big enough. Now that it becomes apparent that in some specific situations, some people will get back more money than they are entitled to, the Republicans complain about that too. The article clearly states that the Treasury Department is aware of the problem and is exploring ways to mitigate the issue -- what are the Republicans doing to be helpful? Nothing but scouring the Internet in search of stuff to complain about. Oh yes, and let's not forget the name calling -- always a helpful tactic.

[JaneBlow]

Good points. I agree.

So would you be in favor of legislation that closes tax loopholes for the wealthy?

FYI - I know conservatives are not in favor of tax increases for the wealthy, but there is an excellent debate on the topic here:

http://www.economist.com/debate/days/view/299

[kmcgraw5]

So would you be in favor of legislation that closes tax loopholes for the wealthy?

FYI - I know conservatives are not in favor of tax increases for the wealthy, but there is an excellent debate on the topic here:

http://www.economist.com/debate/days/view/299

As long as you would also be in favor of similar legislation doing away with "tax breaks" to the 40% of Americans that pay no taxes at all...

And your're right; this a great stuff, even from a liberal rag like The Economist. I agree wholeheartedly with Chris Edwards...

[JaneBlow]

As long as you would also be in favor of similar legislation doing away with "tax breaks" to the 40% of Americans that pay no taxes at all...

I hear ya -- those darn people making less than $13K a year are ****ing the blood right out of this country with all their tax loopholes and Swiss bank accounts. Of course they actually do pay taxes on every purchase they make, and if they own a car, they pay taxes, but hey -- I know what you mean. They should pay more!

And your're right; this a great stuff, even from a liberal rag like The Economist. I agree wholeheartedly with Chris Edwards...

I'm glad you like it. Which of Chris Edwards' arguments was appealing to you?

I like Dean Baker's argument,

"Of course taxes can be designed in a better or worse manner. The best way to increase taxes on the wealthy, in addition to allowing the Bush tax cuts to expire, would be to apply a modest financial transactions tax (FTT).

There is a long history in both the United States and the rest of the world with FTT. Until 1964, the United States imposed a tax of 0.12% on new stock issues and 0.04% on stock trades. Britain still has a tax of 0.25% on each stock sale or purchase, raising five billion pounds a year. This would be equivalent to roughly $30 billion a year in the American economy.

Robert Pollin and I calculated that a scaled set of FTT on stock, futures, options and other financial instruments could raise approximately $150 billion a year. This would go far towards bringing the long-term budget deficit down to a manageable level."

[J.Q. Citizen]

So would you be in favor of legislation that closes tax loopholes for the wealthy?

FYI - I know conservatives are not in favor of tax increases for the wealthy, but there is an excellent debate on the topic here:

http://www.economist.com/debate/days/view/299

I'm not sure why you ask me this Jane. To do so is to invite an opposing opinion. I was under the impression that anything short of complete agreement with, acceptance of and acquiescence to opposing views was the only way to be considered reasonable, tolerant, agreeable, non-argumentative and non-condescending 'round here. Did I miss something? :)

Well, I did my best to see if "we could all just get along" but if you're gonna drag it out of me...I'll do my best to express my opinions without violating any of the infractions named above.

Would I be in favor of closing tax loopholes for the wealthy? And then you go on to post a link that doesn't mention loopholes even once.[I am retracting the previous sentence because I first interpreted your second sentence as implying that the article included references to loopholes but I am inserting this disclaimer so as to avoid the appearance that I tried to remove something after the fact. I made a mistake in haste and I'm fessing up to it] In fact, the debate was simply over whether or not the evil rich should be taxed at an inordinately high rate. And yes, I consider the 80% proposed in this article to be "inordinate". In fact, I would consider anything approaching 50% to be punitive, confiscatory, unjustifiable and pretty much criminal. Nothing society or government has done or will do entitles any of us to half of someone else's private property. So no, I don't particularly favor closing the so-called loopholes. Some of them have a valid purpose such as incentivizing investment. Not that I believe that is a proper role of government or the tax code but if it's going to be punitive in nature it might as well try to offset that somewhat. The rich already shoulder a huge portion of the tax bill. That's just a fact. I can't justify trying to take even more from them.

Now, regarding the article. I think Piketty summed up my opposition the best in his argument FOR this tax.

This brings me to my last point. The main objective of raising marginal tax rates on the rich is not to raise additional tax revenue, but rather to keep top compensation under control and to curb the grabbing hand. In fact, the proposal that I am making - introducing a 80% marginal tax rate on all annual incomes in excess of €1m, leaving the rest of the tax system unchanged—would probably raise limited additional tax revenue.

It is NOT the role of government to manage top compensation...or really, to be directly involved in the economy at all other than their portion of the GDP equation through whatever spending in which they engage through their daily Constitutionally justifiable activities.

Quite frankly, this whole notion that government should be involved in ensuring some kind of "income equality" is a load of Barbara Streisand.

Anyway, I also believe that Edwards rebut7ed that point perfectly when he said

Mr. Piketty argues that if we don't impose very high taxes on the rich "there is a serious risk that citizens will ask for much more damaging, anti-market policies." The Economist debate proposition similarly suggests that we need to buy "social peace" by imposing high tax rates at the top. I think the reality is exactly the opposite. The more arbitrary and punitive government intervention becomes, the more that politicians and the public will get used to it, and the more likely that further punitive measures will be imposed. The government that persecutes certain people with 80% tax rates will find it much easier to expropriate the property of other groups it deems to be a menace.
That excerpt perfectly points out the realities of the "human nature" equivalent of "government nature".

Edwards then goes on to illustrate the realities of human nature involved in the taxation process:

One issue is that the top federal income tax rate fell from 70% in the late 1970s to 35% today, with the result that high-income taxpayers are avoiding and evading taxes less, and reporting more income on their returns
Now I feel fairly certain in my belief that your solution to this aspect of human nature would be to add to or create a bureaucracy that would simply watch those people like a hawk AFTER removing all legal loopholes. However, I believe that reduced taxes are an incentive for people who have money to invest that money when they have a reasonable belief that they can expect a return. And for the record, I believe that tax cuts are the only truly legitimate form of incentive in which the government should be involved.

Rather than argue for an increase in taxes or a further complication of our existing tax code, I would much rather advocate either a Fair, or ideally, a Flat tax. Of course, either one of those are, in reality, much more "fair" than what we currently have so...I don't expect much support.

Sigh...I guess I shall now have to stop biting my tongue and go back and answer your original post with my true thoughts :)

[J.Q. Citizen]

I hear ya -- those darn people making less than $13K a year are ****ing the blood right out of this country with all their tax loopholes and Swiss bank accounts. Of course they actually do pay taxes on every purchase they make, and if they own a car, they pay taxes, but hey -- I know what you mean. They should pay more!

Jane, I think we have to be intellectually honest here. The conversation was about income taxes. Near as I can tell, you are now changing the subject to sales tax, property tax etc. There is no correlation between, nor should an attempt be made to create one, income taxes and other forms of taxes. Those other taxes are simply the insidious method of the government chooses to confiscate our money in ways in which most of us are pitifully unaware.

Yes, the poor pay all of those other taxes to some degree or another. However, just like income taxes, the wealthy pay a much higher amount of their money in those taxes.

I believe that what Kevin was asking was if you would be supportive of legislation that would halt the mailing of checks to people who owe no money in income taxes. In other words, welfare in the guise of "tax credits".

I'm glad you like it. Which of Chris Edwards' arguments was appealing to you?

I like Dean Baker's argument,

"Of course taxes can be designed in a better or worse manner. The best way to increase taxes on the wealthy, in addition to allowing the Bush tax cuts to expire, would be to apply a modest financial transactions tax (FTT).

There is a long history in both the United States and the rest of the world with FTT. Until 1964, the United States imposed a tax of 0.12% on new stock issues and 0.04% on stock trades. Britain still has a tax of 0.25% on each stock sale or purchase, raising five billion pounds a year. This would be equivalent to roughly $30 billion a year in the American economy.

What you fail to either recognize, be aware of is that this type of tax would affect EVERYONE who has money in the stock market. Everyone with a 401K, an IRA etc. Basically, it would affect well over 50% of the people in the country...including retired people living off of their investments.

Robert Pollin and I calculated that a scaled set of FTT on stock, futures, options and other financial instruments could raise approximately $150 billion a year. This would go far towards bringing the long-term budget deficit down to a manageable level."
Yeah well, Kevin and I calculated that a reduction in spending by a runaway government would have a more significant effect on the long-term budget deficit than would ANY tax increase. How about this...the government predicts how much income they will have in the form of revenues and then..GASP...create a spending budget that falls under that amount. Pretty wild and weird concept huh? I mean, other than every single person in the country who has ever had an income and debt who has ever heard of such a concept? By the way, unfortunately, $150 billion is no longer a significant dollar amount for our government. In fact, I think I read somewhere (Enquirer?) that it is now he annual budget for shoes for the First Lady.

Disclaimer: Yes, I took advantage of a typo on your part to make what I consider to be a very valid point. I just thought I would couch it in humor rather than a dry response. :)

[J.Q. Citizen]

When you click on the link I provided, the title of the report appears at the top of the page. It is, "Reversing the Great Tax Shift: Seven Steps to Finance Our Economic Recovery Fairly". Look to the right of the title and click on the link that says, "Download/Open this Report". Or if that is too much trouble, you can click here: http://www.ips-dc.org/getfile.php?id=356

I didn't want to provide that link originally, because I knew you would question the source, which is easier to determine with the first link I provided.

I don't know why you thought that Jane. I have no problem with a site or organization that portrays their message honestly even if I vehemently disagree with it. In this case, that entire document is a justification for how we can effect social changes through our tax codes. Now, if you can show me a viable government document that justifies such a role for our Treasury then I would be happy to reconsider my notion that this is anything more than an attempt to create some unattainable Utopian society.

But, as for this website...I have it permanently bookmarked.

The article states, "In 1955, the top 400 averaged $12.3 million (in 2006 dollars) and paid, after exploiting every possible loophole they could find, 51.2 percent of that in federal income tax." The phrase "after exploiting every possible loophole they could find", means that the bottom line tax rate paid was 51.2%.

Ok, that seemed high but if they found 40% in deductions, more power to them.

I believe that in 2006, the top earners should have paid the same percentage of their income as the middle class paid. They paid 17.2%, while the middle class paid closer to 30%.

Interesting. Considering the dollar amount that they paid, in conjunction with the amount of the overall tax burden they paid, I have a very simple question....why do you believe that?

So if we let the ultra-rich pay at a lower rate than the middle class, they will return the favor by growing their fortunes and we will be rewarded with the ability to tax those larger fortunes later. First of all, there is no proof of this theory. Second, even if it were true, it would be an insufficient reward - especially when these very people drive their companies into the ground and the middle class loses jobs, their life savings and still have to bail out the wrecked companies. Finally, if we tax a fair rate in the first place, we can use the revenue to invest in energy, education and healthcare -- those are REAL rewards that aren't left to chance.

There is no proof of that theory because that is not what I said or meant. My point was that through the investment and spending of their money, those people contributed to the economy in such a way that the revenues to the treasury, taken as whole from the entire country, increased. And there is plenty of data to support that. Let me put it another way. I would rather it be that Bill Gates or Steve Jobs had not paid a single penny in income taxes AFTER the creation of their respective companies than to have not had those companies created at all. I believe our country and the world are much better off for it.

By the way, I highlighted the mantra for you. We can't seem to hear 100 words out of this current administration without having these 3 words tossed at us at least once. Seriously, watch virtually any speech or press conference...if you hear one of them...the other two will follow in short order. I encourage everyone to pay attention to this. You could almost make a drinking game from it...kinda like "Bob". (sigh...so many people won't get that one)

So you argue that the tax cuts are what allowed the ultra rich to grow their fortunes, then you get upset if they are asked to pay some of it back?
That is not a fair assessment Jane. If they make money, they will absolutely pay taxes on the profits. So, it's not like they're paying nothing. Second, and this is the part to which I most strenuously object...THEY ARE NOT PAYING IT BACK. To make such a statement is to assume that it was not their money in the first place and furthermore that it belonged to the government in the first place. It is not "paying it back" if it was their money to begin with. Your assumption is that is only through the graciousness of the government that a person is allowed to retain more of their own personal private property and that if they use that property to better themselves and subsequently enhance the coffers of the government that they somehow owe the government for that privilege.

The power of the government is derived from the consent of the governed. The government has NO power that we do not grant it. And I, as one of the governed, do NOT consent to this abuse of power.

[JaneBlow]

Good points. I agree.

J.Q., did you give out your password to someone else? Apparently, they posted agreement with the same points you are now disagreeing. Maybe you should change your password.

[J.Q. Citizen]

J.Q., did you give out your password to someone else? Apparently, they posted agreement with the same points you are now disagreeing. Maybe you should change your password.

LOL...sorry, that was my cat. I'll have a word with him :)

[JaneBlow]

Now I remember why I left the site. You are too d@mn long winded for me.

I'm not sure why you ask me this Jane. To do so is to invite an opposing opinion. I was under the impression that anything short of complete agreement with, acceptance of and acquiescence to opposing views was the only way to be considered reasonable, tolerant, agreeable, non-argumentative and non-condescending 'round here. Did I miss something?

I asked because you expressed agreement with my previous point that “the top earners should have paid the same percentage of their income as the middle class paid.” If you agree, then it is logical that you would favor taking action to ensure that happens.

I never said that disagreement is unreasonable or intolerant. Stop putting words in my mouth.

Would I be in favor of closing tax loopholes for the wealthy? And then you go on to post a link that doesn't mention loopholes even once.

Yes, sometimes I present two ideas in the same post. I gave an explanation so as not to confuse you.

In fact, the debate was simply over whether or not the evil rich should be taxed at an inordinately high rate. And yes, I consider the 80% proposed in this article to be "inordinate". In fact, I would consider anything approaching 50% to be punitive, confiscatory, unjustifiable and pretty much criminal.

I didn’t show support for either side in this post. In fact, in this thread, I have only supported the wealthy paying the SAME rate as the middle class. I provided the link because it has good arguments on both sides of a related debate.

So no, I don't particularly favor closing the so-called loopholes. Some of them have a valid purpose such as incentivizing investment.

So now you are in favor of the wealthy paying 17% while the middle class pays 30%. I wish you would make up your mind on this.

Not that I believe that is a proper role of government or the tax code but if it's going to be punitive in nature it might as well try to offset that somewhat.


So you position is that since our tax rates are progressive, we need to make them regressive with tax loopholes for the wealthy. You believe that the middle class should pay higher tax rates than the rich. And your support for that brilliant idea is what? Oh let me guess. If we let the ultra-rich pay at a lower rate than the middle class, they will return the favor by growing their fortunes and we will be rewarded with the ability to tax those larger fortunes later. The following are the arguments you agreed with earlier in this thread -- First of all, there is no proof of this theory. Second, even if it were true, it would be an insufficient reward - especially when these very people drive their companies into the ground and the middle class loses jobs, their life savings and still have to bail out the wrecked companies. Finally, if we tax a fair rate in the first place, we can use the revenue to invest in energy, education and healthcare -- those are REAL rewards that aren't left to chance.

Jane, I think we have to be intellectually honest here. The conversation was about income taxes. Near as I can tell, you are now changing the subject to sales tax, property tax etc.

Kevin said 40% of Americans don’t pay taxes. Sorry, but I won’t let untrue statements like that go.

I believe that what Kevin was asking was if you would be supportive of legislation that would halt the mailing of checks to people who owe no money in income taxes. In other words, welfare in the guise of "tax credits".


And I answered sarcastically that those people who earn less than $13K a year are not pulling their weight. Those are the people you and Kevin want to squeeze more money out of. Those are the people getting the Earned Income Credit. You will defend the wealthy paying a tax rate that is half what the middle class pays and then demand the poor pay more. Unbelievable.

What you fail to either recognize, be aware of is that this type of tax would affect EVERYONE who has money in the stock market. Everyone with a 401K, an IRA etc. Basically, it would affect well over 50% of the people in the country...including retired people living off of their investments.


I thought you would be against any tax that only effected the wealthy. Of course this would effect everyone, but the wealthy, who shuffle around huge sums of money daily, would pay much more.


Yeah well, Kevin and I calculated that a reduction in spending by a runaway government would have a more significant effect on the long-term budget deficit than would ANY tax increase. How about this...the government predicts how much income they will have in the form of revenues and then..GASP...create a spending budget that falls under that amount.

I know, I know, if you were Prez, you would have just cut taxes in response to the recession. Grow the deficit and hope someone else out there creates some jobs. Meanwhile no progress on energy, education or healthcare (the #1 cause of personal bankruptcy and the biggest non-defense expense contributing to the deficit).

By the way, unfortunately, $150 billion is no longer a significant dollar amount for our government.

Exactly what is the point of this statement?

In fact, I think I read somewhere (Enquirer?) that it is now he annual budget for shoes for the First Lady.


Really, you are discussing the price of Michelle’s shoes now? Is this what your reduced to? Shall we compare prices of all the first ladies shoes?

I don't know why you thought that Jane. I have no problem with a site or organization that portrays their message honestly even if I vehemently disagree with it. In this case, that entire document is a justification for how we can effect social changes through our tax codes. Now, if you can show me a viable government document that justifies such a role for our Treasury then I would be happy to reconsider my notion that this is anything more than an attempt to create some unattainable Utopian society.

Would it be a Utopian society where the rich pays the same tax rate as the middle class? Again, In 2006, the richest 400 taxpayers in the United States paid 17.2 percent of their incomes in federal income tax. I wish I paid 17.2%.

Interesting. Considering the dollar amount that they paid, in conjunction with the amount of the overall tax burden they paid, I have a very simple question....why do you believe that?

Because their tax burden was 17.2% where the middle class paid at least 30%.

There is no proof of that theory because that is not what I said or meant. My point was that through the investment and spending of their money, those people contributed to the economy in such a way that the revenues to the treasury, taken as whole from the entire country, increased. And there is plenty of data to support that. Let me put it another way. I would rather it be that Bill Gates or Steve Jobs had not paid a single penny in income taxes AFTER the creation of their respective companies than to have not had those companies created at all. I believe our country and the world are much better off for it.

Then you must support not taxing the richest people in the country at all, right? I mean by your logic, if we do that, then revenue will skyrocket!

By the way, I highlighted the mantra for you. We can't seem to hear 100 words out of this current administration without having these 3 words tossed at us at least once.

That’s right, J.Q., the country wants healthcare, education and reduced dependence on foreign oil. Where have you been? That’s what we voted for. I better hear it every time President Obama speaks! If he doesn’t deliver on those three promises, I won’t vote for him again.


That is not a fair assessment Jane. If they make money, they will absolutely pay taxes on the profits. So, it's not like they're paying nothing. Second, and this is the part to which I most strenuously object...THEY ARE NOT PAYING IT BACK. To make such a statement is to assume that it was not their money in the first place and furthermore that it belonged to the government in the first place. It is not "paying it back" if it was their money to begin with. Your assumption is that is only through the graciousness of the government that a person is allowed to retain more of their own personal private property and that if they use that property to better themselves and subsequently enhance the coffers of the government that they somehow owe the government for that privilege.

Again, YOUR argument is that the Bush tax cuts allowed the rich to grow their fortunes. Remember? We allow the rich to pay 17% so they can get richer and create jobs? But the unemployment rate is higher than ever. So why is it so wrong to ask the rich to pay back into the system?

[J.Q. Citizen]

Now I remember why I left the site. You are too d@mn long winded for me.

Well Jane, what can I say. When I keep it brief, you don't get the point. When I make it "long winded", you p**** portions and attempt to twist them.
Case in point. You started this entire thread. It was specifically about income taxes. Then 6 out of the first 9 comments preceding Kevin's "40% pay no taxes" comment are specifically about income taxes. Then you take Kevin to task for not using the word "income" in his "40%" comment. Furthermore, that "40% figure had been bandied about rather extensively on this site in discussions regarding income taxes. So, if you are going to refuse to acknowledge points in a given context, I am going to be as thorough as I feel is necessary to make my point and not give you that opportunity.

I asked because you expressed agreement with my previous point that “the top earners should have paid the same percentage of their income as the middle class paid.” If you agree, then it is logical that you would favor taking action to ensure that happens.

Ummmm, Jane...you never really thought I was serious did you? I assumed your Wow! Thank you! was as tongue-in-cheek as my Good points. I agree.

I never said that disagreement is unreasonable or intolerant. Stop putting words in my mouth.

I am not putting words in your mouth. I said "I was under the impression that anything short of complete agreement with, acceptance of and acquiescence to opposing views was the only way to be considered reasonable, tolerant, agreeable, non-argumentative and non-condescending 'round here."
Now, where in that statement do I use quotes or attribute any words to you? The fact is, I do not do that. So the question is, how did I arrive at my impression? The answer would be...from a large number of posts from you, Bill and, I think, McKinneyRes. Kevin and I have consistently been castigated for our views and our approach for a number of months on this site. Most recently, I got that impression from this:
Bill,I totally understand your frustration, as it is exactly why I left for a while. I began to feel that my precious time was wasted here. While I hate the thought of the right wing view points going unanswered -- especially since FOX news is so popular here -- it became clear to me that the main goal of the right wingers on this forum is to say everything possible to create the illusion that there is no logic behind any liberal viewpoint, regardless what it is. If the only way to accomplish this goal is to twist our words, ignore our supporting evidence, engage in name calling and personal attacks, and lie, they will do it.
Now, since I do not believe there is any evidence that I have engaged in any of that with any of the posters here my impression was that it must have been the content of my opinions that caused you to arrive at your conclusion. Unless, of course, you want to go back through any of these threads and posts and provide evidence that I have ever lied, called you or any other poster names, made a personal attack on any poster here, deliberately twisted words and ignored supporting evidence. Remember, disagreeing with your evidence is not supporting it. And if you're referring to some of the hidden-agenda, socialistic-in-nature sites or quotes you have used in the past...please, give to me a break. Those were not that statistically predominate and would not have affected much of the conversation anyway.

Besides, you tend to ignore your tendency to do some of the exact same things of which you are accusing me. I believe some of that will come up further below in this post.

Yes, sometimes I present two ideas in the same post. I gave an explanation so as not to confuse you.

I caught and addressed that aspect of my post well before you posted this response so I will not rehash it now.

I didn’t show support for either side in this post. In fact, in this thread, I have only supported the wealthy paying the SAME rate as the middle class. I provided the link because it has good arguments on both sides of a related debate.

I don't believe I asserted that you did Jane. I'm not sure why you chose to take it personally. You asked for my opinion on the article. I gave you that opinion. I would disagree with your assessment of the quality of the arguments in that debate...or rather I would say that you are half right :)

So now you are in favor of the wealthy paying 17% while the middle class pays 30%. I wish you would make up your mind on this.

Jane, quite frankly, this is an example of what I was referring to above in my opening response. Do you just refuse to read my comments in the context in which I make them and the context of what you know about me? But see, here's the intellectually dishonest aspect of your statement. You are using an example of 400 people as a broad brush to paint a much larger group.

If you are going to use percentages to bolster your argument, are you also willing to do that even further? Are you willing to look at the percentage of the tax burden that is shouldered by the "wealthy"? Seriously, will you even take that into consideration in these discussions. You want to make it all appear so simple when the reality is that it is not. I went to that document and I looked at the supporting source. That government document also told me that those same 400 people experienced over $3million in business losses. Could it be that they were investing in the economy?

So you position is that since our tax rates are progressive, we need to make them regressive with tax loopholes for the wealthy. You believe that the middle class should pay higher tax rates than the rich.

Actually no. I have repeatedly stated that we should have a FAIR or Flat tax. I am simply commenting on this particular article and your opinions on this specific issue. But that is NOT an implication of what I support overall.

And your support for that brilliant idea is what? Oh let me guess.

I'm sorry...is that an insult or a personal attack or just sarcasm? I get confused on which is which. See, personally Ms. Pot, I can handle it but if I'm going to be castigated for when I, Mr. Kettle, do it then I think we should keep things fair.

If we let the ultra-rich pay at a lower rate than the middle class, they will return the favor by growing their fortunes and we will be rewarded with the ability to tax those larger fortunes later.

This seems eerily reminiscent of a previous discussion but I couldn't find it. No, I am not saying that we will be "rewarded" with the ability to tax them later. I am saying that by virtue of the fact that as their personal fortunes grow, so do revenues to the treasury from the impact on the entire economy. See, your interest appears to be centered around punishment and/or "reward". That should NOT be the goal of our tax system. Rather, it should simply be to generate revenue to the treasury, preferably in as fair and equitable manner to ALL citizens as possible.

The following are the arguments you agreed with earlier in this thread -- First of all, there is no proof of this theory. Second, even if it were true, it would be an insufficient reward - especially when these very people drive their companies into the ground and the middle class loses jobs, their life savings and still have to bail out the wrecked companies. Finally, if we tax a fair rate in the first place, we can use the revenue to invest in energy, education and healthcare -- those are REAL rewards that aren't left to chance.

Again, taxes are not about rewards. Furthermore, it is not the business of you, me or the government what those people do or do not do with their companies unless we are a stockholder. And to compound the matter, the statistics you chose to use were taken from before the economic crisis so we don't really know how things went for 2008. It could all be a moot point. Now that I think about it, we don't know if the 17.2% figure holds up for any year but 2006 which could make it an anomaly. And another though, we have no idea if any of the top 400 have anything to do with the companies that struggled since last year.
I'm not going to get into the HEE mantra debate again. Suffice it to say that we know we disagree on those 3 topic. I would ask one thing though, how do you figure that they're "not left to choice"?

Kevin said 40% of Americans don’t pay taxes. Sorry, but I won’t let untrue statements like that go.

Apparently, nor will you interpret it in context. Are you honestly saying that you did not know beyond a shadow of a doubt that Kevin was referring to income taxes? Honestly?

Continued below

[J.Q. Citizen]

And I answered sarcastically that those people who earn less than $13K a year are not pulling their weight. Those are the people you and Kevin want to squeeze more money out of. Those are the people getting the Earned Income Credit. You will defend the wealthy paying a tax rate that is half what the middle class pays and then demand the poor pay more. Unbelievable.

So, sarcasm fits in the list of acceptable behavior? Whew.
Where did either Kevin or I advocate taking more money, or any money for that matter, from those people? Not giving money to them does not equate taking money from them.
If I typically get a 3% raise every year and this year I get no raise, have I somehow been wronged by my employer?

I thought you would be against any tax that only effected the wealthy. Of course this would effect everyone, but the wealthy, who shuffle around huge sums of money daily, would pay much more.


I am against any tax that targets a specific group of people. That was my objection to the tobacco tax that recently passed. I believe the concept is inherently unfair.
So, in your zeal to punish the evil rich, you are willing to accept the fact that it will also negatively impact you, your neighbor and your retired parents?
Unbelievable.

I know, I know, if you were Prez, you would have just cut taxes in response to the recession. Grow the deficit and hope someone else out there creates some jobs. Meanwhile no progress on energy, education or healthcare (the #1 cause of personal bankruptcy and the biggest non-defense expense contributing to the deficit).

No, I would also have cut spending. Correct, no progress on virtually anything until the economy is straightened out. Yeah, yeah, I'm aware of the mantra. Trust me, bankruptcy ain't all that bad. And technically, isn't it only government spending on healthcare that is contributing to the deficit? How exactly will be change that by spending more on it?

Exactly what is the point of this statement?

Really, you are discussing the price of Michelle’s shoes now? Is this what your reduced to? Shall we compare prices of all the first ladies shoes?
Ladies or otherwise. The sole intent was context within humor.


Sorry, I had to combine these two comments. Why you may ask? BECAUSE THAT WAS MY INTENT IN THE FIRST PLACE!!!!!
You're kidding right? This is EXACTLY to what I was referring above. What is it about that statement that is not immediately intuitive? Did you read both sentences in context? You stated, and I quote "Robert Pollin and I calculated that a scaled set of FTT on stock, futures, options and other financial instruments could raise approximately $150 billion a year. This would go far towards bringing the long-term budget deficit down to a manageable level." My first response was intended to illustrate that that dollar amount is pennies on thousands of dollars. It's virtually minuscule and and FAR from the "go far towards..." theory. My second response was to illustrate the absurdity of the statement by pointing to a recent topical news item. Would you have been happier if I had said that the money was going to fund the "Buy Jane a clue and teach her how to comprehend context" program? Seriously Jane, do you not see the tediousness of the way you p****d that? Of course, I don't want to discuss the cost of shoes...for First

Would it be a Utopian society where the rich pays the same tax rate as the middle class? Again, In 2006, the richest 400 taxpayers in the United States paid 17.2 percent of their incomes in federal income tax. I wish I paid 17.2%.

First, my comment was in reference to that website. Your attempt to spin it into this particular issue is kinda lame. But since you asked, yes, it is kinda Utopian in nature to believe that things are ever going to work out exactly fair. Would you like to compare the dollar amount of the top 400 who paid the 30% relative to the top 400 who paid 17%. There are too many variables and, as I said, you are trying to make it too simplistic.

Then you must support not taxing the richest people in the country at all, right? I mean by your logic, if we do that, then revenue will skyrocket!

Jiminy Cricket Jane. I gave you one example for the purpose of illustration. I clearly indicated that if those were the two choices which one I would choose. At no point did I say that I supported not taxing the richest people and to say so is disingenuous to say the least.

That’s right, J.Q., the country wants healthcare, education and reduced dependence on foreign oil. Where have you been? That’s what we voted for. I better hear it every time President Obama speaks! If he doesn’t deliver on those three promises, I won’t vote for him again.

Actually, only a fraction of the country wants that if it's to be provided by the government...aside from education which needs to done better and more smartly. But yes, I'm aware of the perceived "mandate" by some.
Hey, I figure as long as most people are "hearing" about it then they'll be happy.
I hope you really mean your last sentence in that quote.

Again, YOUR argument is that the Bush tax cuts allowed the rich to grow their fortunes. Remember? We allow the rich to pay 17% so they can get richer and create jobs? But the unemployment rate is higher than ever. So why is it so wrong to ask the rich to pay back into the system?
This is not, or at least should not be, the purpose of taxes. Taxes should never be used as some kind of social equalizer. We "allow" them to pay 17% so now it's only "fair" right? I believe that these fundamental differences in our view of the legitimate role of government are why you and I will seldom see eye to eye many of these issues.

[JaneBlow]

J.Q., you don't understand the concept of fairness if you are ok with the ultra wealthy paying 17% and the middle class paying 30% taxes. That's the bottom line here. I'm done with this thread.

[J.Q. Citizen]

J.Q., you don't understand the concept of fairness if you are ok with the ultra wealthy paying 17% and the middle class paying 30% taxes. That's the bottom line here. I'm done with this thread.

Jane, I believe that I understand the concept of fairness quite well. And my understanding of it typically doesn't require that someone else be brought down to accomplish it.

Another thought...you state that my failure, refusal or inability to grasp your notion of this simplistic example of unfairness in our tax system is the reason you are done with this thread. How is that significantly different than my rejection of a small percentage of the evidence you have provided due to my objection of the nature of that source?

You say that I have no grasp of the concept of fairness and yet, you have thus far ignored, disregarded or pooh poohed any arguments that I have made about the inherent unfairness of a progressive tax. You only seem to be concerned about fairness when it supports your opinion. In fact, I would go so far as to say that you have essentially discounted the notion that the rich deserve any fairness at all...as if the very existence of their wealth exempts them from fairness due to the fact that their wealth is the sole extent of any fairness due them. While, I have consistently argued that to be truly fair, taxes should be spread in a more or less uniform fashion.

You insist that this simplistic analysis of our tax system is somehow indicative of some inherent unfairness to the middle class. I disagreed and stated that it was much more complex than you were attempting to lead us to believe. Very well, allow me to elaborate and thus prove my case.

This, http://amateurassetallocator.com/2008/06/16/do-the-rich-pay-their-fair-share-in-taxes/ is a link to an article that refutes Warren Buffett's claim that he pays a lower percentage in taxes than his secretary.

This link http://www.ntu.org/main/page.php?PageID=6 illustrates how the top 10% of wage earners, those making over $108K, paid over 70% of all Federal Personal Income Taxes paid for the entire country.

Now, I couldn't find information that specifically addressed those making over $108K/yr but I did find this census information that analyzes everyone 15 years of age and older and their incomes. That link is http://pubdb3.census.gov/macro/032007/perinc/new01_001.htm
And from this site, I was able to determine that in 2006 about 12 million people made over $100,000 per year out of about 208.5 million people with income.
So, in other words, approximately 6% of all wage earners shouldered 70% of the national tax burden. It's actually going to be less than 6% when you account for the difference in the number of people who make between $100K and $108K. But, I suppose that that is totally fair. Right Jane?

So, let's take a look at this from one more perspective. It's your assertion that it's not fair that in 2006, the 400 people with the highest incomes in the country only paid an effective tax rate of 17.2% while the middle class paid close to 30%. But the fact of the matter is that regardless of how much or what rate was paid by the top 400, it would not have changed a single penny of how much was owed by the middle class. They wouldn't have had to pay any more or any less than what they already had to pay. What reasonable conclusion can be drawn from this? Your idea of "fairness" is not that the burden on the middle class should be decreased but rather that the burden on the top 400 should be increased.

There are also other considerations to keep in mind such as, what constitutes "middle class"? According to Factcheck.org, it could reasonably be anywhere between $48,561 and $60,224 if you used the middle quintile but anyone below $61,300 falls into the 15% tax bracket. Or, you could use the median income of $70,354 where half fall below that number and half above. So, I would think it's reasonable to say that for purposes of this discussion, anything between $61,300 and $70,354 would fit the definition of middle class incomes that could conceivably have paid 25%. Approximately 12 million people would fall into that category. It's late and I'm tired so I'm not going to research it but I can't help but wonder if the amount of taxes paid by those 400 people doesn't come fairly close to the amount paid by the 12 million.

I basically have two points on this right now. First, any honest discussion about taxes should include how much money is paid in and not just be about how much money was not paid or how much taxes were cut. And second, the whole issue of taxes is not really very simplistic or straightforward. There's almost always more than what meets the eye.

[J.Q. Citizen]

J.Q., you don't understand the concept of fairness if you are ok with the ultra wealthy paying 17% and the middle class paying 30% taxes. That's the bottom line here. I'm done with this thread.

Jane, I believe that I understand the concept of fairness quite well. And my understanding of it typically doesn't require that someone else be brought down to accomplish it.

Another thought...you state that my failure, refusal or inability to grasp your notion of this simplistic example of unfairness in our tax system is the reason you are done with this thread. How is that significantly different than my rejection of a small percentage of the evidence you have provided due to my objection of the nature of that source?

You say that I have no grasp of the concept of fairness and yet, you have thus far ignored, disregarded or pooh poohed any arguments that I have made about the inherent unfairness of a progressive tax. You only seem to be concerned about fairness when it supports your opinion. In fact, I would go so far as to say that you have essentially discounted the notion that the rich deserve any fairness at all...as if the very existence of their wealth exempts them from fairness due to the fact that their wealth is the sole extent of any fairness due them. While, I have consistently argued that, to be truly fair, taxes should be spread in a more or less uniform fashion.


You insist that this simplistic analysis of our tax system is somehow indicative of some inherent unfairness to the middle class. I disagreed and stated that it was much more complex than you were attempting to lead us to believe. Very well, allow me to elaborate and thus prove my case.

This, http://amateurassetallocator.com/2008/06/16/do-the-rich-pay-their-fair-share-in-taxes/ is a link to an article that refutes Warren Buffett's claim that he pays a lower percentage in taxes than his secretary.

This link http://www.ntu.org/main/page.php?PageID=6 illustrates how the top 10% of wage earners, those making over $108K, paid over 70% of all Federal Personal Income Taxes paid for the entire country.

Now, I couldn't find information that specifically addressed those making over $108K/yr but I did find this census information that analyzes everyone 15 years of age and older and their incomes. That link is http://pubdb3.census.gov/macro/032007/perinc/new01_001.htm
And from this site, I was able to determine that in 2006 about 12 million people made over $100,000 per year out of about 208.5 million people with income.
So, in other words, approximately 6% of all wage earners shouldered 70% of the national tax burden. It's actually going to be less than 6% when you account for the difference in the number of people who make between $100K and $108K. But, I suppose that that is totally fair. Right Jane?

So, let's take a look at this from one more perspective. It's your assertion that it's not fair that in 2006, the 400 people with the highest incomes in the country only paid an effective tax rate of 17.2% while the middle class paid close to 30%. But the fact of the matter is that regardless of how much or what rate was paid by the top 400, it would not have changed a single penny of how much was owed by the middle class. They wouldn't have had to pay any more or any less than what they already had to pay. What reasonable conclusion can be drawn from this? Your idea of "fairness" is not that the burden on the middle class should be decreased but rather that the burden on the top 400 should be increased.

There are also other considerations to keep in mind such as, what constitutes "middle class"? According to Factcheck.org, it could reasonably be anywhere between $48,561 and $60,224 if you used the middle quintile...but anyone below $61,300 falls into the 15% tax bracket so they obviously don't fit the given criteria. Or, you could use the median income of $70,354 where half fall below that number and half above. So, I would think it's reasonable to say that for purposes of this discussion, anything between $61,300 and $70,354 would fit the definition of middle class incomes that could conceivably have paid 25%. Approximately 12 million people would fall into that category.

It's late and I'm tired so I'm not going to research it but I can't help but wonder if the amount of taxes paid by those 400 people doesn't come fairly close to the amount paid by the 12 million.

I basically have two points on this right now. First, any honest discussion about taxes should include how much money is paid in and not just be about how much money was not paid or how much taxes were cut. And second, the whole issue of taxes is not really very simplistic or straightforward. There's almost always more than what meets the eye.

[JaneBlow]

While, I have consistently argued that, to be truly fair, taxes should be spread in a more or less uniform fashion.

This is not what you argue. Your argument is that it's more complex than that. I show evidence that in 2006 the top earners paid 17.2% while the middle class paid 30%. You dismiss this without showing contradicting evidence. Then you argue on and on. If your argument was that taxes should be spread uniformly, we would be in full agreement here. But we aren't, are we?

[J.Q. Citizen]

This is not what you argue. Your argument is that it's more complex than that. I show evidence that in 2006 the top earners paid 17.2% while the middle class paid 30%. You dismiss this without showing contradicting evidence. Then you argue on and on. If your argument was that taxes should be spread uniformly, we would be in full agreement here. But we aren't, are we?

Jane, I am not referring to this particular thread in which I have argued that we should have a different tax structure. I was assuming that you would recall previous discussions where I have said that. Seriously, do you not recall any of those discussions? That statement was more of a historical reference to previous discussions. Should I not expect you to recall these things? Do I have to specifically clarify it when I reference things that I believe are common knowledge between us?

Yes, my argument in this thread has been that it was more complex than the situation you portrayed. Do the links I provided not illustrate that?

When you say that if my argument was that taxes should be spread uniformly that we would be in full agreement, are you saying that you would support either a Fair or Flat tax? Would you be willing to give up the existing progressive tax?

[JaneBlow]

Jane, I am not referring to this particular thread in which I have argued that we should have a different tax structure. I was assuming that you would recall previous discussions where I have said that. Seriously, do you not recall any of those discussions? That statement was more of a historical reference to previous discussions. Should I not expect you to recall these things? Do I have to specifically clarify it when I reference things that I believe are common knowledge between us?

Yes, my argument in this thread has been that it was more complex than the situation you portrayed. Do the links I provided not illustrate that?

When you say that if my argument was that taxes should be spread uniformly that we would be in full agreement, are you saying that you would support either a Fair or Flat tax? Would you be willing to give up the existing progressive tax?

I support the rich paying the same percentage as the middle class. PERIOD. From everything you have posted on this thread and on all other threads, I gather you don't. Even if we have a flat tax, which you have said you support, you have never indicated that you would be in favor of closing the loopholes that currently allow the rich to pay a fraction of their tax rate.

[J.Q. Citizen]

I support the rich paying the same percentage as the middle class. PERIOD. From everything you have posted on this thread and on all other threads, I gather you don't. Even if we have a flat tax, which you have said you support, you have never indicated that you would be in favor of closing the loopholes that currently allow the rich to pay a fraction of their tax rate.

A flat tax, by definition, closes all loopholes because there are virtually no deductions. I believe a Fair tax would be best but I doubt you would support that. The equation for the Flat tax I would support goes something like this.
-----
1. How much money did you make? _______________
(Include all sources of income for the year)
2. Calculate your dependent deductions from the notes below and add that number to $25,000 or $50,000 if married. _______________
3. Subtract line 2 from line 1. _______________
4. Multiply line 3 by .17. _______________
Mail a check for the amount on line 4.
(or we'll send you a check if you had money withheld from your paycheck and it's more than you owe.)

Thank you!
-----
Notes for calculating deductions:
2.a. How many dependents do you have? _______________
2.b. If line 2.a. is greater than 4 then enter 4 on this line. ____________
2.c. Multiply line 2.b. by $5,000. _______________
This is the total amount of dependent deductions to use for line 2 above. Please note, if you have more than 4 dependents the IRS recommends that you make sure you can afford them before you acquire them.


Notes from the IRS for the first year of Flat Tax Implementation:

- How much interest/tax did you pay on your mortgage?
Don't include that number in your calculations because it doesn't matter. The federal government will no longer incentivize societal behavior. Renting is just as good as owning.

- How much did you make in capital gains?
Include that number in your calculations for line 1.

- How much more money did you owe than was withheld from your paycheck?
That doesn't matter either. The federal government now recognizes that it is your money and you can spend it how you see fit throughout the year. As long as you send in the amount you owe by the deadline you will no longer be penalized.

- What is the dollar amount over $100 of your refund?
5% of the amount of your refund over $100 will be deducted from your refund. A one time exemption will be granted for this first year. After that time, please realize that the IRS is not a savings account and it costs taxpayer dollars to support the staff necessary to process all of the checks. We realize that predicting how much to withhold is not an exact science so we strongly recommend that you withhold nothing and develop the habit of saving enough money to cover your tax liability at the end of the year. As we will only be using a staff of 10 people to process refund checks after this first year, please allow 6-800 weeks for delivery.

[I may have missed a few details but hopefully you get the gist.]
-----
By the way, just for clarification...your example only illustrated the top 400 income earners and not the generic "rich" you used in this statement. It's too late right now for me to find the proof but I know for a fact that I have come across IRS data indicating that, as a whole, the rich had a higher effective tax rate than 28%. Furthermore, the first link in my last post that included links illustrated that they likely pay much more than what that report indicated.

And what is your impression of what I believe? That the rich should pay less?

Let me ask you this. Since there are significantly less people that make over $100K than there are that make less and since those people pay a much higher portion of the tax bill than those who make less...how is it logically conceivable that they pay a lesser percentage? Unless it's your assertion that there are enough of them that make so much more than the rest of us that their lesser tax rate can account for the huge difference between their total burden and ours. I guess that's possible but I find it fairly unlikely.

Also, I'm curious...do you honestly not feel that paying 70% is sufficient?

[JaneBlow]

If you find any credible resource that shows how 17% flat tax would provide enough money to run the government, I would be happy to invest the time to read it. But, please don't just respond with just your personal opinion that we should just cut everything other than defense until it all fits. Of course we can make cuts, but I'd like to see that someone has done the math.

Let me ask you this. Since there are significantly less people that make over $100K than there are that make less and since those people pay a much higher portion of the tax bill than those who make less...how is it logically conceivable that they pay a lesser percentage? Unless it's your assertion that there are enough of them that make so much more than the rest of us that their lesser tax rate can account for the huge difference between their total burden and ours. I guess that's possible but I find it fairly unlikely.

Are you saying it would be fair if the amount collected from an entire tax brackets as a whole was equal? In other words, each tax bracket must put in a million, for example? If you have a credible resource that has factual data that shows how that math would work, I'd like to see it.


Also, I'm curious...do you honestly not feel that paying 70% is sufficient?


Did you even read the first post? The point of this entire thread is that after tax loopholes, the top earners paid 17% while the middle class paid 30%. I looked at your argument that the rich actually paid more if you count what their companies paid in taxes, but it is such a ridiculous argument, it doesn't merit a response.

So I ask you, do you actually believe it is fair for the top earners to pay 17% while the middle class pays 30%

[J.Q. Citizen]

If you find any credible resource that shows how 17% flat tax would provide enough money to run the government, I would be happy to invest the time to read it. But, please don't just respond with just your personal opinion that we should just cut everything other than defense until it all fits. Of course we can make cuts, but I'd like to see that someone has done the math.

Well, I figured most of it was fairly intuitive. Approximately 2/3 of US households make less than $65,000, which puts them in the 15% tax bracket (less than 17%) before deductions. http://en.wikipedia.org/wiki/Household_income_in_the_United_States
In addition, since there wouldn't be any deductions, those who make over $100K would be paying taxes on more of their money.

I don't have time right now to find specific projections of Flat taxes but here's some info on a Fair tax that is fairly interesting as it describes the benefits of a Fair tax, benefits of reduced taxes and the detriments of our current system.

http://www.econlib.org/library/Enc/MarginalTaxRates.html

http://www.fairtax.org/PDF/Comparing%20AverageandMarginalTaxRates-110206.pdf

Aside from that Jane, your point is essentially moot. If you look at the projected debt and deficit, we don't generate enough in tax revenues as it it NOW and there's no way we can. Why not look at some major non-military cuts and require the government to live within OUR means?


Are you saying it would be fair if the amount collected from an entire tax brackets as a whole was equal? In other words, each tax bracket must put in a million, for example? If you have a credible resource that has factual data that shows how that math would work, I'd like to see it.

Yes Jane, that's exactly what I'm saying. I mean, other than the fact that I didn't make any assertions whatsoever other than to state a known fact, i.e. "Since there are significantly less people that make over $100K than there are that make less and since those people pay a much higher portion of the tax bill than those who make less" and then I asked you a question requiring logic, that's exactly what I said.
Disclaimer: Since I am apparently going to be required to spell out each of my points in painful detail...that was sarcasm.

Ok, I'll make it simple and with numbers.

1,000,000 - amount collected in taxes
700,000 - amount paid in taxes by the top 10% of income earners
300,000 - amount paid in taxes by the remaining population.

15.73% - highest number I could find of people making more than $100K (rounded to 16%)
1,000 - random number of total people chosen for this example
160 - 16% of 1000
840 - number of people paying the remainder of the taxes.

$4,375 - Amount paid by each of the 10% group
$357 - Amount paid by each of the remainder

0.63% - Effective rate paid by the 10% group (4375/700K)
0.12% - Effective rate paid by the remainder (357/300k)

Now, admittedly it's late, I had a long day and I'm catching up on the news, so it's possible that I could be off in my math but I don't think so and I think it illustrates my point. If I'm wrong, let me know. The numbers were chosen at random but I still believe it illustrates my point.
But THAT is what I was actually trying to say. I smaller group paying a much higher number would logically be paying a higher rate.


Did you even read the first post? The point of this entire thread is that after tax loopholes, the top earners paid 17% while the middle class paid 30%. I looked at your argument that the rich actually paid more if you count what their companies paid in taxes, but it is such a ridiculous argument, it doesn't merit a response.

Yes Jane, as many detailed response as I've given I would think it was obvious that I read your first post. I guess I pulled a Jane, but I thought I was clear in what I was doing. I was looking at the top 10% of taxpayers, not just the top 400. You kept using the generic terms "rich" or "top earner" so I figured that was ok. Was the discussion only to be limited to those 400 people or was it also a discussion of the rich? I even included the "rich" to be anyone making over $100K.

I honestly do not see how you can dismiss that article about how much the rich really pay but that's your prerogative.

So I ask you, do you actually believe it is fair for the top earners to pay 17% while the middle class pays 30%
This illustrates my point. When you say "top earners" are you only referring to those 400? Because if you were, that was not clear. If you're going to ask me about only those 400, then I would say this...I believe that their taxes are much more complicated that. I can't verify what I believe because for some reason, I can no longer access that website, either through your link or my bookmark. But, it could be that that part of the study was based on taxes paid on wages and not all income. Capital gains, for instance, may have been accounted for somewhere else, I don't know. But seriously, if you're going to discuss "top earners" then you should include the whole group. But see, this is one of my primary points...why even have such a convoluted tax code? What practical purpose can it really serve other than that of a bunch of special interest groups who have gotten so lost in the muck over the years that no one is probably even aware of what half the purpose of the tax code even is. Heck, it might even be possible that if 17% weren't enough, that the remainder would be made up by eliminating a huge bureaucracy and a ton of federal employees.

[JaneBlow]

Well, I figured most of it was fairly intuitive. Approximately 2/3 of US households make less than $65,000, which puts them in the 15% tax bracket (less than 17%) before deductions. http://en.wikipedia.org/wiki/Household_income_in_the_United_States
In addition, since there wouldn't be any deductions, those who make over $100K would be paying taxes on more of their money.

I don't have time right now to find specific projections of Flat taxes but here's some info on a Fair tax that is fairly interesting as it describes the benefits of a Fair tax, benefits of reduced taxes and the detriments of our current system.

http://www.econlib.org/library/Enc/MarginalTaxRates.html

http://www.fairtax.org/PDF/Comparing%20AverageandMarginalTaxRates-110206.pdf

Aside from that Jane, your point is essentially moot. If you look at the projected debt and deficit, we don't generate enough in tax revenues as it it NOW and there's no way we can. Why not look at some major non-military cuts and require the government to live within OUR means?


Yes Jane, that's exactly what I'm saying. I mean, other than the fact that I didn't make any assertions whatsoever other than to state a known fact, i.e. "Since there are significantly less people that make over $100K than there are that make less and since those people pay a much higher portion of the tax bill than those who make less" and then I asked you a question requiring logic, that's exactly what I said.
Disclaimer: Since I am apparently going to be required to spell out each of my points in painful detail...that was sarcasm.

Ok, I'll make it simple and with numbers.

1,000,000 - amount collected in taxes
700,000 - amount paid in taxes by the top 10% of income earners
300,000 - amount paid in taxes by the remaining population.

15.73% - highest number I could find of people making more than $100K (rounded to 16%)
1,000 - random number of total people chosen for this example
160 - 16% of 1000
840 - number of people paying the remainder of the taxes.

$4,375 - Amount paid by each of the 10% group
$357 - Amount paid by each of the remainder

0.63% - Effective rate paid by the 10% group (4375/700K)
0.12% - Effective rate paid by the remainder (357/300k)

Now, admittedly it's late, I had a long day and I'm catching up on the news, so it's possible that I could be off in my math but I don't think so and I think it illustrates my point. If I'm wrong, let me know. The numbers were chosen at random but I still believe it illustrates my point.
But THAT is what I was actually trying to say. I smaller group paying a much higher number would logically be paying a higher rate.


Yes Jane, as many detailed response as I've given I would think it was obvious that I read your first post. I guess I pulled a Jane, but I thought I was clear in what I was doing. I was looking at the top 10% of taxpayers, not just the top 400. You kept using the generic terms "rich" or "top earner" so I figured that was ok. Was the discussion only to be limited to those 400 people or was it also a discussion of the rich? I even included the "rich" to be anyone making over $100K.

I honestly do not see how you can dismiss that article about how much the rich really pay but that's your prerogative.

This illustrates my point. When you say "top earners" are you only referring to those 400? Because if you were, that was not clear. If you're going to ask me about only those 400, then I would say this...I believe that their taxes are much more complicated that. I can't verify what I believe because for some reason, I can no longer access that website, either through your link or my bookmark. But, it could be that that part of the study was based on taxes paid on wages and not all income. Capital gains, for instance, may have been accounted for somewhere else, I don't know. But seriously, if you're going to discuss "top earners" then you should include the whole group. But see, this is one of my primary points...why even have such a convoluted tax code? What practical purpose can it really serve other than that of a bunch of special interest groups who have gotten so lost in the muck over the years that no one is probably even aware of what half the purpose of the tax code even is. Heck, it might even be possible that if 17% weren't enough, that the remainder would be made up by eliminating a huge bureaucracy and a ton of federal employees.

Throughout the thread I have said top earners because it was easier than saying the richest 400 taxpayers. Sorry if that wasn't clear. That was the topic of the thread all along, although the article also mentioned the most affluent 1%, who only paid 22%. Again, these rates were what they paid after all the loopholes.

The site seems to be down right now, but I'm sure the links will work again when the site comes back up.

I agree that our current system has problems. Again, I would like to see what the projected change would be if we went to a flat tax or fair tax. I'll check out the links you provided, but if you ever find a credible resource that has actually done that math, let me know.

Are there any legislators that have proposed either one? It would be interesting to see what happened.

I agree we should simplify our tax code. We should start by taxing capital gains like all other income.

[J.Q. Citizen]

Throughout the thread I have said top earners because it was easier than saying the richest 400 taxpayers. Sorry if that wasn't clear. That was the topic of the thread all along, although the article also mentioned the most affluent 1%, who only paid 22%. Again, these rates were what they paid after all the loopholes.

The site seems to be down right now, but I'm sure the links will work again when the site comes back up.

I agree that our current system has problems. Again, I would like to see what the projected change would be if we went to a flat tax or fair tax. I'll check out the links you provided, but if you ever find a credible resource that has actually done that math, let me know.

Are there any legislators that have proposed either one? It would be interesting to see what happened.

I agree we should simplify our tax code. We should start by taxing capital gains like all other income.
Well, in all honesty, it appears that both you and I have jumped between the top 400 and the top income earners to some degree or another. And unless your point is that you want to see the tax code changed to apply only to the top 400 then the reality is that we're actually talking about a larger group of people but you are just using their statistics to extrapolate those stats to apply to, and therefore indict, a much larger group of people. If you look at those making over $100K and paying over 70% of the tax burden and compare that to the top 400 then you are talking some 12 million people minus 400, compared to that 400. Not exactly a fair analysis.

Just out of curiosity, did you find any fault with my intuitive analysis?

As far as I know off the top of my head, I guess that would depend on whether or not you consider Ron Paul to be a legislator. Although I believe he favors the Fair tax.

If we would cease with the other, more punitive aspects of our tax codes, then I would be inclined to agree with taxing capital gains as ordinary income except for retired people who are using their investments as their sole source of income. The fact is, there is a significant difference. Capital gains represents an investment, and therefore risk, of money whereas income taxes are derived from capital gained in exchange for our labor but with no inherent risk of capital involved. Risking capital typically benefits the economy and society as a whole.

With your proposal, would those who lost money from investment capital be able to write off those losses?

[kmcgraw5]

I believe the Fair Tax proposal creates more problems than it solves. Check out the Fair Tax Fantasy, by Hugh Hewitt and Hank Adler:

http://www.amazon.com/FAIRTAX-FANTASY-Hugh-Hewitt/dp/1607913046

[JaneBlow]

Just out of curiosity, did you find any fault with my intuitive analysis?

Yes, I find fault with your logic. I don't think comparing what entire tax brackets pay collectively makes sense. The only measurement that makes sense to compare is the percent of income paid by the individual. I'm surprised you, as an individualist, don't find this to be intuitive. If I pay 30%, Bill Gates should have to pay at least 30% even though his 30% is much more money than my 30%. We are both paying taxes to pay for the same infrastructure - roads, bridges, education of our citizens, emergency preparedness, defense, a safety net so our citizens who are too old to work don't have to live under bridges (social security), etc., etc. But Mr. Gates has benefited from this infrastructure much more than I have. And he has much more to lose if it crumbles. So, even though I know you are against him paying the same percent of income as me, I would argue it makes sense for him to pay even more than me. But, hey, if I could get you to agree he should pay at least the same percentage of his income as I do, I'll be happy. But I won't hold my breath.

With your proposal, would those who lost money from investment capital be able to write off those losses?

Yes.

[J.Q. Citizen]

Yes, I find fault with your logic. I don't think comparing what entire tax brackets pay collectively makes sense. The only measurement that makes sense to compare is the percent of income paid by the individual. I'm surprised you, as an individualist, don't find this to be intuitive. If I pay 30%, Bill Gates should have to pay at least 30% even though his 30% is much more money than my 30%. We are both paying taxes to pay for the same infrastructure - roads, bridges, education of our citizens, emergency preparedness, defense, a safety net so our citizens who are too old to work don't have to live under bridges (social security), etc., etc. But Mr. Gates has benefited from this infrastructure much more than I have. And he has much more to lose if it crumbles. So, even though I know you are against him paying the same percent of income as me, I would argue it makes sense for him to pay even more than me. But, hey, if I could get you to agree he should pay at least the same percentage of his income as I do, I'll be happy. But I won't hold my breath.

Maybe I'm not being clear. My analysis was not intended to justify how income taxes should be paid or even why. The sole purpose was to clarify that if a significantly smaller group of people pay a significantly larger share of the taxes then it is intuitive and logically supportable that those people must obviously be paying a higher effective rate. Maybe not each and every one of them but the vast majority. I don't really understand how you expect your reference to my being an individualist really applies in this situation. As far as I know, their individual tax returns are not available.

As an individualist, and in line with your desire for agreement, I believe that it would be ultimately fair if each and everyone one of us paid the exact same rate. So, be happy and breathe. And then tell me, would you be supportive of a tax code that required everyone to pay the exact same tax rate? And if so, what do you believe that rate should be?

Obviously, you and I will never agree on the philosophy of "he who benefits the most subsequently owes more". I believe that is the antithesis of the principles on which this country was founded and has thrived. But, if you're going to maintain that belief, wouldn't it also be fair to say that while he may have benefited more from this infrastructure than you he has also contributed to it much more than you? Or do you just dismiss that contribution?

Contrary to your assertion, I don't believe I've ever said that I am against Gates, or anyone else for that matter, paying the same percentage. Instead, I believe that I have essentially maintained one fundamental point. Namely, that I don't believe that the analysis that you pointed to and used was completely accurate or realistic. I guess it could be argued that I have maintained another point which is that I believe that, taken as a whole, the rich pay more than their fair share of the total tax burden.

[JaneBlow]

The sole purpose was to clarify that if a significantly smaller group of people pay a significantly larger share of the taxes then it is intuitive and logically supportable that those people must obviously be paying a higher effective rate. Maybe not each and every one of them but the vast majority.

This is not logical at all. Your tax rate is a percentage of income the IRS says you should pay. Your effective tax rate is the percentage of income you actually pay after taking advantage of all the tax loopholes possible. Say there are 2 people in the country (for simplicity) and the total taxes collected equals $100. One person paid $99 and the paid $1. What were the effective tax rates paid by each? The answer is, there is no way to tell. You have to know the incomes of the 2 people. If the person that paid $1 had an income of $2, they paid a 50% effective tax rate. If the person that paid $99 earned $1,000,000,000 that year, they paid a .00000009% effective rate.


As an individualist, and in line with your desire for agreement, I believe that it would be ultimately fair if each and everyone one of us paid the exact same rate. So, be happy and breathe. And then tell me, would you be supportive of a tax code that required everyone to pay the exact same tax rate? And if so, what do you believe that rate should be?

No, I wouldn’t because there are so many people out there that live in poverty. In order to come up with a tax rate they could afford, which is really nothing, we would not be able to collect enough money from the country to keep the government running, even if we cut it down to just the bare basics.

Obviously, you and I will never agree on the philosophy of "he who benefits the most subsequently owes more". I believe that is the antithesis of the principles on which this country was founded and has thrived. But, if you're going to maintain that belief, wouldn't it also be fair to say that while he may have benefited more from this infrastructure than you he has also contributed to it much more than you? Or do you just dismiss that contribution?

I don’t give him credit for contributing more than me just because he is more wealthy. It’s like the prize for becoming wealthy is having your tax rate go down. Why isn’t there a prize for maintaining a modest income? Maybe instead of going to work, I choose to let my husband work and I stay home and raise the kids. Why can’t I get a prize for that decision and have my tax rate cut in half?

Contrary to your assertion, I don't believe I've ever said that I am against Gates, or anyone else for that matter, paying the same percentage. Instead, I believe that I have essentially maintained one fundamental point. Namely, that I don't believe that the analysis that you pointed to and used was completely accurate or realistic. I guess it could be argued that I have maintained another point which is that I believe that, taken as a whole, the rich pay more than their fair share of the total tax burden.

So now your argument is that the effective tax rates of the ultra wealthy are actually the same as the middle class? Do you care to provide support for that analysis, or is this just your gut feeling?

So, you don’t believe my facts are true, but you argue that even if they are true, it doesn’t matter. You believe as long as the rich collectively pay more than the middle class pays as a whole, its fine if their effective tax rate is nearly half.

This is exactly what I mean when I say you defend your position like a religious fanatic. When logic doesn't work, you resort to faith.

[J.Q. Citizen]

This is not logical at all. Your tax rate is a percentage of income the IRS says you should pay. Your effective tax rate is the percentage of income you actually pay after taking advantage of all the tax loopholes possible. Say there are 2 people in the country (for simplicity) and the total taxes collected equals $100. One person paid $99 and the paid $1. What were the effective tax rates paid by each? The answer is, there is no way to tell. You have to know the incomes of the 2 people. If the person that paid $1 had an income of $2, they paid a 50% effective tax rate. If the person that paid $99 earned $1,000,000,000 that year, they paid a .00000009% effective rate.

That's a valid point. You're correct, if the total amount of income amongst that group of 12 million that make over $100K is just that astronomically higher than the combined sum of those making under that amount then it could indeed result in a lower combined effective tax rate. Maybe, when I'm feeling more energetic, I'll look at the data from one of those sites I posted, that breaks down income into the number of people within that income and then see if I can find similar data for those that make over $100K and crunch the numbers. Although I suspect that doing so might be a waste of time because I doubt you would be impressed or swayed even if my intuition on this is correct.

No, I wouldn’t because there are so many people out there that live in poverty. In order to come up with a tax rate they could afford, which is really nothing, we would not be able to collect enough money from the country to keep the government running, even if we cut it down to just the bare basics.

Well, typically most proposed tax plans exclude those below a certain rate, but I didn't include that scenario in my question. So, same question but the equal tax rate would exclude those with an income under the poverty level and would include some deductions for dependents.

I do have another thought on this though. Aren't those people to which you're referring actually more likely to benefit more directly and to a greater degree from the actions of the government? And if you support a progressive tax because of what you believe is a "greater benefit" derived from the good fortune the "rich" have of living in this country...would not the same logic apply? Even if the rich could be said to derive a greater benefit, theirs is not as directly attributable to the government as someone living in poverty would receive. Just for clarification, I am not advocating a tax on the poor. I am asking you, from a philosophical and logical point of view, how you would reconcile that apparent discrepancy?

I don’t give him credit for contributing more than me just because he is more wealthy. It’s like the prize for becoming wealthy is having your tax rate go down. Why isn’t there a prize for maintaining a modest income? Maybe instead of going to work, I choose to let my husband work and I stay home and raise the kids. Why can’t I get a prize for that decision and have my tax rate cut in half?

I would have thought, based on previous conversations, that it was obvious that I am not asserting that Gates has contributed more solely based on the fact that he is wealthy. Rather, I am asserting that because of the actions he took to attain his wealth and the associated and cottage industries that evolved because of it, combined with the sheer number of people he employs, that the impact on the economy over time is comparable to the impact of GM or Chrysler. Perhaps even greater. Would not the detriment to the economy relative to the failure of Chrysler be be mirrored in the benefits to the economy due to the success of Microsoft?

So now your argument is that the effective tax rates of the ultra wealthy are actually the same as the middle class? Do you care to provide support for that analysis, or is this just your gut feeling?

I don't believe that in that particular comment that I changed my argument in such a way that it could be qualified as "so now your argument is..." Rather, I thought what I did was reiterate and paraphrase my previous comments. Nor do I believe that I made any new assertions, particularly that I believed that the ultra wealthy actually pay the same rate. The essence of what I said is that without access to that site, I cannot verify the specifics which the IRS used to compute their percentage and that without that information, I am inclined to believe that the taxes of the ultra wealthy may not be realistically or accurately simplified as "they only paid 17% of all of their income". I'm not disputing the possibility, only that I cannot verify it at this time. And yes, I believe that I stated more than once that some of my comments were based on an intuitive perception of the data...essentially a "gut feeling". I never intended for that to be construed as a iron-clad fact.

So, you don’t believe my facts are true, but you argue that even if they are true, it doesn’t matter. You believe as long as the rich collectively pay more than the middle class pays as a whole, its fine if their effective tax rate is nearly half.

First, I would say that, even if it's all completely true, characterizing the difference as "nearly" half is a bit of a stretch. For the analysis to even be close to accurate, it could only include married couples in the lower portion of the 25% or individuals in the 28% bracket. I guess half of 28% could be characterized as "nearly" 17% but I do not believe it is fair to characterize 12.5% as "nearly" 17%. But, this does bring up another point. Were all of the comparisons made to individuals or were married couples being compared to individuals. That could significantly skew the significance of the data because of the applicable tax brackets. However, the end result is the same, a relatively small group of people, whether married or single, are paying over 70% of all income taxes. I guess there are essentially two ways of looking at that reality. If it is your desire to demonize a group of people, based on their income, then you would not want to take that factor into consideration. On the other hand, if it is your desire to assess the inherent "fairness" built into our system, without regard to income, then you would want to take that factor into consideration.

This is exactly what I mean when I say you defend your position like a religious fanatic. When logic doesn't work, you resort to faith.
The difference is Jane, that I am not defending my position as though what I am saying on this matter is absolute, definitive fact. Rather, I am simply voicing my opinion, on the matter. I don't believe that anything I said could realistically and objectively be characterized as a matter of faith used to defend my position.

When you say something to the effect of "I believe the ultra wealthy should pay the same rate as the middle class" is that a statement of fact based on faith or is it simply your opinion?

[JaneBlow]

Well, typically most proposed tax plans exclude those below a certain rate, but I didn't include that scenario in my question. So, same question but the equal tax rate would exclude those with an income under the poverty level and would include some deductions for dependents.

I would have to do more analysis. If there is a rate that won’t push more people below the poverty line and would not require us to eliminate the most successful government programs, I would support it.

I do have another thought on this though. Aren't those people to which you're referring actually more likely to benefit more directly and to a greater degree from the actions of the government? And if you support a progressive tax because of what you believe is a "greater benefit" derived from the good fortune the "rich" have of living in this country...would not the same logic apply? Even if the rich could be said to derive a greater benefit, theirs is not as directly attributable to the government as someone living in poverty would receive. Just for clarification, I am not advocating a tax on the poor. I am asking you, from a philosophical and logical point of view, how you would reconcile that apparent discrepancy?

The purpose of the government is to protect its citizens. Who has more to protect between Bill Gates and a single mother of three who gets food stamps? If you take away not only the food stamps, but the roads, bridges, electrical grid, infrastructure, schools, financial system, law enforcement, national defense, etc., etc., compare what would be lost by each.

I would have thought, based on previous conversations, that it was obvious that I am not asserting that Gates has contributed more solely based on the fact that he is wealthy. Rather, I am asserting that because of the actions he took to attain his wealth and the associated and cottage industries that evolved because of it, combined with the sheer number of people he employs, that the impact on the economy over time is comparable to the impact of GM or Chrysler. Perhaps even greater. Would not the detriment to the economy relative to the failure of Chrysler be be mirrored in the benefits to the economy due to the success of Microsoft?

I agree.

[J.Q. Citizen]

I would have to do more analysis. If there is a rate that won’t push more people below the poverty line and would not require us to eliminate the most successful government programs, I would support it.

Technically, based on the scenario I proposed, there is no tax rate that would push people below the poverty line. Using $19,999 as an arbitrary poverty line and anything over that as the income that would be taxed then you could theoretically tax up to 100% without pushing someone below that line. Of course, at that rate, it would bring everyone else in the country down to the poverty line but no one would be pushed below it.

Of course you did throw in that "AND" that included the "most successful government programs". That does complicate things a little. Off the top of my head I can think of 5 highly successful government programs but I guess that technically...the Army, Air Force, Navy, Marines and Coast Guard all fit under the umbrella of the Military so...hmmm, tough one. Not sure the highway system qualifies as a program but it would need to be funded. I think I'm stumped on this one. Let's see, $500 billion for the military, not sure how much for highways. Given your criteria, I'm thinking that 5, maybe 10 percent max is all we would need to tax. Unless you believe that you can identify more successful programs than I'm able to :)

The purpose of the government is to protect its citizens. Who has more to protect between Bill Gates and a single mother of three who gets food stamps? If you take away not only the food stamps, but the roads, bridges, electrical grid, infrastructure, schools, financial system, law enforcement, national defense, etc., etc., compare what would be lost by each.

I would have thought that most of those things you mentioned would have fit your criteria of the "bare basics". This example pretty much eliminates everything to the point where "wealth" would have no meaning or significance. If there are no roads, energy, national defense etc, money would probably be of no use. Food, water, clothing, guns and ammo would pretty much become the currency of the day. Sure, I guess that you could say that at that point, Gates has lost more than most of us but it's a basically a moot point. Again, similar to my previous comment, I am assuming that there are fundamentals that are the legitimate functions of government. Although, looking at your list, I believe that education should be more the purview of state governments, the financial system is not really something provided by the government anyway, law enforcement outside of national defense is more of a state and local function and I thought that for the most part, the electrical grid is provided for by private industry. Unlike my second comment, I'm not attempting to interject humor into this one. I may just not be seeing your point.

Hopefully that clarifies what I was trying to ask but if not, let me know.

I agree.
I always think it's cool when we find some point on which we can agree.

[JaneBlow]

Using $19,999 as an arbitrary poverty line and anything over that as the income that would be taxed then you could theoretically tax up to 100% without pushing someone below that line. Of course, at that rate, it would bring everyone else in the country down to the poverty line but no one would be pushed below it.

Last I heard, we pay tax on our taxable income, not our taxable income over the poverty line. Are you changing that rule in your hypothetical scenario?

[J.Q. Citizen]

Last I heard, we pay tax on our taxable income, not our taxable income over the poverty line. Are you changing that rule in your hypothetical scenario?

Yes. That would be the part where I said

Well, typically most proposed tax plans exclude those below a certain rate, but I didn't include that scenario in my question. So, same question but the equal tax rate would exclude those with an income under the poverty level and would include some deductions for dependents.


Just to clarify, when I say "most proposed tax plans", I am referring to the Fair and Flat tax plans I have heard proposed over the years. Regardless, that is a part of the scenario I am proposing and the question I have for you.

[JaneBlow]

J.Q., once again you fail to connect the dots on the most simple points. You are a master at this.

You asked me if I would support a flat tax that excludes people living in poverty. I answer that I would IF such a tax could generate enough revenue to pay for necessary government programs without pushing more people into poverty. You answer that no one could possibly be pushed below the poverty line. I point out that could only be true if you only tax income over the poverty level. Then you claim you already stated that. But you didn't. You said you wouldn't tax people earning less than the poverty threshold. That is different than only taxing income over the poverty line. For example, if the poverty line is $19,000. Someone whose taxable income was $19,500 would effectively be pushed below the poverty line with only a 3% tax.

Then you argue that the only worthwhile government programs are the branches of the military. But you make no effort to make a solid argument for eliminating Social Security, Medicare, Medicaid, the postal service or Disaster Relief funds. You completely dismiss as worthless all work done by the Departments of Energy or Agriculture, the Corp of Engineers, the Department of Education, the EPA, the Department of Health and Human Services, Homeland Security, the Department of Labor, and the Treasury, and I could go on. You offer no evidence -- only your estimate that a 5 to 10% tax should be plenty to pay for everything we need. Your arguments are beyond shallow, they are ignorant.

[J.Q. Citizen]

J.Q., once again you fail to connect the dots on the most simple points. You are a master at this.

You asked me if I would support a flat tax that excludes people living in poverty. I answer that I would IF such a tax could generate enough revenue to pay for necessary government programs without pushing more people into poverty. You answer that no one could possibly be pushed below the poverty line. I point out that could only be true if you only tax income over the poverty level. Then you claim you already stated that. But you didn't. You said you wouldn't tax people earning less than the poverty threshold. That is different than only taxing income over the poverty line. For example, if the poverty line is $19,000. Someone whose taxable income was $19,500 would effectively be pushed below the poverty line with only a 3% tax.

No Jane, I'm not a master failing to connect the dots. Perhaps I am a master at not spelling out my point, despite numerous contextual clues as well as a hypothetical examples that spelled it out, in such a way as that you could grasp it immediately and without confusion. I shall rephrase and limit this hypothetical situation to a Flat Tax since a Fair tax is based on consumption rather than income.

Assuming that a new tax system was designed so that it excluded any income, below the poverty line or even somewhat above the poverty line, say $25K, and included some method of raising the amount of non-taxed income to allow for dependents so as to effectively raise that non-taxed income, say $5K per dependent, and ONLY taxed that amount of income that fell ABOVE the original or adjusted line and assuming that a single tax rate could be determined that would allow the government to maintain the current level of tax revenue...could you agree to that?

By the way, that is why I said that no one would ever be pushed below the poverty line. If only the income above that line were taxed then it would be impossible to push anyone below it. Hence, my comment that even a 100% tax [of all income above that line] would not push anyone below the line.

Then you argue that the only worthwhile government programs are the branches of the military. But you make no effort to make a solid argument for eliminating Social Security, Medicare, Medicaid, the postal service or Disaster Relief funds. You completely dismiss as worthless all work done by the Departments of Energy or Agriculture, the Corp of Engineers, the Department of Education, the EPA, the Department of Health and Human Services, Homeland Security, the Department of Labor, and the Treasury, and I could go on. You offer no evidence -- only your estimate that a 5 to 10% tax should be plenty to pay for everything we need. Your arguments are beyond shallow, they are ignorant.
Regarding your list of government programs, I guess I was generically lumping in DHS along with DOD as my focus was on national security, but you're right...I didn't specifically say that. Considering that I would also probably include the FBI and CIA and such as that. However, I did not dismiss those other programs/departments as "worthless" nor did I argue that they should be eliminated. What I did was take them out of the category of my list of "most successful" and asked you to identify which programs/departments you would classify as "most successful". That would account for my tongue in cheek tone as well as the smiley face at the end. I was limiting my list ONLY to those I consider "most" or "highly" successful. As for the USPS, that's supposed to be self-funded and wouldn't be included. Treasury? Much of that could be remodeled and the IRS could practically vanish with a Flat Tax. Social Security is turning out to be an unmitigated disaster. Medicare and Medicaid could be significantly restructured in such a way as to offer more of a free market solution where those who qualify and want coverage could have their premiums paid by the government directly to the insurance company of the patient's choice who would then have the ability to shop competing companies for the plan that best suited them. In addition to boosting the economy and creating jobs, I believe that would also dramatically reduce corruption and fraud. But really, for the most part, I was asking you to justify the existence of those other programs/departments...preferably on a cost vs benefit basis.

[dumont]

EXCELLENT POINT on "paying back." We are not paying anything "back," just paying taxes.

As one who has been poor (seriously, dad skipped town and left mom with 4 kids to raise on her own) and now considered wealthy, I can tell you that I never have begrudged paying taxes (ok, well, maybe somewhat:) rather I have begrudged the ridiculous amount of the government's wasteful spending.

And now you want to raise my taxes to pay for it?

All that said, pay taxes?...happy to.. as I understand it's part of being a civilized society. Just don't make "the rich" out as the "bad guy."

[S. Wade]

I would like to ask if anyone who is active within this forum would be interested in contributing to a blog site? I am really trying to support this site and would love to find some bloggers and or some forum participants. We really need people from all perspectives. I believe it is important to have reasonable discussion and include folks from every side. If you are interested, please private message me. Thanks

[JaneBlow]

All that said, pay taxes?...happy to.. as I understand it's part of being a civilized society. Just don't make "the rich" out as the "bad guy."

I agree that the typical wealthy person is not "a bad guy" and I don't believe I ever made them out to be. If anyone thinks I have, it would be helpful to me if they could point out a specific instance.

[Reargeruize]

we got 120k fixed well it was - its currently floatin and 30k in revolving credit that all our payments go in and out of. Well, mainly in, then our credit cards are paid of automatically everymonth.

Still no answers to my questions though..?

[Emberry09]

we got 120k fixed well it was - its currently floatin and 30k in revolving credit that all our payments go in and out of. Well, mainly in, then our credit cards are paid of automatically everymonth.

Still no answers to my questions though..?

[JaneBlow]

The new numbers are in. The ultra wealthy no longer pay 17% taxes. They now pay 16%.

http://www.salon.com/news/opinion/joe_conason/2010/02/17/top400