In favor of increasing taxes on the wealthy

[ThomasT]

I only know of two arguments against raising taxes on the wealthy. The first is that higher taxes will reduce growth and investment.

If there's money to be made via investment or business startups or expansions, then I don't think that a few points increase in taxation is going to discourage anybody from participating. But US tax increases would tend to increase the probability that individual entrepreneurs and companies would look to countries other than the US, and whether taxes are increased or not it doesn't seem that the US can compete with some rather large overseas labor markets.

To that I say that not all taxes are the same. Credits and deductions providing incentives for investment do not exclude taxation on wealth that goes to lifestyle. And the rich can certainly spare a few bucks.

That's true, but suppose that taxes were increased or decreased some number of points, say, across the board. My guess is that neither action would make much difference, either to the rich or the poor and middle classes, or to the country's economic problems.

But the argument I want to address here is the issue of fairness. Many people claim it is unfair that almost half of Americans pay no taxes!

Politicians have been so busy trying to appear to be fair, as well as appeasing their benefactors, that they've created a self-defeating system of myriad tax credits and deductions and exemptions and loopholes. Imho, they would do well to just abolish the whole thing and start from scratch with a flat tax and no credits, deductions, exemptions and loopholes. (But of course that's not going to happen.)

Then they could focus on the big wastes in medicare, medicaid, social security, defense, foreign aid, etc. How to cut these expenditures, say, in half without creating real hardships, or real national security problems? Wrt social security I think it can be done. Wrt other programs I have no idea.

Anyway, wrt the thread's title, yes I'm in favor of increasing taxes on the wealthy ... just for a certain period. Why not? It's not going to cause the wealthy any undue discomfort. Yes, the wealty already pay most of the taxes, but then the wealthy have most of the money. So I say do it and see if it helps. My guess is that it won't. But it's an empirical question, so we should try it and see.

We have to balance the budget. On that I think we all agree. The notion that this cost should all be carried by the poor and middle class is, in my view, morally and logically unacceptable, and unjustifiable.

We might need to balance the budget, but it appears doubtful that that's ever going to happen. And as the US declines we can keep in mind that for several generations it's 'poor' enjoyed a much higher standard of living than most of the people in the rest of the world. Unfortunately, there's a real possibility that several generations from now that might not be the case.

 

[WhoWee]

This really makes me mad when people who act like they know what they are talking about deliberately leave out key facts in discussions.

Obama extended the Bush cuts in order to extend Unemployment benefits. His back was up against the wall by Republicans.

The same Republicans who would not extend health care for emergency 911 first responders.

So STOP saying Obama extended the Bush tax cuts as if it's something he wanted to do or that he endorsed.

Pay attention, get the facts before you post.

This is how the lies continue, from misinformed or poorly informed people posting as if something is true when it's not.

my bold
It might be best for you to read the forum rules brfore posting - please support your statements.

 

[hagopbul]

corruption is eating every one

 

[WhoWee]

I only know of two arguments against raising taxes on the wealty. The first is that higher taxes will reduce growth and investment. To that I say that not all taxes are the same. Credits and deductions providing incentives for investment do not exclude taxation on wealth that goes to lifestyle. And the rich can certainly spare a few bucks.

But the argument I want to address here is the issue of fairness. Many people claim it is unfair that almost half of Americans pay no taxes!

Of course that is incorrect. What is correct is that they paid no Federal income tax.


http://www.msnbc.msn.com/id/3622644...finance/t/half-us-pays-no-federal-income-tax/

To that I respond with this:


http://reason.com/archives/1975/07/01/inside-ronald-reagan/4

The real question is, what pecentage of a person's income goes to all taxes paid, directly or indirectly? And this isn't just a number's game. In the case of the lower end of the income spectrum, the taxes paid may constitute a significant percentage of the minimum cost of survival, less living on the streets. When people are just barely getting by, those taxes are significant percentage of the cost of life [food, water, rent, power], not lifestyle.

We have to balance the budget. On that I think we all agree. The notion that this cost should all be carried by the poor and middle class is, in my view, morally and logically unacceptable, and unjustifiable.

In an effort to get back on topic - I'll respond to the OP - with an even longer post (sorry).

We clearly have a serious long term debt problem - as evidenced by the credit downgrade of the US on 8/5/2011.

We all agree there are 2 points of attack on the debt - spending controls and revenue management. The discourse revolves around who should pay and how much? Regardless of ongoing debates, how we got to this point is irrelevant to the creditors - they just want to be paid.

To engage in a fair discussion of how to manage the finances of the State- the total liabilities of the US must be taken into consideration. The total includes unfunded liabilities and all contractual obligations. In business, the total debt is carried on the balance sheet as a liability - there is no reason not to use the business model to analyze the problem.

Once the total liabilities are determined, a projection of when those amounts are due and payable must also be determined. This will serve as the framework - the "what" and "when" parts of the problem.

Next we need to look at actual cash flows. This includes current source and use of funds and models to predict short term variables.

When all of this data is scored and inserted into the framework - the specific differences between revenues and spending will be plotted over time (and subject to the known variables). The difference or gap between spending and revenues over time is the problem to solve.

The management of cost controls is a never ending task - an ever-present task to eliminate duplication and waste - and IMO - show be a priority of managers at every level of Government. The decisions to increase spending must be made within the available budget - not mandate spending first and then figure out how to pay the bill at some future date.

The management of revenues should also be measured and fair. IMO - the burden of payment should be spread evenly amongst all US citizens and legal entities subject to taxation.

America is the land of opportunity - anyone can become successful and/or wealthy. Accordingly, the Government has made every effort to balance the playing field and eliminate barriers to success and minimum wage and benefit standards wherever possible.

Unless stricken by disease or accident or some other special circumstance, it is typically a matter of personal choice for an individual to not make an effort to succeed to their full personal potential. It is a reality that some individuals choose to break laws, depend on others for support, or just "get by" any way possible. This is not a judgment - if that's their plan - they should be fully aware of the potential consequences of their actions. These people that plan to avoid the law and to not succeed should also not be counted on to pay their fair share - IMO - they should be discounted.

The second group of people (working people) are the ones who follow the rules and do their best to earn a living and live the American dream. These person earn anywhere from minimum wage to (President Obama's amount) $250,000. This group more than likely has a mortgage, revolving credit, education related debt, and other debt - possibly living on a monthly budget or even paycheck to paycheck. A predictable net income and expenses are very important to this group.

The third group are those persons that are very successful (executives) and reach or exceed their dreams. This is a group that leverages a higher return on assets and has an ability to pay taxes - the ones President Obama refers to when he talks about person who earn over $250,000 per year up to millions and billions. The likely hood of personal debt as a percentage of income (should) decrease as income increases.

The last group of persons are those who had a head-start on wealth and strive to maintain their position - sometimes growth is not realistic and instead they live off sales of (previously taxed) assets or returns on productive assets and passive investments. This group is an easy target of rhetoric due to "wealth" - but quite possibly a disappointing source of income tax.

Every group pays sales tax (about 7% average?) and imbedded taxes (fuel and utilities) - unless 100% dependent upon Government support (possible given re-distribution combined with benefits). The "working people" pay up to the maximum Social Security limits and other payroll taxes, might be eligible for redistribution (up to about $50,000 gross), and are subject to federal income taxes. The "executive group" is subject to all forms of taxes and ineligible for income redistribution programs - including Social Security maximum limit.

Given all of the above, the revenue management decision involves maximizing tax collections in a fair manner that doesn't favor one group over the other - correct? Under our current system, lower income "working people" might be eligible for redistribution but can also reach a maximum Social Security threshold. High income individuals receive special consideration to account for re-investment and charitable contributions.
******************
The question Ivan posed is what is fair and who should pay what - IMO - that is valid.
First, the EITC was designed to offset the Social Security payroll deduction for lower income “working people”. I’m not sure this is fair – given this group will most rely on Social Security benefits and previous groups of tax payers at this same income level were not excluded. As for the SS maximum – I think it’s fair to eliminate the cap on both contributions and disbursements – the more you contribute the more you collect – SS benefits were taxable as regular income over $32,000 married in 2010.
Next, the Medicare contribution to Part A needs to be increased for everyone asap - deductibles and co-insurance amounts are already under review on the spending side.
State and Federal unemployment deductions will probably also need an increase if the extensions are made permanent or additional jobs re-training programs are added.
IMO – we need to consider a standardized (no fault) Workers Comp/Supplemental Income plan funded through payroll deductions – but not likely.
Switching gears a bit, both “working people” and “executives” have made financing decisions on real property with a mortgage interest deduction factored in – it should be continued.
Continuing, if the threshold for “poverty” is established at $30,000 for a couple with 4 children (there are charts every family size) – might we assume 100% of the earnings are consumed at this level – and the tax redistributions back to the family are the annual major purchase or mad money? If so, this might be a good starting point for tax policy (standard deduction)?
Why not (in addition to removing caps on SS contributions and keeping the mortgage deduction) set a flat tax THAT WILL PAY CURRENT OBLIGATIONS OF US AND RETIRE DEBT OVER TIME (perhaps) 20% (for example) for all income (and benefits) above this level – for everyone?
If the family with 4 kids has an income of $60,000 and paid $5,000 in interest mortgage they would pay income taxes on (60,000 – 30,000 – 5,000 = 25,000 @ 20% = $5,000) 5000/60000 = .083% plus payroll deductions. On $300,000, they would pay (300,000 – 30,000 – 5,000 = 265,000 @ 20% = 53,000) 53000/300000 = .1767% plus payroll deductions.

Would this be fair?

 

[jduster]

the bush tax cuts cost $3 trillion per decade.

this is a generous estimate (which includes the middle class tax cuts which democrats vow to keep).

300 b per year savings is a lot!

but in a 1.5t yearly debt, that's not much.

if we raise taxes on EVERYBODY, that will cure 20% of the problem.

 

[WhoWee]

the bush tax cuts cost $3 trillion per decade.

Bush wasn't even in office for a decade.

 

[Physics-Learner]

i favor the position of those who first came to our country - learn to take care of yourself.

the real purpose of govt is to give the wealthy a way to control the population.

so while all of you are talking about what the govt should do about the budget and revenue, i am still clamoring that getting rid of most of govt IS THE ONLY THING THAT IS NECESSARY.

that is the leak in the boat. arguing about which tax to reduce and who is going to pay for it is like arguing about which pail to use to bail out the water. meanwhile, the leak in the boat keeps increasing, with more water getting in.

sorta sound familiar ?

 

[Evo]

i favor the position of those who first came to our country - learn to take care of yourself.

the real purpose of govt is to give the wealthy a way to control the population.

so while all of you are talking about what the govt should do about the budget and revenue, i am still clamoring that getting rid of most of govt IS THE ONLY THING THAT IS NECESSARY.

that is the leak in the boat. arguing about which tax to reduce and who is going to pay for it is like arguing about which pail to use to bail out the water. meanwhile, the leak in the boat keeps increasing, with more water getting in.

sorta sound familiar ?

What part of the Government would you do away with, what would take over the current functions, and what effect would it have?

 

[Physics-Learner]

hi evo,

first, your question implies a very fundamental mistake in the average person's understanding. and that is that there is an equivalence to the money spent and the "goods given". this simply isn't true. if i was king, i could give you the same amount of goods for less than half of what is currently spent, and still have money left over.

the corruption in govt is something fierce. i have always "believed" this to be true, but i have become personally aware of this due to property ownership in sacramento (capital of california). it is ridiculous. and this is just at a state level. i am sure i would vomit if i actually knew all the details at the federal level.

second point - as much as possible, there would be 2 main springboards emanating from a govt that i would set up -

1) people pay for what they use.

2) localize govt as much as possible. this makes govt more accountable.

our country was doomed when the federalists basically won out over the states. i would have a very small federal govt. it would only be involved with things that really affected everyone. such as some sort of national military, english as our language, dollar as our currency. it would be very limited, such that no greedy person would even be interested in serving, because there would be little room for graft.

the state of california is way too big. it would be much better served to at least divide it into northern, central, and southern. the smaller the section, the more common is the needs of the population.

and of course, the more localized the spending, the more apt one pays for what one uses.

obviously, this sort of change can't happen over night. it might take many decades to fully revamp our govt, so that its purpose is truly to help its constituents. but it has been stinking for much longer than that.

 

[Evo]

hi evo,

first, your question implies a very fundamental mistake in the average person's understanding. and that is that there is an equivalence to the money spent and the "goods given".

Wrong, I don't think that at all.

I'm only asking you this since you brought up getting rid of parts of government, just curious, and if you don't have answers, just say so, this isn't an inquisition. I've seen some ridiculous suggestions thrown out, and was curious on your take.

the corruption in govt is something fierce. i have always "believed" this to be true, but i have become personally aware of this due to property ownership in sacramento (capital of california). it is ridiculous. and this is just at a state level. i am sure i would vomit if i actually knew all the details at the federal level.

So #1 get rid of corruption. Great, except that's pretty pie in the sky, and you get rid of one corrupt politician and get another. So I don't see this as a viable solution, although it's a nice thought.

second point - as much as possible, there would be 2 main springboards emanating from a govt that i would set up -

1) people pay for what they use.

Meaning what? If someone breaks into my home and I call the police, I get a bill?

2) localize govt as much as possible. this makes govt more accountable.

Explain what you mean by localize.

our country was doomed when the federalists basically won out over the states. i would have a very small federal govt. it would only be involved with things that really affected everyone. such as some sort of national military, english as our language, dollar as our currency. it would be very limited, such that no greedy person would even be interested in serving, because there would be little room for graft.

So goodbye to interstate highways, and caring for the poor, elderly and ill, scientific research, customs to control quality of imported goods, NIH, NIMH, FDA gone? FBI, FAA, DOT, just to name a few, I agree costs could be cut from the latter, and waste curtailed from the former. How about politician's salaries capped at $50,000 a year for the following

The current salary (2011) for rank-and-file members of the House and Senate is $174,000 per year.

http://usgovinfo.about.com/od/uscongress/a/congresspay.htm

We'll address these issues mentioned above first, that is if you feel like it.

 

[Physics-Learner]

sure, i am to happy to discuss.

i gave you general answers.

why not just give me one direct question at a time, if you have specifics.

were you being sarcastic, regarding the police call ? i will assume that you werent, and answer accordingly. we (within a localized area) all benefit from police protection. so we all pay for it, much like an insurance policy. everyone pays a small amount to counter the large risk that we know a few will hit.

however, insurance rates vary by area. so too our payments of police. the greater need for police, the greater the localized population pays.

this is a generalized principle. something that we attempt to apply to everything as much as possible.

as far as explaining localize, i don't know how i can be more explanatory. but as a general type of principle, deal with things on as small a scale as possible.

perhaps an easier way to think of it would be - handle it on a city district level. if not, then on a city-wide basis. if not, then at a sub-county basis. if not, then on a county basis. etc.

 

[mheslep]

Didn't you get the memo? They're called "job creators" now.

I don't know of any poor people signing pay checks. You?

 

[Evo]

perhaps an easier way to think of it would be - handle it on a city district level. if not, then on a city-wide basis. if not, then at a sub-county basis. if not, then on a county basis. etc.

Let's tackle this first, do you see the US being broken up into small city-states? How would this be cheaper?

 

[OmCheeto]

...
as far as explaining localize, i don't know how i can be more explanatory. but as a general type of principle, deal with things on as small a scale as possible.

perhaps an easier way to think of it would be - handle it on a city district level. if not, then on a city-wide basis. if not, then at a sub-county basis. if not, then on a county basis. etc.

Even at the city level though, things can go wrong:

http://washingtonexaminer.com/blogs/beltway-confidential/angry-public-hounds-obscenely-overpaid-city-official-out-job-he-still-gets"
...
The Times revealed city manager Robert Rizzo made $787,637 a year, with 12 percent annual pay increases as part of his contract. (Rizzo's last raise was $84,389.76.)
...
Normally, council members in a city the size of Bell would be paid about $400 a month, Demerjian said.

 

[Physics-Learner]

Let's tackle this first, do you see the US being broken up into small city-states? How would this be cheaper?

yes, i would much prefer that. the more localized the govt, the more accountable it must be. the easier it is for the citizen to see what is going on, etc.

i prefer the idea of a federation, such that all "sections" are part of the United States on certain federal issues.

there would be much less govt involved, since there would be less overhead. and you would eliminate much of the ability for graft, so again much less govt involved.

it might be somewhat comparable to compare the greater efficiency, etc. a small business has, when compared to its gigantic corporate monstrosity.

so much of govt is involved in making the wealthy, wealthier. all we need to do is look around us, and the horrible economic situation that we are in. it didnt occur overnight.

 

[Physics-Learner]

Even at the city level though, things can go wrong:

to me that is like saying that because a stove is hot, why not run into a forest fire.

 

[WhoWee]

Are we still talking about tax rates?

 

[OmCheeto]

Are we still talking about tax rates?

I'm sure most people know my position.
Raise taxes on the wealthy!
Impose a wealth tax! I pay it!
Impose the speculation tax! And quadruple it! 1/4 of 1%?
Change the capital gains tax to discourage gambling, and encourage investing!

Holding times and tax rates
<1 second... 99%
<1 minute... 95%
<1 hour... 90%
<1 day... 85%
<1 week... 80%
<1 month... 75%
<1 year... 50%
>1 year... 35% minus 3% for each year held(to account for inflation)​

And getting back to "States" administering things better than the feds... All I have to say is watch out for the Texans...

http://www.lakeoswegoreview.com/opinion/story.php?story_id=129850215573478700", some history: El Paso(TEXAS)-based Mesilla Valley Transportation was awarded 752 tax credits worth $4.5 million to equip its truck fleet with the latest fuel-saving technology under Oregon’s Business Energy Tax Credit program.
...
But upon closer examination, Mesilla Valley Transportation’s trucks were spending less than 1 percent of their miles on Oregon’s highways.

And here’s the rest of the story: While MVT qualified for the credits, it didn’t need them because it didn’t have a tax liability in Oregon. In turn, it sold the credits to another company. MVT profited from the credits, while another company paid less in taxes. Meanwhile, there was virtually no environmental benefit in Oregon.

In short, Oregonians were fleeced out of tax revenue.

It wouldn't have hurt my feelings that much to know that my tax dollars had done some good in some other state, but the day after I became aware of the above story, I was watching TV, and they were interviewing the mayor of Austin, who was bragging about their fiscally conservative city government, and how well it worked.

I swore more than Cee Lo on speed that afternoon...

**** ***! *** **** *** ***! ... **** ***! gold digger... **** ***! *** **** *** ***!

 

[WhoWee]

...guess not?

 

[OmCheeto]

Are we still talking about tax rates?

Raise taxes on the wealthy!

...guess not?

Oh! Rates. Sorry. I thought you were trying to pull us back on topic.

My bad.

 

[Physics-Learner]

regarding off topic posts - i have been on many forums. once in awhile, a group of posters may intentionally mess up a discussion.

but most of the time, "off-topic" posts occur for a reason.

i was sorry to see the "believe" thread locked, as i thought it was interesting discussion.

this thread was started regarding a way to help our economy, by talking about tax rates.

but just how much can really be posted about it ?

i started the "off-topic" post - mainly as a way to throw some real light on our problem.

interest in off-topic posts suggest that the idea has more interest. much like regular people talking. it starts off with one idea, that eventually serves as a springboard for other ideas.

if evo or another monitor thinks we should talk just about tax rates, i will exit this thread, as i have no desire to go against any rules. nor do i have any desire to talk about which bucket to use to bail water, as i see my boat about to sink from the glut of water that is continuing to pour in.

if we want to really change our situation, we must also change the system that controls it.

in my mind, that presents 2 large and difficult tasks -

1) a complete redesign of our govt and constitution, such that its goal is really about helping its constituency.

2) a plan to get from here to there. i am not foolish enough to think that i could establish a perfect govt, and then the following day install the complete version. it would take decades to carefully dismantle the current govt, while installing a new one. in fact, i think this task would be considerably more difficult than the task of designing the new govt.

 

[WhoWee]

if we want to really change our situation, we must also change the system that controls it.

in my mind, that presents 2 large and difficult tasks -

1) a complete redesign of our govt and constitution, such that its goal is really about helping its constituency.

2) a plan to get from here to there. i am not foolish enough to think that i could establish a perfect govt, and then the following day install the complete version. it would take decades to carefully dismantle the current govt, while installing a new one. in fact, i think this task would be considerably more difficult than the task of designing the new govt.

This system of checks and balances typically works when used as designed. We do tend to have breakdowns when the compromise politicians reach satisfies only a narrow group of persons (left or right) and not the majority - IMO.

Personally, if our leaders can't work with each other inside a framework of rules - who could you possibly trust to design something different?

 

[Physics-Learner]

leaders ? you got to be kidding me !

let me repeat. the system of govt is not and has never been about helping the general population. this goes for any other govt that has ever existed on this planet.

govt is a system that is formed by the wealthy to control the population. we get brainwashed into many things, like them being our leaders.

you ask who i could trust ? most of the population. the thing is that in order to truly establish a system of govt to truly help the people, the goal has to be to establish a system of govt to truly help the people.

there are many intelligent and educated people in our country who could get the job done, if given a chance. the biggest task that lies before us is removing the wealth and greed from our govt.

if the goal of govt had really been about the betterment of its people, we simply would not be in the situation that we are in today. we can look outward at other countries, and see the terrible oppression of govt, in african countries, and muslim world.

but we don't see here in our own country. sure, it is not as extreme. and because it is so large, it is not quite as obvious. part of the reason why i want whatever govt we do have to be as localized as possible. localization equates to accountability.

i don't know what is happening in timbuktu, nor do i have any real chance of finding out. but i can see what is happening 10 miles away.

 

[Hurkyl]

were you being sarcastic, regarding the police call ? i will assume that you werent, and answer accordingly. we (within a localized area) all benefit from police protection. so we all pay for it, much like an insurance policy. everyone pays a small amount to counter the large risk that we know a few will hit.

however, insurance rates vary by area. so too our payments of police. the greater need for police, the greater the localized population pays.

this is a generalized principle. something that we attempt to apply to everything as much as possible.

Applying the principle "as much as possible" means that only the people who get hit pay for the protection.

Localization, as you describe, is diametrically opposed to the utility of notions like insurance.

 

[Sigglesworth]

I think that what upsets people the most when talking about taxation of the wealthy is the disparity between tax brackets. In the 1950's, a person in the top tax bracket payed an astounding 91%, which to me seems a bit unfair. This 91% slowly tapers off into the 60's and 70's and reaches a 30% figure in 2011. Over time, though, the number of tax brackets disappear, so that now a person who makes $20m yearly pays the same 30% as someone who makes $300,000. This leaves the people at the bottom of tax brackets paying the same rate as someone making $10k, $15k or even $20k more than them.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=543

The tax policy center has some pretty interesting information.

 

[Hurkyl]

A more detailed document can be found at http://www.taxfoundation.org/publications/show/151.html

 

[WhoWee]

leaders ? you got to be kidding me !

let me repeat. the system of govt is not and has never been about helping the general population. this goes for any other govt that has ever existed on this planet.

govt is a system that is formed by the wealthy to control the population. we get brainwashed into many things, like them being our leaders.

you ask who i could trust ? most of the population. the thing is that in order to truly establish a system of govt to truly help the people, the goal has to be to establish a system of govt to truly help the people.

there are many intelligent and educated people in our country who could get the job done, if given a chance. the biggest task that lies before us is removing the wealth and greed from our govt.

if the goal of govt had really been about the betterment of its people, we simply would not be in the situation that we are in today. we can look outward at other countries, and see the terrible oppression of govt, in african countries, and muslim world.

but we don't see here in our own country. sure, it is not as extreme. and because it is so large, it is not quite as obvious. part of the reason why i want whatever govt we do have to be as localized as possible. localization equates to accountability.

i don't know what is happening in timbuktu, nor do i have any real chance of finding out. but i can see what is happening 10 miles away.

Basically what you are saying is let the people decide - correct? We should trust election results - like the ones last Fall that swept the TEA Party candidates into the House - the people spoke and their voice should prevail? I understand now - it makes sense now - thank you.

 

[Physics-Learner]

Basically what you are saying is let the people decide - correct? We should trust election results - like the ones last Fall that swept the TEA Party candidates into the House - the people spoke and their voice should prevail? I understand now - it makes sense now - thank you.

no, you apparently do not understand at all.

 

[OmCheeto]

regarding off topic posts - i have been on many forums. once in awhile, a group of posters may intentionally mess up a discussion.

but most of the time, "off-topic" posts occur for a reason.

i was sorry to see the "believe" thread locked, as i thought it was interesting discussion.

this thread was started regarding a way to help our economy, by talking about tax rates.

but just how much can really be posted about it ?

i started the "off-topic" post - mainly as a way to throw some real light on our problem.

interest in off-topic posts suggest that the idea has more interest. much like regular people talking. it starts off with one idea, that eventually serves as a springboard for other ideas.

if evo or another monitor thinks we should talk just about tax rates, i will exit this thread, as i have no desire to go against any rules. nor do i have any desire to talk about which bucket to use to bail water, as i see my boat about to sink from the glut of water that is continuing to pour in.

I don't think it's too far off topic, if it's the Libertarian aspect you are referring to.

Although Ivan titled the thread:

In favor of increasing taxes on the wealthy

He then went on to clarify:

The real question is, what percentage of a person's income goes to all taxes paid, directly or indirectly?

(spelling correction mine)
People seem to want to ignore all taxes paid, and use "Federal Taxes" as a sound bite excuse not to raise taxes on the wealthy.

Ivan then quoted Ronald Reagan to show us how taxes affect the price of a simple commodity:

Well, there are 151 taxes now in the price of a loaf of bread–it accounts for more than half the cost of a loaf of bread.

I don't know if that's true or not, but if it is, and it's true of most everything we buy, then poor people would appear to be paying way higher taxes than the rich. But many of those taxes are going to state and local governments, so you would have to sit down and analyze each commodity, from start to finish, to figure out where those dollars really go. On top of that, you'd have to follow the commodity from it's origin to one of 30,000 destination cities, as the state/local taxes vary wildly.

Here's an interesting little article that is very much in line with what we are talking about. I found it trying to find out if Reagan's "151 taxes" was true or not.

"[URL
The Unseen Taxes That You Pay Every Day[/URL]
January 19, 2011

Tobacco is one commodity that they listed Fed/State/Local taxes for:

Taxes on a pack of cigarettes:
Fed: $1.01
NY state: $4.35
NYC: $1.50
Total taxes for a NYC smoker: $6.86

Collecting the data on each commodity, for each state and local government would be a horrendous task.

So perhaps we should just try and analyze how much the states and local governments bring in.

The http://www.nasbo.org/" that shows state revenues:

Way lower than the Federal Revenues that I've seen.

But let's check out the http://www.taxfoundation.org/research/show/1888.html":

Average homeowner property taxes: $1917
Taxes as a percent of home value: 1.04%
Taxes as a percent of income: 3.0%

As I said, there are a lot of numbers:

per wiki: "67.4% of all occupied housing units being occupied by the unit's owner"
per http://wiki.answers.com/Q/What_is_the_Number_of_us_homeowners" : "75.4 million people who owned their own homes at that time"
implying: ~112,000,000 residencies
yielding: $214,000,000,000 in property taxes

Still pretty low.

What am I missing?

Ah ha! Sales tax. We don't have that where I live, so I always forget it.

In some jurisdictions of the United States, there are multiple levels of government which each impose a sales tax. For example, sales tax in Chicago (Cook County), IL is 10.25%—consisting of 6.25% state, 1.25% city, 1.75% county and 1% regional transportation authority. Chicago also has the Metropolitan Pier and Exposition Authority tax on food and beverage of 1% (which means eating out is taxed at 11.25%).

I can't find a number for sales taxes collected for the country, but ran across a http://www.usgovernmentrevenue.com/downchart_gr.php?chart=40-total&state=US&local=" which implies that "ad-valorem" taxes collected are around 1 trillion dollars. Ad-valorem apparently includes both sales and property taxes, so we'll have to subtract the $214 billion I listed above.

But that's still a good chunk, at around $800 billion.

Now should we, or should we not, count the notatax?

This being that "it's an insurance policy" kind of thingy called the payroll tax. Which is Social Security and Medicaid/Medicare.

It accounts for http://en.wikipedia.org/wiki/United_States_federal_budget" of the Federal budget.

So if you subtract the notatax from the Federal budget, we get a budget of around $2 trillion.

Compared to the state and county taxes...

Wait.

a hmm... I've been working on this post for about 5 hours now, so you'll have to forgive my senility.

Something doesn't add up here.

And the sun just burst through the clouds.

I have to go.

if we want to really change our situation, we must also change the system that controls it.

in my mind, that presents 2 large and difficult tasks -

1) a complete redesign of our govt and constitution, such that its goal is really about helping its constituency.

2) a plan to get from here to there. i am not foolish enough to think that i could establish a perfect govt, and then the following day install the complete version. it would take decades to carefully dismantle the current govt, while installing a new one. in fact, i think this task would be considerably more difficult than the task of designing the new govt.

 

[WhoWee]

no, you apparently do not understand at all.

Apparently not.

I'd like to return to taxation.

Earlier in the thread, I suggested the starting point for tax reform include plotting the current debt and all future spending (included unfunded liabilities - the $100+Trillion amount) over time. The timing of when the gaps will occur and how large the gap will become apparent. These gaps need to be filled either by increasing taxes, reduced spending, or more debt.

My recommendation is to increase the standard deduction (used an example of a couple with 4 kids) to the poverty level of $30,000 and establish the specific flat tax rate (on everyone) required to address the deficit gaps, address the unfunded liabilities, and retire the debt.

I also indicated the need to remove the SS cap and increase the Medicare Part A contribution - plus keep the mortgage interest deduction for everyone.

Until we know the amounts needed to solve the problem the rates can't be determined. My guess is that a 35% flat tax on all income above (the poverty chart index) $30,000 (less mortgage interest deduction) would be adequate.

 

[Physics-Learner]

i am 56. i would consider my self to be extremely foolish to think that the answer lies with how to tax the population.

this is because i have lived long enough to experience that they have been talking about this before jesus was born.

in other words, it is irrelevant.

we have to reduce govt, thereby reducing the control of the wealthy, and the crooks that they have installed in this govt.

if and when it can be seen that this stranglehold is released, good-intentioned people will want to serve in govt so that they can improve the system.

 

[Hurkyl]

we have to reduce govt, thereby reducing the control of the wealthy

Assuming, for the sake of argument, that your implied premise is true, how the heck have you managed to convince yourself that power can't be gained through other means? Strip the government of power, and I find it very difficult to believe whatever fills the void will be as friendly to the general public.

 

[mheslep]

? The use of the term 'void' implies PL was taken to say eliminate the government thus embracing anarchy, rather than reduce the size of government which has grown dramatically by any historical measure. Taking reduce to mean destroy seems to be a common overstatement of a reasonable proposal, dramatized recently by the fallacious 'Tourists in Fabulous Government Free Somalia' commercial in circulation. Heck, even if the Federal government actually was dissolved and its 3 million non uniformed employees eliminated, the remaining states still have http://www.bls.gov/oco/cg/cgs042.htm" - hardly a 'void'.

 

[WhoWee]

? The use of the term 'void' implies PL was taken to he say eliminate the government thus embracing anarchy, rather than reduce the size of government which has grown dramatically by any historical measure. Taking reduce to mean destroy seems to be a common overstatement of a reasonable proposal, dramatized recently by the fallacious 'Tourists in Fabulous Government Free Somalia' commercial in circulation. Heck, even if the Federal government actually was dissolved and its 3 million non uniformed employees eliminated, the remaining states still have http://www.bls.gov/oco/cg/cgs042.htm" - hardly a 'void'.

It's hard to imagine why 19 million state and local workers can't get the job done with (perhaps) 1 million more federal employees - 20 million people attending to 350 million sounds more than reasonable - doesn't it?

 

[ThomasT]

It's hard to imagine why 19 million state and local workers can't get the job done with (perhaps) 1 million more federal employees - 20 million people attending to 350 million sounds more than reasonable - doesn't it?

It does, but with such a mobile population and dependency on interstate commerce I have to think that having a strong federal government is one of the reasons why America became such a good place to live for just about everybody in it.

Nevertheless, it doesn't seem to me that just increasing taxes on the wealthy will solve the current economic/financial problems.

There's a lot of waste that can be cut from the federal budget. For example, a significant portion of SS retirement funds are paid to people who don't really need those payments. So if SS is revamped accordingly, and the $106K cap is removed, and the SS payroll tax is increased by a couple of points, then that should solve the SS problem (and give the government a significant amount of money to spend on other things such as reducing the debt) without having to increase the retirement age (because it looks to me like we're going to need people to leave the active workforce at increasingly younger, not older, ages).