May 25, 2013 |
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You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.
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There is no question of relieving others at the cost of hardship to yourselves; it is a question of equality. At the moment your surplus meets their need, but one day your need may be met from their surplus, The aim is equality.
Sounds familiar. From each according to their ability, to each according to his need. Marx.
Close. II Corinthians 8:13-15. Jesus was a total Marxist, don't you know.
Or Marx was a total Christian. Either way, I'm neither Christian nor Marxist and don't think sound economic policy out to be based on either Marxism or Christianity.
But thank you for the reference. I haven't read much or the Bible and didn't make the connection between voevoda's comment and the Biblical text.
If you think that "Marx was a total Christian," jhawkinsf, then I guess you don't know much at all about the history of the world in the 20th century.
Said tongue in cheek.
That said, Marx died in1883, a bit prior to the 20th. century.
I known when Marx lived and died, jhawkins. My point is that atheism has been one of the most prominent aspects of the Communist states that were inspired by Marx's writings. That being the case, the proposition that Marx was a "total Christian" indicates lack of knowledge of the 20th century.
And, as a matter of fact, Karl Marx was Christian. He was baptized as a child in order to facilitate his opportunities to advance in German society. He did not identify as a religious believer.
What part of "said tongue in cheek" are you not getting?
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BTW - interesting choice to send your child to parochial school if you're not a Christian and haven't read much of the Bible. There may be a parochial school in the area that isn't Christian, but I'm not aware of it.
Far better education. Unless you want to put up some link that shows otherwise, in which case it would be wrong.
I've oft said I'm not religious in the least, but I'm not anti-religious either. If my child picks up some religion, fine. If not, that's fine as well.
Did I mention far better education. Perhaps it's because the school has a diverse population that includes members of a variety of faiths as well as no faith at all. What it lacks is parents who don't care about education. I feel bad for public schools who are compelled to deal with those parents, but as the only advocate out there for my child, I must look out for my child's best interests.
Tell that to Sam, who has no moral obligation to mooching from hard-working taxpayers more than a half million dollars over the years to subsidize his and his family's farm. I guess it's a form of welfare the Republicans have no problem with.
"When half of the people get the idea that they do not have to work because the other half is going to take care of them"
Half this nation doesn't work? News to me.
Oh wait you mean half the taxpayers don't have to pay federal income tax because of the way the tax code is written. Well, that's far cry different than them not working, isn't it?
I thought conservatives were against taxation... yet you want more people to pay taxes. Odd.
Great idea, Ken. The most pressing need in society right now is to make the poorest and most vulnerable among us even poorer and more vulnerable-- in the name of all that's fair.
I assume the author is advocating for eliminating the credits and accounting tricks that allow GE and other multinational corporations to avoid paying any taxes or even getting millions back in refunds?
It's easy to keep spending when someone else has to pick up the tab. In this case, it's our children and grandchildren. If there is anyone out there who wants to give me their credit card, I guarantee you I can spend on it day into night, night until day.
Raise taxes on everyone, and I mean everyone, a flat tax of 20%, or 30%, or 50%, whatever. Tax every person, every business, every corporation, LLC, church, everyone. Whatever it takes to pay for the things we demand of government. Once we've achieved that, once we're really paying for it, rather than sending the bill to future generations, then we'll be able to decide if all that spending is really what we want from government. Maybe we'll decide to reduce entitlement spending. Maybe we'll slash the military industrial complex. Maybe it'll be a bit of both. Only then can we reduce taxes to the level of our demands for spending. But as long as we have the ability to borrow while having some future generation pay for our recklessness, we'll face a fiscal cliff, a sequestration, an abyss every few months or so.
The meme that the deficit is getting passed on to the next generation is a convenient one, but it's largely false. Even the current debt and levels of deficit spending are a relatively small portion of GDP, especially when extended out over several decades.
The REAL debt that will be handed off to future generations will be the result of austerity hysteria, not government deficits. Those debts include crumbling infrastructure; inadequate funding of education, K thru graduate school; chronically high trans-generational unemployment; and the real biggie, failure to address and roll back the effects of global warming/climate change.
So Bozo, your answer is to keep running up the deficit and make the 5% who already foot 50% of the bill foot more of the bill?
I disagree with you Bozo for one very big reason, a reason I think you're conveniently overlooking. Sure, the negative effect of passing on this debt to future generation would be relatively small, if extended out over several decades, ONLY if we, right here, right now, stopped accumulating more debt through more deficit spending. But that's not what is happening nor is there any reason in the world to believe it's likely to happen. That 16 trillion debt will be higher next year and higher the year after that. And not just higher, but substantially higher. And that's because that deficit spending we have this year, which will be higher next year and higher still the year after that. And not just higher, but substantially higher.
I never said cut spending to all those things you mentioned. Heck, spend away. All I'm saying is that we should pay for it, rather than send to bill to our children. Spend away, I don't care. Increase the budget as far as we'd like for all I care. Just pay for it. And the only way to pay for it is by increasing our taxes. That's what I'm advocating for. Not a reduction in spending for schools. Not a reduction in spending for infrastructure. Heck, spend even more. Just pay for it. Everyone.
You're confusing cause with effect. The collapse of the economy (a result of the collapse of the housing bubble, which was created by all the speculation on the fraudulent "financial instruments" on Wall Street) is what caused the deficits. Continued high unemployment is what's keeping the economy in the doldrums, which in turn, feeds the deficit even further. Austerity measures will only exacerbate this chronically high unemployment, accelerating the downward spiral.
And the only "plan" that Republicans have is to increase the deficits even further by giving more tax breaks to the wealthy, which won't create jobs but would also accelerate the downward spiral.
The deficits were well in place decades before the housing bubble collapsed. But it is true that the collapse helped them along a great deal.
At the end of the Clinton Administration, there were budget surpluses. This was in large part due to the tech bubble, whose burst caused the recession at the beginning of the Bush Administration. Wall Street responded by cranking up the housing bubble, which then collapsed even harder than the tech bubble, taking the world economy down with it.
My suggestion is nothing like the Republican plan. They want to cut taxes while I want to increase taxes so long as they're increased on everyone. My suggestion had nothing to do with an austerity program. I specifically said it's fine with me if we increase spending, as long as we pay for it.
This year, about 6% of our budget is being spent on the interest on debt we've already accumulated. Not paying down the debt, just interest on that debt. That translates to about 220 billion dollars. Your suggestion from above is that it's not a large amount, if extended decades, means we'll be paying that amount until the end of time IF we don't accumulate more debt (an unlikely scenario), AND we don't at some time actually pay down the debt (something we're not currently doing). Well, I don't know about you, Bozo, but I happen to think that 220 billion dollars is a large amount of money, especially if it's every year until the end of time.
Of course, we can simply grow the economy out of this mess, something that happened during the '90s, when we experienced strong growth. Then again, that strong growth was fueled mostly by first the dot com boom and then the housing boom. If growing your way out of the debt and deficits is what you're advocating, I'd be very cautious that we don't slip back into a boom and bust cycle such that we've already experienced.
"They want to cut taxes while I want to increase taxes so long as they're increased on everyone."
This would dramatically slow the economy, which would in turn increase the deficit, not reduce it.
"Of course, we can simply grow the economy out of this mess, "
Agreed-- but austerity will shrink the economy, not grow it.
Increasing taxes would only need to be in place for a relatively short time. Difficult decisions need to be made, what we want vs. what we can afford. As long as we borrow, we don't have to make that decision. But with debt accumulating, with 6% of our current budget going to service that debt, we keep putting off those difficult decisions. Your suggestion is to put off those decisions even further while allowing that 6% to become 8% or 10%. The only thing coming down the 'pike that will make that decision easier is my death from old age while my children and grandchildren then get to make even more difficult decisions. Raise taxes now and pay that thing off. Then, when taxes are relatively high on everyone, then let the debate begin about what we want and how we'll pay for it. I suspect, Bozo, than a good deal of that debate will include the size of the military industrial complex, which as much as it might surprise you, I think is way too big. I may be wrong, but I actually think a majority of Americans think it's too big. But again, as long as we put off decisions until some time in the future, that's one of the decisions that won't need to be made.
The current debt exceeds the national GDP, so it's not a "relatively small" portion of it, in fact it hasn't been this high since the end of WWII.
And that debt got repaid with relatively high taxes on the wealthy. Attempting to pay off the deficit on the backs of the middle class, the poor and the elderly will have the opposite of the desired effect. It will accelerate the downward spiral, hurting everyone but the already wealthy. But eventually, it'll hurt even them, as society becomes ever more petty, punitive and downright Dickensian.
What's needed is more deficit spending, not less. But that spending needs to be smart and focused, not on militaristic pork barrel spending and other corporate welfare that produces nothing of value. Remaking our healthcare, energy, transportation and agricultural systems, along with all the technology that goes with that, is precisely the cure to our economic and budget ills, and government needs to lead the way.
Actually, that debt never really got "repaid" - we simply grew so that the national debt was a smaller fraction of GDP, something advocated by Keynesians like Krugman. In fact, the national debt was pretty constant at about $4 trillion from the end of WWII until the '80's.
You continue to make the mistake of conflating debts and deficits, but you're not alone in that. The national debt is the total amount owed by our government, and deficits are the amount that debt grows each year.
Right now, our national debt is about $16 trillion - at the end of WWII it was about $4 trillion. You don't get that kind of growth from one or two years of a bad economy, you get it from consistently spending more than you take in in revenue.
Deficits have been running about $1 trillion or more recently, which means that our debt increases each year by that amount. At that rate, in 10 years or less, we'll have double our national GDP of debt.
How much deficit spending is enough for you? And, how do you propose to make sure it's spent well and in the manner you suggest, given the government's lack of a good track record in that regard?
Here's a site with fun charts and facts about the debt and deficit.
Flat taxes are an emotionally satisfying answer from people who are either bad at math or deliberately trying to increase the suffering of the poor. So which of those are you, JSF?
Deliberately trying to increase the suffering of the poor.
And the rich.
And the middle class.
You. Me. Your children. My children.
Well, you'd succeed with the suffering of the poor. The rest of us would just whine about having to give up that Disney vacation this year, not decide how to make the rent payment.
Ok - not entirely accurate. It may also have the unintended consequence of crashing the entire economy if enacted too quickly. In that case, it would cause the suffering of everyone.
You may be right, we'll never know. While I think a flat tax is worth a try, I also think it has exactly a zero chance of being enacted. I'm still entitled to my opinion, though, aren't I?
Still, when I hear the suggestions on these pages, I know I've heard them before. No, not from Marx, I'm not quite that old. Not from Corinthians, either. I'm certainly not that old. But I did hear them in the 60's. I heard them in the 70's and 80's. Again in the 90's and with the start of the new century, new calls which were really just the same old calls. The ideas in this forum coming from radicals on the left or radicals on the right have the same chance of being enacted as a flat tax. We're all just hitting our heads on a brick wall. Yea, right, eliminate the military industrial complex, right. Go back to the gold standard, yea right. At least I know my proposals won't ever get enacted. I'm not deluding myself. If you seriously believe your ideas will become policy, then you're no different than those in the 60's who said the exact same thing, except that you're younger. Call me in half a century and tell me how things worked out. (Call me, right, like we'll be calling in half a century).
I'm not sure what you think my ideas are. They're probably far less radical than your imagination views them to be. Even so, advocating for an unlikely but good idea is not the same as advocating for an unlikely but bad idea, even if both ideas are unlikely to ever come to fruition.
Translation: My fairy tale is less pleasing to you than your own fairy tale. Fine. Then the only point of contention we have is that I know my ideas will not come to pass. Do you know yours will not, just as many in the 60's didn't know? They didn't know in the 70's, and maybe they still don't know.
And exactly which fairy tale would that be, oh wise puppeteer of the straw?
You've made 2800 comments on this forum, I've made more than double that number. We know each other well. Don't pretend I'm stupid and I won't pretend the same of you.
I don't have to pretend.
You did walk right into that one. Kidding aside, I've never heard you correctly articulate my positions economic policy. You tend to lump me in with things you've heard elsewhere and mix me up with other posters. Then when flustered you dismiss my opinions - in this case by claiming they're no different than 60s radicals. Which radicals? There were many radical movements in the 60s, and not all of them shared the same philosophies. Some even had ideas that eventually percolated into the mainstream.
Are you a supply side, trickle down believer in Laffer or might you be in favor or higher taxes on the wealthy while providing more services for the poor?
You've tried to characterize me as a Libertarian with conservative leanings. Shall I say you tend to be more of a conservative or progressive? It's not really that hard.
That aside, yes, I did walk right into that one. Intentionally. Because I wanted to bring up something. Earlier in this thread, I thanked you for the Biblical quote. I was unaware of it and my thanks was offered with sincerity. It was sort of an olive branch. I've done that several times, hoping to move away from the sarcasm and snarkyism that has defined our conversations. Frankly, I'm tired of it. So again I will offer an olive branch, hoping you will accept. In the alternative, I will ask you not to respond to my posts, as per the terms of agreement we all agreed to in this forum. I ask you to choose.
Just so we can see where this takes us:
Why base a flat tax on a percentage rather than just a flat amount that everyone has to pay regardless of pay?
Well, one problem that immediately comes to mind is what happens when a person earns less than their stated contribution?
Everyone jumps on my idea of a flat tax as being so wrong because it will start taxing poor people at the same percentage as rich people. That's unfair they say, as if fair can be defined. But I've long advocated coupling that will a near elimination of loopholes and deductions. Sure, some in the middle class might lose a couple of deductions. But it's the wealthy that benefit more from a long and complicated tax code. We can tax them at 100% but if we allow for enough loopholes, they wind up paying less than their secretaries. I say eliminate the entire tax code. Write a new one on a napkin, no longer than that. I'm of the opinion that whatever loss of fairness we suffer from having the poor and the wealthy pay the same percentage, we'll more than make up for it by having both live with the same taxing system, something we don't have in practical practice right now.
Eliminating deductions doesn't cut it, although those certainly need to be addressed, especially when it comes to capital gains. You're still taxing food money for the poor and at best mildly inconveniencing the rich. If you don't eliminate sales, excise, property, and all other forms of tax, you're also disproportionately taxing the poor even more than they do now with loopholes for the rich.
You'd also force, ironically, the government to enlarge. Tax-deducted charity donations would no longer be a thing, and those minimum wage employees of yours would be making choices between food and shelter unless the government stepped in to provide for them. Health care, too, since tax deductions and penalties for providing it would also no longer be a thing.
Our tax code is complicated, that's for sure, but replacing it with a single bracket flat tax would not provide the simplicity of your fantasy.
Elsewhere in this thread, someone suggested the elimination of the military and intelligence agencies. I asked, somewhat rhetorically, how many jobs are involved in those agencies. Just speculation, but we must be talking about hundreds of thousands of jobs, everything from soldiers to CEOs of major defense department contractors to the janitors that clean the bathrooms at Lockheed or Boeing.
No, nothing like that or what I propose can simply be enacted. it would need to be phased in over a great deal of time. I mentioned elsewhere in this thread that I also believe in a reduction of the military industrial complex. But not a total elimination today. I'd guess that would collapse our economy, no matter how pleasing it might be even to the biggest pacifist amongst us.
Yes, we would need a greater commitment to charity while we phase in a flat tax. Those funds might well come from a reduction in the military, that itself being a consequence of an increased voter turnout by the poor. Over time, a balance would be reached, remembering that this whole conversation on my part involves a system where we pay off the debt, eliminate deficits, and decide what we "really" want to pay for and what we are not willing to pay for. Right now we're buying what we want, what we don't want and we're sending the bill to our children.
I think that you are missing my point.
Your stated reason for not having people pay a flat rate is that some people do not make enough to pay it. That is fine. However, essentials like housing, food, gas, insurance, and utilities are not paid on the basis of percentage. There is a certain base amount of money a person has to pay to survive and remain employed. When you tax based on a flat percentage, you are making it a high probability that those at the lower tax levels will have to chose which essential they will pay for.
If you are worried about a flat amount because of the burden it places on the lower brackets, I would posit that a flat percentage is only marginally better. A graded percentage is therefore the most reasonable way to tax expendable income.
Deliberately trying to increase suffering violates my sense of morality.
You could simply have said "Neither, and I don't accept your premise".
You're the one who chose to say it the way you did, and I'm sure that has meaning.
But you're the one choosing to read only part of it. Did you read the part where I said that I wanted to treat every person exactly the same. I included myself and my children in that. How bad can it be when I'm offering the same cruelty to myself and my children.
What chootspa and perhaps you call increased suffering I call being responsible. I fight this battle every day when I tell my child to do his homework and he thinks I'm being cruel. I tell him to eat his vegetables and I'm a mean person. Bedtime the same battle. Yes, I plead guilty. I'm mean. I'm cruel. Just as mean and just as cruel as when I say we should all pay for what the government provides.
You called it increasing suffering, not me.
Actually, I was using the words of the comment to which I was responding. And then by using just a part of my response, as opposed to the entire comment, you've distorted it's content.
And then you add a cryptic suggestion that you're sure it has some meaning. Actually, Jafs, by willfully not seeing that the words were really of the comment above, and then taking my post completely out of context, it says more about you than me.
Yes you did, and you chose to use that term, when you could have used many others, if you didn't agree with it.
I am sure it has meaning, that you made that choice instead of others.
If somebody uses terms I disagree with, or sets up a false choice, I don't go along with it.
Whatever meaning you think was intended, I'm the only person who knows for sure. And I'm telling you you are wrong. And you are wrong because you took one small part of a whole comment, one that when taken out of it's appropriate context, completely changes the meaning.
It would be no different than if you said, "I am not in favor of raising taxes on the poor" and I then quoted you as saying "I am ... in favor of raising taxes on the poor". Every single word I placed in quotations are words you said. Yet I've willfully changed your intent. I've willfully changed the context of the quote.
Unless you believe me to be a pathological sociopath who favors suffering for every single person in this country, then you should know that my comment was intended to say that we should all suffer equally. That's not a call for suffering at all. It's a call for equality. That you don't see what was obvious just means you're taking posts too literally. Nuance, alliteration, sarcasm, many more, are all tools of writing. Don't just look, Jafs, see.
Taxing everyone at the same rate may seem like it treats everyone equally, but it has very different impacts. My last hundred dollars is a lot more dear to me than my last million. My first hundred dollars has less investment potential than my first million, not only because I have more options for diversifying my portfolio or starting a business, but because I do not have to worry that I'll starve before my investment matures.
Furthermore, the actual amount of potential revenue from the lowest quintile is very low, making it an ideologically driven policy, not a fiscal necessity. That revenue also translates to slower growth in all other sectors, since the lower quintiles are far more likely to return their income to our consumer-based economy. There's where your universal suffering comes in.
Intentionally making people suffer for the sake of your own ideology is cruel, and not in a doing homework or eating vegetables sort of way. More like an abusive dad who beats their kid for dropping a dish while setting the table sort of cruel.
Here's the problem I have with what you say. It has to do with the theory of a slippery slope. Suppose we did have a flat tax, such that I propose. But then someone suggests an exception for developmentally disabled adults working in a sheltered workshop such as Cottonwood. Who could argue against such an exception. Certainly not I. But then comes the next exception and then another. All equally deserving. Then the next exception will be deserving, just a tad less. The next exception a tad less than that. Pretty soon, we'll have a tax code that looks just like the one we have now, full of loopholes that benefit the wealthy far more than it benefits the poor.
I've frequently said that fair is too difficult to define. Everyone has an opinion as to what fair is. A few weeks ago a rather famous golfer got into hot water when he said that paying 53% of his income to taxes wasn't fair. Frankly, I agree with him. It violates my sense of fairness. Of course, you're free to disagree. Maybe you're sense of unfairness doesn't kick in until it's 60% while some other person might say it's 40%.
If you've been following my posts throughout the months, you'll see that I believe there would be some other side effects that I think would be beneficial to all. I'm of the opinion that when the poor are taxed at the same rate as the wealthy, they will vote in similar percentages, something that is not now happening. I don't know what price we put on having a voice in our democracy, but it's a benefit I believe will happen.
Taken as a whole, an increase in taxes, an elimination of loopholes that benefit the wealthy and an increased voice in our democracy, I don't see my proposal as a net loss for the poor. Just the opposite, I think there is a net benefit.
Mr. Meyer, I call baloney. Your letter is mostly just re-hashed and myopic rubbish about the "taker" 47% vs. the "maker" 53%, yet trying to masquerade as an appeal to fiscal sanity....
Yes, the top 28% pay the largest share***
*Nevermind the grand canyon of income inequality that makes that general structure a necessity - the top 20% owns 85% of the country's wealth.
**Nevermind that their taxes are still historically very low (see rates set under "Republicans" Eisenhower and Nixon).
Effective tax rates, US high-income.png
***Nevermind that the Bush Tax Cuts are a major reason for 47% not having federal income tax liability...
Look Ken, we all want more efficient government. But whining about how those at the bottom, the 72% percent sitting on a whopping 15% of U.S. wealth, have no skin in the game, is just plain stupid.
How about starting your argument with cogent analysis of inefficiencies you'd like to see corrected rather than warmed-over divisive b.s. that already cost your presumed party of choice the 2012 election.
Well fiddleback yours is too.
Focus on the top 5% and we will find that is where the wealth really is. Using the top 20% helps you justify higher taxes on part of the middle class - a part that is not wealthy. Don't fall for that conservative trick. The 5-20% pay a fair amount of taxes in the aggregrate but it is a reasonably large aggregrate. The 5% is not a large set - but it holds much of our wealth.
Income inequality between the average in Kansas and $100K is twice. Income inequality between the poor and the average is - guess what - 2. Income inequality between the average and the really wealthy is 20 and up.
Now if you go after the really wealthy you will bring in some revenue. The problem is that there are few of them, they are highly mobile, they cheat, they own several congress persons each and will probably not pay much no matter what you do. Therefore only by making the upper middle equal to the middle can you find any real money to pay for the trrillon dollar annual deficit that stretches onward to forever..
If you want to go after the upper middle get your facts straigyht. You are not talking the rich - you are talking those who have worked all their lives like teachers. What you are talking is income redistribution to make us all equal except for a few elites who will still be fancy rich - not much different from how it is today.
You liberals are easily fooled. Do you really want a society where after earning an advanced degree and working all you life married to someone of equaly accomplishment your taxes reduce you to an income level just a bit more than you enjoyed in your late 20s??
"Income inequality between the average in Kansas and $100K is twice. Income inequality between the poor and the average is - guess what - 2. Income inequality between the average and the really wealthy is 20 and up."
Your shorthand is unclear. Please clarify what you're talking about and your sources/links. Also:
-Where did I imply that I'm satisfied with rate structures for the top 28%?
-Where did I imply that I wouldn't want more targeted taxation of the super-rich?
-Where did I imply that I wanted to "go after" the upper middle class?
-On what basis do you assume that we're remotely in danger of particularly punishing the latter, esp. since the GOP defines "upper-middle" much higher, and thereby demanded setting the threshold for the expiring Bush tax cuts at 400/450K rather than 200/250K?
"What you are talking is income redistribution to make us all equal except for a few elites who will still be fancy rich..."
I'll forgo comment on your final two paragraphs; you seemed to start with a straw man of my points and then ended with snowballing hyperbole that doesn't sound the least bit "moderate." If you want to credibly characterize my remarks as seeking to tax teachers into the lower-middle class, then you should bring some actual sources and data to the table.
Oh, I have offended you.
The 100K is a given - I have used it in many posts as an example of an upper middle class income - an otherwise not precisely determined concept
The 55K come from the US DOC website as the average family income in Kansas (a little over $50K)
The average poor income comes from our government definition (many sources) of the poverty line for a family of four (around $23K)
At the latter point the IRS website suggests no federal income tax is paid
At twice that point - the average Kansas Family Income) - according to the IRS website the federal tax payment varies from 0 to about $2500
At 100K - twice the average - that federal income tax payment is about $17,000.
Just reference points on how fast our progressive system increases the tax burden today.
The gist of my argument is
2.) People at $100 K income pay a lot of federal income tax (a lot of tax in general - close to $33K)
3.) We are running a trillion dollar deficit on top of a trillion dollar expenditure
4) Raising taxes on the truly rich, cutting defense and hoping for an economic rebound will not cover that shortfall.
5.) We either deficit spend until the economy covers the cost (if every), reduce expenditures until revenues are equal or we raise taxes broadly to obtain a lot more revenue
6.) If we atke the latter approach to cover the annual deficit we just about need to double our income tax take
7.) That means a $34 K federal income tax on a $100K income.
8.) That means as your income increases from $50K to $100K your federal income tax will increases 7 times leaving you about $15K to cover the increases in other taxes (sales, state, real estate and personal property), investment in retirement and maybe an improvement in your standard of living.
Seems to me that working hard to double the average income is a plain waste of time (if it entails more or harder work) if we choose to continue to expend over 2 trillion from the general fund annually. (and pay for it).
So back to my question. How much tax increase on whom? Otherwise we need to cut a trillion from our annual expenditures (half)
Increase taxes on everyone and cut services. That's the only way out of the debt. Equity is an issue and the upper middle do end up carrying more than their share of the load (compared to other demographics), but it's a mistake to argue just about income tax as the measure of this burden. The poor do pay payroll taxes. The middle and upper class does too, but that means the poor do pay some federal taxes. Let's not try to make it look like they pay nothing. The wealthy pay capital gains. They pay an extremely low rate on capital gains and have numerous ways to shelter their earning from taxes. The middle and upper middle have some access to these shelters too, but they are disproportionately available to the wealthy. It is true that a huge proportion of the wealth is increasingly held by fewer than 5%, but I'm not fond of the argument that the rich own the system and are untouchable so we need to tax the poor. Let's argue about this with all of the federal tax paid as the base line, not some subset that helps one specific position.
Nothing toward Medicaid, Housing assistance, food stamps, child care. welfare and many other income transfer programs.
You didn't previously offend me so much as baffle me. At least this time your main thrusts were intelligible...
So, you're suggesting an unfair jump in income tax burden for those making around 100K. Fine, but income tax is obviously only a part of the puzzle, and you have to consider the overall burden or "effective" tax rate for these various incomes. Payroll and other taxes take a greater percentage of lower incomes, plus there's no payroll tax on income over 106K. The rates are designed in such a way as to make a fairly gradual progression in overall tax burden across the income spectrum.
Total Effective Tax Rates 2011.jpg
So I'm not saying that you're mistaken about a person at 100K+ income paying a 30% effective rate, or upwards of 30K in taxes, but I'm saying that those with 40-50K incomes still pay an effective rate of 25%, or 10-12K.
Moreover, I never wrote anything to suggest that we don't need spending reforms and restructuring to become fiscally sustainable, or that there shouldn't be shared sacrifice. But to look only the federal income tax as the author does, and then conclude that there's no way that the wealthy should ever pay a greater share when the poorer half pays nothing, is still totally myopic and willfully oblivious to the larger economic and historical imbalances that I originally outlined.
Ii might point out that my argument is
1.) the upper middle pays a lot and when we allow the right to lump them in with the rich we conceal;e how little the really rich pay and how much of the wealth of the nation that 1 % holds.
2. Raising income taxes will not increase payroll taxes and will not increase federal income taxes on that mystical 50%. Only the half paying taxes will see an increase to cover the trillion dollar annual deficit. That would be horribly wrong.
Just out of curiosity, how many people are employed in those industries? If we did get rid of those departments, what will become of them?
My numbers suggest that is wrong. Perhaps you have some data to support your assertion
Hey rockchalk1977? Can you please explain to us the reason why no budget has been passed?
If the Obamanator has his way we will all be unarmed pesants
You may be, I'll be an unarmed peasant* who can spell.
I notice that all liberals like to make that argument – that other taxes even the score. I will never accept that argument. Payroll taxes buy the recipient a retirement and a medical program. None of the money goes to pay for the operation of the federal government. I just do not count that tax because of the very clear link to personal reward.
The income tax buys many programs that most Americans never use. It buys Medicaid, food stamps, housing support, child support and a myriad of other programs that at the federal and state level equal almost a trillion a year. It is my assertion that everybody must contribute to those costs. Simply buying yourself a retirement and a health care program does not under any rational argument discharge the personal responsibility to contribute to the COMMON good.
Yes, I support progressive taxation. I do not support half the tax paying world not having to contribute to the common pot or filthy rich people paying an effective rate less than a middle income player. The system is horribly skewed. You will note from my data how highly progressive the tax rates are between 50 and 100K. That progressivity ends at about $400K – why?
While I count state and local taxes as taxes that do contribute to the common good. They by no means discharge the responsibility of every citizen to contribute to all the common pots. They are also progressive and lower income taxpayers pay little.
The real issue here is seeking additional taxes from the middle while settling for 4% from the filthy rich and effectively excusing half the population from any increase. Unfortunately that is how I interpret continuous and loud arguments from the left for more revenue. These are arguments that never reconcile the trillion dollar annual shortfall with an identified taxpayer. Cutting Defense, nicking the rich for some deductions or hoping the economy improves enough just will not IMHO cover the annual shortfall.
The decision to increase annual expenditure from around 20% to close to 24% was not driven by the “Bush” tax cut. It was a conscious decision to spend more money on a host of government programs. So far the decision has been paid by incurring debt. The alternatives are to cut those increases or tax somebody.
IMHO that somebody is the upper middle and the sums involved are ruinous. One more time – how much is enough and who should pay?
Moderate, FICA taxes are not payments into a dedicated retirement/medical account, but enter the Treasury General Account right alongside income taxes, excise taxes, fines and fees, tariffs, seigniorage and other government revenue to fund operations. Many people receive more in benefits than they ever pay in FICA taxes, and others receive less that they contribute.
Actually, they are"booked" into a trust fund where US Government bonds are physically placed for redemption when the annual payments are less than the annual outgo. Not yet. Now the government can refuse to redeem the bonds but the bonds remain. How would you have the government handle the several hundred billion dollars of over payments made to the trust fund over the last couple of decades?
The bonds are booked into the Trust Fund account, but the funds purchasing the bonds are credited to the Treasury General Account and are dispersed as regular government payments just the same as income taxes, etc. Thus, FICA taxes go to support the general government expenses. There is no 401k or other type of savings, pension or medical account with individual amounts corresponding to payments. Your SS account does track quarters worked, earnings and contributions, but benefits are only roughly correlated to contributions as blackcopter points out.
I fail to understand your argument that issuing bonds for my payroll payments somehow makes the underlying money anything other than funds for social security. It would have been stupid for the government to have "invested" the money in the market on say commercial bonds while borrowing to pay the annual deficit. It instead borrowed from the trust fund.
And there really are bonds in a draw in a government facility in West Virginia. Perhaps you could explain the difference between government bonds and commercial bonds?? They are both investments on one hand and debt financing on the other.
Payroll taxes are for social security unless of course it is your argument that we should renege on paying back the bonds issues by our federal government.. Was that the liberal plan all along??
Let me try this way. When SS (FICA) taxes exceed current payment needs, the surplus funds are used to purchase Treasury bonds. The bonds are held by SS, but the surplus funds go into the Treasury General Account to help fund the deficit. Funding the deficit is the reason the Treasury issues bonds; no deficit, no bonds are issued. The Treasury General Account is used to pay government operating expenses, payroll, purchases, whatever the government owes.
When the bonds mature, the Treasury redeems them at face value, probably by issuing new bonds if Treasury is running a deficit. So, while Treasury has the money, it is spent on operations. When Treasury redeems the bonds, SS has more funds to pay benefits. If the Treasury had sold the bonds to a bank, would we say the Treasury borrowed mortgage money from the bank or small business loan money from the bank or depositor's money? It's just money owed to the bank. When it's paid back, it becomes the bank's money to use as it sees fit. When Treasury has the money, it's the government's money. The bank owns the bonds, the government has the money. Same with Social Security, which can use the funds to pay retiree benefits, SSI benefits, Medicare benefits, parts A-D, Survivors benefits or dependents of deceased workers like Paul Ryan, or maybe for operating expenses like brochures or new computers. By the way,Treasury pays interest on the bonds just like it would to a bank, but SS is prohibited form investing any surplus in the markets or commercial bonds; only US Treasuries.
PS, it seems to me the Republicans are the ones threatening default by not raising the debt ceiling to pay for appropriations they have already authorized and spent.
Except for the underlying reason in the law for collecting the funds that are "borrowed". . A separate funding source was established for the express purpose of funding SS and Medicare A. That is the law. If the government chooses to borrow from those funds that does not change the intent of the tax. Payroll taxes buy a retirement annuity and a hospitalization program for the individual paying them and nothing else. What you write might be considered accurate if it is the intent of the government not to redeem the bonds. Otherwise every nickle collected for SS and Medicare A will go for SS and Medicare A - and nothing else.
Fiction!! The Fed pools all of the money and spends money collected for Social Security and Medical expenses. They give a bigger proportion of contribution to lower income contributors than upper. Payroll tax is tax and tied to specific benefits in name only.
You mean there's no lockbox? :)
There is a lock box in name, but it has more holes than Swiss cheese. The government puts an IOU in for every dollar it takes out, but it's more like a cash register that is never shut. Dollars out, IOUs in.
You are appropriately named. See response above. You will be accurate only if we decide to end the program.
Sorry, I did not mean to imply that the Fed does not account for a difference between payroll and income tax. The do clearly separate revenue from Social Security and Medicare/Medicaid and keep a careful accounting. I have 2 points about this though.
1. They spend the money anyway. The federal government continues to borrow from payroll tax and the system is unsustainable. When we start defaulting on our debt I don't think Social Security recipients are going to be at the head of the line of creditors. Congress will simply change the law to allocate some or all of those funds to other purposes.
2. Social Security and Medicare are already systems that don't reserve specific dollars to specific individuals up front. Some get much more out of the system than they pay in, some get much less. Congress can always change the rules about how the money is distributed. This means individuals are paying into a system from which they are not guaranteed to benefit.
The argument on the Right is that lower income brackets pay no taxes and enjoy huge handouts from the federal government. I think you need to include payroll tax in the discussion to indicate that lower income brackets do pay some money for some of these benefits.
Stripping out payroll tax from the discussion is just as misleading as assuming the wealthy earn most of their money as income and are taxed at the higher rate.
OKJ, but I am not the right. My issue is pain. The income tax pays for far more than the social safety net. If everyone feels some pain when the feds add a program - whatever it is - the taxpayers will be more aware of what is being done in their name and perhaps more limiting. When only half the taxpayers feel pain the probability of a new program being created is high.
Oh by the way I know better when it comes to the wealthy. Since the wife and I are just below near the peak of effective federal taxation, I feel that you and those of your opinion will sell us down the pike because you can not get the rich and you will not touch the poor. Moving to 24% of GDP for federal expenditures will require a doubling of the income tax for those that actually pay it That is destructive of people at our level.
The right wing posing as the GOP are pushing the Forbes Flat tax I'd say...
This includes Sam Brownback in Kansas
You know there is a difference between a flat tax and no tax. Think about it!
What about Federal Social Security and Medicare/Medicaid taxes? Everyone who works pays those.
Yep, and everyone gets back as a retirement annuity and hospitalization program the money they and their employer put in (with interest). In fact the lower income recipients get back more than they put in while the higher income players ($100K) do not quite get back what they pay. Nobody in the old age portion of the program gets general revenue funds. Source of data is CMS the government managers of the programs.
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