Tax on rich will bring in 63.67B per year

[samclem]

Certainly the folks who have the most to lose in that scenario might be expected to pay the most to maintain a status quo that benefits them disproportionately.

And the wealthy would pay "the most" even with an entirely flat income tax. What I believe you are arguing for is a situation in which those who achieve the most (or benefit the most from the publicly-provided common services) pay proportionately more. Is it "fair" that those above the median income provide virtually all of the funding for these common services.? Is it conducive to the overall prosperity of the country for these common services to funded in this way? If those voters who earn the least pay virtually no federal taxes, exactly what is their personal interest in moderating the expenditures of the federal government?

 

[Gone4Good]

Is it "fair" that those above the median income provide virtually all of the funding for these common services.? Is it conducive to the overall prosperity of the country for these common services to funded in this way? If those voters who earn the least pay virtually no federal taxes, exactly what is their personal interest in moderating the expenditures of the federal government?

Many of the issues you raise have as much to do with income dispersion as they do with tax policy. According to the census bureau Historical Income Tables - Households people in the top quintile take home 49.7% of all income. It's kind of hard to have more widely dispersed funding for the federal government when income is concentrated so narrowly.

I agree that a system where only a handful of people pay for a majority of the nation's government seems unstable. It also seems unstable to have only a handful of people take home the majority of the nation's income. But that is the unstable situation we find ourselves in.

 

[dex]

But they do make an incredible difference. If all of those things were eliminated, everyone's wealth and income is reduced to zero. Certainly the folks who have the most to lose in that scenario might be expected to pay the most to maintain a status quo that benefits them disproportionately.

The key words are:
"eliminating those that make no difference in the observable predictions of the explanatory hypothesis or theory."

It doesn't mean they are eliminated from the world.

 

[samclem]

Many of the issues you raise have as much to do with income dispersion as they do with tax policy. According to the census bureau Historical Income Tables - Households people in the top quintile take home 49.7% of all income. It's kind of hard to have more widely dispersed funding for the federal government when income is concentrated so narrowly.

It couldn't be simpler to have the funding burden more widely distributed. All we'd have to do is go with a flat tax and reduce/eliminate the deliberate attempt we make through the tax code to assure the burden is not evenly distributed. If the top quintile earns 55% of all income, they would pay 55% of all income taxes. Today they pay 87% of all income taxes (my figures are from this link). If we include all federal taxes, including estate taxes and the supposedly "regressive" payroll taxes, the total federal tax rate on the top quintile was 26.2%, while the total tax burden on the bottom quintile was 1.1%.

I agree that a system where only a handful of people pay for a majority of the nation's government seems unstable.

Yes. Perhaps we could just adopt Governor Blago's "pay to play" model and weight votes by the amount paid in federal taxes. The more you pay, the more say you get. A modest proposal . . .

BTW, the "top quintile" isn't as lofty as some folks imagine. Here are the "floors" for the quintiles in 2007:
1st: $0
2nd: $20,032
3rd: $37,771
4th: $60,000
5th: $97,030

 

[HFWR]

Yes. Perhaps we could just adopt Governor Blago's "pay to play" model and weight votes by the amount paid in federal taxes. The more you pay, the more say you get. A modest proposal . . .

There's come delicious irony in complaining about how much you pay in taxes, while donating brazillions of dollars to lobbyists and brazillions more to politician's campaign funds...

I like the flat tax idea, though.

 

[Gone4Good]

The key words are:
"eliminating those that make no difference in the observable predictions of the explanatory hypothesis or theory."

It doesn't mean they are eliminated from the world.

You misunderstand. I'm not trying to explain an individual's "success". The social institutions of which I speak are not predictive variables for wealth creation. They are prerequisites. These prerequisites must be preserved and paid for. The question here is by whom?

If you're looking for predictive variables for individual "success" their are many, and merit is not always the most important, or deterministic. Family wealth, family connections, race, gender, place of birth, etc. can each be a greater predictor of "success" than individual merit. The blanket assumption that the wealthy "earned it" is, in itself, flawed.

I'd also challenge the notion that only the wealthy are "successful". The most gifted school teacher will likely never become wealthy. Some of the fruits of her success, though, eventually go on to receive high salaries that they might not have otherwise "earned" were it not for the lowly teacher's talents.

 

[Gone4Good]

BTW, the "top quintile" isn't as lofty as some folks imagine.

Surely not a view shared by the other, less fortunate, 80% of the population.

 

[dex]

You misunderstand. I'm not trying to explain an individual's "success". The social institutions of which I speak are not predictive variables for wealth creation. They are prerequisites. These prerequisites must be preserved and paid for. The question here is by whom?

If you're looking for predictive variables for individual "success" their are many, and merit is not always the most important, or deterministic. Family wealth, family connections, race, gender, place of birth, etc. can each be a greater predictor of "success" than merit. The blanket assumption that the wealthy "earned it" is, in itself, flawed.

I don't think it is my misunderstand that is an issue. Take a look at the post below that I responded to and how it has evolved into what you currently wrote above. I'm not going to list the differences - too many.

The sense of entitlement among many high income individuals is breathtaking. The idea that "I earned my 7 figure salary" usually ignores the opportunities and protections given the individual, often due to an accident of birth, that made success possible. This is not to say society shouldn't reward high achievement, it should. But high achievers should display a little humility and recognize that our system and infrastructure, built and maintained through the hard work and sacrifice of countless people, both living and dead, is what made that achievement possible.

No one's success is achieved in a vacuum.

If you want to begin anew; how about writing the taxing basis/principals based upon how you see it.

 

[Gone4Good]

I don't think it is my misunderstand that is an issue. Take a look at the post below that I responded to and how it has evolved into what you currently wrote above. I'm not going to list the differences - too many.

The social institutions of which I speak are not predictive variables for wealth creation. They are prerequisites.

Prerequisite: adj. required beforehand, esp. as a necessary condition for something following

The idea that "I earned my 7 figure salary" usually ignores the opportunities and protections given the individual, often due to an accident of birth, that made success possible.

Let's see, I argued in one case that high income individuals should display humility because they were given conditions that made success possible. And in another I stated that these same things were prerequisites for success.

Yup, entirely consistent.

If you want to begin anew; how about writing the taxing basis/principals based upon how you see it.

I have no problem with progressive taxation, in case that also wasn't clear.

 

[samclem]

Edited portion in bold

Surely not a view shared by the other, less [-]fortunate[/-] productive, 80% of the population.

 

[eridanus]

Already answered...

 

[eridanus]

Good question.

I had not seen this apparent impossibility refuted so I did some googling.


Americans for Tax Reform






-ERD50

Those who don't pay income tax still pay FICA. Unless you're a hedge fund operator, and there aren't too many of those left.

 

[explanade]

Which nations with flat taxes are prosperous?

Don't the rest of the G7 all have even steeper progressive taxation than the US?

 

[HFWR]

Which nations with flat taxes are prosperous?

Don't the rest of the G7 all have even steeper progressive taxation than the US?

Yes, I think so. But I would add that we are more prosperous.

 

[ziggy29]

Don't the rest of the G7 all have even steeper progressive taxation than the US?

Probably so. But if this current economic mess has taught us anything, one takeaway would be that just because "the herd" does something doesn't make it right. Someone who went against "the herd" over the last few years -- saving instead of spending, getting out of the market -- is probably sitting prettier than most of us.

 

[dex]

Yup, entirely consistent.

Definitely.
Unfortunately, you did not show proper humility and gratefulness for the benefits granted to you by fortune when you entered this world. Nor did you show the proper humility and gratefulness to everyone and everything that enabled you to accomplish what you just did.

Therefore, a cloud has been cast over the accomplishment you mentioned and all your previous accomplishments so that they all have been devalued and sullied.

 

[Zubini]

Interesting discussion. I'm a successful, small business owner who would be well over the $250k threshold. Me and my partner built our company the old fashioned way, through hard work, person financial risk, dedication and yes, luck. I'm in the tech industry and I can assure you most of the people I know who have big, successful companies did not build their companies this way. They leveraged their connections from business school, family friends, etc. to obtain venture or private equity funding. Their only goal was to build the company big enough to either go public and cash in or sell to a big corporation and cash out. In no way did they work harder or take more risks than I did. I come from a very disadvantaged background, I'm the first person in my family to graduate from college and I don't think people who don't have the same history can even imagine the hurdles you have to overcome. In effect you have to be smarter, work harder and possess a greater motivation to achieve than those born into more fortuitous circumstances. I have no problem paying more taxes if it benefits our society as a whole. I do mind paying higher taxes if they are swallowed whole by our obscene military industrial complex. It's the 800lb gorilla in the corner nobody wants to mention. Easier to go after the unemployed, public housing moms and other deadbeats. I'd keep doing what I do no matter how high the taxes because I value the freedom and control I have over my career and I derive great satisfaction from providing high-paying jobs for the people who work with us.

 

[explanade]

Probably so. But if this current economic mess has taught us anything, one takeaway would be that just because "the herd" does something doesn't make it right. Someone who went against "the herd" over the last few years -- saving instead of spending, getting out of the market -- is probably sitting prettier than most of us.

Just saying that the industrialized countries have progressive taxes and policies like universal health care.

One thing I also noticed in the past few months is that the opposition to some of these safety net policies aren't as vocal. Sure the conservatives are drawing lines in the sand for things like health care reform but for instance, they're not resisting infrastructure spending like many of them would have a couple of years ago and they didn't really seem to fight the extension of unemployment benefits or the subsidies for COBRA for the unemployed.

The flat tax countries that I've heard of are Russia, Greece and a number of Eastern European countries. However, before the crisis at least, a lot of the citizens of these Eastern European countries migrated in big numbers to Western Europe as soon as their countries joined the EU to take a lot of low-skilled jobs.

The push for flat tax just isn't there, at least among most US politicians. There was some thought that Huckabee might endorse the "fair tax" proposals but he didn't.

 

[samclem]

There was some thought that Huckabee might endorse the "fair tax" proposals but he didn't.

Huckabee made the Fair Tax a major element of his campaign, is still a proponent of it, and he speaks at many of the functions promoting it. Please let me know if you've seen something authoritative to the contrary.

Regarding your observations about politicans not fighting COBRA extensions, not fighting extensions of unemployment benefits, and not pushing for a flat tax--I disagree. Of course this is a subjective call, but many voices were raised in opposition to the recent humongus spending bill--remember all the Republican support it received? The "Fair Tax" (National Retail Sales Tax) bill has been reintroduced and has more co-sponsors and support than ever.

 

[ziggy29]

I have no problem paying more taxes if it benefits our society as a whole. I do mind paying higher taxes if they are swallowed whole by our obscene military industrial complex. It's the 800lb gorilla in the corner nobody wants to mention. Easier to go after the unemployed, public housing moms and other deadbeats. I'd keep doing what I do no matter how high the taxes because I value the freedom and control I have over my career and I derive great satisfaction from providing high-paying jobs for the people who work with us.

Fair enough, but I'll ask you the same question I ask most successful people who say they'd be willing to pay higher taxes: What's stopping you from writing a check to the U.S. Treasury voluntarily to reduce the public debt? Are you only willing to put up more of your money if everyone else in a similar to your situation is forced by law to do the same?

That's fine if so, but I'd at least like to hear someone admit that they are looking at the Tragedy of the Commons and don't do so because they think alone they can't make a difference.

Until then, the U.S. Treasury would gladly cash your check payable to reduce the public debt.

 

[samclem]

That's fine if so, but I'd at least like to hear someone admit that they are looking at the Tragedy of the Commons and don't do so because they think alone they can't make a difference.

I don't think the Tragedy of the Commons situation exists in this case. That scenario exists when there is a common resource to which no individual can claim ownership, but each individual derives benefit from using it.

Money paid to the federal government is entirely different--the dollars sent in by Zubini or anyone else do just as much good if contributed by one person or by the millions. Peopel who aregue for higher taxes but don't voluntarily pay additional sums themselves are behaving hypocritically.

 

[ziggy29]

I don't think the Tragedy of the Commons situation exists in this case. That scenario exists when there is a common resource to which no individual can claim ownership, but each individual derives benefit from using it.

Maybe true in the very technical sense; what you describe is a case study of Easter Island, for example.

But a similar thing applies. In either case, individuals don't make individual sacrifices for the good of the entire society because they don't think it can make a difference unless everyone sacrifices together. And if someone won't write a check to the U.S. Treasury to reduce the debt when they can well afford it, they are behaving the same way if they advocate tax hikes on their own economic class.

I'd sooner follow leadership by example -- putting your money where your mouth is -- but maybe that's just me.

 

[Gone4Good]

Edited portion in bold

Surely not a view shared by the other, less [-]fortunate[/-] productive, 80% of the population.

I'm sure Paris & Nicky Hilton completely agree.

 

[explanade]

I recall after he won the Iowa primary, some Fair Tax advocates were hoping he'd make a statement about it and as I recall he didn't.

Then his star faded.

 

[explanade]

Nobody is arguing for higher taxes, just saying they may be necessary and that it doesn't lead to the economic catastrophe that opponents claim -- like the current economic catastrophe, which we arrived at with lower taxes than in the '90s.

BTW, Obama won among voters making over $200k. People don't define economic performance only by the level of taxation.