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Old 12-09-2010, 09:26 AM   #121
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Maybe one of the problems is that rich people don't feel rich...
One classic definition of "rich" is simply anyone who makes at least one dollar more than I do.
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Old 12-09-2010, 09:27 AM   #122
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The US must raise taxes- who do you think should pay?
Canadians!
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Old 12-09-2010, 09:37 AM   #123
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Canadians!
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Old 12-09-2010, 09:46 AM   #124
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Originally Posted by Texas Proud View Post
Maybe one of the problems is that rich people don't feel rich...

But sorry to say... if you are making $250,000 or more a year... you are in the top 1.5% of income earners... to me that would be a good level to say 'rich' in income terms...

Now, you can choose to spend that all (and more) and not have much to show for this level of income.... but trying to make it appear that this level is not at the 'rich' level shows how some just do not understand where most people are...

Last night I was telling my wife that we are 'well off' and I make a LOT less than the $250K level...
You're right in that it boils down to the definition of rich. We never felt rich because we never...

belonged to a country club
traded $30k+ cars every two or three years
lived in a mansion
had a swimming pool
or even a hot tub
ate out as a family regularly
employed nannies or servants
sent our kids to private schools
had an investment account with a hedge fund
were the first, or even second, to own the latest and greatest electronics
paid someone to mow the grass except when out of town
paid someone to tend to the landscaping or rake the leaves
paid for household repairs if we could do it ourselves
and so on and so on

The most important thing we never did was to run up a lot of debt.

Yes, we did live comfortably and paid our bills and saved but we watched our finances closely in order to do it. Yes, we were rich compared to many in this country but we sure didn't live like or feel like the rich you see on TV. And we certainly weren't the evil rich that some politicians love to attack on a regular basis.

That's all in the past now anyway.

And we still have another 7 1/2 years of working and saving before we can safely retire without being a burden to our fellow citizens.
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Old 12-09-2010, 09:46 AM   #125
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Generally US top marginal tax rates are low by international standards. Surprisingly (perhaps) is that compartively speaking a very high proportion (co pared to other countries) of personal income taxes are collected from the top income earners. I live in the lowest tax jurisdiction in Canada and my marginal tax rates are higher than Bill Gates. The US must raise taxes- who do you think should pay?
Maybe I'm not following you, but don't your statements contradict?

You say (correctly) that 'a very high proportion... of personal income taxes are collected from the top income earners.'

But then you seem to say that these are the people who should have their taxes raised? Maybe they should, but it doesn't seem to jibe with the earlier comment.

FYI, it's not surprising to many of us, it might be to the average person on the street.

National Taxpayers Union - Who Pays Income Taxes?

Quote:
Percentiles Ranked by AGI
AGI Threshold on Percentiles
Percentage of Federal Personal Income Tax Paid

Top 1% $380,354 38.02%

Top 5% $159,619 58.72%

Top 10% $113,799 69.94%

Top 25% $67,280 86.34%

Top 50% $33,048 97.30%

Bottom 50% <$33,048 2.7%
Bit of a sidetrack here, but if we hit the bottom 50% to share equally in paying enough taxes to reduce the deficit, we might just see a bigger push at the ballot box for reduced spending?

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Old 12-09-2010, 09:57 AM   #126
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The US must raise taxes
There you go again...

Let's try cutting spending instead. Balance our budget. Reduce the size of the bloated public sector, and quit spending money we don't have on every feel-good, boondoggle earmarked spending program that comes along. Hold our elected officials accountable for every dime they request from us. Spend our tax dollars on improving education and infrastructure here at home, instead of pissing away billions every year on our demonstrably inneffective "love thru largess" programs around the world with folks who hate us. Quit using the US military as the world's police force while the EU and the UN wring their hands and bloviate about problems in their backyards. Reserve our social programs for our own citizens, but don't make them a multi-generational way of life. Get tough on illegal immigration, and secure our borders. Expand our manufacturing base to provide jobs here at home and reduce our trade imbalance. Eliminate unnecessary trade and agricultural subsidies. And so on...If after implementing all these measures we need to raise taxes to meet our basic needs for governance, then I guess we need a referendum on how much we really need to to raise them and for how long; akin to local bond issues...
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Old 12-09-2010, 10:02 AM   #127
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As an aside - I'm still trying to figure out the logic of this deal.

According to the NYT, it will cost >$900 billion. Of that, $336 billion cost is the continuation of the current tax rate for those making >$250k/yr (not quite sure how not getting additional revenue is now a cost, but I'll leave that to greater minds)
What has me kerfluffelled is - I heard over and over that we couldn't afford leaving the current tax rates in place for those making over $250K. Question: If we couldn't afford the "cost" of continuing the current tax rates for everyone, how are we going to afford the additional $564 billion that just magically appeared in this bill proposal?

Could we really have afforded the $366 billion in the first place or was the whole arguement just crafted to justify not doing something they didn't agree with ideologically ? Note: the two are obviously not mutually exclusive - we're talking politicians, after all.
Do you have a link to the NYT article? My guess is that the confusion is about the duration. The $900 billion is probably over a two year period, are you sure the other numbers are for two years?
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Old 12-09-2010, 10:24 AM   #128
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ERD50 : Yes it is a little contradictory. My point was rates are low but still the " rich" carry a high proportion of the total tax burden. This high proportion is often cited as a reason not to raise rates. I am saying taxes need to be raised and the"rich" will inevitably pay as they should and can afford. Western skies: agree with you that expenditures should be cut but this will not solve the problem Americans pay low rates of tax by international standards. Many people in other countries would be very happy to pay taxes at your rates and participate in the economic opportunities that your country has to offer. I am confident that you will eventually work this out. The alternative is too horrible to contemplate. Canadians reached a consensus to solve our fiscal problems about 15 years ago. You will too.
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Old 12-09-2010, 10:26 AM   #129
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There you go again...

Let's try cutting spending instead. Balance our budget. Reduce the size of the bloated public sector, and quit spending money we don't have on every feel-good, boondoggle earmarked spending program that comes along. Hold our elected officials accountable for every dime they request from us. Spend our tax dollars on improving education and infrastructure here at home, instead of pissing away billions every year on our demonstrably inneffective "love thru largess" programs around the world with folks who hate us. Quit using the US military as the world's police force while the EU and the UN wring their hands and bloviate about problems in their backyards. Reserve our social programs for our own citizens, but don't make them a multi-generational way of life. Get tough on illegal immigration, and secure our borders. Expand our manufacturing base to provide jobs here at home and reduce our trade imbalance. Eliminate unnecessary trade and agricultural subsidies. And so on...If after implementing all these measures we need to raise taxes to meet our basic needs for governance, then I guess we need a referendum on how much we really need to to raise them and for how long; akin to local bond issues...

That's just crazy talk!!!








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Old 12-09-2010, 10:29 AM   #130
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ERD50 : Yes it is a little contradictory. My point was rates are low but still the " rich" carry a high proportion of the total tax burden. This high proportion is often cited as a reason not to raise rates. I am saying taxes need to be raised and the"rich" will inevitably pay as they should and can afford. Western skies: agree with you that expenditures should be cut but this will not solve the problem Americans pay low rates of tax by international standards. Many people in other countries would be very happy to pay taxes at your rates and participate in the economic opportunities that your country has to offer. I am confident that you will eventually work this out. The alternative is too horrible to contemplate. Canadians reached a consensus to solve our fiscal problems about 15 years ago. You will too.
Perhaps we have the economic opportunities over other countries BECAUSE we have such a low tax rate. I was listening to one economist (I can't recall who or what research he was quoting) who maintained that countries with the least safety net have the most number of people succeeding. It made sense if looked at from the point of what happens if one fails. Abject poverty is a very strong motivator, as long as opportunities are present to succeed.
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Old 12-09-2010, 10:31 AM   #131
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To me, this is one of the big mistakes we are making.... guaranteed employment... if you continue to get an unemployment check you are in effect being paid not to work... and now for a third year...

I am sure a lot of the people who are not working would find some kind of job if their benefits stopped... back in the 80s, I had a friend who lost their job... and eventually got a job paying $8 per hour for almost 2 years... then the economy picked up and they worked their way back up... this should be the way it is...
This statement is right on in my opinon.

If people know they can lose their job and have to rely on their own means they will adapt. Just look at those who grew up in the great depression and their excellent example of frugality, avoidance of waste and self-reliance.
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Old 12-09-2010, 10:38 AM   #132
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Generally US top marginal tax rates are low by international standards. Surprisingly (perhaps) is that compartively speaking a very high proportion (co pared to other countries) of personal income taxes are collected from the top income earners. I live in the lowest tax jurisdiction in Canada and my marginal tax rates are higher than Bill Gates. The US must raise taxes- who do you think should pay?
You are failing to take into account very high corporate level income taxes, state income taxes, state and local sales and use taxes, and property taxes. Add these to the federal level marginal tax rates and you will get a much different picture.
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Old 12-09-2010, 11:01 AM   #133
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You're right in that it boils down to the definition of rich. We never felt rich because we never...

belonged to a country club
traded $30k+ cars every two or three years
lived in a mansion
had a swimming pool
or even a hot tub
ate out as a family regularly
employed nannies or servants
sent our kids to private schools
had an investment account with a hedge fund
were the first, or even second, to own the latest and greatest electronics
paid someone to mow the grass except when out of town
paid someone to tend to the landscaping or rake the leaves
paid for household repairs if we could do it ourselves
and so on and so on

The most important thing we never did was to run up a lot of debt.

Yes, we did live comfortably and paid our bills and saved but we watched our finances closely in order to do it. Yes, we were rich compared to many in this country but we sure didn't live like or feel like the rich you see on TV. And we certainly weren't the evil rich that some politicians love to attack on a regular basis.

That's all in the past now anyway.

And we still have another 7 1/2 years of working and saving before we can safely retire without being a burden to our fellow citizens.

Interesting list of what is needed to be rich...

I do agree that it seems that there is a bit of 'evil rich' talk by some... not me...


About the list... it is interesting that a number of items on the list are done by people who make a lot less...

I pay someone to mow the lawn
My mother pays someone to clean her place (she is 91, so needs it)
There are people at my work who send their kids to private school and make less than half of the 'rich' level
OH, forgot to put down that I have a hot tub (came with the house... did not want... cost me money)

My point is that if you are in the top 1%... or even 5% of income... you are closer to rich than middle class... not matter what you do with your money...
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Old 12-09-2010, 11:19 AM   #134
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There you go again...

Let's try cutting spending instead. Balance our budget. Reduce the size of the bloated public sector, and quit spending money we don't have on every feel-good, boondoggle earmarked spending program that comes along. Hold our elected officials accountable for every dime they request from us. Spend our tax dollars on improving education and infrastructure here at home, instead of pissing away billions every year on our demonstrably inneffective "love thru largess" programs around the world with folks who hate us. Quit using the US military as the world's police force while the EU and the UN wring their hands and bloviate about problems in their backyards. Reserve our social programs for our own citizens, but don't make them a multi-generational way of life. Get tough on illegal immigration, and secure our borders. Expand our manufacturing base to provide jobs here at home and reduce our trade imbalance. Eliminate unnecessary trade and agricultural subsidies. And so on...If after implementing all these measures we need to raise taxes to meet our basic needs for governance, then I guess we need a referendum on how much we really need to to raise them and for how long; akin to local bond issues...
I agree. To close a $1 to $1.4T budget shorfall we'd need to cut about 25 to 30% across-the-board. This means defence, social security, medicare, medicaid, education, pork.

Any takers?

The 10% 2011 cut (excluding SS, Medicare, Defense) mentioned by Speaker-elect Boehner won't put much of a dent in it, especially if we just cut payroll taxes by $120B next year..
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Old 12-09-2010, 11:29 AM   #135
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I don't think the huge hole in the budget can be completely fixed with tax increases alone or with spending cuts alone. Well, they could be, but I think the economic impact of that magnitude of tax hike or spending cuts would be devastating.

It needs to be tax hikes AND spending cuts, and the pain needs to be broad-based and shared fairly amongst all of us. There should be no punching bags or sacred cows. We all have to be in it together, and if we insist on only increasing taxes on *other* folks or cutting only the spending we don't like, well, that's part of the reason why we're in this mess and haven't yet extricated ourselves from it.
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Old 12-09-2010, 11:44 AM   #136
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I don't think the huge hole in the budget can be completely fixed with tax increases alone or with spending cuts alone. Well, they could be, but I think the economic impact of that magnitude of tax hike or spending cuts would be devastating.

It needs to be tax hikes AND spending cuts, and the pain needs to be broad-based and shared fairly amongst all of us. There should be no punching bags or sacred cows. We all have to be in it together, and if we insist on only increasing taxes on *other* folks or cutting only the spending we don't like, well, that's part of the reason why we're in this mess and haven't yet extricated ourselves from it.
+1

Well said..
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Old 12-09-2010, 11:51 AM   #137
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WHY? Just because you think so? What is your rationale for supporting these arbitrary tax thresholds?
my rationale is simple, the people who have the highest incomes are benefitting the most from this country so they should pay a much larger share of the cost of running this country. i also think that income above $500k should be taxed at a higher rate than income below that level. i think multiple new higher tax brackets for higher levels of income are a good and fair idea. i think this way for another reason besides the 1 i just stated; the gap between the haves and the have nots is growing wider and this needs to be changed before the have nots revolt violently.


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Anything "contrary to our current tax code" deserves serious consideration, IMO. Many people pay no federal taxes, there are also way too many shelters, loopholes, etc. Personally, I think a VAT or flat tax tax is the fairest tax system- everyone has to pay a share and those who spend more, pay more. I believe we should do everything we can to promote a VAT or flat tax. What we have now isn't working; the multi-tiered system promotes class warfare and encourages a welfare state.

Just my two cents worth- which you probably want to tax me for having.
i guess that depends on your definition of fair. if you think it is fair that lower income people pay a higher percentage of their income in taxes than higher income people than a VAT would be fair. but as i said above i think it is fair that the people who have received the greatest benefit from living in this country pay the most to support it. when you do an economic analysis of the value (utility) of the last dollar earned by high income people and low income people you will see that the low income people's last dollar earned is far more valuable to them than the last dollar earned by a high income person. sooo from a utility stand point higher taxes on higher incomes is necessary to even come close to having a fair tax system.

and when it comes to class warfare, making the lower income people part (via taxes) with more valuable dollars than the high income people do is what will lead to said warfare. do you want a workers revolt here as happened in russia in the early 1900's?
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Old 12-09-2010, 11:57 AM   #138
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Maybe one of the problems is that rich people don't feel rich...

But sorry to say... if you are making $250,000 or more a year... you are in the top 1.5% of income earners... to me that would be a good level to say 'rich' in income terms...

Now, you can choose to spend that all (and more) and not have much to show for this level of income.... but trying to make it appear that this level is not at the 'rich' level shows how some just do not understand where most people are...

Last night I was telling my wife that we are 'well off' and I make a LOT less than the $250K level...
top 1.5% of income earners in the US, if you look world wide i am sure you would be in the top 0.1%. how can you objectively look at that income level and not consider yourself rich (from an income standpoint)
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Old 12-09-2010, 12:13 PM   #139
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Perhaps we have the economic opportunities over other countries BECAUSE we have such a low tax rate. I was listening to one economist (I can't recall who or what research he was quoting) who maintained that countries with the least safety net have the most number of people succeeding. It made sense if looked at from the point of what happens if one fails. Abject poverty is a very strong motivator, as long as opportunities are present to succeed.
we have "such a low tax rate" because we have not yet woken up and smelled the coffee. our low tax rate isnt sufficient to pay for our significant safety net. so by your logic we need to get rid of welfare, SS, medicaid, medicare, unemployment insurance, the new health care reform, etc. and maybe even some of our military and then our people will be more successful. well if we do that then our low tax rates might be sufficient to pay for our government. while that might be an interesting discussion but i am not willing to part with all of those programs (that is not to say that i dont think they need some changes) so i am thinking tax rates (more specifically the tax rates on higher income) will need to go up.
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Old 12-09-2010, 12:17 PM   #140
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Actually, a number of us have answered that directly a number of times. Clearly, you are not interested in the answers. You seem to have your own sales pitch going on.

Reader's Digest Version: 1990's - bubbles. 1950's high marginal tax rates - Congress wrote broad exceptions in to the tax code (commonly referred to as 'loopholes'), people weren't paying those rates.
And I've answered those "assertions" with actual data. I've posted this twice on these forums already, this makes it time #3. So if someone isn't listening, it ain't me.

Note: The chart says "Rates" but if you look at the actual study, what they are calculating is effective tax rates based on individual tax returns.






With respect to the other argument, there were bubbles in both periods. But lets compare average growth rates in the most favorable way possible to your position. For the 1990's we'll include the '91 recession and exclude the last 4 years of the bubble. And for the 2000's we'll exclude both recessions and only look at the growth (and bubble) years from 2002-2007. Even on that basis, real growth in the 90's averaged 2.7% versus 2.6% in the '00s.

So basically none of your explanations withstand scrutiny. A better explanation is that tax rates don't matter as much as we've all been lead to believe.
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