ikubak
Recycles dryer sheets
- Joined
- Dec 2, 2007
- Messages
- 482
The bottom 90% obviously aren't doing their part to make more money!
I like the sound of that: "peace dividend".
that graph is pretty meaningless because there is a large population that makes no money at all dragging down the average. In 2006 there were only 150.6 million jobs including self employed and unpaid family members, and 298.8 million people in the US. Half the country makes Zero dollars.
OHHH, and just to throw in one of my pet peeves.... I still have never figured out that if someone in a previous admin put in a ridiculous high growth rate for some program... and the new prez said, instead of a 10% increase, let's increase it only 3%.... and get accused of CUTTING the program.... that math does not add up for me....
That doesn't account for population growth or inflation. For instance: in year one you spend 10k on a program that covers 1000 people, in year two you might have 1100 people in the program so the amount you spend on it should be increased proportionally. You also need to increase for inflation. If you don't do this then you are in a very real sense cutting the program.
Or... hey, that 2% raise is NOT a raise, because inflation is 3%... so you are cutting my salary....
To see how the tax code is becoming less and less progressive, compare the middle class (not those in poverty) versus the rich. The middle class has seen their tax rates stay largely unchanged through the Bush era, and they are getting squeezed with AMT starting to hit them. But the rich have seen significant decreases in ordinary income rates, and huge decreases in cap and div rates.
Interesting thread -- lots of sources quoted and charts and graphs going around.
.... I tend to ignore all that and try to simplify such questions whenever possible.
Like I said, I support progressive taxes. So the 'next question' is - at what point do they become 'unfair', and cause resentment or other problems? What if the feds asked for 40% of your 6 figures, or 50%, or 75% ( total, not 'marginal rates)? At 75%, a $100,000 would still keep $25,000, which would be better off than the person who earned $20,000. So this is OK? Or not?Stipulated: I get taxed a lot on my 6-figure income, while other folks get taxed a lot less, percentage-wise, on their $20-30K per year incomes.
Question: Would I trade my life for theirs?
Answer: No, I would not.
Next question.
To see how the tax code is becoming less and less progressive, compare the middle class (not those in poverty) versus the rich. The middle class has seen their tax rates stay largely unchanged through the Bush era, and they are getting squeezed with AMT starting to hit them. But the rich have seen significant decreases in ordinary income rates, and huge decreases in cap and div rates.
I'm not sure what to make of the numbers I have seen. I am actually supportive of progressive taxes, but that IRS chart shows that 4.4% of filers (those w/AGI> $200,000) pay over half the Federal Income tax. Throw in non-filers, and that must say that they are 'paying the way' for much more than half the population, right? Five earners paying the way for another 50 (or more)? That is a factor of 10X. When I look at it that way, I think it leads to " Thank you high AGI taxpayers, for paying so much for so many", rather than " Hey - those 'rich' guys should pay more!".
-ERD50
I also think that when I see a line like "the top __% of tapayers pay __% of the individual income tax", then I also want to see a line like "and that __% of taxpayers also [-]received[/-] earned __% of the total income".
Whether he toiled in a trench, taught in a university, or put his cash at risk so that others could use it, that individual earned the money he "received." A minor point, but one that is at the philosophical heart of this discussion of tax fairness.
Like I said, I support progressive taxes. So the 'next question' is - at what point do they become 'unfair', and cause resentment or other problems? What if the feds asked for 40% of your 6 figures, or 50%, or 75% ( total, not 'marginal rates)? At 75%, a $100,000 would still keep $25,000, which would be better off than the person who earned $20,000. So this is OK? Or not?
If I am reading these correctly (big *if*), the IRS figures do not seem to bear this out. Do you have better numbers?
http://www.irs.gov/pub/irs-soi/98in11si.xls
http://www.irs.gov/pub/irs-soi/06in11si.xls
Here is what I did - I looked at the percent of fed taxes paid by the 'under $50K group' in 1998 an 2006.
In 1998 the 'under $50K group' paid 17.1% of the fed income taxes.
In 2006 the 'under $50K group' paid 8.4% of the fed income taxes.
Since 1979 — the first year for which the CBO date are available — income gains among high-income households have dwarfed those of middle- and low-income households. Over this 25-year period:
- The average after-tax income of the top one percent of the population nearly tripled, rising from $314,000 to nearly $868,000 — for a total increase of $554,000, or 176 percent. (Figures throughout this paper were adjusted by CBO for inflation and are presented in 2004 dollars.)
- By contrast, the average after-tax income of the middle fifth of the population rose a relatively modest 21 percent, or $8,500, reaching $48,400 in 2004.
Best options:
- National Retail Sales Tax (with "prebate" on expenses up to the poverty line to produce a progressive tax rate).
If I made $100K, they took $75, and the remainder was enough to meet my needs and wants then what, at the end of my life, would be the difference?
My analysis is simple:
Tax brackets in 1999 were 28/31/36/39.6
Tax brackets in 2007 were 25/28/33/35
Subtracting the two: 3 / 3/ 3/4.6
4.6 > 3 therefore the rich are getting a better deal.
Another source that says the inequality between the rich and middle class is widening is:
New CBO Data Show Income Inequality Continues To Widen: After-Tax-Income for Top 1 Percent Rose by $146,000 in 2004, 1/23/07
Which says:
Because there's no single "right" or "fair" way to tax, a plethora of different taxes crop up like weeds.. some are disguised as "fees", etc. And each one grows to sustain its own regime, from overpaid city workers to overpaid KBR mercenaries. We need more accountability over spending (although, even if spending were 1/2 or 1/4 of what it is, people would still argue over whether they are paying their appropriate slice of the spending pie). But I think if people had more direct input over budgeting they would be less angry about paying taxes in the first place.
sam, a good question.. BUT is it possible to run a modern society w/o taxes of any kind? I don't think so. So the minute you institute a tax of even a penny, under whatever regime, you open up discussions of fairness. To some minds, working even one extra day is too much, so where is the appropriate cutoff in your mind? 5%, 10%, 20%, 25%, 30%??
Is a poll tax fair? (everyone pays $Xk/year) Probably not.
Is a sales tax fair? (people who make beyond what they need to spend will get that money tax-free, so that's not fair).
Is a flat tax fair? (everyone pays x%) Maybe, but only if you eliminate all other taxes that are regressive -- remember the conceit above of how the lower-end regressive taxes and the higher-end progressive income tax complement each other.
Whichever way you institute a tax will seem unfair to someone. What gets me is how high earners are still complaining, even now that the tax climate is more favorable to them than in any time in living memory. There's not much perspective.
Because there's no single "right" or "fair" way to tax, a plethora of different taxes crop up like weeds.. some are disguised as "fees", etc. And each one grows to sustain its own regime, from overpaid city workers to overpaid KBR mercenaries. We need more accountability over spending (although, even if spending were 1/2 or 1/4 of what it is, people would still argue over whether they are paying their appropriate slice of the spending pie). But I think if people had more direct input over budgeting they would be less angry about paying taxes in the first place.
I love Caroline's offering of the dog bone fable.