Let's Tax The Rich!!!

[kombat]

Isn't it the same as the justification for all taxes?

I have no objection to paying taxes. I recognize that it costs money to live in a civilized society, and I'm willing to pay my fair share.

What I have a problem with is when the same money is taxed repeatedly. I earn some income, the government takes a cut. I take what's left and use it to buy something, whoops, that's taxed too. Then I die, and want to leave what's left to my kids. Guess what, taxed again.

 

[kombat]

why should wealthy people inheriting an estate get the benefit. Why shouldn't middle class/upper class/X people get the benefit?

Um... because it's their money?

Or are we ready to decide that society as a whole actually ultimately owns all assets, and individuals are just allowed to use it at the ruling government's whim?

Isn't there a word for that? Social....something. I'm blanking. Help me out.

 

[lets-retire]

Or are we ready to decide that society as a whole actually ultimately owns all assets, and individuals are just allowed to use it at the ruling government's whim?

That is a common idea on this board. We've had the discussion many times and usually it results in closing the thread down.

 

[Independent]

See below

On the tax side, you seem to be mixing individual FIT and total tax collections - the 25.5% is total, the $899b is individual income only. I don't follow this. The 25.5% is FIT effective tax rate from the CBO, what other taxes are you saying are included?

You didn't provide a link for your number, so I can't see where you got it. I'm guessing the original source is here Congressional Budget Office - Historical Effective Federal Tax Rates: 1979 to 2005

Table 1A in the appendix shows four types of federal taxes. For the top quintile they are these percents of income:

14.1% Individual Income Tax
+6.0% Social Insurance Tax
+4.9% Corporate Income Tax *
+0.5% Excise Taxes
------
25.5% Total Federal Taxes

Instead of raising taxes on the top 20%, I suggested raising taxes on the top 1%. So I used column L which shows 19.1% individual FIT for that group. I got income rates and number of taxpayers from Table 1C.

"Doesn't come close" isn't very precise. I provided numbers to show that much of the 2010 deficit is 9+% unemployment. The long term general fund deficit is more like $520 billion. So I think that $140 billion, which we could get by simply raising the average individual FIT rate to maybe 27% on the top 1% of taxpayers, could be a "significant" part of the package.

You apparently found some people who think we could cover 100% of the deficit with taxes on the rich, I know I'm not one of them. If the OP was only addressed to a few posters, it might have helped to name them.


* Note that the allocation of Corp income tax to individuals is difficult. The CBO has historically allocated 100% of CIT to all owners of capital. That makes sense in a closed economy. However, as capital has become much more mobile than workers, there's a case for allocating a significant piece to workers instead of capital.

 

[Independent]

The relevance is because your perspective is so unashamedly pro-tax for you to be considering the private sector.

I worked for the gov't for a few years as a TA 35 years ago. Other than that, I've always worked in private business. But I think our tax system should be more progressive, and I think an inheritance (or estate) tax should be part of the mix.

If I were to say "I can ignore everyone else's opinion because they're all blinded by their circumstances, while I'm the only person who can see these things clearly" it wouldn't make sense for me to talk to anyone who disagreed with me.

 

[MasterBlaster]

By progressive tax, Do you mean that progressives pay extra tax ? Sort of since you want it so bad, you should pay up.

Don't worry though, your money will be wisely spent this time, they promise.

 

[FinanceDude]

Government as a whole needs to live like the folks on this board, live BELOW their means...........

 

[haha]

After carefully perusing this thread, I'll take Porky across the board for $100 !

 

[Westernskies]

After carefully perusing this thread, I'll take Porky across the board for $100 !

Not fair, since you have a dog in the fight.

 

[Independent]

By progressive tax, Do you mean that progressives pay extra tax ? Sort of since you want it so bad, you should pay up.

Don't worry though, your money will be wisely spent this time, they promise.

Apparently "progressive" is confusing. I'll try again

I worked for the gov't for a few years as a TA 35 years ago. Other than that, I've always worked in private business. But I think our tax system should [have higher tax rates for people who have higher incomes and lower tax rates for people who have lower incomes], and I think an inheritance (or estate) tax should be part of the mix.

 

[MasterBlaster]

But I think our tax system should [have higher tax rates for people who have higher incomes and lower tax rates for people who have lower incomes], and I think an inheritance (or estate) tax should be part of the mix.

I think there should be a liberal tax. You want it, you pay for it.

 

[Westernskies]

I think there should be a liberal tax. You want it, you pay for it.

No, it needs to be Other People's Money.

 

[sheehs1]

I thought there was an exclusion of $5 million on the estate tax. So anybody paying it would be pretty wealthy even if it split amongst a few siblings. Did I make a mistake here?

The point I wanted to make was that you can't evaluate the fairness of a tax in isolation. You really have to look at the entire system.

Regarding your neighbour, I think you should videotape him and report him for fraud. That would help get our overall tax burden down.

O.K...friends...I think the estate tax issue is a moot point. With the now 5 million dollar exclusion ..it will not have the impact it has had in the past. So let's agree...that it was a problem before the exemption increase but is no longer the elephant in the room it once was...as of January.

Along the lines of "tax the rich"... Local and state governments have to balance their budgets. The Federal government should do the same. How they do that is up to them. They are pushing for more tax dollars...so...it makes it easier for them NOT to have to do something. I don't think any of us are impressed with the way Congress has appropriated our tax dollars the last 20 years of so (if not longer). Because of this, I am for reducing the footprint of the government.

For ex: How right is it...that just because I become a Federal employee...they pay off my student loans. ? Yep...happens...and is a benefit.
I read about this last year...and this week our news channel carried a segment on it.
Our government is so big, so cumbersome...even they can not find the waste. Wouldn't be surprised if the waste = 15% or more all spending. I'm certain I will not be able to find any valid statistics on that.

 

[sheehs1]

I thought there was an exclusion of $5 million on the estate tax. So anybody paying it would be pretty wealthy even if it split amongst a few siblings. Did I make a mistake here?

The point I wanted to make was that you can't evaluate the fairness of a tax in isolation. You really have to look at the entire system.

Your comment about "Jo Blow" getting a benefit from the estate tax is no different from any other tax. I paid tens of thousands of dollars of income tax this past year for which I saw no benefit. Why should others benefit from my hard work? Why can't they pay for their own benefits by themselves. Did Jo Blow do anything to deserve my tax money? I worked very hard to earn it and it's just been taken away from me and given to others.

I think if you think about taxes in terms of what's "fair" you will never be satisfied by any tax system. Some people will always end up paying more to the government than they get back in benefits. Although the US is a capitalist society, we still believe in help those less fortunate than ourselves. That means that people with good incomes/fortune will end up paying more in taxes than they ever recover from government benefits.

Regarding your neighbour, I think you should videotape him and report him for fraud. That would help get our overall tax burden down.

I do not object to paying taxes while living. I object to the "death tax".
So...what I meant about Jo Blow...is that he is getting it all the while I am living. Don't know that I like it that he also gets it because I am dead. I would admittedly enough...prefer my children to get it...since it was my hard work. I have a right to think that.

Disclosure: I am not worth 5 million. Numbers are for the sake of discussion.

 

[sheehs1]

No, it needs to be Other People's Money.

 

[Independent]

I think there should be a liberal tax. You want it, you pay for it.

I've thought that we should set federal spending by direct vote. Divide the budget into 6-10 major categories and have annual referendums where we get to pick the number for each.

What do you think about that?

 

[Mulligan]

"Don't tax me and don't tax thee. Tax that man behind the tree."

I love that quote posted by M Paquette, I believe. If tied up to a lie detector, 90% of us would have to admit we prefer that method of taxation

 

[samclem]

I've thought that we should set federal spending by direct vote. Divide the budget into 6-10 major categories and have annual referendums where we get to pick the number for each.

What do you think about that?

Is each vote weighted by the amount the voter pays in FIT?

 

[Mulligan]

Make sure the government doesnt take it all in the estate tax, because in Seattle they tacked one more tax onto death. Dying isnt cheap anymore!
A New Kind of Death Tax

As of January 1, 2011 it costs money to die in Seattle. King County, which includes Seattle, has instituted a $50 fee for reporting a death to the Medical Examiner's Office. If you don't pay, you don't get the permission and paperwork needed in order to be buried.

 

[glippy]

Is each vote weighted by the amount the voter pays in FIT?

Only letting the landed gentry vote... yeah, that's never lead to any problems.

 

[Independent]

Is each vote weighted by the amount the voter pays in FIT?

Sorry, still [officially] one person one vote. I think money counts a lot in our politics in terms of advertising to potential voters, so the high income people would have extra clout in this system just like they do today.

So, what do you think?

 

[samclem]

Sorry, still [officially] one person one vote. I think money counts a lot in our politics in terms of advertising to potential voters, so the high income people would have extra clout in this system just like they do today.

So, what do you think?

In that case, no. I'll pass, thanks. Voters who don't pay FIT already have enough motivation to vote for the candidate who offers the most "money for nothing." Making the spoils system even more explicit would only hasten the decline. In three years we'd have 10 FBI agents, one diesel submarine, and 85% of federal funds going to HHS and the EITC.

 

[Midpack]

Good info, I did not have as much detail as you did.

14.1% Individual Income Tax
+6.0% Social Insurance Tax
+4.9% Corporate Income Tax *
+0.5% Excise Taxes
------
25.5% Total Federal Taxes

You apparently found some people who think we could cover 100% of the deficit with taxes on the rich, I know I'm not one of them. If the OP was only addressed to a few posters, it might have helped to name them.

There are several people here who have repeatedly suggested taxing the rich is the solution, without considering the $, with no specifics and without offering any other answers. I can only assume they think that's all it will take - that's absurb when you look at the numbers. I was hoping they might look at the relative numbers and realize how absurd their positions are.

It's one thing to challenge each others posts in a civilized manner, but IMO it's not our place to call each other out on this forum by starting another thread and naming people. I wanted to see if any of them would put their money where their mouths are, none did (so maybe they did look at the numbers and realize they had no retort).

FWIW, I believe we are going to have to cut spending pretty dramatically and we're all going to have to pay more in taxes if we want to eliminate deficits even at full employment. I'm OK with a progressive tax structure, but I think we're all going to have to pony up...

 

[GregLee]

There are several people here who have repeatedly suggested taxing the rich is the solution, without considering the $, with no specifics and without offering any other answers.

I think taxing the rich is a fine idea. We need tax monies, the rich have got money, so let's take some. Why pretend it is so complicated? Do I have to prove that increasing taxes on the rich will solve all our problems? Of course it won't. If I can't show how to solve all our problems, does that mean taxing the rich won't help solve any problems? A journey of a thousand miles begins with a single step.

 

[youbet]

I think taxing the rich is a fine idea. We need tax monies, the rich have got money, so let's take some. Why pretend it is so complicated? Do I have to prove that increasing taxes on the rich will solve all our problems? Of course it won't. If I can't show how to solve all our problems, does that mean taxing the rich won't help solve any problems? A journey of a thousand miles begins with a single step.

I think we're waiting for you to offer up your FIRE portfolio to the gov't to be used for the common good. In doing so, you'd show you're not a hypocrit but rather a say-do guy who puts his money where his mouth is.

And BTW, we are taxing the rich with a progressive tax schedule now as far as incomes go. We still have work to do in terms of taxing wealth such as financial holdings and real estate progressively.

It's not always easy to spot the wealthy. With deceiving, LBYM lifestyles, many ER'd folks pass themselves off as everyday middle class people while holding FIRE portfolios of a half mil, a mil or even more. Sometimes much more. I've heard some of them drive around in motorhomes!

Obviously folks who are able to live without working by collecting SS, pensions and/or living off investment income are to be eyed suspiciously. Increasing their taxes won't solve all our problems, but it'll help. If they don't like it, they can go back to work. How should we get started?

Any suggestions?