Great piece today from the WSJ.

Pokes holes in some of Obama's "plans"

The nearby chart shows that the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years. The top 10% in income, those earning more than $108,904, paid 71%.


Just sad. Any alot of people want them to pay more. I just dont get it.

http://online.wsj.com/article/SB121659695380368965.html?mod=opinion_main_review_and_outlooks

7/21/2008 1:56:41 PM

This couldn't be contained in any of the other anti-obama or obama vs mccain threads?

7/21/2008 2:08:51 PM

This couldn't be contained in any of the other anti-obama or obama vs mccain threads? your bajillion other threads about how unfair taxes are to rich people?

7/21/2008 2:17:47 PM

typical you address the posting and not the info.

Just some more info for you to ignore 420. But i guess you dont like info that doesnt fit into slogans or on bumper stickers. jk


So you two feel the rich should "pay thier share" or pay more?

[Edited on July 21, 2008 at 2:23 PM. Reason : .]

7/21/2008 2:22:00 PM

Here comes a real response.


I heard this on Rush today. It seems really skewed. My first reaction is to push for a flat tax, however I have not done enough research on this topic and its repercussions.

In the end, I plan on making over 100k conservatively (hopefully over 250k) and honestly don't feel like I should have to pay any more than anybody else.

7/21/2008 2:24:30 PM

I think the point is this topic has been kicked around so many times that it just doesn't warrant it's own thread.

7/21/2008 2:24:45 PM

I've been on a long and arduous Soap Box quest to seek explanation of why equal % = equal share.

I've already made the pro-progressive taxation argument.

But for these figures in particular-- why is it that when people are trying to defend all the poor rich people out there, they only cite income taxes? Why not an estimated composite of all types of taxes?

7/21/2008 2:27:17 PM

well here are some more facts that were written today for your discussions.

Care to comment trole?

spy, it is skewed and thats the real problem. You have less than half of the people paying for the other. Everyone should have to contribute. Im a big fan of the fairtax, but a flat tax is a step in the right direction. You can see from this political campaign how Obama is using the income tax as a political tool to buy votes. That is how we get uncontrolled spending and growth.

haha, boone are you serious? I guess they dont figure in all the other taxes bc Walmart doesnt ask for my social security number when I buy a pack of gum. LOL

[Edited on July 21, 2008 at 2:31 PM. Reason : .]

7/21/2008 2:29:32 PM

I think a differentiation needs to be made between taxing income vs. taxing wealth when it comes time for politicians to debate about taxes. Lower class and to a point those in the middle class (that lack much understanding of the economy) solely understand the "income" part w/o much understanding or perception on how taxes work to manipulate wealth redistribution.

7/21/2008 2:37:08 PM

Quote :

"I've been on a long and arduous Soap Box quest to seek explanation of why equal % = equal share. "

Because if you really want an equal share, you would have a regressive tax, unless you want to suggest that the rich consume more government services than the poor (and for the purposes of this, I'm discounting corporate welfare and looking at individual people only).

Quote :

"But for these figures in particular-- why is it that when people are trying to defend all the poor rich people out there, they only cite income taxes? Why not an estimated composite of all types of taxes?"

I imagine because the picture would be even worse as the other taxes are consumption, luxury, and property taxes as well as capital gains taxes, and unless you've got compelling evidence to the contrary I would imagine the rich consume more of the things that these taxes apply to.

7/21/2008 2:39:09 PM

Quote :

"and unless you've got compelling evidence to the contrary I would imagine the rich consume more of the things that these taxes apply to."

probably true, but i would also imagine that they already consumer less by percentage of their income

7/21/2008 2:41:37 PM

Quote :

"haha, boone are you serious? I guess they dont figure in all the other taxes bc Walmart doesnt ask for my social security number when I buy a pack of gum. LOL"

I think he means FICA, among other taxes, which, given its cap around $100K, inordinately skews the burden back again to the middle class. In other words, while I'm not a huge fan of progressive taxation myself, FICA is inherently regressive, given its income cap.

So, how about this compromise - a flat tax with the cap on FICA contributions lifted? The resulting tax rate would thus theoretically be lower, given that FICA now captures a much larger revenue stream. Given that, despite all assurances otherwise, SS/Medicare are essentially a wealth transfer as it is (and, as it is, for Social Security at least, from poor to rich - given, that is, who ends up living longer to collect on it...)

7/21/2008 3:00:14 PM

Quote :

"Because if you really want an equal share, you would have a regressive tax, unless you want to suggest that the rich consume more government services than the poor (and for the purposes of this, I'm discounting corporate welfare and looking at individual people only)."

I think you misunderstood-- perhaps I should have said "equal individual burden." I don't think, even with today's current system, that taxes burden extremely wealthy people nearly as much as they do working class people.

7/21/2008 3:21:16 PM

The reason i dislike the typical liberal tax plan is not because i boo hoo over the top 5% will pay more in income taxes.

Nonetheless i do not have a problem in caping at a certain income FICA taxes. This money is collected for the sole purpose that most poor people in the working class and even lower middle class are not responsible enough to save for retirement.

Those making above teh cap are already paying into the system more then other Americans. why should they be forced to further subsidize the retirement of the rest of america. Most likely they are taking care of their own retirement through responsible saving and 401k and will never see any of their FICA withholding back.

If i made 100K/year i'd much rather pay slightly more in income taxes which has more utility for myself then have to pay more FICA

[Edited on July 21, 2008 at 3:26 PM. Reason : ;]

7/21/2008 3:23:42 PM

Quote :

"Most likely they are taking care of their own retirement through responsible saving and 401k and will never see any of their FICA withholding back."

Incorrect. Being rich never stopped anyone from pulling a SS check - not even certain Senators.

7/21/2008 3:28:48 PM

Quote :

"I think you misunderstood-- perhaps I should have said "equal individual burden." I don't think, even with today's current system, that taxes burden extremely wealthy people nearly as much as they do working class people"

So you support a flat tax? (that would surprise me) Where everyone would pay the same burden or percentage of their income?

I like the fairtax, but the flat tax is a good step towards fairness.

7/21/2008 3:30:01 PM

I'd be chill with capping it for that reason

if

they agree to not collect.

If they're too rich to throw in a percentage of their full income, apparently they're too rich to take out. Fair's fair.


^

Quote :

"So you support a flat tax? (that would surprise me) Where everyone would pay the same burden or percentage of their income?"

I said I don't think wealthy people are burdened as much as working class people. I'm for progressive taxation.

And again, you're assuming equal % = equal burden.

WHY

It's mathematically easy, but I've heard no justification for that assumption, yet.

[Edited on July 21, 2008 at 3:33 PM. Reason : ,]

7/21/2008 3:30:50 PM

Redistribution of wealth is the only way capitalism can work. That number is around 90% in countries that are better than the US. Healthcare, education and other domestic services need to be improved and we have a huge deficit already from Bushes tax cuts and war. The money has to come from somewhere.

7/21/2008 3:31:44 PM

^ that is just the age old class warfare.

7/21/2008 3:34:28 PM

Quote :

"So you support a flat tax? (that would surprise me) Where everyone would pay the same burden or percentage of their income?"

He's making a rather obtuse argument for marginal utility in favor of progressive taxation - i.e., diminishing marginal utility of income. Since, we assume, marginal utility of income decreases as income goes up, those rich folks won't mind if we just take a liiiiittle more income. Or so the story goes.

I still think a proper examination of the tax burden needs to be done with all federal taxes thrown together - FICA, for one. And a reasonable estimation of taxes paid based upon consumption - such as gas taxes - could easily be made. This, to some degree, undercuts the argument that the rich are wildly disproportionately supporting the income system.

Although one could again easily rectify this by doing as I suggest and just admitting what FICA is actually funding - a wealth-transfer scheme, and simply do away with the false pretense of paying "up" to one's limit. In this case, I think much of the salient objections to the flat tax can be vanquished, as the marginal rate could be thus lowered.

Quote :

"I'd be chill with capping it for that reason if they agree to not collect. If they're too rich to throw in a percentage of their full income, apparently they're too rich to take out. Fair's fair."

We both know, however, that this is a political non-starter. An overweening sense of entitlement is hardly limited to the lower classes alone.

"But that's my money! I paid in already, I deserve it back!"

Which is why I advocate stripping out the whole false notion of SS being anything other than wealth transfer, rather than some kind of "Social Insurance." Social Insurance would imply that distribution is based upon need - rather than universal entitlement alone.

[Edited on July 21, 2008 at 3:38 PM. Reason : .]

7/21/2008 3:34:33 PM

The Bush administration is a strong advocate of corporate welfare.

7/21/2008 3:41:33 PM

7/21/2008 3:57:23 PM

Quote :

"a rather obtuse argument for marginal utility in favor of progressive taxation"

There we go. If only I'd recalled econ 105, I could've avoided the confusion.

7/21/2008 4:01:56 PM

Quote :

"And again, you're assuming equal % = equal burden. WHY "

I still dont understand your arguement. You are saying everyone should be burdened equally? And dont see taking home the same percentage of income regardless of income as being burdened equally? Or are you saying that someone making 8 bucks an hour is more burdened by taking his money? I think that is your point.

Well you seem to forget the burden I took with 8 yrs of school and over 100k of debt to acheive my income level. Where does that factor in? You forget that people actually do something to get greater income levels than just bitch about it.

7/21/2008 4:06:02 PM

Boone, you want flat tax proponents to address the argument of "equal share". How about you address the phenomenon that the share of tax revenues paid by the rich has gone up as their taxes have been cut?

[Edited on July 21, 2008 at 4:08 PM. Reason : 2]

7/21/2008 4:07:33 PM

DrSteve,

Quote :

"He's making a rather obtuse argument for marginal utility in favor of progressive taxation - i.e., diminishing marginal utility of income. Since, we assume, marginal utility of income decreases as income goes up, those rich folks won't mind if we just take a liiiiittle more income. Or so the story goes."

But that argument also assumes that an individual's utility function can not only be measured but compared across individuals. However, there are not any standard units for measuring utility. So there is no good reason to make this assumption. For example, Bill Gates may love money so much that even taking a dollar bill from him would generate a greater welfare loss than the dollar received as tax revenue.

Saying that taxing the rich "hurts" them less than taxing the poor by the same percentage using this line of reasoning is essentially assuming one's conclusion into their argument.

Not that you're making the argument, just thought I would point that out.

[Edited on July 21, 2008 at 4:15 PM. Reason : ``]

7/21/2008 4:10:32 PM

Quote :

"you saying that someone making 8 bucks an hour is more burdened by taking his money?"

More or less, sure.

Quote :

"Well you seem to forget the burden I took with 8 yrs of school and over 100k of debt to acheive my income level."

How could I? The subject is raised in every tax thread.

Quote :

"How about you address the phenomenon that with respect to the rich, their share of tax revenues has gone up as taxes have been cut?"

It says that many of the ultra-rich are competitive assholes who think that life is a zero-sum game between them and everyone else, so they exploit the tax code even though they're making more than they could ever spend?

I'd much rather the government figure out ways to prevent exploitation that to appease the ultra rich into being honest.

[Edited on July 21, 2008 at 4:11 PM. Reason : ,]

7/21/2008 4:11:41 PM

Quote :

" How could I? The subject is raised in every tax thread."

i really dont think you understand this premise however

7/21/2008 4:22:21 PM

What, that he had a government-subsidized education for 8 years?

Q.Q

7/21/2008 4:25:14 PM

nope

7/21/2008 4:26:49 PM

Quote :

"Boone: many of the ultra-rich are competitive assholes who think that life is a zero-sum game between them and everyone else"

you've got this wrong. here's a basic wikipedia explanation http://en.wikipedia.org/wiki/Zero_sum:

Quote :

"Economics and non-zero-sum Many economic situations are not zero-sum, since valuable goods and services can be created, destroyed, or badly allocated, and any of these will create a net gain or loss. Assuming the counterparties are acting rationally, any commercial exchange is a non-zero-sum activity, because each party must consider the goods s/he is receiving as being at least fractionally more valuable to him/her than the goods he/she is delivering. Economic exchanges must benefit both parties enough above the zero-sum such that each party can overcome his or her transaction costs."

in essence, redistributive policy looks to shuffle ownership within the "pie", while free market policy looks to expand the "pie". I would imagine that growth occurs for most within the "pie". But, even if the "pie" only expands in the hands of the wealthy, that means that a lower percentage of tax upon the wealthy can produce the same tax revenue as a previously higher tax. Prawn Star brought this up before:

Quote :

"Prawn Star: How about you address the phenomenon that the share of tax revenues paid by the rich has gone up as their taxes have been cut?"

7/21/2008 4:46:32 PM

Quote :

"The nearby chart shows that the top 1% of taxpayers, those who earn above $388,806, paid 40% of all income taxes in 2006, the highest share in at least 40 years"

What a meaningless statement. That could easily mean that the income gap merely grew (which it did), which accounted for the new tax statistics. 40 years ago, the rich were definitely paying more taxes, it's just income was more evenly spread out.

7/21/2008 4:47:25 PM

The fact that share of revenues went up even when taxes went down is a meaningless statement? How do you figure?

Tell me moron, what is the point of taxation? Only if you think it is purely a tool to redistribute wealth can you possibly believe what you just posted.

You have a legitimate point that the income gap between the rich and "the rest" has increased. However, unless you can prove that our economy is in fact a "zero-sum game" and that their wealth has come at the expense of the rest of us, I fail to see how increased revenues due to a surge in the number and wealth of rich folks is a bad thing.



[Edited on July 21, 2008 at 5:00 PM. Reason : 2]

7/21/2008 4:56:09 PM

Huh?

The point of taxes is to collect revenue for the gov.

7/21/2008 5:00:22 PM

well it is also used to stem demand for some goods and services

for example alcohol, gasoline, etc

7/21/2008 5:06:18 PM

^"Sin Taxes"

^^Exactly.

So since it has been shown many times that cutting taxes frequently increases revenues in the long run, then why is it "meaningless" to note the fact that the share of tax revenues contributed by the rich has gone up as taxes have gone down? After all, that was the idea in the first place, right?

[Edited on July 21, 2008 at 5:10 PM. Reason : 2]

7/21/2008 5:08:20 PM

^ I wasn't saying the idea is meaningless, I was saying the statement was meaningless because there is not enough data in that editorial to validly make that statement. There are several thing that could explain that statement.

Are you disagreeing though that more rich people and more poor people would cause the share of revenues from the rich to go up? And historically, a drop in taxes usually accompanies a drop in tax revenue. THere's not even any conclusive correlations between drop in taxes=rise in revenue. It's gone both ways (and actually more times drop in taxes=drop in revenue by a small margin) in the past. I do think there is some merit to the idea that the Bush tax cuts caused an increase in tax revenue from the rich, but I haven't seen enough data to state that conclusively. Correlation doesn't equal causation.

Quote :

"However, unless you can prove that our economy is in fact a "zero-sum game" and that their wealth has come at the expense of the rest of us"

It's not that it comes at the expense of us, it's what it does to society. It because is an implicit caste system. The poorer people get, the more likely it is they get involved with crimes, and the less likely it is they can be anything more that drones in society. Statistics show a VERY strong correlation between income and professional and education achievement. In the long run, continuing to let the rich essentially subjugate the poor not only damages our democracy, but damages society, and is really unsustainable. The reason things trend this way is because humans by nature are not completely compassionate, and become more so from the separation caused by a large population society. A gov. of such a society should ensure that no one group gets too powerful (otherwise it threatens the democracy of that gov.). Taxes are an indirect mechanism of our gov. attempting to do this, and the growing income gap is evidence that something is out of balance.

[Edited on July 21, 2008 at 5:23 PM. Reason : ]

7/21/2008 5:12:58 PM

Quote :

"What, that he had a government-subsidized education for 8 years? "

LOL. I paid out of state for undergrad and went to a private school after. OH and the loans I pay back with interest.

You want to address the question boone? WHy are you not considering THAT burden into your equation?

Moron, the point of taxes SHOULD be to raise revenue for the govt. Not a political tool to buy votes or to alter ones behavior. imo

[Edited on July 21, 2008 at 5:20 PM. Reason : .]

7/21/2008 5:18:28 PM

Quote :

"re you disagreeing though that more rich people and more poor people would cause the share of revenues from the rich to go up?"

Yeah, I am disagreeing with that. The # of rich and # of poor are capped off at a percentage, in this case the top 1%. So more rich people would mean that the bottom 99% would be paying a bigger portion of taxes.

Richer rich people and poorer poor people, on the other hand...

7/21/2008 5:24:21 PM

Quote :

"Not a political tool to buy votes or to alter ones behavior. imo"

Wanting to lower taxes on the rich IS buying votes as much as wanting to lower them on the poor. And, it's a very common political idea that taxes are one mechanism of social engineering. If the gov. doesn't engage in social engineering for the good of the people, corporations would (and do actually) do it for their own benefits. These forces oppose each other, and there is no other way for it to be.

7/21/2008 5:25:23 PM

Quote :

"If the gov. doesn't engage in social engineering for the good of the people, corporations would (and do actually) do it for their own benefits. These forces oppose each other, and there is no other way for it to be."

Now there's a rather sweeping and unsubstantiated claim.

7/21/2008 5:35:37 PM

Quote :

"You want to address the question boone? WHy are you not considering THAT burden into your equation?"

Are you not being compensated for your additional schooling?



[Edited on July 21, 2008 at 5:52 PM. Reason : .]

7/21/2008 5:43:22 PM

^^ If you've ever read any political science books you'd know that gov. doing social engineering is a core tenant of gov., and always has been. And it doesn't take a very deep look at American history to see the direction corporations like to go.

7/21/2008 5:52:07 PM

I'm guessing I've read more on the topic of political economy than you have.

And to treat the issue as a foregone conclusion of a false dichotomy of government engaging in social engineering "for the people" or "by the corporations" is nonsense. This is not the only set of possible outcomes, and claiming as much displays a remarkable degree of naivete. Not even getting into whether said social engineering "for the people" works out that way in practice, or just which people it ends up benefiting.

7/21/2008 5:54:47 PM

I never claimed that was the only 2 possibilities, but theoretically, a gov. elected by the people for the people is going to work for the people, vs. a corporation which almost by definition is going to work for itself. Occasionally the 2 realms intersect.

7/21/2008 5:57:24 PM

Why? How come you believe when we walk the same human being out of a board room and into a legislature they suddenly stop being greedy and self-interested?

7/21/2008 6:04:59 PM

Quote :

"Wanting to lower taxes on the rich IS buying votes as much as wanting to lower them on the poor. "

No moron, its about fairness and shared responsiblity. Continuing to take more from a minority to give to the majority is buying votes.

The top 10% in income, those earning more than $108,904, paid 71%.

Anything fair about that?

Great point loneshark. Moron seems to think that a coorporation trying to compete with better products, better pay, and doing a good job is somehow greedy and bad. While a politician LYING for votes, making promises they KNOW arent viable in the long term simply to get his ass into office is somehow noble? There are alot of crooked companies and alot of crooked politicians. Its just when a coorporation is crooked the people funding them had a choice.


Boone, yes im compensated with a 25yr student loan repayment and morons calling me rich while they do nothing to better thier own life. Then I get to be in the group that pays 71% of the nations taxes.. .AND THEN be told I need to pay my share. What you seem to be alluding to is pure communism. YOu want everyone to be paid the same and share the same "burden" regardless of thier work or importance in life. correct? Dont get mad that you choose your major and career and didnt work as hard as others. That is no reason to punish others for your jealousy or choices in your life. I wonder how in the world you can look at those numbers and think its somehow fair.

[Edited on July 21, 2008 at 6:14 PM. Reason : .]

7/21/2008 6:13:15 PM

Quote :

"YOu want everyone to be paid the same and share the same "burden" regardless of thier work or importance in life. correct?"

Not even remotely.



[Edited on July 21, 2008 at 6:26 PM. Reason : .]

7/21/2008 6:24:41 PM

I can't believe that people still think that the government cares about "the good of the people"

I mean right now we're about to have an election, and the main question about the two candidates in my mind is not "who is going to be the best for this country?" but "who is going to do the least damage?"

And sadly, that's pretty much how it goes for just about every elected office...


This country needs to push hard for LESS government involvement in our lives. Right now neither party has any inclination do do anything but increase government power.

7/21/2008 7:02:55 PM

I agree bobby.


Boone, how can everyone have the same burden? In your mind/world?

7/21/2008 7:19:08 PM