Tax the Rich!

[Mr. Shaman]

Shaman, obviously someone making more will get a larger cut, because they paid the majority of the taxes to begin with.

Yeah....."unusually" larger.​

 

[Openmind]

Shaman, obviously someone making more will get a larger cut, because they paid the majority of the taxes to begin with.

BigRob, with all due respect, obviously someone making the overwhelming majority of money in the US SHOULD pay the majority of the taxes. . .But it is not happening!

[QUOTE: from "Who Rules America" by
Wealth, Income, and Power
by G. William Domhoff
September 2005 (updated January 2011)
In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2010).

And this situation is getting worse. This is the TRUE redistribution of wealth that has accelerated over the last 10 years! The wealthy got wealthier, the poor got poorer. The reason why? Bush tax cuts, and the many tax loopholes that benefit the wealthy first and foremost.

Please, check into factual data, factual statistics. This (the Domhoff document) is not the only one demonstrating that (although Domhoff has been one of the most respected source for factual data for over 20 years).

Why would you ask someone who has NO disposable income after he paid his taxes, and paide his bills to pay more taxes?

But why wouldn't you ask someone who has to become increasingly more "creative" with tax loopholes and where to place his/her huge disposable income to go back to a tax level that did bring prosperity to everyone in the 1990's?

If the bottom 85% of Americans are being stripped of more of their "wealth," who will be left to purchase the products that made the top 15% (and especially the top 1%) even wealthier?

 

[Openmind]

No, I do not think such a person is lazy..I think they are being paid according to what the market says they are worth.

As for how they manage, they take out a smaller mortgage, not as nice a car, or they wallow in debt (which seems to be case more often than not).

That said, making me pay more in taxes will in no way change their lives, so it is somewhat bogus to argue about this specific point.



I am well aware of that, but the fact remains, if I go out and earn $500,000 a year, why should I have to live on $10,000 a month?



No, that is Democratic talking point about the GOP line. The GOP line is that people should be able to keep more of the money they earn.

The simple fact is this...you can raise my taxes, and it will make zero difference in the life of someone making $40,000 a year.

Sorry, but I disagree. The Bush tax cuts have created (or rather accelerated) a redistribution of wealth from the middle class to the wealthy class.
And now, the GOP wants to keep all those tax cuts that have been a great part of the disastrous economic situation we are facing today.

All the money that was not paid in taxes by the wealthy during those last 10 years have been in large part REMOVED from the US economy, and invested all over the world, but not HERE!

Those huge tax break have gone to purchase yachts, world cruises, condos in the Bahamas or Costa Rica, they have been invested in Swiss Banks, Luxemburg banks, and have NOT been reinvested in American's business and infrastructure.

Now, the GOP wants all the budget to be balanced on the back of the "little" people, they want less tax money to go to those who REALLY NEED the help, the (mediocre) safety net that was established decades ago. . .

Obamas has agreed to give $2 spending cuts for every $1 of tax increase to the big corp and to the wealthiest among us.

You do not believe that this consist in a compromise?

You want EVERYTHING to come out of safety net/entitlement programs?

You have sounded like a real fair person to me since the first time I read your posts, and I don't believe that, in your conscience, you are perfectly at peace with that plan!

 

[Lagboltz]

So it is your assertion that all those people will be vastly better off by making someone else pay more?

I would say yes. Because that is one way to keep alive the social programs that allow the lowest classes to survive.

And yet they have still paid the same percent, and the "rich" person has paid in far more in terms of real dollars.

Don't forget that any surplus FICA taxes that we paid have been raided and gone to the general fund. 98% of us have put roughly 2.4 trillion compared to the top 2% that have put in roughly .048 trillion. Yes, it is still in the SS trust in the form of government securities. Will the government give it back to the trust fund in cash. I think not. We are too much in debt. The government has always handled shortfalls by raising SS revenue rather than redeeming the securities in the trust.

Somehow, you argue that the person paying in less is the one getting screwed?

I would argue the 98% of us are the ones getting screwed.

 

[BigRob]

BigRob, with all due respect, obviously someone making the overwhelming majority of money in the US SHOULD pay the majority of the taxes. . .But it is not happening!

Wealth, Income, and Power
by G. William Domhoff
September 2005 (updated January 2011)
In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2010).

First, I would say your numbers are entirely misleading. It is an "income" tax, not a "wealth" tax...so to examine someone's wealth and then declare they need to pay more income tax is a bogus comparison in my opinion.

Additionally: (these numbers are from 2007 (I will repost if I find 2010 numbers, and SS/Medicare is not included in these figures)

1) The top 1% of households earned 19% of income and paid 37% of the income tax. So I ask you, what % is their "fair share"?

2) The bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes.

3) IRS data show an increase of more than $100 billion in tax payments from the wealthy by 2005 alone. (Bush Tax cuts)

4) The number of tax filers who claimed taxable income of more than $1 million increased from approximately 180,000 in 2003 to over 300,000 in 2005. The total taxes paid by these millionaire households rose by about 80 percent in two years, from $132 billion to $236 billion. (Bush Tax cuts)

5) The Treasury’s estimate was that the top 1 percent of earners would pay 31 percent of taxes if the Bush cuts did not go into effect; with the cuts, they actually paid 37 percent. Similarly, the share of the top 10 percent of earners was estimated at 63 percent without the cuts; they actually paid 68 percent.

Also, there is the question: Have gains by the rich come at the expense of a declining living standard for the middle class? The answer is a clear no. The middle class (defined as those between the 40th and the 60th percentiles of income) isn’t falling behind or “disappearing.” It is getting richer. The lower income bound for the middle class has risen by about $12,000 (after inflation) since 1967. The upper income bound for the middle class is now roughly $68,000—some $23,000 higher than in 1967. Thus, a family in the 60th percentile has 50 percent more buying power than 30 years ago. Sounds like a "rising tide lifting all (or at least most) boats.

If Bill Gates suddenly took all his money and left, on paper we would appear to have a better income disparity...but in reality, no one would be any better off.

And this situation is getting worse. This is the TRUE redistribution of wealth that has accelerated over the last 10 years! The wealthy got wealthier, the poor got poorer. The reason why? Bush tax cuts, and the many tax loopholes that benefit the wealthy first and foremost.

If you look at the real hard data, you will see that each of the following income groups, top 1%, top 5%, top 10%, top 25%, has paid a larger tax burden than estimated by the Treasury had the Bush Tax cuts never taken effect.

In other words, the rich continue to pay more already.

Please, check into factual data, factual statistics. This (the Domhoff document) is not the only one demonstrating that (although Domhoff has been one of the most respected source for factual data for over 20 years).

According to Treasury statistics this claim seems to make no sense...unless you go into the study with an agenda, and make it about "wealth" instead of "income."

Why would you ask someone who has NO disposable income after he paid his taxes, and paide his bills to pay more taxes?

So, at the core, this is really an issue of, "You need to pay more taxes because you can." There doesn't seem to be much else to the argument.

But why wouldn't you ask someone who has to become increasingly more "creative" with tax loopholes and where to place his/her huge disposable income to go back to a tax level that did bring prosperity to everyone in the 1990's?

Are you attempting to argue that the economic boom of the 1990's was directly related to the tax structure? That is absurd, and there is no evidence to support this..outside of the generic "the economy was good and tax rates were X." That however, proves nothing, and is not evidence.

If the bottom 85% of Americans are being stripped of more of their "wealth," who will be left to purchase the products that made the top 15% (and especially the top 1%) even wealthier?

As I showed above, the purchasing power of the lower income groups has dramatically increased over the years, while the "rich" have already paid a far greater proportional share of the taxes.

 

[ProudLefty]

Factor in who consumes the most services? The poor family who can not afford a car, gasoline, and insurance? Or the wealthy family with 3 kids and 6 vehicles? The middle class family that has flown somewhere maybe twice in their lives, or the wealthy family who book 15 flights and more per year? Who consumes the most police services? The middle class family who sees a cop on the move maybe once a month in their neighborhood, or the wealthy who have a patrol car or two monitoring their neighborhoods 24/7/365?

In short, the consumers of services should be expected to pay for the services. Yes, the wealthy should pay more.

 

[BigRob]

Sorry, but I disagree. The Bush tax cuts have created (or rather accelerated) a redistribution of wealth from the middle class to the wealthy class.
And now, the GOP wants to keep all those tax cuts that have been a great part of the disastrous economic situation we are facing today.

According to the Treasury's own numbers, the "rich" pay more under the Bush taxes than they would have without them.

All the money that was not paid in taxes by the wealthy during those last 10 years have been in large part REMOVED from the US economy, and invested all over the world, but not HERE!

All money invested overseas ultimately finds it way back to the United States. All someone can do with dollars is exchange it (which then restarts the cycle), take them out of circulation (making those dollars still around more valuable), or spend those dollars in a place that accepts dollars (most notably the United States.)

Or I suppose they could put it in a bank, which then lends it out anyway, so the cycle starts again.

Those huge tax break have gone to purchase yachts, world cruises, condos in the Bahamas or Costa Rica, they have been invested in Swiss Banks, Luxemburg banks, and have NOT been reinvested in American's business and infrastructure.

Perhaps they have not been reinvested in American infrastructure, but those dollars are being, and continue to be reinvested in the United States...see above the choices someone has when they hold dollars.

Now, the GOP wants all the budget to be balanced on the back of the "little" people, they want less tax money to go to those who REALLY NEED the help, the (mediocre) safety net that was established decades ago. . .

The proposal that I have seen doesn't actually balance the budget...am I mistaken here?

Obamas has agreed to give $2 spending cuts for every $1 of tax increase to the big corp and to the wealthiest among us.

You do not believe that this consist in a compromise?

I think the whole debate has turned political, and it is a shame.

You want EVERYTHING to come out of safety net/entitlement programs?

You have sounded like a real fair person to me since the first time I read your posts, and I don't believe that, in your conscience, you are perfectly at peace with that plan!

I have enjoyed speaking about issues with you as well, and it seems here that we just disagree.

I think that no matter what happens, if entitlements are left as is, we will be having this same debate 15 years from now, just with 25 trillion in debt, and even less good ideas.

 

[BigRob]

Factor in who consumes the most services? The poor family who can not afford a car, gasoline, and insurance? Or the wealthy family with 3 kids and 6 vehicles? The middle class family that has flown somewhere maybe twice in their lives, or the wealthy family who book 15 flights and more per year? Who consumes the most police services? The middle class family who sees a cop on the move maybe once a month in their neighborhood, or the wealthy who have a patrol car or two monitoring their neighborhoods 24/7/365?

In short, the consumers of services should be expected to pay for the services. Yes, the wealthy should pay more.

And they already pay dramatically more as it is...

At what point will you feel that the "rich" are paying their fair share?

 

[Openmind]

And they already pay dramatically more as it is...

At what point will you feel that the "rich" are paying their fair share?

The point is that they are NOT paying their fair share!

After all loopholes, deductions for this and that (including, their interest deduction on super, dupper, $1 or $2 millions mortgages), as Mr. Buffett documented (and HE was not trying to get the last bit of deduction money through "creative" loopholes), he is paying LESS than his secretary!

He paid 17.7% of his net income. She paid 30% of her net income.

THAT is not fair!

 

[Openmind]

According to the Treasury's own numbers, the "rich" pay more under the Bush taxes than they would have without them.



All money invested overseas ultimately finds it way back to the United States. All someone can do with dollars is exchange it (which then restarts the cycle), take them out of circulation (making those dollars still around more valuable), or spend those dollars in a place that accepts dollars (most notably the United States.)

Or I suppose they could put it in a bank, which then lends it out anyway, so the cycle starts again.



Perhaps they have not been reinvested in American infrastructure, but those dollars are being, and continue to be reinvested in the United States...see above the choices someone has when they hold dollars.



The proposal that I have seen doesn't actually balance the budget...am I mistaken here?



I think the whole debate has turned political, and it is a shame.



I have enjoyed speaking about issues with you as well, and it seems here that we just disagree.

I think that no matter what happens, if entitlements are left as is, we will be having this same debate 15 years from now, just with 25 trillion in debt, and even less good ideas.

I disagree that every dollars that leaves the US makes its way back to the US. And, what is worth, even if "some" dividend income from foreign investment makes it back to the U.S, we only see the "end" of the velocity multiplicator, and we loose all the investment possibilities that exist because of those foreign investments.

Could you say that a business man investing $100 millions to start a new business in Germany is as advantageous to OUR country than if he invested the same $100 millions in, let's say, Alabama?

Yes, he may get the profit from that business in Germany, and he may even pay (some) taxes on it. But what about the "velocity" advantages of that money?

Where are the new business quarters built? In Germany.
Where are the new hires made: In germany.

Where do these new hires spend the money they earn from that business? In Germany.

Where do those workers pay their taxes, where do they build their houses, where do their kids go to school? In Germany.

Where do they buy their cars? In Germany.

And. . .the "snow ball" (or velocity effect) continues. Since the business is started in Germany and not in Alabama, the little convenience store at the corner of the street will NOT get additional sales.

The hair dresser in the town in Alabama who just missed getting that $100 million investment will NOT get the new, more prosperous workers from that firm to visit her salon.

But Germany will!

 

[BigRob]

The point is that they are NOT paying their fair share!

I just showed you that under the Bush Tax cuts the "rich" are paying more of a percentage than they otherwise would be...and you then turn around and blame the Bush Tax cuts for allowing the rich to not pay their fair share.

I ask again....what is their fair share?

After all loopholes, deductions for this and that (including, their interest deduction on super, dupper, $1 or $2 millions mortgages), as Mr. Buffett documented (and HE was not trying to get the last bit of deduction money through "creative" loopholes), he is paying LESS than his secretary!

He paid 17.7% of his net income. She paid 30% of her net income.

So he paid a few million in taxes, and she paid $20,000...maybe, and that is not his "fair share"?

THAT is not fair!

What is not fair is that someone who won't have to bear the burden of any tax increase tells me I am not paying my fair share...especially when as a group, the top bracket pays far more in taxes than they earn in income (percentage wise).

 

[BigRob]

I disagree that every dollars that leaves the US makes its way back to the US. And, what is worth, even if "some" dividend income from foreign investment makes it back to the U.S, we only see the "end" of the velocity multiplicator, and we loose all the investment possibilities that exist because of those foreign investments.

Could you say that a business man investing $100 millions to start a new business in Germany is as advantageous to OUR country than if he invested the same $100 millions in, let's say, Alabama?

Alright, tell me what happens to those actual dollars then? They don't magically go away when they are converted to Euros.

Yes, he may get the profit from that business in Germany, and he may even pay (some) taxes on it. But what about the "velocity" advantages of that money?

Where are the new business quarters built? In Germany.
Where are the new hires made: In germany.

Where do these new hires spend the money they earn from that business? In Germany.

Where do those workers pay their taxes, where do they build their houses, where do their kids go to school? In Germany.

Where do they buy their cars? In Germany.

And. . .the "snow ball" (or velocity effect) continues. Since the business is started in Germany and not in Alabama, the little convenience store at the corner of the street will NOT get additional sales.

The hair dresser in the town in Alabama who just missed getting that $100 million investment will NOT get the new, more prosperous workers from that firm to visit her salon.

But Germany will!

It is a global economy...it is time to get on board.

 

[ProudLefty]

And they already pay dramatically more as it is...

At what point will you feel that the "rich" are paying their fair share?

The top marginal rate under Ronald Reagan was 50%. Do you think of Ronald Reagan's tax policies as being tough on the wealthy?

 

[BigRob]

The top marginal rate under Ronald Reagan was 50%. Do you think of Ronald Reagan's tax policies as being tough on the wealthy?

Good WSJ article on tax rates.

 

[BigRob]

The top marginal rate under Ronald Reagan was 50%. Do you think of Ronald Reagan's tax policies as being tough on the wealthy?

I think that high marginal tax rates reduce work effort, savings, and investment. They also promote tax avoidance and use of shelters.

Low marginal rates, for all income levels boosts long term economic growth.

So, Reagan's rates were better than before, but not as good as they could be.