BBO Discussion Forums: The budget battles - BBO Discussion Forums

It seems to me that talking about how much some individual, rich or otherwise, should pay to fund the government is putting the cart before the horse. Let's talk about the horse: what, exactly, do we want government to do? My personal opinion is "as little as possible".

luke warm, on 2011-September-22, 03:51, said:

You asked this before and my answer is the same: I would be perfectly happy to have tax rates restored to the levels of the Clinton years (and even earlier). I would live just as well. I'd still eat what I wished, live where I wished, travel where I wished, do what I wished.

I'm thankful to live in a place where one can start and run businesses without paying bribes to every two-bit official around, and to operate within the domestic framework of the strong, but benign and helpful government that we have in the US. Elizabeth Warren has it right.

blackshoe, on 2011-September-22, 06:46, said:

No one agrees with everything that the government does. That's universal.

But we have a group of elected representatives who have already decided much of what the government has done, is going to do now, and will do in the immediate future. If you don't like roads, bridges, police and fire protection, public education, national defense, and a social safety net, you are free to try to convince others to change that over time.

So long as our borders are still unfenced, you still have the right to leave and establish yourself in a place more to your liking.

But while you enjoy the benefits of living here, it's small to begrudge the taxes required to pay for the benefits you receive.

phil_20686, on 2011-September-21, 19:31, said:

This sort of calculation seems very suspect for a number of reasons. First, it seems to assume that investment income is effected by the corporate tax rate. While some such link probably exists, it is tenuous at best because few companies pay out a significant proportion of their profits in dividends (in fact some very lucrative investments like Apple pay no dividend at all). Second, it ignores the fact that virtually everyone's income might be effected by corporate tax rates; for example a company which had less tax burden (and more profits) could more easily give its employees a raise, so middle class people may well see their wages suppressed by the corporate rate. Third, virtually all money in the economy is taxed "multiple times" -- every time the money changes hands (from person to company to employee to another company to an investor etc) and the choice of who to "charge" this tax burden to is pretty arbitrary. Percentage of income seems like a more legitimate way to calculate tax burden than trying to calculate indirect impacts of taxes on people's income into the equation.

I'd also be curious how the very wealthy are paying just as much now as before "because of corporate tax" when corporate tax is also at record lows. Is it baked in now and not thirty years ago? And if so, why?

awm, on 2011-September-22, 09:21, said:

Federal revenue from all sources fell from 20% of GDP to 14% of GDP between 2000 and 2010. Although many folks pay less today than in 2000, by far the largest portion of the revenue crater is due to reduced contributions by the wealthy. No amount of obfuscation changes that.

PassedOut, on 2011-September-22, 10:00, said:

Not sure if this is an apples to apples comparison...

Neither the stock market nor the real estate market are appreciating at nearly the same rate as they did a decade ago.
Even if rates were precisely the same, tax revenue would be a LOT smaller.

PassedOut, on 2011-September-22, 07:41, said:

This is the kind of asinine "argument" that makes it impossible to discuss these things. But then I suppose you can now play the "I win!" card and strut around as if you've actually accomplished something. Me, I'm not playing that game.

blackshoe, on 2011-September-22, 15:18, said:

Funny, I had exactly the same attitude when you stated

Quote

PassedOut, on 2011-September-22, 07:26, said:

but that answers a question i did not ask... is it safe to assume your answer is "yes" to the question i did ask?

PassedOut, on 2011-September-22, 07:41, said:

america, love it or leave it eh?

awm, on 2011-September-22, 09:21, said:

funny eh? record lows and still the second highest rate (2nd to japan) in the world... and speaking of income taxes (though richard will probably accuse me of spouting talking points), the top 5% in the u.s. pay right at 97% of the tax (if these figures are correct)... and the bottom 50% of wage earners pay about 3% of the taxes... how fair do you want it?

luke warm, on 2011-September-22, 15:43, said:

What do the people between the top 5% and the bottom 50% pay? Nothing?

luke warm, on 2011-September-22, 15:43, said:

Comment one:

The main thing that your link shows is that you're too stupid to read a table properly

Looking at the 2008 numbers, the top 1% pay 38.02% of incomes taxes.
The top 5% pay 58.72%.
Add these two numbers and you get something very close to 97%

Here's the rub... The top 5% includes the top 1%
Your 97% percent estimate is double counting.

This is blatantly obvious (look at the top 50% / bottom 50% split)


Comment 2:

Your "analysis" focus on income tax... One of the few parts of the tax code that isn't highly regressive.
The part of the tax code that is designed to help balance out payroll taxes and sales taxes, and all the other taxes that hit the poor so much more than the rich.

For what its worth, the CBO has put out some good charts that give a stratified view of tax income and tax burden.

According to the 2006 figures (the latest that I found) the highest quintile of income earners look to capture about 58% of income while paying 70-75% of taxes.
http://www.cbo.gov/p...istribution.cfm

So yes, Virginia, the tax code taken as a whole is slightly progressive but nowhere near to the extent that you're claiming...

luke warm, on 2011-September-22, 15:43, said:

Given that the bottom 50% have only 2.5% of the wealth in the US, their paying 3% of the income tax doesn't strike me as unfair to the rest of us. Depends upon your world view, I guess. What percentage would you consider fair?

And the lowest earners never reach the cap on social security payments either, so they are stuck with those payments regardless.

luke warm, on 2011-September-22, 15:43, said:

This is a sort of standard talking point too. Yes, the United states has one of the highest statutory corporate tax rates in the world. However, we also have massive numbers of potential deductions. You have to measure the percentage that companies actually pay... which is much less than what's on the books. In fact there are many highly publicized examples of companies like GE, Bank of America, and Exxon which are paying virtually nothing in corporate tax (or even getting a refund) while making billions in profits.

Here's a link.

PassedOut, on 2011-September-22, 16:57, said:

I'm sure Plantinga has some bearing on this...

"Profits" is not an obscenity, whatever some may think.

blackshoe, on 2011-September-23, 17:37, said:

Couldn't agree more! I've been in business all of my life, and profits are the lifeblood of our family's businesses.

blackshoe, on 2011-September-23, 17:37, said:

Neither is "taxes".

Winstonm, on 2011-September-23, 22:20, said:

no offense, but you can't use language like that on a family site

No wonder some folks believe claims that the wealthy in the US carry more than their share of the tax burden. Seems that many do not know how skewed the distribution of wealth here actually is:



You can read the paper upon which this chart is based here.

luke warm, on 2011-September-24, 06:29, said:

I said "taxes", not "Texas".