American Politics during the Obama Presidency

The question was flawed to begin with.

We should not be talking about wages. The very wealthy have a funny way of hiding income. So we should instead be talking about actual wealth.

[url]http://www.faculty.fairfield.edu/faculty/hodgson/courses/so11/stratification/WealthIncome07.gif[/url]

[url]http://www.faculty.fairfield.edu/faculty/hodgson/courses/so11/stratification/Wealth2004.gif[/url]

The fact remains that the top 20% do in fact control 85% of the wealth in this country. If you look at total net worth the figures are even more skewed. The top 1% control almost 50% of all wealth in the country and the inequalities and the disparities keep growing.

So to answer Jackson's question, the top 1% should be paying at least 50% of all income tax, and the remaining 19% should be paying the other 35.

That would be fair, equitable and democratic. It would only be socialist if they were made to pay 100%.

Source :

[url]http://www.levyinstitute.org/publications/?docid=1235[/url]

[QUOTE=Esten;414458]Sounds good on first glance, but the data shows the top 10% earn about 46% (not 90%) of all income, while paying 70% of all income taxes. [/QUOTE]

I've found over time that when something is free people don't really appreciate it. Even worse, they can become very demanding and even downright nasty when free stuff isn't done perfectly and to their expectations. Early on the Habitat for Humanity folks had a problem where the houses they gave to the poor were being stripped of anything of value (including the wiring in the walls) and abandoned. They instituted a policy where the families receiving houses had to work at least 20 hours a week on the homes they received. Even if this meant bringing volunteers water during breaks. Lo and behold, the problem went away as the families understand the amount of work and effort it actually took to build the house they received. My problem with the bottom 50% not paying taxes is they don't feel any of the pain associated with the benefits they receive and therefore all they want is more! If every time some new program or benefit increase occurred there was at least some token tax on wages for the bottom 50% I believe people would pay better attention to what they consider to be really important. This is human nature, something that both parties seem to ignore or exploit quite often.

I thought you guys were finally coming around. BadMan promoting the idea of a flat tax -- "If the top 10% of income earners earn 90% of all income, my summation is that they should pay 90% of all income tax." Esten pointing out that the USA system is highly progressive --"the data shows the top 10% earn about 46% of all income, while paying 70% of all income taxes." But then you backtrack and come up with weak arguments why the wealthy should be taxed more.

BadMan, you appear to propose a wealth tax, which would indeed be considered "fair, equitable and democratic", by Marxists and socialists. Esten, you appear to propose much higher tax rates on capital gains and dividends. What I think both of you are missing is that your proposals are primarily taxes on capital. The majority or most of the increased taxes you'd raise would have otherwise gone into private savings and investment. You'd be promoting consumption by the federal government, and discouraging the private investment that this country needs to grow and prosper.

The empirical arguments against your beliefs are strong. Faster growing economies have lower taxes on capital, businesses, savings and investment.

Great post Sysco

This is highly debatable and you know it.

[QUOTE=Tiny12;414481]The empirical arguments against your beliefs are strong. Faster growing economies have lower taxes on capital, businesses, savings and investment.[/QUOTE]

[QUOTE=BadMan;414483]This is highly debatable and you know it.[/QUOTE]If you're looking at this issue based on your idea of a tax on wealth, I admit it's hard to debate, mainly because there aren't any countries that use a wealth tax as their primary way of generating revenue. That's unless you'd propose to do like Chavez or Castro or Lenin and just take property from the capitalists, in which case you'd lose the debate.

If you look at this based on what Esten implies below, that taxes on the wealthy should be boosted by increasing their tax rates on capital gains and dividends and maintaining high rates on business income, it's a slam dunk for my side. Can you think of a single country with an income tax rate greater than 30% on business income, capital gains and dividends that has had a good GDP growth rate over an extended period? I can't. Here are tax rates for some of the countries that have grown the fastest over extended periods,

China 25% business, 20% capital gains, 10% dividends.

Hong Kong 16.5% business, 0% capital gains, 0% dividends.

Singapore 17% business, 0% capital gains, 0% dividends (except REIT's, unit trusts and unfranked dividends)

Taiwan and South Korea also have reasonably low rates, comparable to China, although the system of calculating the capital gains and dividends varies from asset to asset or involves tax credits.

The easiest tax to administer and the smartest tax system is a Value Added Tax on all goods and all services. Period. No exceptions. Period. No income tax, period. The wealthiest spend the most and therefore will contribute the most. The poor spend the least and will be taxed the least. Income taxation has only about 80% compliance at best and the very wealthy rort it and those in the cash economy simply ignore their responsibilities. Social engineering by way of sliding scale income taxation is always a guarantee of a left / right divide. Solve it simply and equitably and the only people objecting would be the millions of public servants, the battalions of lawyers and the multi millions of accountants that scam the income tax system and ensure that those who are required to pay, don't, and those who consume and are under the tax threshhold, don't. It is the people in the middle who consume the least of the taxation dollar that pay the most. The illegal immigrants, resented because they cannot pay income tax, will contribute their share regardless of their status. Just about the perfect system to solve a myriad of the USA's current social and economic woes. Won't happen because it is too simple and too easy and leaves no room for political shenanigans such as sweetheart deals and the infamous Bookmarks. Need more goods or more services from Uncle Sam? Sure, we can do that. The cost is an extra 1% VAT. Sure would focus a few minds that have never realized where the money ultimately is sourced, including a few members of this site. Less government expenditure, less VAT. Just too simple.

Argento

Mongers-

Argentina sources a significant portion of their revenue from a wealth tax, called "bienes personales" in these parts. Of course evasion is rampant due to a number of factors including offshore holdings and underreporting of domestic real estate values. The other primary revenue generators for the Argentine government are the IVA (also rampant evasion) , export taxes, and excise taxes on imported electronics / cars / capital equipment.

Suerte,

Rock Harders

[QUOTE=Rock Harders; 414492]Mongers-

Argentina sources a significant portion of their revenue from a wealth tax, called "bienes personales" in these parts. Of course evasion is rampant due to a number of factors including offshore holdings and underreporting of domestic real estate values. The other primary revenue generators for the Argentine government are the IVA (also rampant evasion) , export taxes, and excise taxes on imported electronics / cars / capital equipment.

Suerte,

Rock Harders[/QUOTE]Generally considered, their IVA or Value added Tax has a compliance of less than 60%. Complicated by the fact that the large national and multi-nationals more or less comply and the small businesses rort it and the sole traders don't even think about it. In what ought to be a simple administration, the Argentine AFIP (tax department) has a series of invoices named A, B, C, and several others that I know exist. All businesses are required to be registered for tax purposes and responsible to issue a tax invoice for all transactions. Doesn't happen does it? In their wisdom, AFIP requires the A invoice receiver to be registered with the business issueing. This is the main invoice type for the claiming of tax imputs. Suppliers are loath to do it and avoid it as much as possible. The B invoice, consumidor final and the one you get in the restaurant or supermarket if issued, shows tax has been paid but you cannot claim the tax paid as an imput tax. The C invoice is issued by small businesses that are not big enough to issue A invoices. All are laborious in administration and a pain in the ass for the purchasers. One tax invoice would suffice and it is the 8th marvel of the world how quickly business people comply when they can claim the imput tax against theit tax liabilities. The ultimate consumer has a tax invoice that verifies their purchase but cannot utilize the tax paid. A fucking mess. Import duties are 50%, luxury tax applies to many goods and is an additional 25% calculated after IVA is paid. I buy at auction here and the cost of goods can be as much as 60% greater when the commission, IVA and Suntuarios impuestos (luxury tax) are ultimately calculated.

Argento

[QUOTE=Esten; 414458]So to answer Jackson's question:

[i]It would be fair for the top 10% of income earners to pay 100% of all income taxes. [/i][/QUOTE]So you would advocate a system wherein 90% of us would be telling the other 10% that they alone have to pay all of our collective income tax burden.

I find that entire concept to be manifestly unfair.

"[i]Democracy is not 9 wolves and a sheep deciding what's for dinner."[/i]

Thanks,

Jackson

[QUOTE=BadMan; 414451]If the top 10% of income earners earn 90% of all income, my summation is that they should pay 90% of all income tax.

You see what I just did there? [/QUOTE]Yes, I agree.

Irrespective of the head count, the group of people who earn 90% of all income should pay 90% of the income tax burden, and the group of people who earn 10% of all income should pay 10% of the income tax burden, etc., etc., etc.

That's called a [u]FLAT[/u] [u]TAX[/u], and it's the only fair method for assessing taxes on income.

Thanks,

Jackson

[QUOTE=Jackson; 414494]So you would advocate a system wherein 90% of us would be telling the other 10% that they alone have to pay all of our collective income tax burden.

I find that entire concept to be manifestly unfair.

"[i]Democracy is not 9 wolves and a sheep deciding what's for dinner."[/i]

Thanks,

Jackson[/QUOTE]Hey, but at least you finally got a straight answer to your question. It only took about 3 years from the first time you asked it here.

Before I get started let me clarify something. My response to Jackson was focused on his question of what would be a fair proportion. I [b]do not[/b] advocate the top 10% paying all taxes. But not because it would be unfair. Not at all. They are already paying 70% of all taxes and still that only amounts to an 18.71% rate. With a small rate hike, they could with little pain cover the other 30%. That's fair because of the huge proportion of income wealth they already receive. Such a change would help reduce the extreme income inequality we have, but just a bit. The top 10% would still be earning far more than everyone else.

However there is something to be said for having some skin in the game. To Sysco's good point, people value something more when they have a stake in it. When it's not free. And Tiny is correct that investment will go down as investment taxes go up. For these reasons, I don't think the current tax system is [i]that[/i] far off from where it should be. But it needs to be more progressive. If we can balance the budget with spending cuts (doubtful), give the middle class a 5% tax cut, offset by a 1% increase for top earners. Or if we need to raise taxes as part of balancing the budget, increase the rate for top earners some multiple (say 3-4) of any increase on the middle class. This is all consistent with what I posted December 8.

I am a big proponent of balanced budgets and reducing extreme wealth inequality. Federal taxation is an important tool in addressing both. I believe in wealth inequality, but extreme inequality is an unnecessary obstacle to a more prosperous society.

We have seen where conservatives stand on these issues. The current tax debate clearly demonstrates that nothing is more important to them than ensuring even more wealth is transferred to the wealthy. Giving the rich tax cuts is even more important than ensuring justice for our 9-11 heroes. How low can you go? I'll show you.

[QUOTE=El Alamo;414440]I say each person should have voting rights based on the amount of taxes they pay. People like Jackson and Exon, who pay a lot of taxes, would have hundreds of thousands of votes each election. Meanwhile, Freddy Freeloader, 3rd generation welfare recipient, would not be allowed to vote. Why. Freddy doesn't pay taxes.[/QUOTE]Unbelievably, some conservatives don't believe in democracy, they believe in plutocracy. The rich don't have enough power and influence, let's give them more. Phuck Freddy. Who cares what a poor man has to say? And it doesn't stop there. The unemployed, underemployed and underpaid who may benefit from government programs are all painted to be freeloaders. Kick them to the curb financially, strip their voting rights and insult them. And then proclaim how great our country is.

You can't make this stuff up.

[quote]Unbelievably, some conservatives don't believe in democracy, they believe in plutocracy. The rich don't have enough power and influence, let's give them more. Phuck Freddy. Who cares what a poor man has to say? And it doesn't stop there. The unemployed, underemployed and underpaid who may benefit from government programs are all painted to be freeloaders. Kick them to the curb financially, strip their voting rights and insult them. And then proclaim how great our country is.

You can't make this stuff up. [/QUOTE]Esten,

I understand that you are frightened that you might lose your right to vote under my new, improved voting rights bill.

I will talk to my co sponsors and try to arrange an Esten exception. For Esten and Esten alone, we will allocate one tenth of one vote, even if you don't qualify to vote.

I think this gesture should eliminate any suspicion that we are mean spirited

[QUOTE=El Alamo; 414505]Unbelievably, some conservatives don't believe in democracy, they believe in plutocracy. The rich don't have enough power and influence, let's give them more. Phuck Freddy. Who cares what a poor man has to say? And it doesn't stop there. The unemployed, underemployed and underpaid who may benefit from government programs are all painted to be freeloaders. Kick them to the curb financially, strip their voting rights and insult them. And then proclaim how great our country is.

You can't make this stuff up. [/QUOTE][quote]Esten.

I understand that you may be frightened that you might lose your right to vote under my new, improved voting rights bill.

I will talk to my co sponsors and see if we can arrange an Esten exception. For Esten and Esten alone, we will allocate one tenth of one vote, even if you don't qualify to vote.

I think this gesture should eliminate any suspicion that we are mean spirited[/QUOTE]See the sense in a Value Added Tax yet? Everybody pays the tax. Everybody has skin in the game. And the polemic between left and right wing positions on social engineering by variable taxation rates ceases. I guess it is so simple and so easy you don't want to take it seriously.

Argento