We hear all the time about how the rich aren't paying their" fair share" of taxes and that we should probably impose a millionaires tax on them so they pay more(note that most "millionaire taxes" would start at an income of about $500,000 per year). This would help balance the State and Federal budgets that are out of control because governments only know how to do one thing - spend taxpayers money. Now, the "rich" are the people who provide capital for new business start ups, start businesses on their own, or invest in stocks or bonds which provides capital to other businesses who expand their businesses resulting in job increases. It's an old cliche, but did you ever get a job from a poor person?
What exactly is the rich's fair share of taxes? 25%, 50%, etc.?
Here are some figures from a 2005 CBO (Congressional Budget Office) study from 2005. The study shows the breakdown of what income levels of the total nationwide income is earned by different groups and what percentage they pay in taxes.
Taxpayers % Earned of Total Income Total % of Taxes Paid
Top 1% 18.1% 38.8%
Top 5% 31.1% 60.7%
Top 10% 40.9% 72.7%
Top 20% 55.1% 86.3%
Middle 44% 39.9% 16.6%
Bottom 20% 4.0% -2.9%
There is your proof of how "little" the "rich" are paying. The top 20% of wage earners are paying 86.3% of the tax load, but are making only 55.1 % of the income. The bottom 20% actually pay less than zero because of the "Earned Income Tax Credit" that gives "tax refunds" to people who don't pay taxes.
Five Presidents in the last 90 years have cut taxes and regulations and in each instance it resulted in robust economic growth with the resulting huge decrease in unemployment, Warren Harding, Calvin Coolidge, Ronald Reagan, George W. Bush, & John Kennedy. Raising taxes always has the opposite "job killing" results.
Accepting that as truth doesn't change the simple fact that, largely as a result of changes in the tax code dating back to President Reagan, both income and wealth are far more concentrated now than at any time in history.
ReplyDeleteAnd the excessive concentration of wealth is inherently corrosive to society.
Just listen to Uncle Barack and "spread the wealth around". You want to totally destroy the economy and the country, play Robin Hood and steal from the rich and give to the poor. How long do you think the "rich" will continue creating wealth and jobs if it keeps being taken away from them? In a free market capitalist system, the wealthy lift up the poor, not the other way around. In a Socialist society everybody suffers equally.
ReplyDeleteJon,
ReplyDeleteThe problem is that the wealthy don't lift up the poor. They only lift themselves higher.
I am not a socialist, nor is our President. Neither he or I have any interest in owning and managing the major corporations (which is the definition of Socialism). Most of the banks that we directly invested in a year ago have paid us back with interest. I am hopeful that GM and Chrysler will eventually prosper enough to buy out the shares held by the US government, but we are not making any effort to run the companies.
Many conservatives/Republicans look back on the 1950s as some sort of golden age. The maximum marginal tax rate until 1963 was 90%. Now its 35%. With the way the tax system is currently structured Warren Buffet pays a smaller percentage of his income in taxes than his secretary.
I am not advocating confiscatory rates, just a return to the rates established by the Clinton Tax package in 1993. I think you might remember how strongly the economy grew in those 8 years while we almost balanced the budget.
Conservatives/Republicans want to believe the untrue. Tax cuts, by themselves, do not every pay for themselves. Tax Cuts, by themselves, provide a very small short term stimulation to the economy and create a long term drag on the economy.
If you look at economic performance under every president dating back to FDR, the economy has consistenly grown stronger and created more jobs with lower deficits and more increase in stock prices under Democratic Presidents than under Republicans.
Its Republicans with your insistence that taxation and regulation are uniformly bad that created the current economic crisis and created the vast bulk of the National Debt.
And yes, I think that if the "rich" have to be an effective tax rate of 20% or even (GASP) 25% instead of the 16% or so that they currently pay, they will continue to do what they do, some of which sometimes creates jobs.
There is a middle ground between a tax policy that allows for the top 1% of earners to take in 50% of the national income which is where we are now, and tax rates that will make the rich poor.
Mostly as a result of the Bush Tax cuts, the rich are getting richer and the middle class are getting poorer. The poor?? They are just royally screwed.
Figures don't lie. The top 20% of wage earners are paying 86.3%of the tax load. Where do the "rich" put their money? In a mattress? They invest it! That makes it available for businesses to borrow for business expansion or business creation with subsequent job creation. The current highest tax rate is about 35%, not 16%!! My wife and I make way less than $200,000 a year and the tax return I just filed for last year has us paying about 23%. Do you call me wealthy? People like Warren Buffet know how to work the loopholes in the tax system to pay a small part of their income in taxes, and don't forget the income tax is on income not net worth. How much does he "earn" each year? That's a good argument for a flat tax.
ReplyDeleteTax cuts don't have to pay for themselves, because they create new, additional revenue for the Federal, State, and Local governments. There is not a limited amount of "money" that has to be spread around.
Ronald Reagan's administration had large budget deficits because Tip O'Neil and the Democrats reneged on their promise to cut spending dollar for dollar for every dollar of tax cuts, which Tip agreed to before the tax cut was passed. Reagan's tax cuts almost doubled the revenue coming into the Federal government by the end of his second term.
Bill Clinton's administration had budget surpluses by the end of his second term mainly because after 1994, Conservative Republicans held the Budget purse strings. Kind of the opposite of old Tip.
George Bush's tax cuts took millions of poor people off the tax rolls and despite what the Democrats preach, his tax cut was the same across the board percentage wise.
The poor sure are getting screwed. I assume they are in the bottom 20%, who pay no taxes, and get tax refunds anyway. Should we just give them $100,000 a year? Then they wouldn't be poor anymore. That sounds like Communism to me. It sure as hell isn't Capitalism.
Obama wants to destroy the private sector and turn this country into a European type socialist country, and he's well on his way. He wants the government to totally control everyone's life. If health care passes that will just about "seal the deal", because if the government controls your health care they control you totally.
It always disturbs me when people use the "Robin Hood" example in talking about Leftists. The story goes back to the 13th century and has many variations but Walter Scott’s story is basically this: Robin Hood was a noble that lost his property to a tyrant. He then went on a campaign of stealing from the rich and corrupt government, i.e. Prince John, the Sheriff of Nottingham and a crooked clergy that over taxed and stole from the working class. Obama is the antithesis of Robin Hood. He and his “Chicago Way” cronies in Congress are Prince John et al. We that are trying to get our “property back” (the Constitution) are the real Robin Hoods.
ReplyDeleteAre you talking about "thug politics" that Chicago is known for? What Article and Section of the Constitution says wealth should be redistributed? I can't seem to find it in my copy.
ReplyDeleteI agree, figures don't lie.
ReplyDeleteSo which figures are more relavent?
In the same way that it is clear that the wealthy pay the bulk of income taxes in our system, its also absolutely clear that as the wealthy have become even wealthier, the middle class have been, at best, holding ground.
While middle class incomes have essentially stagnated, health care costs have sky-rocketed, as have costs for eduction. The net result for the middle class has been an overall loss of spending power and economic freedom.
And for the poor, all the trends for the middle class have been even worse.
Remember if you will, that reductions in income tax do not affect the FICA taxes that everyone pays on earned income, except that the tax rate for that tax essentially goes down for the wealthy since FICA taxes are capped and that cap is inflation adjusted.
So which is more important.
Tax rates or the overall impact of the economic and tax structure.
Right now, despite paying the bulk of the income taxes, the wealthy are accumulating a larger percentage of the national wealth than at any time since the great depression, and probably before that.
We have a system now where the average CEO makes 400 times what the average employee makes. In the 60's that ration was about 40 to one.
I am not sure that you can argue that those who have that wealth are actually that much smarter than the rest of us. And I have seen no evidence that the wealthy in any way contribute more to society than nurses or teachers or firemen or policemen or members of our military.
Taxes are a tool for leveling the playing field a little bit at the same time that they are used to finance government operations.
So which is more relavent? Distribution of taxes or concentration of wealth?
As an aside, there is no evidence that I have seen that the wealthy actually use their wealth to help the rest of us rise up as well.
ReplyDeleteIn many cases they have achieved their wealth by running corporations that have taken jobs from American workers and moved those jobs to other countries where their workers don't make as much money, work in sometimes deplorable conditions, and whose overseas factories are environmental disasters since nations in the developing world do not have the same type of enviromental protections that we have here.
Other wealthy people got that way by manupilating the oil market, creating the oil price spike in 2007 and 2008 or by manipulating financial markets in reckless ways that enriched them and almost ruined the rest of us.
There is no evidence that trickle down economics works, wealth doesn't actually trickle down.
You blame Democrats for spending in the Reagan years and cite some mythical promise that Tip O'Neil made to cut spending.
ReplyDeleteYet Ronald Reagan did not, to my knowledge, veto any of those horrible Democratic Spending Bills.
And then George BushII moves into the White House in 2001 and, with the enthusiasitc support of a Republican led Congress, proceeds to BOTH cut taxes AND Raise Spending.
Tehre is no evidence that Republicans are either capable of or willing to make large cuts in government spending. But they do talk a good game.
It's really too bad when facts get in the way of an agenda isn't it? Can't argue with people who don't know how to read the writing on the wall. Hope your taxes and Government control of life don't get too bad, if Obama gets his agenda passed.
ReplyDeleteWhich facts??
ReplyDeleteWhose agenda?
You can't have a discussion with someone who has a differnt take on things? Tell me what writing on which wall I am missing.
And what control over my life do you think President Obama wants to take away?
Facts about taxes, economy, and government control. Yours and Obama's Socialist/Marxist agenda. Control? He doesn't want to take away control, he wants to add to what's already there. If he gets everything he wants, he'll tell you how you can heat your home, what car you can drive, what you can say publicly (or in private, if the wrong person hears you), what you can eat and drink, what doctor you can see (if you are allowed to see a doctor), etc, etc, etc. If you can't see that wall, I suggest you are overdue for an eye exam.
ReplyDeleteWell Mr Quint,
ReplyDeleteEnjoy your time hiding in your bunker being afraid of the boogie man under your bed or in the White House.
Meanwhile I will be out in the world unafraid of the nascent dictator you see hiding in the shadows.
For a sanity check though, what law or regulation, or executive order has this administration proposed or enacted or imposed that would:
Tell me how I can heat my home?
What car I can drive?
What I can say in public or private?
What I can eat or drink?
What Doctor I can see?
Are there any facts behind your fears or are you simply afraid because you want to be?
I wasn't going to post any more comments, but this is too easy.
ReplyDeleteCap & Trade will take care of your heat and car.
Health Care will take care of what you eat and drink and what doctor you see, if you get t see one on a timely basis.
Reinstituting the fairness doctrine will take care of the speech part.
I feel sorry for people like you who obviously feel the need for the government to take of them.
Personally, I am a believer in the Constitution, personal freedom, freedom of choice, and American exceptionalism, all of which built this great country of ours. Government intrusion is slowly destroying it, and I'm not talking about just now, but for at least the last 80 years, with a few exceptions. If you want to be taken care of by the government, be my guest, but I want no part of it. Oh, and by the way, I don't even have a bunker, and I am sitting out in the sunshine, where true Americans, who believe in the principles set forth by Washington, Jefferson, Madison, and Hamilton, are.
End of conversation on my end.
Which element of the existing (or any proposed) Health Care Reform bills will tell me what to eat or drink or what doctor to see or if I get to see a doctor.
ReplyDeleteI am curious.
The Senate bill is some 2700 pages long. Which provision of the bill will do any of these things??
Just because you are paranoid in this area, doesn't mean its true.
Which provisions will do any of what you are claiming?
I would ask the same questions about cap and trade, but I know you don't have any answers there either.
ReplyDeleteCap and Trade will, by design, make it more expensive to make inefficient use of energy. So if you want to continue driving a Hummer, then go right ahead. It will just cost more. You get to make that choice.
It will also make it more expensive to continue to use fossil fuel based energy systems to provides incentives for using more environmentally benign systems. This turns out to be not only good for the environment, but bad for terrorists as well since as we use less petroleum, the petro dictators who run most of the Middle Eastern nations will have less money to spend funding terrorist organizations. Its also good for our balance of trade and our current accounts balance. Kind of like a win win.
One more opportunity for you to actually have something specific to say.
ReplyDeleteWhich part of the Constitution do you want to believe I don't want enforced?
Ranting and Raving,
ReplyDeleteWaving your fist at the sky
And seemingly, no real willingness or ability to defend your beliefs.
Typical Conservative