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How the Rich Soaked the Rest of Us

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March 02, 2011 – Comments (36)

The answer is that we let them. - Steven

 

The astonishing story of the last few decades is a massive redistribution of wealth, as the rich have shifted the tax burden

by Richard Wolff

Over the last half century, the richest Americans have shifted the burden of the federal individual income tax off themselves and onto everybody else. The three convenient and accurate Wikipedia graphs below show the details. The first graph compares the official tax rates paid by the top and bottom income earners. Note especially that from the end of the second world war into the early 1960s, the highest income earners paid a tax rate over 90% for many years. Today, the top earners pay a rate of only 35%. Note also how the gap between the rates paid by the richest and the poorest has narrowed. If we take into account the many loopholes the rich can and do use far more than the poor, the gap narrows even more.When the Cadillac Eldorado made its debut in the 1950s, wealthy Americans were paying a top rate of tax of 90%; today, the top rate of tax is 35%.

One conclusion is clear and obvious: the richest Americans have dramatically lowered their income tax burden since 1945, both absolutely and relative to the tax burdens of the middle income groups and the poor.

Consider two further points based on this graph: first, if the highest income earners today were required to pay the same rate that they paid for many years after 1945, the federal government would need far lower deficits to support the private economy through its current crisis; and second, those tax-the-rich years after 1945 experienced far lower unemployment and far faster economic growth than we have had for years.

Historical tax rates for the highest and lowest income earners

The lower taxes the rich got for themselves are one reason why they have become so much richer over the last half century. Just as their tax rates started to come down from their 1960s heights, so their shares of the total national income began their rise. As the two other Wikipedia graphs below show, we have now returned to the extreme inequality of income that characterised the US a century ago.

The graph above shows the portion/percentage of total national income taken by the top 1%, the top tenth of a percent, and the top 100th of a percent of individuals and families: the richest of the rich. The third graph compares what happened to the after-tax household incomes of Americans from 1979 to 2005 (adjusted for inflation). The bottom fifth of poorest citizens saw their income barely rise at all. The middle fifth of income earners saw their after-tax household income rise by less than 25%. Meanwhile, the top 1 % of households saw their after-tax household incomes rise by 175%.

In simplest terms, the richest Americans have done by far the best over the last 30 years, they are more able to pay taxes today than they have been in many decades, and they are more able to pay than other Americans by a far wider margin. At a time of national economic crisis, especially, they can and should contribute far more in taxes.

Instead, a rather vicious cycle has been at work for years. Reduced taxes on the rich leave them with more money to influence politicians and politics. Their influence wins them further tax reductions, which gives them still more money to put to political use. When the loss of tax revenue from the rich worsens already strained government budgets, the rich press politicians to cut public services and government jobs and not even debate a return to the higher taxes the rich used to pay. So it goes – from Washington, to Wisconsin, to New York City.

Share of national income taken by top tranches of earners

How do the rich justify and excuse this record? They claim that they can invest the money they save from taxes and thereby create jobs, etc. But do they? In fact, cutting rich people's taxes is often very bad for the rest of us (beyond the worsening inequality and hobbled government it produces).

Several examples show this. First, a good part of the money the rich save from taxes is then lent by them to the government (in the form of buying US Treasury securities for their personal investment portfolios). It would obviously be better for the government to tax the rich to maintain its expenditures, and thereby avoid deficits and debts. Then the government would not need to tax the rest of us to pay interest on those debts to the rich.

Second, the richest Americans take the money they save from taxes and invest big parts of it in China, India and elsewhere. That often produces more jobs over there, fewer jobs here, and more imports of goods produced abroad. US dollars flow out to pay for those imports and so accumulate in the hands of foreign banks and foreign governments. They, in turn, lend from that wealth to the US government because it does not tax our rich, and so we get taxed to pay for the interest Washington has to give those foreign banks and governments. The largest single recipient of such interest payments today is the People's Republic of China.

Third, the richest Americans take the money they don't pay in taxes and invest it in hedge funds and with stockbrokers to make profitable investments. These days, that often means speculating in oil and food, which drives up their prices, undermines economic recovery for the mass of Americans, and produces acute suffering around the globe. Those hedge funds and brokers likewise use part of the money rich people save from taxes to speculate in the US stock markets. That has recently driven stock prices higher: hence, the stock market recovery. And that mostly helps – you guessed it – the richest Americans who own most of the stocks.

Relative increases in net household incomes of Americans from 1979 to 2005

The one kind of significant wealth average Americans own, if they own any, is their individual home. And home values remain deeply depressed: no recovery there.

Cutting the taxes on the rich in no way guarantees social benefits from what they may choose to do with their money. Indeed, their choices can worsen economic conditions for the mass of people. These days, that is exactly what they are doing.

36 Comments – Post Your Own

#1) On March 02, 2011 at 10:47 PM, Option1307 (29.92) wrote:

Today, the top earners pay a rate of only 35%.

Ha ha ha, ya, those cheap people only pay 35%.

I propose a new rule, you can't propose to raise taxes on certain brackets of people, unless you are in that bracket. I'm tired of hearing everybody say, "tax those evil rich folks". It's easy to say raise taxes on others, it's a whole different ball game when you talk about raising taxes on yourself included.

 

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#2) On March 02, 2011 at 10:48 PM, catoismymotor (< 20) wrote:

Devoish,

I agree with you that the tax system is broken. BROKEN. It is because of that I devote part of my off hours to promoting The Fair Tax. No system is perfect, but I believe this is the best of the ideas being floated today.

Cato

 

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#3) On March 02, 2011 at 11:21 PM, valunvesthere (< 20) wrote:

It depends how we interpret the taxation system.

This tax system is also similar in developed and even emerging world where governments are competing with other governments in trying to attract wealthy people to invest in their economies by giving huge incentives (in a form of paying less taxes). If governments heavily taxed the wealthy, the wealthy will take their wealth to another jurisdiction that taxes them less. It's a lose situation for governments (especially leftist governments) and always a win situation for wealthy people.

If we look at history, when a communist regime or extreme leftist party forms government there's mass exodus of wealthy people with their money to jurisdictions that give incentives (in a form of paying less taxes) thus exponentially crippling economy they left and exponentially boosting economy they went to.

All in all, I have no problem with wealthy people paying less taxes providing they use their wealth in investing in economy, creating jobs, spending some wealth to stimulate economy and etc. so by all means give them more incentives if they become economic engines!!! If they hoard wealth and is burden on economy then taxed them to the fullest extent!!!

Valunvesthere

 

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#4) On March 02, 2011 at 11:27 PM, Valyooo (99.61) wrote:

"All in all, I have no problem with wealthy people paying less taxes providing they use their wealth in investing in economy, creating jobs, spending some wealth to stimulate economy and etc. s"

Do you know how badly the government would influence those investments if they were in charge of enforcing it.

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#5) On March 02, 2011 at 11:43 PM, ikkyu2 (99.36) wrote:

Here's an example of how the government "influences" its "investment" of tax dollars.  Basically, the rich get richer.  Is that really news?

http://www.latimes.com/news/local/la-me-build3-20110303,0,2746481.story

 

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#6) On March 02, 2011 at 11:50 PM, valunvesthere (< 20) wrote:

@ Valyooo

I believe its the other way around!!!

3) Alot of wealthy people with massive wealth will build their business(es) private than public.

2) Usually wealthy people with alot of wealth has done their homework when investing in a jurisdiction that attracted them in the first place with agreements.

1) Governments that give INCENTIVES to attract wealthy people to invest in their economy are obviously FREE MARKET thinkers (little or no government interfernce or regulations for all businesses).

Valunvesthere.

 

 

 

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#7) On March 03, 2011 at 12:39 AM, russiangambit (29.31) wrote:

35% tax is more than enough, nobody should be taxed more. What does government do to deserve such a huge share of somebody's income? These people normally don't qualify for most government programs because they are rich, so basically they are paying for somebody else. The tax should be flat and on everybody, no matter how much you make.

This is just the federal tax we are talking about, there are also state, sales, property, gas and all kinds of taxes we pay. So, in total we pay no less than europeans but we don't get free healthcare or  higher education.

All this complicated tax system we have is achieving is creating distortions and malinvestment. US corporations pay only about 10% tax but we want individuals pay more than 35%? It makes no sense. All it will do is to force them incorporate and offshore their money.

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#8) On March 03, 2011 at 12:43 AM, HarryCaraysGhost (99.73) wrote:

I'm for the flat tax.

Cato were pretty much in agreement, just a matter of logistics.

While praising both reforms as superior to the current tax system, Daniel J. Mitchell, an expert on tax reform and supply-side tax policy at the Cato Institute, favored the Flat Tax because "I don't trust politicians."

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#9) On March 03, 2011 at 12:56 AM, L0RDZ (81.19) wrote:

How about a zero income tax and if we want  the government, than the government should be forced to work in the private sector ~ just like everyone else ~ out there hustling and a bustling ~ perhaps they could start with  some part time jobs ya know like during the 80% of the time they are just screwing around we could make them stand at the corners selling themselves or selling oranges or knives or vacuumn cleaners instead of this BS that they take money from productive people to pay for their lifestyles and ridiculous spending and gift giving to select countries, industries, unions, etc etc

Imagine the first lady having to actually work to earn some money to pay for the government her husband  wants or to pay towards the massive health care take over.

Imagine all the senators having to meet quota sales goals to fund the government so that instead of bickering and fighting and all the bs we listen and see and all the wasteful staffs are paid for by them actually having to go out and work instead of just being handed a pay check from uncle sam paid by tax payers.

Imagine all those idiot house of representative members also having to make so much money to maintain their seats.

And instead of having a supreme court justice who's gotten paid despite in 5 years not uttering one word in any type of oral argument presented towards the supreme court ~ you know the guy ~ the long john silvers watching who put that hair on my coke token minority individual who amazing has managed to get paid despite never uttering a single word ~ imagine him having to do legal work for those who are in need.

Too long have these fools in government been able to suck the life out of our economy and I say its time for them to pay for their way.

Wow what a radical original idea...

 

 

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#10) On March 03, 2011 at 1:46 AM, whereaminow (45.39) wrote:

@#6,

1) Governments that give INCENTIVES to attract wealthy people to invest in their economy are obviously FREE MARKET thinkers (little or no government interfernce or regulations for all businesses). 

That was said in sarcasm, right?

"little or no government interference or regulation" except the part about providing "incentives" which are an "interference" that must by their very nature be "regulated." 

There is no such thing as a free market government incentive. 

David in Qatar 

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#11) On March 03, 2011 at 7:07 AM, devoish (97.62) wrote:

Lordz,

Thanks for weighing in with that ridiculously extreme "rant of the elitists".

Sorry about losing the graphs when I posted. The original article is here.

A "flat" tax continues shifting the financial costs of supporting a "super rich" class onto those who actually work for their money, just as a 15% capital gains tax does, rather than treating all income equally.

Note to Option - I did not call rich people "cheap" or "evil". Neither does the article.

I propose a new rule, you can't propose to raise taxes on certain brackets of people, unless you are in that bracket.

That is not radical, it is just not a Democracy. Actually every American is taxed the same on their income. income that was worked for- up to 35%, capital gains 15%, a trip to the corporate skybox - 0%.

Best wishes,

Steven

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#12) On March 03, 2011 at 7:37 AM, dbjella (< 20) wrote:

Tax rates are funny to me. We all banter about what is the right level, but rarely do we argue about what services we want our fed, state and local governments to offer.

I am more of a small fed gov and let the states control what services they offer.  Will MS and AL be poor, probably no poorer than they are now.  But a smaller Fed gov't gives power to the people.

Right off the bat I would get rid of the Dept of Education.  To me that was a boondoggle from the get go.

Once we understand what we want to offer, then we can determine a cost and then back into the amount of tax revenue to collect.  We probably would be surprise that we are overtaxed :)

Stepping out of my euphoria......now. 

 

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#13) On March 03, 2011 at 8:51 AM, ChrisGraley (29.95) wrote:

I'm really interested at what income level do you want to tax people at 90% ?

What tax rate would be good for the people making $250k a year?

What is your income level?

 

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#14) On March 03, 2011 at 9:20 AM, L0RDZ (81.19) wrote:

I don't think having the income tax completely removed is a rant of any class,  if you look at our history in the beginning there was no big all controlling government and the taxes were none to very little and than to generate more money to fund armies and national security it was proposed and accepted that those who had plenty of assets and incomes would have some of their assets taxed to the benefit of the country, at the time the majority of people didn't qualify to get said taxed so such a policy was easily passed by our government.  As you point out over the years those with assets and power have managed to skew and screw the tax system and with the growth of the all consuming government  ~ everyone and anyone with  a source of means ~ income  ~ income producing assets ~ are now subject to taxation.

I say let the government fund itself, make government employees and politicians responsible for raising the funds to govern and pay for programs they want or deem necessary.  Its amazing how politicians  can fund raise hundreds of milllions and easily spend hundreds of millions if not billions in total to get elected and yet once on the job suddenly can't raise or make money for the government.

Imagine if all the money Obama raised to get elected and fund his caimpaign  went towards paying for the size of gov he wants.

I'm tired of paying for programs and policies that I don't agree with or for politicans that I haven't voted for,  so what would be more fairer than to have elected politicians  now responsible for funding their own laws and programs,

What i'm saying is that its ridiculous for average non rich people to be subjected to having close to half of all their earnings eventually dwindled away to pay for all the taxes ~ FED income tax, State TAX, Property tax, School tax, sales tax, liquor tax, transfer tax, Car tax, tax tax tax  tax tax tax there are thousands of taxes not to mentioned the cruelest of taxes  ~ inflation ~

Its ridiculous to look at someone who has managed to be sucessful and demand that we take more than 50% of their assets  to pay for what ?  having trolls like Nancy and other corrupt living off the tax payer institutionalized  zombies allocate your pie.

How about instead of looking to eat my pie, that you go out and bake your own not with my tax dollars but with yours.

clearly i can't be the only one ?

 

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#15) On March 03, 2011 at 9:32 AM, L0RDZ (81.19) wrote:

The rich didn't soak anyone they simply used their resources to their own benefits,  wow  they actually had a sense of self interest and self preservation, the taxes that  easily passed onto the rich got passed on to others and as the size and scope of government grew and grew to the ridiculous level of thousands of specialized czars who are responsible for blowing tax payer money, our politicians have simply found that they needed to tax everyone and yet still our taxes don't seem to match the wasteful spending of those in gov.

My solution stop feeding them.

Its like watching some big oversized pig with wings running wild eating everything saying that if you just feed me more I'll be okay and soon I'll be able to fly and you'll all see how much better things will be all the while soon the piggy will not be able to even walk thanks to its ridiculous size and the food bill.

 

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#16) On March 03, 2011 at 11:17 AM, devoish (97.62) wrote:

Lordz,

Great plan for turning the wealthy into the Government, rather than having to at least buy it.

No thanks.

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#17) On March 03, 2011 at 11:25 AM, ChrisGraley (29.95) wrote:

At least you are willing to admit that your platform supports government being bought devoish.

We are making progress!

Care to take a stab at # 13 now?

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#18) On March 03, 2011 at 11:55 AM, L0RDZ (81.19) wrote:

Devoish how many poor people do you think are in  Government ?

How many homeless ?  destitute ? utterly without means to support themselves or others are in elected offices ?

How many wealthy people aren't in Government ?

How many wealthy people are without supporting casts of accountants, lawyers, business overseers, consultants, tax planners who at the very least look out to make sure their clients are served.

Who really pays for the government  and receives the greatest benefits from a stable rule of rich person law government if not the ubber wealthy.

Charles my guess is that Dev doesn't mind the gov drinking from the other side of the cup  ~ thinking that somehow his side of the cup doesn't get drained, but I could be wrong (not)

From the movie there will be blood

My straw drinks your milk shake   

slurp slurp slurp

Anytime the less well off think they can manipulate  the system and laws so as to think they will be punishing those with means ~ usually only end up hurting themselves and painting themselves in corners.

Look at how the taxation laws changed, imagine how much better things would be if the masses didn't allow such change.

Slurp slurp slurp

 I drink your milk shake with my long straw

slurp slurp slurp

funny how someone elses milk shake always tastes better when its free.

 

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#19) On March 03, 2011 at 6:58 PM, ckd5555 (< 20) wrote:

Wow, there are quite a few right-wing nutjobs on this site. 

First, I don't think the author is suggesting a 90% tax.  

Second, as the graduated income tax became more even (e.g. instead of a 90% tax on income over a certain rich threshold, we now have a 35% tax, which is closer to the median tax), inequality in this country has also gone up.  That is fact.  Whether it is solely caused by taxes or is the result of deregulation, the internet age, etc. is up for debate.  I think taxes are part of that cause.

Third, you might think income disequality is okay.  I do too.  Democrats are not communists.  We just have a different ideal income inequality level than you.  I think we can all agree that the 90s were a pretty good time.  Were taxes too high then?  Why are 90s taxes too high right now?

Fourth, I'm all for cutting government spending.  But let's cut entitlement spending for seniors first.  I do want to invest in education, infrastructure and jobs for the 21st century (which is almost all found in discretionary spending).

Fifth, the question in #13 is quite the "gotcha" question.  There's no good response.  And again, just to reiterate, my understanding is that Dev was not suggesting a 90% tax but was instead noting that the 1950s had a greater growth rate than we currently have.

Sixth, if the trend continues, more and more people will earn their money the old fashioned way - by inheriting it.  I'd prefer a society that rewards entrepreneurship.

Seventh, the goal of all of this economic growth is to enhance the material lives of all of the citizens, not just a small portion of it.  You might claim you have to work for it.  I agree.  But let's make that true on both ends.  Make the poor work for it, but make the rich work for it too (rather than inheriting it).

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#20) On March 03, 2011 at 7:23 PM, 5thand7th (< 20) wrote:

Many people who make < $40,000 per year pay little, none or sometimes negative income tax (they get everything back plus some more), what with all the deductions, credits, etc.

The growth rate in the 50's can be attributed in large part to the post war boom, babies being born, our status as maker of just about everything - tax rates didn't have much to do with it.  The rich people just sheltered more of their money back then due to the high tax rates.

There have always been rich people and poor people.  There always will be no matter how hard people try to even it out.

There is a story that if you took all the money in the world and split it evenly among everybody, that within a year, the rich people would be rich again, and the poor people would be poor again.  And I for the most part believe it.

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#21) On March 03, 2011 at 7:27 PM, russiangambit (29.31) wrote:

> But let's make that true on both ends.  Make the poor work for it, but make the rich work for it too (rather than inheriting it).

How will you make rich "work for it"? They already got the "it". Are you suggesting we take away their money if they don't work?

In the USSR it was illegal not to work, everybody had to work regardless of whether the work was enjoyable or of any use. You had to work. You want to stay home and raise your kids? Nope, not allowed, it is a crime.

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#22) On March 03, 2011 at 7:40 PM, 5thand7th (< 20) wrote:

And I should of added that there will always be envious people who, if they can't have what the other guy's got, they want to figure out how to take it away from him.

I think most rich people do and have worked for their money.  Most are smarter in a business sense, are more motivated, and have something inside them that other people don't necessarily have.

I agree that there are alot of rich people who have inherited their money and are somewhat useless.  But, that doesn't make it right to take the money away because they didn't earn it.  Somebody else did, it got taxed probably more than once, and it got passed along.

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#23) On March 03, 2011 at 7:40 PM, devoish (97.62) wrote:

ckd5555,

Thanks for the calm and rational reply. You are correct in that I did not suggest a 90% top income tax rate. I would like to clarify though. I could see a 90% top rate for a limited time period to balance the budget or get it closer to balanced. It should also cover all capital gains, except what is in IRA's and 401k's (I have money invested outside of tax advantaged vehicles Chris).

As far as Chris' "gotcha" question goes I don't think it is unfair for him to ask what tax level I would set even though he actually asked who I would tax at 90%.

I just don't have an answer yet.

Best wishes,

Steven

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#24) On March 03, 2011 at 8:33 PM, ckd5555 (< 20) wrote:

>How will you make rich "work for it"? They already got the "it". Are you suggesting we take away their money if they don't work?

>In the USSR it was illegal not to work, everybody had to work regardless of whether the work was enjoyable or of any use. You had to work. You want to stay home and raise your kids? Nope, not allowed, it is a crime.

I wouldn't expect a rational answer from a Republican.  How about this less drastic solution:KEEP the estate tax.

Look, I'm in the top bracket (top 5%ish).  I have no problem with people being rich.  Hell, I want to be in the top 1% some day.  To that end, I'll invest intelligently, work hard and be an entrepreneur.  I do not want my children (when I have them) to think, however, that they don't have to work.  They do and they will.  

You might argue that I've already paid taxes on the money my kids will eventually inherit.  That's true.  But taxes have two main goals: (1) raise revenue and (2) encourage a productive society.  I do agree that we need to fix things on the lower end of the spectrum as well (get rid of or loosen certain security nets) but I also think that we need to fix things on the higher end.  Money is not being used productively.  Rather than building infrastructure, we're investing in exotic derivatives.  That isn't productive and, in fact, is counter productive.  Why not tax that?

This fundamentally gets down to the question of whether the government knows better than the free market.  On the whole, I prefer a balance (as we've always had).  Both have their downsides (see European welfare state vs. financial crisis). But I think that the financial crisis was worse (and would have been even worse if not for the bailout and stimulus).

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#25) On March 03, 2011 at 9:12 PM, russiangambit (29.31) wrote:

> I wouldn't expect a rational answer from a Republican.  How about this less drastic solution:KEEP the estate tax.

I am deeply insulted  (not really, but almost). I can't stand most  politicians. When given 2 choices - democrat vs. republican I vote democrat. But if my screen name didn't clue you in - I grew up in USSR, and I am well aware of how such good intentions as yours end.

> Money is not being used productively.  Rather than building infrastructure, we're investing in exotic derivatives.  That isn't productive and, in fact, is counter productive.  Why not tax that?

I actually agree that US wealth is being wasted and not used productively. Fine, put a higher tax on capital gains. Except they'll just simply move to a country where there is no tax on capital gains. Yet, somehow US has the more speculation in stock market than in those countries. I think it is because there is too much money funneled into US financil sector. To stop that you have to start with the fed ( slow down the flow of liquidity), taking power of corporations to inflence the election process, and cutting the government cheese , i.e. spending.  Taxes just need to be simplified to take power from politicians and also cut all the beauraucracy build around maintining and gaming the tax system. Making tax system more convoluted is counterproductive and what is worse it is just a smoke screen, it it not going to solve the problem of wasting the wealth, only make it worse.

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#26) On March 03, 2011 at 10:17 PM, valunvesthere (< 20) wrote:

Certain security nets seems to be INCENTIVES to encourage people not work because of knowing big brother will be there to take care of them (procastinate in finding work or not work at all). By eliminating certain security nets people will work at what ever work they could find (like it or not like it) to buy food, pay rent, and etc.

If government tax less on people who earn more money it's giving INCENTIVES to encourage people to be more entrepreneurial, innovative, productive, risk takers, and etc all of which contributes to the economy.

It seems nowadays governments are afraid to give INCENTIVES (in forms of tax cuts and etc.) to encourage people to work and make as much money as possible and not being afraid to climb high up the tax brackets, because there are too many people who don't want to work and rather have big brother give them free money or they'll vote big brother out in the next election.

Valunvesthere

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#27) On March 04, 2011 at 12:05 AM, HarryCaraysGhost (99.73) wrote:

A "flat" tax continues shifting the financial costs of supporting a "super rich" class onto those who actually work for their money

Would it suprise you to know that whilpool is paying no taxes this year, Ge's tax bill is almost nil.

If everbody was paying the same percentage it would actually be a windfall of tax revenue. In  theory it could eliminate the deficit.

Unfortunately, My faith in government not blowing the increased revenue like a crackwhore who had a good night is also nil.

Warren Buffett has mentioned many times that it is madness that he pays a lower percentage of taxes then his secretary.

The main argument against a fair or flat tax is what would happen to the whole beancounting industry. My solution is phase it in over a two year period. Every accountant I've ever met is a bright person so I'm sure they could regroup in that time span. Granted, some of the pinheads at the I.R.S would be S.O.L

You could classify myself as either lower middle class or middle class depending on how my year went. Should I really be burdened with 35% to 50% taxes. While the uber rich pay less then 10%

 

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#28) On March 04, 2011 at 12:44 AM, ChrisGraley (29.95) wrote:

I chuckled very hard at ckd5555 calling russian a republican, it was almost as funny as calling me a right-winger.

The funny thing about a 2 party system is that whichever side that you argue with they only know one name to call you. The names are polar opposites depending on whatever side you are arguing with.

devoish posted an article with the headline the the rich are soaking us. The article said that the world is ending because they are no longer taxed 90% and didn't mention that 35% of $1,000,000 is a hell of a lot more than 35% of $10.

Now I post this and I know that your reaction is that I must not have an understanding of living paycheck to paycheck and the hardship of a 35% tax on the middle class. Well for a good part of my life I couldn't even dream of being as wealthy as they middle class. I was much more worried about finding food.

The thing for me after struggling to get out of a situation like that is the absurdity of thinking that anyone should pay 35% taxes for the betterment of the community. 

This 35% is outside of the state, local, and consumption taxes and licenses and fees paid by the average consumer.

So lets just go with the 35% and ignore the reality that is well over 50% as the normal tax burden. Let's just say that everyone in the country pays just the 35%.  

Does a government that has the track record of our government. (A government that gets bought by special interest according to devoish) have a right to control more than a third of our GDP?

I really haven't looked at the numbers, but I don't think that I'm in upper 5% like you are. I'm getting there, despite a government intent on working against me.

So let's all just forget about the atrocity of the government taking away 90% of your prosperity and let's just talk about taking away more than 1/3 rd of your prosperity. (If we figured in State, Local, etc... it's actually well over half, but we'll ignore that too, so we can all be civil)

This country was supposed to be founded on life, liberty and the pursuit of happiness. It's supposed to award accomplishment.

It's not supposed to be a country that dictates to you that you are only entitled to a reward of 65% of your efforts, or 45% of your efforts or 10% of your efforts.

russian is right that you will tax people out of the country. I have a few passports ready and a boat standing by.  Not so much about what you will tax me though, but more about what your solutions for the country are. 

The more that you want to put the growth of the country in the hands of the government, the more that I respond to the fact that you don't understand that politicians put personal gain above the gain of their country.

That's both the left side and the right side BTW! Both sides are equally corrupt! I put that in bold to in case you wanted to continue on that right-winger thing. 

Ok so lets get back to the "Shame on the rich for not being taxed 90% anymore" thread. 

I know devoish doesn't want to go on record to set an income level for a 90% tax.

I also know that he doesn't want to go on record to pick a tax for a guy making $250k.

So lets just pick a generic guy with an undetermined amount of income. How much of his prosperity is a fair amount to take away from him?

It's not really fair of me to put both of you on the spot without going on record myself, so I'll lay my tax plan for you to disect.

First off, I'll have no corporate tax (it's paid by the consumer anyway), no income tax, no estate tax and no capital gains tax.

To pay for the government that we have now, (personally I think that we can get by with government at about 1/7th of what we have right now) I would start a 42% sales tax. From this tax, I would omit food, shelter, gasoline, education and healthcare. Taxing any of these things is regressive and not fair to people on fixed incomes.  If you really want to be fair to the poor, you need to concentrate on eiminating regressive taxes.

If you are right, and the wealthy are partying hard at a low tax rate then we can tax the big screen TV's and yachts and botox injections at 42% instead of 35%. The guy on social security should pay nothing. They earned the right to pay nothing before you or I were born. We stand on a platform of growth that they built despite all attempts by government to weaken the structure of that platform. 

So don't let me put you on the spot guys.

Pick the amount of prosperity to take away from the average Joe.

You can pick any income level above the amount that the average Joe makes that makes that person evil and tell me how much prosperity is acceptable to tax away. These rich people are soaking you, so point them out and tell everyone what you are going to do about it!

I'm on the side that making money is not bad as long as you aren't bribing a politician for the right to make money. 

The next part has to do with economics, so I know it's hard to understand for the liberal types, but I'll say it anyway. For a good economy (or good personal finances for that matter) you have to take in more money than put out. 

What you need to promote is Everyone making money and once they make it, they should try to save as much as possible and spend well within their means.

So is it a brilliant idea to tax someone for succeeding in life or is it a better idea to tax them for living the high life when they could be saving money and lifting the country's reserves?

It's a funny thing, in my world, I can point out the evil people pretty easy. I picked a 42% sales tax to pay for our current government, but I think we could get by with a 6% sales tax for an optimum government.

I will tax poor people much less than you will because I will tax them nothing as long as they are just paying for their own survival. If they want to buy a big screen TV, they get taxed just like the rich guys though. The result of this is that we teach poor people to save and invest money. 

Forgive me for wanting to teach poor people to save and invest money. I grew up poor and nobody was really promoting that to me at the time. It's the only way that I got out of being poor though. I was blessed enough to understand economics. I'm not diluted enough to think that taxing productivity is the answer.

So in my personal opinion, if you really want to tax the evils and excesses of the rich, tax their consumption and not their productivity. I put a number out there. 42%. That number supports a much bigger government than I agree with. The government that I agree with can be supported with about a 6% consumption tax.  When you tax the productivity of that 1 rich man, you eliminate the possibility of several wage earners to grow with him.

Is it better to penalize a man for making money or for wasting money?

What's better for the economy?

What's better for the poor?

What's right and what's wrong?

Last but not least, who's really thought about this and who's out there making a political statement?

devoish, if you are going to call out a rich man for not paying enough, you should at least be able to say what is enough.

If you can't say that, it's a sign that that no matter what that man pays, it's never going to be enough.

 

 

 

 

 

 

 

 

 

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#29) On March 04, 2011 at 3:35 AM, valunvesthere (< 20) wrote:

ChrisGraley

"if you really want to tax the evils and excesses of the rich, tax their consumption and not their productivity."

If we tax consumption won't it reduce production?

I believe if consumer goods are highly taxed consumers would spend less and merchandises will be produced less, thus hampering and slowing economic growth. If you compare sales tax from Canada and the United States of America. The Canadian dollar (as of time writing) is at par with the US dollar and many Canadians are crossing the border to the United States of America to purchase big ticket items because State Sales Tax are lower than Harmonized Sales Tax or Provincial Sales Tax + Goods and Sevice Tax with  the bonus of the Canadian dollar at par with the US dollar thus hurting the Canadian economy.

The same as the Province of British Columbia where it had PST (Provincial Sales Tax) and GST (Goods and Service Tax) and its neighboring Province of Alberta only had GST (Goods and Service Tax). Alot of British Columbians purchased big ticket items in Alberta hurting British Columbia's retail sector. Now British Columbia has combined PST and GST called HST (Harmonized Sales Tax)  which costs consumers but supposedly (time will tell) business friendly (attract investments, increase exports, manufacturing and etc). Finally heavily taxing consumption will hurt manfacturing, distribution, retailing and etc. 

Valunvesthere

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#30) On March 04, 2011 at 8:58 AM, ChrisGraley (29.95) wrote:

"If we tax consumption won't it reduce production?"

No, it reduces consumption! High local consumption is not necessary in a global economy.

Economically, if we ever get in a spot where we produce more than we consume, the world will be in a better place.

That saved/invested money produces jobs. That saved/invested money grows the economy.

Tax prosperity and you limit prosperity.

Tax consumption and you limit consumption.

Tax someone 90% and they take their productivity somewhere else.

cdk5555 posted "We are not communists"

If you're not, then don't tax productivity. Being productive isn't bad. Tax the spoils. Tax the consumption. And don't tax the necessities of life!

It amazing how the thought process of what is fair changes when you have your hands in someone else's pockets.

The commonwealth State that taxes food, basically taxes life.

You have the right to Life, Liberty and the pursuit of happiness.

No entity has the right to tax you simply for living.

The more any entity takes liberties with taxes, the more inclined it is to tax liberties.

Anyone confused enough to think that any entity (including government) will spend their money with their best interests in mind and more efficiently than they would have on their own, deserves a communist state.

"We are not communists"

No, you are just people that want to control a large part of the state productivity so you can force spending on programs that in your opinion, benefit the majority of the population no matter if  they want it or not.

Shame on them for not agreeing with you for how to best spend the fruits of their labor.

Freedom after all, is the best demostrated by you spending their money for them.

When Patrick Henry said "Give me liberty or give me death!" , I don't think he realized that you'd tax him for dying.

Shame on the wealthy Patrick Henry for being productive and having the audacity to die. We should take some of his money for that.

If we want to be really efficient, we could tax him at birth. Shame on him for being born. We can tell by his eyes that he wants to be one of those productive people.

If you can't see that taxing productivity reduces productivity, you deserve the communist state that you are striving for.

I should remind the pigs that you eventually get to the point where "some pigs are better than other pigs" though.

Good luck with your benevolence,

Chris

 

 

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#31) On March 04, 2011 at 9:38 AM, edwjm (99.87) wrote:

Chris Graley says:  "If you are right, and the wealthy are partying hard at a low tax rate then we can tax the big screen TV's and yachts and botox injections at 42% instead of 35%. The guy on social security should pay nothing. "

It seems to me that a government as small as you seem to advocate could not afford social security.

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#32) On March 04, 2011 at 10:27 AM, ChrisGraley (29.95) wrote:

Well when we are taxing at 42%, that is with government as it is now.

Once we are taxing at 6%, social security still exists, but it's privatized. That privatization would need to be phased in over decades to honor our commitments to seniors that were foolish enough to depend on the government to manage their money for them though.

 

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#33) On March 04, 2011 at 7:08 PM, devoish (97.62) wrote:

Income tax - 75% of your income percentile. As an example, if your income puts you at the 90th percentile your tax would be 67.5%. If you are at the 100th it woul be 75% and if you were at the 50th it would be 37.5%

This would also apply to the incomes (revenue) of the "people" known as corporations. Unless they lose the legal status of being people. Frankly I think it is inherently corrupting to allow an international conglomerate unlimited financial influence over the messaging of elections in the USA. If they lose the legal satus of being people, then they can be taxed on revenue at 20%, no deductions.

This tax level would apply until the USA is solvent, and SSI is fully funded, and Medicare is fully funded, and ChrisGraley's goal of the highest income is 35x that of the lowest, lowest to be defined as bottom 5th percentile because I don't want to limit the wealthiest to those who will never earn a dollar.

If Chris leaves and takes his wealth and productivity with him that will get us there that much quicker.

Additionally, The Fed reserve banks are history. No longer are they needed to distribute money. This is not 1930. If Bernanke thinks the economy needs more money he can deposit it into SSI and distribute it by increasing the money paid out to Americans who earned it all their lives first, and make the financial industry come begging with interest rates to them for it, rather than the other way around.

I could go on, but I'll stop here for now.

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#34) On March 07, 2011 at 10:18 AM, ChrisGraley (29.95) wrote:

I'm with you on the FED thing.

Are you taking 75% of my money before you kick me out devoish?

and ChrisGraley's goal of the highest income is 35x that of the lowest, lowest to be defined as bottom 5th percentile because I don't want to limit the wealthiest to those who will never earn a dollar.

I initally sought CEO total compensation at 35x times the lowest paid employee, (not the 5th percentile, but actually the lowest paid guy) but I see a flaw in that now.

Companies will structure their payrolls so that there is no job progression and no in between payroll slots. If you try CEO as a multiple of the average pay it will give companies an incentive to overstaff and overpay other management positions to get the average up. The answer should be a multiple of both in order to create a higher starting wage and job progression.

I'm still working on a solution. I'm thinking that both a multiple of lowest pay and average pay would be in order. I'll let you know what I come up with.

 

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#35) On March 09, 2011 at 8:04 AM, devoish (97.62) wrote:

Are you taking 75% of my money before you kick me out devoish?

First, I am not kicking you out, I am letting you choose to run.

Second. If your are among the 3000 that receives more of the countrys income than 100 million gainfully employed Americans then Rd80 says you need to be taxed at 95% to balance the budget, but I think it should be done for less over a longer period of time.

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#36) On March 10, 2011 at 12:08 AM, valunvesthere (< 20) wrote:

@ devoish

As the saying goes, "Never bite the hand(s) that feeds you".

How much of the 100 million gainfully employed Americans jobs rely on taxpayers money or funding?

How much of the 100 million gainfully employed Americans jobs rely on the 3000 who create jobs that produces goods and services and pays wages that are taxed?

What should the ratio be on non-government jobs (rely on selling goods and services to stay afloat)  to government jobs (rely on taxing non-government jobs and nearly everything to provide public services) for an economy to be extremely healthy?

Valunvesthere

 

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