Can Afford Higher Taxes. Will Work Less.

Why would medicare come out of that $1,000? The writer of the article is a liar.

part of self employment tax. As a private contractor, he has to pay the whole of the FICA and medicare thing.

"IRS Web Page" said:
SE tax rate. The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).

Maximum earnings subject to SE tax. Only the first $106,800 of your combined wages, tips, and net earnings in 2009 is subject to any combination of the 12.4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax.

All your combined wages, tips, and net earnings in 2009 are subject to any combination of the 2.9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax.

Fiscal year filer. If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year.

Self-employment tax deduction. You can deduct half of your SE tax in figuring your adjusted gross income. This deduction only affects your income tax. It does not affect either your net earnings from self-employment or your SE tax.
He claims this would be on top of his $250,000 salary. Therefore he would not pay medicare.
 
Check the quote. Social security has a limit. Medicare does not. You pay medicare tax on all earned income.

So he would pay the medicare.


After 125,000 Social Security tax goes away.
 
People make decisions on the margin. you move the margin, you change the decisions they make.

Lower income people have no real choice in the matter. They have to produce to the limit of their time, or they lose.

At the level of income that the Tax cuts are at, increases in taxes result in less economic activity, which means those who need the services do without, and the government looses income.

Is that what happened after the Clinton tax increase? How does that compare to what happened after the Bush tax cuts?

How can you cry about deficits on one hand, and insist on defunding the government on the other?
 
the laffer curve......

where does it turn back toward the y-axis?

on the laffer example...anything above 50% rate for taxes, reduces tax collections I believe it says....

is that what you were asking?

The concept does not have numbers attached, as it is personal to each individual depending on his own circumstances.

It is a garden variety Marginal revenue curve flipped upside down.

At the point where marginal cost of getting that next dollar exceeds the marginal gain from that next dollar, then people go "the hell with that!" and put in fewer hours doing productive labor, to the point where they perceive themselves better off by working harder.

It was a big deal in the 70s because large numbers of people were bailing out of the normal labor market, and going natural, bartering etc. The "Whole Earth" thing was a Laffer Curve response. What is the point of working so hard, when what you have to show for it is so little?

So it is a better thing that now the people that are doing this are forced into it by the financial shenanigans that increased the wealth of the already wealthy, and put millions of americans out of work?
 
No one puts a gun to anyones head to do an extra bit of work. People work more now because the marginal return is greater. If the game is not worth the candle, they don't bother
 
the laffer curve......

where does it turn back toward the y-axis?

on the laffer example...anything above 50% rate for taxes, reduces tax collections I believe it says....

is that what you were asking?

The concept does not have numbers attached, as it is personal to each individual depending on his own circumstances.

It is a garden variety Marginal revenue curve flipped upside down.

At the point where marginal cost of getting that next dollar exceeds the marginal gain from that next dollar, then people go "the hell with that!" and put in fewer hours doing productive labor, to the point where they perceive themselves better off by working harder.

It was a big deal in the 70s because large numbers of people were bailing out of the normal labor market, and going natural, bartering etc. The "Whole Earth" thing was a Laffer Curve response. What is the point of working so hard, when what you have to show for it is so little?

I think there is little doubt that the marginal amount of both tax revenues and economic activity decreases when taxes increase from these levels. However, there is no evidence at all that absolute amounts decrease.

There was a good article in Grant's Interest Rate Observer a few months ago which noted 11 major tax increases over the past century, and every single time, economic growth was higher. GDP per capita has grown pretty steadily for at least the past 140 years, regardless of what the taxes were.
 
on the laffer example...anything above 50% rate for taxes, reduces tax collections I believe it says....

is that what you were asking?

The concept does not have numbers attached, as it is personal to each individual depending on his own circumstances.

It is a garden variety Marginal revenue curve flipped upside down.

At the point where marginal cost of getting that next dollar exceeds the marginal gain from that next dollar, then people go "the hell with that!" and put in fewer hours doing productive labor, to the point where they perceive themselves better off by working harder.

It was a big deal in the 70s because large numbers of people were bailing out of the normal labor market, and going natural, bartering etc. The "Whole Earth" thing was a Laffer Curve response. What is the point of working so hard, when what you have to show for it is so little?

I think there is little doubt that the marginal amount of both tax revenues and economic activity decreases when taxes increase from these levels. However, there is no evidence at all that absolute amounts decrease.

There was a good article in Grant's Interest Rate Observer a few months ago which noted 11 major tax increases over the past century, and every single time, economic growth was higher. GDP per capita has grown pretty steadily for at least the past 140 years, regardless of what the taxes were.

But never in an economy already flat on its back.
 
FDR raised taxes during the Depression and the economy grew.

But otherwise, yeah. We shouldn't be raising taxes now.

FDR's economy stayed in a coma for 10 years.

Just like the one we're in now.

Actually, the economy under FDR grew powerfully. But then again, it fell powerfully too.

It was dead in the water until WWII came along. It was propped up by nothing but transfer payments from government.
 
FDR's economy stayed in a coma for 10 years.

Just like the one we're in now.

Actually, the economy under FDR grew powerfully. But then again, it fell powerfully too.

It was dead in the water until WWII came along. It was propped up by nothing but transfer payments from government.

Not true.

GDP from 1933 to 1939 was, if I recall correctly, the fastest growing since that time

fredgraph.png
 
Actually, the economy under FDR grew powerfully. But then again, it fell powerfully too.

It was dead in the water until WWII came along. It was propped up by nothing but transfer payments from government.

Not true.

GDP from 1933 to 1939 was, if I recall correctly, the fastest growing since that time

fredgraph.png

The Depression ended for every country except fro America.
DoD spending started to pull us out.
Entrance into WW2 marks the end of the Great Depression

FDR made things worse, and extended the Depression, into the Great Deression by spending.
 
It was all goverment spending, and it did crash again, before the war, and did not attain pre-Depression levels until the 1970s.

The people who are in the best postion to get the country off its back aren't going to bother, thanks to higher taxes.
 
The Depression ended for every country except fro America.
DoD spending started to pull us out.
Entrance into WW2 marks the end of the Great Depression

FDR made things worse, and extended the Depression, into the Great Deression by spending.


So what you're saying is that FDR's spending didn't go far enough. But rather, it took massive government spending to end the Great Depression.
 
The Depression ended for every country except fro America.
DoD spending started to pull us out.
Entrance into WW2 marks the end of the Great Depression

FDR made things worse, and extended the Depression, into the Great Deression by spending.

It was all goverment spending, and it did crash again, before the war, and did not attain pre-Depression levels until the 1970s.

The people who are in the best postion to get the country off its back aren't going to bother, thanks to higher taxes.

Both of these are incorrect and the statistics back it out, other than the 1937-38 recession, which was precipitated by cutting the budget deficit and tightening monetary policy.

But that's not the issue here. There have been many, many New Deal threads on USMB. I'm not turning this thread into one.
 
The Depression ended for every country except fro America.
DoD spending started to pull us out.
Entrance into WW2 marks the end of the Great Depression

FDR made things worse, and extended the Depression, into the Great Deression by spending.


So what you're saying is that FDR's spending didn't go far enough. But rather, it took massive government spending to end the Great Depression.

In a fashion,

the government created jobs by spending on getting ready for war.
Welfare was a stop gap, and (if I recall correctly) was suppose to end.

So if we take the GD as an example. Spending in the DoD will create jobs, hopefully here, and the economy will recover. It will take longer this time, b/c there is no draft, so no jobs will be created that way.
 

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