How Much Revenue will Government Gain from Tax the Rich?

[rdean]

How Much Revenue will Government Gain from Tax the Rich?

How much additional revenue will the government collect from increasing taxes on those making over $1 million a year? On those making $250k a year?

Be sure to factor in some Laffer curve bias.

Will this additional revenue cover the government spending gap?

Can we give the rich incentives to pay higher taxes?

Come on Democrats, Make your best case!

Considering the Bush 2.4 trillion dollar tax cut that was passed through the same reconciliation that Republicans hate did nothing to help the country and more than 52% went to the top 1% and all of those that were millionaires and billionaires only saw their fortunes swell, I would say we could start there. That would bring back over a trillion dollars from people who never needed it in the first place.

Link?

Link to what? The Bush tax cuts? Is this a joke? You didn't know that Bush cut taxes to the tune of 2.4 trillion and more than 52% went to the top 1%? This is what everyone has been arguing about since Bush's first term.

 

[FireFly]

We should tax the government unions & their members. Since they have money to blow on dues they can afford to pay their fair share. They only work 20 years & get paid for the rest of their life. When you add their benefits they are the rich.

 

[KissMy]

So far the highest additional tax revenue proposed is $300 billion a year. That will barely make dent in our $1.4 Trillion annual deficit. The deficit is much to large to grow our way out of. We must cut government wages & spending. History proves that higher government wages & spending does not lower unemployment.

 

[Wiseacre]

Considering the Bush 2.4 trillion dollar tax cut that was passed through the same reconciliation that Republicans hate did nothing to help the country and more than 52% went to the top 1% and all of those that were millionaires and billionaires only saw their fortunes swell, I would say we could start there. That would bring back over a trillion dollars from people who never needed it in the first place.

Link?

Link to what? The Bush tax cuts? Is this a joke? You didn't know that Bush cut taxes to the tune of 2.4 trillion and more than 52% went to the top 1%? This is what everyone has been arguing about since Bush's first term.

Joke's on you dude, get your facts straight before you jump on somebody else. The below is from cnn.money.com:


" Treasury estimates the costs of making the tax cuts permanent for everyone is $3.7 trillion over 10 years.

Of that, $3 trillion accounts for the cost of extending them for the vast majority of Americans, as the president has proposed. The remaining $700 billion is the cost of extending them permanently for the high-income earners. "

 

[Lovebears65]

I think its stupid to tax the rich again. They are already paying most of the taxes in this country. Most of the so called"rich" are small business owners who creates jobs. Do you think if they put this in action that it will make the unemployment even worse. There are so many small business owners who gross over 250,000 but do not bring that home to their family. With Obama's plan this will destroy their business and many people will lose even more jobs..

 

[Intense]

I think its stupid to tax the rich again. They are already paying most of the taxes in this country. Most of the so called"rich" are small business owners who creates jobs. Do you think if they put this in action that it will make the unemployment even worse. There are so many small business owners who gross over 250,000 but do not bring that home to their family. With Obama's plan this will destroy their business and many people will lose even more jobs..

How many days a year do Federal and State Employee's average??? What is the average of the Self Employed???
Maybe we should Tax Vacation time or just put a Surcharge on it???
Is 50% too high???

 

[editec]

Here's a thought...tax all revenue exactly the same way.

Tax all revenue?

Yes, as in taxes being called "revenue" to the government.

\

So if a business has $1 Million in revenue but $950,000 in costs you suggest that the tax be levied on $1 Million?

Tell ya what...I'll pretend that you're not an idiot if you do the same, okay?

I think you mean tax all income the same way. In that case...

How much money will that raise for the federal government? Remember that some of the money currently taxed at 15% is profit long term capital gains that currently makes a 5% ROI before tax and 4.25% after tax. If all income is taxed as income at the current 35%, then that means the after tax return would diminish to 3.25%.

A valid complaint.

Low margin businesses just wouldn't be worth the risk and that's a lot of restaurants, gas stations, and owner-operator mom & pop stores that would close. How would that affect government revenue?

No, actually this one is not relevant to the discussion, I think.

If anything, if all income was taxed the same SMALL businesses (real small businesses, not multimillion dollar a year corporations which fit in the insane SBA definition of small) would benefit from a FAIRER tax system where they weren't being expected to make up the difference that the investor class isn't paying

The people who would pay more are that class of investors whose revenue sources (AKA income for purposes of this discussion) would end up paying much higher rates of taxes than they currently do. No more "tax free" revenue bonds would exist for example.

A jump from 15% to whatever the highest rate of taxes would be would under those conditions be a staggeringly high increase in that class' RATE of taxation.

 

[mudwhistle]

The truly wealthy never have any taxable income, so no tax increase will hit them. They have their wealth hidden in phony "charities" that they control. The only way to get them to pay their fair share of taxes is to end all charity deductions, and tax all "charities."

For example: The DuPonts had their house declared a historical site and then set up a "charity" to maintain the historical site. They packed the board with family members and required that the head of the board must be an immediate family member. They then donated the historical site to the foundation and specified that the head of the foundation lives in the house. They now get a tax deduction for the value of the house they live in and a tax deduction for their electricity, heat, etc. When the head of the foundation dies, the next family member becomes the head and lives in the house without paying a penny in inheritance taxes.

August 7, 2007
CALLER: And, you know, and the way our tax system works, we have an overly complex system, which in and of itself is a problem, but the way our tax system works and the way the tax laws are written, it's based on a few kind of like hinge numbers like adjusted gross income and taxable income, and while the soak the rich -- or however you choose to describe it -- really doesn't come down that way. It really comes down to much lower income levels.

RUSH: It does, exactly, and here's the dirty little secret if you ever to pull it off. It's hard. This is why most people don't understand the tax-the-rich business. You've got to structure your life so you have no "earned" income. I'm out of time. I'll explain that. There's a category called earned income versus other kinds of income. Earned income is what the income tax rate is on. That's how "the rich" do it. They don't have "earned" income.
END TRANSCRIPT

The Truth About Taxes
August 6, 2007
RUSH: I've told you before: the income tax is designed to keep people like his [Buffett's] secretary from becoming wealthy! There is no "wealth" tax. So this is a big misnomer. ...
But there's no tax on wealth. There is a tax on income, and the tax on income is designed to keep everybody who is not wealthy from getting there.

I'm talking about genuine wealth, not the way Democrats define "rich."

Maybe we should start by taxing Black Churches.

I wonder how that would go over.

 

[edthecynic]

The truly wealthy never have any taxable income, so no tax increase will hit them. They have their wealth hidden in phony "charities" that they control. The only way to get them to pay their fair share of taxes is to end all charity deductions, and tax all "charities."

For example: The DuPonts had their house declared a historical site and then set up a "charity" to maintain the historical site. They packed the board with family members and required that the head of the board must be an immediate family member. They then donated the historical site to the foundation and specified that the head of the foundation lives in the house. They now get a tax deduction for the value of the house they live in and a tax deduction for their electricity, heat, etc. When the head of the foundation dies, the next family member becomes the head and lives in the house without paying a penny in inheritance taxes.

August 7, 2007
CALLER: And, you know, and the way our tax system works, we have an overly complex system, which in and of itself is a problem, but the way our tax system works and the way the tax laws are written, it's based on a few kind of like hinge numbers like adjusted gross income and taxable income, and while the soak the rich -- or however you choose to describe it -- really doesn't come down that way. It really comes down to much lower income levels.

RUSH: It does, exactly, and here's the dirty little secret if you ever to pull it off. It's hard. This is why most people don't understand the tax-the-rich business. You've got to structure your life so you have no "earned" income. I'm out of time. I'll explain that. There's a category called earned income versus other kinds of income. Earned income is what the income tax rate is on. That's how "the rich" do it. They don't have "earned" income.
END TRANSCRIPT

The Truth About Taxes
August 6, 2007
RUSH: I've told you before: the income tax is designed to keep people like his [Buffett's] secretary from becoming wealthy! There is no "wealth" tax. So this is a big misnomer. ...
But there's no tax on wealth. There is a tax on income, and the tax on income is designed to keep everybody who is not wealthy from getting there.

I'm talking about genuine wealth, not the way Democrats define "rich."

Maybe we should start by taxing Black Churches.

I wonder how that would go over.

It figures you would take a racist approach to the problem.
We should start by taxing ALL churches, funds, foundations, etc.

June 14, 2007
RUSH: -- a lot of people, a lot of people wealthy people set up foundations and they do this to keep the government from getting the money.

 

[mudwhistle]

The truly wealthy never have any taxable income, so no tax increase will hit them. They have their wealth hidden in phony "charities" that they control. The only way to get them to pay their fair share of taxes is to end all charity deductions, and tax all "charities."

For example: The DuPonts had their house declared a historical site and then set up a "charity" to maintain the historical site. They packed the board with family members and required that the head of the board must be an immediate family member. They then donated the historical site to the foundation and specified that the head of the foundation lives in the house. They now get a tax deduction for the value of the house they live in and a tax deduction for their electricity, heat, etc. When the head of the foundation dies, the next family member becomes the head and lives in the house without paying a penny in inheritance taxes.

August 7, 2007
CALLER: And, you know, and the way our tax system works, we have an overly complex system, which in and of itself is a problem, but the way our tax system works and the way the tax laws are written, it's based on a few kind of like hinge numbers like adjusted gross income and taxable income, and while the soak the rich -- or however you choose to describe it -- really doesn't come down that way. It really comes down to much lower income levels.

RUSH: It does, exactly, and here's the dirty little secret if you ever to pull it off. It's hard. This is why most people don't understand the tax-the-rich business. You've got to structure your life so you have no "earned" income. I'm out of time. I'll explain that. There's a category called earned income versus other kinds of income. Earned income is what the income tax rate is on. That's how "the rich" do it. They don't have "earned" income.
END TRANSCRIPT

The Truth About Taxes
August 6, 2007
RUSH: I've told you before: the income tax is designed to keep people like his [Buffett's] secretary from becoming wealthy! There is no "wealth" tax. So this is a big misnomer. ...
But there's no tax on wealth. There is a tax on income, and the tax on income is designed to keep everybody who is not wealthy from getting there.

I'm talking about genuine wealth, not the way Democrats define "rich."

Maybe we should start by taxing Black Churches.

I wonder how that would go over.

It figures you would take a racist approach to the problem.
We should start by taxing ALL churches, funds, foundations, etc.

June 14, 2007
RUSH: -- a lot of people, a lot of people wealthy people set up foundations and they do this to keep the government from getting the money.

It's not racist to point out an obvious double-standard.

You want to screw everyone but focus on only one group and I focused on how it would effect all of them and what the natural reaction might be from the left if we did. Too bad the point was not only valid but not PC enough for you.

 

[edthecynic]

Maybe we should start by taxing Black Churches.

I wonder how that would go over.

It figures you would take a racist approach to the problem.
We should start by taxing ALL churches, funds, foundations, etc.

June 14, 2007
RUSH: -- a lot of people, a lot of people wealthy people set up foundations and they do this to keep the government from getting the money.

It's not racist to point out an obvious double-standard.

You want to screw everyone but focus on only one group and I focused on how it would effect all of them and what the natural reaction might be from the left if we did. Too bad the point was not only valid but not PC enough for you.

I love how CON$ can RATIONALIZE anything.

I said tax ALL charities and you singled out the Black churches, and that becomes I focus on ONE group and you focused on all of them.

 

[expat_panama]

... How about everyone pay their fair share. IMO everyone should pay the same % of what they make.

"Fairness" is nice but it's just a great place to start arguments and get no where. In the meantime the state must survive and must get money. Us rich guys have more money so we get taxed more, so right or wrong that's what is. Besides the fact we got more money, there's a lot to be said for having us rich pay a bigger percentage because an extra ten percent cut for me won't change my eating habits like that kind of hike would do to my kids.

That said, the fact remains that this 'rich-taxing' bit is a good idea that's gone too far and we're at a place where more tax hikes will just further reduce revenue.

 

[KissMy]

The truly wealthy never have any taxable income, so no tax increase will hit them. They have their wealth hidden in phony "charities" that they control. The only way to get them to pay their fair share of taxes is to end all charity deductions, and tax all "charities."

For example: The DuPonts had their house declared a historical site and then set up a "charity" to maintain the historical site. They packed the board with family members and required that the head of the board must be an immediate family member. They then donated the historical site to the foundation and specified that the head of the foundation lives in the house. They now get a tax deduction for the value of the house they live in and a tax deduction for their electricity, heat, etc. When the head of the foundation dies, the next family member becomes the head and lives in the house without paying a penny in inheritance taxes.

August 7, 2007
CALLER: And, you know, and the way our tax system works, we have an overly complex system, which in and of itself is a problem, but the way our tax system works and the way the tax laws are written, it's based on a few kind of like hinge numbers like adjusted gross income and taxable income, and while the soak the rich -- or however you choose to describe it -- really doesn't come down that way. It really comes down to much lower income levels.

RUSH: It does, exactly, and here's the dirty little secret if you ever to pull it off. It's hard. This is why most people don't understand the tax-the-rich business. You've got to structure your life so you have no "earned" income. I'm out of time. I'll explain that. There's a category called earned income versus other kinds of income. Earned income is what the income tax rate is on. That's how "the rich" do it. They don't have "earned" income.
END TRANSCRIPT

The Truth About Taxes
August 6, 2007
RUSH: I've told you before: the income tax is designed to keep people like his [Buffett's] secretary from becoming wealthy! There is no "wealth" tax. So this is a big misnomer. ...
But there's no tax on wealth. There is a tax on income, and the tax on income is designed to keep everybody who is not wealthy from getting there.

I'm talking about genuine wealth, not the way Democrats define "rich."

We would have to start taxing charities & life insurance. The rich donate to charities who buy a life insurance policy on the donor. The donor barrows against this life insurance to live on tax free until he dies. The the insurance pays off the loans. The rich avoid inheritance taxes & income taxes this way.

 

[KissMy]

100 Percent Tax on Those Earning $500K or More Leaves U.S. With $839B Deficit

After taxing away 100 percent of the income of those earning $500,000 or more in 2009, the Obama administration would still have needed to increase taxes on Americans earning less than $500,000 by a total of $839 billion--just to balance federal accounts for the year.

Do you think we have a spending problem or what? Yes we do need to actually collect more taxes from the rich who escape taxes through loopholes in tax laws.

 

[edthecynic]

100 Percent Tax on Those Earning $500K or More Leaves U.S. With $839B Deficit

After taxing away 100 percent of the income of those earning $500,000 or more in 2009, the Obama administration would still have needed to increase taxes on Americans earning less than $500,000 by a total of $839 billion--just to balance federal accounts for the year.

Do you think we have a spending problem or what? Yes we do need to actually collect more taxes from the rich who escape taxes through loopholes in tax laws.

Of, of course, stats like that are intended for suckers. Most of the wealth of incomes over $500,000 does not show up as AGI, which does not include unrealized capital gains. What I found interesting was that 3% of the over $500,000 group had NO TAXABLE INCOME!!!!!

 

[expat_panama]

... we do need to actually collect more taxes from the rich who escape taxes through loopholes in tax laws.

'Fraud-waste-and-abuse' comes up when nobody wants to get anything done. At one time the story was we had enough of FW&A to pay for Obamacare, but now there's not enough of it to bring down the deficit without more tax-hikes. So let's get specific and see what worked before with increasing government revenue. Budget totals from the GPO have revenue increasing when tax rates were cut:

Year__Receipts(in millions of dollars)
2000 2,025,191
2001 1,991,082
2002 1,853,136
2003 1,782,314

(tax-rate cuts)

2004 1,880,114
2005 2,153,611
2006 2,406,869
2007 2,567,985
2008 2,523,991
2009 2,104,989
2010 2,162,724

 

[KissMy]

Of, of course, stats like that are intended for suckers. Most of the wealth of incomes over $500,000 does not show up as AGI, which does not include unrealized capital gains. What I found interesting was that 3% of the over $500,000 group had NO TAXABLE INCOME!!!!!

Where did you find this info?

 

[edthecynic]

Of, of course, stats like that are intended for suckers. Most of the wealth of incomes over $500,000 does not show up as AGI, which does not include unrealized capital gains. What I found interesting was that 3% of the over $500,000 group had NO TAXABLE INCOME!!!!!

Where did you find this info?

Your link had this sub link, "However, recently released statistics from the Internal Revenue Service" which is where I found that amount in column 54.

 

[KissMy]

Of, of course, stats like that are intended for suckers. Most of the wealth of incomes over $500,000 does not show up as AGI, which does not include unrealized capital gains. What I found interesting was that 3% of the over $500,000 group had NO TAXABLE INCOME!!!!!

Where did you find this info?

Your link had this sub link, "However, recently released statistics from the Internal Revenue Service" which is where I found that amount in column 54.

Thanks. I clicked that before but did not realize all the info scrolling to the right.

It is an eye opener. Looking at the change in "Tax as a percentage of AGI" from 2001 to 2007 the largest percentage drop is in the highest income earners. They did recover some in 2008 & 2009. I guess the Rich really did get a bigger percent tax break.

 

[Wiseacre]

Where did you find this info?

Your link had this sub link, "However, recently released statistics from the Internal Revenue Service" which is where I found that amount in column 54.

Thanks. I clicked that before but did not realize all the info scrolling to the right.

It is an eye opener. Looking at the change in "Tax as a percentage of AGI" from 2001 to 2007 the largest percentage drop is in the highest income earners. They did recover some in 2008 & 2009. I guess the Rich really did get a bigger percent tax break.

Which means we need to overhaul our tax code or go to a flat tax with no deductions, loopholes, or credits. Or at least put a ceiling on deductions and clamp down on the req'ts for tax exempt foundations.