Let's Tax the Rich More!

[MaggieMae]

the fact is that government spending is out of control. And since taxes are the largest source of government revenue, it follows that taxes will follow government spending and rise for everyone not just one class or another.

at what point does government spending hamper growth?

Government Size and Economic Growth

Borrowing a graphical technique popularized by Arthur Laffer, Representative Richard Armey, an economist by training, developed what he termed the Armey Curve (see Figure 1).1 In a state of anarchy, output per capita is low. Similarly, where all input and output decisions are made by government, output per capita is likewise low. Where there is a mix of private and government decisions on the allocation of resources, however, output often is larger. The output-enhancing features of government dominate when government is very small, and expansions in governmental size are associated with expansions in output. At some point, however, further expansion of government no longer leads to output expansion, as the growth-reducing aspects of government grow larger, and the growth-enhancing features of government diminish. Further expansion of government contributes to economic stagnation and decline.

As governments grow, the law of diminishing returns begins operating. While the construction of roads initially assists output expansion, the construction of secondary roads and upgrading primary roads start to have less added positive impact per dollar spent. Moreover, the taxes and/or borrowing levied to finance government impose increasing burdens. Low tax rates become higher. New taxes, such as income taxes, are added to low consumption levies, with increasingly adverse effects on human economic behavior. Tariffs are raised, thwarting trade. New government spending no longer enhances economic growth.

The data here suggest that a further reduction in government size to 17.45 percent of GDP would be growth enhancing.

So what percentage of GDP is Obama using to fund government?

Over 22%.

where does that put us on the Armey curve?

Do do nothing (no infusion of money), then we would be looking at a 200-300% of GDP just in credit obligations.

 

[Skull Pilot]

SS is most definitely a tax. The employee pays 7.5% directly. According to most economist, the employer's contribution would be paid as higher salary to the employee, so it is effectively coming from their wages.

http://www.appwp.org/documents/bush_taxbenefits_1pager.pdf

Congressional Budget Office:
"CBO's analysis of effective tax rates assumes that households bear the burden of the
taxes that they pay directly, such as individual income taxes and employees' share of
payroll taxes. CBO assumes-as do most economists-that employers' share of
payroll taxes is passed on to employees in the form of lower wages than would
otherwise be paid. Therefore, the amount of taxes is included in employees' income,
and the taxes are counted as part of employees' tax burden."
"Historical Effective Federal Tax Rates: 1979 to 2004." Congressional Budget Office, December 2006.

"Public finance theorists generally agree that the employer's share of [payroll] taxes is
passed on to workers in the form of lower wages. CBO follows that assumption and
treats payroll taxes as if employees paid both shares."
"Effective Marginal Tax Rates on Labor Income." Congressional Budget Office, November 2005.

Joint Committee on Taxation:
"Most analysts conclude that both the employee's and employer's share of the payroll
tax is borne by the employee and that therefore the marginal payroll tax rate would
include both the employee's and employer's share."
"Overview of Present Law and Economic Analysis Relating to Marginal Tax Rates and the President's Individual
Income Tax Rate Proposals." Joint Committee on Taxation, 6 March 2001.

and?

so called poor people are not exempt from SS taxes but they are exempt from regular income taxes. they should not be exempt and should have to pay some minimum income tax above and beyond SS and payroll taxes.

What is so hard to understand about that statement?

Nothing. You said you thought it would be fair if they paid 5% tax. I showed you they effectively paid closer to 15% already. I think that's plenty, but everyone has their own opinion as to what is "fair".

SS is NOT INCOME TAX IT IS A FUCKING ENTITLEMENT TAX

 

[Newby]

Are they not getting the amount they are paying into SS back at some point?

Depends on when they die.

Your argument is lame, imo.

That is what is great about forums like these. Everyone can decide for themselves which arguement is lame, regardless of your opinion.

What you said in the first part is true of everyone that pays into it, regardless of income.

You're not making an honest argument in the least, everyone else also pays the same taxes as a percentage of income as the 'poor' do as well as increased federal income taxes. The poor are not paying the tax revenues taken in by the federal government that supports its spending. That's the bottom line.

 

[Skull Pilot]

the fact is that government spending is out of control. And since taxes are the largest source of government revenue, it follows that taxes will follow government spending and rise for everyone not just one class or another.

at what point does government spending hamper growth?

Government Size and Economic Growth

Borrowing a graphical technique popularized by Arthur Laffer, Representative Richard Armey, an economist by training, developed what he termed the Armey Curve (see Figure 1).1 In a state of anarchy, output per capita is low. Similarly, where all input and output decisions are made by government, output per capita is likewise low. Where there is a mix of private and government decisions on the allocation of resources, however, output often is larger. The output-enhancing features of government dominate when government is very small, and expansions in governmental size are associated with expansions in output. At some point, however, further expansion of government no longer leads to output expansion, as the growth-reducing aspects of government grow larger, and the growth-enhancing features of government diminish. Further expansion of government contributes to economic stagnation and decline.

The data here suggest that a further reduction in government size to 17.45 percent of GDP would be growth enhancing.

So what percentage of GDP is Obama using to fund government?

Over 22%.

where does that put us on the Armey curve?

Do do nothing (no infusion of money), then we would be looking at a 200-300% of GDP just in credit obligations.

So spend more and slow growth more which diminishes tax revenue more so we can spend more.

OK

Now Obama is predicting that his expansion of government spending will result in an increase in GDP but the data contradicts him does it not?

So if GDP continues to decline as a result of government spending, how does the government raise enough revenue?

Higher taxes for everyone that's how and that has been my point all along but you would all rather argue about what rich people pay in taxes rather than the real issue of an out of control spend happy government.

 

[txlonghorn]

 

[Iriemon]

and?

so called poor people are not exempt from SS taxes but they are exempt from regular income taxes. they should not be exempt and should have to pay some minimum income tax above and beyond SS and payroll taxes.

What is so hard to understand about that statement?

Nothing. You said you thought it would be fair if they paid 5% tax. I showed you they effectively paid closer to 15% already. I think that's plenty, but everyone has their own opinion as to what is "fair".

SS is NOT INCOME TAX IT IS A FUCKING ENTITLEMENT TAX

Yeah you said that already.

So your point is that the single mom making $15,000 to support her kid should pay 20% tax on the first dollar of her income?

15% is more than enough IMO.

 

[Iriemon]

Are they not getting the amount they are paying into SS back at some point?

Depends on when they die.

Your argument is lame, imo.

That is what is great about forums like these. Everyone can decide for themselves which arguement is lame, regardless of your opinion.

What you said in the first part is true of everyone that pays into it, regardless of income.

So the answer to your question as to whether they get SS back is "it depends".

It is also true that SS has paid current beneficiaries from current workers, so the SS taxes paid are already spend. And, for that matter, for the past 20 years about 25% of SS taxes have been taken by the Govt to finance deficits created by tax cuts the mostly benefitted the wealthiest.

You're not making an honest argument in the least, everyone else also pays the same taxes as a percentage of income as the 'poor' do as well as increased federal income taxes. The poor are not paying the tax revenues taken in by the federal government that supports its spending. That's the bottom line.

That is false. The SS tax caps out at $106k. Up to that point it is a flat tax. No taxes are paid beyond that point. The very wealth do not effectively pay SS as a percentage of their income.

I'll assume you did not know that and that you were not making a dishonest argument, in the least.

 

[edthecynic]

Geez ... you people NEVER quit where it comes to digging in MY pockets and spending MY money.

Are you saying you don't know how to keep the government out of your pockets?

You need to understand the difference between "ownership" and "control" as well as the difference between "income" and "wealth."

The Truth About Taxes
August 6, 2007
RUSH: 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.

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

 

[MaggieMae]

the fact is that government spending is out of control. And since taxes are the largest source of government revenue, it follows that taxes will follow government spending and rise for everyone not just one class or another.

at what point does government spending hamper growth?

Government Size and Economic Growth

So what percentage of GDP is Obama using to fund government?

Over 22%.

where does that put us on the Armey curve?

Do do nothing (no infusion of money), then we would be looking at a 200-300% of GDP just in credit obligations.

So spend more and slow growth more which diminishes tax revenue more so we can spend more.

OK

Now Obama is predicting that his expansion of government spending will result in an increase in GDP but the data contradicts him does it not?

So if GDP continues to decline as a result of government spending, how does the government raise enough revenue?

Higher taxes for everyone that's how and that has been my point all along but you would all rather argue about what rich people pay in taxes rather than the real issue of an out of control spend happy government.

'I Am Dr. Realist'
Economist Nouriel Roubini

...if we didn't have these fiscal deficits, the recession would become a depression. On the other side, I do agree that this is not a free lunch. We are going to add trillions of dollars to our public debt, which is going to go from 40 to 80 percent of the GDP. There are only a few ways in which you can finance that extra public debt. If you rule out default and a capital levy on wealth, you either have the "inflation tax" or you have to painfully cut spending or raise taxes, and either one is not going to be politically palatable.

 

[sealybobo]

FYI entitlement spending is by far the biggest item in the budget not defense.

And where did i say tax the rich and poor evenly asshole?

I said no one should be exempt from any taxes.

When all defense spending is added to the budget, the Pentagon's is indeed bigger than entitlement spending.

The Federal Pie Chart

remove the portion of military spending for fighting 2 wars we should not be fighting and what do you get?

Why would you remove the two wars? That's how the GOP/Haloburton/Blackwater/KBR and every other Dick Cheney subsidiary is making all their money. And this has a lot to do with our economy, budget, deficit, debt, etc.

You do know that, right?

Socialize the losses and privatize the profits. What a plan.

And you can say that the Afgan was wasn't Bush's fault, except for that it was his fault, because he got hit on 9-11. Can you imagine if a 9-11 happened to Obama? Would you be so kind to give Obama the free pass you gave Georgie? Fuck no.

I was going to say Iraq was his fault, but on second thought, both wars are.

 

[edthecynic]

The data here suggest that a further reduction in government size to 17.45 percent of GDP would be growth enhancing.

So what percentage of GDP is Obama using to fund government?

Over 22%.

where does that put us on the Armey curve?

Is it just my browser or are there NO numbers on the "Armey Curve?"

 

[Iriemon]

Geez ... you people NEVER quit where it comes to digging in MY pockets and spending MY money.

Are you saying you don't know how to keep the government out of your pockets?

You need to understand the difference between "ownership" and "control" as well as the difference between "income" and "wealth."

The Truth About Taxes
August 6, 2007
RUSH: 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.

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

Remarkable fothrightness by Rush.

His point explains why the GOP have fought so hard to reduce/eliminate things like investment and estate taxes.

 

[Newby]

Depends on when they die.



That is what is great about forums like these. Everyone can decide for themselves which arguement is lame, regardless of your opinion.

What you said in the first part is true of everyone that pays into it, regardless of income.

So the answer to your question as to whether they get SS back is "it depends".

It is also true that SS has paid current beneficiaries from current workers, so the SS taxes paid are already spend. And, for that matter, for the past 20 years about 25% of SS taxes have been taken by the Govt to finance deficits created by tax cuts the mostly benefitted the wealthiest.

You're not making an honest argument in the least, everyone else also pays the same taxes as a percentage of income as the 'poor' do as well as increased federal income taxes. The poor are not paying the tax revenues taken in by the federal government that supports its spending. That's the bottom line.

That is false. The SS tax caps out at $106k. Up to that point it is a flat tax. No taxes are paid beyond that point. The very wealth do not effectively pay SS as a percentage of their income.

I'll assume you did not know that and that you were not making a dishonest argument, in the least.

Yes, I'm well aware of the current shape of the Social Security system and how the government has taken all of our so-called savings that we aren't capable of doing on our own better than they do and piddled it away on their excessive spending. Isn't that exactly their excuse for taking it from us to begin with? Because we're supposedly not responsible enough to save for ourselves and our own retirement. So, they take it from us and then they aren't responsible enough to keep their rotten hands off of it any better than we would have been. Actually, I would have done a much better job of saving MY money for MYSELF than the government could have ever hoped to do.

Secondly, the people that do not pay in excess of the SS threshold will also not collect any more money out of it than what they put in to begin with so that makes your point moot and irrelevant. My first point still stands that the 'poor' people who contribute into it will eventually get it back out. And your argument that they could die first is ridiculous. Anyone that pays into it and dies before being able to collect it is in the same boat, which will become more and more of a reality as they keep increasing the age when you can start collecting it, if you even get to collect any at all in 20 years or so. It actually is yet another argument against Social Security, because if I saved the money on my own, I could pass it to my descendants and not have the government confiscate the whole damn thing.

 

[jillian]

Sure, let's figure out a way to penalize people for saving their money as well. Geez ... you people NEVER quit where it comes to digging in MY pockets and spending MY money.

How does it make more sense to penalize those who are at the bottom rung trying to work their way out of poverty instead?

I will repeat what Newby said, because it's true:

The poor don't pay taxes.

There is a bottom line, if you earn less than that you pay nothing in income taxes.

oh pish posh.... the MIDDLE and WORKING classes pay taxes.

no one is "penalizing" successful people by ending welfare for the rich as it was effectuated for the last eight years.

 

[Newby]

How does it make more sense to penalize those who are at the bottom rung trying to work their way out of poverty instead?

I will repeat what Newby said, because it's true:

The poor don't pay taxes.

There is a bottom line, if you earn less than that you pay nothing in income taxes.

oh pish posh.... the MIDDLE and WORKING classes pay taxes.

no one is "penalizing" successful people by ending welfare for the rich as it was effectuated for the last eight years.

What percentage of the federal tax bill do the 'middle and working' class pay, Jillian?

Do you consider middle and working class to be poor then? That is what we were talking about.

 

[Iriemon]

What you said in the first part is true of everyone that pays into it, regardless of income.

So the answer to your question as to whether they get SS back is "it depends".

It is also true that SS has paid current beneficiaries from current workers, so the SS taxes paid are already spend. And, for that matter, for the past 20 years about 25% of SS taxes have been taken by the Govt to finance deficits created by tax cuts the mostly benefitted the wealthiest.

You're not making an honest argument in the least, everyone else also pays the same taxes as a percentage of income as the 'poor' do as well as increased federal income taxes. The poor are not paying the tax revenues taken in by the federal government that supports its spending. That's the bottom line.

That is false. The SS tax caps out at $106k. Up to that point it is a flat tax. No taxes are paid beyond that point. The very wealth do not effectively pay SS as a percentage of their income.

I'll assume you did not know that and that you were not making a dishonest argument, in the least.

Yes, I'm well aware of the current shape of the Social Security system and how the government has taken all of our so-called savings that we aren't capable of doing on our own better than they do and piddled it away on their excessive spending. Isn't that exactly their excuse for taking it from us to begin with? Because we're supposedly not responsible enough to save for ourselves and our own retirement. So, they take it from us and then they aren't responsible enough to keep their rotten hands off of it any better than we would have been. Actually, I would have done a much better job of saving MY money for MYSELF than the government could have ever hoped to do.

I agree and the theft of $3 trillion in *extra* SS taxes boomers have paid for the past 25 years to finance the deficits is one of the biggest unreported scandals of all time, IMO.

Secondly, the people that do not pay in excess of the SS threshold will also not collect any more money out of it than what they put in to begin with so that makes your point moot and irrelevant. My first point still stands that the 'poor' people who contribute into it will eventually get it back out. And your argument that they could die first is ridiculous.

It's certainly not ridiculous looking at it on an individual basis; you may have been considering it on a collective basis.

Anyone that pays into it and dies before being able to collect it is in the same boat, which will become more and more of a reality as they keep increasing the age when you can start collecting it, if you even get to collect any at all in 20 years or so. It actually is yet another argument against Social Security, because if I saved the money on my own, I could pass it to my descendants and not have the government confiscate the whole damn thing.

SS is not an investment program but an insurance program. Its more like life insurance. You pay $$ for life insurance and if you don't die you've lost the value. Could you have gottem more if you invested the money instead of purchased life insurance? Sure. But life insurance serves a different purpose.

SS is a pension insurance, the opposite of life insurance in that you get it only if you don't die. But the money you pay to SS is to provide that insurance, that regardless of your investments or anything else, if you live your SS insurance will pay off to keep you off the streets.

 

[Skull Pilot]

Nothing. You said you thought it would be fair if they paid 5% tax. I showed you they effectively paid closer to 15% already. I think that's plenty, but everyone has their own opinion as to what is "fair".

SS is NOT INCOME TAX IT IS A FUCKING ENTITLEMENT TAX

Yeah you said that already.

So your point is that the single mom making $15,000 to support her kid should pay 20% tax on the first dollar of her income?

15% is more than enough IMO.

No she'd be paying 12.5% not 7.5% because her employer pays half of her SS tax

 

[Skull Pilot]

Do do nothing (no infusion of money), then we would be looking at a 200-300% of GDP just in credit obligations.

So spend more and slow growth more which diminishes tax revenue more so we can spend more.

OK

Now Obama is predicting that his expansion of government spending will result in an increase in GDP but the data contradicts him does it not?

So if GDP continues to decline as a result of government spending, how does the government raise enough revenue?

Higher taxes for everyone that's how and that has been my point all along but you would all rather argue about what rich people pay in taxes rather than the real issue of an out of control spend happy government.

'I Am Dr. Realist'
Economist Nouriel Roubini

...if we didn't have these fiscal deficits, the recession would become a depression. On the other side, I do agree that this is not a free lunch. We are going to add trillions of dollars to our public debt, which is going to go from 40 to 80 percent of the GDP. There are only a few ways in which you can finance that extra public debt. If you rule out default and a capital levy on wealth, you either have the "inflation tax" or you have to painfully cut spending or raise taxes, and either one is not going to be politically palatable.

This is not about deficits. Nice try at deflection though.

The Armey curve is a relationship of the size of government spending and the growth of GDP.

When government spending reaches the tipping point of about 17.5% every dollar more of government spending corresponds to a net decrease in GDP.

And I am for painfully cutting spending because there is so much waste that the pain will not be felt by most of us. In fact most of us will be better off in the long run because in the long run we will have more of our own money to keep.

 

[Skull Pilot]

When all defense spending is added to the budget, the Pentagon's is indeed bigger than entitlement spending.

The Federal Pie Chart

remove the portion of military spending for fighting 2 wars we should not be fighting and what do you get?

Why would you remove the two wars? That's how the GOP/Haloburton/Blackwater/KBR and every other Dick Cheney subsidiary is making all their money. And this has a lot to do with our economy, budget, deficit, debt, etc.

You do know that, right?

Socialize the losses and privatize the profits. What a plan.

And you can say that the Afgan was wasn't Bush's fault, except for that it was his fault, because he got hit on 9-11. Can you imagine if a 9-11 happened to Obama? Would you be so kind to give Obama the free pass you gave Georgie? Fuck no.

I was going to say Iraq was his fault, but on second thought, both wars are.

because you idiot, i was never in favor of Iraq or Afghanistan and i thought you weren't either.

So you're in favor of unnecessary wars as long as it's a Dimocrat in charge right?

 

[Iriemon]

SS is NOT INCOME TAX IT IS A FUCKING ENTITLEMENT TAX

Yeah you said that already.

So your point is that the single mom making $15,000 to support her kid should pay 20% tax on the first dollar of her income?

15% is more than enough IMO.

No she'd be paying 12.5% not 7.5% because her employer pays half of her SS tax

Sorry, I should have said "effectively paying." She is already effectively paying 15% (including medicare taxes) since the employer's part comes out in the form of lower salary; so your point is she should pay effectively 20% tax on the first dollar she makes?