Who Are Paying Taxes?

Discussion in 'Politics' started by red states rule, Jul 16, 2007.

  1. red states rule
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    red states rule Senior Member

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    It is a surprise - but the NY Times comes clean on who is paying taxes



    snip

    Fair Taxes? Depends What You Mean by ‘Fair’

    By N. GREGORY MANKIW
    Published: July 15, 2007

    DO the rich pay their fair share in taxes? This is likely to become a defining question during the presidential campaign.

    The C.B.O.’s most recent calculations of federal tax rates show a highly progressive system. (The numbers are based on 2004 data, but the tax code has not changed much since then.) The poorest fifth of the population, with average annual income of $15,400, pays only 4.5 percent of its income in federal taxes. The middle fifth, with income of $56,200, pays 13.9 percent. And the top fifth, with income of $207,200, pays 25.1 percent.

    At the very top of the income distribution, the C.B.O. reports even higher tax rates. The richest 1 percent has average income of $1,259,700 and forks over 31.1 percent of its income to the federal government.

    One might wonder how Mr. Buffett gets away with a tax rate of only 17.7 percent, while a typical millionaire is paying so much more. Most likely, part of the answer is that Mr. Buffett’s income is made up largely of dividends and capital gains, which are taxed at only 15 percent. By contrast, many other top earners pay the maximum ordinary income tax rate of 35 percent on their salaries, bonuses and business income.

    http://www.nytimes.com/2007/07/15/b...bf&ei=5124&partner=permalink&exprod=permalink
     
  2. ReillyT
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    ReillyT Senior Member

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    That is not a surprise. Liberals don't claim that the poor, lower middle class, and middle class pay more in taxes than wealthier Americans. We (or more specifically, I should say I) just feel that there are some things that government should be doing to contribute to a better society (often dealing with health care, education and the environment) and that since these things cost money, they should be funded by higher taxes on those who can afford it.

    I understand that taxes bring into play questions of incentives, and I wouldn't favor a return to tax rates of 70%, but I think that it is appropriate to consider what affect on revenues and incentives a rise in the average tax payout from (to use the figure above for example) 31.1% to 35% might produce.

    Also, I do think that we tax capital gains at too low a rate. For the very wealthy, dividends and capital gains can be a significant portion of one's income. Without knowing what the effects of a tax increase would do to investment, I can't say how much I would favor an increase in capital gains taxes, but I wouldn't think that a modest increase in this tax wouldn't tamper too much with incentives, as it only taxes income from capital gains, and even at 22%, investment in the markets remains more attractive an option than letting your money rot in a savings account. But, economists (although I am sure they would disagree with one another) would have a better idea of where to right level would be, and how much additional revenue it could provide.
     
  3. Angel Heart
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    Angel Heart Conservative Hippie

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    Doesn't surprise me. I've seen what they've done as my parents have made more. They are in to their pockets all the time.

    Heck the article didn't even bring up the fact that the lowest % actually at a negative tax bracket. The poor take out of our government, they don't put in at all. I'm not just talking social services. EIC and the child tax credit are both taxes given back to families that they didn't put in.
     
  4. red states rule
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    red states rule Senior Member

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    The rich are not the only ones who benefit from lower capital gains tax rates. Retired folks who get an income from stocks benefit - and have you seen the gains in the Dow? Another record close last week

    Lower taxes are bringing in record revenues to the government. yet it is not enough to the left (and some on the right)

    When you raise taxes on the producers and the investors - you lose money
     
  5. red states rule
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    red states rule Senior Member

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    Only in America.........

    Those who pay the most in taxes use government services the least, and

    those who pay the least in taxes, use government services the most
     
  6. ReillyT
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    ReillyT Senior Member

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    Well, I agree with part of what you said. Retired Americans do also gain a substantial portion of their incomes from capital gains. However, why not employ a graduated capital gains system, taxing at lower rates for lower returns on income. That way, someone who earns millions each year won't be paying 15%, but retirees still will be able to.


    This just isn't true. Tax revenues are up, but not remotely at a level to fund the government right now. A few days ago, I posted a link to a Washington Post article, where a former member of Bush's economic team stated that the higher revenues were in all likelihood not attributable to the lower taxes.

    It is about finding the right mix - the right tax level - sufficient to adequately fund the government and still interfere as little as possible with market forces. Take your last line to its logical conclusion, and it would suggest that no taxation is the best approach, but that is obviously not true.
     
  7. red states rule
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    red states rule Senior Member

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    Lower taxes brought in more revenue for JFK, Reagan, and now for Pres Bush

    When you lower taxes, you increase economic activity, more jobs are added, thus more taxes are collected
     
  8. RetiredGySgt
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    RetiredGySgt Platinum Member

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    A liberal has never met a tax they couldn't support ( as long as there is an out for them of course)
     
  9. red states rule
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    red states rule Senior Member

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    With libs all funding for their programs must come from the OPM account

    (Other Peoples Money account)
     
  10. Angel Heart
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    Angel Heart Conservative Hippie

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    I must say, it's been very helpful for us. It's been a shot in the arm once a year that has kept us afloat since my DH got laid off during the dot com bomb. It took him over 4 years to find another good job. He's had to start at the bottom. I don't want to see those programs go. You have to make money to even qualify. People with out a job can't qualify. It's helping the lower income families with kids. You have to have kids to qualify.
     

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