Who Are Paying Taxes?

[red states rule]

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

 

[ReillyT]

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

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.

 

[Angel Heart]

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.

 

[red states rule]

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 would tamper too much with incentives, as it only taxes income from capital gains, and even at 22%, investment is still more attractive an option than letter 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.

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

 

[red states rule]

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.

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

 

[ReillyT]

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

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.

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

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.

 

[red states rule]

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.

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

 

[RetiredGySgt]

A liberal has never met a tax they couldn't support ( as long as there is an out for them of course)

 

[red states rule]

A liberal has never met a tax they couldn't support ( as long as there is an out for them of course)

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

(Other Peoples Money account)

 

[Angel Heart]

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.

 

[red states rule]

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.

If Dems have their way, they want to repeal ALL the tax cuts. You and your familty wil pay more in taxes, retired couples will pay more in taxes - ALL taxpayers (regardless of income) will pay more in taxes

Liberal compassion comes with a high price tag

 

[ReillyT]

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

We just had this exact conversation a few days ago, and I cited you the Washington Post article. We reviewed the figures from the OMB, and you wrote exactly the same thing you just wrote above. Why don't we discuss anything else about taxation that we didn't just discuss. You could, for instance, read my post, and then respond to any of the specific things that I said.

Or not... either way, I still love you, as I pointed out to some others yesterday.

 

[ReillyT]

A liberal has never met a tax they couldn't support ( as long as there is an out for them of course)

I don't know how many of you guys are in the top tax bracket, but most liberales would not favor raising taxes on the middle class. Most of us, would however, favor raising tax levels at the top quartile. I am fortunate, and my wife and I reach that upper tax level, and I am willing to tax myself more. I am not willing to tax my siblings more, who are all solidly middle class.

 

[red states rule]

Revenue Collections Hit Record High in April, Improve Budget Deficit


WASHINGTON (AP) -- Federal revenue collections hit an all-time high in April, contributing to a further improvement in the budget deficit for the year.
Releasing its monthly budget report, the Treasury Department said Thursday that through the first seven months of this budget year, the deficit totals $80.8 billion, significantly below the $184.1 billion imbalance run up during the first seven months of the 2006 budget year.

So far this year, tax revenues total $1.505 trillion, an increase of 11.2 percent over the same period last year. That figure includes $383.6 billion collected in April, the largest monthly tax collection on record.

Tax collections swell in April every year as individuals file their tax returns by the deadline.

For the first seven months of this budget year, which began Oct. 1, revenue collections and government spending are at all-time highs.

However, the spending total of $1.585 billion was up at a slower pace of 3.2 percent from the previous year.

The difference in the growth of tax collections and spending is the reason for the narrowing deficit.

The Congressional Budget Office said that it now expects the deficit for all of 2007 to total between $150 billion and $200 billion. That would be a significant improvement from last year's deficit of $248.2 billion, which had been the lowest imbalance in four years.

http://biz.yahoo.com/ap/070510/federal_budget.html


Under Reagan, the amount of revenue to the government DOUBLED in eight years

Yes, when you cut taxes - you increase revenues

 

[red states rule]

I don't know how many of you guys are in the top tax bracket, but most liberales would not favor raising taxes on the middle class. Most of us, would however, favor raising tax levels at the top quartile. I am fortunate, and my wife and I reach that upper tax level, and I am willing to tax myself more. I am not willing to tax my siblings more, who are all solidly middle class.

The Dems want to do just that. They passed a $400 billion tax increase - that repealed ALL the Bush tax cuts

 

[red states rule]

I don't know how many of you guys are in the top tax bracket, but most liberales would not favor raising taxes on the middle class. Most of us, would however, favor raising tax levels at the top quartile. I am fortunate, and my wife and I reach that upper tax level, and I am willing to tax myself more. I am not willing to tax my siblings more, who are all solidly middle class.

Since the top earners are already paying the most in taxes - why should they have to pay more?

 

[RetiredGySgt]

I don't know how many of you guys are in the top tax bracket, but most liberales would not favor raising taxes on the middle class. Most of us, would however, favor raising tax levels at the top quartile. I am fortunate, and my wife and I reach that upper tax level, and I am willing to tax myself more. I am not willing to tax my siblings more, who are all solidly middle class.

Yet I bet you strongly support not renewing the tax breaks Bush gave, go figure.

 

[ReillyT]

Revenue Collections Hit Record High in April, Improve Budget Deficit


WASHINGTON (AP) -- Federal revenue collections hit an all-time high in April, contributing to a further improvement in the budget deficit for the year.
Releasing its monthly budget report, the Treasury Department said Thursday that through the first seven months of this budget year, the deficit totals $80.8 billion, significantly below the $184.1 billion imbalance run up during the first seven months of the 2006 budget year.

So far this year, tax revenues total $1.505 trillion, an increase of 11.2 percent over the same period last year. That figure includes $383.6 billion collected in April, the largest monthly tax collection on record.

Tax collections swell in April every year as individuals file their tax returns by the deadline.

For the first seven months of this budget year, which began Oct. 1, revenue collections and government spending are at all-time highs.

However, the spending total of $1.585 billion was up at a slower pace of 3.2 percent from the previous year.

The difference in the growth of tax collections and spending is the reason for the narrowing deficit.

The Congressional Budget Office said that it now expects the deficit for all of 2007 to total between $150 billion and $200 billion. That would be a significant improvement from last year's deficit of $248.2 billion, which had been the lowest imbalance in four years.

http://biz.yahoo.com/ap/070510/federal_budget.html


Under Reagan, the amount of revenue to the government DOUBLED in eight years

Yes, when you cut taxes - you increase revenues

We just did this a couple of days ago, and it is really boring to go over the same stuff over and over. You think that lower taxes always means more revenue. I don't. You post these articles. I post articles. We both look at the statistics from the OMB, and we draw different conclusions. Can you just discuss something different. I actually posted some ideas up there, such as a graduated capital gains tax. Why don't you tell what you like about that, or don't like about that? Just try to be specific. It is boring to read the same old "Libs love taxes," "Cutting taxes is always great!" stuff.

Just help me maintain interest.

 

[ReillyT]

Yet I bet you strongly support not renewing the tax breaks Bush gave, go figure.

I haven't reviewed the individual tax breaks, so I don't really know. It sounds like Angel received some help when she needed it, and it didn't sound like she was in the upper tax bracket at that moment, so I am probably okay with whatever tax break she utilized.

 

[red states rule]

We just did this a couple of days ago, and it is really boring to go over the same stuff over and over. You think that lower taxes always means more revenue. I don't. You post these articles. I post articles. We both look at the statistics from the OMB, and we draw different conclusions. Can you just discuss something different. I actually posted some ideas up there, such as a graduated capital gains tax. Why don't you tell what you like about that, or don't like about that? Just try to be specific. It is boring to read the same old "Libs love taxes," "Cutting taxes is always great!" stuff.

Just help me maintain interest.

I understand libs have a problem understanding Economics 101

History shows when you lower taxes you increase revenues

Now, we need spending cuts and MORE tax cuts

Good luck with the Taxacrats running Congress