Degenerate's Tax the Rich Fixation

[LogikAndReazon]

Raising taxes on the rich was the cornerstone of President Obama’s reelection campaign. “If we’re serious about reducing the deficit,” Obama told a rally in Columbus, Ohio, on election day, “we’ve got to ask the wealthiest Americans to go back to the tax rates they paid when Bill Clinton was in office.”

But just how much deficit reduction would Obama’s tax hikes on the rich necessarily accomplish?

Nothing, according to the Congressional Budget Office.

Letting tax rates rise to Clinton era levels for those families making over $250,000 a year would only raise $824 billion over ten years. That is not even enough revenue to undo the sequester that Obama promised “will not happen” during his final debate with Mitt Romney....

How much deficit reduction would Obama

 

[jwoodie]

In anticipation of the standard retort that previous U.S. economies have grown under higher tax rates, please explain the economic theory which supports this alleged correlation and why we shouldn't raise taxes on the rich to 90% or even 100% in order to reap even greater tax revenues.

 

[DiamondDave]

Many of us have said all along that his attack plan was bullshit and that if middle classers are voting for Obamalama, they will eventually rue the day because their taxes will have to go up for Obamalama's freebie fixation... And you think he wants a candidate of the REPs in 2016 to say 'I told you so' and point to 20-25T in debt? Nope... So he will indeed raise taxes on everyone in the middle class, but sneakily try and mask it as something else

 

[Koios]

Raising taxes on the rich was the cornerstone of President Obama’s reelection campaign. “If we’re serious about reducing the deficit,” Obama told a rally in Columbus, Ohio, on election day, “we’ve got to ask the wealthiest Americans to go back to the tax rates they paid when Bill Clinton was in office.”

But just how much deficit reduction would Obama’s tax hikes on the rich necessarily accomplish?

Nothing, according to the Congressional Budget Office.

Letting tax rates rise to Clinton era levels for those families making over $250,000 a year would only raise $824 billion over ten years. That is not even enough revenue to undo the sequester that Obama promised “will not happen” during his final debate with Mitt Romney....

How much deficit reduction would Obama

It has other impacts besides the direct revenue:

1. It's an historical fact that growth (+ GDP) is higher when tax rates are higher; the reason is its "redistributive effect," a vital component in modern econmies, the world over. Money at the top tends to stagnate, whereas when it's re-distributed it moves rapidly through the economy, in what are called "high monetary velocity points." Increase growth by a percentage point or two, and the impact on revenue is substantial.

2. The calculation focuses only on income from Labor (about 2/3rds) and ignores the impact on income from Capital (1/3) which also need to be increased at the same time, progressively.

FWIW

 

[Skull Pilot]

Raising taxes on the rich was the cornerstone of President Obama’s reelection campaign. “If we’re serious about reducing the deficit,” Obama told a rally in Columbus, Ohio, on election day, “we’ve got to ask the wealthiest Americans to go back to the tax rates they paid when Bill Clinton was in office.”

But just how much deficit reduction would Obama’s tax hikes on the rich necessarily accomplish?

Nothing, according to the Congressional Budget Office.

Letting tax rates rise to Clinton era levels for those families making over $250,000 a year would only raise $824 billion over ten years. That is not even enough revenue to undo the sequester that Obama promised “will not happen” during his final debate with Mitt Romney....

How much deficit reduction would Obama

It has other impacts besides the direct revenue:

1. It's an historical fact that growth (+ GDP) is higher when tax rates are higher; the reason is its "redistributive effect," a vital component in modern econmies, the world over. Money at the top tends to stagnate, whereas when it's re-distributed it moves rapidly through the economy, in what are called "high monetary velocity points." Increase growth by a percentage point or two, and the impact on revenue is substantial.

2. The calculation focuses only on income from Labor (about 2/3rds) and ignores the impact on income from Capital (1/3) which also need to be increased at the same time, progressively.

FWIW

So you're fine with the taxes going up on everyone and the ending of tax credits for buying cars, the earned income tax credit etc etc?

If you're pining for the good old days of higher taxes then just make sure you're including everyone.

 

[LogikAndReazon]

Raising taxes on the rich was the cornerstone of President Obama’s reelection campaign. “If we’re serious about reducing the deficit,” Obama told a rally in Columbus, Ohio, on election day, “we’ve got to ask the wealthiest Americans to go back to the tax rates they paid when Bill Clinton was in office.”

But just how much deficit reduction would Obama’s tax hikes on the rich necessarily accomplish?

Nothing, according to the Congressional Budget Office.

Letting tax rates rise to Clinton era levels for those families making over $250,000 a year would only raise $824 billion over ten years. That is not even enough revenue to undo the sequester that Obama promised “will not happen” during his final debate with Mitt Romney....

How much deficit reduction would Obama

It has other impacts besides the direct revenue:

1. It's an historical fact that growth (+ GDP) is higher when tax rates are higher; the reason is its "redistributive effect," a vital component in modern econmies, the world over. Money at the top tends to stagnate, whereas when it's re-distributed it moves rapidly through the economy, in what are called "high monetary velocity points." Increase growth by a percentage point or two, and the impact on revenue is substantial.

2. The calculation focuses only on income from Labor (about 2/3rds) and ignores the impact on income from Capital (1/3) which also need to be increased at the same time, progressively.

FWIW

Just think of the velocity and growth the economy could have with 90% income and capital gains tax rates ..... LOL

 

[WillowTree]

obummie has the unions in fo lunch today.. he's got big plans,,, tomorrow? the big business men who kiss his butt, like GE,, the next day,, a bilateral meeting with the gop and demoncrap leaders,, know who's left out? take a guess?



Small business owners.







heeeee fucking heeeeeee.

 

[Chris]

The 400 highest-earning taxpayers in the U.S. reported a record $105 billion in total adjusted gross income in 2006, but they paid just $18 billion in tax, new Internal Revenue Service figures show. That works out to an average federal income tax bite of 17%--the lowest rate paid by the richest 400 during the 15-year period covered by the IRS statistics.

 

[Chris]

There was, in fact, only one time that capital gains were taxed at the same rates that were paid by people who earned their money by working. That was during the years 1988 to 1990, as a result of the Tax Reform Act of 1986 — a law championed by President Ronald Reagan.

 

[Chris]

" We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. In theory some of those loophole were understandable, but in practice, they sometimes made it possible for millionaires to pay nothing." ~ Ronald Reagan.

 

[Skull Pilot]

Here's a great reference for tax rates for the past 5 decades or so.

http://www.taxpolicycenter.org/taxfacts/Content/PDF/individual_rates.pdf

Take a look at the bottom tax bracket when the highest was 70% or over and tell me you all want to go back to the good old days.

 

[Koios]

Raising taxes on the rich was the cornerstone of President Obama’s reelection campaign. “If we’re serious about reducing the deficit,” Obama told a rally in Columbus, Ohio, on election day, “we’ve got to ask the wealthiest Americans to go back to the tax rates they paid when Bill Clinton was in office.”

But just how much deficit reduction would Obama’s tax hikes on the rich necessarily accomplish?

Nothing, according to the Congressional Budget Office.

Letting tax rates rise to Clinton era levels for those families making over $250,000 a year would only raise $824 billion over ten years. That is not even enough revenue to undo the sequester that Obama promised “will not happen” during his final debate with Mitt Romney....

How much deficit reduction would Obama

It has other impacts besides the direct revenue:

1. It's an historical fact that growth (+ GDP) is higher when tax rates are higher; the reason is its "redistributive effect," a vital component in modern econmies, the world over. Money at the top tends to stagnate, whereas when it's re-distributed it moves rapidly through the economy, in what are called "high monetary velocity points." Increase growth by a percentage point or two, and the impact on revenue is substantial.

2. The calculation focuses only on income from Labor (about 2/3rds) and ignores the impact on income from Capital (1/3) which also need to be increased at the same time, progressively.

FWIW

So you're fine with the taxes going up on everyone and the ending of tax credits for buying cars, the earned income tax credit etc etc?

If you're pining for the good old days of higher taxes then just make sure you're including everyone.

Yes and no. I do not advocate a rate increase on the middle class (lower and middle; upper middle, yes), but support policies that would increase pay, and with it revenue from lower and middle earners. I would, given the power, also raise the rate on the top earning brackets, and eliminate differentiation on types of income; in essence, I'd want all income, whether from Labor, Capital or C Corps, taxed similarly.

 

[Skull Pilot]

It has other impacts besides the direct revenue:

1. It's an historical fact that growth (+ GDP) is higher when tax rates are higher; the reason is its "redistributive effect," a vital component in modern econmies, the world over. Money at the top tends to stagnate, whereas when it's re-distributed it moves rapidly through the economy, in what are called "high monetary velocity points." Increase growth by a percentage point or two, and the impact on revenue is substantial.

2. The calculation focuses only on income from Labor (about 2/3rds) and ignores the impact on income from Capital (1/3) which also need to be increased at the same time, progressively.

FWIW

So you're fine with the taxes going up on everyone and the ending of tax credits for buying cars, the earned income tax credit etc etc?

If you're pining for the good old days of higher taxes then just make sure you're including everyone.

Yes and no. I do not advocate a rate increase on the middle class (lower and middle; upper middle, yes), but support policies that would increase pay, and with it revenue from lower and middle earners. I would, given the power, also raise the rate on the top earning brackets, and eliminate differentiation on types of income; in essence, I'd want all income, whether from Labor, Capital or C Corps, taxed similarly.

So Do I In fact I think that all income regardless of its source should be taxed at a flat rate of 10% no deductions, no tax credits just 10% off the top. Simple and it will increase tax revenues substantially and we can save billions by gutting the IRS.

 

[Koios]

So you're fine with the taxes going up on everyone and the ending of tax credits for buying cars, the earned income tax credit etc etc?

If you're pining for the good old days of higher taxes then just make sure you're including everyone.

Yes and no. I do not advocate a rate increase on the middle class (lower and middle; upper middle, yes), but support policies that would increase pay, and with it revenue from lower and middle earners. I would, given the power, also raise the rate on the top earning brackets, and eliminate differentiation on types of income; in essence, I'd want all income, whether from Labor, Capital or C Corps, taxed similarly.

So Do I In fact I think that all income regardless of its source should be taxed at a flat rate of 10% no deductions, no tax credits just 10% off the top.

Doesn't work for two reasons:

1. 10% is not sufficient; it would need to be north of 30%, currently;

2. No redistributive effect, which would fast-track us to a dual society, akin to South American economies.

 

[Skull Pilot]

Yes and no. I do not advocate a rate increase on the middle class (lower and middle; upper middle, yes), but support policies that would increase pay, and with it revenue from lower and middle earners. I would, given the power, also raise the rate on the top earning brackets, and eliminate differentiation on types of income; in essence, I'd want all income, whether from Labor, Capital or C Corps, taxed similarly.

So Do I In fact I think that all income regardless of its source should be taxed at a flat rate of 10% no deductions, no tax credits just 10% off the top.

Doesn't work for two reasons:

1. 10% is not sufficient; it would need to be north of 30%, currently;

2. No redistributive effect, which would fast-track us to a dual society, akin to South American economies.

No it wouldn't need to be 30%

In 2009 the take in income tax revenues was 865 billion the total AGI was 7.8 trillion for an average tax rate of just north of 11%.

Now the total [personal income in 2009 ( not AGI) was 11.8 trillion 10% of that would be 1.2 trillion

Now add the billions we could save by gutting the IRS and scaling back other government spending.

The result is more revenue not less all for a flat tax of 10%.

Summary of Latest Federal Individual Income Tax Data | Tax Foundation

Total Personal Income U.S. and All States

The purpose of taxation is not to redistribute money but to pay for the government.

 

[jwoodie]

1. It's an historical fact that growth (+ GDP) is higher when tax rates are higher; the reason is its "redistributive effect," a vital component in modern econmies, the world over. Money at the top tends to stagnate, whereas when it's re-distributed it moves rapidly through the economy, in what are called "high monetary velocity points." Increase growth by a percentage point or two, and the impact on revenue is substantial.

2. The calculation focuses only on income from Labor (about 2/3rds) and ignores the impact on income from Capital (1/3) which also need to be increased at the same time, progressively.

FWIW[/QUOTE

Did you just make this up? The "redistributive effect" simply refers to a progressive tax system which transfers wealth from the rich to the poor. Its principle attribute is the perception of "fairness." Economically, it results in a less efficient allocation of resources.

But even if your thesis was correct, how would you determine optimum "high money velocity points" and why wouldn't they be at a 100% taxation level? Also, how would you increase Capital at the same time as you are raising taxes? More government spending and Quantitative Easing?

 

[LogikAndReazon]

Just think of the social "justice" and envy that could be addressed..............

 

[Koios]

1. It's an historical fact that growth (+ GDP) is higher when tax rates are higher; the reason is its "redistributive effect," a vital component in modern econmies, the world over. Money at the top tends to stagnate, whereas when it's re-distributed it moves rapidly through the economy, in what are called "high monetary velocity points." Increase growth by a percentage point or two, and the impact on revenue is substantial.

2. The calculation focuses only on income from Labor (about 2/3rds) and ignores the impact on income from Capital (1/3) which also need to be increased at the same time, progressively.

FWIW[/QUOTE

Did you just make this up? The "redistributive effect" simply refers to a progressive tax system which transfers wealth from the rich to the poor. Its principle attribute is the perception of "fairness." Economically, it results in a less efficient allocation of resources.

But even if your thesis was correct, how would you determine optimum "high money velocity points" and why wouldn't they be at a 100% taxation level? Also, how would you increase Capital at the same time as you are raising taxes? More government spending and Quantitative Easing?

Hahahahahahaha ...

No; I didn't make it up. It's a vital component in tax policy, in every modern economy in the world, and known to economists as "redistributive effect," which I'll explain right after this:

Right wing fear-mongering firms focus group-tested "wealth redistribution," and came up with that gem, which exploits ignorance of the many minutia in political economics. And it's kinda laughable, since we do not tax wealth, per se. We tax incomes, which benefit from the redistributive effect, increasing wealth, especially for the wealthy.

Back to redistibutive effect, from progressive taxes on income: it mobilizes stagnant capital and moves it back through the economy, creating some momentum on its way back to the top, where it always goes in the end. Thing begin to happen, such as more investor, banking and consumer confidence, with the money flowing around at higher monetary velocity points, greatly improving earnings, especially of the most well off. So the extra few precentage points on their incomes north of $320,000 (about) is easily eclipsed by earnings increases of just 5% or 10%, which is a low average when the economy is growing by 4 or more percent, annually, which higher rates of redistribution have always paralleled, if not more. In the end, the net more, since slightly less of a much bigger number is more than 100% of a lower number, quite often.

And here's why: Lower earners are not paid more when companies do better. They're paid based on labor markets and wage minimums, which do not suddenly improve based on earnings. But higher wage earners and company owners do make more as profits and the economy grow, with bonuses, profit sharing or their S/LL Corp just doing better. And even a saint (S Corp seeing a nice spike in business) might up their worker(s) pay when they're doing better, but ot in parallel with the owner's increase, nor even close.

In re: "fairness," I leave that to preists and philosophers. I merely focus on what's best policy, economically.

Does that clear it up for you?

 

[OohPooPahDoo]

Raising taxes on the rich was the cornerstone of President Obama’s reelection campaign. “If we’re serious about reducing the deficit,” Obama told a rally in Columbus, Ohio, on election day, “we’ve got to ask the wealthiest Americans to go back to the tax rates they paid when Bill Clinton was in office.”

But just how much deficit reduction would Obama’s tax hikes on the rich necessarily accomplish?

Nothing, according to the Congressional Budget Office.

Letting tax rates rise to Clinton era levels for those families making over $250,000 a year would only raise $824 billion over ten years. That is not even enough revenue to undo the sequester that Obama promised “will not happen” during his final debate with Mitt Romney....

How much deficit reduction would Obama

824 billion over 10 years = nothing


Wow. That's some new kinda math.

 

[jwoodie]

Glad I gave you a chuckle, but let's get back to linear logic:

1. Define "stagnant capital" and why it would be more efficiently used by poor people buying food and basic products.

2. Assuming you want to raise taxes on the wealthy, where is your maximum "monetary velocity" point and how did you calculate it?

3. Haven't we mimicked a "redistributive effect" (through borrowing) over the past four years? How has that worked out?

4. You still haven't answered where "additional capital" is supposed to come from.

Note: I am deliberately ignoring Rope-a-Dope's post.