Why Not Raise the Top Tax Bracket to 90%?

[sealybobo]

You need to check your facts, during the Carter administration, a very liberal tax and spend administration, where we had 21 % interest rates the government took in LESS revenue.

When Reagan was elected he cut taxes across the board including those EVIL rich people's taxes, we had tremendous economic growth. The government took in MORE tax revenue than the Carter administration simply because when you reduce taxes across the board, people will spend, save and invest because they have more of their own money to do so, this creates demand, which creates jobs and opportunities. Econ 101

Poor people do not pay taxes, THE UNEMPLOYED PERSON DOES NOT PAY TAXES- you can't squeese blood out of a turnip.

Every unemployed person I know smokes cigarettes and buys gas. So they do pay federal taxes.

And at the end of the year, they have nothing left over. That's why we want to give them some of your money. Spread it around.

 

[editec]

If higher taxes on the rich is the answer to fix our economy... Why not raise the top tax rate back to 90%?

Because it's probably not necessary.

Besides, with this current state of the economy, we need more money in circulation so raising taxes is probably counter-productive.

Understand I think even this modest raise of 4% increase on the > $250,000 incomes is not a good idea.

And that, despite the fact I've been complaining about the too-low rate of taxes on the superwealthy for years and years.

But right now raising taxes is not a good idea.

Your argument however assumes that people are using the extra marginal after tax income in productive economy improving ways.

No, actually I do not assume that at all. What I assume if the poorer people feel the less they spend.

But you point does address why I was advocating tax increases on the superwealthy before this ecomonic meltdown happened.

If folks instead are putting their money in savings accounts, or paying off CC bills, that use of the money is not helping the economy because it is not creating demand for products and services.

True enough.

That is the counter argument. If someone sits on their $$ or just pays down debt, it is better for the Govt to tax it, and spend the revenues on things that create demand for services and products that start the economy moving.

I understand that argument in principle, but right now that principle isn't as inportant as the zeietgiest of people who just saw their investments hammered, and their real estate holding hammered, too.

When people feel poorer, they don't spend, either.

And raising their taxes right now, certainly doesn't improve their mental disposition.

 

[Iriemon]

What exactly is a "statist". I heard Mark Levine use that word, and now I see it being parrotted here, but I'm not sure what it means. Someone who thinks there should be a government?

I thought I gave a fairly succinct description in my post above.

(A statist) want(s) (emphasize) centralized power of the state and de-emphasized autonomy of the individual.

It is from Mark Levin, but not a parrot of what he says. I find it a better definition of what I observe than some of the tags I was trying to stick on it before like marxist or socialist. That's because, it doesn't really matter what the economics of the statist are, it is more important that they emphasize centralized control to the detriment of individual liberty.

Both Republicans and Democrats can be statists. I would argue that both Bushs were statists. It is a matter of degree, speed and focus, just how a particular flavor of statist deprives the individual of their liberty. The Republican flavor does it at a generally slower speed and slightly different focus and the Democrat flavor does it a faster speed and another focus.

That's what it means to me anyway. I can only speak for myself. But, I think the focus of the "Statist" appellation is to denote a control befreft of any economic meaning. So, you could be a fascist statist or a communist statist or a socialist statist.

Thanks.

I suppose who then is a "statist" depends. The pro-life camp, for example, wants the central Govt to make the determination about whether a woman can have an abortion, as opposed to respecting the autonomy of the individual to make the choice. It that way may conservatives would be statists. And probably Levine too, though I'm not positive what his take is on the abortion issue.

 

[editec]

I actually think it's a pretty absurd allegation.....

once again, if it were true, it wouldn't be the red states sucking the federal dollars out of the sytem in welfare funds.

you know, the funds that are paid by the blue states.

I think this has already been covered Jillian. Those federal welfare dollars, as you put them, include things like SS. Many more retirees move to red states where cost of living is lower, and therefore, they collect more "welfare". I'm sure everyone considers SS welfare. On top of this, the percentage of money spent on highways and other types of projects, plus military spending that is higher in many red states, all goes to benefit everyone, not just the red states themselves.

it's because there are also higher levels of poverty in red states.

And lower wages, too.

But hey, they're not plagued by those demon unionists, either are they?

 

[auditor0007]

I actually think it's a pretty absurd allegation.....

once again, if it were true, it wouldn't be the red states sucking the federal dollars out of the sytem in welfare funds.

you know, the funds that are paid by the blue states.

I think this has already been covered Jillian. Those federal welfare dollars, as you put them, include things like SS. Many more retirees move to red states where cost of living is lower, and therefore, they collect more "welfare". I'm sure everyone considers SS welfare. On top of this, the percentage of money spent on highways and other types of projects, plus military spending that is higher in many red states, all goes to benefit everyone, not just the red states themselves.

it's because there are also higher levels of poverty in red states.

Sorry to have to state otherwise, but the fact is that blue states, for the most part, have higher rates of welfare recipients based on population. California seems to lead the way with a rate just a bit higher than Tennessee. West Virginia is fairly high also. However, after that, states like New York, Pennsylvania, Washington, and Oregon, all have more welfare caseloads based on population in comparison to states like Mississippi, Nebraska, Georgia, and Oklahoma. I just did a comparison on this, and it proves out. If you would like to check the numbers yourself, you can use the information from the following links:

StateMaster - Welfare Caseloads > Total recipients (most recent) by state

List of U.S. states by population - Wikipedia, the free encyclopedia

 

[auditor0007]

I actually think it's a pretty absurd allegation.....

once again, if it were true, it wouldn't be the red states sucking the federal dollars out of the sytem in welfare funds.

you know, the funds that are paid by the blue states.

I think this has already been covered Jillian. Those federal welfare dollars, as you put them, include things like SS. Many more retirees move to red states where cost of living is lower, and therefore, they collect more "welfare". I'm sure everyone considers SS welfare. On top of this, the percentage of money spent on highways and other types of projects, plus military spending that is higher in many red states, all goes to benefit everyone, not just the red states themselves.

Prove that. We're telling you that red states take in more WELFARE.

No one said anything about social security.

Bet red states still take more even without SS. BET!!!

I did the research. Facts are facts. Blue states have more welfare recipients based on population than red states. You can't deny the numbers.

 

[auditor0007]

You need to check your facts, during the Carter administration, a very liberal tax and spend administration, where we had 21 % interest rates the government took in LESS revenue.

When Reagan was elected he cut taxes across the board including those EVIL rich people's taxes, we had tremendous economic growth. The government took in MORE tax revenue than the Carter administration simply because when you reduce taxes across the board, people will spend, save and invest because they have more of their own money to do so, this creates demand, which creates jobs and opportunities. Econ 101

Poor people do not pay taxes, THE UNEMPLOYED PERSON DOES NOT PAY TAXES- you can't squeese blood out of a turnip.

Unemployed people pay very little in taxes. However, once you get passed the earned income credit, everyone pays at least 20% to 25% percent. Most pay 30%.

 

[Iriemon]

You need to check your facts, during the Carter administration, a very liberal tax and spend administration, where we had 21 % interest rates the government took in LESS revenue.

When Reagan was elected he cut taxes across the board including those EVIL rich people's taxes, we had tremendous economic growth. The government took in MORE tax revenue than the Carter administration simply because when you reduce taxes across the board, people will spend, save and invest because they have more of their own money to do so, this creates demand, which creates jobs and opportunities. Econ 101

And Clinton raised taxes to 40% and the Govt took in more revenues. Econ 101.

So what is your point, other than demonstrating that it is meaningless to make comparisons of actual numbers over time?

It's not suprising Reagan took in more revenue. With inflation running at close to 10% everything was going up rapidly including nominal income and revenues.

Same with the "tremendous" growth. Real GDP growth during Reagan's term was good, though I wouldn't call it tremendous. It average around 3.4%. A little better than Carter's (3.3%). Add in Bush1 years and average real growth for Reagan/Bush was about 3.0%, which is below average. Compare Clinton years (3.7% average) the 1950s (4.1% average) and the 1960s (4.4%) average.

Revenues in inflation adjusted dollars, using the inflation adjustment factor the BEA uses for GDP figures:

Year - Infl adj Rev in $2000
1981 1013.7
1982 984.9
1983 921.1
1984 985.1
1985 1053.0
1986 1079.6
1987 1167.3
1988 1201.3

Given decent economic growth, revenue growth was not very good. Plus Reagan spent a shitload on the military, which is why the national debt increased 180% while he was president.

 

[knightowl]

I'm with editec. I would have been for slightly higher taxes on the wealthier, but not in the current economic situation.

That is the counter argument. If someone sits on their $$ or just pays down debt, it is better for the Govt to tax it, and spend the revenues on things that create demand for services and products that start the economy moving.

Forced wealth redistribution doesn't sound like something even vaguely in line with our American ideals, but it has become an integral part of our government, and we're hearing it more and more all the time. When will we wake up and smell the Marx beans? The bottom line is that credit allowed us to spend money before we had it. Now the bill is due, and that has to be paid. This has lead to artificial economy growth, that has to be rectified by ... paying cc's and saving.

Rather than 90% taxes, how about somebody that has not been fed with a silver sppon work out the budget with a little common sense? With the record budget deficits, I would have liked to have seen at least a token effort to cut spending, rather than the rampant exacerbation of the issue. When so many are not even getting cost of living increases this year and many are losing hours or even their entire job, the Federal Gov tosses out raises to its employees. Its senseless. I think the GOP finally woke up to this with their crushing losses in the polls. I hope the dems can wake up and arrest the spiraling freefall before our country goes completely bankrupt.

I would be ok paying higher taxes to pay down the debt if there was some responsibility with where those funds are going, and I think the majority of Americans would agree. I'm convinced though, that the current government can't spend $1 without wasting $4 and they have proven that over and over again over the past century.

 

[NOBama]

the post is about raising income taxes not payroll taxes and yes 50% pf people pay no income taxes. And an employer contribution to Social es in just that, the employers tax not the employee's tax.

You didn't say income taxes, you said 50% paid nothing. That is false. I clarified.

Many economists contend that the employers contribution would be more salary to the worker as it is a cost of labor. But even without it they pay about 7.5% directly.

the thread is about raising the top income tax rate to 90% not about payroll taxes and social security so there should be no need to explain my post as I was on topic.

 

[Skull Pilot]

You didn't say income taxes, you said 50% paid nothing. That is false. I clarified.

Many economists contend that the employers contribution would be more salary to the worker as it is a cost of labor. But even without it they pay about 7.5% directly.

the thread is about raising the top income tax rate to 90% not about payroll taxes and social security so there should be no need to explain my post as I was on topic.

Thanks for clarifying.

Then you know the answer to your own question "Why not have the 50% of people who pay nothing pay something?" is they are paying something.

If you want to ask why they shouldn't pay more taxes than the 7.5-15% they already are paying, then we can get into a discussion about why a very poor family barely getting by without enough to pay for necessities should pay even more taxes so the family with tens of millions in income can afford a larger yacht.

Excuse me, but the income taxes that everyone should pay do not help the wealthy buy a yacht. they help provide government services which those that don't pay use far more of than those that pay the highest rates.

and again we are talking about income taxes here not social security taxes and yes everyone should pay more than the 7.5% ( not 15%) for social security. After all they get all that back and more after they retire don't they?

 

[Iriemon]

I thought you were talking about the people who would be subject to the 90% tax (if it were to be imposed). My bad if I misapprehended you.

As a point of reference though, the top 1% of income earners earn 18% of all income earned in the US. However, they pay 39% of all income taxes paid in the US.

Given that, how much is their "fair share?"

On the other hand, the top 1% only pay about 4% of payroll taxes like medicare and SS.

Fair if you are asking my opinion would be some percentage higher than the percentage of total income they earned. How much higher depends on a number of factors (like how much the Govt is in debt) but somewhere around 10-20 points would be my estimation.

Let's leave the entitlement sham aside. We're all getting our ass handed to us on that ponzi scheme.

But it is the working poorer that effectively pay this tax. The very wealthy don't effectively pay SS as a percentage of their income.

So yes, if your goal is to skew the data and make it look like the rich are paying more of the tax burden than they are, which is apparently your objective, it makes sense to pretend people don't pay payroll taxes.

So, if I understand your response, if the stats I've cited are true and the top 1% is receiving 18% of the income, but paying 39% of the taxes, that would mean they are paying in taxes over 100% more than the percentage of income they earn.

So, you're saying that they are over-paying by about 80-90%, right? Or, stated another way, if people who currently pay little or no income tax, the bottom 40-60% of the population, paid more, then the disparity would disappear, right?

The wealthiest 1% pay 27% of all taxes, according to the CBO. Which is a little skewed high because the CBO attributes all corporate taxes as being paid for by shareholders, which is a debateable conclusion, and the corporate tax accounts for about about 1/3 of their effective taxes. On the other hand, they make 18% of all income. That is a 66% ratio using your formula.

Given that the only a small percentage of the income of this group is needed for necessities compared to compromising most all the income of the poorest group, the richest 1% should pay more than there share of income. Given my druthers and the debt shape the country is in, a figure closer to the lower to mid 30s (or a ratio closer to 100%) would probably be my preference.


http://www.cbo.gov/ftpdocs/88xx/doc8885/Appendix_wtoc.pdf

 

[Iriemon]

the thread is about raising the top income tax rate to 90% not about payroll taxes and social security so there should be no need to explain my post as I was on topic.

Thanks for clarifying.

Then you know the answer to your own question "Why not have the 50% of people who pay nothing pay something?" is they are paying something.

If you want to ask why they shouldn't pay more taxes than the 7.5-15% they already are paying, then we can get into a discussion about why a very poor family barely getting by without enough to pay for necessities should pay even more taxes so the family with tens of millions in income can afford a larger yacht.

Excuse me, but the income taxes that everyone should pay do not help the wealthy buy a yacht. they help provide government services which those that don't pay use far more of than those that pay the highest rates.

If you point is the poor should pay more instead of the rich paying more, that means the after tax income of the rich is greater, and they can afford that bigger yacht.

Meanwhile the poorer go without health insurance or some other basic need.

and again we are talking about income taxes here not social security taxes and yes everyone should pay more than the 7.5% ( not 15%) for social security. After all they get all that back and more after they retire don't they?

I'm talking about all taxes. I can understand why you'd want to only talk about income taxes to make the rich look relatively worse off.

SS taxes are taxes. About a quarter of them have been used to fund the deficits -- in effect SS tax revenues the working poor mostly pay have been financing tax cuts that benefit the richest most.

Their SS taxes that are used for SS go to current retirees. Whether they get anything back depends on how long they live.

 

[Iriemon]

I'm with editec. I would have been for slightly higher taxes on the wealthier, but not in the current economic situation.

That is the counter argument. If someone sits on their $$ or just pays down debt, it is better for the Govt to tax it, and spend the revenues on things that create demand for services and products that start the economy moving.

Forced wealth redistribution doesn't sound like something even vaguely in line with our American ideals, but it has become an integral part of our government, and we're hearing it more and more all the time. When will we wake up and smell the Marx beans? The bottom line is that credit allowed us to spend money before we had it. Now the bill is due, and that has to be paid. This has lead to artificial economy growth, that has to be rectified by ... paying cc's and saving.

Rather than 90% taxes, how about somebody that has not been fed with a silver sppon work out the budget with a little common sense? With the record budget deficits, I would have liked to have seen at least a token effort to cut spending, rather than the rampant exacerbation of the issue. When so many are not even getting cost of living increases this year and many are losing hours or even their entire job, the Federal Gov tosses out raises to its employees. Its senseless. I think the GOP finally woke up to this with their crushing losses in the polls. I hope the dems can wake up and arrest the spiraling freefall before our country goes completely bankrupt.

I'd like to see spending cuts in an ideal world too. I have about $1/2 trillion I'd do. But cutting government spending in a credit based recession arguably makes little sense. The economy needs all the spending it can get because businesses and individuals aren't.

I would be ok paying higher taxes to pay down the debt if there was some responsibility with where those funds are going, and I think the majority of Americans would agree. I'm convinced though, that the current government can't spend $1 without wasting $4 and they have proven that over and over again over the past century.

Good for you. I'm with you.

Though I'm not sure I agree with your view that the majority of Americans would agree with your proposal. Some conservatives here have indicated they just as soon see the country go bankrupt than pay more taxes, and many won't even address that issue. I believe for most of them, there is no compromise on taxes regardless of the situation.

 

[garyd]

Sorry we on the pro life side do not want the federal government decidsing who will and will not have an abortion or whether or not such is legal. The Federal government by the way already did that in the presonage nine black robed supremes. What we wish to do is return that power to the various states where the hell it belongs. By the way at the time of Roe v. Wade 36 of the 50 states already allowed abortions in the case of rape, incest, and threat to the mother's health and life.

The larger the tax rate the smaller the economy and the more likely the people you are trying to soak will tell you to stick it up your but anf move elsewhere. That right now is the California experience where businesses are fleeing like there is no tomorrow.

 

[mash107]

Because they earned their money and they should keep it. The same way you dont want to pay 90%

Can we compromise?

Clearly the way both parties spend, our government needs additional money.

Now you can't approve of borrowing from China and putting it on the debt, can you?

So where are we going to come up with the money to pay off what we have already spent?

You think your taxes should be raised? That'll dramatically affect your prosperity. In my opinion, you and I already get taxed too much.

So why not roll back the tax cuts back to what they were when Reagan was in office? Rich people were still rich back then. And the economy was good so that middle class people could become rich.

Are you in favor of Oligarchy?

Oligarchy (Greek Ὀλιγαρχία, Oligarkhía) is a form of government where power effectively rests with a small elite segment of society distinguished by royalty, wealth, family, military influence or religious hegemony.

We're heading that way buddy with your free market capitalism no regulations blabla

Whaaaaaaaaat o.0?

That doesn't make any amount of sense.

The system that preaches the government elite doesn't have power to do anything harmful against us is free market capitalism. Free markets is the ultimate freedom against the powerful and it's regulations. Regulations against speech, privacy, assembly, property has always been a tool of the powerful monarchies in centuries before to control their population... and free markets arose in the 18th century as a stark opponent to that. Now you want to regress us to a time period where our overlords/king/queen/President/etc has direct control of our property? Leave those regressive ideas in the middle ages where they belong.

Not to mention, why do you enjoy pillaging the poor to benefit AIG/GM/Chrysler/etc? In free markets, government would simply not have the power to do so. But if you want us to regress a few centuries to an economic system where the powerful get to decide how we are to spend our money, who among us gets to own property, etc, then move to North Korea and join your regressive buddies there.

 

[Iriemon]

...and again we are talking about income taxes here not social security taxes and yes everyone should pay more than the 7.5% ( not 15%) for social security. ...

CBO assumes -- as to most economists -- that employers' share of payroll taxes is passed on to employees in the form of lower wages than would otherwise be paid.

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

 

[Iriemon]

Sorry we on the pro life side do not want the federal government decidsing who will and will not have an abortion or whether or not such is legal. The Federal government by the way already did that in the presonage nine black robed supremes. What we wish to do is return that power to the various states where the hell it belongs. By the way at the time of Roe v. Wade 36 of the 50 states already allowed abortions in the case of rape, incest, and threat to the mother's health and life.

The federal government does not decide who will have an abortion. An individual decides that. Only the statist would say that the state has a role in that decision.