I’m all for flat tax.
I’m all for any system that isn’t focused on taxing work. The tax system is great at generating revenue AND encouraging/discouraging certain behaviors. If we could move a little more toward taxing consumption and passive income rather than taxing work, we might be able to generate a little more growth and give people some more incentive to strive for a better life themselves rather than waiting for Uncle Sam to just redistribute their fair share from all the greedy robber baron 1%ers.
I like consumption tax. But I bet my kids won’t so it’s a wash.
The slow decline in US GDP growth over time is correlated with decreases in federal income tax rates. Obviously correlation is not causation, but its practically impossible to conduct a controlled study on the US economy because its not a system you can control. Its quite annoying hearing people say increased tax rates cause a decrease in economic growth when I havent seen any evidence to that claim.
http://taxfoundation.org/sites/taxfoundation.org/files/docs/fed_individual_rate_history_adjusted.pdf
https://commons.wikimedia.org/wiki/File:U.S._GDP_Growth_Rate_Over_Time.png
True, in most of the states that have an estate tax, the threshold for paying the tax is lower than for the federal estate tax. But then, only 15 states have an estate tax. Popular retirement destination states like Florida, Arizona, and Texas don’t have estate taxes. And of the 10 most populous states, only #4 New York and #5 Illinois have a state estate tax, though #6 Pennsylvania has an inheritance tax, which is a somewhat different thing–it taxes the heir, not the decedent’s estate. #11 New Jersey has both an estate tax and an inheritance tax, and its estate tax kicks in at $675,000, the lowest for any state. New Jersey can be an expensive place to die.
@ 23,
Try not to over think it with charts and graphs. Even though the top US marginal tax rates decreased slightly that alone wasn’t enough to create growth in the overall economy. But do we need evidence? Doesn’t it stand to reason if tax rates go down, economic activity is likely to go up?
When Reagan got congress to overhaul the tax code in 86 or 87 it was followed by a recession. At first. But soon enough the economy started to kick butt. Does hat count as evidence?
Well a lot of things seem intuitive, but are not supported by evidence. And something that short term doesn’t really show anything, There was only only 3 years during Reagan’s term when the economy was growing at kick butt pace
Charts and graphs aside, it’s somewhat pathetic for an advanced society to put such a heavy tax on an activity that we are trying to encourage. Focusing a little more consumption and/or use taxes will at least give people the illusion that they have a little control over their financial standing outside of what the government independently determines they are entitled to.
And don’t get too excited about the estate tax. In most recent years it affects less than 10,000 households a year and only raises about $25 billion. What’s that get you, 2 or 3 F-22 fighter jets? We have much bigger issues.
But the significant and real tax overhaul of 86 paved the way for the boom years of the 90’s. I don’t think that is controversial at all, that is basically common knowledge. But did we really need proof? If you make small incremental changes to tax law, you shouldn’t expect much economic reaction. What happened in 86 was a big deal. Congress, for once, didn’t tinker with the tax law they really overhauled it and it had a clear effect that can’t be denied.
What else do you need to know about how lowering tax rates would be spectacular for the economy and is exactly what this country needs. Of course, just lowering tax rates (and government revenues) would only add to the deficit unless government spending also goes down. And that, ladies and gentlemen, is why is rarely happens.
Like I said a lot of intuitive things are not supported by evidence. This is exactly what i’ve said in orignial post in this thread. People continually claiming something as fact, but dont provide evidence for it. This is basic science. Without evidence you cannot claim something as a fact. Show evidence, yes we need it regardless of how obvious it seems to some.
Um…I hope you understand that “the really rich” consists of a large number of individuals, all of whom don’t do exactly the same thing.
ETA: Speaking of “hypocrisy”…what about all those middle class citizens with incomes between, say $75K and $125K who are always grousing about the rich? Their average rate is about 10% - much less than half of what the rich pay.
I don’t have words to describe that sort of logic.
If you don’t want to buy the Raptors, then don’t buy them, but $25 billion is still $25 billion.
“ETA: Speaking of “hypocrisy”…what about all those middle class citizens with incomes between, say $75K and $125K who are always grousing about the rich? Their average rate is about 10% - much less than half of what the rich pay.”
No idea what you’re talking about, 10%?
If you’re making $125K, you’re paying far more than 10%, unless you have tons of deductions, and not everybody does. Add the fact that you’re paying Medicare and social security on about all of your income, and that’s over 8% right there.
I’m not really interested in raising anyone’s taxes, however, if it’s going to be done, I say tax capital gains as ordinary income, lower rates and make deductions disappear.
I object to criticizing anyone who follows the rules in place while they criticize those rules. We set up a trust for our kids because we live in a high estate tax state. But I don’t support the law that enables me to do that. Why is that hypocritical? That’s like criticizing a baseball manager for not liking the designated batter rule but using it anyway.
You play by the rules that exist, not the ones we’d like to exist.
Well, of course you are. That’s because $125K is at the top of the range I just mentioned and the 10% figure is an average over the entire range. It’s lower at the bottom and higher at the top.
I don’t have the data for the taxpayers making exactly $125K as you stated, but the average for the next group up is 13%, so your “far more” number is somewhere between 10% and 13%.
I don’t think that’s hypocritical at all, as most of us follow the rules, though we don’t make the laws. However, someone like Warren Buffet loudly advocating for tax law change, while using his battery of attorneys to avoid every tax possible, seems hypocritical. Makes you think he’d find a way out of paying any taxes even if he managed to change the tax laws single handedly. Kind of in the same vein as how his company rips off low income people buying mobile homes.
So, why do people complain that the rich pay lower rates when they not only pay (much) higher rates, but they pay many more times as much in an absolute sense as well?
The top 1% are already paying over 45% of fed income taxes. The bottom 60% pay less than 2%. Google is your friend.
It depends upon who you consider “the rich”. The working wealthy, who are taxed very highly on earned income, or the extremely wealthy, who pay a much lower tax rate, and get their income from capital gains, not earned income. Some people don’t understand that there’s a huge difference.
That would be consistent with everything I’ve said.