<p>People always have an easy time telling other people THEY should be paying more. Cheney paid over $500,000 in taxes. I think that’s plenty no natter how much he made. It’s not for anyone else to say what he should be able to get by on.</p>
<p>So, pmrlcomm, do you think the rich should pay taxes at a lower rate than the middle class? Why? And what standard would you propose for paying the nation’s bills? (No fair using the Republican “solution” of borrowing the money and leaving the tab for our kids.) And no “free lunch” or “magic wand” solutions, either. </p>
<p>Barron’s – feel free to chime in: Accept that the nation needs revenue to run the government, and you say who is going to pay it. For everyone whose taxes you cut, somebody else has to pay more. Who do you soak to keep Leona Helmsley’s dog’s tax rates low? Who pays more so that the Cheney’s can pay less? Who? Who are you going to tell to get by on less?</p>
<p>Madviile - That’s an interesting report, and I would recommend it to anyone interestes in the subject. It’s a little out of date - since 2004 the share of the nation’s income enjoyed by the top 1% has gone from 19% to 21% - and the assumption that everyone enjoys equal benefit from military, police, and regulatory expenditures is clearly wrong, but it’s nice to see a recognition that every American gets benefits from government at all levels, whether they recognize it and appreciate it or not.</p>
<p>Who said anything about a lower rate? Not once did I ever say they should pay a lower rate. You obviously either can’t read properly what is posted or are imagining things. It is a proven fact that when marginal tax rates are cut there is an INCREASE in taxes flowing in to the government. Are you in San Fran by chance?</p>
<p>pmrlcomm: You’re talking about the Laffer curve, and you are wrong. It is only proven that cutting marginal tax rates increases revenue at certain levels of taxation. It is not true at all levels.</p>
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<p>I think that the frustration comes from those that are accused of not paying their fair share actually do, and that they receive less in federal services than the amount they contribute, while many that don’t contribute significantly, receive a grossly disproportionate amount relative to their contributions. I think this report demonstrates this. The resentment grows more when the perception or reality is that many that need federal, state, local interventions have repeatedly created the adversity they find themselves in.</p>
<p>The fact that those who may be independently wealthy are attempting to avert the hemorrhaging of their assets to utilize at their discrepancy as opposed to the government isn’t surprising in the least to me.</p>
<p>1of42, I am vaguely familiar with the Laffer curve. From my understading it theoretically can be used to determine an “optimal” tax rate for generating tax revenues. I do not believe it is exactly the same as what I am referring to. Is there an economist in the house?</p>
<p>It is exactly what you are referring to. The Laffer curve is the idea that taxable income elasticity means that there is an optimal marginal taxation rate, above which and below which total tax revenue is lower. Your “when marginal tax rates are cut there is an INCREASE in taxes flowing in to the government” illustrates the idea that the United States was taxing at a rate above the optimal on the Laffer curve.</p>
<p>If you say so. All I know is that in my lifetime each time there has been a significant tax cut the coffers for the government have increased. Am I wrong about that?</p>
<p>pmrlcomm: Within the limited range of tax increases and decreases which we see in America the tax rate’s impact on the economy is negligible. Lowering some taxes can have a short term effect of increasing revenues (which will then decrease to compensate thereafter, resulting in no net change) but the Laffer curve is only true at its extremes: tax rates approaching zero vs. tax rates approaching 100%. As a practical policy guide for America it was debunked long ago.
A discussion here: [Experts</a> Agree That Capital Gains Tax Cuts Lose Revenue Experts Agree That Capital Gains Tax Cuts Lose Revenue](<a href=“http://www.cbpp.org/press-points.htm]Experts”>http://www.cbpp.org/press-points.htm)</p>
<p>Madviile: I wasn’t the one who claimed that the top 1% were paying 50% of the taxes and the bottom 50% nothing (both statements untrue.) I was just encouraging people to get an accurate grip on reality. And the reality is that rich people do not labor under a crushing burden. Rich people do just fine. And rich people also take home a bigger percentage of their gross income than the middle class does. That’s just a fact. The people who are lobbying to shift part of their current share of taxes onto other people are the wealthy, not anyone else. And they use a very sophisticated PR mechanism, including viral marketing, to sell that pitch. (Can you blame them?) I just want people to know the facts: The Cheney’s paid total federal income tax of less than 24% on an income of $2.5 Million. I picked the Cheneys because their tax return has been published. I don’t know the details of the taxes of Paris Hilton, Leona Helmsley’s dog, the various heirs of the Koch, Walton, Mars, Newhouse, Cox, Bass etc. fortunes so I can’t reference them.</p>
<p>You are aware that most people who are very wealthy got that way by being born into the right family, rather than by any personal accomplishments, aren’t you?</p>
<p>The bottom line is that taxes on the wealthy are lower than at any time in my lifetime. I personally wouldn’t mind seeing tax rates restored to the way they were before Reagan, Bush and Bush started running massive deficits due to the shortfall of tax revenue created by their cutting rates - cuts which mostly benefited the very wealthy. I don’t like our kids being saddled with debt; I really don’t like that when the only reason for it is to decrease the effective tax rate of the very wealthy, which is what happened. </p>
<p>Those are facts; you can form whatever opinion you like with them.</p>
<p>[edit]
Yes, you’re wrong. Don’t blame yourself; the PR job of selling that one to you was very good.</p>
<p>Something interesting. Can’t say I understood ever last word of it but…</p>
<p>[Supply-Side</a> Economics, by James D. Gwartney: The Concise Encyclopedia of Economics: Library of Economics and Liberty](<a href=“Supply-Side Economics - Econlib”>Supply-Side Economics - Econlib)</p>
<p>Taxes on the wealthy and the poor are lower now than at any time in our lifetimes. This discussion has pretty much been limited to federal income tax and to say that “And rich people also take home a bigger percentage of their gross income than the middle class does.” can’t be accurate. The top 1% pay on average 23.13% of their AGI in income tax. The bottom 50% pay 2.98%. How can you say that. I think I understand what you mean but what you said isn’t correct.</p>
<p>BTW I think I am the one that threw out the 1% pay 50% of the taxes thing and after I looked it up I was admittedly wrong. They only pay 39% or something like that. </p>
<p>Since several of you seem to have a better grip on economics than I do take a look at this and let me know how you boil it down:</p>
<p>[Supply-Side</a> Economics, by James D. Gwartney: The Concise Encyclopedia of Economics: Library of Economics and Liberty](<a href=“Supply-Side Economics - Econlib”>Supply-Side Economics - Econlib)</p>
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Kluge, you are wrong again.</p>
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<p>Wrong. You define progressive/regressive based on INCOME. Sales tax is based on spending. It cannot be regressive as you claim because it is based on spending, not income. In other words, your claim that the sales tax is regressive (as defined using the term “income”) and somehow excuses lower income people from any income tax burden is patently false. </p>
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Your extreme examples are meaningless. We are talking about groups of people. On average, groups of people with higher income spend a lot more than groups of people with lower income. Thus, higher income people pay proportionatly more sales taxes than do lower income people.</p>
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No, healthier people live longer. Even the poor can be healthy. Wealthier people should not have to pay more for the same FICA benefits as do poorer people. We don’t charge rich people three times the price of a 37 inch TV than we do poor people. It is the same product and should be the same price for all.</p>
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You obviously didn’t major in economcis. In a purely competitive market, taxes charged to a company are paid by that company and are not passed thru to consumers. Whether costs such as taxes are passed throught to consumers and by what amount depends on how competitive the market is in the locality. Your assertion assumes 100 percent pass through which rarely happens in real estate. Tenants don’t pay real estate taxes, they pay rent which is based on the rental market in the locality. BTW, Walmat does not pay sales taxes, its consumers pay sales taxes. </p>
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<p>You continue to over look the most important point. Those with salaries of 200K pay twice as much for Medicare as do people with salaries of 100K. People with salaries of 300K pay three times as much, etc. If health insurance at IBM costs 5K per person, you don’t see IBM charging its executives 40K for the same health insurance that costs a secretary 5K.</p>
<p>Kluge, why don’t you just go ahead and admit you hate the most productive people in our society – the rich.</p>
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<p>Yes, it would seem plausible. However, I don’t feel the cumpulsion to tell my legislature that because of that privilege, they should be obligated to contribute more of their wealth. My energies would go towards holding the legislators more fiscally repsonsible. A pipe dream maybe, but class envy isn’t the answer either.</p>
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The most obvious response to this specific point would simply to tax capital gains at a higher rate than income. That’s an ultra-progressive tax.</p>
<p>A famous Senator once said: Don’t tax you, and don’t tax me; tax the man behind the tree (i.e., the other guy).</p>
<p>Here’s a link to the US budget. <a href=“http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf[/url]”>http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf</a> The historical charts, pages 20 - 25, are informative. You can see that as the economy has grown, federal revenues have grown as well. But there’s no pattern of revenues increasing disproportionately after tax cuts; in fact, the opposite is true. And total tax revenues and expenditures have remained relatively stable as a % of GDP for 50 years; the main variation in recent years has come when Reagan, Bush & Bush borrowed money instead of raising it through taxes, and spent more than we paid.</p>
<p>In terms of “take home” you need to remember that workers pay 15% of their gross income in FICA taxes in addition to income taxes. The middle class (as opposed to the poor) pays income tax on top of that. People living off of their inheritances don;t have to pay any FICA tax if they choose not to; if they do, it doesn’t affect their total net income that much.</p>
<p>Madville, accusing anyone who supports a progressive tax structure of “class envy” is kind of cheesy, don’t you think? I’m just responding to the suggestion that the rich all get rich by working harder, so they should be rewarded with lower taxes. That’s generally not true.</p>
<p>kluge, the employer pays half of that 15% so only 7.5% (roughly) is paid in the form of a tax by the income earner. I really don’t see how anyone can make a plausible argument that some should be taxed more just because they can afford it. I guess if your ilk had their way that almost everything we purchase should be on a sliding scale. </p>
<p>I really don’t see how increasing capital gains taxes would help to spur the economy or share the wealth. What I think would really interesting is to see the nation’s top 1% of income earners take a year long siesta and stop earning for that year. Let everyone else fend for themselves instead of subsidising them. How would you feel if Bill, Warren and all the others decided to no earn any taxable federal income in 09?</p>
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<p>The fool and his money shall soon be parted. At least in this one respect those who have perpetuated their wealth have applied that proverb by not being foolish. I’m not an advocate for creating wealth from ill gotten means, but if I’m ever fortnate enough to have someone bequeath me an inheritance or through hard work, ingenuity, luck, whatever, come across a huge sum of money, I SURE don’t want the government thinking that can appropriate it better than I can. Let’s face it, many of those who are proponents of such tax laws are given to class envy and petty jealousies, subject to the rhetoric of socialist minded demagogues. If it doesn’t apply personally, one shouldn’t be offended. This country has a large issue with consumption. Focus on our personal habits first and foremost, then, if there are serious economic conditions keeping americans from obtaining basic fundamental quality of life necessities through no fault of their own, then we should look into governmental interventions to alleviate those issues. Robbing (rich) Peter to feed (poor) Paul isn’t the solution.</p>
<p>Increasing capital gains tax is a bad idea, research has shown that, it decreases tax revenue, and also, decrease investments. The economy is better off if wealthy individuals invest more of their money, and this will happen if the capital gains tax is low.</p>
<p>“1of42, I couldn’t agree with you more. There are those who are always going to be jealous and think that folks that have more didn’t do anything to deserve it. If I wanted to work harder I could likely have more. Taking away someone’s wealth because you don’t like how they legally earned it…that’s a road I wouldn’t want to go down. Smacks of communism…maybe worse.”</p>
<p>The problem is when you have a wealthy group that can influence the laws that we have to live under. And then charge a toll to access the basics of life.</p>
<p>Legally earned it? When you get to influence the laws to favor your company or your industry, is it really moral or ethical?</p>