In America, it's liberal-leftist to say the rich should pay the same percent taxes as the middle class
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Eli Rabett
Eli Rabett, a not quite failed professorial techno-bunny who finally handed in the keys and retired from his wanna be research university. The students continue to be naive but great people and the administrators continue to vary day-to-day between homicidal and delusional without Eli's help. Eli notices from recent political developments that this behavior is not limited to administrators. His colleagues retain their curious inability to see the holes that they dig for themselves. Prof. Rabett is thankful that they, or at least some of them occasionally heeded his pointing out the implications of the various enthusiasms that rattle around the department and school. Ms. Rabett is thankful that Prof. Rabett occasionally heeds her pointing out that he is nuts.
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50 comments:
Oh, worse, it's "class warfare", you know, just like the Bolshies, lining them up against the wall ...
Oliphant has a great and relevant cartoon today ...
Makes you wonder who's really doing the class warfare.
Looks like an half of a #greenfieldism.
Speaking of class warfare, Wall Street protesters are being arrested:
http://www.livestream.com/globalrevolution?utm_source=lsplayer&utm_medium=embed&utm_campaign=footerlinks
Already debunked by the AP, try again rabetts.
http://www.google.com/hostednews/ap/article/ALeqM5iP3lhS4ZQ-UhyUvFfUgdPCiu-jJA?docId=47a565563a294b2bad96544a7f0ddc1b
Celery Eater
From CE's link:
"There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service."
Blueshift
Blueshift, for some strange reason, did not post the complete quote.
"There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. But that's less than 1 percent of the nearly 237,000 returns with incomes above $1 million."
I encourage all of you to read the article, go to the IRS website and look at the actual numbers. This is just Obama's ploy to have something to campaign on, it is NOT a serious effort to create jobs or reduce the deficit.
Celery Eater
" But that's less than 1 percent of the nearly 237,000 returns with incomes above $1 million"
Then there's no real reason for the Republicans to oppose getting that less than 1 percent in line with the greater than 99 percent who are taxed at a reasonable rate, eh, Celery Eater?
I'm sure that's your point ...
Of course the number of millionaires paying "no income tax" isn't the point, but is something of a goalpost move, the point (made by buffett) is that many people with high income are making most of their money from capital gains, taxed at 15%, and not subject to FICA.
CE,
The additional sentence appears to add information, but when examined it doesn't tell us much.
1% paid $0 in income tax.
99% paid >$0. What percentage paid less than the typical middle class tax rate? You can't know from the article.
blueshift
"Then there's no real reason for the Republicans to oppose getting that less than 1 percent in line with the greater than 99 percent who are taxed at a reasonable rate, eh, Celery Eater?"
Sure, propose a plan to limit deductions and flatten out all taxes and you will have my support. And let us include the 47% of americans who cureently pay $0 in Federal Income taxes, let's say they each pay $100, so everyone contributes, the Democrats could not say no to that, could they Dhogaza?
"What percentage paid less than the typical middle class tax rate? You can't know from the article."
Irrelevant point you are trying to make, look at the overall picture.
"This year, households making more than $1 million will pay an average of 29.1 percent of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.
Households making between $50,000 and $75,000 will pay an average of 15 percent of their income in federal taxes.
Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5 percent of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7 percent."
So Obama's "Buffet Rule" is based on a faulty premise. Buffet's company has its own problems paying taxes as well.
http://www.huffingtonpost.com/2011/08/29/warren-buffett-taxes-berkshire-hathaway_n_941099.html
Do you all support the plan, because it taxes the rich, because it will work and fix the economy, or you just want to support Obama no matter what?
Celery Eater
The article seems written to be confusing - it nowhere clearly describes the FICA issue. Total FICA tax (employee + employer) is 15.3% of salary below about $100,000, and 0% for salary above that amount. That, together with the low capital gains/investment tax rate, is why even with present large exemptions and credits the total rate for low-income people is often higher than for high-income people.
The federal taxes people pay either have to include both the federal income tax and FICA, or you have to agree that Social Security and Medicare are completely separate issues from the Federal Budget and are not a concern as far as deficit-cutting. You can't have it both ways.
It pretty much depends on how much you can shift to capital gains. The other game is to deduct things like your Mercedes and your Easter Egg collection as a business expense. Eli has seen a lot of that.
CE,
"Obama's Buffet Rule" is based on the premise that people making more than $1million/yr shouldn't pay less in taxes than a middle class tax payer.
Your own article clearly showed that some people making over $1mill/yr pay far less. Referencing average tax rates doesn't tell us what percent pay less than 15%. However, we know that there are such people. So when you say the premise is faulty you must mean that there is nothing wrong with these people paying less than the middle class.
To Anonymous above,
Some middle class taxpayers pay $0 in income taxes so how do the rich pay less than that?
This is why you have to look at the averages for the brackets, as there aree always the few exceptions to every rule.
Celery Eater
I'll try again.
CE, it is wrong for *any* person making over a million/yr to pay a lower rate than an average middle income tax payer. This is clearly happening.
Or how about this:
The Buffet Rule is a minimum rate for tax payers making over a million. You have shown that there are some paying well below this minimum rate.
Blueshift
From the Guardian
HMRC has been given £917m 'to ensure that tax rules are adhered to across the board'. Photograph: Michael Kemp/Alamy
Britain's tax authority has launched a clampdown on tax evasion in football to ensure players are not dodging payments during the country's economic turmoil.
A 100-member "affluence team" is being put in place by the British government to scrutinise the tax affairs of the estimated 350,000 people whose personal wealth exceeds £2.5m, including many Premier League footballers.
Blueshift,
It may make you feel better, but it will have little if any impact on the deficit/debt/job creation front.
So it is bad for some millionairs to pay less than the average middle class taxpayer in taxes, but it is OK for 47% of American taxpayers to pay $0 in income taxes, got it.
For 2008 the IRS reports those individual filers of $1 million or more in reported income, their total income was $935 billion of which $255 billion in taxes was paid. So even if you made the "Buffett Rule" tax these evil Americans at 100%, you would not even balance the budget in that year.
All this proves is Obama is not serious about our economic policy as his only intention is to generate a class-warfare arguement for his campaign, and I see from these comments he has some of you fooled already.
Celery Eater
My, my, rich people have no shortage of poor folk volunteering to carry their money bags for them. They learn their lines almost perfectly, too; I've rarely seen forehead knuckling performed better than today's persistently Anonymous.
Just to turn it around CE
You think it is important to make sure that the 47% of American taxpayers who earned so little that they payed no income tax (while still paying regressive taxes like sales tax and payroll tax) get some "skin in the game". But you don't think it is important that millionaires pay at least the same rate as middle income earners?
You have some weird priorities.
Farast
Farast,
Millionaires by and large pay more in taxes at a higher rate than middle income earners. I think everyone should pay some taxes, and yes those who are not paying anything, no matter their income level, should pay something, especially what they should (those pesky few millionares).
I propose a new rule the "Buffet and Immelt should shutup and pay taxes rule". It is very amusing that the Rabett followers demand that the few thousand millionaires who do not pay taxes at the same rate as an average middle income earners, but igmore the the 200,000+ who pay more. Yet these same followers are perfectly content to listen to Buffet and Immelt (GE) who avoid paying taxes, talk about carrying the water for your masters!
Celery Eater
CE you got your talking point wrong. Everybody does pay tax. However some people don't pay income tax because they don't earn enough. What you are saying is that even though poverty is at its highest level in 52 years you want to make it harder on those people. This is frankly crazy!
As for your attempt to divert this conversation with talk of tax avoidance no one here is saying that they should get away with it. If anybody cheats on their taxes I hope they get caught but at least in the case of GE what they do seems to be legal. Unfortunately we can't fix this because a certain party refuses to reform the U.S. tax system because getting rid of loopholes would be a "tax increase".
Farast
Farast,
You mean like the over 8 million returns of people who made between $30k - $100k who paid $0 in Federal Income tax?
Oh of course it is the Republicans fault, because the Democrats are never responsible for anything. Talk about worn out talking points.
Please go educate yourself on the income and tax numbers before you embarrass yourself further. After that come back and tell us how much more we need to tax the rich to balance the annual budget, that should be quite entertaining.
Celery Eater
Celery Eater, back to your patch.
You grow tiresome.
CE I would love to see where you are getting this information from but lets look at exactly why people pay no income tax. The three main reasons are earned income tax credits, child credits and mortgage interest deductions. Now as far as I can see Obama hasn't increased any of these (they did extend the current level of child credits in 2010). So we have to ask ourselves why the number of people who are not paying income tax has gone up. Hmm I wonder if it is because peoples pay has gone down?
So tell us which of the above programs are you in favour of scrapping?
Also I thought we were trying to have a civilised debate. Why do you have to continue to create straw man arguments about liberal positions? The US have serious problems and taxing the wealthy will not fix them by themselves. It will require savings in a lot of different areas but just about every economist agrees that it must include tax increases of some kind or another.
Farast
David - I might get weary of CE too, but he's not done anything to merit getting chased away. Bad logic isn't grounds enough for that. And maybe at some future point he'll understand the Alternative Minimum Tax and the intent of Obama's proposal.
Rabid Doomsaying Little Mouse says
You want the owners of the country to pay tax?
RDLM says it. America is living in the LIA.
"We don't pay taxes. Only the litle people pay taxes." - Ivana Trump.
Farast,
You are right, I got carried away with the snark, my apologies.
My source for the information has mostly been from http://www.irs.gov/pub/irs-soi/08in02tr.xls
Cancel if prompted for credentials and the spreadsheet will load.
Correction for above where I said "8 million" that should be 7 million.
Yes pay has gone down and so has the number of millionaires. Look my point is that Obama's plan is not a serious effort to get our budget in order, it is a political tool to help him get re-elected. But to go out and claim millionaires (as in all) do not pay the same tax rate as middle income earners is false, as I have proved.
Great contribution David, excellent point, way to contribute..
Celery Eater
The top 400 stats give insight into part of the problem. In 2007 they paid 16.6 % tax - lower than my effective tax rate by about 1% -(I run a small business). They derived 81.3% of income from capital gains, dividends, and interest -- most of which was capital gains. Even the interest was likely tax advantaged. Their income from salaries and wages was about 6.5%. Average income for the group was about 345 million.
Since dividends and interest are 15% under Bush Tax cuts, those with high percentage of cap gains income are subject almost to a defacto flat tax system that has lower rates than some not so well off people and a lot of pretty well off people too. An appropriately lower cap gains rate is justified to prevent double taxation on corporate stock -- for those that don't scoot out of the country to avoid taxation that is. But other than that, most arguments for favorable treatment of cap gains don't hold up. In fact, they encourage tax shelters that make poor use of capital since the interest expense to finance a shelter is deductible at ordinary rates while the gains from the shelter are taxed at long term rates. Many of these arrangements would not be viable but for the tax treatment.
There are a lot of people that pay no federal tax. A good deal of these are retired people and they shouldn't be begrudged in my view. Perhaps more should pay a token federal tax. But most of these people are the big losers in the capitalist game. Their wealth has been redisributed to the investors. They're already broke and likely have a neagtive equity position. One should be careful in advocating that they should be pushed further over the edge. If you are one of the fortunate that has won the capitalist lottery, you shouldn't expect the poor to take you out to lunch to celebrate.
Hey, if it was good enough for Dutch Reagan, it should be good enough for Obama. Tax rates at Reagan levels!
This is why there should be more brackets, not fewer. Fewer brackets crates a jolting ride, and has resulted in a significant percentage of the folks at the bottom not paying any income tax at all. It was stupid to drop to three brackets. It simplifies nothing. It created a class of citizens who do not pay, and there is a hazard to that.
The flat tax is the dumbest idea in history. Had this country used that instead of progressive rates, we would be 2nd-rate pile of crap - as bad as the commie economies. Because of three brackets, we're almost there anyway.
Also, what the heck does incomes over a million mean? Is it total income? AGI? Taxable income? How does somebody pay zero income tax on one million in taxable income? If they had a credit, then it's stupid to imply they are getting away with something.
My wife once made $300,000 in a country that has a 75% income tax rate. They took $225,000 out of her checks. The $300,000 was on her USA W2. If not for the $225,000 credit, almost her entire income would have been consumed by income taxes.
Thanks for that CE very interesting. However I think you have forgotten that the bill that Obama is proposing isn't designed to fix the budget. It is intended to get people back to work. So you shouldn't be judging these by whether they help pay for his plans. The jury is still out on this but you have to admit that it makes a lot more sense to increase the taxes of the very rich so that they pay the same rate as middle income earners than it does to increase the taxes of those who are as a general rule struggling in this current climate.
Farast
Brian --- I wasn't suggesting banning or even down the rabett hole. But Celery Eater was growing terribly repetitious.
Waitaminnit. If tax breaks for the wealthy are so wonderful for promoting job creation, why, with the Bush tax cuts still in place, is unemployment so high?
The rich get richer-- that's the law of the jungle, not civilized society.
David, a celery diet IS repetitious. Carrots? You can prepare carrots hundreds of different nutritious and delicious ways.
Eli,
My name is Celery Eater, not Celery Only Eater!
I may dine on a carrot now and again when the dinner company is polite, like Farast.
Celery Eater
Horatio always thought the Tire Patch was where they grow tiresome.
seamus --- It the Hood Robin principle.
Dr. Jay Cadbury, phd.
Well, well, well, what a big surprise. Eli do you think nobody knows to just go to the IRS website to see how much of a liar you are? There is no millionaire and billionaire tax. The republicans dare the donkeys to make a new tax bracket but they won't.
Reason: There is a huge number of people making between 200,000-1million. Sorry to tell you, this amount of money isn't right, its' upper middle class. You'd be surprised how much money you can make when you're no wasting time crying about fake global warming and engaging in class warfare.
When Eli was a fuzzy bunny there were the rich, they are always with us, the middle class, which extended from professionals like the quacks, the teachers and the managers, and were maybe 20-30% of the people, but not the clerical workers, the secretaries, and the rest of the working class, who were most of us.
The concept of "middle class" has been so politicized so today everyone is "middle class". Someone earning north of 200K$/year is not "middle class" in any meaningful sense of the words and anyone who thinks so is either smoking something harmful or running for office.
Congresscritter sez he can't afford tax increase after buying celery:
"By the time I feed my family, I have maybe $400,000 left over."
http://thinkprogress.org/economy/2011/09/19/322405/gop-rep-whines-400k/
Dr. Jay Cadbury, phd.
The good doctor must strongly disagree, Eli. Let's review some important background information. You are a disgruntled teacher. Truth to be told, you never should have gone into the teaching profession if you didn't like the pay scale. However, before taking the job, you knew you would never make a lot of money. If you did not know this, you are very naive.
The good doctor, on the other hand, went into sales. The good doctor did this because he knows there is a much higher earning potential. The good doctor also knows his job is more difficult, requires longer hours and is very stressful. Therefore, I deserve more money than you do. Regarding the notion that any amount of money above $200,000 is "not middle-class" as Eli oh so carefully put it, is open to interpretation. Personally, I think rich starts at the 10,000,000 income earning mark. If you make 250k and have 2-3 kids, that will cover college and you may live comfortably but you're not going to be able to buy a lot of the things you want.
The good doctor wants Eli to guess at his age.
Candyman, EDNGAS.
"it is OK for 47% of American taxpayers to pay $0 in income taxes, got it."
So I suppose you;re in favor of applying payroll taxes to capital gains income, so that we wont have any cases of capital gains earners not paying any payroll taxes?
Those "$0" tax payers you mention, have paid about 7 1/2 % (with a recent short term reduction of a couple percent) in direct tax with no deductions, plus their employer pays another 7.5% in what is effectively an indirect tax on their pay - so 15% right off the top.
Ad it only applies to the first $107,000 if income, so even though poor people cant deduct even a cent of the payroll taxes, the better of automatically get deep deductions - they pay no payroll tax on income over their first ~100k.
Several years back, my family income grew from about $30k to ~$120k, in 4 steps over 4 years, as I and my wife both transitioned from grad school to employment. At each step the the percentage rate of total taxes we paid DROPPED substantially, primarily because we gained access to deductions of various kinds (especially mortgage interest), but also because things like sales tax and gas tax stayed at a fixed dollar amount.
Focussing on just income tax skews the analysis of just how unfair and regressive our overall tax policy is for most people.
"The good doctor, on the other hand, went into sales."
That explains a lot.
Based on this last comment, I have to agree with the earlier suggestion. Jay Cadbury is Ray Ladbury in tea-party drag. Nice Poe!
stewart
"Those "$0" tax payers you mention, have paid about 7 1/2 % (with a recent short term reduction of a couple percent) in direct tax with no deductions, plus their employer pays another 7.5% in what is effectively an indirect tax on their pay - so 15% right off the top. "
Good arguement against a Ponzi scheme, could not have done better myself!
"Ad it only applies to the first $107,000 if income, so even though poor people cant deduct even a cent of the payroll taxes, the better of automatically get deep deductions - they pay no payroll tax on income over their first ~100k."
Even better!
"percentage rate of total taxes we paid DROPPED substantially, primarily because we gained access to deductions of various kinds (especially mortgage interest), but also because things like sales tax and gas tax stayed at a fixed dollar amount."
You are free to write a check to the government to relieve your guilt and I hope you included the sales tax and property taxes on you home purchase to the taxes you pay. It seems you had an INCENTIVE to earn more, buy a home and provide for your family, now if only everyone could have that same motivation. Nah lets remove the motivational factors to succeed and experience the American dream. Here, do not put forth additional effort we will take from those that do and just give to you, because that is fair.
Celery Eater
"You are free to write a check to the government to relieve your guilt"
Insert standard response about refusing government benefits.
The proper answer is no free riders, you pay your fare or you pay the fine.
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