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Obama’s tax plan and the redistribution of wealth


alexey

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You have no idea what you are talkinng about and have an incredibly poor handle on how capitalism actually works.

Because you say so doesn't make it so.

As much as you cant wait for it to happen, we arent scraping capitalism in this country.

Pure Capitalism is gone my friend, as such what we have now is a blend of Socialism and Capitalism and socialism entails income redistribution the point of conflict that we arrive at is simply which direction the redistribution should flow. Pro-business folks believe that the redistribution should flow to the rich, I on the other hand believe it should flow in the other direction.

:doh: Thats an awful lot of words you put into my mouth.

Its the logical conclusion of your argument;

1) if corporations pass on their tax burden to the people and there is nothing we can or should do to stop that then

2) we should remove corporate taxes so that those corporations will stop passing the burden on to the people.

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Socialism is a read herring label. The wealthy have seen their tax rate drop in half over the last three decades. Drop by two thirds over the last five decades. Before anybody crys any rivers for the wealthiest Americans you should understand that the wealthiest Americans pay a significantly smaller percentage of their earnings to taxes than do the middle, middle class.

The wealthy never had it so good since 1980, especially under Bush.

JMS, you're absolutely correct that the wealthy pay a smaller percentage of their income in taxes that most of the middle class does. However, the top 5-10% of all earners in the United State still pay the majority of the total taxes taken in by the Federal Government. That doesn't sound too fair to me. Especially when we have people at the other end of the spectrum who are not only not paying any taxes, but with the EITC probably getting money from the Government that they never even put into the system. In addition to the social funding that they tend to get from the government in the way of welfare, etc...

Let's see, the tax system takes money from the richest people (without necessarily providing them much service) and gives it to the poorest people (who do nothing for it, and get additional monies through other programs).... either the tax code was written by Lord Robert of Locksley in Sherwood Forest, or it's a Socialist system.

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Wow are you reading what I write or just responding? I said it does not "bridge the gap" you yourself said that the gap between rich and poor needed to be bridged but the rising tide raises all ships at the same level i.e. the gap is still the same only its in a different place.

I NEVER said anything about any rising tides. Quote me if i did.

And do you really believe that anyone outside of the CEO and Board of Directors owns enough shares in the company to affect the way the company operates?

Yes, and if you dont believe that, then you shouldnt even be posting on the subject.

Lets pick an example, say ExxonMobil, everyone's favorite target.

The top 3 owners of Exxon stock are mutual fund companies, Barclays, State Street, and Vanguard.

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So if were going to put out what SHOULD be.

Shouldn't the tax be everyone over the poverty line (so as not to put a person back below it) should pay a fair share?

20% of 40% = 8k fair.

20% of 2,000,000 = 400,000k fair.

or

Everyone pays on the stuff they buy:

Rich people buy more stuff so they pay more: Fair.

I lean more toward percentage of income with no loop holes, when it comes to "things people buy" that would leave open the opportunity for a multi-billionaire to live like someone who is in the middle class as per what he/she buys and as such avoid paying a fair tax.

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Because you say so doesn't make it so.

Me saying it isnt what makes it true, you are correct in that. :)

Pure Capitalism is gone my friend, as such what we have now is a blend of Socialism and Capitalism and socialism entails income redistribution the point of conflict that we arrive at is simply which direction the redistribution should flow. Pro-business folks believe that the redistribution should flow to the rich, I on the other hand believe it should flow in the other direction.

Pure capitalism was never in place in this country, but at this point, i dont really expect you to know that.

Its the logical conclusion of your argument;

1) if corporations pass on their tax burden to the people and there is nothing we can or should do to stop that then

2) we should remove corporate taxes so that those corporations will stop passing the burden on to the people.

Its a conclusion, but its not the logical conclusion.

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Great idea, in theory, but impossible to implement.

Terrible idea because it doesn't take into consideration percentage of income spent. The more money you make the smaller percentage of it, on average, you spend. Any tax tied to spending would shift the tax burden almost entirely onto the middle class which make enough to pay significant taxes but also spends almost every penny earned. You'd have a situation where middle class would be taxed on 90-100% of earnings while the wealthy are taxed on 25%.

It's a massive give away to the people that need it the least. It would also greatly impact the american economy, it has the potential of significantly impacting the velocity of money in the US as it heavily penalizes spending.

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Terrible idea because it doesn't take into consideration percentage of income spent. The more money you make the smaller percentage of it, on average, you spend. Any tax tied to spending would shift the tax burden almost entirely onto the middle class which make enough to pay significant taxes but also spends almost every penny earned. You'd have a situation where middle class would be taxed on 90-100% of earnings while the wealthy are taxed on 25%.

It's a massive give away to the people that need it the least. It would also greatly impact the american economy, it has the potential of significantly impacting the velocity of money in the US as it heavily penalizes spending.

hmmm alright, I didn't think it through... :silly: Although from a strict "fairness" perspective it does seem to make sense.

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Pure capitalism was never in place in this country

Exactly! Which is the point, if we have always had a blend of socio-capitalism which entails a measure of redistribution of wealth then the question is not "should we have redistribution of wealth" but instead "to what levels, what direction, and to how evenly should the burden be shared". Your suggestion is that corporations should not bear an equal burden because they create jobs and they would just pass the extra on to consumers. I disagree in that corporations should share an equal burden and should be required to pay that burden without paying it to the consumer

Its a conclusion, but its not the logical conclusion.

If the goal is to ease the pressure on the consumer and free corporations to "create more jobs" then it certainly is the "logical" conclusion, the only problem is that its wrong headed.

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I disagree in that corporations should share an equal burden and should be required to pay that burden without paying it to the consumer

I disagree with this. Corporations should not be somehow prevented from passing the burden on to the consumer. Free market can take care of that. Let those that try to pass the burden onto the consumer go ahead and compete against those that do not.

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JMS, you're absolutely correct that the wealthy pay a smaller percentage of their income in taxes that most of the middle class does.

This is as far as you need to go. When the tax rates are equal, the person with a higher income is left with more money after taxes than someone making less than him:

Taxpayer A makes $1,000,000; 20% tax = $200,000 and $800,000 left

Taxpayer B makes $100,000; 20% tax = $20,000 and $80,000 left

If a tax rate of 20% is applied to both, it is true that Taxpayer A pays more total dollars, even though he pays the same percentage. But that is simply a function of the fact that he earned more than Taxpayer B, and will still have significantly more money at his disposal after taxes. In fact, Taxpayer A has exactly the same proportion of Taxpayer B's income (i.e., 10 times) both before and after taxes. Every dollar earned is taxed at the same rate, and therefore each person has the same incentive to earn that next dollar as the next person.

By addressing this issue by any other criteria than PERCENTAGE of income taxed, you are purposely confusing and distorting the argument to suit your preconceived political argument. The ONLY proper way to analyze tax fairness is by the percentage of one's income that is taken in taxes.

Of course, there are arguments that can be made for both a progressive (higher tax percentage as income increases) and regressive (lower tax percentage as income increases) alteration to the tax rate applied to incomes. But unless you frame your argument in the context of tax rates, and not in total dollars or other measurement, you are being disingenuous.

MSF, you obviously favor a regressive tax system. I would assume that most people (including me) do not share your views.

I think that, in a civilized and compassionate society, those blessed to receive extremely large annual incomes (and we can quibble over where that line should be drawn, but certainly somewhere north of $1,000,000) should be asked to contribute a slightly higher percentage of their large incomes to assist those in poverty, those less fortunate souls who have fallen on hard times, or even those in the lower middle class who could benefit from having a few hundred extra dollars a month in their pocket. But that's just my opinion.

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I disagree with this. Corporations should not be somehow prevented from passing the burden on to the consumer. Free market can take care of that. Let those that try to pass the burden onto the consumer go ahead and compete against those that do not.

One problem....they all do it ergo no competition.

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I think that, in a civilized and compassionate society, those blessed to receive extremely large annual incomes (and we can quibble over where that line should be drawn, but certainly somewhere north of $1,000,000) should be asked to contribute a slightly higher percentage of their large incomes to assist those in poverty, those less fortunate souls who have fallen on hard times, or even those in the lower middle class who could benefit from having a few hundred extra dollars a month in their pocket. But that's just my opinion.

If slightly higher percentage means "slightly higher than what they currently pay" then yes. I'm for equal tax burden if that be 20% then so be it, but it has to be across the board (poverty excluded for obvious reasons). I am not for a progressive tax system, nor am I for shifting the burden to those who use the systems more because that simply compounds their problem in that you make them pay for the things that they need that they can't afford to pay for to begin with.

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One problem....they all do it ergo no competition.

I think it varies greatly by industry, which seems to underline worthlessness of that extremely general "raising the corporate tax rate is just going to raise prices for everyone" argument.

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If i could pass my taxes onto you i would. What i said was that companies pass their tax burden onto consumers. You are one of those. So am I. So is everyone. And earlier in the thread, the "so and so doesnt really pay taxes" spin was coming from the Obama supporters like DjTj and Midnight judges.

If you read my posts and came away with "everyone" passes their taxes onto others, when i was clearly not talking about "everyone" then i dont know what to tell you, your reading skills suck.

No, what I read in your post was "well, if you take this tax, and pretend that it's really a tax on something else, then . . . "

Problem is, we can play "let's pretend that A is really B" all day long.

OK, corporations get the money they pay in taxes from their customers.

Well, the customers get their money from their employers. So I guess that means that employees don't really pay taxes, their employers do.

But their employers don't just invent money, either. They get it from their customers.

It's a nonsense argument. Just like mine was.

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MSF, you obviously favor a regressive tax system. I would assume that most people (including me) do not share your views.

I think that, in a civilized and compassionate society, those blessed to receive extremely large annual incomes (and we can quibble over where that line should be drawn, but certainly somewhere north of $1,000,000) should be asked to contribute a slightly higher percentage of their large incomes to assist those in poverty, those less fortunate souls who have fallen on hard times, or even those in the lower middle class who could benefit from having a few hundred extra dollars a month in their pocket. But that's just my opinion.

No, actually I believe in a FLAT/FAIR tax system, where EVERY WAGE EARNER pays the EXACT SAME PERCENTAGE with NO deductions whatsoever. So when Joe the Schmo makes $250 at McDonalds this week, he gets (to use an example) 10% of his income taken in Federal taxes ($25.00) and 5% more ($12.50) in state taxes, and then his pay of $212.50 has his health care, retirement, alimony garnishment, or whatever else deducted from it by his employer; where as Joe the CEO makes $25,000 a week has 10% ($2500) taken out of his pay for Federal taxes, the 5% ($1250) for state taxes, leaving him with $21,250.00 before health insurance, retirement, trust fund payments, etc... is deducted by the company he owns.

There is absolutely no reasonable explaination why Joe the CEO should be PUNISHED for having done the necessay things to make $25K a week. Nor is there any reasonable explaination why Joe the Schmo should be allowed to get away tax free (or only lightly taxed). Especially since at $250 a week, Joe the Schmo is probably getting government assistance of one sort or another in addition to his paycheck.

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If you think that tax increases will just be passed on to consumer's, then you must also think that companies, not the markets control pricing. I think your right in some industries. ;)

If there were enough competition someone would undercut that price and eat a little of the taxes. That they don't points to either one player controlling the market in a certain industry, or a few players doing the wink wink nod nod to collude and keep profits stable.

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JMS, you're absolutely correct that the wealthy pay a smaller percentage of their income in taxes that most of the middle class does. However, the top 5-10% of all earners in the United State still pay the majority of the total taxes taken in by the Federal Government.

Well they should shouldn't they because teh top 10% of wage earners own the vast majority of all the wealth.

http://www.nytimes.com/2007/03/29/business/29tax.html

I believe if you have a family income of 100,000 you are in the top 10% of wage earners.

That doesn't sound too fair to me. Especially when we have people at the other end of the spectrum who are not only not paying any taxes, but with the EITC probably getting money from the Government that they never even put into the system.

Mass, this is a good argument; and I hate to shoot you down on it because your position does sound so well thought out.. But here is how I see the discussion...

You say two guys are standing on the street corner, one guys pays 4 million dollars in taxes the other guys pays 2,000. That's not fair.

I say the guy paying 4 million earned 30 million and the guy paying 2k, earned 12k. The guy earning 30 million benifited much more from the system than the guy paying 2, and the guy paying 30 million can certainly afford to pay the same percentage income as the guy making 12.

I think we can also both agree, we would both rather be the guy paying 4 million dollars in taxes even if he had to pay 12.

Let's see, the tax system takes money from the richest people (without necessarily providing them much service) and gives it to the poorest people (who do nothing for it, and get additional monies through other programs).... either the tax code was written by Lord Robert of Locksley in Sherwood Forest, or it's a Socialist system.

Actually the tax system takes money from just about everybody. It just takes the largest tax per revenues from the middle class....

This is a new gift of the George Bush era. When Ronald Reagan came to town he said it was crazy he should be taxed less than is secretary and he made investment income taxable as income... George Bush reversed that trend to give us our current frankinstein tax system.. And he did it while runing up record deficites...

I don't know how anybody could defend him.

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What options are available that actually force corporations to pay the taxes that are due to them without simply making their consumers make the difference?

Corporations don't pay much taxes. two thirds of them don't pay any taxes at all. US corporate tax codes are so freaking soft even most of the foreign companies doing business here don't pay any corporate taxes.

But that's not really the argument here, cause nobody is talking about increasing those corporate "taxes".

The topic here is should the middle class actually be giving a multi billion dollars in tax dollars to the large corporations, some like the oil companies who are making record profits....

The side argument is, should folks making millions be condemned to pay the same tax rate as the middle class in this country... As painful and barbarous and incideous as that sounds; I actually think that plan has some merit.

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