Eat the Rich -- Why taxing the "rich" more isn't the answer

[Gator Bait]

That would be a disaster. You'd completely eliminate the ability of the government to react to economic problems.

that wouldn't be a disaster...that would be ideal. Government shouldn't be reacting to economic problems...just snow balls them. Let the damn market fix itself. I've had it with bail outs and government intervention (we've seen how well those bail outs worked!)

[TD_washingtonredskins]

lol, whatever man. we need to stop cutting taxes for the wealthy, end of story

I'm not attacking either (and, for the record, I don't believe that GB was), but I want to hear your reasoning. If you believe that the playing field should be evened out as much as possible, then you are supporting some socialist viewpoints. There is nothing wrong with that...that term doesn't mean that you are going to become a Red or anything.

I'm just curious why you believe that the rich should pay more than the poor (percentage-wise) when it comes to taxes? The entire point of percentages is to be fair across the board.

[Destino]

I don't see how it would help the rich so much, as they can afford to find the loop holes available now.

Because it would lower their tax rate significantly and what loop holes are you referring too? We are talking about personal income taxes right? That means it wouldn't effect corporate taxes, which have the biggest problems with loop holes, or capital gains where wealth is really grown and maintained. People tend to confuse personal income taxes with all other facets of the tax system. One of the things a flat tax with no deductions would do is make it impossible for the government to respond to economic dangers by spurring investment or spending in a particular sector. The only ways to respond under a flat tax system would be with bail outs. Is that really something you'd like to see expanded?

I also don't see the value in rewarding people for continuing to over populate, with tax breaks.

You didn't think this one through. FYI your parents are dependents if you care for them. Disabled kids are more expensive too but hey why give a family a break when they are struggling to stay afloat... No deductions would be a CRUSHING blow to the middle class.

The housing thing I do understand, but if it forced people to start buying more modest sized houses, instead of the McMansions I'd be all for it.

That problem is dead and buried already. What this would do is cripple the housing market for a period of time while it devalued significantly negative affecting all sectors and total wealth as a result. But yeah that small percentage of families with annoying homes would like totally be screwed. Awesome.

[Hubbs]

Because it would lower their tax rate significantly and what loop holes are you referring too? We are talking about personal income taxes right? That means it wouldn't effect corporate taxes, which have the biggest problems with loop holes, or capital gains where wealth is really grown and maintained. People tend to confuse personal income taxes with all other facets of the tax system. One of the things a flat tax with no deductions would do is make it impossible for the government to respond to economic dangers by spurring investment or spending in a particular sector. The only ways to respond under a flat tax system would be with bail outs. Is that really something you'd like to see expanded?

Hold on. Why would a flat tax make it impossible for the government to shift its spending around?

[Duncan]

Assuming the rich worked harder is a bit of a stretch.

How about those who didn't work for any of it? There's plenty of them out there.

~Bang

This is one of the biggest misconceptions in the debate about "millionaires", but leftists continue to make this absurd claim.

http://research.stlouisfed.org/publications/review/97/07/9707jw.pdf

"Most of the rich are entrepreneurs, and most have earned their wealth. Inheritance accounts for about 8 percent of the net worth of these households in the aggregate. More than half have never inherited anything, and inherited wealth is less than 10 percent of total wealth for more than two-thirds of those who have." (Study, at page 6)

[zoony]

I

I also don't see the value in rewarding people for continuing to over populate, with tax breaks.

you should probably read up on it then.

[mcsluggo]

....

I also don't see the value in rewarding people for continuing to over populate, with tax breaks.

...

you do, of course, realize hoiw Nazi that sounds...

but but really, ideology aside, I think that dependents isn't a normal "deduction", like all the others.... it is an indication of how much of the nation's population is being supported by the taxed income. If you are the head of a 10 person household, and the solitary earner for that household, then your income is differnent than someone living alone in a bachelor pad somewhere, from a pure national income accounting standpoint It isn't a value judgement to say that this income is divided amongst more people, and so the tax burden should be as well.

income per capita in the US is somewhere around 50k a year. this is total national income divided by TOTAL population (including 4 month old dependents).

[Destino]

Hold on. Why would a flat tax make it impossible for the government to shift its spending around?

the no deductions part would make creating tax incentives impossible. You would pay 20% or whatever no matter what. No tax breaks for cleaner vehicles, energy efficient home improvements, buying a home, saving more, etc etc etc.

[zoony]

$30k = $7500 in taxes, or $289/paycheck.

$300K = $75K in taxes, or $2,885/paycheck

$3M = $750K in taxes, or $28,847/paycheck.

Each guy pays the same %, but ends up paying 10 times the actual $$, because they make 10 times the salary. It is the definition of fair.

So its your opinion that a guy making $35k a year reaps the same amount of gov't benefits, infrastructure, environmental impact, etc, as a guy making $300k?

Interesting definition of fair.

[DC_Hokie]

http://online.wsj.com/article/SB10001424052748704604704576220491592684626.html

[zoony]

Jesus gets it. Why doesn't the political party that capitalizes on his name get it?

Mark 12:41-44 (New Living Translation)

The Widow’s Offering

41 Jesus sat down near the collection box in the Temple and watched as the crowds dropped in their money. Many rich people put in large amounts. 42 Then a poor widow came and dropped in two small coins.[a]

43 Jesus called his disciples to him and said, “I tell you the truth, this poor widow has given more than all the others who are making contributions. 44 For they gave a tiny part of their surplus, but she, poor as she is, has given everything she had to live on.”

[Koolblue13]

you should probably read up on it then.

I admit openly that I don't have much understanding about economics and base most of my opinion on what I read and right and wrong as defined by my opinion.

And Des, I understand the definition of dependent does vary. I would support separate agencies that would help people in those situations, but I don't believe in the reward for having children.

[Tweedr01]

Jesus gets it. Why doesn't the political party that capitalizes on his name get it?

wow, bit of a stretch huh? tell you what, when the government becomes God I'll give them everything, sound good? or how about you give us an example of a guy making $35k giving away all his money to taxes?

[cedk]

.

Government should not be Greedy….A confiscation rate of 35% on the federal tax level alone is certainly getting there.

Nor should Government take advantage of any minority or allows others to take advantage of a minority even if they are a rich minority….

Folks you got to be fair ….35% confiscating rate is a good chunk of money

[Bliz]

$30k = $7500 in taxes, or $289/paycheck.

$300K = $75K in taxes, or $2,885/paycheck

$3M = $750K in taxes, or $28,847/paycheck.

Each guy pays the same %, but ends up paying 10 times the actual $$, because they make 10 times the salary. It is the definition of fair.

Disagree completely. It is the definition of an incredibly regressive tax that over-burdens the poorest among us, because there is a certain baseline of expenditures that everyone who wants to be sheltered, fed and clothed must spend.

It's called the decreasing marginal utility of the dollar. Whether or not $100 is a lot of money depends on how much you have. And with each additional dollar you add to your pot, the "value" of all of the preceding dollars decreases. The last $100 of income of a family living near poverty is considerably more valuable than the last $100 of income of a millionaire, so it is not at all "fair" and "equal" to tax that last $100 of income the same despite vast differences in the marginal value.

Try not to think about it in such absolutes. Consider instead that in order to be "fair" a tax system should impose approximately the same pain on everyone. Because of the decreasing marginal utility, doing that requires higher percentages from higher income levels.

i would love a simple graduated tax structure oalong these lines.

nobody pays any taxes on their first $20k

EVERYBODY pays 10% on $20 through $50k

EVERYBODY pays 15% on 50-100

EVERYBODY pays 20% on $100-200k

EVERYBODY pays 25% on every dollar over $200K

NO DEDUCTIONS< except for the number of people being supported by that income. Period.\

This is exactly what we have now (except the no deductions part). Everyone pays the same amount of taxes on the first $50k of their income, regardless if they make $50k, $500k or $5 million per year.

[Skinz4Life12]

Disagree completely. It is the definition of an incredibly regressive tax that over-burdens the poorest among us, because there is a certain baseline of expenditures that everyone who wants to be sheltered, fed and clothed must spend.

It's called the decreasing marginal utility of the dollar. Whether or not $100 is a lot of money depends on how much you have. And with each additional dollar you add to your pot, the "value" of all of the preceding dollars decreases. The last $100 of income of a family living near poverty is considerably more valuable than the last $100 of income of a millionaire, so it is not at all "fair" and "equal" to tax that last $100 of income the same despite vast differences in the marginal value.

Try not to think about it in such absolutes. Consider instead that in order to be "fair" a tax system should impose approximately the same pain on everyone. Because of the decreasing marginal utility, doing that requires higher percentages from higher income levels.

you did a good job explaining what i was trying to do earlier in the thread

[Wrong Direction]

A few points to nobody in particular, except for Zoony.

1. As proposed by Forbes, I believe the Flat Tax is accompanied by a zero tax bracket for the first $20k - ish.

2. High personal income and corporate taxes contributes to companies 1) sending jobs overseas, 2) moving jobs to other states and 3) seeking out loopholes.

3. Loopholes are entirely too prevalent in the corporate world, but they're not limited to that world. There are numerous tax shelters that allow particularly industrious individuals to lower their effective tax rate.

4. All of these loopholes are a result of a system where changing the tax code is done dozens of times/year (more, actually). This system has resulted in incredible amounts of tax law, incredible inefficiencies/overhead in accounting for and paying taxes, and incredible amounts of lobbying.

5. Even if the math of a consumption or flat tax works out (and I think it could), the only way it'll ever happen is if we change our system of government. That means we need to remove the incentive to constantly provide tax breaks. Which leads to:

6. Term limits for all of Congress, zero private dollars allowed in campaign financing (more federal/state funding for that) and very stricht post-office restrictions on the newly retired members of the house and senate, so any quid pro quo would at a minimum be delayed for several years.

7. If Jesus were alive today, he'd probably wonder why the poor don't pay any taxes but get huge benefits from the rich.

Rather than blame Democrats and Republicans, look for someone...anyone...offering a real solution.

[Enter Apotheosis]

Jesus gets it. Why doesn't the political party that capitalizes on his name get it?

So basically you're advocating a 99.9% flat tax?

[JMS]

How about taxing the rich as much as Reagan, Clinton of Bush I did?

My understanding is removing just the W Bush tax cuts, eliminates the deficit in half.

Yep the bush tax cut which moved the top tax rate from 38 to 36% over the next ten years would pay for the next 70 years of social security deficites... And even a 38% tax rate is near historic lows for taxes...

The entire budget problem is 80% a self inflicted gunshot wound. Of coarse you are going to run massive deficites if you cut taxes while increasing spending as Bush did.

[Hubbs]

the no deductions part would make creating tax incentives impossible. You would pay 20% or whatever no matter what. No tax breaks for cleaner vehicles, energy efficient home improvements, buying a home, saving more, etc etc etc.

To be fair, part of any serious simplifying of the tax code would involve eliminating a lot of deductions. Buying a home, for example, is something I'm very skeptical of subsidizing, because it involves tremendous amounts of debt on a national scale. Obviously there are complications with any transition, most notably protecting current homeowners. I wouldn't eliminate mortgage deductions for anyone who already owns a home, and the changes would have to be gradual so as to not push real estate prices down further in the near term while so many are still underwater. And I obviously can't speak for anyone else, but I wouldn't eliminate deductions for dependents. I wouldn't even mind deductions for specific national goals, like moving away from oil. (Something which really should be an easy rallying point for both the right and the left, because the right can say it makes us less dependent on questionable foreign powers in the Middle East while the left can say it helps the environment. Sadly, it's one of the stupider political debates of our time.)

But simplification means we have to, well, simplify. Shredding thousands of pages of tax code means a lot of deductions will have to go.

[mcsluggo]

This is exactly what we have now (except the no deductions part). Everyone pays the same amount of taxes on the first $50k of their income, regardless if they make $50k, $500k or $5 million per year.

I know...

but first of all, the zero deductions part is kinda important, no?

and second... if you don't explicitly spell out what a graduated tax rate means, then i guarantee that at LEAST 33% of the people reading this post would picture someone with $19,999 income paying $0 in taxes, and someone making $20,001 paying $2,001 in taxes. I GURANTEE it. (and the 33% figure is being overly generous, based on earlier discussions here and elsewhere i would guess that at least 50% would have that particular complete and fundemental misunderstanding of the system...)

[Destino]

To be fair, part of any serious simplifying of the tax code would involve eliminating a lot of deductions. Buying a home, for example, is something I'm very skeptical of subsidizing, because it involves tremendous amounts of debt on a national scale. Obviously there are complications with any transition, most notably protecting current homeowners. I wouldn't eliminate mortgage deductions for anyone who already owns a home, and the changes would have to be gradual so as to not push real estate prices down further in the near term while so many are still underwater. And I obviously can't speak for anyone else, but I wouldn't eliminate deductions for dependents. I wouldn't even mind deductions for specific national goals, like moving away from oil. (Something which really should be an easy rallying point for both the right and the left, because the right can say it makes us less dependent on questionable foreign powers in the Middle East while the left can say it helps the environment. Sadly, it's one of the stupider political debates of our time.)

But simplification means we have to, well, simplify. Shredding thousands of pages of tax code means a lot of deductions will have to go.

I don't need a tax code that is idiot proof. That's why the world is filled with accountants and I'm fine with that. What I need simplified is what are deductions in plain English and what qualifies as a supporting document in plain English. I don't need it any more simple than that and frankly I'm not interested in law being written by/for people that do.

[JMS]

Government should not be Greedy….A confiscation rate of 35% on the federal tax level alone is certainly getting there.

Nor should Government take advantage of any minority or allows others to take advantage of a minority even if they are a rich minority….

Folks you got to be fair ….35% confiscating rate is a good chunk of money

History disagrees with you. A federal income tax of 35% is lower than any other time in your lifetime, your parents lifetime, and for most of your grandparents lifetime. So unless the United States became a super power under a "greedy" tax structure; you are not being reality based in your assertion.

[PokerPacker]

Disagree completely. It is the definition of an incredibly regressive tax that over-burdens the poorest among us, because there is a certain baseline of expenditures that everyone who wants to be sheltered, fed and clothed must spend.

do you even know what "regressive tax" means? Everyone paying the same percentage of their income is the DEFINITION of a flat tax. A regressive tax is one where, say, everyone pays the same amount of money regardless of how much they make, thus the poor pay a higher percentage of their income.

[Madison Redskin]

7. If Jesus were alive today, he'd probably wonder why the poor don't pay any taxes but get huge benefits from the rich.

Can you elaborate on this theory?