FN / Gang of Six Back Together

[Hubbs]

Scroll down to page 19. Top 10% of earners at almost 64%.

http://www.cbo.gov/ftpdocs/57xx/doc5746/08-13-EffectiveFedTaxRates.pdf

Um... yes, it's gone up as their percentage of income has gone up, and has always been higher than that number. Kind of goes along with the whole progressive income tax thing. The point is that we have a deficit of $1.6 trillion, which means we're probably going to have to generate a bit more revenue. As much as I'd like to make $1.6 trillion in cuts, it ain't happening. So who's going to have to pay a bit more? The lower and middle classes, who have been on the losing end of the income trend for thirty years?

[NoVaO]

It seems that everyone is all for raising taxes on the rich. 47% of households currently pay NO federal income taxes (all of which make less than $100k/year) and some of those even GET money back.

But they pay sales taxes, payroll taxes, state and local taxes, gas tax, etc. I'm glad you specifically said federal income taxes. Because many conservatives who use that figure make it sound like those people don't pay any taxes, which obviously isn't true. But a couple of other things...

1. You don't really need to tax people's income on the bottom because they don't save any of their money. They typically spend all they have just to get by, so their money is constantly circulating through the economy.

2. There are very rich people included in that 47% figure you cite.

3. Some people get money back because of tax cuts brought forth by Ronald Reagan. Any tax cut for the rich has to be attached to some tax cut for the rest of the public. That is the only way for them to be politically acceptable.

[repo_4]

But they pay sales taxes, payroll taxes, state and local taxes, gas tax, etc. I'm glad you specifically said federal income taxes. Because many conservatives who use that figure make it sound like those people don't pay any taxes, which obviously isn't true. But a couple of other things...

I may not be a genius but consider myself a little edamuhcated. I do think that when quoting that figure people should be required to state it is for "federal" taxes. Most people do take people at their word and just assume that these people pay NO taxes, or just dont stop to think about it. There is already a graduated tax structure in place to get more taxes from the people that make more. Just doesnt seem fair (to me, and Im not one of them mind you) that most are ok with people making less than $40k/year not paying federal taxes. They would rather they take more from people that have more. Everyone needs to be paying SOMETHING. Just my 2 cents.

[ABQCOWBOY]

But they pay sales taxes, payroll taxes, state and local taxes, gas tax, etc. I'm glad you specifically said federal income taxes. Because many conservatives who use that figure make it sound like those people don't pay any taxes, which obviously isn't true. But a couple of other things...

I may not be a genius but consider myself a little edamuhcated. I do think that when quoting that figure people should be required to state it is for "federal" taxes. Most people do take people at their word and just assume that these people pay NO taxes, or just dont stop to think about it. There is already a graduated tax structure in place to get more taxes from the people that make more. Just doesnt seem fair (to me, and Im not one of them mind you) that most are ok with people making less than $40k/year not paying federal taxes. They would rather they take more from people that have more. Everyone needs to be paying SOMETHING. Just my 2 cents.

The point that I believe everybody needs to come to grips with is the fact that even if we taxed the rich at 100%, we would not reach the objectives. It can't just be the rich. It has to be every class. You can say that the rich are not paying their fair share and that's fine. I'm for no loopholes. You can say that the rich have the majority of money in this country and that's fine too. The reality is that you can't force the rich to stay and you can't force the rich to just give all of their money to the Government. At some point, they will go where circumstances are more friendly towards them adn then we are all SOL. We have to get comfortable with the fact that we are all going to have to contribute or we will all surely fail.

[Fred Jones]

Of course you should tax the rich. Why Not? Do you think they earned their money solely by themselves? No one helped them get rich? Please, they can give up their fourth vacation.

That said, I don't have a problem with having an AMT for everyone. Should the bottom earners pay a lot, no. But I don't have a problem with them paying just a little bit extra. Some type of graduated tax from zero on up. Every little bit will help. And, I will no longer have to hear that lots of people pay no taxes.

And, it is about pain across the board. Pain, everywhere. Cutting spending means cutting back on the military and the war on terror in addition to all the other agencies.

If the Rich want to move to another country, fine, leave, and take your company with you. Please don't tell me another company would not gladly step in and take your place.

[oisn1]

But they pay sales taxes, payroll taxes, state and local taxes, gas tax, etc. I'm glad you specifically said federal income taxes. Because many conservatives who use that figure make it sound like those people don't pay any taxes, which obviously isn't true. But a couple of other things...

I may not be a genius but consider myself a little edamuhcated. I do think that when quoting that figure people should be required to state it is for "federal" taxes. Most people do take people at their word and just assume that these people pay NO taxes, or just dont stop to think about it. There is already a graduated tax structure in place to get more taxes from the people that make more. Just doesnt seem fair (to me, and Im not one of them mind you) that most are ok with people making less than $40k/year not paying federal taxes. They would rather they take more from people that have more. Everyone needs to be paying SOMETHING. Just my 2 cents.

He literally explained it right after the statement you quoted. There is no money to tax from those people. This has been repeated ad-nauseum but the lowest classes of our society don't really save money. They can't save money because they barely make enough money to survive. They live paycheck to paycheck and thus all of their money goes to consumption. The money goes to housing, clothes, food, healthcare, etc. Extra money they have goes to consumer goods. There is very little saved (and that often gets used when emergencies arise). Essentially, all of their money is being circulated through the economy meaning that taxation is pointless.

Taxation has many uses and one is to circulate money through a stagnant economy. Money that would have been saved or locked away is taxed and put back into the economy (through federal spending which ends up in the hands of people who then spend it). The top 20% of our nation controls close to 85% of our wealth, while the bottom 80% controls 15%. Yet the total tax rate for the top 20% tends to only be a few percentage points above the rate of everyone else. So yes, I agree that things need to be more fair; that means increasing taxes (or rather just letting the Bush tax cuts expire) on the rich.

[ABQCOWBOY]

Of course you should tax the rich. Why Not? Do you think they earned their money solely by themselves? No one helped them get rich? Please, they can give up their fourth vacation.

That said, I don't have a problem with having an AMT for everyone. Should the bottom earners pay a lot, no. But I don't have a problem with them paying just a little bit extra. Some type of graduated tax from zero on up. Every little bit will help. And, I will no longer have to hear that lots of people pay no taxes.

And, it is about pain across the board. Pain, everywhere. Cutting spending means cutting back on the military and the war on terror in addition to all the other agencies.

If the Rich want to move to another country, fine, leave, and take your company with you. Please don't tell me another company would not gladly step in and take your place.

Another company would not step in and gladly take there place. The reality is that you can't tax anybody to the point where they are not seeing profits. That's just the reality of things.

---------- Post added July-20th-2011 at 08:11 AM ----------

He literally explained it right after the statement you quoted. There is no money to tax from those people. This has been repeated ad-nauseum but the lowest classes of our society don't really save money. They can't save money because they barely make enough money to survive. They live paycheck to paycheck and thus all of their money goes to consumption. The money goes to housing, clothes, food, healthcare, etc. Extra money they have goes to consumer goods. There is very little saved (and that often gets used when emergencies arise). Essentially, all of their money is being circulated through the economy meaning that taxation is pointless.

Taxation has many uses and one is to circulate money through a stagnant economy. Money that would have been saved or locked away is taxed and put back into the economy (through federal spending which ends up in the hands of people who then spend it). The top 20% of our nation controls close to 85% of our wealth, while the bottom 80% controls 15%. Yet the total tax rate for the top 20% tends to only be a few percentage points above the rate of everyone else. So yes, I agree that things need to be more fair; that means increasing taxes (or rather just letting the Bush tax cuts expire) on the rich.

A few percentage points? Try 35% to zero. That's not a few percentage points and any increase would only compound that.

[repo_4]

He literally explained it right after the statement you quoted. There is no money to tax from those people. This has been repeated ad-nauseum but the lowest classes of our society don't really save money. They can't save money because they barely make enough money to survive. They live paycheck to paycheck and thus all of their money goes to consumption. The money goes to housing, clothes, food, healthcare, etc. Extra money they have goes to consumer goods. There is very little saved (and that often gets used when emergencies arise). Essentially, all of their money is being circulated through the economy meaning that taxation is pointless.

I would disagree that it is pointless to tax them. Even if it does get sent back through the economy in the form of comsumption it is not the same as a tax. The tax would be used for the good of the country in the form of services. Say they pay no tax and have an extra $100, and they go buy 2 PS3 games with that money. The only people that benefit are the consumer (entertainment) and Best Buy and its shareholders. So the $100 spent in the economy is not the same as $100 paid in taxes. This is a simplified scenerio but it makes the point.

[oisn1]

A few percentage points? Try 35% to zero. That's not a few percentage points and any increase would only compound that.

Yet you ignored the rest of my post. I should have been more specific because I'm talking about effective tax rates. What percent of income is actually being taxed as opposed to actual numbers. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=456&Topic2id=20&Topic3id=22

That difference is not so large, and again ignores what I just said; there is very little money that can be taxed on the poor that doesn't get spent anyways. But it's alright, just keep spouting that talking point about taking all the money from the rich when literally no one has suggested that.

[nonniey]

good, now pass it.

Now that we know this is humanly possible, make 6 variations of this and get the version that can get the votes. Same result.

Pass what?

Key Dems: Gang of Six plan won't be ready for debt-limit deal by Aug. 2

http://thehill.com/homenews/senate/172299-key-dems-gang-of-six-plan-wont-be-ready-for-debt-deal-by-aug-2

[oisn1]

I would disagree that it is pointless to tax them. Even if it does get sent back through the economy in the form of comsumption it is not the same as a tax. The tax would be used for the good of the country in the form of services. Say they pay no tax and have an extra $100, and they go buy 2 PS3 games with that money. The only people that benefit are the consumer (entertainment) and Best Buy and its shareholders. So the $100 spent in the economy is not the same as $100 paid in taxes. This is a simplified scenerio but it makes the point.

Yes, but then those companies pay their employees who in turn by more stuff, which then gets circulated through to others who then buy other stuff, etc. All the while, it is getting taxed in smaller portions. $100 in consumer spending has a multiplier effect when it circulates through the economy. The real problem is that the money no longer circulates through the economy. It tends to get gobbled up at the top when owners and the highest income bracket are able to make their paycheck and then save all of it effectively taking the money out of the economy. Increasing the top income tax bracket forces more money back into the economy to be spent and used which stimulates proper growth. And as I said earlier, the money gets taxed (federally) on higher brackets which is where the 100 dollars will move towards when it gets spent.

I'm not speaking to you personally, but I see that many people consider the economy to be some sort of beginning and end system. The economy is a cycle and that is being ignored by the massive wealth disparity where the top class is able to essentially horde wealth that gets taken out of the economy.

[ABQCOWBOY]

Yet you ignored the rest of my post. I should have been more specific because I'm talking about effective tax rates. What percent of income is actually being taxed as opposed to actual numbers. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=456&Topic2id=20&Topic3id=22

That difference is not so large, and again ignores what I just said; there is very little money that can be taxed on the poor that doesn't get spent anyways. But it's alright, just keep spouting that talking point about taking all the money from the rich when literally no one has suggested that.

The rest of your post is not what I am making a point about. The reality is that you can't save any of the programs that aid the segment of society that you are posting about unless we all contribute. You can't say that this segment can not contribute but all others must when it is exactly this segment that is using these benefits. This is a hard stop between both parties. If you can't overcome this, then the result will likely be that these programs die off and there is nothing for these folks. That's the reality of our economic situation. Everybody has to contribute.

[Beans]

Another company would not step in and gladly take there place. The reality is that you can't tax anybody to the point where they are not seeing profits. That's just the reality of things.

---------- Post added July-20th-2011 at 08:11 AM ----------

A few percentage points? Try 35% to zero. That's not a few percentage points and any increase would only compound that.

Except that the real marginal tax rate is likely to be higher for some middle class schmuck than some uber wealthy captain of industry. You know, that's why they pay those all those accountants and stuff mega bucks...

The 35% on paper is not the reality.

Here's something to get smarter with:

http://www.economics-finance.org/jefe/econ/Allenpaper2.pdf

Maybe the rich need to quit playing the victim card. It rings hollow for the middle class.

As an aside, I believe tax brackets need to be redefined and loopholes closed. The rich act like these loopholes are there to be exploited. Loopholes get their namesake because they aren't supposed to exist, except for some ommitted or incorrect verbiage in the creation of law (or perhaps legislative espionage).

[ABQCOWBOY]

Another company would not step in and gladly take there place. The reality is that you can't tax anybody to the point where they are not seeing profits. That's just the reality of things.

---------- Post added July-20th-2011 at 08:11 AM ----------

Except that the real marginal tax rate is likely to be higher for some middle class schmuck than some uber wealthy captain of industry. You know, that's why they pay those all those accountants and stuff mega bucks...

The 35% on paper is not the reality.

Here's something to get smarter with:

http://www.economics-finance.org/jefe/econ/Allenpaper2.pdf

Maybe the rich need to quit playing the victim card. It rings hollow for the middle class.

As an aside, I believe tax brackets need to be redefined and loopholes closed. The rich act like these loopholes are there to be exploited. Loopholes get their namesake because they aren't supposed to exist, except for some ommitted or incorrect verbiage in the creation of law (or perhaps legislative espionage).

Thank you for the assist. However, the point here, as has been discussed, it the rich and the increase in Federal Taxation in order to pay for shortfalls in our current budget. So, that would be a 35% tax rate currently. However, if you want to discuss lower tax bracket folks, which is not who is being targeted, we can do that too.

25%

28%

33%

35%

None of those, depending on your earnings, are just a few percentage points if your paying zero and somebody else is ponying up under one of these other brackets. At least, not in my book.

[repo_4]

Yes, but then those companies pay their employees who in turn by more stuff, which then gets circulated through to others who then buy other stuff, etc. All the while, it is getting taxed in smaller portions. $100 in consumer spending has a multiplier effect when it circulates through the economy. The real problem is that the money no longer circulates through the economy. It tends to get gobbled up at the top when owners and the highest income bracket are able to make their paycheck and then save all of it effectively taking the money out of the economy. Increasing the top income tax bracket forces more money back into the economy to be spent and used which stimulates proper growth. And as I said earlier, the money gets taxed (federally) on higher brackets which is where the 100 dollars will move towards when it gets spent.

I'm not speaking to you personally, but I see that many people consider the economy to be some sort of beginning and end system. The economy is a cycle and that is being ignored by the massive wealth disparity where the top class is able to essentially horde wealth that gets taken out of the economy.

I propose we close ALL loopholes and then implement a flat tax for EVERYONE. If your annual income is $8k or $800k you pay the same percentage. Problem solved. This, to me, would satisfy the "fair share" question. But your logic would be that people saving their money (even though they are rich) is an evil thing to do. That by saving the money, that they have legally earned, they are taking it away from someone else who needs it more and the goverrnment is obligated to step in and take it from them?

[ABQCOWBOY]

I propose we close ALL loopholes and then implement a flat tax for EVERYONE. If your annual income is $8k or $800k you pay the same percentage. Problem solved. This, to me, would satisfy the "fair share" question. But your logic would be that people saving their money (even though they are rich) is an evil thing to do. That by saving the money, that they have legally earned, they are taking it away from someone else who needs it more and the goverrnment is obligated to step in and take it from them?

I agree with this. I can see both sides. I understand the argument that those who are in need are hard put to find extra money. I also understand that money earned by those who have a business or have worked for it is theirs to keep. I will admit that I fall on the side of the argument that says Government has no business telling people what to do with their own money. I can't fault people for wanting to save money or keep it in their own hands right now. There is a lot of uncertainty out there and who's to say what the next few years holds? You have to provide for you and yours first. That's how it works for me.

[Thiebear]

So the Biden committee is a setup.

The Republican plan is a setup

The Committee on debt reduction that finished last year was ignored.

President Obama has 'nothing" to add? or the bill with 2billion? not sure.

The Senate hasn't passed a budget since 2009

Seems like the Gang of 6 is all we have. Fire the rest.

[ABQCOWBOY]

So the Biden committee is a setup.

The Republican plan is a setup

The Committee on debt reduction that finished last year was ignored.

President Obama has 'nothing" to add? or the bill with 2billion? not sure.

The Senate hasn't passed a budget since 2009

Seems like the Gang of 6 is all we have. Fire the rest.

You may be on to something Thiebear.

[oisn1]

The rest of your post is not what I am making a point about. The reality is that you can't save any of the programs that aid the segment of society that you are posting about unless we all contribute. You can't say that this segment can not contribute but all others must when it is exactly this segment that is using these benefits. This is a hard stop between both parties. If you can't overcome this, then the result will likely be that these programs die off and there is nothing for these folks. That's the reality of our economic situation. Everybody has to contribute.

Many of the programs are used by everyone, but just focusing on the social programs, you seem to misunderstand one of the fundamental reasons for these programs. The social safety net is used to better the lives of those less fortunate than us because it benefits the economy to have people buying things rather than dying on the streets.

But more importantly, and from a rich person's perspective, it also keeps the poor and middle class calm. When you're scrapping by but at least have some meager amount of assistance to help with food and clothing, you are less willing to rock the boat. On the other hand, if you're on the streets dying, you might just decide that you no longer want to just redistribute the wealth, but rather redistribute the blood of the people holding that wealth. Now, when a sizable portion of the population feels that way, you get things like the French Revolution or the Socialist uprising in Russia. And let me tell you, that didn't really out so well for the people in power.

So whether or not the rich are using the systems, they sure as hell are benefiting from it. They benefit from it everyday when the poor and increasingly, stressed middle class in this country don't decide to take matter into their own hands. And that's the real reality of our economic situation.

[repo_4]

Many of the programs are used by everyone, but just focusing on the social programs, you seem to misunderstand one of the fundamental reasons for these programs. The social safety net is used to better the lives of those less fortunate than us because it benefits the economy to have people buying things rather than dying on the streets.

But more importantly, and from a rich person's perspective, it also keeps the poor and middle class calm. When you're scrapping by but at least have some meager amount of assistance to help with food and clothing, you are less willing to rock the boat. On the other hand, if you're on the streets dying, you might just decide that you no longer want to just redistribute the wealth, but rather redistribute the blood of the people holding that wealth. Now, when a sizable portion of the population feels that way, you get things like the French Revolution or the Socialist uprising in Russia. And let me tell you, that didn't really out so well for the people in power.

So whether or not the rich are using the systems, they sure as hell are benefiting from it. They benefit from it everyday when the poor and increasingly, stressed middle class in this country don't decide to take matter into their own hands. And that's the real reality of our economic situation.

Well, groing up in a family of 4 that only had one income that was under $40k per year I have some insight on it. We got by just fine without handouts and the social welfare programs that you mention. To assume that my family (or anyone in our situation) was going to revolt and start killing because someone had more than us is questionable. I think there is a disconnect between what people see as a sustainable income and what isnt. $40k/year isnt going to have people dying in the streets. So I dont see how painting a scenario where it will be armageddon if you dont tax the rich more makes sense.

[PeterMP]

Well, groing up in a family of 4 that only had one income that was under $40k per year I have some insight on it. We got by just fine without handouts and the social welfare programs that you mention. To assume that my family (or anyone in our situation) was going to revolt and start killing because someone had more than us is questionable. I think there is a disconnect between what people see as a sustainable income and what isnt. $40k/year isnt going to have people dying in the streets. So I dont see how painting a scenario where it will be armageddon if you dont tax the rich more makes sense.

I grew up in a family of 8 that for a number of years lived on a single salary around ~50K, but things have changed since then. Right off the bat, the costs of health care have been going up essentially every year at a rate faster than inflation.

The current costs of health care when corrected for increases in compensation for the average worker are much higher than they were then.

[oisn1]

I propose we close ALL loopholes and then implement a flat tax for EVERYONE. If your annual income is $8k or $800k you pay the same percentage. Problem solved. This, to me, would satisfy the "fair share" question. But your logic would be that people saving their money (even though they are rich) is an evil thing to do. That by saving the money, that they have legally earned, they are taking it away from someone else who needs it more and the goverrnment is obligated to step in and take it from them?

A flat tax is extremely regressive.

Saving isn't a bad thing, in fact it should be encouraged. But over saving is a problem too. When middle class wages stagnant like they have for the past 30 years while executive pay grows by leaps and bounds, the strength of the economy is ruined. We go back to the days of the Industrial Revolution or feudalism where there is a super rich upper class and the rest are serfs working the farm. Unfortunately, there is no farm in the US anymore, we are a service based economy (like most other developed nation). Our money comes from the trading services with one another.

Let me ask you a question. If every person in the US decided to save all of their money, outside of food and shelter, what would happen? That should answer your question on why over saving is not good.

[repo_4]

I grew up in a family of 8 that for a number of years lived on a single salary around ~50K, but things have changed since then. Right off the bat, the costs of health care have been going up essentially every year at a rate faster than inflation.

The current costs of health care when corrected for increases in compensation for the average worker are much higher than they were then.

There is a huge leap from an increase in health care costs and the masses taking to the streets to riot and kill people that have a little money as was suggested. My point was, the people that are poor and ACTUALLY need the help are not the ones that you think they are. I cannot tell you how many times I have seen the welfare system abused. To assert that cutting some funding to these programs is going to cause the country to collapse is absurd. I think that is what is needed so that the people that actually need the help are the ones getting it. You lived in a family of 8 people for under $50k a year. Were your parents plotting to kidnap someone for randsome because you or your siblings were on the verge of death from starvation? Because you are posting here, my assumption is "no". That they got by.

[oisn1]

Well, groing up in a family of 4 that only had one income that was under $40k per year I have some insight on it. We got by just fine without handouts and the social welfare programs that you mention. To assume that my family (or anyone in our situation) was going to revolt and start killing because someone had more than us is questionable. I think there is a disconnect between what people see as a sustainable income and what isnt. $40k/year isnt going to have people dying in the streets. So I dont see how painting a scenario where it will be armageddon if you dont tax the rich more makes sense.

Hahahaha, yeah and in the 1900s you could live on a couple bucks a day so we should go back to that right? While I love your anecdote, I'm looking at the big picture. You do realize that as you were growing up, your family was actively or passively taking advantage of social engineering. Your tax rates were lower and public services were available so you didn't have to pay top dollar for everything. The thread about closing public libraries is a perfect example of this. that is social engineering on a state/federal level. If you went to the library, you took advantage of welfare. If you went to public school, you took advantage of welfare.

Also you missed my point. It isn't that we are going to start beheading people, but the idea stands. Social safety nets keep the population calm. When things get ugly, drastic measures get taken. Take a look at any third world nation and you'll see what happens when there is a large population of poor people that have no hope. The world is not so civilized that people will lay down and die.

[ABQCOWBOY]

Many of the programs are used by everyone, but just focusing on the social programs, you seem to misunderstand one of the fundamental reasons for these programs. The social safety net is used to better the lives of those less fortunate than us because it benefits the economy to have people buying things rather than dying on the streets.

But more importantly, and from a rich person's perspective, it also keeps the poor and middle class calm. When you're scrapping by but at least have some meager amount of assistance to help with food and clothing, you are less willing to rock the boat. On the other hand, if you're on the streets dying, you might just decide that you no longer want to just redistribute the wealth, but rather redistribute the blood of the people holding that wealth. Now, when a sizable portion of the population feels that way, you get things like the French Revolution or the Socialist uprising in Russia. And let me tell you, that didn't really out so well for the people in power.

So whether or not the rich are using the systems, they sure as hell are benefiting from it. They benefit from it everyday when the poor and increasingly, stressed middle class in this country don't decide to take matter into their own hands. And that's the real reality of our economic situation.

I understand all of this. None of this is new to me. However, we are not Europe, nor are we Russia and our histories, our social beliefs and our economic beliefs are very different from those countries. You may view things in a very European way and our current Administration may share those views but that does not mean that we, as a country believe in those social and economic beliefs. I think the jury is very much out on that and this is at the root of why our Legislators have had such a difficult time. This discussion can go on for however long but it does not trump the fact that the immediate threats to our economy trump any of these discussions. If we have no economy, then none of the rest of this matters. You have to have the ability to generate revenue through private commercial dealings in order to generate revenue through taxes. If the debt is too great and we can not do this, then we are all done. Suffer shared pain now or run the risk of suffering real poverty and destitution later. I believe that this is the reality we are facing.