QuoteI'm a sap, a specific kind of sap. I'm an Obama Sap.
When the president said the unemployed couldn't wait 14 more months for help and we had to do something right away, I believed him. When administration officials called around saying that the possibility of a double-dip recession was horrifyingly real and that it would be irresponsible not to come up with a package that could pass right away, I believed them.
I liked Obama's payroll tax cut ideas and urged Republicans to play along. But of course I'm a sap. When the president unveiled the second half of his stimulus it became clear that this package has nothing to do with helping people right away or averting a double dip. This is a campaign marker, not a jobs bill.
It recycles ideas that couldn't get passed even when Democrats controlled Congress. In his remarks Monday the president didn't try to win Republicans to even some parts of his measures. He repeated the populist cries that fire up liberals but are designed to enrage moderates and conservatives.
He claimed we can afford future Medicare costs if we raise taxes on the rich. He repeated the old half-truth about millionaires not paying as much in taxes as their secretaries. (In reality, the top 10 percent of earners pay nearly 70 percent of all income taxes, according to the I.R.S. People in the richest 1 percent pay 31 percent of their income to the federal government while the average worker pays less than 14 percent, according to the Congressional Budget Office.)
This wasn't a speech to get something done. This was the sort of speech that sounded better when Ted Kennedy was delivering it. The result is that we will get neither short-term stimulus nor long-term debt reduction anytime soon, and I'm a sap for thinking it was possible.
Yes, I'm a sap. I believed Obama when he said he wanted to move beyond the stale ideological debates that have paralyzed this country. I always believe that Obama is on the verge of breaking out of the conventional categories and embracing one of the many bipartisan reform packages that are floating around.
Read on at:
http://www.nytimes.com/2011/09/20/opinion/brooks-obama-rejects-obamaism.html?_r=1&ref=davidbrooks
Quote from: Conan71 on September 20, 2011, 01:19:20 PM
Read on at:
http://www.nytimes.com/2011/09/20/opinion/brooks-obama-rejects-obamaism.html?_r=1&ref=davidbrooks
The tax inequities are well defined and documented. Even by the richest amongst us.
And yes, there is need for much more reform. Spending AND tax policy must both be changed.
Wow, he fell for the "they pay more in absolute dollars, so there's no problem" canard. Of course they pay more tax than poorer people. That still doesn't mean they pay the same proportion of their income as those of us lower on the income scale. (Some folks may, many don't)
Quote from: Conan71 on September 20, 2011, 01:19:20 PM
Read on at:
http://www.nytimes.com/2011/09/20/opinion/brooks-obama-rejects-obamaism.html?_r=1&ref=davidbrooks
Blasphemer! He should be fired from the Times. . .in 3. . .2. . .1
Quote from: nathanm on September 20, 2011, 03:29:13 PM
Wow, he fell for the "they pay more in absolute dollars, so there's no problem" canard. Of course they pay more tax than poorer people. That still doesn't mean they pay the same proportion of their income as those of us lower on the income scale. (Some folks may, many don't)
Oh, you mean the "they don't pay their fair share" canard?
Quote from: Conan71 on September 20, 2011, 04:12:01 PM
Oh, you mean the "they don't pay their fair share" canard?
We decided the better part of a century ago that it is reasonable to tax people in proportion to their income. We have been doing so ever since. Before that, we decided it was reasonable to tax people's property based on the amount they own. We levied duties based on the amount of dutiable items brought in to the country, not a flat fee per shipment. If many or most high-earning individuals/families are paying less tax as a proportion of their income than those making less income, I can't see a problem with rectifying that.
Quote from: nathanm on September 20, 2011, 04:17:51 PM
If many or most high-earning individuals/families are paying less tax as a proportion of their income than those making less income, I can't see a problem with rectifying that.
So we should make everyone pay an equal "tax as a proportion of their income" right?
Quote from: Gaspar on September 20, 2011, 04:55:23 PM
So we should make everyone pay an equal "tax as a proportion of their income" right?
I smell one of your turds of over generalization intended to discredit my argument without actually having to argue logically against it coming on. But yes, in general, to the extent that income exceeds the level needed to keep a person/family out of poverty, the tax rate shouldn't be drastically unlevel. That said, some progressivity in rate both encourages consumption at the low end of the scale and reinvestment rather than profit taking at the high end of the scale, so stands on its own merit as a driver of the economic engine, making us all better off, including those asked to pay more. (the idea being that they can avoid paying much more just by structuring their business activities in a more productive way to society as a whole)
I think taking the top (federal) rate over the 40s is counterproductive, although I can envision punitive scenarios where certain activities are so detrimental to society that a 100% tax rate on income attributable to that activity would be appropriate.
Quote from: nathanm on September 20, 2011, 05:36:09 PM
I think taking the top (federal) rate over the 40s is counterproductive, although I can envision punitive scenarios where certain activities are so detrimental to society that a 100% tax rate on income attributable to that activity would be appropriate.
I see.
So you are saying that activities that are legal, and fill an obvious demand, should be somehow further regulated through the tax code?
For instance, if I produce Hamburgers, and everyone loves hamburgers, but the federal government establishes that Americans are too fat, should they have the right to tax my business out of existence in order to regulate the weight of the people?
As Marshall said, "the power to tax is the power to destroy." Are you advocating that government exercise this power more? If so, why not establish regulatory levels for all goods and services, establish price controls, and regulate supply levels?
I thought Marshall said: "Everyone should be able to drink great beer".
Oh wait, different Marshall.
You know Nate, yesterday the AP basically called BS on Obama's remarks about the rich not paying their fair share.
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.
The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 percent of their income in federal income taxes, according to the IRS.
Those making $100,000 to $125,000 paid on average 9.9 percent in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 percent.
The Tax Policy Center estimates that 46 percent of households, mostly low- and medium-income households, will pay no federal income taxes this year. Most, however, will pay other taxes, including Social Security payroll taxes.
http://news.yahoo.com/fact-check-rich-taxed-less-secretaries-070642868.html
Is it correct that many of the poor pay no taxes? Yes
Is it correct that the rich get big tax cuts? Yes
Is it correct that the middle class shoulders much of the burden? Yes (there are more of them!)
But at the end of the day the discussion is always misleading when you discuss "tax rate."
If I am taxed at 17% and Warren Buffett is taxed at 17%, I will pay $17,000 in taxes and he will pay $6,938,744. However, I have very little capital gains liability, and Mr. Buffet does. first is taxed for "labor" income, and then taxed again as capital income. He is also paying the double taxation on capital gains and dividends. Sure his return may say 17%, but he paid far more than $6,938,744 and he knows it. Because of his wealth, he is also liable for the 45% death tax that I am not currently liable for. So to say that he "pays less than his secretary" is a lie designed to get the sheep restless.
This is why one of two things needs to happen. One, we eliminate the progressive system and all of the deductions and adopt a flat rate of taxation on income, or two, we eliminate all taxation on income and only tax based on use, a flat sales tax that applies to ALL purchases.
Our current system is becoming more and more economically oppressive, and its very management sucks trillions out of the economy that could improve the lives of every American.
You can be quite certain that Mr. Buffett has a myriad of trusts which will limit the impact of that 45% estate tax.
Sure, he's considered one of the brightest investors ever, but he comes off as being completely disingenuous when he starts up with his: "I pay a lower rate than my secretary does" meme.
Quote from: Conan71 on September 21, 2011, 09:23:54 AM
You can be quite certain that Mr. Buffett has a myriad of trusts which will limit the impact of that 45% estate tax.
Sure, he's considered one of the brightest investors ever, but he comes off as being completely disingenuous when he starts up with his: "I pay a lower rate than my secretary does" meme.
Every thing he does has a purpose.
Quote from: Gaspar on September 21, 2011, 09:57:30 AM
Every thing he does has a purpose.
He grows ear hair.
Quote from: Townsend on September 21, 2011, 10:22:57 AM
He grows ear hair.
And eyebrows you could fan a Pharaoh with!
Quote from: Gaspar on September 21, 2011, 08:38:46 AM
You know Nate, yesterday the AP basically called BS on Obama's remarks about the rich not paying their fair share.
That was one of the smoothest transitions from talking about total tax to "federal tax" I've seen yet. The poor pay more as a proportion of their income in sales tax and other state/local tax than higher income earners.
Regarding punitive tax, I was thinking more along the lines of a 100% tax on illegally gotten gains, for those times when fines don't cause the disgorging of all the illegally obtained profit. Or, for example, not that I'm advocating this, a punitively high tax on profits derived from offshored labor. There are scenarios where taxation is more effective at curbing certain types of behavior than the criminal code. As long as we recognize punitive taxation for what it is, I don't have a big problem with using the tax code that way. Of course, with the Tax Courts the way they are, I wouldn't advocate using that stick at present.
And please explain to me how capital gains are double taxed at the federal level. The investment was either sold within a year, in which case it is taxed as ordinary wage income, or it was not, in which case it is only subject to capital gains tax. IMO, capital gains should get a lower rate, but only to the extent that the total tax bill is of a certain percentage (less any losses, of course).