12 Nov 10
Originally posted by MelanerpesI'm all for eliminating all tax loopholes and shelters to raise revenue if your object is to reduce the deficit. But how does massive cuts in the marginal rates at the top accomplish this?
I think one of the big problems we have right now is that the tax code is a monstrously complex thing. There are so many loopholes and deductions and exemptions in it. So the amount of taxes that a given rich person actually pays depends on a myriad of factors including the quality of their lawyers and accountants.
So ultimately, it's very difficult to ...[text shortened]... uch easier for progressives like yourself to demand that politicians make the rich pay more.
And at the bottom, the commission co-chairs recommend eliminating the Earned Income Credit which is an anti-poverty income supplement similar to a "negative income tax". How exactly does eliminating this program while cutting the wealthy's marginal rates make the tax code more "progressive" as Telerion claims?
12 Nov 10
6 edits
Originally posted by no1marauderThere are two steps here. First, you eliminate all the loopholes and establish new tax rates that approximates the tax levels that the average person in each bracket is actually paying now. So the average person in a 36% tax bracket with lots of loopholes is ACTUALLY paying something like 23% of their income.
I'm all for eliminating all tax loopholes and shelters to raise revenue if your object is to reduce the deficit. But how does massive cuts in the marginal rates at the top accomplish this?
And at the bottom, the commission co-chairs recommend eliminating the Earned Income Credit which is an anti-poverty income supplement similar to a "n ting the wealthy's marginal rates make the tax code more "progressive" as Telerion claims?
Once you've established "revenue neutral" tax rates, you can then raise the taxes to increase revenue. Once people see that the top rate that the rich are actually paying is only 23% or so, they might be very forceful in demanding that this be raised. Since I have no idea what the exact "revenue-neutral" tax rates are once all loopholes have been removed, I don't know for sure whether the rich would be paying more or less than they do now. I'll let the tax experts go through the byzantine tax code and try to figure this out. I look forward to hearing what they have to say.
As for the Earned Income Tax Credit -- the proposal includes a number of scenarios for the Zero Option model. One scenario eliminates every single loophole - a second scenario eliminates all loopholes, EXCEPT for the earned income tax credit & the child tax credit - and two additional scenarios adds back loopholes for mortgages, healthcare plans, and retirement benefits.
12 Nov 10
Originally posted by MelanerpesPeople already think the wealthy don't pay enough in taxes and that deficit reduction should be done, in large part, by raising their taxes. So this whole exercise is pointless if its purpose is in any measure what your post postulates.
There are two steps here. First, you eliminate all the loopholes and establish new tax rates that approximates the tax levels that the average person in each bracket is actually paying now. So the average person in a 36% tax bracket with lots of loopholes is ACTUALLY paying something like 23% of their income.
Once you've established "revenue neutral" ...[text shortened]... l scenarios adds back loopholes for mortgages, healthcare plans, and retirement benefits.
12 Nov 10
Originally posted by no1marauderGood. So that means that legislation has already been passed to significantly increase the tax rates on the rich. The people have spoken and the politicians, fearing the voters' wrath, have acted.
People already think the wealthy don't pay enough in taxes and that deficit reduction should be done, in large part, by raising their taxes. So this whole exercise is pointless if its purpose is in any measure what your post postulates.
12 Nov 10
Originally posted by MelanerpesDon't act like whodey; I've already explained that the politicians in both big money parties are far more responsive to the economic elite than they are to the preferences of the people. What part of that didn't you understand? Surely the recommendations of the two co-chairs of the commission reinforces that argument of mine.
Good. So that means that legislation has already been passed to significantly increase the tax rates on the rich. The people have spoken and the politicians, fearing the voters' wrath, have acted.
12 Nov 10
Originally posted by no1marauderThat my point. The politicians are not going to respond to the will of the people unless the people can express their will strongly enough to make them listen.
Don't act like whodey; I've already explained that the politicians in both big money parties are far more responsive to the economic elite than they are to the preferences of the people. What part of that didn't you understand? Surely the recommendations of the two co-chairs of the commission reinforces that argument of mine.
So if the tax simplification process makes people more aware of the exact amount that the rich are actually paying, it will stir up increased intensity and broaden the existing support further -- until the politicians have to seriously worry about losing their seats unless they act.
That's the problem with polls. They measure what percentage of people favor raising taxes on the rich -- but they do a poor job measuring their intensity - they don't measure how likely the people will make a major fuss, conduct large noisy protests, and then show up in droves during the primaries.
13 Nov 10
Originally posted by MelanerpesThe federal income tax burden is much more concentrated than the income distribution. The real income of the rich has gone way up right? Well, the tax concentration has grown by even more. Rich people pay more than a proportional share of income taxes.
I think one of the big problems we have right now is that the tax code is a monstrously complex thing. There are so many loopholes and deductions and exemptions in it. So the amount of taxes that a given rich person actually pays depends on a myriad of factors including the quality of their lawyers and accountants.
So ultimately, it's very difficult to ...[text shortened]... uch easier for progressives like yourself to demand that politicians make the rich pay more.
Not saying that they shouldn't pay so much. Maybe they should pay more, but don't get conned into thinking that rich people aren't paying.
13 Nov 10
My budget proposals are:
1. Begin placing the Social Security taxes in a seperate fund, not general revenue. And make it inaccessible to thieving politicians.
2. Revoke tax exempt status for all churches. Most are just political arms of one party or another.
3. Reduce the salaries 10% of all Federal politicians. Eliminate government subsidized pensions and healthcare for all congressman and senators.
13 Nov 10
Originally posted by KazetNagorraYou would be losing items such as the mortgage deduction. There ar several areas where taxes would increase thus the initial frown from the Tea Party types.
Well, why don't you do the maths? If I understand correctly a lot of deductions which benefit mostly the rich will be abolished, so it may be correct. It's still a bad idea to have such a low top rate, of course, but it might still be an improvement over the current situation.
They say that mathematically it works, but both parties will whiff on it.
14 Nov 10
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Originally posted by teleriontheir income streams are also disproportionate to what common sense says anyone needs. Even if its not a zero sum game, you can't tell me that the rich getting richer is noot affecting income distribution....
Rich people pay more than a proportional share of income taxes.
Not saying that they shouldn't pay so much. Maybe they should pay more, but don't get conned into thinking that rich people aren't paying.
edit: I'm not Scottish btw
17 Nov 10
Originally posted by kmax87The richest have become richer relative to bottom 95% or so. I have said this already. And of course that affects the distribution of income (by definition).
their income streams are also disproportionate to what common sense says anyone needs. Even if its not a zero sum game, you can't tell me that the rich getting richer is noot affecting income distribution....
edit: I'm not Scottish btw
My point was that the distribution of federal income taxes is far more concentrated than that of income and has become so more rapidly than income inequality has grown. In other words, we have been getting more and more of the share of taxes from high income earners. So much so, that the growth in income inequality alone cannot account for it.
That doesn't mean that taxes shouldn't be even more progressive, but it is a fact that serious people should be aware of.
17 Nov 10
Originally posted by telerionYes, Bush's co-Chairman of Economic Advisors thinks it's slightly progressive. Not much to hang an Argument to Authority Fallacy on.
Found a nice opinion piece in NYT by respected economist Glenn Hubbard. He also points out the fact that the proposals are on net progressive.
http://www.nytimes.com/2010/11/16/opinion/16hubbard.html?_r=1
17 Nov 10
1 edit
Originally posted by telerionEquating income taxes to all taxes is fallacious. The overall tax burden is very mildly progressive which is a disgrace given the massive and growing inequality in income distribution.
The richest have become richer relative to bottom 95% or so. I have said this already. And of course that affects the distribution of income (by definition).
My point was that the distribution of federal income taxes is far more concentrated than that of income and has become so more rapidly than income inequality has grown. In other words, we have s shouldn't be even more progressive, but it is a fact that serious people should be aware of.
18 Nov 10
1 edit
Originally posted by MelanerpesThis does not seem to bad to me. I doubt it will survive in it's present form though. Too many lawmakers on both sides of the partsian fence have still not accepted the fact that spending needs to be cut, and tax revenues need to be increased to balance the budget, and begin to pay down the national debt. Oh well, hope springs eternal...🙂
http://www.nytimes.com/2010/11/11/us/politics/11fiscal.html?_r=1
well...it's still a "draft" so it's not really a finished proposal yet.
http://documents.nytimes.com/draft-proposal-from-the-national-commission-on-fiscal-responsibility-and-reform?ref=politics#p=1
this is the document itself -- it's fifty "pages" are presented in a power-point for hat it considers a more accurate CPI (the chained-CPI) for cost-of-living adjustments.