Tim Allen tweet about taxation

Originally posted by KazetNagorra
There are several systems which use a wealth tax rather than a capital gains tax, although the wealth tax in these systems is arguably quite low. For instance, the Netherlands taxes assets at 1.2% of their value annually (if I remember correctly).

1.2% if nothing, and very few government do it or ever will do it.

I would argue that the Progressive income tax is nothing but class warfare against the poor.

Originally posted by finnegan
Hang on - is the question about helping the poor or helping the middle class? Tim Allen referred to the middle class.

If I dare risk repeating an exercise which KazetNagorra tried recently, if you are prepared for the moment to make the ASSUMPTION that the total tax revenue is to remain the same, but we wish to change its distribution, then I would adv ...[text shortened]... society or a system ruled and dominated by the small minority of the wealthiest citizens[/quote]

I still fail to see how increasing the income tax on the rich is helping the poor. The poor will get X amount of redistribution either way.

Now I could understand if there were no deficit and they had to balance the books, but they are not even close to that. Deficit spending is a way of life for the government, so I fail to understand the difference between $2 or $3 trillion dollars in deficit spending. It's all monopoly money.

Originally posted by whodey
I still fail to see how increasing the income tax on the rich is helping the poor. The poor will get X amount of redistribution either way.

Now I could understand if there were no deficit and they had to balance the books, but they are not even close to that. Deficit spending is a way of life for the government, so I fail to understand the difference between $2 or $3 trillion dollars in deficit spending. It's all monopoly money.

If the poor are getting x amount of redistribution anyway, that does not prevent them steadily getting worse off, as also are the middle class, who get y amount of redistribution but can't see it, while only one group is getting better off and that is the very rich, who enjoy a vast quantity of redistribution at the expense of everyone else and it is very easy to see by looking at the evidence.

You seem to be saying that it doesn't matter if the tax is collected or not from rich people as government can just print the required sums. You could use the same argument to abolish all taxes, including taxes paid by the rest of us. They just aren't needed. As it happens you are wrong.

The present situation is that the rich are evading taxes and enjoying almost tax free status while sucking up a growing share of wealth and income at the expense of every other class and everyone else is paying taxes. Our income is taxed - they can evade it. Our spending is taxed in lots of ways - they spend only a part of their income. They invest and engage in huge transactions to sustain and enhance their wealth - they are not being taxed on that. They transfer huge sums through inheritance - and receive huge sums through inheritance - without being properly taxed on that. Basically, what the rich people do with their money is not being taxed in the way what we do with our money is being taxed. Now that is special treatment and they do not earn it, merit it, deserve it, or even admit it. They just use it to get more wealthy at our expense. and people like you seem to defend them!

I don't see why the very rich merit this extraordinary freedom that nobody else is enjoying.

Originally posted by finnegan
If the poor are getting x amount of redistribution anyway, that does not prevent them steadily getting worse off, as also are the middle class, who get y amount of redistribution but can't see it, while only one group is getting better off and that is the very rich, who enjoy a vast quantity of redistribution at the expense of everyone else and it is very e ...[text shortened]...

I don't see why the very rich merit this extraordinary freedom that nobody else is enjoying.

I will try and simplify my position using this example.

For the sake of argument, let's say that the federal government spends $100,000 a year.

It takes in $2 revenue a year from the Middle class.

It takes in about $15 revenue from the "rich".

As you can see, the revenue generated from both the poor and rich are insignificant.

The government then spends about $10 on the poor to redistribute. This amount will go unchanged regardless of whether or not the rich pay in taxes $20 or $40 a year or higher.

All that has been done is disallow those who make between $2 and $15 a chance to build wealth from income to rival those that have become wealthy by making $15 historically. Those that have built up wealth making $15 can live off the wealth.

What you then wind up with regarding a progressive income tax is a caste system of sorts.

Originally posted by finnegan
Firstly, this stuff about reducing tax for the wealthy needs a context. The wealthy have seen marginal tax rates slashed since the Eighties to the extent that some, like Warren Buffet for example, comment that their secretaries have a higher marginal rate than they do.

Secondly, rules have been changed in the past thirty years to enable the very wealthy ...[text shortened]... g is why they are being given such a free ride at the expense of every other section of society.

The United States has a highly progressive income tax structure, so if the rich are paying lower effective rates than the middle class, it is due to an excessively complex tax code filled with shelters, and loopholes.

How about eliminating those with either a flat tax, or a sales tax with few if any exemptions. The question is not about reducing taxes on the wealthy, but what benefit is there to raising taxes on them. Who gets the money?

Originally posted by normbenign
The United States has a highly progressive income tax structure, so if the rich are paying lower effective rates than the middle class, it is due to an excessively complex tax code filled with shelters, and loopholes.

How about eliminating those with either a flat tax, or a sales tax with few if any exemptions. The question is not about reducing taxes on the wealthy, but what benefit is there to raising taxes on them. Who gets the money?

That's just it. If the revenue generated meant anything to those in Washington they would do away with them tomorrow.

I think it suits their purposes better allowing the loop holes and then demagogueing about wanting to close the loop holes.

Originally posted by whodey
I will try and simplify my position using this example.

For the sake of argument, let's say that the federal government spends $100,000 a year...

What you then wind up with regarding a progressive income tax is a caste system of sorts.

Sorry but that does not work for me. I wonder why you picked $100,000 as the grand total then such small numbers later - only $10 spent on the poor is a fraction of a percent. Whatever, what stops your hero from getting rich is not taxes - let alone progressive taxes. It is the failure of incomes to keep pace with inflation for all except the top 10%. The top class is moving away at an escalating pace and the reality is that they can only be stopped from screwing the rest of us by means of progressive taxation. So yes it is a caste system and you need progressive taxes to END the caste system.

I wonder why you imagine the government takes more from the rich than from the middle class? You must be dreaming again.

while, on average, millionaires do pay more in taxes than middle-class earners (about 30 percent compared to about 19 percent), the use of average tax rates in discussions surrounding the issue "hides a great deal of variation in the tax rates that taxpayers actually face."

"The primary reason for this is the higher-income taxpayers with low tax rates receive a very high proportion of the income from long-term capital gains and qualified dividends, which are taxed at low tax rates and not subject to payroll taxes," Hungerford says.

Lower-income taxpayers, however, earn most of their income from wages - which are subject to payroll taxes.

http://www.cbsnews.com/news/25-of-millionaires-pay-lower-tax-rates-than-many-middle-class-americans-study-says/

The next article shows that while the rich do pay the largest proportion (70% ) of federal taxes, however...

When factoring in state and local taxes, the top 10% pay just under half the tab. And when calculating tax burden as a percent of income, the tax code is even less progressive. The top 10% paid an average of 30% of their income in local, state, and federal taxes in 2011, said McIntyre. That's not much different than the 25% percent paid by the middle class.
"The system is a little progressive, but not much," McIntyre said.
Still, the wealthy are paying more taxes on a federal level simply because they are making so much more money. The top 10% of taxpayers take home 45% of the nation's income, according to Citizens for Tax Justice. Moreover, they seem to be getting richer all the time.
"The vast majority of income gains have gone to the people at the top," he said.
And it's this growing issue of income inequality that seems to anger people the most. Overall salaries and wages haven't even kept pace with inflation over the past few years.

http://money.cnn.com/2013/03/12/news/economy/rich-taxes/

On actual US government spending this reference gives a breakdown of the US government's sources of income and its spending. http://www.dummies.com/how-to/content/how-are-your-tax-dollars-used-by-the-federal-gover.html. Income tax represents about 42% of government revenue. Social insurance and retirement receipts is another 40% so that leaves surprisingly small sums for the rest. For instance only 9% from corporate income taxes.

This reference assesses US public spending on the non working poor and shows this is about 5% of the budget: http://www.motherjones.com/kevin-drum/2012/02/how-much-do-we-spend-nonworking-poor Discussion of US government spending on the poor more generally seems to hit major flaws since many programmes benefit the poor but not directly and / or not exclusively. Other sources (life is short but I checked a good few) all seem too politically charged to use as reference.

Originally posted by normbenign
The United States has a highly progressive income tax structure, so if the rich are paying lower effective rates than the middle class, it is due to an excessively complex tax code filled with shelters, and loopholes.

How about eliminating those with either a flat tax, or a sales tax with few if any exemptions. The question is not about reducing taxes on the wealthy, but what benefit is there to raising taxes on them. Who gets the money?

"The system is a little progressive, but not much,"

See my post above.

Originally posted by finnegan
Sorry but that does not work for me. I wonder why you picked $100,000 as the grand total then such small numbers later - only $10 spent on the poor is a fraction of a percent. Whatever, what stops your hero from getting rich is not taxes - let alone progressive taxes. It is the failure of incomes to keep pace with inflation for all except the top 10%. The t ...[text shortened]... s (life is short but I checked a good few) all seem too politically charged to use as reference.

Ok, so let's say that the middle class pays $10 and the upper class pays $12 a year. How does that change anything? This just drive home my point that the average person is being kept down by the tax system. And if they miraculously do become "rich", their ability to accumulate wealth has been eroded as the taxation increases.

As for the $100,000 a year that the government spends, I was just driving home the fact that if you took all the wealth in the US and threw it at the debt it would not even be a drop in the bucket.

Having said all that, I still fail to understand how increasing taxes on the rich help the poor at all.

Originally posted by whodey
I still fail to see how increasing the income tax on the rich is helping the poor. The poor will get X amount of redistribution either way.

Now I could understand if there were no deficit and they had to balance the books, but they are not even close to that. Deficit spending is a way of life for the government, so I fail to understand the difference between $2 or $3 trillion dollars in deficit spending. It's all monopoly money.

The difference is that expanding the money supply, the real definition of inflation, is a regressive tax on the poor and middle class. Of course it effects every dollar, but the reduction of what money will buy more has more effect on lower income groups.

Originally posted by finnegan
"The system is a little progressive, but not much,"

See my post above.

You can look at the actual numbers at each percentile, and it doesn't fit Buffett's claim in the least. The higher you go on the income scale, the greater the percentage of revenue that group is paying.

Originally posted by normbenign
The difference is that expanding the money supply, the real definition of inflation, is a regressive tax on the poor and middle class. Of course it effects every dollar, but the reduction of what money will buy more has more effect on lower income groups.

True. So as they inflate the dollar the "rich" simply buy gold or some other inflation proof commodity that shield them from wealth erosion while the rest of the country is not so fortunate.

No wonder the middle class is disappearing.

Originally posted by whodey
True. So as they inflate the dollar the "rich" simply buy gold or some other inflation proof commodity that shield them from wealth erosion while the rest of the country is not so fortunate.

No wonder the middle class is disappearing.

The middle class is disappearing because that is what collectivism does. It keeps the poor where they are. It also harms the ability of the middle class to create wealth. The more the collectivism, the less ability to create wealth. The political class for the time being needs the wealthy, so they are the last to bite the bullet.

Originally posted by normbenign
The middle class is disappearing because that is what collectivism does. It keeps the poor where they are. It also harms the ability of the middle class to create wealth. The more the collectivism, the less ability to create wealth. The political class for the time being needs the wealthy, so they are the last to bite the bullet.

Ideology. You are not actually engaged with this conversation at all. You reiterate the contents of your school text on economics as though it was the literal and final truth, and I wonder if you read your bible in the same way. Certainly debating with you on this forum is like debating with a biblical literalist on the spirituality forum.

You may or may not one day engage with the new evidence published by Thomas Piketty, but as he is the US best seller on Amazon I rather suspect that you are getting badly left behind on this.

Originally posted by normbenign
The difference is that expanding the money supply, the real definition of inflation, is a regressive tax on the poor and middle class. Of course it effects every dollar, but the reduction of what money will buy more has more effect on lower income groups.

In the Weimar Republic during hyperinflation, it was pointless to hold cash at all. Physical, tangible assets were the only secure way to hold on to any economic value. Useful to bear that in mind when confronting inflation: savings are doomed.