Supporters of Tax Increase on Rich

[Adam]

He took shots from alot of people initially, now he has support from nearly all conservatives. I edited my previous post, read how Geithner responded to Paul Ryan's question regarding their long-term solution.

It has been awhile and I am getting up there in years- I don't remember all of the details of the Ryan plan, but from what I remember, I liked many aspects of it. We need to cut a lot of things- we also should have taken a big look at Simpson/Bolls.

 

Spending cuts (including military), entitlement reforms and major tax overhaul. That is a lot to do, so our government needs to get to work for once......

[Rob's House]

No, it's defined as paying the taxes you owe. What will naturally occur from all of this, however, when we see the very low rate a very rich man pays is a discussion on the fairness of that. It may open the eyes of some folks who don't currently understand how the system is gained to benefit the very rich. As the article I originally posted shows we have a progressive tax system--until you get to the very top. Folks need to ask themselves why is that? Personally, I think it's because the very rich have captured the legislative process/govt over the last 30 years or so and have reaped those rewards in the form of lower taxes. Read Hacker and Pierson's "Winner-Take-All Politics" for more details--they lay it all out in a pretty good and accessible way for those who have an interest.....

You basically just confirmed what jjamie said. You want the tax returns to play class warfare so you can run ads telling people that they pay higher taxes than rich boy Mitt And while the debate you mention may be a valid one to have, it has nothing to do with how fit he is to be President.

 

And the only taxes anyone owes are those mandated by law. If Mitt has found legal ways to avoid those you can legitimately debate whether the tax code should be altered to prevent that, but to claim that by running for President he's obligated to volunteer as the case study for your tax debate is absurd.

Edited July 23, 2012 by Rob's House

[MattM]

Many thanks for the legwork. I'll take a look and come back with my thoughts when I have a chance (ie, after work)....

 

 

 

 

 

name='WorldTraveller' timestamp='1343051748' post='2510812']

Income taxes in America are more progressive than in other rich countries--according to an authoritiative official study which, to my knowledge, has not been contradicted. The OECD's report "Growing Unequal", on poverty and inequality in industrial countries, includes a table that provides two measures of income tax progressivity in 2005. This is evidently the source of de Rugy's numbers. Here they are in an excel file. According to one measure, America's income taxes were the most progressive of the 24 countries in the sample, except for Ireland. According to the other, they were the most progressive full stop. (A more recent OECD report, "Divided We Stand", uses different data, a smaller sample of countries and a different measure of progressivity: the results are similar.)

 

http://www.theatlantic.com/business/archive/2012/02/us-taxes-really-are-unusually-progressive/252917/

 

http://www.oecd.org/document/4/0,3343,en_2649_33933_41460917_1_1_1_1,00.html

 

 

The presidential election has given us two myths about the rich. First, that their incomes, and income inequality, are at all-time highs. Second, that the wealthy pay less in taxes than ever, and lower taxes than the rest of us.

 

A recent report from the Congressional Budget Office, however, suggests that both may be false.

 

 

Let’s consider income first. Between 2007 and 2009, after-tax earnings by Americans in the top one percent for income fell 37 percent. On a pre-tax basis they fell 36 percent in the same period.

 

 

That may sound like a minor haircut for One Percenters compared to people who lost their jobs. But when you take into account federal transfers, assistance and taxes paid, the incomes of the bottom 20 percent grew by 3 percent, while it fell a modest 2 percent for the middle 20 percent.

 

In other words, the incomes of the top one percent fell 18 times more than the incomes for the middle class at the start of the recession.

 

Change in after-income tax (2007-2009)

 

The result of this big drop at the top was that their share of the country's total income also fell. In 2007, the top one percent earned 16.7 percent of all after-tax income. In 2009, that portion fell to 11.5 percent.

 

Inequality, in other words, fell during those years. We are now in an age of High-Beta Wealth, where the incomes of the One Percent have become far more manic and prone to wild drops than the rest of the country.

 

And taxes paid? Despite the oft-repeated fact that tax rates for the wealthy are at an all-time low (which is true), it’s also true that the actual amount paid in taxes by the wealthy is higher than before the recession.

 

 

The One Percent paid an average effective tax rate of 28.9 percent on their income — far more than any other group, and more than twice the average effective rate of the middle class, who paid 11 percent on average.

 

So the rich lost more income and paid more of their money in taxes than the rest of the population.

 

This is not an argument against taxing the wealthy. And the incomes and tax rates of the wealthy may have jumped back since 2009, with the rebound in financial markets.

 

But when politicians and pundits talk about the rich just getting richer and paying less taxes, they need to pay closer attention to the actual numbers.

 

http://www.cnbc.com/id/48257611

 

 

Size Matters - Why "Just" Taxing 3% of Small Businesses is Misleading

July 12, 2012

By Ed Gerrish

 

 

President Obama has recently called for letting the Bush tax cuts expire on families more than $250,000 a year (and individuals making over $200,000). This tax increase will affect many businesses that file under the personal income tax code rather than as C corporations – what are known as “pass-through” businesses because the profits pass through to the owners. This is small potatoes, he claims, because the tax hike will only impact 3% of these individually owned businesses, which includes businesses that file as S-corporations and partnerships.

 

How many businesses that will face higher taxes is not the economically meaningful statistic here. What is meaningful is (1) how many people earning over $200,000 have business income and (2) how much business income will be taxed at a higher rate.

 

While S-Corporations and partnerships earning over $200,000 [1] a year may represent a small percent of all personal income tax returns – just 1.2% in 2010 according to the IRS, they represent nearly 5% of adjusted gross income (AGI) in the U.S. More importantly, S-Corporations and partnerships earning over $200,000 a year represented more than 97% of all income earned by these entities in 2010 due to net business losses at lower income levels.

 

This not only means that most of the positive net income from S-corporations and partnerships will face higher tax rates, it ultimately means that the most successful S-corporations and partnerships in the U.S. will see a tax hike. This is important both because there are four times as many S-corporations and partnerships than traditional C-corporations (as of 2008), and S-corporations and partnerships earned 26% more taxable net income in the US than C-corporations – 1.4 trillion to 1.1 trillion. [2]

 

The latest IRS state data on S-corporations and partnership income and returns also demonstrates that some states will be hit harder by these new taxes than others. D.C., Connecticut, and New York, for instance, all receive more than 6.4% of their total state’s adjusted gross income from in S corporations and partnerships; allowing the Bush tax cuts to expire would disproportionally draw more tax dollars from these states than others (even accounting for population).

 

http://taxfoundation.org/blog/

 

 

 

In short, that 3% number reflects the total number of small businesses, not the total % of revenues. If you include the total number of revenues from that 3%, you are talking about well over half the revenues generated from small businesses.

 

Of course, I don't expect you guys to loony leftists to understand this because you are spoon fed distorted numbers from MSNBC, The Obama administration and leftist media organizations.

 

The facts are that this 3% number is misleading at best and doesn't truly reflect the scope of of the net of this tax policy on small businesses.

 

Also, that we do indeed have the most progressive tax code in the world according to the OECD, and that the rich are even paying more in taxes now than then they were before the economic downturn.

 

Those are facts.

 

 

 

There it is, facts are facts, and you lose.

 

Oh, and while you loony leftists have been obsessing over his tax returns, and the vast outspending from the Obama administration on this issues and the media giving mitt horrible coverage over the past two weeks, the polls have tightened. So much for your school of thought. lol

[MattM]

I've taken a look at the stuff you cited above and before I address it, must note that it really doesn't address the point I originally made and that you responded to, which is that there's been no better time to be rich in recent American history (as measured in decades) from a tax perspective. Nothing you cited here goes to that at all, as best I can tell. Instead you focus on either comparative progressivity or how much of the total the rich pay. In fact, in the Frank piece, Robert Frank acknowledges that taxes for the rich have never been lower.

 

That said, here goes:

 

1. The argument in Crook's piece (which links on a study using deciles and a confusing, imperfect cross-country comparison to begin with) isn't granular enough as he himself acknowledges:

 

"What happens to tax progressivity at the very top of the US income distribution--inside the top one percent, or 0.1 or 0.01 percent? Good question. When it comes to international comparisons, I don't know of any good answers. But note that the US isn't the only country to tax capital at preferential rates."

 

The article I quoted from the LA times yesterday shows what happens up the income scale in the US--overall rates go down to 19.9% at the very top (top 400 returns). Others I believe have shown the same thing with less granularity than the Top 400, again all largely due to capital gains treatment. I was curious to see cap gains rates across jurisdictions, so I checked Wikipedia among other sources--looked to me like the US rate is fairly low, particularly for developed democracies. On ordinary income, from personal experience I know that many jurisdictions have much higher top marginal rates than the US, so I'm not too sure how this study worked, although the unfortunately named Mr. Crook hinted at it in his article--the low rates of income tax paid by folks down the income scale in the US.

 

This is all consistent with what I wrote way above--we have progressivity until the very top. This also noted by Hacker & Pierson in their book, which I also noted above. To quote them at more length:

 

"The federal tax code is still progressive overall. But what used to be a key feature of the code--its steep progressivity at the very top income levels--has simply disappeared. The richest of the rich now pay about the same overall rate as those who are merely rich. Indeed, though figure one doesn't show this, the uppoer middles class--families in the top 10 or 20%--are paying an avg. federal tax rate not much lower than that paid by the superrich." [Personally, I'd argue they pay more based on the LA Times article.] This is a pattern we will see again and again: dramatic benefits for the rich that are so precisely targeted that they are only visible when we put that tiny slice of Americans [you know, those guys starting the Super PACS, but they're just doing that out of the goodness of their hearts, right?] under our economic microscope. It is as if the govt had developed the economic policy equivalent of smart bombs, except these bombs carry payloads of cash for their carefully selected recipients."

 

2. On the Frank article, Frank also acknowledges that tax rates paid by the rich are at an all-time low as noted above, which actually supports my original point. (FYI, before he got his CNBC gig I used to see him at the gym at lunchtime--without talking much to him he seems like a good guy--he at least lets you work in and share weight equipment!)

 

3. I'm steering clear of your last link, since that's taking us further afield of my original points, and I only have so much time to waste today.

 

As I've argued with conservative friends on these points (who usually point to the facts re: how much of the income tax liabilities the rich pay as a total percentage), both sets of facts can be "right" on some of these points--i.e., the wealthy's rates can be at all time lows and due to shifts elsewhere in the Code they can also pay large percentages of the total income tax.

 

BTW, WT, what is your interest in the Bills, as you seem to have shown up recently and basically simply post in PPP, which I usually avoid like the plague because it ends up in long threads like this one which don't solve anything or change anyone's mind.....

[WorldTraveller]

I've taken a look at the stuff you cited above and before I address it, must note that it really doesn't address the point I originally made and that you responded to, which is that there's been no better time to be rich in recent American history (as measured in decades) from a tax perspective. Nothing you cited here goes to that at all, as best I can tell. Instead you focus on either comparative progressivity or how much of the total the rich pay. In fact, in the Frank piece, Robert Frank acknowledges that taxes for the rich have never been lower.

 

That said, here goes:

 

1. The argument in Crook's piece (which links on a study using deciles and a confusing, imperfect cross-country comparison to begin with) isn't granular enough as he himself acknowledges:

 

"What happens to tax progressivity at the very top of the US income distribution--inside the top one percent, or 0.1 or 0.01 percent? Good question. When it comes to international comparisons, I don't know of any good answers. But note that the US isn't the only country to tax capital at preferential rates."

 

The article I quoted from the LA times yesterday shows what happens up the income scale in the US--overall rates go down to 19.9% at the very top (top 400 returns). Others I believe have shown the same thing with less granularity than the Top 400, again all largely due to capital gains treatment. I was curious to see cap gains rates across jurisdictions, so I checked Wikipedia among other sources--looked to me like the US rate is fairly low, particularly for developed democracies. On ordinary income, from personal experience I know that many jurisdictions have much higher top marginal rates than the US, so I'm not too sure how this study worked, although the unfortunately named Mr. Crook hinted at it in his article--the low rates of income tax paid by folks down the income scale in the US.

 

This is all consistent with what I wrote way above--we have progressivity until the very top. This also noted by Hacker & Pierson in their book, which I also noted above. To quote them at more length:

 

"The federal tax code is still progressive overall. But what used to be a key feature of the code--its steep progressivity at the very top income levels--has simply disappeared. The richest of the rich now pay about the same overall rate as those who are merely rich. Indeed, though figure one doesn't show this, the uppoer middles class--families in the top 10 or 20%--are paying an avg. federal tax rate not much lower than that paid by the superrich." [Personally, I'd argue they pay more based on the LA Times article.] This is a pattern we will see again and again: dramatic benefits for the rich that are so precisely targeted that they are only visible when we put that tiny slice of Americans [you know, those guys starting the Super PACS, but they're just doing that out of the goodness of their hearts, right?] under our economic microscope. It is as if the govt had developed the economic policy equivalent of smart bombs, except these bombs carry payloads of cash for their carefully selected recipients."

 

2. On the Frank article, Frank also acknowledges that tax rates paid by the rich are at an all-time low as noted above, which actually supports my original point. (FYI, before he got his CNBC gig I used to see him at the gym at lunchtime--without talking much to him he seems like a good guy--he at least lets you work in and share weight equipment!)

 

3. I'm steering clear of your last link, since that's taking us further afield of my original points, and I only have so much time to waste today.

 

As I've argued with conservative friends on these points (who usually point to the facts re: how much of the income tax liabilities the rich pay as a total percentage), both sets of facts can be "right" on some of these points--i.e., the wealthy's rates can be at all time lows and due to shifts elsewhere in the Code they can also pay large percentages of the total income tax.

 

BTW, WT, what is your interest in the Bills, as you seem to have shown up recently and basically simply post in PPP, which I usually avoid like the plague because it ends up in long threads like this one which don't solve anything or change anyone's mind.....

 

I enjoy discussing politics more so than discussing bills football. Also, your assertion that there isn't as much progressivity at the top is not backed up by what I linked. I would say re read it again.

 

Increasing capital gains taxes is a bad idea in so many ways, I wouldn't know where to begin, even though I've discussed it at length on this site a couple times and I'm not enthusiastic about relitigating the issue once again. Let's just say this, the main reason why some top income earners pay a lower tax % than some other top income earners is because of the capital gains structure, the idea of raising capital gains taxes in the name of "fairness" at the expense of the economy is not only illogical and ideologically over zealous but tremendously short-sighted.

 

Bill Clinton understood the importance of capital formation, Obama doesn't. Also. Mitt Romney has a plan to keep capital gains taxes the same for folks making over 250k and for those making less than 250k, to eliminate them.

 

His tax plan is more progressive than the status quo.

 

Regarding your interest in my interests or there lack of, you are now the third person who has had enough of an interest to look at my profile and come up with the same question. The funny thing is that the three people who asked the same question were all liberals, and one left wing loon even suggested that I should be banned because of it.

 

How liberal of him

Edited July 24, 2012 by WorldTraveller

[SDS]

If you want to make a statement about taxation and government spending then the only way to change people's minds is to raise taxes immediately to levels that would balance the budget (yeah, I know it is more complicated then that, but I'm just pontificating). As it stands now, like digital music, we have devalued the cost of government and services. We get $1.40 worth of that for every $1 paid. No one wants to pay more for something they are getting on the cheap. Just like kids who don't want to pay $1 for a song...

 

So, raise taxes on everyone. Everyone. Show people what it would take to fund this government. Maybe then we will sing a different tune...

[MattM]

I enjoy discussing politics more so than discussing bills football. Also, your assertion that there isn't as much progressivity at the top is not backed up by what I linked. I would say re read it again.

 

Increasing capital gains taxes is a bad idea in so many ways, I wouldn't know where to begin, even though I've discussed it at length on this site a couple times and I'm not enthusiastic about relitigating the issue once again. Let's just say this, the main reason why some top income earners pay a lower tax % than some other top income earners is because of the capital gains structure, the idea of raising capital gains taxes in the name of "fairness" at the expense of the economy is not only illogical and ideologically over zealous but tremendously short-sighted.

 

Bill Clinton understood the importance of capital formation, Obama doesn't. Also. Mitt Romney has a plan to keep capital gains taxes the same for folks making over 250k and for those making less than 250k, to eliminate them.

 

His tax plan is more progressive than the status quo.

 

Regarding your interest in my interests or there lack of, you are now the third person who has had enough of an interest to look at my profile and come up with the same question. The funny thing is that the three people who asked the same question were all liberals, and one left wing loon even suggested that I should be banned because of it.

 

How liberal of him

 

 

Where, as what you linked was quite voluminous? The OECD report stopped at deciles, for ex. And many thanks for the change in tone!

[/dev/null]

If you want to make a statement about taxation and government spending then the only way to change people's minds is to raise taxes immediately to levels that would balance the budget (yeah, I know it is more complicated then that, but I'm just pontificating). As it stands now, like digital music, we have devalued the cost of government and services. We get $1.40 worth of that for every $1 paid. No one wants to pay more for something they are getting on the cheap. Just like kids who don't want to pay $1 for a song...

 

So, raise taxes on everyone. Everyone. Show people what it would take to fund this government. Maybe then we will sing a different tune...

Also stop Federal withholding so every April 15th those of us who pay Federal taxes for the rest of America to mooch off, have to write a check for our Fair Share

[Oxrock]

Also stop Federal withholding so every April 15th those of us who pay Federal taxes for the rest of America to mooch off, have to write a check for our Fair Share

 

That would go a long way to ending this argument. Ask someone what they paid last year and most people would say "I got $$$ back! I didn't pay anything!".

[DC Tom]

That would go a long way to ending this argument. Ask someone what they paid last year and most people would say "I got $$$ back! I didn't pay anything!".

 

Took me about eight years to finally get my wife to understand that getting money back every year is not a good thing.

 

Although I'm still not sure she understands...I suspect she just got tired of listening to me.

[B-Man]

 

...I suspect she just got tired of listening to me.

 

 

 

Well..............................nah, too easy...lol

 

 

 

 

Actually, I have had the same argument with my wife for over twenty years, she loves that refund.

 

.

[Park]

If you want to make a statement about taxation and government spending then the only way to change people's minds is to raise taxes immediately to levels that would balance the budget (yeah, I know it is more complicated then that, but I'm just pontificating). As it stands now, like digital music, we have devalued the cost of government and services. We get $1.40 worth of that for every $1 paid. No one wants to pay more for something they are getting on the cheap. Just like kids who don't want to pay $1 for a song...

 

So, raise taxes on everyone. Everyone. Show people what it would take to fund this government. Maybe then we will sing a different tune...

Sounds like a pretty good deal, actually! Getting 40%!

 

But to your point about just pay as we go, the left wanted to do that for the Iraq War, pay as we go, that didn't go too far, though.

[IDBillzFan]

Sounds like a pretty good deal, actually! Getting 40%!

Yes, it's this kind of thinking that makes idiots stand up on congress and explain how welfare is the way to stimulate the economy because every dollar spent on welfare pumps $1.50 back into the economy.