This Just In - Top 10% Paid 70% of 2010 Federal Taxes

[birdog1960]

Really? It's already higher than that. Person earning the federal minimum wage of $7.25 an hour earns $14,500 for working 2,000 hours per year - 40 hours a week for 50 weeks. My link shows the feds say that the poverty level for a single person is $11,170 in the lower 48 states, and $13,970 in Alaska, and $12,860 in Hawaii.

go back a read my posts. arguing against my reasoning is fine. being unable to comprehend straightforward statements isn't.

[birdog1960]

I wonder if he understands things like ratios?

 

For example if milk costs $3.80 now, and dude makes $8.00 working at the store, he has to work 1/2hr to buy it. Under the Omnipotent Idiot Plan(OIP), Ominpotent Idiot(OI) raises dude's wage to $16.00, which fits the criterion re the poverty line, but then... OI doesn't realize that every store will raise its milk price to $7.60 to compensate for having to pay dude's increased wage. (How this simple cause/effect can elude OI's omnipotence? Did I mention he was also an idiot?)

 

So now, the "more moral" solution = dude still has to work 1/2hr to buy milk. In fact, OI and his plan are a waste of time.

 

1/2 = 1/2. And the reason is: the market value of the work done by dude is: 1/2 of his hour = 1 gallon of milk. F'ing about with prices and wages doesn't change the ratio, nor does it change the market value of the work dude does.

 

......

 

Now, let's talk Google. Rather than hiring lots of Americans, or 5x as many Indians, Google hires hardly anybody. Google is the perfect example of why income '= is going to only get worse under Obamacare, or the OIP. In fact, Obamacare couldn't be more irrelevant to a company like Google, and what business doesn't want to run a model that makes the government irrelvant?

 

Since their business model is to automate everything and literally live off software, they don't need to hire people. Since they are turning a great profit, they could self-insure their entire staff having cancer, without batting an eye. They don't need the OIP to make them pay more, they are already paying 30-40% higher than average, because they only want a very few, elite people.

 

Thus, the incomes of the elite workers at Google go up even higher, and the non-elite must seek life elsewhere. This is the automated response to idiocy like OIP and Obamacare. It will produce even more income inequality, and literally destoy the middle class. This is already happening.

this assumes that the cost of milk is tied penny for penny to lower wage employees wages. that the marginal cost of each minimum wage workers increase will be reflected penny for penny in the cost of each widget produced. so for milk, minimum wage labor costs represent 100% of the cost of producing and selling milk? i don't think so. in reality, it's likely a small fraction of the cost of putting a gallon on the shelf. for argument sake llets make a ridiculous assumption that it represents 25% of the cost to sell that milk. then a 30% increase in that production cost should increase the sale price of the milk by 30% of 25 or 7.5%. btw, some folks with very nice business degrees have concluded that wal mart would do better with a minimum wage increase using what amounts to more sophisticated bicycle economy reasoning.

 

Well the biggest challenge with dishwashers in many parts of the country is they're not even supposed to be here. The last time I had an American high school kid washing dishes was nearly 40 years ago. The "talent pool" has long disappeared. Hmmm, why is that?

and i'll bet you complain about the "illegals"...you ever consider that if those jobs paid a livable wage there wouldn't be a need for illegals to fill those spots and with few job prospects, fewer illegals might seek entry? but the current system works really well for the unscrupulous business owner. he can hire them under the table, pay no benefits or fica or unemployment etc and then act outraged that they're allowed to stay.

[Dante]

this assumes that the cost of milk is tied penny for penny to lower wage employees wages. that the marginal cost of each minimum wage workers increase will be reflected penny for penny in the cost of each widget produced. so for milk, minimum wage labor costs represent 100% of the cost of producing and selling milk? i don't think so. in reality, it's likely a small fraction of the cost of putting a gallon on the shelf. for argument sake llets make a ridiculous assumption that it represents 25% of the cost to sell that milk. then a 30% increase in that production cost should increase the sale price of the milk by 30% of 25 or 7.5%. btw, some folks with very nice business degrees have concluded that wal mart would do better with a minimum wage increase using what amounts to more sophisticated bicycle economy reasoning.

 

and i'll bet you complain about the "illegals"...you ever consider that if those jobs paid a livable wage there wouldn't be a need for illegals to fill those spots and with few job prospects, fewer illegals might seek entry? but the current system works really well for the unscrupulous business owner. he can hire them under the table, pay no benefits or fica or unemployment etc and then act outraged that they're allowed to stay.

If the federal government did what they were supposed to do, that is to protect our borders from foreign invasion maybe owners would be forced to hire citizens and pay a legit wage. But government has no interest in that. They would rather have illegals here to build their own power base.

[IDBillzFan]

But I wouldn't expect any more from a leftist liberal.

 

Now, now...everyone knows Meathead is a registered independent who voted for Republican presidents in the last two elections.

[B-Man]

Now, now...everyone knows Meathead is a registered independent who voted for Republican presidents in the last two elections.

 

Heh......

 

 

 

 

 

 

Jindal: ‘Blow Up the Tax Code’

By Katrina Trinko

 

 

Governor Bobby Jindal, who is fighting to eliminate the income tax in his state of Louisiana, called on Republicans today to embrace tax reform.

 

“We should stand for radically simplifying our tax code, not for the benefit of Washington, but to get Washington out of the way,” Jindal said at the Conservative Political Action Conference.

 

“Let’s blow up the tax code,” he added. “Let’s get rid of those loopholes paid for by the lobbyists. . . . Let’s get rid of those incentives Washington tries to use to coerce our behavior”

 

“And I’ve got a message for the president and the Democrats in Congress: Tax reform is not about taking more money from the hardworking people of America and sending it to Washington, D.C.,” Jindal continued. “That’s not tax reform.”

 

He also reiterated his message that the GOP should be focused on “growth,” not “austerity” and should not have an excessive focus on fiscal issues at the federal level.

 

“I’m not calling for a period of introspection and navel gazing,” Jindal concluded. “I’m calling for us to get busy winning the argument.”

 

 

Obviously, he is trying to take more and more money away from the poor and give it to his rich buddies.

 

.

Edited March 16, 2013 by B-Man

[TPS]

 

 

Now juxtapose that to the bottom 50%

 

1981: the average rate paid 6.62%

1982: 6.1%

1987: 5.09% which is over a 10% drop from the year before... (Of course the tax reform act of 1986 which changed the definition of AGI had nothing to do with it, naaaa)

1988: 5:06%

1991: 4:62%

1993: 4:29%

2000: 4:6% For Top 1% 27.45%

 

2001: (Bush era begins) 4:09% for bottom 50% ( 13% drop from the previous year) Top 1% paid 27.5%

2002: 3.21% for bottom 50% ( over 20% drop from the previous year) Top 1% paid 27.25%

2003 2.95% for bottom 50% ( over 8% drop from the previous year) The Top 1 % paid 24.31%

2008 2.59% for bottom 50% The Top 1% paid 23.27%

2009 1.85% for bottom 50% The Top 1% paid 24.01%

 

 

In 2000, what the top 1% paid relative to what the bottom 50% paid as far as a percentage of income paid in Federal taxes was 596% higher.

 

By 2003, what the top 1% paid relative to what the bottom 50% paid as far as a percentage of income paid in Federal taxes JUMPED to 824% higher.

 

in 2009, what the top 2% paid relative to what the bottom 50% paid as far as a percentage of income paid in Federal taxes SOARED to 1297% higher.

 

We're not talking total aggregate, we are talking PERCENTAGE. That's what we call comparisons of relativity.

 

The data is clear. The tax code has gotten more Progressive, specially ever since the Bush tax cuts. The Bush tax cuts was the most progressive act we've seen over the past 30 years.

 

There is no way you can rationally spin those numbers. Even if you attempt to spin it, it still doesn't take away the fact that the US tax code is much more progressive than before the Bush tax cuts. Main reason being is become of the child tax credits incentives like child care and income tax credits for the poor have been greatly expanded.

In this post I'm going to solely--"choke!"--admit that you are correct that the effective average tax rates indicate less progressivity. Just so this stands out for posterity. I'll provide my reponse in the next one.

[Nanker]

go back a read my posts. arguing against my reasoning is fine. being unable to comprehend straightforward statements isn't.

Buzz off birdbrain. I responded to your (*^*&%^$^#post before reading through the rest of your drivel posts.

You can't say that a single person earning minimum wage is below the poverty level. They are not.

You may want to pay for someone else's !@#$ing, but I don't. If they want to have kids - get a better paying job first so you can afford to care for them. If they're in a relationship, then the other person should be pulling some of the freight too, even if it's another minimum wage job.

[TPS]

As I stated initially, the "formal marginal tax rates" are "less progressive." The top rate has fallen from 70 to 35 (for the years of data), and the bottom has fallen from 14 to 10. In your relative terms, the ratio went from 500% to 350% relative to the bottom.

 

However, the effective taxes paid, as you've indicated, are more progressive (though, again, 2009 is an outlier due to the recession, so it's not as extreme as that year indicates). We've gone from 34.5/6 to 24/3 (I think the numbers prior to 08-09 are more indicative). So your relative numbers look more progressive. The reality is those changes are what have also driven the rise in inequality, which was

the original point I made.

 

Lower marginal top rates (as well as other changes in tax advantages) have caused the effective average rates to decline from 34% to 24% over that period. Given the share of income the top receive, the additional after-tax income compounded over time increases their share relative to the bottom. That's just a matter of significantly greater after-tax benefits from their lower effective rates vs the after-tax benefits of the lower 50%. For example, in 2009, that 10% difference for the top 1% means they received an extra $140 billion after taxes; whereas for the bottom 50%, they received an extra $40 billion in after tax income from their lower effective rate. Do that for every year (at the appropriate rates) and it's pretty clear that tax policy influences inequality.

Edited March 16, 2013 by TPS

[Magox]

In this post I'm going to solely--"choke!"--admit that you are correct that the effective average tax rates indicate less progressivity. Just so this stands out for posterity. I'll provide my reponse in the next one.

 

I'm assuming you meant more not less.

 

As I stated initially, the "formal marginal tax rates" are "less progressive." The top rate has fallen from 70 to 35 (for the years of data), and the bottom has fallen from 14 to 10. In your relative terms, the ratio went from 500% to 350% relative to the bottom.

 

However, the effective taxes paid, as you've indicated, are more progressive (though, again, 2009 is an outlier due to the recession, so it's not as extreme as that year indicates). We've gone from 34.5/6 to 24/3 (I think the numbers prior to 08-09 are more indicative). So your relative numbers look more progressive. The reality is those changes are what have also driven the rise in inequality, which was

the original point I made.

 

Lower marginal top rates (as well as other changes in tax advantages) have caused the effective average rates to decline from 34% to 24% over that period. Given the share of income the top receive, the additional after-tax income compounded over time increases their share relative to the bottom. That's just a matter of significantly greater after-tax benefits from their lower effective rates vs the after-tax benefits of the lower 50%. For example, in 2009, that 10% difference for the top 1% means they received an extra $140 billion after taxes; whereas for the bottom 50%, they received an extra $40 billion in after tax income from their lower effective rate. Do that for every year (at the appropriate rates) and it's pretty clear that tax policy influences inequality.

 

I agree that the downturn distorts the numbers, but even if you were to take away 2008-2009 and simply look from 2001-2007, you will see that the US tax code produced a more progressive tax code than in previous years.

[TPS]

 

 

I'm assuming you meant more not less.

 

 

 

I agree that the downturn distorts the numbers, but even if you were to take away 2008-2009 and simply look from 2001-2007, you will see that the US tax code produced a more progressive tax code than in previous years.

Yes. I agree, but the last year just makes it more distorted.

 

And, to the original point, the cuts in marginal rates since 1981 have worsened inequality over time.

 

Last, the relative results are essentially a function of the math involved--it's a lot easier to generate a big % change from a small number than a big number. In order to keep your relative shares constant, assuming the bottom numbers go from 6 to 3, the top 1% would have to fall from 34 to 17%. The top 1%'s change, while smaller in % terms, allowed them to keep 350% more inomce after taxes than the bottom 50%.

[Meathead]

well i apologize for calling you a dick. i wasnt feeling well that day and went too far. besides that should have been pretty obviously inferred anyway

 

people can call me anything they want. ive been dealing with that for decades. depending on the situation ive been called everything under the sun by partisans. it is indeed a fact that ive voted for more republican presidential candidates than democrats, including the last two rounds. i do that in all cases bc i vote for whom i think is most qualified and who will do the most benefit for the country, with a secondary goal to achieve balance in gubmit

 

unfortunately this republican party has gone so far off the deep end that ive turned to voting for a disproportionate number of democrats to make a statement and punish the republicans. that makes it even more important to vote for a republican president, to provide that balance and to provide strong leadership that would force that horribly dysfunctional party to get its act together. ron paul and jon huntsman are both intelligent, honest, and principled men that would have done that. fortunately, obama was a relatively poor candidate in my mind and didnt deserve reelection, so voting for those qualify individuals instead was easy and convenient. and i sure as hell wasnt going to vote for romney

 

the further right someone is the more left the rest of the world looks to them. if that makes me a leftist in someones mind so be it. its a very common problem among the far right, and im not here to change anyones mind on that - as if i could

[birdog1960]

If the federal government did what they were supposed to do, that is to protect our borders from foreign invasion maybe owners would be forced to hire citizens and pay a legit wage. But government has no interest in that. They would rather have illegals here to build their own power base.

so you are saying there are opportunists that exploit illegals? well, yeah. so is the most effective way to disincentivize the exploitation to use big, expensive walls, military presence and weapons? are would it be cheaper and likely more efficient and effective to increase the minimum wage? i'd bet a lot on the latter. and while were at it we'll be improving the lot for many of the underclass. win - win.

[GG]

As I stated initially, the "formal marginal tax rates" are "less progressive." The top rate has fallen from 70 to 35 (for the years of data), and the bottom has fallen from 14 to 10. In your relative terms, the ratio went from 500% to 350% relative to the bottom.

 

However, the effective taxes paid, as you've indicated, are more progressive (though, again, 2009 is an outlier due to the recession, so it's not as extreme as that year indicates). We've gone from 34.5/6 to 24/3 (I think the numbers prior to 08-09 are more indicative). So your relative numbers look more progressive. The reality is those changes are what have also driven the rise in inequality, which was

the original point I made.

 

Lower marginal top rates (as well as other changes in tax advantages) have caused the effective average rates to decline from 34% to 24% over that period. Given the share of income the top receive, the additional after-tax income compounded over time increases their share relative to the bottom. That's just a matter of significantly greater after-tax benefits from their lower effective rates vs the after-tax benefits of the lower 50%. For example, in 2009, that 10% difference for the top 1% means they received an extra $140 billion after taxes; whereas for the bottom 50%, they received an extra $40 billion in after tax income from their lower effective rate. Do that for every year (at the appropriate rates) and it's pretty clear that tax policy influences inequality.

 

And therein lies the foundation of progressivism - people "receive" after tax income, they don't "earn" it. That along with the theory that the highly progressive tax code which creates rising income inequality should be made even more progressive, underlined by the assumption that earnings would be static no matter what the tax rates are.

 

It's as if a superior being should be in charge of legislating equality that everyone receives their fair share.

Edited March 18, 2013 by GG

[TPS]

And therein lies the foundation of progressivism - people "receive" after tax income, they don't "earn" it. That along with the theory that the highly progressive tax code which creates rising income inequality should be made even more progressive, underlined by the assumption that earnings would be static no matter what the tax rates are.

 

It's as if a superior being should be in charge of legislating equality that everyone receives their fair share.

You create a straw man when you imply progressives want everyone to receive their fair share.

 

The goal of a progressive tax system is to keep inequality from reaching its logical conclusion (from compound interest)--an elite 0.01% that controls all private wealth and uses that wealth to buy political influence to maintain their wealth and control. Extreme inequality and democracy do not tend to be compatible.

[GG]

You create a straw man when you imply progressives want everyone to receive their fair share.

 

The goal of a progressive tax system is to keep inequality from reaching its logical conclusion (from compound interest)--an elite 0.01% that controls all private wealth and uses that wealth to buy political influence to maintain their wealth and control. Extreme inequality and democracy do not tend to be compatible.

 

Talk about a strawman ....

 

Tell me, how would a 20% flat tax on everybody, lead to that 0.01% elite controlling everything?

[Magox]

I can with 99.99% certainty say that the US tax code has played virtually no role in the rising disparity between the top 1% and the bottom 50%'s income wages. If anything it has helped "even the playing field" ever since the Bush tax cuts. Any policy prescriptions that look to reform the tax code to try to remedy this dynamic, will bare no fruits whatsoever. Education, training, entrepreneurism and innovation are the best options we have. Liberals believe that in order to remedy the rising disparity of incomes is to apply punitive taxation to the wealthy, and distribute those funds to their intended recipients. The logical way to approach this issue is to figure out a way to put the bottom 50% into a position to where they will earn more, rather than look to support them through welfare, subsidization and entitlement programs.

 

For one, added taxation does demonstrably slow economies down. Two, welfare and entitlements increase dependency and decrease production from many of these recipients. And three, subsidies by in large increase the price (inflation) of the underlying product.

 

It's time to begin looking for real solutions to this issue, rather than the same old liberal one's, which is to punitively tax more those that have and distribute it to those that don't, to simply even out the playing field.

Edited March 18, 2013 by Magox

[DC Tom]

The goal of a progressive tax system is to keep inequality from reaching its logical conclusion (from compound interest)--an elite 0.01% that controls all private wealth and uses that wealth to buy political influence to maintain their wealth and control. Extreme inequality and democracy do not tend to be compatible.

 

THAT'S the goal of progressive taxation?

 

That is one of the dumber things I've read here recently.

[GG]

I can with 99.99% certainty say that the US tax code has played virtually no role in the rising disparity between the top 1% and the bottom 50%'s income wages.

 

Don't bet your house on those odds. There is an effect in the US tax code that aids income disparity because the code doesn't treat all income the same. But the real question is, "Is it a bad thing?" and has been the crux of my debates with the professor now in their second decade.

 

Because the code offers lower tates on investment income, there is a built in incentive for the holders to recognize investment income on a more frequent basis. Because owners of investment assets tend to come from the upper income quintiles, a higher churn of investment income pushes up their overall income on a disproportionate basis relative to overall taxpayers.

 

The other effect of income disparity was caused by liberals' hatred of cash compensation and th push in the '70s & '80s to align more executive compensation with company performance. The reason more companies started adopting more equity compensation was that companies paid an extra tax for any salaries in excess of the maximum threshhold (I think it was $1 million or so back then.) This then drove the runaway train of equity options, which were in effect free money if the stock kept rising.

 

So I can see how tax policy impacts income inequality, but that's only because the capital markets make it easier for the wealthy to cash in if times are good. Of course the progressives' explanation speaks nothing of the issues you note below. And of course, since high activity in the capital markets will always lead to a boom bust cycle, you shouldn't even go down that road, because we need to protect the man from himself.

 

If anything it has helped "even the playing field" ever since the Bush tax cuts. Any policy prescriptions that look to reform the tax code to try to remedy this dynamic, will bare no fruits whatsoever. Education, training, entrepreneurism and innovation are the best options we have. Liberals believe that in order to remedy the rising disparity of incomes is to apply punitive taxation to the wealthy, and distribute those funds to their intended recipients. The logical way to approach this issue is to figure out a way to put the bottom 50% into a position to where they will earn more, rather than look to support them through welfare, subsidization and entitlement programs.

 

For one, added taxation does demonstrably slow economies down. Two, welfare and entitlements increase dependency and decrease production from many of these recipients. And three, subsidies by in large increase the price (inflation) of the underlying product.

 

It's time to begin looking for real solutions to this issue, rather than the same old liberal one's, which is to punitively tax more those that have and distribute it to those that don't, to simply even out the playing field.

[TPS]

THAT'S the goal of progressive taxation?

 

That is one of the dumber things I've read here recently.

A goal. It's an issue that's been discussed for thousands of years--the impact inequality has on social stability. Maybe you missed it?

[TPS]

I can with 99.99% certainty say that the US tax code has played virtually no role in the rising disparity between the top 1% and the bottom 50%'s income wages. If anything it has helped "even the playing field" ever since the Bush tax cuts. Any policy prescriptions that look to reform the tax code to try to remedy this dynamic, will bare no fruits whatsoever. Education, training, entrepreneurism and innovation are the best options we have. Liberals believe that in order to remedy the rising disparity of incomes is to apply punitive taxation to the wealthy, and distribute those funds to their intended recipients. The logical way to approach this issue is to figure out a way to put the bottom 50% into a position to where they will earn more, rather than look to support them through welfare, subsidization and entitlement programs.

 

For one, added taxation does demonstrably slow economies down. Two, welfare and entitlements increase dependency and decrease production from many of these recipients. And three, subsidies by in large increase the price (inflation) of the underlying product.

 

It's time to begin looking for real solutions to this issue, rather than the same old liberal one's, which is to punitively tax more those that have and distribute it to those that don't, to simply even out the playing field.

You've just redefined the terms to meet your 99% certainty statement. I said tax policy influences measured income inequality, and you've changed it to wages paid--I'm sure that will fool a few people.

 

The argument isn't complicated:

1. Lowering the top marginal rate leads to a lower effective average tax rate for the 1%.

2. In the example I gave for 2009, the top 1% gained an additional $140 billion in after-tax income from the decline in their average tax rate relative to their 1981 rate (versus about $40 billion for the bottom 50%, and the bottom 50% spend all of their income).

3. The after-tax income gains reinvested over time (going back to 1981) add to the growing asset base of the top 1-10% and therefore their income.

 

We're not too far away. The top 20% owns 95% of the financial wealth in the US.