From front to back and on nearly every page, President Obama’s new budget plan delivers a stark message: It’s time for the rich to lighten the load on the middle class.
In education, healthcare and an array of other proposals, the budget focuses more benefits on middle-class and lower-income Americans and looks to the affluent to help pay for them.
The change is meant to reverse a long-running trend in the opposite direction.
Class warfare. Just don’t be surprised when the wealthy take their capital elsewhere, Mr. President, and leave you with nothing to plunder. There will be nothing to buy votes with at that point.
Class warfare? More like self-defense.
So, rich Americans are going to leave their country in droves? To where? France? Brazil? China?
The tax increases are small, and will remain less than in other countries. And the investment in the middle class means greater demand, giving more opportunities for middle class entrepreneurs. In the end, a new class of wealthy will form, and the ones who benefit from government subsidies will be reined in. The executives from Lockheed and other companies will have to pay taxes on the income they get from doing business with the government.
Patriotism is cheap for the rich, perhaps.
“You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.”
~~~ The late Dr. Adrian Rogers , 1931 to 2005 ~~~
Works just as well substituting “middle class” – actually, for all who think themselves poor because not on the Forbes list of the most wealthy – does it not. Because I am not Bill Gates, I am poor. A directly proportional tax would treat all equally. 10% of a dollar is ten percent whether one is Lazarus, Dives, or Bill Gates. But true equality is NOT what is desired nor offered. You cannot legislate morality regarding the poor or middle class or wealthy and thereby relieve any of them from their moral obligation to the needy wheresoever they may be in the social order. But it is precisely this obligatory morality that is being set up as the government’s role and a priori redefining the “poverty” level to be 250,000 per annum (for today, at least, but give it time, it will adjust downward).
John, they will take their capital elsewhere, not necessary for them to physically move. But then, you knew that already, didn’t you?
As long as the “rich” are defined as anyone who makes more money than I do, we are doomed. Economic turnarounds have never begun with increased taxes and public sector spending, and they never will. We’re looking at a one term presidency for Obama unless he reinvents himself….
A “long-running trend in the opposite direction?” Does this author think high earners have been milking the middle and lower income groups for benefits? High earners already pay a large disproportionate share of total income taxes. Now high earners’ charitable deductions and exemptions will be further reduced, and this may hit charities and churches hard. And as the WSJ points out, all of this won’t go anywhere near paying for Obama’s programs.
Jeffersonian,
Don’t you at least think it’s a pity that there’s been such a shortage of altruistic behavior from those in positions of authority within the financial sector?
I have more reservations about government capacity to spend wisely than I would have done seventy years ago, but the lack of willingness on the part of corporate America to take their share of responsibility for the mess or to offer to decline bonuses and take personal pay cuts has done much to strengthen the hand of the regulators. Most of us here are looking for greater fiscal responsibility and self-discipline from ordinary Americans. The same holds even for those who generate the wealth.
From those to whom much has been entrusted, much will be expected.
[url=http://catholicandreformed.blogspot.com]Catholic and Reformed[/url]
In my opinion, the “class warfare” thing is being way overdone. It is dangerous ground these folks are treading. As someone said above, the “rich” are everyone who has more than I do. Isn’t anyone looking at the “gimme mine” attitude of the non-taxpayers. Do they truly think they can rouse the rabble just enough to take out the “upper level”, and then all go home?
Don;t they realize that those who encourage “revolution’ eventually end up hanging on the same rope as those they drove the populace to rid themselves of?
This game is so dangerous, the idea that it is being encouraged by our own government folks is truly insane.
Grandmother in SC
An attempt to stir up “Class Warfare”, without a doubt. The Democrats have been doing a good job of creating an ‘Us vs. Them’ mentality for some time now, hiding the fact that they are part of “them”.
As to a lack of altruistic behavior on the part of the wealthy:
Our library could not have afforded new computers or a computer instructor if not for the Bill and Melinda Gates Foundation.
PBS is funded by the rich, through their foundations (‘Masterpiece theatre is brought to you in part by a grant from the John D. and Katherine T MacArthur foundation”)
The ‘rich’ have been very generous with their money, perhaps because they are mindful of what it takes to earn as much as they have. Many prefer to give anonymously, through foundations. Contrast that to the Democrats in Congress, whose record of charity is in the .008% range if it exists at all. Yet they are the ones complaining of selfishness on the part of others? Instead of a tea party, perhaps sending our congressmen and senators a compact mirror with ‘the face of selfishness in America’ emblazoned around the edges.
Jim E. <><
Does 250K per family count as rich? And let’s be clear corporations do not pay taxes. They collect and/pass on taxes. They also do not make charitable contributions. They simply take part of the money they have collected from others and pass it along.
#6: who did the people in positions of authority in the financial sector, to whom you are referring, support for President? By and large, Obama. Altruism thrives far more among conservatives than liberals, vast chunks of the latter thinks charity is the responsibility of the state.
[blockquote]”The ladder into the middle class and beyond has become harder and harder to climb,” Obama’s budget says. “The American dream has slowly slipped beyond the grasp of millions as we have deliberately ignored the very investments in our people that strengthen the middle class and neglected the drivers of economic growth that will sustain our economy for the long run.”[/blockquote]
It’s pretty hard to climb that ladder when you’re listening to gansta rap all the time and playing basketball 4 hours a day instead of doing your homework and studying hard. (I’m just following Eric Holder’s lead here and not being cowardly about race).
If people listened more to Bill Cosby instead of President Barry, more progress on economic equality would be made.
This reminds me of the time I bought food before Christmas and was given the name of a needy family, supplied by the county social service agency to my church, that needed help. My family and I made arrangements to deliver all the fixin’s plus additional canned goods to the family. The address was not in a great place in town but we wanted these folks to know we cared for them enough to deliver the food in person and spend some time with them. Imagine my surprise when I found a home with a new, big screen TV, the latest gaming consoles and games, as well as a sound system better than anything I ever had.
Daniel,
My dad (retired Government worker) says that he gets very upset whenever he goes to the store, stands behind a woman who pays with everything with food stamps then goes outside and gets into and drives away in a brand new Lincoln Navigator! He always adds “This is why I’m paying taxes on my retirement funds? So they can live better than I do?”
Yep.
I remember candidate Obama saying that he wanted to spread the wealth around. The economic crisis we are facing provides him the opportunity (and the cover) to do just that. I am very upset with the modern day Robber Barons who sold out their investors for forty pieces of silver AND the Federal Government for it’s collusion. I feel very sorry for the young folks like my children and grandchildren who will pay for this. I also feel sorry for those retired folks who depended on the stock market for their retirement income. Nancy Pelosi can shake her finger at the executives that mismanaged our banks and manufacturing but she came to the hearings in her husband’s corporate jet too. The prevailing attitude on Wall Street and in Washington is one of greed and entitlement.
I’ve posted this before, I’ll post it again because it’s true (sorry, Irenaeus):
Barstool Economics
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ‘Since you are all such good customers,’ he said, ‘I’m going to reduce the cost of your daily beer by $20.’ Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount and he proceeded to work out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%! savings) .
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
‘I only got a dollar out of the $20,’declared the sixth man. He pointed to the tenth man,’ but he got $10!’
‘Yeah, that’s right,’ exclaimed the fifth man. ‘I only saved a dollar, too. It’s unfair that he got ten times more than I!’
‘That’s true!!’ shouted the seventh man. ‘Why should he get $10 back when I got only two? The wealthy get all the breaks!’
‘Wait a minute,’ yelled the first four men in unison. ‘We didn’t get anything at all. The system exploits the poor!’
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him.
But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works.
The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
Author unknown
The “rich” already pay the vast majority of taxes.
If the Democrats in Congress and Obama stay on their current agenda, you can look for the Republicans to take back the House in the next election and then the Senate and White House in the following election. We are doing nothing more than throwing money into black holes – which means the US government is spending us all into poverty. Who remembers among our politicians that some countries in Africa and South America spend so much on interest payments on their national debts that they have nothing left to spend on social programs and infrastructure.
What is interesting about the above comments is how resentful they are toward the poor. The poor, it seems don’t behave graciously. It’s anecdotal evidence and renders us less charitable. But it’s anecdotal, and doesn’t prove much. For I can also find lots of big corporations that benefit from using the public lands at much less than market price, that benefit from federal subsidies, that get rich from government contracts. I can also find plenty of corporations that are full of cultivated, gentlemanly scam artists, enough that it would indicate a rot in the entire system.
but helping poor people is a lot cheaper than helping rich people. And yet we are much more forgiving of the wealthy.
Branford, that’s an interesting allegory.
But the “bill” is a bit misleading. It assumes that the rich guy had one beer. In fact, when it comes to the benefits of the state, the rich guy ends up buying 30 beers. He may give them away as he sees fit. But that’s the lie. The wealthy, and corporations, benefit from the state much more than a poor person does. If anything, a corporation benefits from public education, roads for products to be distributed upon, contracts from the government, reliable defense, a healthy workforce, and a society that doesn’t resent the rich. They benefit from an independent legal system, which can be quite expensive.
Your comment bears littler resemblance to the mechanisms of commerce or the welfare state. It might say something about entitlement and resentment.
Chris #4 – you say that economic turnarounds have never begun with higher taxes and public sector spending, but I think that sounds like ideology. If you look at when the national GDP increased the most, it was when taxes were much higher and public spending was higher as well.
Targeted taxes and public sector spending isn’t different than other sorts of spending. However, as public sector spending is long term, more businesses benefit. Where would we be without public education, roads, and the numerous investments we’ve made through the military (which is a form of public sector spending!)? The GI bill educated thousands of men who became professors at public and private institutions – who engineered our economy.
Look, if you can find me a single corporation that didn’t benefit at all from public investment (e.g. they only hired people who went to private schools), didn’t use trains, bridges or roads, and had no government contracts, then I stand corrected. And also – no planes. The government regulates those, also.
[i]Targeted taxes and public sector spending isn’t different than other sorts of spending.[/i]
Yes, it is. Public sector spending actually produces very little, as it is primarily consumptive. Painting a school wall may or may not be a good idea, but it is most definitely not productive.
Public sector spending is also notoriously inefficient, so much so that only 24c of each public sector dollar designated for “poverty relief” actually makes it to the poor. Charities that spend 25% on administration are somewhat suspect, yet a government spending 75% on administration is a good idea?
I’m not resentful towards the poor, after all, I’m very close to being one of them (and if I don’t get a job soon, I soon will be one!). But I’m also not resentful towards the rich.
They fulfilled the American Dream, and many of them are giving back much more than they put in to get where they are — especially if you count private sector job creation, and charitable giving. Why should we punish them for being successful? One Legislator recently suggested a 97% tax rate! Is that fair? Will that encourage others to strive as hard as they did? Won’t that encourage them to ‘close up shop’ or move to another, more corporate-friendly country?
Just one example: Wal-Mart, that most hated of companies by the ‘liberal left’. They recently advertised 200 jobs in our community, and the application website crashed after 5,000 hits! Plus they give back to the community: At the recent “Extreme Makeover Home Edition” here, Wal-Mart sent semi-trucks full of materials for the build. As did Ashley Furniture and Turner’s Furniture and CVS Pharmacy… I was there when the trucks rolled in.
Target gives 5% of earnings back to the community.
IF you think that higher corporate rates are good, one might want to take a look at Socialist East Berlin in comparison to capitalist West Berlin, and the amount of corporate funding and investment it took to bring EB up from 1930’s style poverty to 1990’s prosperity. Especially the quality of automobiles produced – in the home country of Mercedes Benz and Volkswagen, the cars in EB were primitive and had the styling and technology stuck in the 1950’s.
Is an East Berlin what we want the United States to become? It’s where we are headed with this style ‘stimulus’ planning.
I for one am not looking forward to it, and can’t wait for the 2010 elections.
#17 John Wilkins,
“What is interesting about the above comments is how resentful they are toward the poor”. Well John, isn’t that a judgmental blanket statement guaranteed to turn all the previous posters against you. Your comments give new life to a dying thread.
[blockquote]So, rich Americans are going to leave their country in droves? To where? France? Brazil? China? [/blockquote]
Possibly. It will be anywhere they can find to have it grow without punitive confiscation by the State. And that means capital formation, growth, jobs and a higher standard of living…elsewhere. How does that square with your sympathy for the poor?
[blockquote]Targeted taxes and public sector spending isn’t different than other sorts of spending. [/blockquote]
They most certainly are. When I trade my dollars for a product or service, I’m doing so because the product or service I am acquiring is worth more to me than the money I am spending. From the seller’s POV, the same applies. Therefore, wealth is created as lower-value items are exchanged for higher-value items.
That is not necessarily the case in government transactions because the extraction of taxes is coercive. The wealth I create though my labor, when confiscated, is far more likely spent on low-value items. If not, why would the coercive use of taxation be needed?…I’d spend it on the higher-order items anyway.
I’ll agree that there are things that the government taxes for that are higher-order in nature: Highways are a perfect example. But the test of that is the fact that the use fees (read: fuel taxes) cover the construction and maintenance of the roads themselves (and also fund foolish nonsense like light rail systems that lose money hand over fist).
So no, John, not all spending is created equal. If that was the case, then all a poor nation would have to do would be to print a bunch of fiat currency, spend it and voila!, it would be a first-world nation in a jiffy. Since that is obviously not the case, your theory is bankrupt and your nostrums destructive.
You’d never know it from the anti-government caterwauling here, but under Obama’s proposal wealthy people would still pay income taxes at a lower marginal rate than they did during most of the Reagan Administration.
Yet we’re hearing here about class warfare, confiscation, nationalization, plunder [Edited by Elf].
So let’s try it again in letters large and plain enough to be seen during a tantrum: [b]under Obama’s proposal wealthy people would still pay income taxes at a L-O-W-E-R marginal rate than they did during most of the R-E-A-G-A-N Administration[/b].
[A reference in this comment has been edited, subsequent references in this thread have been either edited or deleted. Commenters are requested to exercise discretion and delicacy in how they express themselves – Elf]
A lot of Americans are moving to places like Costa Rica and Panama. A program I saw last night about moving to Panama touted the fact that the cost of living was “like America in the 1950s.” If that isn’t an indictment of the present situation. I can’t figure it out. I would probably be considered one of “the rich” under Obama’s formulation, and yet my family’s standard of living is nowhere close to my parent’s middle class lifestyle when I was growing up. Then, my father was the sole breadwinner, my mother was a stay-at-home Mom. He took a three-week vacation every year, had a company car, and never worked on weekends as far as I can remember, and came home every weekday like clockwork at 5:30 (which was when TV cartoons ended for us little kids ended and the local TV news came on). Now, both my wife and I work (I often have to put in 60-70 hour weeks and almost always have to work on Saturday or Sunday, if not both), I haven’t had a vacation in 5 years, and both of us worry constantly about whether we can pay the mortgage, keep one kid in college and another in private high school (forget the government schools, they are worse than useless).
Anyone who didn’t spend Econ 101 back in the dorm sleeping off their hangovers knows that if “the rich”(defined as anyone who makes more money than I do) have less money to spend, they won’t spend it. Which means that if Barry’s confiscatory tax rates go through, the first thing that “the rich” will stop paying for is for other people to do things for them(see jobs). Which also means that the unemployment rate climb, established small businesses in this country will go under right and left and it will be extremely unlikely that anyone will want to start a new one.
Oh and mandatory, government-enforced altruism, John? Interesting concept. Me, I always thought that the LORD loved a cheerful giver. To my knowledge, the Bible doesn’t say anything about how God feels about a giver with a gun to his head but you’re the ordained guy here.
[blockquote]So let’s try it again in letters large and plain enough to be seen during a tantrum: under Obama’s proposal wealthy people would still pay income taxes at a L-O-W-E-R marginal rate than they did during most of the R-E-A-G-A-N Administration. [/blockquote]
True enough, however they won’t be calculating AGI with the pre-1986 formulas, so the comparison is specious.
What marginal tax rates were twenty years ago is irrelevant. This is supposed to be an economic downturn so raising taxes on the folks who actually create jobs which pay people money so that they can buy things seems as monumentally stupid an idea as can possibly be conceived. Except, perhaps, by people too emotionally invested in this man to think rationally.
[blockquote] The fortunes of the American economy have grown so alarming and the pace of the decline so swift that economists are now straining to describe where events are headed, dusting off a word that has not been invoked since the 1940s: depression.[/blockquote] http://www.nytimes.com/2009/02/28/business/economy/28recession.html
The problem is that the budget is at odds with the stimulus.
[blockquote]You’d never know it from the anti-government caterwauling here[/blockquote]
Let it be recorded that I am not “anti-government” or any such other lazy characterization. I am anti-State. If you are interested in understanding the distinction, I suggest you read Albert Jay Nock’s “Our Enemy, the State.”
Nor am I anti-Government. I am against Government expansion into areas not authorized by the Constitution, aka “Massive Federalism”.
I think the issue of “marginal tax rates” misses the point. The fact is that government taxation and levies are more onerous and pervasive in ways we can’t even conceive of now. Virtually everything you do is taxed, from sales taxes, use taxes, permit fees, recycling fees, a plethora of hidden taxes and fees added into your phone bills and utility bills. Right now our legislature is considering imposing a use permit fee to use our public parks, for example. Fees that were originally charged to support the processing costs of the government approval are now siphoned off into unrelated govenrment programs and are 10 or 20 times higher what they were originally. And then you get hit with “expediting fees” for government services, which means you can stand in the regular line and wait 6 to 12 months for the agency to process your application, or you can bribe the government to do what it used to do for free (and of course everyone pays the expediting fee). They used to pick up your garbage for free, because you already paid taxes for that. Now you get extra assessments if you want more than one pickup a week. You get charged recycling fees which our government has admitted do not go into recycling but into the general coffers. You get charged a tax for hurricane insurance premiums which are supposed to be put in a hurricane relief fund for the next hurricane disaster, and yet has been raided for general government services and is empty. And on and on and on.
[i] The “rich†already pay the vast majority of taxes.[/i]
How do you define “rich”? Making more than $65,000 (top 25% of U.S. income scale)? Such people did pay 86% of [i]federal income taxes[/i]. That probably qualifies as the “vast majority” of federal income taxes.
But federal income taxes account for only 24% of all U.S. taxes. The Social Security and Medicare taxes (also accounting for 24% of all U.S. taxes) fall more heavily on middle- and lower-income wage-earners than does the federal income tax. Ditto for state sales taxes.
In any event, a $66,000 income doesn’t make you “rich” as that term is used in this debate. People earning more than $390,000 paid 40% of [i]federal income[/i] taxes. But their share of [i]all[/i] taxes (e.g., counting Social Security and sales taxes) is much lower.
[i] What marginal tax rates were twenty years ago is irrelevant [/i]
It is eminently relevant to hysteria about class warfare, confiscation, nationalization, plunder [Edited by Elf].
[blockquote]But federal income taxes account for only 24% of all U.S. taxes. The Social Security and Medicare taxes (also accounting for 24% of all U.S. taxes) fall more heavily on middle- and lower-income wage-earners than does the federal income tax.[/blockquote]
Not counting the EITC, that is. No one can really tell who’s paying what, really.
All the more reason the current, byzantine tax code should be used for a mammoth bonfire, the 16th Amendment repealed and a flat, national sales tax implemented.
[blockquote]It is eminently relevant to hysteria about class warfare, confiscation, nationalization, plunder[Edited by Elf]. [/blockquote]
The reality is, from all that I’ve read, is that the wealthy were paying an effectively higher percentage of their income after the 1986 tax code reform as a result of the removal of myriad deductions that made a farce of the high marginal rates. In effect, very few ever paid those rates. What we have now is the scaled-back AGI deductions regime, along with the higher marginal rates.
From [url=http://www.cfif.org/htdocs/freedomline/current/in_our_opinion/The-Numbers-Are-In-Again-The-Rich-Pay-More-Than-Their-Fair-Share.htm]Center for Individual Freedom[/url]:
[blockquote]According to the [latest Internal Revenue Service’s (IRS)] statistics, the richest 1% of American taxpayers (those earning above $389,000) earned 22% of the nation’s reported income. But their share of the nation’s income taxes was 40%. In other words, the wealthiest 1% of Americans’ income tax payments are almost twice as much as their “fair share.â€
The same is true for other income levels as well. According to the IRS data, the wealthiest 5% of Americans earned 37% of the nation’s income, but paid some 60% of the nation’s income taxes. The top 25% of Americans earned 68% of the nation’s income, but paid 86% of the nation’s taxes.
And astonishingly, the top 50% of American earners brought in 88% of income dollars, but paid 97% of all income taxes in this country. Thus, half of the American population is paying almost the entirety of income taxes.
As noted by The Wall Street Journal, the wealthiest Americans today pay twice as much of the nation’s income taxes as they did during the Carter administration. Back then, they paid 19% of income taxes, compared with 40% today. [/blockquote]
but I’ve seen this on many websites, including [url=http://www.rushlimbaugh.com/home/menu/ny_times_top_20__pay_80__of_taxes_.guest.html]Rush Limbaugh’s[/url] site (and I hesitate to post this one because as accurate as the data is, some people just see a purple haze when Rush’s name is mentioned):
[blockquote]A new CBO report produced at the request of congressional Democrats confirms that tax cuts since 2001 increased the share of federal income taxes paid by the highest earners. Increased! It increased the share of federal income taxes paid by the highest earners, while decreasing the tax share of lower and middle income groups.
Here are the numbers. You’ll be stunned. The overwhelming majority of federal income taxes are paid by the very highest income earners. The top 1% of income earners pay about 32% of all income taxes. The top 5% pays 51.4%. The top 10% of high income earners, pay 63.5%. The top 20% of income earners pays 78% of all federal income taxes. The top 20%.
Now, if you’re going to have a tax cut that is broad-based and reaches 78% of the people, I’m sorry, you’re going to be cutting taxes on the top 20%. It’s unavoidable! And guess what? It worked! It stimulated the economy. Where would we be without them?
Here’s the final number. The bottom four-fifths, 80% – the bottom 80% of income earners pay just 20%, 22% of the federal income tax burden. The bottom 80% pay only 20% of the burden.
[url=http://www.rushlimbaugh.com/home/menu/top_50__of_wage_earners_pay_96_09__of_income_taxes.guest.html]His summary[/url]
Top 5% pay 53.25% of all income taxes (Down from 2000 figure: 56.47%). The top 10% pay 64.89% (Down from 2000 figure: 67.33%). The top 25% pay 82.9% (Down from 2000 figure: 84.01%). The top 50% pay 96.03% (Down from 2000 figure: 96.09%).
The bottom 50%? They pay a paltry 3.97% of all income taxes. The top 1% is paying more than ten times the federal income taxes than the bottom 50%! And who earns what? The top 1% earns 17.53 (2000: 20.81%) of all income. The top 5% earns 31.99 (2000: 35.30%). The top 10% earns 43.11% (2000: 46.01%); the top 25% earns 65.23% (2000: 67.15%), and the top 50% earns 86.19% (2000: 87.01%) of all the income. [/blockquote]
[i] The fact is that government taxation and levies are more onerous and pervasive in ways we can’t even conceive of now [/i]
Total taxes as a percentage of gross domestic product are lower in the United States than in any major industrialized country except Japan.
There are many good arguments for lower taxes and a smaller government role in the economy, but let’s keep the status quo in perspective.
Let’s also remember that if the Clinton Administration’s fiscal policies had remained in effect during this decade, we would have paid off the federal government’s entire publicly held debt. We would have had less of a bubble in real estate and the stock market and have run a smaller trade deficit (leaving us as a nation less indebted to foreign creditors like the Chinese). In that context, running a temporary fiscal deficit to counteract the severe recession would be much less troubling.
[blockquote]Let’s also remember that if the Clinton Administration’s fiscal policies had remained in effect during this decade, we would have paid off the federal government’s entire publicly held debt.[/blockquote]
I’m not sure that’s accurate, though we were in a far better place back then (though, again, we were still using the Social Security overtax to balance the budget…IOW, the debt was still going up). It should be remembered that the Clinton Administration had to be dragged kicking and screaming into that fiscal discipline, though the Republicans completely lost their minds when Bush came into office…one of the more disgusting political spectacles of the last 20 years, IMO.
[blockquote]We would have had less of a bubble in real estate and the stock market and have run a smaller trade deficit (leaving us as a nation less indebted to foreign creditors like the Chinese). [/blockquote]
Since the real estate bubble was Clinton policy, and began under his watch, that is just silly.
[i] The wealthy were paying an effectively higher percentage of their income after the 1986 tax code reform as a result of the removal of myriad deductions that made a farce of the high marginal rates [/i] —#34
I took account of that argument in framing my basic point: that “under Obama’s proposal wealthy people would still pay income taxes at a lower marginal rate than they did [i]during most of the Reagan Administration[/i]”
The 1986 tax reforms applied only during the last quarter of the Reagan Administration.
In any event, the “myriad deductions” staged a comeback over the past 15 years.
Jim [#35]: Your festival of cutting and pasting does not refute my comment #31. Federal income taxes account for only 24% of all U.S. taxes.
_ _ _ _ _ _ _ _
[i] Tax cuts since 2001 increased the share of federal income taxes paid by the highest earners. Increased! [/i] —Rush Limbaugh
The share of federal income taxes paid by the wealthiest taxpayers increased because the wealthiest taxpayers’ share of national income increased. The real income of the wealthy increased significantly whereas lower- and middle-income wage-earners logged fairly modest gains.
I for one am not resentful of the poor (I’ve been there myself), but I am perplexed, bemused and befuddled by those who somehow think the federal/state governments are such stalwart economical providers of services that extra tax dollars will automatically be spent well and wisely. As a resident of California, I can tell you, that is not true. So, yes, I resent the government taking my money and throwing it away on pork-barrel projects or continually expanding government bureaucracies – and I have every right to be resentful of that.
[blockquote]I took account of that argument in framing my basic point: that “under Obama’s proposal wealthy people would still pay income taxes at a lower marginal rate than they did during most of the Reagan Administration†[/blockquote]
True, but isn’t that a bit inaccurate? [personal reference to commenter edited – Elf]. Aside from the complexities introduced by loopholes that reduce AGI, isn’t the salient figure the net percentage paid?
I’d agree about the deduction explosion, it’s gotten out of hand. Government is doing its darndest to push us into certain behaviors, something I don’t see has a place in a supposed free society.
#30 – why are you surprised? Taxes in the US are low. WE instead have permit fees and the like because we’ve decided that we prefer it that way. As federal taxes decrease, state and local taxes will increase. Liberty requires taxes. Otherwise its might makes right.
Bart: public sector spending is “consumptive?” What do you mean by that? There is little difference between a business that spends and a government that spends. A government that buys paint, hires contractors and a clean up crew is as productive as a corporation that buys paint, hires contrators and a clean up crew. Not only that, painters, paintmakers, brush makers, hardware stores, all benefit from government spending. Is the quality of the cash different?
Christopher, you might want to take econ 201 at some point. The wealthy do not always spend the money that they earn. They may put it in investments, treasuries, foreign countries, or CDs. They are more likely to reinvest it in companies when tax rates are higher. The rich may help create a demand economy, but it’s much slower than the government sometimes.
Jefferson, the “coercive” nature of taxes is needed for those things that benefit everyone, but that no individual can effectively profit from. I’m a bit more skeptical of our better natures, and I can say that people don’t share enough voluntarily.
But if the rich did leave for Costa Rica (which has no defense, interestingly, so they have a lot less infrastructure to spend on), other people would create businesses in the US. More middle class people wanting to eat pizza means more opportunities for people who want to make pizza.
[i] I resent the government taking my money and throwing it away on pork-barrel projects or continually expanding government bureaucracies [/i]
I resent it as well, just as I resent being left with a huge bill for Bush’s fraudulent foreign adventures. But I’m not going to have a personal meltdown or cast myself as a hapless victim. I often disagree with the politicians elected by my fellow citizens, but I’ll take the bitter with the sweet.
[Comment deleted by Elf]
[blockquote]Bart: public sector spending is “consumptive?†What do you mean by that? There is little difference between a business that spends and a government that spends. A government that buys paint, hires contractors and a clean up crew is as productive as a corporation that buys paint, hires contrators and a clean up crew. Not only that, painters, paintmakers, brush makers, hardware stores, all benefit from government spending. Is the quality of the cash different? [/blockquote]
Yes. Government outlays are almost uniformly consumptive because they are not in exchange for things people want, and therefore do not add to the wealth of the nation, but subtract from it. That harms everyone. Businesses that are well-run do not spend money on items that do not give return on the investment, thus increasing the wealth of the nation and improving the lot of all.
[blockquote]Jefferson, the “coercive†nature of taxes is needed for those things that benefit everyone, but that no individual can effectively profit from. I’m a bit more skeptical of our better natures, and I can say that people don’t share enough voluntarily. [/blockquote]
LOL…I have to laugh at the scare quotes. If you don’t think taxes are coercive in nature, try not paying them and see what happens.
I’m not even talking about an individual profiting from government expenditures, John, but the government itself. When a Bush, Obama, etc, says we need to invest in this or that, our response is properly to ask what the prospective return on that investment is (ignoring for now the issue of Constitutionality). I daresay that the blank look one would receive to that inquiry would be all the answer one would need: The vast majority of government spending is consumptive, not getting back so much as a penny as return. This makes us all poorer.
A short tale: Fifteen years ago, we were debating a light rail system in our city. We libertarians put on a forum called “Boon or Boondoggle” about the issue. We said that the system would actually harm the cause of mass transit as the system would draw funds away from the (relatively) efficient bus system to support light rail. We were ignored and well over $1 billion was spent to build a two-line light rail system.
Today, the metro transit authority is broke, weighed down by the massive losses from the light rail system. Fares only cover a fraction of the operating costs, much less the funds needed to retire the bonds used to build the system. Bus service in the suburbs is being cut 50-75% and the light rail itself is being slashed 30%. Only a huge (and regressive) sales tax increase, mostly falling on people who do not or cannot use the system, can salvage the system.
We believed wooly, woozy, feel-good rhetoric such as yours, eschewing the hard analysis of cost-benefit and now we’re all stuck, poorer for it.
[Deleted by Elf]
[Comment deleted by Elf]
Instead of an income tax system (where we all get to be unpaid accountants for the government), why not move to a retail sales tax system – or better yet, a per capita levy on the states to fund the federal government. I would rather my taxes be paid at the state level.
When John and Ireaneus talk about our low tax rate relative to other countries, they do not mention our high corporate tax rate. Corporations do not pay taxes. Taxes are an expense item that they pass on to their consumers.
I believe that it is dangerous for a democracy or a republic to have people who pay no taxes having a large say in how much other people pay in taxes. That is akin to two wolves and a sheep voting on what to have for dinner. :).
One problem that we have in our country today is that we have taken the deadly sin of “Envy” and turned it into a social virtue called “fairness.” The question on a just tax rate is legitimate. It seems that the answer to what is just (among political liberals) is “just a bit more.”
YBIC,
Phil Snyder
#43 – Irenaeus – from your comment: “But I’m not going to have a personal meltdown or cast myself as a hapless victim. I often disagree with the politicians elected by my fellow citizens, but I’ll take the bitter with the sweet.”
In case I wasn’t clear, I am not having a personal meltdown or casting myself as a hapless victim. I am, however, exercising my rights as an American citizen to criticize my government. Please don’t attribute to me motivation or psychological analysis – it’s called freedom of expression and as many, including myself, used it against GW Bush when we disagreed with him, I am availing myself of it to criticize Congress and Pres. Obama (who is in the process of slowly removing the conscience clause for medical personnel among other things).
I think it’s time that the majority of the posters here read this and get a little glimpse of reality.
Free market capitalism doesn’t work. We’re all moving on. Are you coming with us?
Question: What do you think of free market capitalism in the US?
Answer: I think it’s worth a try! Let’s go for it.
Oh, and by the way, socialism and socialism-lite have also been shown to be massive failures. Why do you suggest we imitate systems that have so spectacularly self-destructed in most of the countries in which this has been tried? Do you really want to be like Cuba and France? Isn’t that why we had a revolution, to get away from imitating oppressive regimes?
No, thank you, I am not coming with you. Not willingly, at least. And I will vote accordingly in every election to fight this type of system.
[blockquote]I think it’s time that the majority of the posters here read this and get a little glimpse of reality. Free market capitalism doesn’t work. We’re all moving on. Are you coming with us? [/blockquote]
I feel bad for the guy, but what in the story A – suggests that the free market doesn’t work and B – that whatever you think you’re going to replace it with will be better? Do you really think you are going to design a system where no one ever loses a job or has to take a pay cut? Do you seriously think it’s going to be anything but a total fiasco?
No thanks, I’ll take the untidyness of the market over this utopia you and your pals are planning.
[i] Total taxes as a percentage of gross domestic product are lower in the United States than in any major industrialized country except Japan [/i] —Irenaeus [#36]
[i] When John and Ireaneus talk about our low tax rate relative to other countries, they do not mention our high corporate tax rate [/i] —Philip Snyder [#47]
Philip [#47]: Wrong. “Total taxes” includes [i]all[/i] taxes, federal and state, individual and corporate. Hence the use of “total.”
Branford [#48]: I did not have you in mind when I referred to meltdowns and casting oneself as a victim.
RE: “It is eminently relevant to hysteria about class warfare, confiscation, nationalization, plunder, and [Part of comment already edited by Elf].”
Only one man on this thread keeps mentioning [Part of comment already edited by Elf]. Just sayin’ . . .
Moving on — it will be good for all the people angry at the expanding power of the State to remember each and every day of the next some 600 and something days.
It’s why Americans never need be real victims in our territory. ; > )
[We agree Sarah with the issue you mention and have edited this thread accordingly – thank you – Elf]
Padre Mickey [#49]: That’s a moving article, and I appreciate your link to it. Market adjustments pose very real pain. We should, as Christians and as citizens, be mindful of those bearing the brunt of them. But that doesn’t mean we—or they—would be better off junking capitalism or banning layoffs.
[i] Just sayin’ . . . [/i]
The wonder, Sarah, is that one of your soulmates would raise the subject to begin with.
Irenaeus is a soulmate of mine?
Irenaeus, I just read through this thread. I came here to see who’s talking about [Part of comment already edited by Elf]. It sounded to me like this was getting quite juvenile. Who mentioned the subject before you did? And where are the elves?
And JW once again demonstrates that he doesn’t just disagree with people. He thinks people who don’t agree with him are ignorant, and he sneers. That’s not pretty, and it reflects on him.
Katherine [#59]: The reference is no longer here, but it most assuredly was here when I posted my initial comment.
Irenaeus – #54 – thanks for the clarification. God bless.
I have some thoughts about this tax issue. The income tax was illegally passed. The Supreme Court has ruled it is the law of the land and so it is. When the amendment was passed to allow income tax the American people were PROMISED only the wealthiest would be taxed. Does this sound familiar? We now have a situation where those with the least can vote themselves into the pockets of the “richâ€.
This is nothing other than sob story class warfare! We are told we have to help the poor. Look at President Obama’s and Joe Biden’s record on PERSONEL giving! It is so much easier to be compassionate with other people’s money. We are told it is our patriotic duty to pay taxes. Does this then mean that those recently appointed by President Obama are unpatriotic also including Charles Rangle, Tom Daschle, Geitner, and a host of other Democrats who pass the laws that take our money but cheat on their own taxes?
Does helping the poor include high speed rail roads from LA to Vegas so Reid’s state can prosper? Does helping the poor include giving money to ACORN to perpetrate election fraud and break into private homes? The list of how our tax dollars are used to consolidate political power is long, I guess we are just helping the poor DEMOCRATS
[Please would commenters observe the general comment policy. Comments should address issues, not other commenters and in particular avoid ad hominem references or crude expressions – Elf]
[Please remain on-topic – Elf]
RE: “Who mentioned the subject before you did?”
Katherine, the first edit by the elves begins with comment #22, Irenaeus.
Sarah [#64]: Don’t put me in a false light. Comment #22 responded to a prior comment on this thread, as already noted in #60. And “[i]the wonder, Sarah, is that one of your soulmates would raise the subject to begin with[/i]” [#57].
#51- I’m amused you can’t tell a difference between France and Cuba. Have you lived in France before? What’s interesting is that I can imagine the French saying the same thing about the US.
You also seem to imply that we HAVEn’t been doing market capitalism. What, then, have we been doing?
John,
Your memory is going again. We’ve discussed this ad infinitum, and your questions have been answered multiple times. Seek and ye shall find.
I would neither live in France nor Cuba. I prefer Democracy in a Constitutional Republic and the freedoms guaranteed by the U.S. Constitution, which, contrary to Obama’s claims, is not a seriously flawed document.