what % of their income do you think the "rich" pay in federal taxes?

[steronz]

Originally Posted by Terr

Yes, last year they did. This year is different.

http://www.foxnews.com/politics/2012...s-on-tax-bill/

[Obama] said he wants to find ways to bring down health care costs without hurting seniors and is willing to make more cuts in entitlement programs such as Medicare.

That was 2 days ago. And the link is to Fox since you apparently don't trust the reporter for ABC News. Why do you refuse to accept reality?

[Terr]

Originally Posted by steronz

http://www.foxnews.com/politics/2012...s-on-tax-bill/

That was 2 days ago. And the link is to Fox since you apparently don't trust the reporter for ABC News. Why do you refuse to accept reality?

Cool. Of course, I'll believe it when I see it. And I strongly suspect I won't see it. Our President has a tendency to say a lot of things while actually never meaning them or doing them.

[L. G. Butts, Ph.D.]

So, Terr, what is wrong with the tax system being progressive? You keep talking about what is "fair", but I do not see what is wrong with those households that make less (on average) than $49,000 only pay ~10% of their income, while those households that make on average $1,200,00 per year pay ~30% of their income. Do you think everyone should pay the same rate? Would it be fair to make those families that make less than $15,000 a year pay 30 percent also? What would be fair in your book?

For me, a progressive tax system is fair because the wealthy get more benefit from the infrastructure in this country than the poor do. Business owners and people with investments in this country get much more benefit from the infrastructure, the military (free trade), and the educated workforce in this country than a poor person working at Walmart. Is this fair?

Anyway, as a liberal I don't think that we need to triple rates on the top 1%, and my main beef with the tax system is the low rate on long term capital gains and some dividends (35% for the top marginal rate is actually fine IMLHO - L is for liberal). That said, I don't see what the big deal is asking for another 3% on the top marginal rate. It should not be that big a deal and will probably not harm the economy since most of the investment these days is happening overseas anyway.

Finally, one thing I do believe in is that the revenue stream should more or less match the expenditures. If we were running surpluses, we could cut everyone's taxes including the top 1%. Feel the need to give drug benefits to the elderly on the taxpayer's dime and fight a bunch of wars around the globe? Well, we better raise taxes to pay for these programs. Should the rich bear the entire burden for these programs? No, at least IMHO, but they should bear more of the burden than the poor simply because they can. Should we get rid of these expenditures and thus sidestep the whole tax discussion? Maybe, but it's too late now. Much (if not the majority) of the current deficits can be laid at the feet of the Republican administration and congresses in the early 2000's (Medicare part D, Bush tax cuts, wars in Iraq and Afghanistan and the associated veteran' benefits). What debt can't be laid at their feet is mostly due to the decreased revenue during the current downturn.

[bup]

Originally Posted by L. G. Butts, Ph.D.

Anyway, as a liberal I don't think that we need to triple rates on the top 1%

Even addressing that is buying into Terr's framing. Nobody has called for the top 1% to pay triple what the middle class pays.

[Terr]

Originally Posted by L. G. Butts, Ph.D.

So, Terr, what is wrong with the tax system being progressive? You keep talking about what is "fair", but I do not see what is wrong with those households that make less (on average) than $49,000 only pay ~10% of their income, while those households that make on average $1,200,00 per year pay ~30% of their income. Do you think everyone should pay the same rate? Would it be fair to make those families that make less than $15,000 a year pay 30 percent also? What would be fair in your book?

What would be fair in my book is eliminating income tax completely, because it is one of the most inefficient and counterproductive methods of taxation, in my opinion. So - now that I answered that, what would be "fair" in your book? 10-15% vs 30% is obviously not "fair". But if you add a few percent to that 30% it becomes "fair"?

Anyway, as a liberal I don't think that we need to triple rates on the top 1%

Why not? The criteria seems to be "they can afford it" - they can afford tripled rates, can't they?

Finally, one thing I do believe in is that the revenue stream should more or less match the expenditures.

Since adding that 4% on the "rich" will be a drop in the bucket towards the goal of "revenue matching the expenditures", what are your other proposals to reach that goal?

[Robot Arm]

Originally Posted by Terr

Reminds me the tale of these two poor settlers in Palestine at the beginning of the 20th century that were receiving a stipend from Rothschild. One of them dies, and Rothschild cuts off that stipend. The other one writes to him accusing him of trying to profit on the death of his friend.

That's a real nice story. You want to answer my question now?

[Terr]

Originally Posted by bup

Even addressing that is buying into Terr's framing. Nobody has called for the top 1% to pay triple what the middle class pays.

So explain to me, what is the difference in principle between paying double what the middle class pays and paying triple?

[Terr]

Originally Posted by Robot Arm

That's a real nice story. You want to answer my question now?

The story answers your question. If you're getting handouts, and they get cut off, that's not a "sacrifice".

[Giraffe]

Originally Posted by Terr

So for me there are two questions:

1. Why do most people think it's so much less? I would say the left's propaganda about it was wildly successful and most people have been fooled into thinking that.

Because of Mitt Romney. By running for president as a billionaire in the post-Bush tax cut era, he singlehandedly exposed the enormous inequities in our current tax code. People making six figures a year working as lawyers and doctors (i.e. making all their money from their salaries) who are paying 30-40% of their income in federal taxes should be absolutely furious at the Republicans for passing tax cuts that allow billionaires and hedge fund managers to pay <15%. Because the public is going to automatically lump them in with the Mitt Romneys of the world.

Fairness-wise, I think it's fine for the top marginal tax rate to revert from the Bush level to the Clinton level, but far more important is to revoke the ultra-low rates for dividend and capital gains income for high earners. We should also replace the Alternative Minimum Tax with the Buffett rule, so that everyone above a given income (adjusted for inflation) pays a reasonable minimum tax rate. Billionaires should not be paying less than half the effective tax rate of dentists and surgeons.

[steronz]

Originally Posted by Terr

Cool. Of course, I'll believe it when I see it. And I strongly suspect I won't see it. Our President has a tendency to say a lot of things while actually never meaning them or doing them.

So you're doubling down on ignorance. Got it.

[bup]

Originally Posted by Terr

So explain to me, what is the difference in principle between paying double what the middle class pays and paying triple?

50%. And reality.

[John Mace]

Originally Posted by Giraffe

Because of Mitt Romney.

Nope. I've seen lots of polls over the years that have shown people underestimate how much taxes are paid by "the rich". This predates Romney, even if he may have exacerbated the problem.

[Robot Arm]

Originally Posted by Terr

The story answers your question. If you're getting handouts, and they get cut off, that's not a "sacrifice".

The story was about stopping a stipend once the recipient died. Unless you're planning to kill everyone on Social Security, Medicare, and Medicaid, then no, it really doesn't answer my question.

[Giraffe]

Originally Posted by John Mace

Nope. I've seen lots of polls over the years that have shown people underestimate how much taxes are paid by "the rich". This predates Romney, even if he may have exacerbated the problem.

No, but I'd argue that Mitt Romney is pretty much singlehandedly responsible for people's current belief that a typical tax rate for someone in the top 1% of annual income is <= 15%. Some people may have had a vague notion of the rich having lots of tax shelters and loopholes available to them before that, but now people have a hard number of what very rich people are paying. And it's a low number.

[Terr]

Originally Posted by Robot Arm

The story was about stopping a stipend once the recipient died. Unless you're planning to kill everyone on Social Security, Medicare, and Medicaid, then no, it really doesn't answer my question.

"If you're getting handouts, and they get reduced, that's not a "sacrifice"." - that answers your question. In terms of "entitlement reform" - the part of the "entitlement" that the recipient paid for - such as the sum of Social Security contributions with reasonable ROI - is not a handout. The rest of it is.

[DSeid]

Originally Posted by John Mace

You should have let the poll run longer and shame on Dseid for spoiling the answer so quickly. ...

Originally Posted by Terr

I couldn't let the poll run longer since DSeid insisted on spoiling it.

1) Maybe I misunderstand how polls work, but I always answer the poll before reading the rest of the thread. Reading everyone else's responses and then answering the poll seems to not be in the spirit of an IMHO poll.

2) The poll was going on without clarification, despite being asked for several times, regarding how (s)he was handling taxes paid by corporations. I think if it was made clear to those reading the poll that taxes paid by corporations who then distributed dividends to 1% or above individuals (or interest or capital gain income) would be handled not as an expense to the corporation but as individual tax paid by the 1%er, many would have given different answers. Certainly I would have. It is of note that Romney's reported 14% was based on income tax alone. Minimally he likely "paid" (via the fact that the companies that are the source of his income paid taxes) another 8% indirectly. Note that even Romney was not stupid enough to try to play that as his tax burden.

3) Agreed however that the general public does not appreciate the difference between the 2% (Obama's definition of wealthy in these fiscal cliff posturings), the 1%, and the 0.1 and 0.01% who have increasingly accumulated a larger and larger share of the wealth and income of this country.

4) The bottom line is that in our supposedly progressive system of taxation the 1% pay (not counting taxes paid by corporations as art of doing business before they distribute profits to shareholders, etc.) only about 3% more than the the average tax payer. It did not used to be so. That graphic (which includes giving credit for corporate taxes) shows how the effective tax rate for most everyone has stayed flat since the 70s, except a modest decline for the 1% and a HUGE drop for the top 0.01%.

[Voyager]

Originally Posted by DataX

The rich would still benefit from the lower tax brackets below 39.6%. This is not some punishment where if they are in the higher tax bracket they get the shaft. Only the income above whatever the cutoff gets a shaft - and they pay like 4.6% points on that income only (at least as far as the earned income tax brackets go).

If you raised the top bracket to 90% or something, then you could say the rich were getting the shaft. The actual increase is a pinprick at most. Now raising the tax rate on people just barely getting by is giving them the shaft.

[colonial]

I am not going to slog through all three pages of replies, but the first page seems to overlook
the fact that the way it is written OP should only be taken to mean what percentage of their
income the rich actually pay in Federal taxes, not what their statutory Federal tax rate is.
It is certain the average payment is a hell of a lot less than the ~29.5% statutory.

I selected the 20% option, and I would not be suprised if it was around 15%.

[Terr]

Originally Posted by colonial

I am not going to slog through all three pages of replies, but the first page seems to overlook
the fact that the way it is written OP should only be taken to mean what percentage of their
income the rich actually pay in Federal taxes, not what their statutory Federal tax rate is.
It is certain the average payment is a hell of a lot less than the ~29.5% statutory.

I selected the 20% option, and I would not be suprised if it was around 15%.

And as you read on you will find out you're wrong. Which was the point.

[Voyager]

Originally Posted by John Mace

It's also important to recognize that there was a certain economic event in 2007/08 that made lots of people think raising taxes across the board was a bad idea. I don't think it makes sense to compare what might or might not have been good policy in 2004 with what is good policy now. We're still not out of the hole yet!

Since everyone seems to have ignored this post, I'll bring it up again. Tax policy is not random - the reason you cut taxes in a recession caused by a drop in consumption is to increase consumption. (A recession caused by lack of investment is another matter, and this one isn't one of those.) Increasing taxes on those making under $250K a year will decrease consumption (though the breakpoint might be a bit lower.) Increasing them on the 1% won't affect consumption at all.
The proof that this is what the tax cuts are about is that Obama did the payroll tax cut, which was nearly invisible so he didn't get as much credit as sending a check, because the behavioral economists told him that this increases consumption more than a check would, which tends to go into savings or paying down debt.
The European austerity program has involved not just spending cuts but also across the board tax increases. Hasn't helped much, has it.

And there is also the fact that each incremental dollar is worth a lot less to the rich person than the poorer person. That is why progressive taxation makes sense - it is closer to equalizing the pain, which decreases faster than linearly with increasing income.

[colonial]

Originally Posted by Terr

And as you read on you will find out you're wrong. Which was the point.

Instead of being cute how about just telling me what rate the poor wittle snowflakes do pay.
What they actually pay, if you don't mind too much.

[Terr]

Originally Posted by colonial

Instead of being cute how about just telling me what rate the poor wittle snowflakes do pay.
What they actually pay, if you don't mind too much.

It is in the thread.

[colonial]

Excuse me if this site has already been linked:

Tax Foundation

It says that in 2010 the top 1% paid an average of 23.39% Federal.

Poor widdle Thaaaangs!

My ass-- rachet it up to 35% or so.

[colonial]

Originally Posted by Terr

It is in the thread.

This reply of yours might reasonably be termed a dick.

[Terr]

Originally Posted by colonial

Excuse me if this site has already been linked:

Tax Foundation

It says that in 2010 the top 1% paid an average of 23.39% Federal.

Poor widdle Thaaaangs!

My ass-- rachet it up to 35% or so.

CBO says 28.5. Compared to "middle class" 's 10-15%. Your guesses were wrong.

[Fear Itself]

Originally Posted by Terr

CBO says 28.5. Compared to "middle class" 's 10-15%. Your guesses were wrong.

If conservatives don't trust the CBO, neither do I. I'm going with 23%.

[colonial]

Originally Posted by Terr

CBO says 28.5. Compared to "middle class" 's 10-15%. Your guesses were wrong.

You expect me to believe the top 1% with all their access to fancy accountants
and tax lawyers can only get out from under ~1% of their 29.5% statutory rate?

Until I get a link from you I will assume you don't know how to read a data table.

[Terr]

Originally Posted by colonial

You expect me to believe the top 1% with all their access to fancy accountants
and tax lawyers can only get out from under ~1% of their 29.5% statutory rate?

Until I get a link from you I will assume you don't know how to read a data table.

http://cbo.gov/sites/default/files/c...bles_Final.xls

First tab, top table.

[colonial]

Originally Posted by Terr

http://cbo.gov/sites/default/files/c...bles_Final.xls

First tab, top table.

I do not believe that tax rate is synonymous with tax actually paid as a per cent of income,
for reasons given earlier.

[DataX]

It is of note that Romney's reported 14% was based on income tax alone. Minimally he likely "paid" (via the fact that the companies that are the source of his income paid taxes) another 8% indirectly. Note that even Romney was not stupid enough to try to play that as his tax burden.

Excellent point - we are talking about the party that bitched about polls over sampling democrats (which turned out not to be true) and I didn't hear one person claim this corporate 8% stuff. In fairness, I did hear people bring up his donation to his "charity".

[Terr]

Originally Posted by colonial

I do not believe that tax rate is synonymous with tax actually paid as a per cent of income,
for reasons given earlier.

It's an "average tax rate". From the 1st page: "Average tax rates are calculated by dividing tax liabilities by before-tax income.". "Tax liabilities" equals "tax paid" - unless you want to go to jail.

This table tracks the "effective tax rate". Whether you believe it or not.

[The Niply Elder]

Does this effective tax rate include state And local taxes as well?

[Terr]

Originally Posted by The Niply Elder

Does this effective tax rate include state And local taxes as well?

Federal taxes.

[The Niply Elder]

So then this is incomplete data on "effective taxes paid"?