Bottom 50% of wage earners don't pay taxes--yeah, right!

Great Debates
41

kanicbird: Why would you want to deny people the choice to own SUV’s. THe problem I see with your reasoning is that you will acheive a situation where only the rich will be able to have SUV’s, while the middle class will have a much [more] limited choice. […]
Again you are suggesting taking away a persons right to [choose] where they want to live, again you are trying to set up a system where only the rich will be able to live in the country and work in the city.

Well, what jshore is advocating here is removing the subsidies that encourage these choices. You’re absolutely right that when society stops subsidizing something, it usually becomes more expensive, and that means that it becomes less available to the non-rich.

What’s wrong with that? As you yourself pointed out a few sentences later when mentioning home ownership, we as a society give financial subsidies to the things we want to encourage. If there are good reasons (e.g., reducing sprawl and pollution and waste) why we don’t want to encourage lots of people owning big inefficient cars and driving several hours a day, why should we go on subsidizing it?

[hijack]

  • I have a optimistic view of humanity and the resources we have been given by our Creator. These include the natural ones and the ones insdie the human mind. We have abundant natural resources that we haven’t even dremt up ways to even find them all YET, but we will. Will we use up all the oil in X years, I don’t see it, I see that we will contine to discover new reserves and new cheaper ways to extract it, or a shift to a new technology that will outmode burning oil. *

Wow! Thanks kanicbird, I collect instances of a phenomenon I’ve tentatively named “conservative eco-mysticism”, and this is a beautiful specimen.

Not long ago I was a little surprised to note that, although leftists are usually the ones accused of holding vague mystical beliefs about the environment in defiance of any scientific evidence to the contrary, there are actually quite a few conservatives who think in the same sort of way, although they’re holding different beliefs.

It’s very interesting to see many conservatives—who have traditionally prided themselves on their factual realism and hard-headed pragmatism—flopping around in cotton-candy rhetoric about how you shouldn’t worry about scientific findings 'cause they’re all biased and political and all, but instead just rely on the goodness of the Creator and the inexhaustible wonders of the Creation and optimism about the invincible resourcefulness of human nature. Well, I guess that settles that, huh? Hey everybody, how about a chorus of “Kumbaya”? :slight_smile:

Meanwhile, I guess it’s up to us hard-headed pragmatic liberals to tackle the problem of finding out what really is going on with the environment, and what steps we should be taking to modify our impact on it, instead of just sitting around on our complacent butts trusting to other people’s resourcefulness to spontaneously avert or solve our problems before we have to deal with any serious consequences of them. Ah well, back to the salt mines…

[/hijack]

42

I have always felt that a person has a very hard time logically deciding that their tax burden is greater than someone else’s – it’s sort of like saying, “My baby is cuter than yours”, or “Our competitor’s products are not as good as ours”: it may be true, but it’s hard for you to evaluate all the factors objectively.

43

Speaking of those who don’t pay their fair share, how has it become acceptable practice for a “head of household”, who is already the beneficiary of a monthly allocation of foodstamps and federally subsidized housing, to work part time, have as little as $200 deducted from their payroll for the year, but yet receive a “tax refund” of $2000?

“The Earned Income Tax Credit”, how’s that for an example of Orwellian newspeak?

And can any of you explain just what the Hell is “earned” with regards to the “Earned Income Tax Credit”?

Well, I suppose if a legislator were to vote for a bill entitled “The Income Redistribution Plan for the Working Poor”, he might expect to lose some votes come next election.

Boortz is right on the money, as usual.

44

Anyone who wades through this article should take it with a truckload of salt. Most of the “evils” the author cites are explained away very simply in a way that shows that the actual statement is literally true, but most people would not think that what the author is talking about is actually abusive.

I don’t have time right now to respond to the whole thing, but know that (1) there’s no such thing as a “secret tax break” for the rich or any such nonsense–all tax laws are published where any interested person can find them; (2) much of the stuff about “the super-rich pay very little in tax” can be explained by the different ways in which the media and the tax laws define income and the ways in which the super rich get richer (hint: the media sees unrealized appreciation in assets as increased wealth but it doesn’t count as gross income for tax purposes); (3) the “stealth tax” is the alternative minimum tax, which really will be a problem for more and more Americans soon if something’s not done to fix it; and (4) examples of lax enforcement of tax laws or of specific rich people who weren’t prosecuted doesn’t really prove anything–lots of people get away with lots of crimes all the time.

So, I think this article at its best puts a sensational spin on widely-known and uninteresting phenomena and at its worst makes up stuff that doesn’t exist. The notion that poor or middle class people are “subsidizing” rich people is just patently ridiculous, at least for any non-retarded definition of “subsidizing.”

Also, what is the San Francisco Gate anway?

I probably won’t take the time to go point by point on this thing, but I may be able to respond if anyone is interested in a specific point. Let me know.

45

Peronsally, I found the article useful and educational. You are entitled to your own opinion.

San Francisco Gate is the gateway for the San Francisco Chronicle newspaper. Not sure what that matters but you could have found that out by looking around.

When they refer to “secret”, they are referring to the fact that most people don’t know or understand about how the tax code has been structured to favor the rich over the middle class. This is not to be unexpected, since tax laws are made by politicians and rich people give a lot of money to politicans.

So two wrongs make a right then?

46

Teachers average salary.

Truck Drivers average salary.

I don’t think firemen and factory workers are down there either, since they are usually union affiliated…

47

Well besides the aspect of global pollution and global resource depleation is IMHO negligable, it does give us choices, we are not locked into an area to seak employment, or to start a business. We have the ability to get to and work in areas fairly far away from where we live, this in general is good for the job market.

Thanks, but I must insist that you include the part about He3 mining on the moon as it is a intergral part of it. Actually nothing mystical at all, we have a solar system that produces power in quantities that we can’t even comprehend - this is fact, also the energy of the solar system given by Einstein’s E=mc^2 should mean we have energy far beyond billeniums, so it isn’t all just blind faith. As for developing the technology to harness this, we are already in the process, nuke and solar power are here. Fusion is also a reality, but currently only in the diestructive sense for now, but research is ongoing.

Again I think much of this can be boiled down to politics, one side will say that we must conserve resources and use this to control peoples lives, the other says it is esential to use these resources to better mankind - and that frees people to be all they can be and carry humanity into the future.

Well then get off your collective butt and start finding out what is really going on, instead of all that political nonsense.

48

You are saying pollution is negligible? What about acid rain, global warming, or the loss of the ozone layer? If you don’t accept these, what about the effects of air and water pollution on people’s health, on arable land, on economically exploitable natural resources?

You say that effectively subsidising gasoline gives people choices, it also takes away choices. Gasoline isn’t magically cheaper, someone (ie the general tax payer) still has to pay for all of the costs involved in getting it. Someone gains $x of choice from having cheaper gas, someone else loses $x of choice by having to pay for it.

49

Well, I suppose if you support an effective federal tax rate that is higher on those who earn $60,000 per year than those who earn $25 million, then there is indeed nothing to worry about. Some of us do find that kind of abusive though. And, by the way, the author of that article, David Cay Johnston is, as noted in the byline, a Pulitzer-prize winning reporter for the N.Y. Times and has written a book called “Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich – and Cheat Everybody Else” that discusses all this in considerably more detail.

Well, the “earned income tax credit” was really the fulfillment of an idea proposed by none other than that well-known Commie himself, Milton Friedman (with some good justifications, IMHO). Here is fact is a history, courtesy of conservative commentator Bruce Bartelt (who admittedly is himself no big fan of it):

In other related news, Citizens for Tax Justice released a study today documenting what the Bush tax cuts have done to the tax system as a whole (i.e., federal, state, and local taxes taken together). It has indeed made it more regressive, with the top 1% receiving a 12% cut in their effective tax rate while most of the rest of the population receives 7-8% cut in their effective tax rate and the bottom 20% receive only a 3% cut in their tax rate. The effective tax rate is still progressive…going from a 19.7% rate for the bottom 20% to 32.8% for the top 1% (with a rate of 27.0% for the middle quintile). However, most of this progressivity is near the bottom and then it flattens out. So, in particular, the bottom 99% of the population pays at an average effective rate of 29.4% whereas the top 1% pays at an average effective rate of 32.8%.

50

Errr, what’s you’re point? Different sources I’ve checked give the average American salary as somewhere between $35,000 and $40,000. Thus, your sources prove what I originally asserted, namely that druck drivers earn below average, as do many schoolteachers. (On your first cite, follow the link to beginning salaries, they’re all below $35,000). And I feel fairly confident that factory workers and some firemen are “down there” too.

51

As kimstu notes, the question is not whether we deny people the right to choose but whether we subsidize it…Or, worse yet, subsidize it and then say “the people have spoken through the market and who are we to argue otherwise.”

Well, yes, it is divided along “political lines” if by this you that there are some conservative/libertarian think-tanks and fossil fuel companies saying anthropogenic climate change is not a real threat and then everyone else (including all but a few of the scientists in the field and now even some major oil companies like BP and Shell) saying that it is indeed a very serious concern even if we cannot yet predict exactly how bad the consequences will be. I won’t derail this thread any further on this, but you can visit this recent thread for more discussion and links to the science.

Well, I am not saying that the deduction should necessarily be gotten rid of (although I do wonder about phasing it out for higher incomes). But, we at least should be sensitive to some of the unintended consequences of this deduction and not just pretend like these results were willed by the people through the free market and we thus should not do anything to discourage the resulting sprawl, etc.

Having not lived outside the U.S. doesn’t invalidate your opinion but it does give one pause to think that you seem to have determined that not only is the U.S. the best country but is so far above everyone else that we have nothing to learn from them…And yet this opinion is based on having firsthand experience with only the U.S.

I am not saying that we should adopt what everyone else is doing uncritically. However, on the other hand, we should not be so set in our ways that we are unwilling to consider the possibility that other countries have come up with better solutions to problems that we face.

Well, it is all well and good to have faith in the power of technology to solve problems. (Although I think I read something pretty skeptical recently on this helium mining on the moon idea…I can’t dig it up right now.) However, these things don’t just happen by magic. As long as it is free (or cheap) for companies and consumers to put various pollutants and greenhouse gases into the atmosphere, the market is not going to push for these technologies to be developed. It is only once we correct the market to stop effectively subsidizing these polluting technologies that we are going to get the market to come up with creative solutions.

So, I would tend to characterize at least some of the people who you say are saying “we must conserve resources and use this to control peoples lives” as those who are actually recognizing that markets aren’t always perfect and they must be corrected to properly internalize the costs of things that are right now “externalized” costs. And I would tend to characterize many of the people who you say are saying it is “essential to use these resources to better mankind - and that frees people to be all they can be and carry humanity into the future” as actually proposing that we continue to subsidize pollution and the like, and basically stick our heads in the sand in regard to real environmental (and other) problems that this causes.

52

The income. The credit applies to the tax on earned income. Income is divided based on how it is aquired. If you work for it it is earned otherwise it is unearned income. We used to have the idea in America that the hard earned dollars folks received in exchange for their labor ought to be taxed at a lower rate than those revenues derived from the labor of others.

53

Now, many conservatives seem to have the opposite view…i.e., that dividend and capital gains income should be taxed at a lower rate (besides not being subject to the payroll taxes). And, of course, there was clammering to essentially eliminate taxes on such unearned income altogether.

54

I guess the reason I didn’t find it useful or educational is that I know way more about federal income taxation than the average bear.

Well, whether or not “the tax code has been structured to favor the rich” is certainly a matter of opinion. My definition of “favor” doesn’t encompass the present tax situation since the bulk of the tax burden falls squarely on the shoulders of the rich while the poor pay a relative pittance, which (just to be clear) I’m not saying is inhrently unfair.

Um, no, I’m just saying that it’s not that exciting a revelation. It’s like saying “Bill Gates was speeding yesterday and didn’t get caught.” So what? Lots of people were speeding yesterday and didn’t get caught; it’s only the author’s opinion that Bill Gates was in fact speeding yesterday; and even if it’s true that Bill Gates was speeding yesterday it only shows that the cops failed to catch one speeder yesterday, it doesn’t prove that the cops will not arrest rich guys who speed.

55

Can you define what you mean by “effective federal tax rate”? And are you saying that those who earn $60,000 per year pay a higher percentage of their income in taxes than do those who earn $25 million a year?

56

Effective federal tax rate = total federal taxes / total reported income.

Well, it is Johnston who said this. I am taking him at his word that this is true. I haven’t seen the actual data myself.

57

The cite that John Mace (dated 2001) gave early on for the basis of this debate, puts the cut-off for the “bottom 50%” at $28,528, yet I did not see your sources. You decided to compare starting salaries of teachers to the average American salary from your source that you did not provide to this thread, when you should be comparing average teacher salary to average American salary. With the cites I provided, I showed that the majority of teachers (dated 1999-2000) and truck drivers are not in the lower 50%, because they were earning over $28,528.

BTW, $35K-$40K is quite a sizeable range to call it an average American salary. Sounds like there is a lot of uncertainty in your cites, when John Mace’s source was more precise and obviously, more reliable because he provided the cite in the first place.

That is my point.

58

Well, the only way your (and Johnston’s) statement is not completely and utterly ridiculous is if you define “income” as something other than “adjusted gross income,” which is the tax term for the amount of income to which the tax rate is applied. And in that case I’d argue that what you are doing is illegitimate.

To reiterate, it is ludicrous to say that the person who has $60,000 of adjusted gross income pays a higher percentage of such person’s income in taxes than does the person who has $2.5 million of adjusted gross income.

The whole debate usually centers around how much more of their income the richer person should pay. I’ve never seen someone actually say the richer person’s percentage is less (which would mean that the federal income tax is regressive).

I think you’ve misunderstood something along the way here.

Way to fight ignorance, bub.

59

It might also be a matter of comparing AGI (adjusted gross income) with raw income numbers. AGI is what you use to actually calculate the amount of income tax due. Raw income can vary considerable, especially if there are dependents.

60

Or you can take advantage of lots of tax avoidance loopholes <lol>.