Sam isn’t worth arguing with on this. He’s a cultist. He believes his ideology over any amount of data.
Hell, so am I. I’ve seen ample evidence that my ideology of peace, love and justice is doomed to fail. I don’t give a shit. Hippies can be surprisingly stubborn.
I haven’t seen a raise in fifteen years. Of course, I also understand why and haven’t demanded more either…
Speaking of sluggish… 
Even I, with no union help, got a raise 2 years ago; not this year, as it was clear that it is better to keep one’s head down in an economy like this one.
The interstate highway system and the transcontinental railroad are the two largest we have ever had. You think these were failures?
Roughly 12% of the U.S. work force is unionized.
2 CEOS stands in for the top .2% of income earners - the very rich. If you want to be more accurate, we can re-do the numbers using the tax data for the top 1% of all income earners - the top 1% earned about 20% of all income, but they also paid 37% of all income taxes due to the progressive tax code. But fine, we can use that.
So…
We have 1,000 cookies.
10 people get 20 each
240 people get 1.9 cookies each
250 people get .8 cookies each
500 people get .25 cookies each
That’s a roughly accurate depiction of how income breaks down in America - the top 1% make 20% of the income. The next 24% make about 46% of all income. The next 25% make about 20% of all income, and the bottom 50% only make about 12.5% of all income.
So… to make it into the top 1%, you have to have a household income of about $385,000 per year. To make it into the top 25%, you only need a household income of about $65,000 per year. That puts a lot of public union workers in the top 25%.
Of course, to make this complete we’d have to look at how many cookies each group gives back in the form of taxes. So if we look at after-tax cookies, it’s more like this:
10 people get 15.3 cookies each
240 people get 1.6 cookie each
250 people get .75 cookies each
500 people get .24 cookies each
So how about we double the tax collected on the top 1%? How many cookies does that grab for us? About 45. Let’s give it all to the poorest half the people: Great, now instead of .24 cookies each they get .33 cookies each. You’ve hardly made a dent in progressivity.
Oh, but there’s a problem: The deficit is 190 cookies. You could take ALL of the cookies from the top 1%, and you couldn’t even balance this year’s budget, let alone pay for any extra services to the bottom 500.
That’s the math behind taxing ‘the rich’. There aren’t enough of them, and they don’t have enough money.
Let’s drop the cookie analogy and look at the raw numbers:
The top 10% of the population is defined as anyone making more than $114,000. In total, they had $3.86 trillion dollars in income in 2008, out of which they paid 721 billion dollars in taxes. If you doubled their taxes the most you could hope to claim would be another 721 billion, but you would have to raise marginal rates to unrealistic levels to do it, and the additional tax avoidance and reduced output would seriously cut into that. But let’s say you could raise $500 billion. That amount would not pay for a third of this year’s deficit, and it wouldn’t balance the budget in even the lowest projected deficit year in the coming decade.
That’s why the only hope for real fiscal conservatism is either to raise taxes on everyone, or to substantially cut government entitlements and services. There is no ‘progressive’ solution to this problem that can be carried out on the backs of the rich.
And notice I was being generous by including the top 10% - which is much lower than even Obama’s definition of the ‘rich’. Even if we go to the top 5%, the starting income is only $159,619. So if we tried to limit our tax increases only to people earning more than that, you’re now dealing with 2.9 trillion, of which 605 billion is already taxed. The total income of that group after tax is only about 2.3 trillion dollars. If you doubled their tax rates, you might get another 350-400 billion out of them if you’re lucky.
Of course, you’d be doubling the rates on people making as little as $159,000, which even Obama doesn’t want to do. So let’s go back to that 1% - people making more than $369,000 per year. There’s still a lot of double-professional middle class families in expensive cities in that group, but I think we can reasonably say that anyone with that kind of income isn’t hurting. Let’s double their taxes!
This group had a total income in 2008 of 1.68 trillion dollars, out of which they paid 392 billion in tax. Double their average tax rate from 23.27% to 46.5% (which would probably require marginal rates well over 60%), and now you’ve gained another $392 billion dollars. That’s only 25% of this year’s deficit.
And of course I’m being wildly generous here. Don’t forget that all these people also pay state and local taxes, and that you could never find the will to suddenly double the taxes paid by the rich. You’d be lucky if you could increase tax revenue from the rich by 20%. In which case you’ve raised a grand total of maybe $80 billion dollars, which is exactly 5% of the current deficit and would be no more than 15% of the smallest deficit predicted in the next ten years. It’s certainly not the wellspring of wealth that’s going to power the progressive transformation of America into an egalitarian society, is it?
So as I said - you can try to tax the rich more if you want, but you will never, ever be able to tax them enough to give significant benefits to everyone in the middle class, and certainly not enough to raise them all up to the level of pay and benefits the public sector enjoys.
Always? :dubious:
But no comment on how you leapt to the conclusion that california public utilities were operating on California state subsidies?
Sam, I think it’s disingenuous to argue that we shouldn’t tax the rich simply because taxing them doesn’t completely solve our problems. Many people understand that increasing the taxes on the top earners won’t be the solution. But it’s a start.
We need to increase taxes AND cut spending. What the Republicans keep suggesting is to NOT increase taxes and to cut spending on a few million dollar programs (NPR, Planned Parenthood) and completely ignore the 500 billion ton Defense Department in the room. Meanwhile they add money to the deficit while labelling themselves “conservative” and then use scapegoats like the unions as the root of all evil. It doesn’t work. What you end up with is a bloated mess of a government, no real way to pay for it, and everyone angry at everyone else until the whole system goes tits up.
So go ahead. Slash and burn government if you really want. But first you’re going to have to increase taxes because the system needs to be paid for somehow until we all figure out what cuts to make.
Then it’s a good thing I didn’t say that. What I said was that you can’t solve the budget on the backs of the rich, so you can’t avoid making tough cuts. So since you’re going to have to make tough cuts, it’s better to start as soon as possible.
Because one way or the other, they’re getting done. Your choice is whether you want to be part of the process or whether you want world events to simply take over for you. If you do that, the result will be harsh.
So lets take the cookies away from the public union workers…
…and give them to the CEOs! It’s only fair, really; all the cookies rightfully belong to them, and government had no business taking them away in the first place.
We can do multiple things at once. Raise taxes on the rich, i.e. not just income, but raise the SS cap, inheritance tax, and means-based testing to receive benefits.
More dollars there I think than you suggested.
The biggest problem with entitlements is that medical is rising at double digit rates. We HAVE to fix that.
The Defense budget should absolutely be looked at. We need to decide just how much welfare we really need to send the the military-industrial complex.
We can also stop subsidizing ALL private companies (so much for free markets) and close tax loopholes (any particular reason we need give tax breaks to companies to off-shore American jobs?)
You will have to do all of those things. So long as we’re clear that ‘the rich’ aren’t going to provide more than a small fraction of the adjustments that need to be made.
And absolutely you’re going to have to raise the retirement age, cut back on SS and Medicare benefits, and probably means-test these programs and add co-pays and such.
However… the political will to do this across the general population is going to be extremely difficult to build, and you damn sure aren’t going to build the political will for painful cuts to the general populace while protecting the even-better benefits of the public unions.
If you think the unions are losing support of the public now, wait until the government tells everyone else that they have to retire at 68, while public union people are still taking 70% pensions at age 59.
So like it or not, the days of cushy benefits and job security for public sector workers are about to come to an end. Your choice as Democrats is whether you want to get on board with the process and held manage a transition that provides the least pain possible, or whether you want to fall in lockstep behind the unions and kick and scream at every change until the day of reckoning, at which point you will have no input whatsoever, and the pain will be sudden and sharp.
There are no other options. My point with those last posts was to counter the typical brush-off that ‘the rich’ can take it on the chin for once instead of the poor working man. That’s the shell game the unions generally play, but the math just doesn’t work. You can tax the rich all you want, but at the end of the day the reality of the situation will be unchanged.
Yes ,the reason is they finance their campaigns and send in armies of lobbyists to get the regulations lifted and the laws they want snuck into bills. It is rare when a senator pushes a break to corporations or specific industries in the prime hours, in a bill for that specific purpose. Glass/ Steagal was removed in a late night lame duck session. That is typical.
So like it or not, the days of cushy loopholes and low tax rates for multi-millionaires are about to come to an end. Your choice as Republicans is whether you want to get on board with the process and held manage a transition that provides the least pain possible, or whether you want to fall in lockstep behind the Koch brothers and kick and scream at every change until the day of reckoning, at which point you will have no input whatsoever, and the pain will be sudden and sharp.
And the working man has been taking in on the chin for the past 30 years, working harder and seeing little to no benefit from it. The rich can’t take all the pain, but rarely in my life have I seen them take any.
amtrak.
Hey, I’m all for that! So I guess you’re against:
- $7500 credits for buying a Chevy Volt
- ‘Green Jobs’ tax breaks
- Tax breaks for hiring minorities or disadvantaged people
- Ethanol subsidies
- The State Export Promotion Grant Program
- The HIRE act, which gives tax breaks to companies providing health care benefits
- 17.5 billion in small business loan guarantees
- The $5,000 business tax credit for hiring new employees
- Small business investment tax credits
- Tax deductible employer health insurance
- Tax breaks for using solar, wind, and other renewable resources
- R&D tax credits
- Pollution reduction tax incentives
See, that’s another shell game the Democrats play - they trumpet all the tax breaks that business gets to prop up the claim that businesses are under-taxed, but they don’t tell you that they voted for a large number of them, and that many of the tax breaks they’re railing about were Democrat projects to attempt to push businesses in a more progressive, green direction. All of the tax breaks I listed above are either supported by or were initiated by the Obama administration.
As for subsidizing offshore activity, that’s not exactly correct. The problem is that the U.S. corporate tax rate is among the highest in the world. The effective tax rate is much lower because of all the special incentives..er. loopholes in the system. Because international offices and factories are taxed at much lower rates in other countries, the U.S. has created an incentive for companies to move their manufacturing and other operations offshore if they don’t qualify for the myriad loopholes in the tax system. For example, they can’t get the employee health care tax benefit if they’re hiring foreign employees in a foreign country. So suddenly the effective tax rate goes up.
The U.S. then charges the corporate tax rate when the money comes back to America, so many companies simply park the money offshore and use it to fund international operations, never bringing it back into the U.S.
The U.S. government probably loses about $20 billion per year in tax revenue from that. But what’s the alternative? Charge the full U.S. tax rate on foreign offices? The effect of that might be to drive the entire company out of the country. In any event, the problem is that this offshoring ‘loophole’ has been in place for half a century, and companies have built their business models around it. You won’t be able to undo it overnight without destroying a whole lot of wealth both in and out of America.
A better answer is to close the other loopholes, tax breaks and subsidies, then use the savings to lower the U.S. corporate tax closer to the world average. Level the playing field, then maybe companies won’t be incentivized to move their business offshore in the first place.
But that’s not going to happen any time soon, and even if it does it’s not going to get you anywhere near enough revenue to make a significant dent in the fiscal gap.
Aw, that’s cute, but it’s a total non-sequitur. Whether you tax the rich more or not, they’re never going to be able to provide more than a tiny fraction of the amount needed to fix the problem. Again, you seem to be trying to draw an either/or kind of balance here.
Tell you what - I’d support you if you agreed to the same deal Canada did to get its fiscal house in order - we raised taxes and cut spending, but we cut $7 in spending for every dollar in tax we raised. And that’s about the ratio you’re going to need if you’re only going to raise taxes on the rich. Get 80 billion from them, cut 560 billion in government spending, and you’re approaching a balanced budget in a few years.
Of course, the only way you’re going to cut 560 billion in government spending is to take an axe to everything. But hey, that’s what decades of big government idiocy has bought you. Now the problem is really big, and the solution will have to be really hard.
You do know that the top 5% of the population pays more in income tax than the bottom 95%, right? That’s despite having only about 30% of the income. That’s also why you’re going to have a hard time bleeding them for a whole lot more. Even the 20% extra I granted is likely to be far more than is politically feasible.
If you did anything close to doubling their taxes, well… Canada is right next door. And our top marginal rate is 28%, our capital gains and dividend taxes are lower, and we have no inheritance tax. For the last half of the 20th century we watched as our industry dismantled itself and moved to the U.S. and we lost our best and brightest doctors, scientists, engineers and business leaders to the U.S. where taxes were lower. Raise taxes substantially more on the rich in America, and be prepared for a brain drain and capital flight. It’s a global world now, and the trend everywhere else is to lower taxes on business and individuals alike. The U.S. is bucking the tide. There’s a limit to how far you can go.
Oh, and… The Koch Brothers? Seriously? What a useless meme. I guess Rush and Beck and Palin have been too quiet lately, and you’ve got to have someone to be the bogeyman.
Actually, I am in favor of dismantling a lot of the subsidies you mentioned and agree with most of “A better answer is to close the other loopholes, tax breaks and subsidies, then use the savings to lower the U.S. corporate tax closer to the world average. Level the playing field, then maybe companies won’t be incentivized to move their business offshore in the first place.”
But taxes are just one of the reasons companies move offshore. The bigger reason is so that they can pay foreign workers slave wages compared to what they would have to pay American workers.
I think that it is just more than just coincidence that as the number of union jobs gets smaller and smaller, so does the American middle class.