Over all, states get 26% of their revenue from income taxes and the rest from sales taxes, property taxes, and fees.
In the PDF it shows that state and local taxes are actually regressive for all income quintiles.
http://www.scribd.com/doc/6674234/Citigroup-Oct-16-2005-Plutonomy-Report-Part-1
This is a Cit-Group plan dent to rich customers
!. World is divided in 2 groups-Plutonomies -where economic growth is powered and consumed by the wealthy few and the rest. The characteristics of Plutonomies are disruptive technologies, creative financial innnovations,capitalist friendly governments, international use of immigrant band rule of law.
There is much more but they describe how the government and the economic control will be a tool of the few .
This is long but, it is Citi-Group laying out their plans . If this doesn’t shake you up, I don’t know what will.
You’re correct, it has nothing to do with fair and unfair. I believe churches aren’t taxed to ensure that government doesn’t establish one over another through taxation
The government can create an infinite number of unfair tax policies - this thread is about what is a fair one and I’m wondering about a basic principle we can use to determine if a tax policy is fair or not.
But market segmentation only works because of marginal utility. Your barber doesn’t look because you self select a barber targeting your level of income. Haircut prices can vary my an order of magnitude at least, and the pants I mentioned are 20xs as expensive as ones you can buy at Target. Unless their target market is pants fetishists, we can assume they are bought by people for whom they are about as expensive as normal pants for you and I. And I’d bet the people who buy them do not make 20X what we do - but they have enough spare money so that buying them is not a hardship.
Always happy to learn something which why I enjoy GDs. In this case it wasn’t you offering useful information
, well that must automatically be bad. I did note that under a flat tax without all the loopholes and special case deductions the wealthiest still pay a lot more taxes than anyone else right?
We’re also just talking income tax rather than other forms of state and Fed revenue.
the deductions would benefit everyone equally and would not eliminate all taxes, so free ride is just ridiculous.
that and the principle of marginal utility does give me something to consider. I’m glad *somebody * made the effort to offer some information, which I kinda expect in GD
I’ll thank you not to put words in my mouth. Lowering taxes during a boom does not automatically mean no surplus and raising them during a downturn.
How about offering some worthwhile information rather than information free criticism?
Now that’s interesting. Help me understand the graphs.
In the first graph the first total taxes column is a % of taxes collected and the second is % of taxes paid correct?
Is the 2nd graph also total taxes paid compared to income? It seems the fourth group pays almost as much as the top 1% {because they make up a much higher percentage of the population?} but the top group still pays more taxes than any other group. Is that correct? It also seems that the fourth and fifth group combined pay more taxes than the top 1%. Is that also correct?
So when someone presents some facts to show you’re mistaken and we’re close to a flat tax in a very convoluted complex way, your response is “Yeah but cosmosdan was more wrong”
The problem is you’re still wrong because the pdf includes all taxes and I was only referring to income tax. Not sales , property, or even really state income tax ftm since we don’t have one here in TN. It does seem in concept alone , we’ve gravitated toward the flat tax idea.
That’s not counting UHC which I would support as a non deductible percentage and educational opportunities for everyone as a boon to all society.
No, you don’t understand, I was agreeing with the other poster. Despite all the wailing by conservatives, the rich do not pay an undo amount of taxes as a percentage of income. For Federal taxes only, the rich pay a greater share of taxes than their share of income, but not a tremendous amount more. What DSeid’s graph showed is that if you include the regressive state sales and property taxes then the rich really don’t pay more taxes than any group except the bottom quintile, and the richest 1% pay a smaller percentage of their income in taxes than the 90-95th percentile.
So I’m not sure exactly what you think I’m wrong about. If we have a flat tax at the federal level then the rich will pay less than they do now and the middle class will pay more. Do you not agree?
I really have no idea of what you are talking about. A deduction of the first n amount of income does not benefit everyone equally. In your example the family was exempt from the first $40K of income. A family making less than that will pay no taxes at all. Isn’t that the free ride that you conservatives are complaining about. Today, even if they paid no federal income tax at all, they pay 7.25% of their income in FICA taxes.
Under your plan a deduction of $40k from a person making $100k means that they only pay taxes on 60% of their income, while a person making $1M pays taxes on 96% of their income, and someone making $100Mm pays taxes on 99.6% of their income.
It is presenting figures for total taxes collected, not just income and not just Federal The first column shows what percent of the total income produced and of total taxes paid each group produces/pays. So the top 1%ile is shown as having produced 22.2% of the nation’s income and of having paid 23% of the total tax burden; the next 4%ile is producing 14.3% of the nation’s income and paying 15.5% of the total taxes paid; and so on. The second column is what percent of each group’s income goes to taxes (Fed, state/local, and total all listed). And then they show those figures graphically in that order.
well this
I was referring to federal income tax only not SS state or local.
In light of this new graph info it appears to truly assess “fair” we have to consider taxes as a whole, and oddly enough, if that info is accurate, we are in the flat tax ballpark. I agree that changing the federal income tax without also addressing other tax issues that take their toll on the working masses, is unwise.
First, because I entertain the concept of a flat tax in the interest of fairness, it’s incorrect to assume I’m a conservative. Most conservative’s including my conservative friends would call me pretty left of center but it does depend on the issue. Although I prefer to live in a society where we offer aide and opportunity to the less fortunate I also see the need to steer people toward personal accountability. We don’t want to be a society that enables bad behavior on either end of the spectrum.
We are reminded fairly often on these boards that poor families that pay no income tax , or even get more back than they paid in, still pay taxes in other forms. So, I was not advocating a free ride for anyone. I think promoting the idea that almost everyone ought to pay something to reap the benefits of our society promotes that sense of personal responsibility.
Sorry I have been snarky.
Do you think that if more people were aware of the real impact of the tax code, rather than the common perception that the rich pay way more than their share, that it would change the attitude of groups like the Tea Partiers? Or for that matter, do you think that most people really know how much Federal income tax they pay? I know that I am always surprised when I look at the actual numbers.
It may not have been clear, but in my figures I was including SS and other payroll taxes. Because SS tax is capped, it makes the tax system less progressive. Often times people will look only at income tax, without realizing that 75% of Americans pay more in SS than they do in Federal income tax.
One of the easiest changes we could make to the tax code is to lift that cap. Historically that has not been done because of the desire to keep SS separate, and because SS benefits are capped.
I actually agree with that. Even if it is a realtively small amount, I like the idea that everyone pays something. If for no other reason, I think it would help create a sense of community.
Accepted and thank you. I am embarrassingly ignorant of the big picture and the numbers concerning taxes so participating here was educational for me.
I think the big picture is different than that. I have several conservative friends who are terrific people and their frustration seems to be the government taking the money they work hard for and earn and giving to people who don’t earn it. It’s not that they don’t want to help others. They do. One even started a small charitable organization. It’s just that they think the government as a whole is horrible at it and all the entitlement programs get abused and discourage personal responsibility.
I think what they may not realize is how small a number that abuse is in relation to other economic issues. One friend is in the 150k annual income bracket and we’ve talked several times about the % he pays vs others. It hasn’t stopped him form having a fabulous home and lots of toys but it still bugs him as unfair.
I do agree that people are woefully ignorant of how taxes work. I know I got a bit more back this year than last but I saw a video online of Tea Party protesters being interviewed and denying that working families got more back.
Really? Wow.
Is it also true that people get back all they paid in a more on a pretty regular basis?
Right, a sense that, since we share this society everyone should contribute what they can.
Incorrect. You’ve narrowly connected “marginal utility” to the quantity of money. This is not necessary. One can have marginal utility simply based on how different people prioritize their usage of money. Therefore, market segmentation can still work even if everyone was given an equal amount of money.
You give $10,000 to both John and Jane. They have an equal quantity of money.
John, happens to really like movies.
Jane, happens to really like fancy clothes.
Market segmentation can still be applied because John will pay more for a premium Blu-Ray disc than Jane. Jane will pay more for a hat than John. It’s the buying preferences and not the quantity of money that lays at the foundation of marginal utility.
Therefore, your characterization of “market segmentation” being similar to progressive taxes is wrong. Likewise, it is entirely reasonable to see progressive taxation as “more unfair” than a flat tax because the progressive tax is connected to “quantity” of money.
There are good reasons for progressive taxes but “marginal utility” is not one of them.
Of course tax cuts can raise revenue, just as tax raises can lower it. Historical precedent and common sense says so (otherwise we’d all be on board with that 99% tax rate). Unfortunately for the idealogues of the right and left, neither always does so, and it’s usually impossible to predict in advance.
You’ll find no defense from me of Bush’s budget policy, but it must be pointed out that he did not merely cut taxes – he also raised spending massively, even if you exclude the military. Bush was running a deficit even if the tax cuts never happened. Obama is just increasing spending even faster yet, while raising taxes.
And no, that’s not one-time stimulus: Even if we assume absolutely everything goes according to their plan, the current administration will not balance the budget. Not in five years, not in ten years, not in any planned future at all. And of course, it won’t go according to plan. There will be be another downturn, or another war, and again, the cries will go up for “one time” spending to deal with this new, “unexpected” crisis.
This is not a partisan point. Bush was shitty too, and I expect that whatever Pub is next in office will be shitty. Even if my wet dreams come true and we elect a serious libertarian, I’d expect him to be hamstrung by congress, the bureacracy, corporate interests and ultimately, we the people, who are addicted to our government cheese. I expect we’ll keep on going until it all goes south, and then, like Greece, we’re going to be shocked and angry when people decline to keep funding our profligacy.
While I’m all for tax reform (massive simplification, including combining ALL federal taxes, would be my biggest wish) unless and until we get our spending under control, fiddling with the tax code just determines how quickly or how slowly we sink.
Which of course takes me off the topic of this thread …
http://www.fiscalcommission.gov/ Time for you kiddies to get your hackles up. There is a bi-partisan Fiscal Commission that is intended to prevent financial disaster. They say time is of the essence. One member Reuschauer says the longer reform takes, the greater the chance for financial collapse.
Bernanke said it is important to make the tax system fair and equitable, while considering how much revenue is needed.
Other members include Budget Director Orzag and Former CBO director Penner.
I feel sad that you guys can not see what has been done. Nor do you want to face what it will take to fix it. But we are not out of the woods.
This ignores the fact that the utility of money diminishes the more you have of it.
Or to put it another way: Take away 30% of a rich man’s income and he’s still living a life of luxury. Take away 30% of a poor man’s income and he’s out on the street.
A flat tax is only “fair” for what I would consider an overly simplistic definition of “fairness”.
So if the richest man in the country paid $1 because that is all it cost to run our government, you would have a problem with the fact that he was carrying the entire burden?