Yeah, if you can afford a Ferrari or a Mercedes, they you should pay a bigger share of society’s police costs; you benefit more from a social system where things are less likely to get stolen, where unlike some South African neighbourhoods you didn’t need a 10 foot barbed wire fence around your suburban home, or flamethrowers under the car to prevent carjackings. (The latter didn’t work so well, apparently the result was to encourage thugs to shoot you from a relatively safe distance and then approach the car. )
Before anyone comments about crime rates - boo hoo, compared to many places in time and history most North Americans are very safe and their possessions sit unmolested while they are at work. In many other societies, the filthy rich need to pay for an army of bodyguards simply to move around; kidnapping of the children of the rich is a common crime. Here, the most that bodyguards usually need to worry about are paparazzi.
Similarly, the rich benfit from the road network - not just driving, but also they buy more and all that extra stuff is delivered by road. They fly more - so should pay more for airports and air traffic control. Etc. Even welfare and unemployment; the money society distributes to the unfortunate (or just plain lazy) means they are that much less likely to form rampaging mobs just to find food. As the french aristocrats found, the rampaging mobs tend to go after the rich.
The rich use more of society’s services and benefit more form society so they should pay more. Even if Bill Gates paid 75% income tax (not on assets, just income) then he would still be a multi-billionaire.
So the top 18% of income shoulders 28% of the tax burden. And as the rich have gotten richer their share has increased as well. Yeah, that’s what I’d expect with a progressive tax system. Seems fair to me and I am also at a high tax bracket.
As to your question, CP, I have no idea what percent of the budget of France, or England, or Canada, or where ever, is paid for by the top 1%, or by the top 18% of all income, so I have no idea how paying 28% of the nation’s budget compares. Do you know? Or are you just making it up? If your claim is that the wealthiest 1% of Americans pay more of their nation’s budget than do the wealthiest 1% in other countries, or have a bigger share of their incomes going to the government, then I’d ask you to support that claim, not ask me to disprove it. I really doubt it but no one has claimed anything about that issue other than you so the burden is on you to prove it. What I have shown to you is that an individual wealthy American pays less of his or her income to taxes in America than does the individual wealthy individual in most of the world, at least according to Forbes and several other sources.
If you object to the idea of the earned income tax credit, if you want to argue that the poor and the middle class should pay more of the total tax burden because having a progressive system is, boohoo, unfair to the very rich, then argue those points. But the fact is that Americans, including the wealthiest Americans, are taxed sparingly compared to the wealthiest in other countries of the world. Honestly if they are so much wealthier than others of the world that it adds to a greater portion of the total bill then I really don’t care.
Even without getting into whether or not a progressive tax is morally just or whatever, I’m just saying that the stat that Chief Pedant keeps throwing out is completely useless for comparing our tax burden to other countries. It’s a number that’s highly dependent on the skew of the income distribution. If Bill Gates and I formed our own country, the top 1% of wage earners would pay a shitload more than 40% of the taxes, and that factoid would say exactly nothing about how high taxes are in this hypothetical country.
Not quite that but here is a pdf poster giving some information about income inequality for many countries. The measure is how much greater are the earnings for the top 20% than the bottom 20%. The US is first by far with the top earning 8.5x the bottom. It is 7.2 x for the UK, 5.2X for Germany, and 3.4 X for Japan. There is also a chart showing how inequality for the UK shot up under Thatcher.
This article (also pdf) gives some information on income distribution in England. On page 127 (page 5 of the pdf) shows the income share of the top 1% pre-tax is 13%, post-tax is just over 10%. On page 130 we see the distributions for several countries - with lower numbers being more inequality. The US is way ahead, with a great increase in inequality during the Reagan years. There is some discussion of tax rates later on, but I couldn’t find a diagram or a table giving the information you want.
But in any case with the income of the top 1% so much lower overseas, we’d expect the amount they pay would be lower also. If you want to equalize the tax burden, a good thing, all you need to do is to support policies that tend to equalize income.
You should also be asking what is the marginal utility of an extra dollar for the top 1% versus someone in the middle, let alone someone at the low end. If it is more less than half the average, the top 1% are getting off easy. I rather expect it is much lower than 50%.
I took his numbers at face value. Silly me. But, since the top 1% have a share 50% greater than that in England, which is now a country with relatively high income inequality, his question is more or less meaningless, since it assume that the top 1% have equal shares across countries.
True, and this is why Lichenstein or Monaco or the Bhamas or any other tax haven can operate. A yatch-load of extra billionaires contributing a pittance to the local economy is just icing on the cake for any regular economy - especially if they don’t actually live there to add to the burden of services.
Many people seem to be up in arms over Obama’s promise to tax people higher if the make more than $250,000 a year. How many people here come CLOSE to $250K/year? When I worked at a place where my bonus-induced pay peaked over $100,000/yr, I suspect there were only 2 or 3 people out of the 1500 there who made more than $250,000. Of course, the head office would be a different story…
And the 47% who paid zero taxes? There really are not that many tricks to get out of paying actual taxes on money you take home to spend. So think what little you have to make and how many kids you have to support with that little money to pay zero taxes. Minimum wage earners? Seniors with only Social Security? I seriously doubt they could pick up the tab so millionaires could pay less.
Of course, minimum wage is low so millionaires can keep more of the income others earn for them; another benefit society provides the rich.
Yup. If true all it would mean is that the top 1% in America have so much more of the income coming to them that even with a lower tax rate than upon the wealthiest of other countries they still end up paying more taxes. Which makes what point?
Anyway the canard here is the bit that implies that the lower half, and in particular the poor, get off without paying a sizable chunk of taxes. That our progressive taxation system leaves 40% or more getting a free ride carried by the wealthiest. That is a crock (warning: pdf).
Interestingly enough, according to this source the group that pays the biggest share are the moderately well off, percentiles 90-95, with an average income of $144K. They pay at a rate of 32.2% of their total income to total taxes. But the next 4% up and the next 10% down also pay a larger percent of their income to taxes overall than does the top 1%. And the lowest 20% of income earners still pays 18.7% of their income to taxes overall.
Sigh…your liberal knee jerk reactions are kicking my shins. In self defense I will try one last time:
My posts refer to the assertion by Der Trihs that the wealthy in the US are not taxed differentially:
Here’s that statement from Der Trihs again:
“Given that America is known for its low taxes, especially on the people with the most money that is highly unlikely…” (emphasis mine)
Now then…ahem…
THE US DOES NOT HAVE LOW TAXES “ESPECIALLY ON THE PEOPLE WITH THE MOST MONEY.” IT MAY HAVE LOW TAXES OVERALL, BUT AS A MATTER OF FACT, THE WEALTHIEST 10%–BY INCOME, AT LEAST–IN THE US PAY MOST OF THE FEDERAL TAX BURDEN. THIS IS PARTLY BECAUSE THEY HAVE THE MOST MONEY AND PARTLY BECAUSE OUR PROGRESSIVE SYSTEM ASSIGNS TO THEM AN AMOUNT ABOUT DOUBLE–AT LEAST FOR THE TOP 1%–IN PROPORTION TO THEIR INCOME.
Read that at few times, put it in your liberal income redistribution pipes, smoke it, inhale it, digest it, and stop with the blather over these points, which I am NOT making and am uninterested in debating in a GQ thread:
The US has lots of rich people, who should be paying even more in taxes.
Sort of a matter of opinion. Utterly unrelated to the point in caps above. Suppose the top 1% are all Bill Gates and everyone else is the janitor. Suppose Bill has a trivial marginal tax rate but is so filthy rich his group’s 1% is 60% of all taxes. HIS GROUP STILL PAYS MOST OF THE TAXES. The fact that an assortment of fiscally liberal re-distributionists think he should pay even more for his “fair share” has NOTHING to do with the numbers showing his wealthy group pays most of the taxes, and calling them “low” only has any meaning if it’s your opinion they should be higher. It has no meaning when you look at how much money you extracted out of the guy. You only think it’s “low” cuz he has lots left to re-distribute and your paradigm is that society should be allowed to take that, too. :dubious: There are lots of taxes besides Federal Income tax (such as Social Security and real estate taxes.
Yes there are; yes there are. Most of these are not directly progressive, although their tax deductability can get phased out. The rich still pay more of them in absolute numbers; a rich guy typically owns a more expensive house,e.g.
The only thing that brings any credence to the idea that the wealthy in the US pay “low taxes” is an a priori assumption that taxes should be progressive and that from each should come taxes according to his ability to pay. This is a lovely topic and perhaps suitable for Great Debates (the opposing view wouldn’t get far on this board) but, sadly, is unrelated to “high” and “low” taxes, and which chunk of folks pay them. In terms of total federal tax in the US, the top 1% pay about 40% of Federal Income tax and about 28% (by DSeid’s cite, IIRC) of all federal taxes. That does not lend credence to an idea that taxes for the wealthy are somehow “low” unless you buy into the notion (it may be genetic for fiscal liberals) that tax must be progressive to be considered high or low. That way if the guy making a billion pays a million in taxes and the guy making 100,000 pays a thousand in taxes, you can complain the billionaire’s taxes are “low.”
And before you get too floofed up, I believe in progressive taxes. As I’ve pointed out, the top 1% pay double in Federal Income tax relative to income; the bottom 47% paid none at all this year. Now that’s Progressive!
Oh yeah; one thing more. Europe, at least, has higher tax burdens. However this is because a lot more of them pay a lot more taxes. I am unable to find a system anywhere where the top 1% carry as high a proportion (relative to income) or an absolute percentage of the national tax burden as the US. I do not say it doesn’t exist, but if it does, I need help finding it. Our rich–and thank goodness there are so many of them–are carrying us (well, and our grandkids, too, but that’s another GD…). I’m just moaning about this notion that our rich have “low taxes” as if they are skating, somehow and as if our system is not progressive.
Now get out there you paupers, and pony up some more. I need my moolah for my yacht.
Sorry, this is nonsense. Taxes must be progressive to be considered high or low? That makes no sense at all. Let’s use your (non-progressive) example:
I’m going to go out on a limb and say that in this example, everyone’s taxes are “low.” The effective rate is one tenth of one percent. That is rock bottom low. And not because it isn’t progressive. It could be a progressive tax going from 0 to 5% and guess what? That would be “low”.
Meh, I get called liberal, I get called conservative … all I am is a stickler for what is accurate. And in GQ the facts are what matter.
DT’s statement. We agree then that the first clause is completely accurate, as you shout “IT MAY HAVE LOW TAXES OVERALL”. As to the second - I think by now you accept my cites (such as Forbes) that show that a wealthy individual will be taxed less in America than in most other Western countries, and for the same level of wealth sometimes dramatically so. And that the highest marginal rate is lower now than it has typically been in this country. What else does “is known for” mean other than relative to the circumstances in other countries (or perhaps to our own country’s historic norms)? If you choose to (mis)read that phrase as that the wealthy are taxed low relative to the poor, then I’d question your reading comprehension skills but not argue the point. No, they are indeed taxed at a higher rate than the poor are.
I don’t know what is in your pipe, but you must be smokin’ something potent. This is a matter of what the facts are, not what your (or my) politics are or are not. Per my last cite, looking at the complete tax burden (all Fed to local), the top 10% is actually just shy of half of the tax revenue stream (49.4%) and is also about the same of the total income stream (46.6%). If you want to look at the top 1% of earners then, per that cite, they cover about 23% of all tax revenues on 22.2% of the total income (2008). You don’t want to count state or local taxes for some reason? You limited yourself to Federal you say? Fine. My previous cite showed that just looking at the complete Fed taxes picture gave that top 1% credit for paying 28% of Fed tax revenues while producing 18% of the county’s income (2005 numbers). The 2008 report had it at 22.2% of the total income and 23% of the total tax revenues. So your claim about the top 1% being assigned double relative to their income is a falsehood. Your continued conflation of income tax with total tax burden after the error has been pointed out to you multiple times bespeaks a certain disingenuousness about this subject apparently motivated by a political agenda.
Agreed that who should be paying what is a matter of opinion. And agreed that that debate is best had at another location. The issue related to your “point in caps above” is merely that the richest are indeed taxed relatively low per unit income in America compared to most of the rest of the world and to America’s own historic norms, and that no matter how many caps you use, NO, THE TOP 1% DOES NOT PAY MOST OF THE TAXES.
And NO, THE RICH DO NOT PAY MORE SOCIAL SECURITY AND REAL ESTATE TAXES IN ABSOLUTE NUMBERS. They pay, for example, a mere 4% of the total Social Security and Medicare revenues. That aint “most”.
Please run for office. I’d vote for you in an instant. This sort of fact-based analysis is what the press should be doing instead of having two angry people yelling at each other, with at least one side lying through their teeth.
The problem is that nobody really knows what a Laffer curve is supposed to look like, and efforts to quantify it with empirical data to determine the optimum revenue-maximizing level of tax have yielded widely varying results.
Wrong. Here is a newer comparison by Forbes: 2009 Tax Misery & Reform Index. Only USA/Texas is in what you might call the “lower grouping.” USA/Illinois is near the middle and USA/New York City is in the top third. Most U.S. states do have progressive personal income tax rates, unlike Illinois or Texas, so they would be higher on the chart than Illinois. This chart does not account for the health care bill, which will move the US higher. And it does not account for the likely expiration of the Bush tax cuts, which will move it higher still.
It is unclear to me if that newer chart addresses the same specific question, looking specifically at the tax burden for the wealthiest. But let us assume it does.
In that chart overall “USA” is placed in the lower third. And indeed USA-Texas in in the lower grouping. Of the Western nations USA-Illinois is only above Ireland and Australia and is below all other Western countries listed.
One out of three USA-(state)s listed is indeed at the edge of the upper third and above several Western countries (as well as still below about as many others): New York. Pertinent to this op it is interesting that that (relative to other American states) higher tax burden of the wealthiest has not hobbled that state which is, to this day, still home to our financial centers.
Indeed, no fact based analysis of how things are includes speculative predictions about what will or won’t happen in the future.
Great Debate time…
A person on minimum wage or near it - let’s say $7/hr - makes $14,000 a year assuming they actually get full time work. What percentage of their income do they pay in the USA? How much if you count Social Security?
(I’m from Canada - here they would pay close nothing in taxes and maybe a small percent of the $3000 max. of Canada Pension and Unemployment Insurance - perhaps $1000.)
The average industrial wage in Canada is about $40,000; I assume the median wage is not far off. This person will pay $3000 for CPP and UIC, plus probably a little less than 20% of their wages in fed/provincial income tax… So about say, $10,000 give or take in payroll deductions.
What taxes would a person making $40,000 pay in the USA? How much more should they pay so that a millionaire can afford a bigger yatch? Again, keep in mind the taxes in Canada full cover health care costs that your bottom-of-barrel citizens have to arrange themselves. I assume a $40,000 household does not qualify for Medicare there?
And again - how many dopers here make more than $250,000 a year personally or per household? Just how big is this group that is going to pay somewhat more to ease the burden for the Medicare crowd?
The problem is that society is so complicated that there are huge numbers of services that only a centrally-controlled public service can easily (efficiently?) provide. The illusion that most public services are rife with waste is far from the truth, and in my experience lage corporate organizations - that the right would love to have come in and replace those government services - are no better organized.
On average, meaning that single, married, no kids, lots of kids, abled, disabled, etc., someone with that income would pay several hundred dollars in taxes to the Federal government. Virtually all of it would be payroll taxes, probably offset by a negative Federal income tax.
Again, averaging out kids, no kids, married, not married, the average is about 10% in Federal taxes, so about $4 grand. They would generally not qualify for Medicaid, which is government sponsored health care for poor people.
You didn’t ask it, but someone making this amount would probably pay about 25% in Federal taxes.
Please note that I haven’t found a good, authoritative source for how state taxes break out by income levels. My WAG is that the poorest would pay a few percentage points (primarily sales taxes) and the very upper end would pay in the neighborhood of 15%, depending heavily on which state they live in. (Citations for Federal income tax burdens come from my previously posted cite.)
Margaret Thatcher inherited a top marginal rate of 83%, and the top British wage earners were all buggering off to America and the Bahamas to avoid paying it.
That is not exactly the case here - though I suppose you could use the Thatcher government as evidence that the top of the Laffer curve is somewhere between 0 and 83%.
Tax evasion is much more sensitive to changes in levels of enforcement enforcement than to chamges in tax rates (especially when youa re talking about 33% vs. 25%).
There are industrialized nations where the top marginal tax rates are in the 10% - 15% range where the tax evasion is rampant. Raising marginal tax rates from 35% to 39.6% is not going to have a noticable effect on compliance.
