Yep. My bad. I used the total expected revenue for 2003 instead of the revenue for individual income taxes. That number is about 794 billion. Of which 11 billion is about 1.4%… Also it appears that my I dropped a decimal point one place left in my last calculation. I should have put .6% instead of 6%. If I had not made that second mistake I would have caught the first one. As it turns out, two wrongs make pervert a bad boy :smack:
In other news, it appears we are comparing apples and amigas again. The percentages from the book we are talking about seem to be focusing exclusively on personal income tax returns. I wonder what happens to them when we add in the other revenue sources. This ratio (groups tax rate) divided by (average or total tax rate) goes up for every income group above the bottom This cite. At least when you look at total income share vs total tax share. This seems to be because while the share of social security tax goes down as income goes up, the share of corporate taxes goes up even more as income goes up.
I suspect that the author is looking at income tax, or income tax combined with social security tax and ignoring (or perhaps reassigning them) corporate taxes. As we saw from the graph in the last cite of mine this can reverse the progresivity of the tax rate. As you read the book, would you look out for this? I’d appreciate very much hearing your thoughts.
Thanks again for noticing my error. I will take another turd off of your list.
Well, so far Johnston has focussed almost exclusively on income taxes so it hasn’t come in.
I don’t know what the solution is for how to incorporate corporate taxes. I assume from your description that CBO is reassigning them on the basis of assuming they come off of dividends and capital gains that the rich get? It is interesting because conservatives always try to claim that higher corporate income taxes just get past on to the consumer, in which case they would actually be regressive (like sales taxes). Of course, I think this is too simplistic. But, I do hope that CBO isn’t going to the other extreme and assigning 100% of the corporate income taxes to people’s dividends and capital gains.
How many do I have left?
Just to point out, erislover used to be named aynrandlover and probably came in with stronger libertarian leanings than you and look where he is now. So, there’s hope for you, yet!
They say "* Taxes on businesses were attributed to households. […]Economists find less consensus on the ultimate incidence of corporate income taxes. For this analysis, CBO considered the taxes to be borne by owners of capital under the assumption that the taxes affect the way capital is allocated between the corporate and noncorporate sectors of the economy, which influences the rate of return on all capital. CBO allocated corporate tax liabilities to households in proportion to their income from interest, dividends, rents, and capital gains.*
They seem to have assigned them based on an assumption about ownership of capital. I think this is quite reasonable. If you assign corporate taxes to customers, you should also assign some portion of proffesionals taxes to the users of those services, no? Certainly, higher corporate taxes would make goods more expensive. But higher taxes on doctors, for instance, might make health care more expensive as well.
I’m not sure. I intend to testify that you made me do math when I did not want to. I will, however, in your defence, remind the judges that you also helped me when I needed it. We’ll let them determine who many that leave you.
Just to answer my own question, from your CBO site:
I must admit that I am not too keen on this assumption. While I have never agreed with the conservative’s argument that higher corporate taxes are all just passed on to the consumers in the form of higher prices (when conservatives want to make the point that we need to lower this taxes), this counter-assumption that the CBO makes does seem a bit too extreme the other way to me. I wonder if there are any economics studies that weigh in on how this should be assigned.
I know I am going to get in trouble for this, but I have to ask.
If you were President, jshore, what would you do if you felt strongly about this assignment of corporate tax issue? Might you require that they change the assumption?
Well, I don’t think the President can control the CBO since it answers to Congress. But, to answer your question more in a hypothetical sense, if I felt there was a better way this could be done, I might ask them to study it or ask an independent party (NAS or the equivalent for economics) to weigh in on the issue. But I would not simply try to force them to do what I thought they ought to do.
