This is Interesting
As regular readers know, I have been arguing since long before angrybear.blogspot.com existed that Democrats should campaign on raising taxes on rich people (I was convinced in 1993 or 1994). One of the facts that all savvy people think they know is that people of modest means in the USA reject the proposal to soak the rich. Oddly those savvy people neglected to convince the substantial majority of US adults which has declared support for higher taxes on rich people in every poll on the subject in the past two decades (at least).
I assert that there has been a conspiracy of silence as the villagers and the MSM hide the fact that most US adults support higher taxes on the rich from almost all US adults.
This article by Rosalind S. Helderman is interesting as it shows that something has changed and something has remained the same. The article reports
Obama told residents that Republicans like Hultgren must be willing to raise taxes to reduce the deficit.
A few hours and 90 miles away, Hultgren’s own constituents had picked up the message, repeatedly hectoring the freshman congressman at a town hall meeting to raise taxes on the wealthy and corporations.
The extremely widespread solid majority view that taxes on the rich should be increased has (finally) been reported in the WAshington Post.
www.washingtonpost.com headline person(s) part MMMMCCXXVI
The headline is interesting too. I have repeatedly criticized the www.washingtonpost.com headline person (or persons) for extreme centrist (or frankly Republican) bias.
The article on how a Republican congressman’s constituents gave him two earfuls is entitled “Democrats’ road tour strikes back at GOP’s stand against raising taxes.”
Odd. After the first sentence, the article reports on a Republican’s road tour. The reported news is that this Republicans constituents strike back at GOP’s stand against raising taxes. But somehow Mr or Ms headline person thinks the news is that Democrats disagree with Republicans and want to raise taxes. The headline gives no hint of any recognistion of the fact that not all tax increases are the same and that taxes can be raised on rich people without raising taxes on non rich people (and frankly I guessed the article on the parties and taxes was based on the debate over whether to cut taxes on non rich people as proposed by Obama and blocked (so far) by the Republicans).
Frankly, I think the game is up and that the people with pitchforks are about to storm the fake Trianon village.
The fact that all such predictions have proven wrong in the past doesn’t give me enough pause to prevent me from hitting the post button.
Define rich.
Little John,
Here you go:
http://www.angrybearblog.com/2009/04/define-rich.html I started this one with: Define rich. Define rich! Define rich?
That’s the come back every time the issue of raising the income tax on the rich come up. What is unsaid is: Go ahead. Define rich. I dare ya! (Triple dog dare at that.)
And:
http://www.angrybearblog.com/2009/05/define-rich-part-ii-rat-race-and.html
This post starts with: Have you missed the phrase: Rat Race?
Wonder why we ask: Is the American Dream dead?
Could it be that in an economy where “rich” is not or will not be defined, the race is won and the dream obtained? After all, we’re all rich now!
Note the dates: 2009. Make sure you read the comments as that is where you will find a more complete answer to your question.
I don’t think your 5/09 blog answers LJ’s question. Let me try to rephrase the question.
Today we have 9% deficit. A long term goal would be for 3% (not zero). So we have a bucket to fill that is 6% of gdp. In 2012 that comes to ~900b.
The future is not too much different. We need to either raise revenues by $900b or cut expenses by that, or some combination
Of the 6% we need, how much should come from increased taxes and how much should come from spending cuts?
The war machine pillages 4% of GDP too much, that is more than reasonable.
And to me reasonable is the same % GDP that the Euro’s spend on war, which is about 20% of the share of GDP the US wastes.
The other 2% can be raised from the % of population which holds 20% of the nation’s accumulated net worth.
It occurred to me: The US used the SSTF excess receipts instead of war bonds and taxes to run the imperial occupations with their lamborghini war chariots propping up our unwanted puppets.
Cashing SS is not a deficit issue it is paying off the empire’s war credit cards.
@ bruce krasting…
Why do we have to reduce the deficit? Deficits add to national wealth. Isn’t that what many in the middle class need the most?
BK,
3.4 percent will be filled when the economy recovers. http://www.cbo.gov/ftpdocs/122xx/doc12212/06-21-Long-Term_Budget_Outlook.pdf
Follow the baseline (let tax cuts expire on everyone and do a few more things that I do understand are unlikely) and you are at 3.1 percent.
ilsm:
I agree. Cutting the military is one place to cut. There are two components of the military. One is the cost of maintaining the military at a level they are prepared to defend the nation. The other is the actual costs of military action. This is called OCO or Overseas Contingency Operations.
The OCO number is very hard to predict. Lets assume (hope) that the US ends its involvement in Iraq and Afghanistan (OCO-Big time!). Lets further assume that we don’t go to war for the next ten years.
Then we get back to the maintenance cost. The CBO projects that number to be 4%. That is an average number for the past 40 years (ex OCO). That 4% is what is in the budget.
Now you want to cut the number to zero. So there would be no Army, Navy Air Force or Marines. No Special Forces. No combat ready troops. Nothing.
That may be would you would like. I wish the world was “safe” enough to achieve this, but it isn’t.
I think it is impossible to cut this number by 50%. As a political matter that would be impossible. Lets be optimist and more reasonable and assume that the most you can cut out of the military is 25%.
That means 1%. So we have a 5% shortfall. Would you raise taxes for that full amount?
Rich is easy to define. Any one who makes more than I do. (For retired folks it may need to be anyone who has more than I do.)
This may sound like a totally snarky anwer, but it can actually be applied. Simply increase the number of tax brackets again. I am in the <25% on taxable income over $34,500 to $83,600> range (after itemized deductions), but I am clearly richer than those making $50K who are in the same range.
People who make their money as capital gains tend to be richer. I see little reason why someone who makes $150K in salary should pay more taxes than someone who makes $150K from investments.
As an aside: capital gains tax is very volatile. Basing a sustainable budget on a stream that includes capital gains is tricky. I have a notion that capital gains should be directed to reserves, but this would seem to amplify economic cycles, so I think my notion is flawed.
It should be obvious that I was looking at the 2021 column of numbers for a recovered economy.
You are asking the same rhetorical question when you ask how much would come from raising taxes. The question follows who to tax which begs who is rich.
As noted in the blogs, until we answer that, we can’t answer the other two questions.
And I doubt that LJ was asking “define rich” as anything other than the come back it has become when someone is asking “how much should come from tax increase”.
Also, how much of the 9% short is SS and medicare in your calculations.
When I start thinking about short falls, I first remove SS as it has a dedicated revenue stream. I also remove Medicare as it has a dedicated revenue stream. Yes it is short, but it should be delt with as the separate and unique program it is.
Without SS in the budget picture of $761B (2.109T 2012) defense of $881B becomes 65% of the budget (818/2109-761). Medicare/Medicaid is 35% of the $2.109T Take out the MC and defense is even greater.
Now what should we do?
I’m also for using the tax system as a means for equalizing power as is the prime directive of our Constitution. I also base my budget approach on the understanding that no one earns a penny without the many pennies spent by the government and the more pennies you earn the more government benefit you have used.
BOLB-Not much of an answer. I am interested in a number…an annual income number. And I am not asking to prevent further discussion. Sure, tax the rich. But does rich start at 250K of gross household income? Or is it 300K of AGI? It’s a relevant question that needs to be answered in a straightforward fashion. Do then polls Mr. Waldman cites have a figure in mind? I am not even sure if I can define rich. I’ve heard a lot about 250K but I am unsure if that’s gross income or AGI. I am just trying to get a feel for what is rich.
I’m not certain but I think the top 1% includes those that pay taxes on $375,000/yr adjusted income.
Eliminating the Bush II/Obama tax cuts for the upper income earners doesn’t provide enough revenue over a ten year period in relation to projected federal budget deficits on the order of $8-10.5 trillion (post-Budget Control Act of 2011), unless much deeper budget cuts occur.
The Congress needs to buck up and eliminate ALL of the BushII/Obama tax cuts and start rewriting tax policy, broadening the tax base. It’s already clear that the U.S. Government may forfiet part or all corporation taxation, thereby creating another revenue hole to be filled by you know who. The game is already in play in the halls of Congress.
U.S. Treasury’s published data indicates that elimination of Bush II era tax breaks over ten years would only represent 18.49% of total Bush II era tax cuts. It’s a laugh that Congressional Democrats only want to increase taxes on the upper income earners. What a con job, one that is not much better than the Congressional Republicans’ con job of no tax increases.
Who the hell do the Members of Congress think they’re fooling? Look at the mess we were in before the recession. The government was already on an unsustainable fiscal path which had been explained in writing by Treasury and CBO. They didn’t use invisible ink, though one might think so in blogland.
U.S. Treasury stated that elimination of the Bush II tax cuts in 2010 for upper income earners over the period 2010-2020 would result in additional federal revenue of $679.5 billion as compared to $3.675 trillion if all Bush II era tax cuts had been eliminated.
You can take a look at the following U.S. Treasury data for verification:
http://www.taxpolicycenter.org/numbers/displayatab.cfm?DocID=2785
and
http://www.treasury.gov/resource-center/tax-policy/Documents/greenbk10.pdf
.
bruce krasting,
ilsm is quite comfortable with a piper cub U.S. Air Force, outboard engine U.S. Navy, a .22 cal pistol and chopped Ford Pinto U.S. Army, and a U.S. Marine Corps that has to swim to shore. I’m haven’t seen him gut the U.S. Coast Guard yet, but I’m sure it’s on his list.
And forget about forward deployment. ilsm wants them playing out in the back yard so he can call them for lunch and dinner or send them to the store.
You probably think I am kidding. I. Am. Not.
MG,
O.K……so if I am reading this right….we will not be able to simply raise taxes and cut defense spending to equalize the deficit, assuming the we have an economy similar to the one we have now for say, the next 2-4 years, and that seems the most likely scenerio.
The lastest I have seen….a projection of 8.5% unemployment with 3% growth (conservatively) in fall 2012. This would lead me to believe that it will be 2014, the year ObamaCare is fully implemented, until we are going to have an economy that will provide enough growth to alleviate some of this pain. By that time, and with the ObamaCare burden, these numbers will most likely look worse.
So…if we will get a maximum of $3.5 Trillion (conservatively) by letting the Tax cuts expire, and we are supposed to get another $3.3 Trillion in cuts in new spending over the tens years, of course we didn’t get any real cuts from the baseline spending but we should have, and assuming we pull out of Iraq and Afghansistan and make some meaningful cuts to the defense budget…..that still leave us with a major problem!
The President is going to come back from vacation with a plan to increase spending so much so, that the Republicans will deny it, just so that he can blame them as the “Do Nothing” Congress for the election and nothing is going to happend with exception of things getting much worse.
Man……we are in quite the pickle!
Little John,
An even more important question is whether “Rich” is defined by income or wealth.
“In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one’s home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2010).”
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
This is important, becaue when people start talking raising taxes on the “Rich”, we can see that there is only a small pool of people we may be taking about, and how much revenue is actually going to be generated? There most certianly is a change in behavior with a change in tax code, so then the question becomes a gain vs. consequnces analysis.
Yes, There’s Real Money at the Top – When billionaire investor Warren Buffet recently called on policymakers to “get serious about shared sacrifice” by raising taxes on the nation’s wealthiest people, some critics claimed that this wouldn’t make a serious dent in our budget problems. Nonsense. IRS data show that the top 1 percent of taxpayers had a combined income of $1.7 trillion in 2008, the most recent year available. This is fully 20 percent of the nation’s total adjusted gross income — and much more than the bottom half of the population had (around 13 percent). Moreover, the tax burden at the top of the income scale has fallen dramatically in recent decades. IRS data show that the top 1 percent of taxpayers paid an average of about 23 percent of their income in federal income taxes in 2008. That’s far below what they paid prior to the Bush tax cuts, and about a third less than they paid back in 1980 (see graph). Returning the average tax rate on the top 1 percent of taxpayers to its 1996 level of 29 percent could raise about $100 billion a year, or $1 trillion over the next decade.
I am forever amazed at how liberals, even on an economics blog, can not seem to do simple arithmetic. RJS claims a $100B gain in revenue with a tax increase on the top 1%. Several others want us to stop spending on OCO for another ~$150B annually. ILSM want us to cut DOD by ~80% or ~$400B (not counting the OCO spending already cut). with the draconian (especially the DOD) cuts we are left with $900 – ($150 + $400 + $100) = $250B per annum short falls.
BK,
We had defense spending at less than 4 percent in the late 90s. Now it is over 6 percent. That is 2 percent more you can take off. Added to the 3.6% (3.4% was an error) for simply improving the emplyment situation, and you are over half-way there. You could balance the rest by taxing just the rich, but it would require higher than Clinton rates.
Democrats should be asking (and many are) to roll back all of the 2001 and 2003 tax cuts. That will put you inside 3 percent for over a decade. Something still needs to be done to control rising healthcare costs.
MG,
Since defense is currently over 6 percent, the 4 percent ilsm was suggested is unprecedented, but certainly more than enough to allow for some nice toys in both the front and the back yards.
CoRev
without checking your arithmetic, are you saying that 250 is not less than 900?
Arne
reading very fast it seems to me you are one of two reasonable commenters on this thread.
But i would not like to worry about “who” is rich. And I don’t like “tax the rich”… it’s a dishonest and essentially greedy attitude that means “don’t tax me, tax the other guy.”
A simple progressive tax structure wouldn’t have to ask the question. Such a structure could easily be designed so that the poorest were not paying enough to feel any pain, and the “richest” were not paying so much they would feel real pain either.
Then the question would become… do we want all this stuff we are paying for. Our visiting idiots would say, “no, we don’t need no steenking government at all.” but when it came time to actually cut this or that, we would find we’d be paying about as much as we are now… only, we’d be paying for it as taxes now instead of bonds (worthless iou’s) later.
so once more i’ll offer: rescind ALL the Bush tax cuts. raise the tax on Social Security about one tenth of one percent per year. raise the Medicare tax at about the same rate. This will take care of all the “ususal” spending, and the people will be paying pretty much for what they want.
In addition I would recommend a 10% Patriotic Deficit Emergency Surtax to pay down the deficit caused by the tax cuts that were going to pay for themselves but didn’t… until the deficit is “no longer a factor” politically.
And all of this can be done with no real pain to anyone.
The pain is all psychological. The pain of “mine, mine, mine” and the disappointment of “more, more, more.”
oh… the surtax would be on incomes above the payroll tax cap.
MG
if we know anything about you, we know you are not kidding.
Darren
begin by understanding that i don’t favor the “tax the rich” philosophy.
but when you decide that 1% of the people owning 35% of the wealth “means” that you’d be taxing only a small number of people… do you seriously believe that is a reason not to tax them?
in a sane world, IF you need money to run the government, you tax money. not people. money.
in a sane world, you adjust the tax rate to avoid overburdening anyone. that means a progressive tax rate.
everything else follows from that. the one percent who have (carelessly assuming here that “wealth” is related to income) 35% of wealth would pay a little more than 35% of the taxes…
your unwillingness to accept taxes on “the rich”, and the “liberal” unwillingness to accept taxes on anybody else, is what is driving this country to ruin.
i’d be glad to see you cut taxes if you can cut spending.
but you don’t cut spending by cutting away the people’s ability to pay for their own retirement or their own medical care.
last time i checked, raising the average tax about 3% would take care of the deficit over time. admittedly things have changed a bit since them. but your insisting that Bush had nothing to do with those changes just makes it that much harder to deal with them.
lets give up the blame the other party, tax the other guy, game, and get on with paying for what we bought and trying to live within our means in future…. that doesn’t mean… that exactly doesn’t mean, not paying our bills in future, and not regulating our private sector criminals so that we end up in the same situation again in another eight years.
and it doesn’t mean the problem of poverty is going to magically solve itself if we just force people to work or starve…. when there is no work.
MG
i know i’m going to hate myself in the morning for this…
but i agree with you.
here.
coberly,
That’s ok. They will never do it. Not that crowd.
“i would not like to worry about “who” is rich”
The tax-the-rich concept is so prevalent I think it need to be addressed.
1) It is very likely that everyone commenting here is rich by some measure. I certainly feel that I am. I should be paying more. Still, there are good reasons for me to think that someone who is richer should be paying more. Rich is not a binary attribute. It is a relative attribute.
2) We should not tax people because they are rich. Rather, there is a correlation between being rich and being someone who should pay more than someone who is not as rich. This is nothing new; the tax system is intended to be progressive.
3) There is also a correlation between being rich and being powerful. We had a revolution because we did not like what the powerful were doing. I think we are headed in that direction. We definitely need to be concerned about limits on power. Making the rich pay for more may be cathartic, but I am not sure it provides the right limits. In any event, limiting power and taxing the rich have gotten entangled.
I wonder if a rhetorical trick could be useful?
Instead of “tax the rich” “tax the top 33% of the income in the US”. Which is roughly equivalent to taxing the top 5% of the people.
Arne,
“Simply increase the number of tax brackets again”
This is a favorite of mine. Why should someone with $400K taxable income be in the same bracket as someone with $500M in TI? It’s a relatively small number of people, but it’s a huge amount of money. Meanwhile, at the middle of the income distribution, a mere $60-70k will bump you into a new bracket.
Coberly,
“but when you decide that 1% of the people owning 35% of the wealth “means” that you’d be taxing only a small number of people… do you seriously believe that is a reason not to tax them?”
No…What I am saying is, if that’s the plan…it isn’t going to work. If it is part of a larger plan then fine, but the Left has consistantly attempted to make people beleive that taxing the “Rich” actually solves a problem. It clearly does not….it is just class warfare.
Your comment also makes the propoganda play that the “Rich” are not being taxed….they are, and they make up some 70% (conservatively) depending on your definition, of the revenues to the federal government already.
“last time i checked, raising the average tax about 3% would take care of the deficit over time.”
That is not accurate! As you can see from the data MG provided, if we let all tax cuts expire we will only generate $3.6 Trillion and that still is a rosey outlook because that is based on projections of a growing eceonomy that we haven’t even met yet when that projection was made. This amount of money does not even cover the Entitlement Liabilities, not to mention the built in deficit thru the baseline spending, and whatever unforeseen spending may occur. If you raise taxes beyond just the expiration of the Tax Cuts there will consequences for doing so, there always is. And if you especially focus those tax increases on the so-called “Rich,” your not really gaining enough to solve the problem…..that’s the point!
“the MSM hide the fact that most US adults support higher taxes on the rich “
Since just reversing the Bush tax cuts on those with incomes above $250K is not enough (as more than one commenter has alluded to), this attitude should be looked into more deeply. I agree that the MSM does not get to the root. But I question the narrowness of the above assertion.
Look at the polls. It is clear that people support raising taxes on others and support not cutting services, but when have you seen a poll that actually asked about a legitimate solution? How about “are you willing to pay higher taxes as long as those who make more pay more?” Or “are you willing to pay more taxes to prevent cuts to services?” I generally object to push polls, but we need to see some say “given that you need to pay more to get more, now what do you want?”
Arne
i essentially agree. the idea of taxing the rich to limit their power is a little new to me. similar to the rationale for the estate tax, but get ’em while they’re live. i think it may be a good idea, but i’d rather go after the ways they make their money as a lot of it looks to me as if it ought not to be legal.
i am somewhat conflicted on the issue because i believe that rich people are in a position to, and often actually do, do things that make this a better world than just giving the poor more money to spend at walmart.
MG
no. SS increased costs should be funded by increased payroll tax. except for the general fund paying back the money it borrowed.
you simply don’t get to go into court and tell the judge… judge, sir, if i pay back the money i borrowed from the plaintiff, that will increase my deficit.
Darren,
You’re right.
That was one of the points I was making by posting the cashflow shortfalls for Medicare, Medicaid, and SSA OASDI. Besides, that doesn’t cover all mandatory entitlement spending outlays as there are many other smaller programs in place. There is also a pile of mandatory spending that is not necessarily tied to entitlement programs (yet some program outlays by various departments and agencies are). The OMB historical tables have a couple of sublinks that roll up such mandatory spending. It’s quite a list.
$679 billion, $3.675 trillion, and even $5 trillion in additional tax revenue over ten years doesn’t cover the budget shortfall. And it certainly won’t cover the deficits projected in the next decade when things really go haywire as entitlement spending ramps up sharply.
There are plenty of people in blogland who have named everything under the Sun and pretended that increasing tax revenues on the upper income earners will cover the tab. It’s laughable. I don’t waste time make that claim under the assumption that ALL the Bush II/Obama tax cuts are eliminated because it’s not true.
It’s not a lot of fun to devote energy and time to federal budget analysis but it beats the heck out of sounding like an idiot on such matters. It’s all a matter of stepping up and looking at the facts as well as the near term projections. Plenty of time is wasted on this blog correcting revenue and budget nonsense that is stated and repeated every so often. It’s just easier to stick with real math and move on from there. But not everyone gets that simple point.
The Congress will probably consider moving to budget surpluses at some point before it is too far out of control, after which we can sit back and question how they intend to overcome that nightmare. Driving down the existing level of debt – I am only referring to the federal debt held by the public – will allow some room to support additional discretionary spending needs and cover reimbursements to programs managed as part of the intergovernmental holdings (SSA OASDI, for example).
This would not be a fun time to serve in the U.S. Congress. Yet, it is the most important time to serve in some time. The Members of Congress are facing difficult, necessary decisions that will shape our future economic well being. Hopefully, they will be successful in their efforts.
Arne,
I agree.
I used a similar approach during the 1990s and early 2000s when asking friends and others including those at conferences whether they were willing to pay 1-5% more for their finished goods and help U.S. employment and standards of living or would they opt for offshoring and related end product price savings. Most of them favored offshoring to save a few dollars. Well, I have been raising the same questions this year to many of the same individuals and their opinions have changed. Now, almost all of them want to help U.S. employees and are willing to spend the extra 1-5% to help put the United States back on a stable economic footing.
I want to raise federal taxes but I also want to see spending at the federal level cleaned up. Absent that effort, it’s a tough sell with the U.S. public. And I can understand that. So, the Congress and Administration need to clean up their operations, eliminating waste and duplication now estimated to be in the $billions if not $trillions. A good effort on that might give the public cause to support tax increases across the board. Otherwise, they will be pointing at another target group to go after for more taxes.
Citizenship is not easy if taken serious.
coberly,
I kid around quite a bit. Even on some blogs and other forums. But I don’t kid around when talking about serious subjects or attempting to correct obvious misstatements when facts are readily available.
Angry Bear was a lot more enjoyable when real economic data was cited more frequently instead of some of the more naive and misleading statements encountered now. If Angry Bear can get back to the reality of hard data, my comments will relax as should those of others. But turning AB back into a high quality economics blog requires everyone’s help if the intention is to attract broader readership and participation as well as provide more informed main posts to all readers.
I remember how it used to be early on. It was great. And we had a very good time.
Unlike cutting taxes, raising taxes on the rich pays for itself. Even if we only classify those with the top 0.1% of incomes as rich, they control such a huge cash flow that taxing at 60% or 70% it will raise a lot of money. It also pays for itself by generating economic growth. High marginal tax rates cause high rates of GDP growth and raise everyone’s income. We know that. That’s a proven fact, even if we aren’t 100% sure of the mechanism.
We’ve had 30 years of economic stagnation in this country thanks to the Reagan “pro business” experiment. It has been a failure. It’s time to go “anti business” and get the country a healthier economic climate which will be better for business and for most Americans.
coberly,
It is unfortunate that you’re not a more careful reader. What part of the following statements from my post do you disagree with?
1. “It’s not likely that the Congress will save much short-term or medium-term funding – say, thru 2021 or 2025 – by going after the larger entitlement programs without consideration of raising beneficiary contributions.”
2. “Yet, increasing contribution revenues however slightly may save a couple of those programs from more harm in the budget cutting process.”
And don’t even try to go down the “it doesn’t affect the federal budget deficit” road with me. I have corrected your error on that point far too many times to have to repeat it again.
There aren’t many individuals who would read my response to Darren and then try to turn what I stated into something that I didn’t say. Thankfully.
I am willing to accept Obama’s definition — family income over $250,000 per year or, for single indiviuals, income over $200,000 per year. This definition is often included in the polls.
Personally I think that a more reasonable cut off woul be lower. Also, of course, a family with low income but high wealth can be rich. However, it is clear that the word rich as discussed in public and as described in the polls is family income over $250,000 per year.
It is true that the Gallup poll doesn’t include a precise definition. The huge numbers of recent polls almost all of which show majority support for higher taxes on the rich do.
I think that I am rich even though my family income is below the stanard line.
well I am willing to pay much higher taxes than current US taxes (I do and don’t complain). When Warren Buffet wrote tax the rich, he didn’t mean the other guy.
I think the case for extending Bush tax cuts for the non rich and, instead, rasing taxes on the rich enough to make up for the lost revenue is very simple. I think the marginal utility of consumption declines with consumption, so I think a highly progressive tax code raises the necessary revenue at lower social cost than, say, the 2000 tax code Bush inherited from Clinton.
I am aware of the argument that high marginal tax rates cause significant damage to the economy including lower GP growth. I am completely unconvince by the allege evidence presented in support of that argument.
To be clear, I think a top rate of 70% is fine, but I think that Eisenhower over did the soaking of the rich (90%).
To implement such a high rate it woul be wise to add a tax on gross income over X (say 300,000) to the current tax code. This would not increase incentives to find deductions and loopholes. It would reduce incentives to work and save. I am quite sure those effects are very small, so the optimal extra no loophole tax would bring the marginal rate up very high. I cite Diamond an Saez
http://elsa.berkeley.edu/~saez/diamond-saezJEP11opttax.pdf
Kaleberg – “It’s time to go “anti business” and get the country a healthier economic climate which will be better for business and for most Americans.”
Obama already tried that and got knocked on his ass. More than once.
What’s your socialist plan if that is what it is?
Robert
I don’t disagree with you all that much. But Presentation is everything. I am not worried about Buffet calling for taxes on the rich. I am worried about people making 100k saying “don’t tax me. I am not rich.”
And frankly I am worried about people making 20k saying “don’t tax me” I need every dime just to get by.
Well, I have been that poor, and they don’t. Paying a few dimes in taxes would improve their morale.
I don’t take the “high taxes hurts the economy” line seriously either. It’s all a crappy game to grab and keep as much as you can and pretend the country that made it all possible doesn’t need to have the oil changed once in a while.
MG
I presented “hard” data and analyses with my Social Security series. It doesn’t seem to have helped. My posts lately have been…uh… less rigorous. Because you can only say “the truth” so many times before you get bored of it yourself, and as even you must suspect, Truth is not in great demand.
MG
the system ate my reply to your last nasty missive. you accused me of not reading carefully.
if you had read carefully you would have noticed that i was answering your first comment, not the second one which contained the passages you accused me of missing.
Darren
no, you are not right. the “entitlement” liabilities need to be paid for by raising their own dedicated taxes. the 3% i referred to “last time” was before the recent run up in the deficit. i believe i mentioned that in my comment… you should have finished reading the sentence before you replied to it.
and no i did not say that the rich pay no taxes, propaganda or not.
but there is no hope you will ever see a point that isn’t in your handbook.
bye now.
Arne,
Thank you for asking these questions. (I much prefer to reply to them here than to simply agree with MG)
As someone whose income is both low and comprised of more than 50% qualified dividends, I’m already an oddball. Complete repeal of the Bush cuts would cost me plenty. Then again, I objected to them from the beginning and saw them as a gift which wasn’t going to last.
Last fall, I was appalled at Obama’s “bargain” with the Republicans. I wrote to him more than once that it was time to just let ALL the tax cuts go rather than fall into the trap of a payroll tax holiday. Frankly, I would have preferred to see the Making Work Pay credit (which doesn’t help me directly) retained, and all the tax cuts go.
Not only am I an oddball financially, I’m an oddball politically, too. I actually believe my own rhetoric about the role of government, and I’m willing to put my money where my mouth is. What good will a bit of retained money do me or anyone else in this country if our infrastructure crumbles, our school children aren’t cared for, our sick are ignored, our food and water aren’t safe, 20% of our workforce is idle … you get the point.
And yes, I do require that those who spend the equivalent of my annual income on renting a vacation home or a single outfit of clothing should pay considerably more than they currently pay.
I seem to recall, maybe a year or two ago, seeing demonstrations somewhere in the midwest where people were objecting to service cuts and chanting, “Tax us!” It was momentarily heartening, but failed to become a national movement for reasons I could only speculate about.
“a Quinnipiac University poll this year showed nearly two-thirds of those with household incomes of more than $250,000 a year support raising their own taxes to reduce the federal deficit.”
http://blogs.wsj.com/wealth/2010/09/20/tax-me-more-says-wealthy-entrepreneur/
Arne wrote: “We had a revolution because we did not like what the powerful were doing.” Not to quibble, but it might be more accurate to describe the American revolution, like most revolutions, as “we had a revolution because some of the not-quite-so-powerful among us did not like what the more-powerful were doing to them, and enlisted the not-powerful because they were unhappy as well.”
buermann
you have given this old man hope. bet we don’t see the dems run on it though.
MG
since you use the word entitlements to include all welfare type programs, and i use it only to refer to Social Security…. because that’s what the Big Liars mean when they talk about entitlements” it’s SS they want to gut… we are going to keep misunderstanding each other.
Social Security already does pay for itself. It has nothing to do with the debt… except as a creditor. Medicare needs to be put back that way, even if it means higher “taxes” so that ordinary people pay the cost of their own expected medical care when they will no longer have enough income to pay the high premiums that a private company would have to impose on old people.
I don’t talk about Medicaid much, but I am still waiting to hear your plan for taking care of the sick people who can’t afford medical care.
oh… i did not read your last at all carefully. a quick skim told me all i needed to know.
note: “all i needed to know.”
you might also note that even though i thought i was inserting my comment above yours, js-kit inserted it below yours.
have fun playing with yourself.
PQuincy
you have identified the dynamic of all revolutions. the best the poor can hope for is that the New Boss will need their help enough to grant some concessions he can’t easily renege on too soon.
actually my screen shows the times as 5:58 and 5:59 respectively. apparently someone is keeping track of time zones. still, it is so wonderful that MG has “proved” that i was lying about not reading his 5:59 letter before i posted my 5:58 letter.
since we know that MG always reads everything v e r y c a r e f u lly, we have to conclude that he doesn’t know the difference between clockwise and counter clockwise.
or just gets so excited finding fault with others that he prematurely ejaculates.
just to save myself the trouble of having to come back and explain:
2 dated utter suddenly (a short prayer).• [with direct speech ] say something quickly and suddenly : “Indeed?” ejaculated the stranger.
Dear MG
Here is the can opener.
There’s a can of beans in the refrigerator.
The judge granted the divorce. Mental cruelty. I was surprised it went so fast. I asked him if he didn’t need to hear your side of the story. He said, No, you have been sending him letters and he doesn’t want…er need… to hear any more of what you have to say. He said you reminded him of a sixth grader he knew when he was in first grade. Big kid who shaved, but he insisted on playing in the sandbox with the first graders and always ended up throwing sand in their eyes and beating up on them.
Well, that’s justice for you. Don’t write if you get work. I am sure you and Sammy will be happy together. Especially now that you have a little one. Darren is his name? cute.
coberly,
Stop digging. You just undermine your own arguments.
Islam will change
coberly,
Stop digging. You just undermine your own arguments.
Islam will change
Coberly,
Insisting that MG and Sammy have a Bromance, and have a adpoted a son Darren is not only funny, but it displays a real jealousy of Sammy.
I know your Bromance with MG didn’t last long, but look what Sammy had to offer compared to what you were offering? Maybe if you cleaned yourself up a little bit, quit wearing so much Make-Up….MG would have found you more attractive. And what about the etiquette classes MG was paying for?
And don’t think for a second that MG wasn’t on to your secret Bromance with Burce Webb…..things happend for a reason…..sooner or later someone will love you again!