Friday, May 12, 2006

The Progressive Tax System...

...Or why hysterical populist are full of it.

See the chart about the tax burden in this country.

The top 1% of incomes pay nearly 35% of the taxes. The top 50% of incomes pay over 96% of taxes. Looks very progressive to me.

Of course tax cuts hit the 'rich' disproportionately because they are taxed disproportionately. It's pretty basic that you have to pay taxes in order to get a tax cut.

5 Comments:

Blogger George W. Bush said...

I think the point you're missing is that there should be NO tax cuts for these people in our current climate of spending (think multiple WARs and Medicare and SS and education and military on the borders), and also that the Alternative Minimim Tax is disproportionatley hitting the middle class instead of its intended recipient (the elite). Not to mention the ignorant and unequal obliteration of the Capital Gains tax.

Interesting that the Dow collapses on the same day that the Bush administration and the Republican Senate are looting the treasury on their behalf, from the NYT:

"Renewing all those tax cuts again in 2010 would cost hundreds of billions of dollars a year, posing excruciating budget choices for the next president as the nation's baby boomers become eligible for billions of dollars in Medicare and Social Security benefits.

In addition, lawmakers merely postponed dealing with huge problems surrounding the alternative minimum tax, a parallel tax that was originally aimed at millionaires but is not adjusted for inflation and is rapidly engulfing more middle-class families. The vote only prevents expansion of the tax this year."

1:49 PM  
Blogger sexyretard said...

You're still doing pretty well to have to pay the AMT, although I agree it needs revamping.

I both agree and disagree with HurtLeg. I like the idea of a marginally progressive income tax system; people need dollars to eat with more than they need dollars to buy that second yacht.

At the same time, Democrats have taxed upper middle income taxpayers while the wealthy escape paying taxes through offshore schemes cited in Johnston or other such nefariousness.

I have noticed that my total federal tax bill decreased about 25% from 2000 to 2004 (this past year I got another 1000 bucks off plus exemption because of Michael Benjamin the abnormally beautiful, and next year I'll get another one due to Mr/Mrs November), and I don't know that the wealthy are paying 25% less in taxes, even though their savings in dollars are surely greater, their savings in "marginal utility" are likely somewhat less.

To lay it out:

1-The tax cuts since 2001 have been a blessing to me, and I don't earn the big dollars. Had I owned property, I might be a little less enthralled with it.

2-I don't mind soaking the wealthy. At all. Cry me a river in your chardonnay, hurtleg. I'm not saying you can't have your Lexus, I'm saying that in a country where people go hungry those with Lexuses (Lexii?) should pay more.

3-I don't want tax increases if all they are going to do is go to waste. Income taxes should go up when there is an accountable system that ensures people will be served, as opposed to bureaucracies becoming more inefficient.

4-The Democratic Party, the "people's representatives," gave us our last payroll tax increase, which is a "regressive" tax.

5-It would save us a few dollars to get our troops out of harm's way in Iraq and see what the Iraqis do on their own.

8:02 AM  
Blogger Germanicu$ said...

Do you have any "hysterical populist" in mind, or is this another slam of the left in general?

"The top 1% of incomes pay nearly 35% of the taxes. The top 50% of incomes pay over 96% of taxes. Looks very progressive to me."

Yeah, but looks can be deceiving. Would it seem "more progressive" to you if the top 1% paid 45%? Would it seem more "fair" if the top 1% of incomes paid 1% of taxes?

If you read the book Perfectly Legal you would have at your fingertips a veritable moutain of evidence indicating how the tax system is rigged in favor of the rich. Yet your position on this issue is to pity the rich for their onerous tax burden, and you de-contextualize data to support this strange position. Of all the wrongs to make right in the world, shouldn't making sure rich people don't have to pay too much in taxes be way down the list?

Hysterical populists abound - I see them all the time. But not on this issue.

10:16 AM  
Blogger sexyretard said...

To what extent does publically financed infrastructure benefit the wealthy in a disproportionate sense? I'm thinking of seaports, national parks accessible by private plane, coast guard protection for yachts, and the FDIC.

Not to mention housing deductions on them McMansions.

If the Republicans made more of an issue of where tax money actually goes (and how well it's actually used), rather than espousing some bogus theory that tells me somehow my life gets better when Rush Limbaugh buys that second yacht, I think they'd get more of a hearing in November.

3:39 PM  
Blogger Jeff said...

Germanicus alluded to the David Cay Johnston book getting it right on the true tax burden distribution, and I agree with that. You have to figure in payroll taxes if you're serious about the concept of tax "burden," and that changes everything. The disingenuous answer to that is that at least the FICA part of it is not really a tax because wage earners eventually get it back in the form of social security payments. But that begs the question of what a tax really is--is it just money you give the government and for which you get nothing in return? Sexyretard points out that multiple aspects of the nanny state are in fact public contributions to the wealth creation apparatus that exists to serve the capitalist class--which, in turn, helps the rest of us make money, too.

It's all very complicated, and I'm not really a "soak the rich" kind of guy, but I have two major objections to the current system:

1. I can't even begin to comprehend the justification (moral or practical) for income from capital being taxed at lower rates than income from labor. Maybe you could make a pragmatic case for it in the short term if we were so short on national savings that interest rates became prohibitively high (though even then you'd have to prove to me that taxing capital income at lower rates could significantly increasing savings rates, which I doubt very much, given the current circumstances), but that's about it.

2. As Herbman noted, if you want to spend a lot of the government's money, you have to tax a lot of the people's money. That's just the way it is. If you're not doing that, you're basically just preparing the way for massive future tax hikes, and hoping the other party gets stuck with the dirty work. Not a particularly tough trick to see through, but I'll grant that it consistently fools the vast majority of Americans (witness Bush Sr. when he attempted to be an adult regarding Reagan's profligacy).

9:31 PM  

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