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But since you do raise the issue of more cuts to the federal budget , let me just say, that what needs to be done now, is not more de-funding, but massive RE-funding; restoration of prior funding levels to agencies that have been eviscerated for the cause of still more tax breaks for people who don't need them.
Extreme income inequality breeds political instability. That used to be taught in university economics classes back in the good old days of the mid-19th Century, those Leave-It-To-Beaver days. Latin America was shown as the sick patient. You, too, can live in a country with 3 Communist Parties, 2 Maoist Parties, and 2 or more Socialist Parties! Just keep voting to rob your own government and give all the proceeds to people who already have more money than they know what to do with! Let Social Security go bankrupt, who cares? You're sitting pretty, so what's the noise all about, right?
Cheers. Enjoy your day.
We don't have "extreme" income inequality in this country to any great degree. Sure, there are some people who have nothing and some people who are rich, but that's true in every economic system. The fact is that "poor" people live better today than most of the lower income working people did back in the 1950's and '60's. With all the food subsidies, reduced or free housing, free medical care, and on and on, the "poor" today live better than I and many others did when we were kids with working parents.
Rather than reducing incentive by punishing success in a misguided attempt to assure equal outcomes, we should instead strive to assure ample opportunity for all. You don't get that by destroying incentive or punishing success. If you want a system where everyone is equally poor with only a few very wealthy ones at the top, then China would be a good place to move to. Why work hard if the fruits of your labor are going to be taken away from you to give to others who just want to coast through life with little to no effort? That simply discourages hard work and innovation and encourages coasting and lack of effort.
Since the late 1970s, the pre-tax share of the bottom income quintile has decreased from 5% to 3.7%. The pre-tax share of the top income quintile increased from 45.6% to 55.2%.
The after-tax share of income for the first four quintiles has stayed roughly the same over this time period. The top quintile has payed slightly more in recent years, but only an increase of about 2.5% relative to pre-tax income over forty years.
The increase in pre-tax income share for the top quintile has more than offset the increasing share of tax revenue paid by this group. It makes sense that an increasing share of tax revenue would be paid by the wealthy, because that's where the income growth is occuring.
Frankly at 3.7% of pre-tax income for the bottom quintile, there is nothing there to tax. Prosaically the compliance costs would outweigh the marginal revenue. If you want the tax burden to be more equitably shared, you need to increase pre-tax income for lower quintiles. Otherwise you're trying to squeeze blood from a stone.
The most remarkable thing in these numbers is their stability, but the second most remarkable thing is the growth in top quintile pre-tax income share. It's the biggest trend. The biggest trend in post-tax income share is the increase of the top quintile during the 1980s.
The progressive income tax has always been more progressive than many people realize, but at the same time growth in pre-tax income disparities since the late 1970s have been similarly unnoticed by a lot of people. On the whole the wealthy only had it better net of taxes in the mid-2000s.
I'm glad to hear all that. The progressive income tax is necessitated by the fact that most other taxes in this country are regressive. The sales tax on food is a tax that exists in many if not most of the states in this country. Since everyone has to eat, this tax hits the poor and poor families hardest of all. The property tax tends to be regressive because property values rise while the income for many people declines as they reach their senior years. The property tax can be a particularly difficult tax for those who lose their jobs and experience periods of unemployment and for the poor elderly. Many states have an income tax, but often it is a flat rate tax that affects the working poor more than other groups because they have little discretionary income after meeting all their expenses.
One criticism I have heard of the progressive income tax is that it supposedly "redistributes income". I don't see it that way at all. I see it as the only practical means to pay for a government provides for health care for the poor and elderly, pensions for its oldest citizens, a defense second to no other country in this world, and endeavors like Operation Warp Speed. The poor cannot afford to pay for this kind of government. Only those with large incomes can afford to pay for the kind of government we need. Those who advocate for a "flat rate income tax" are, in effect, advocate for a very weak and limited government. That may not be wrong, but they should make it clear that a flat rate income tax would inevitably lead to that type of government.
Sales taxes are one of the most regressive taxes but those are not federal taxes which is what is being discussed.
But sales tax does NOT exist on most food in the US. In the US, 5 states have no sales tax, 45 states have a sales tax but 32 of them exempt food from that tax. Only 13 states have any sales tax on food and 10 of those have a tax credit or lower sales tax on food than other items. Only 3 (Alabama, Mississippi, and South Dakota) tax at full rate. So very wrong to say most food is taxed in the US.
Property taxes are not really regressive - they are based on value and many states have exemptions for older homeowners or longer term residents. Same with income taxes - even a flat tax is not regressive because directly tied to income and most states have deductions that remove the tax at the lower levels and exemptions for things like SS - that makes it essentially progressive. Also, most states that have a progressive income tax have higher tax rates.
What you are describing with progressive income tax is text book income redistribution - taking more from the rich to provide services for the poor that essentially boost the poor's income by providing free food, housing and medical care. A flat tax in no way has to mean a weak government but many would argue that the government should be more limited - that is not necessarily a bad thing.
I don't want to hijack this thread, but I have a question that may have the best audience right here.
If all of you were to rewrite the tax tables, can you show me your own brackets if you wrote them for the whole country? To keep things simple, just federal income taxes.
Agree. I don't think that our federal tax system is generating "too little" income for our needs. The problem is on the other end. We need to be more accountable for what we spend the money on. And this circles right back to the issue of a large majority of our population paying little to no federal income tax. When someone has no skin in the game, they don't care where the money goes... especially if a few of those dollars are showered on them in the form of "freebies". It's always great to have a party if someone else is footing the bill.
Exactly these
When these dirt bag bought and paid for politicians (on both sides) start spending money intelligently and efficiently with accountability people can then talk about whether or not we take in enough in taxes.
I don't want to hijack this thread, but I have a question that may have the best audience right here.
If all of you were to rewrite the tax tables, can you show me your own brackets if you wrote them for the whole country? To keep things simple, just federal income taxes.
It's too limiting to keep it to just income taxes.
I think the federal income tax brackets have been honed over decades of political tussle and seem fairly stable at this point.
Where I would reform the tax code would be to make brackets across income, corporate, and capital gains tax uniform. I think the economy is too complex for us to know a priori which factors of production are more valuable than others. So the parsimonious response is to equalize the tax treatment of these factors and let the free market decide the prices.
As to state rates, I love the laboratory of democracy concept and would not try to prescribe what states should do.
Oh, great; so we've now moved "forward" (a relative term on this thread) from Redear's Digest as our authoritative source, to a failing 3rd World newspaper with clearly no understanding of how US foreign aid works, nor of its purpose/s.
Wow! Are you off your medications, or what?
There are multiple internet sources relaying the news that Congress is going to send $25 million to Pakistan for gender programs. I just happened to choose one that you went off on a rant about.
Seriously, get a grip.
I don't think the US should be taxing its citizens or taking on more debt for gender programs in Islamic countries. You are the naive one to think that it will promote democracy in Mullahland.
For example, we sent tons of money to Saudi Arabia over the years to promote democracy and what did that get us? It got us 15 of the 19 airline skyjackers that took down the Twin Towers, and hit other sites as well.
No, they can't. You know why? Because foreign aid was already slashed to the bone in the mid-90's, during the Gingrich Contress! ALL the government foreign aid agencies were cut loose, and told to fend for themselves. They are now non-profit organizations, going begging annually for their operating budgets!
The implications of that are rather intriguing. Since they're no longer government agencies, they could in theory, wage their own foreign policy; they're no longer beholden to the government, so they could pursue policies that are contrary to the government's interests. They could undermine the government's efforts abroad, if they wanted. They no longer have to share intelligence with the CIA, either. (They were a major source of intel back when they were on the gov't payroll.)
This really shows how little you and most other people know about foreign aid.
Anyway, there's no more "waste". There's nothing left to cut. And that news piece about "foreign aid" going to make payments to non-citizens was fake news. That was covered in another concurrent thread. Look it up; there was a whole thread devoted to that topic.
Actually foreign aid has increased even though the number in poverty has gone down worldwide - we also no longer give significant aid to China. Also to equate reductions to Gingrich is to ignore who was president, Clinton and ignores why there was a drop in the 90s - Clinton & Gingrich together were pushing to eliminating Budget deficits. The actual lowest level was 2001, after Gingrich was no longer speaker (1995-99) so sounds like Clinton/Gore push.
You know little about foreign aid agencies and intelligence gathering methods - lets not pretend otherwise.
We don't have "extreme" income inequality in this country to any great degree.
We're getting there! How much farther along that path do you want to go?
Quote:
Originally Posted by Chas863;
Sure, there are some people who have nothing and some people who are rich, but that's true in every economic system.
The US has the highest income inequality of any "Western" nation. Here's a World Bank list of countries, and where they rank on the income-inequality scale. The higher you are on the list, the worse the income inequality. See #51. US ranks just behind (i.e. slightly better than) Cote d'Ivoire, Djibouti, Turkey (where some people still literally live in caves) and Papua New Guinea! We rank just above (i.e. WORSE THAN) Argentina, Haiti, and Turkmenistan! This is where Reaganomics and MAGA have placed us.
Read it and weep: https://www.indexmundi.com/facts/ind....GINI/rankings
The fact is that "poor" people live better today than most of the lower income working people did back in the 1950's and '60's. With all the food subsidies, reduced or free housing, free medical care, and on and on, the "poor" today live better than I and many others did when we were kids with working parents. [/quote] Keep telling yourself that, if it helps you get through the day. Free medical care? Are you aware that Medicaid isn't available in some states? It doesn't sound like you are. Where do you live, btw?
Food subsidies? That program was cut. "Free housing". My, my. A lot of people struggling to maintain a toehold on the San Francisco Bay Area and the greater Seattle area would love to get some of that. (Those regions need unskilled and low-skilled workers, just like anyplace else, but they keep getting pushed farther away.)
That's quite the Heaven On Earth you've painted there. It's amazing anyone's able to access any benefits at all, after all the raids made on the federal budget for tax giveaways to people who don't need them. Kinda warms your heart, doesn't it? It's amazing how the more the budget is gutted, the more the freebies just shower down upon the multitudes. Voodoo economics at its best!
Quote:
Originally Posted by Chas863;
Rather than reducing incentive by punishing success in a misguided attempt to assure equal outcomes, we should instead strive to assure ample opportunity for all. You don't get that by destroying incentive or punishing success. If you want a system where everyone is equally poor with only a few very wealthy ones at the top, then China would be a good place to move to. Why work hard if the fruits of your labor are going to be taken away from you to give to others who just want to coast through life with little to no effort? That simply discourages hard work and innovation and encourages coasting and lack of effort.
Nobody was disincentivized from working hard back when the tax rate for the upper middle class was around 60-65%. Lawyers still showed up to work, doctors still ministered to the sick, industrialists still ran industry, and amazingly, everyone paid their taxes, and continued to live well, with kids in private schools, backyard pools, nice summer vacations for the whole family in exclusive enclaves. In fact, some of those industrialists protested to the GW Bush administration, that tax cuts would undermine the national infrastructure that was key to the growth of their industries, and lobbied against the cuts.
And the part of the picture you're missing, of course, is that the tax revenue mainly went to expanding infrastructure (the interstate highway system, which benefitted the afore-mentioned industrialists, among others), medical R & D via the NIH, the expanding national parks system, public health policy, the environmental oversight and superfund site cleanup via the EPA, support to the states for public school programs and for police and fire departments, Vet Administration hospitals and clinics, a stable, solvent Social Security system, IRS staffing to monitor tax compliance by higher earners, modernization of the air traffic control system and aviation safety, mental health care programs, occupational safety standard-setting and oversight, and so much more.
Everything listed here (and more) was cut, some areas--more than once, from Reagan through Bush II, up to and including the recently departed President.
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, let me just say, that what needs to be done now, is not more de-funding, but massive RE-funding; restoration of prior funding levels to agencies that have been eviscerated for the cause of still more tax breaks for people who don't need them. 
