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Sure, I'll correct you. Total income of all taxpayers for the year 2009 was $7.8 trillion and the total income paid was $865 billion. Total income of the top 1% was $1.3 trillion. They paid 24% of this in income taxes, or $318 billion. If we raised their average rate to 50% (more punitive than raising their marginal rate to 50%) they'd pay $662 billion in income taxes. Since the deficits are running at a trillion dollars a year, we'd still be $338 billion short. To get the money exclusively from the top 1% of income earners, we'd have to raise their average rate to 73%.
Here's a fun fact for you to contemplate while you're thinking of ways to cover the shortfall: with the federal debt at $16 trillion and climbing at $1 trillion a year, our total federal debt will be $20 trillion by the time President Obama leaves office. If interest rates on that debt rise to 4-1/2% on average, the total annual interest cost will be $900 billion and exceed the total amount of federal income tax collected. At that point, you can try confiscate all the income of the top 1% and you'll still be short.
Interest expense on the federal debt, not entitlement programs, is what will probably be the straw that breaks the camel's back.
The one big thing about increasing the tax on the rich, is that it means that they just cut down on buying stuff. That "stuff" is what makes jobs for a lot of people. Cars, furniture, houses, swimming pools, clothes, etc. Its the kind of things that people like me make last and last because we can't afford to buy more. They even do things like redocorating and new paint on the walls. It's been 20 years since we bought paint. What would happen to all the painters if everyone did as we do?
One good example is what happened when there was a tax increase on Yachts. Rich folk just quit buying the things so often. Boat builders all over went under. They were not needed.
Let's give a cheer for the Rich! They make it possible for the rest of us to earn a salary. If they have to pay more taxes, There will be more without jobs... more people be eligible for government handouts. As long as the Rich have money, they will spend it.
However, there are too many dodges for the rich. Off shore accounts, certain tax exemptions, things like that. Tax should be fair. It shouldn't favor the Rich.
A person with an income in the millions of dollars a year doesn't spend it all. They invest most of it. Just like someone earning $20,000 would spend every cent of a tax cut and someone earning $500,000 would just save a little less, some in the 1% isn't going to change anything about their lives.
they will not squeeze out of the rich what they want to spend, the rich dont have that much money. DC does not have an income problem, DC has a spending problem.
they will not squeeze out of the rich what they want to spend, the rich dont have that much money. DC does not have an income problem, DC has a spending problem.
From a study by professionals of the debt crisis facing the U.S. It IS both a spending and a revenue problem. You can't start wars and pay for them by cutting taxes as GB did:
No Silver Bullet: Paths for Reducing the Federal Debt
Sep 30, 2010
America’s federal debt is as old as the nation itself, and throughout the past two centuries the debt has fluctuated dramatically, spiking during wars and economic crises and declining during times of peace and prosperity. Once again, it is on an upward climb: As a share of annual gross domestic product (GDP), it is now about three-quarters higher than what it was a decade ago, and in the next 15 years Pew projects that it will reach 95 percent of annual GDP, the highest level since 1947. Many economists caution that it would be unwise to attack the debt with tax increases or spending cuts while the economic downturn lingers. But nearly everybody agrees that once the economy has recovered, the nation will have to begin to control its debt or face serious economic consequences. The question is, how?
Some insist the problem can be solved simply by raising taxes, without cutting spending; others argue that it can be done by cutting spending, without raising taxes. But No Silver Bullet, a study by the nonpartisan Pew Fiscal Analysis Initiative, illustrates just how difficult it would be to tackle America’s fiscal problem by relying exclusively on any single strategy. If action is taken in 2015, when some project the U.S. economy will return to full employment, consider what it would take to reach a debt-to-GDP ratio of 60 percent by 2025 with just one of the following approaches:
It would take a 43 percent reduction in discretionary spending, a cut of about $590 billion, a figure roughly equivalent to eliminating the Department of Defense.
Spending on entitlement programs such as Medicare, Social Security, Medicaid and certain veterans’ benefits would have to be cut by 22 percent. That means that in 2015, the average Social Security beneficiary would receive $985 per month, rather than $1,255.
It would take a 32 percent hike in individual income-tax revenues to achieve the 60 percent goal in 2025. That means that the average income-tax liability for every man, woman and child in the U.S. would be $6,520 in 2015 instead of $4,955.
Relying just on economic growth, without tax increases or spending cuts, to solve the fiscal problem would require unprecedented productivity gains. In particular, inflation adjusted GDP would have to grow by an average of 4.1 percent annually, instead of the 2.1 percent forecast by the Congressional Budget Office. Such a change would be tantamount to more than doubling America’s productivity growth.
In contrast, an approach combining both spending and revenue policies would mean an across the-board tax increase and spending cut of about 7.5 percent in 2015 to achieve the target debt-to-GDP ratio by 2025.
It makes it reasonably clear that the bottom income brackets have done much worse than the others over the past 30 years. So at least we can rid ourselves of claims that the poor are making out...
Well, that in itself is interesting, but I'd offer that it actually refutes several different progressive claims.
For example, the working class and blue collar class have suffered greatly because of taxation levels that practically invite American manufacturing jobs to relocate overseas. The United States has the highest level of corporate taxation of any industrialized country by a wide margin. Heck, even Sweden has a corporate tax rate of only 23.5%.
The CEO of Intel made an interesting point in a speech in 2010. If Intel built two identical chip plants, one in Asia and one in the United States, at the same time, the American plant would cost twice as much to build and operate. And only 10% of the difference would be in higher wages. The rest is the cost of additional taxes and regulations. And this is born out in my conversations with my manufacturing clients, all of who really don't want to offshore. Several of mine have tried to do so but it's just not cost-competitive for them. Those who do put their plants in the Southeast.
So right there, you're looking at policy that is ultimately damaging to the economic fate of those on the lowest rungs of the economic ladder. Yet why is there such resistance to lowering corporate taxes?
Moving on, let's look at the other issue: Immigration 'reform.' Right now, there are roughly 10-12 million illegals working in this country. Mind you, they are not taking the skilled trade jobs or the professional jobs. No, they're taking the jobs that the lowest tiers of the workforce used to have that were often well-paying. Construction. Manufacturing. Hospitality. The list goes on and on. What's more, it's not just a matter of illegals taking a lot of the jobs that used to sustain the people in question. The sheer number of illegals also drives down wages, too, in a classic case of the Law of Supply and Demand. A Harvard economist (Don't ask me the name. I'm too pressed for time to look it up) looked at the correlation of wages and working population and found that there was indeed a correlation between number of people entering the workforce and downward pressure on what people get paid.
Yet the people who squeal so loudly for the right of an illegal immigrant to live and work in this country never seems to connect the dots when it comes to the effect such largesse has on the ability of our poorest citizens to hold a job and earn a decent wage. Why?
So before you blame the well-to-do for the economic fate of the lowest tiers of society, try looking at government policy first.
Well, that in itself is interesting, but I'd offer that it actually refutes several different progressive claims.
For example, the working class and blue collar class have suffered greatly because of taxation levels that practically invite American manufacturing jobs to relocate overseas. The United States has the highest level of corporate taxation of any industrialized country by a wide margin. Heck, even Sweden has a corporate tax rate of only 23.5%.
The CEO of Intel made an interesting point in a speech in 2010. If Intel built two identical chip plants, one in Asia and one in the United States, at the same time, the American plant would cost twice as much to build and operate. And only 10% of the difference would be in higher wages. The rest is the cost of additional taxes and regulations. And this is born out in my conversations with my manufacturing clients, all of who really don't want to offshore. Several of mine have tried to do so but it's just not cost-competitive for them. Those who do put their plants in the Southeast.
So right there, you're looking at policy that is ultimately damaging to the economic fate of those on the lowest rungs of the economic ladder. Yet why is there such resistance to lowering corporate taxes?
Moving on, let's look at the other issue: Immigration 'reform.' Right now, there are roughly 10-12 million illegals working in this country. Mind you, they are not taking the skilled trade jobs or the professional jobs. No, they're taking the jobs that the lowest tiers of the workforce used to have that were often well-paying. Construction. Manufacturing. Hospitality. The list goes on and on. What's more, it's not just a matter of illegals taking a lot of the jobs that used to sustain the people in question. The sheer number of illegals also drives down wages, too, in a classic case of the Law of Supply and Demand. A Harvard economist (Don't ask me the name. I'm too pressed for time to look it up) looked at the correlation of wages and working population and found that there was indeed a correlation between number of people entering the workforce and downward pressure on what people get paid.
Yet the people who squeal so loudly for the right of an illegal immigrant to live and work in this country never seems to connect the dots when it comes to the effect such largesse has on the ability of our poorest citizens to hold a job and earn a decent wage. Why?
So before you blame the well-to-do for the economic fate of the lowest tiers of society, try looking at government policy first.
Good post.
Add in the fact that even though they earn wages, they use up services but do not pay into the tax revenue pool - which increases the tax burden on those who pay.
Well, that in itself is interesting, but I'd offer that it actually refutes several different progressive claims.
For example, the working class and blue collar class have suffered greatly because of taxation levels that practically invite American manufacturing jobs to relocate overseas. The United States has the highest level of corporate taxation of any industrialized country by a wide margin. Heck, even Sweden has a corporate tax rate of only 23.5%.
The CEO of Intel made an interesting point in a speech in 2010. If Intel built two identical chip plants, one in Asia and one in the United States, at the same time, the American plant would cost twice as much to build and operate. And only 10% of the difference would be in higher wages. The rest is the cost of additional taxes and regulations. And this is born out in my conversations with my manufacturing clients, all of who really don't want to offshore. Several of mine have tried to do so but it's just not cost-competitive for them. Those who do put their plants in the Southeast.
Source? The statement on its face is incredibly unbelievable. The construction of a semi-factory is virtually all equipment which is available from only a couple of sources and basically costs the same wherever you buy it.
The operating costs are also unbelievable.
The only way either statement is true is if government subsidies are at work...which could be partially true.
Quote:
So right there, you're looking at policy that is ultimately damaging to the economic fate of those on the lowest rungs of the economic ladder. Yet why is there such resistance to lowering corporate taxes?
Moving on, let's look at the other issue: Immigration 'reform.' Right now, there are roughly 10-12 million illegals working in this country. Mind you, they are not taking the skilled trade jobs or the professional jobs. No, they're taking the jobs that the lowest tiers of the workforce used to have that were often well-paying. Construction. Manufacturing. Hospitality. The list goes on and on. What's more, it's not just a matter of illegals taking a lot of the jobs that used to sustain the people in question. The sheer number of illegals also drives down wages, too, in a classic case of the Law of Supply and Demand. A Harvard economist (Don't ask me the name. I'm too pressed for time to look it up) looked at the correlation of wages and working population and found that there was indeed a correlation between number of people entering the workforce and downward pressure on what people get paid.
Yet the people who squeal so loudly for the right of an illegal immigrant to live and work in this country never seems to connect the dots when it comes to the effect such largesse has on the ability of our poorest citizens to hold a job and earn a decent wage. Why?
So before you blame the well-to-do for the economic fate of the lowest tiers of society, try looking at government policy first.
It would appear that illegal immigrants pay taxes about the same as similar legals. They do not pay federal income tax but they do pay the other taxes one way or another.
They certainly should not have been allowed to come in...but they are here now and fixing that situation is a difficult and expensive task.
Hispanics including some illegals dominate the residential construction industry here. But they actually work for gringos who were out to undercut the union workers. They succeeded. They are however still relatively well paid.
The one big thing about increasing the tax on the rich, is that it means that they just cut down on buying stuff. That "stuff" is what makes jobs for a lot of people. Cars, furniture, houses, swimming pools, clothes, etc. Its the kind of things that people like me make last and last because we can't afford to buy more. They even do things like redocorating and new paint on the walls. It's been 20 years since we bought paint. What would happen to all the painters if everyone did as we do?
One good example is what happened when there was a tax increase on Yachts. Rich folk just quit buying the things so often. Boat builders all over went under. They were not needed.
Let's give a cheer for the Rich! They make it possible for the rest of us to earn a salary. If they have to pay more taxes, There will be more without jobs... more people be eligible for government handouts. As long as the Rich have money, they will spend it.
However, there are too many dodges for the rich. Off shore accounts, certain tax exemptions, things like that. Tax should be fair. It shouldn't favor the Rich.
The rich we are speaking about in the USA have it all. Not just well off. Hugely, beyond understanding well off. A lot of these plutocrats are not listed in Forbes or Fortune but are old money.
plu·toc·ra·cy (pl-tkr-s)n.pl.plu·toc·ra·cies1. Government by the wealthy. 2. A wealthy class that controls a government. 3. A government or state in which the wealthy rule.
If we shld have learned anythig b now witt he welth sharig since the mid 60's its that i time what it really results i is destructio of the middle class and concentartio of wealth. Even tho income have risen so has cost.We have alos learned that with technolgy more cna be prodcued at less cost with less humans involved.Its apth to dependence wihich is a path to the bottom of income.Itime it rsults in need for more tax on those prodcutive until nomore can be gain and growth ebcaome staggant. Many european countries are facing just this and the only anwser is years of austerity with lower govenment dependence payments and few jobs to replace them.Wealrady see startig i mnay states ;cities with unsustainable obligations and debt.
A couple points to respond to different things being discussed here.
First, I don't think taxing 1% was (and is) anything but a political move to back up the liberal's efforts (and effective efforts at that) of creating not just class warfare, but class jealousy. It is now evil to be successful, regardless of how that success was achieved. As already proven here, that tax increase for the 1% won't even close 1/2 of the gap the liberal (and conservative) government spends in deficit every year. All it does is make those who bought into class warfare happy that someone besides them is miserable. Misery loves company - so, instead of fixing the real issue which is spending more than we're taking in in taxes, we'll **** people off... make them jealous... demonize someone else... then go after the demon. I am just saddened that there are people so ignorant as to buy into that philosophy.
Secondly, instead of taxing 1%, why not tax 100%? If people want to scream "fair" then be fair. If everyone paid $1, that's $311(+) million a year. Simple math could set levels based on income and determine a pre-shelter amount based on which economic group an individual fits into. Thus, people that are living solely on government money don't get to double-dip come April 15th - first by getting free money (which is actually earned money... just earned by someone else), secondly by getting all that money back after April 15th. Everyone pays taxes... and it's pre-shelter determined, we working on closing loopholes for the wealthy, and we work on spending not more than we bring in, and we'll be better off for it.
Third... why did we start taxation? I may be wrong about this (admittedly), but it was to pay those that administer to the purpose behind the creation of our government. As far as I can tell, that is to protect the rights of the individual and to protect the sovereignty of our nation (militarily). So, we should be only taxing what is needed to achieve those purposes and to compensate those in government who adminster what is needed to ensure those (SCOTUS, POTUS, Congress, military). When did it become the responsibility of the government to make sure people have rent, food, etc.? Why is it still that way? Too big to fail?
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You can't have one without the other
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k
r
-s
)n. pl. plu·toc·ra·cies 1. Government by the wealthy.
