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You're right that people really don't understand progressive taxes.
... The high wage earner therefore pays more than twice as much in taxes, despite only having twice the income.
The progressive tax system is substanatively unfair, and punishes people who create wealth in the economy.
Quote:
Originally Posted by leftydan6
No, what is sick is the greed in this country of those who already have so much. If we set a flat tax, the poor can't afford to live at a rate that's high enough for us to actually pay for the necessary services. Tell a minimum wage worker that they need to pay MORE taxes because some guy who makes 10x as much didn't want to see his taxes go up 2.5%. The disparity of wealth in this country is worse than any other first world nation. If a progressive tax system is so bad for the rich, how have our rich gotten so much more wealthy than our poor?
By "necessary services", lefty, are you perhaps referring to the various entitlement services on the menu right now? The ones whose sole purpose is to ensure that the Dem supporters get re-elected? Who wants those working at the minimum ewage to pay more? I've NEVER heard that suggestion from the "right" (which, I remind you, I'm definitely NOT!).
Quote:
Originally Posted by leftydan6
Would you suggest a flat tax? Or how about no taxes at all? Honestly, the Progressive tax is the only way to pay for services without bankrupting the lower and middle classes. A 7% increase on the lower and middle classes would have devastating effects, but that same increase on all money above a certain threshold would not.
If you're rich, you argue with me because you're greedy and you want it all for yourself. If you're not, you argue with me because you don't know any better. The Flat tax would kill your bottom line to make up for the lost taxes to rich people, and no taxes would eliminate all the services you take for granted.
So which is it, are you greedy or stupid?
Quote:
Originally Posted by irspow
Ideally, I would like to see a flat citizen fee that is the exact same for every American. If that equal amount can not be afforded by everyone, than obviously the Federal Regime will have to cut its spending drastically.
So in your world view, I am stupid, because I don't want to fund ridiculous central government planning policies.
First, let's stop the insults. With a few obvious exceptions, there are no obvious and truly stupid people here. We come here to discuss, debate and enjoy. Thank you!
Second, lefty, a simple structure that allows a significant initial deduction (say, $20k per person, more for a married couple. Just an example...) gets around your objection. Not enough? Then make it $25K. $30k? Whatever. Then your less fortunate folks would, given the right setup, be better off than they are now by a simple calculation. Then, of course, a fixed, say, 22% or 25% on everything else above would be, I think the word is, FAIR. With reasonable deductions for any and all medical expenses, drop the deduction for home mortgages (despite the howls of outrage from banks and realtors; why should home buyers get a special deal?) .
Mathematically, the top, say, 5% of wage earners in this country would, of course, obviously and provably, pay waaayyy more than the bottom 50%! In absolute dollars. With some Federal government fiscal responsibility (huh?) we could balance the budget. It would be fair, an incentive to make more, and it would not constitute the predatory, confiscatory system we have now.
As for minimum wages. Well, let's not go there. And as for helping the truly disadvantaged, just who do you know who would deny them? You also know, don't you, that there are a significant percentage of those on welfare (particularly BEFORE the Republican-authored Welfare Reform Bill they offered a reluctant vote-pandering Bill Clinton into signing) who are not disadvantaged beyond their control. They just would rather NOT work too hard if at all. And certainly not at the minimum wage. Which, by the way, is supposed to be an incentive to improve yourself, not a life income goal!
It could all be SO SIMPLE. But that would be too simple! And FAIR.
Well, let's be nice now. Please?
Last edited by rifleman; 11-06-2008 at 06:41 PM..
Reason: typos
In early December of 1999, George W. Bush announced a plan for large-scale tax reductions. The plan was clarified and amended in May 2000. The principal components of the Bush plan are:
A major reduction in personal income tax marginal rates (accounting for just under half the total Bush tax cut). Specifically:
The current 39.6% top rate would drop to 33%.
The current 36% rate would drop to 33%.
The current 31% rate would drop to 25%.
The current 28% rate would drop to 25%.
The current 15% tax bracket would be retained over most of its range.
A new 10% bottom bracket would apply over about a quarter of the range of the current 15% bracket.
(The revised and clarified Bush tax plan does not adjust the current 26% and 28% tax rates for the Alternative Minimum Tax (AMT), which taxpayers must pay if it exceeds their regular tax due. As a result, a substantial portion of the income tax cuts his plan seems to promise to taxpayers currently in the 28% through 36% tax brackets would be obviated by the AMT.)
The $500 per child tax credit would be doubled and extended to much higher-income families. Two-earner couples would get a special deduction of up to $3,000. Taxpayers who don't itemize deductions could nevertheless deduct charitable contributions. And a few other personal tax breaks would be provided. (These changes account for a quarter of the total Bush tax cuts.)
The rest of the Bush tax cuts reflects repeal of the federal wealth tax on very large estates (24% of the total tax cut) and tax breaks for corporations (2% of the total).
Distributional Effects
Most of the Bush tax cuts would go to taxpayers in the top end of the income scale:
Three-fifths of the tax cuts would go to the best off 10 percent of all taxpayers.
Some 43 percent of the tax cuts would go to the top one percent, those making more than $319,000 a year, with average incomes of $915,000 in 1999. The average tax cut for the top one percent would be $46,000 a year.
In contrast, the average Bush tax cut for the bottom 60 percent of taxpayers would be only $227 a year.
Effects of George W. Bush’s Revised Tax Plan
(Annual effects at 1999 income levels)
Income Group Income Range Average Income Average Tax Cut % of Total Tax Cut
Lowest 20% Less than $13,600 $ 8,600 $ –42 0.8%
Second 20% $13,600–24,400 18,800 –187 3.5%
Middle 20% $24,400–39,300 31,100 –453 8.4%
Fourth 20% $39,300–64,900 50,700 –876 16.2%
Next 15% $64,900–130,000 86,800 –1,447 20.1%
Next 4% $130,000–319,000 183,000 –2,253 8.4%
Top 1% $319,000 or more 915,000 –46,072 42.6%
ALL $ 50,800 $ –1,070 100.0%
ADDENDUM
Bottom 60% Less than $39,300 $ 19,500 $ –227 12.6%
Top 10% $92,500 or more 218,000 –6,410 59.4%
Source: Institute on Taxation and Economic Policy Tax Model, May 2000.
The Cost of the Bush Tax Cuts
Based on official projections from the Congressional Budget Office and the Joint Committee on Taxation, the Bush tax cut plan would use up slightly more than all of the projected budget surpluses over its first ten years, not counting the surpluses in the Social Security and Medicare trust funds. Over the fiscal 2002-11 period, the Bush tax cuts would cost $1.9 trillion, while the projected surpluses are only $1.8 trillion.
In fact, the Bush tax cuts effects on the surpluses is even greater than that. As is well known, the official surplus projections are substantially overstated, because, among other things, they assume that federal appropriations keep up with inflation only, with no adjustment for population growth or real wage growth. If, for example, one assumes that appropriations will probably keep up with the economy, then the projected surpluses over the 2002-11 period (excluding Social Security & Medicare) fall from $1.8 trillion to only $770 billion. Thus, in all likelihood, the Bush tax cuts would use up far more than the likely surpluses over the next decade. That would require dipping heavily into the Social Security and/or Medicare trust funds to cover the cost of the tax cuts.
Revised G.W. Bush tax cuts estimates (interest at 5.5%) over ten years (FY 2002-11)
Fiscal Years, $-bill. 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 10 yrs
Tax cuts (JCT 02-10) $ 21.1 $ 57.4 $ 88.9 $ 125.5 $ 167.1 $ 193.2 $ 210.0 $ 224.5 $ 232.9 $ 243.7 $ 1,564.3
Interest (5.5% rate)** 0.6 2.8 6.9 13.2 22.0 33.1 46.0 60.5 76.4 93.7 355.3
Total effect $ 21.7 $ 60.2 $ 95.8 $ 138.7 $ 189.1 $ 226.3 $ 256.0 $ 285.0 $ 309.3 $ 337.4 $ 1,919.6
*Tenth year (FY 2011) is Citizens for Tax Justice estimate.
**Based on latest CBO interest rate estimates.
Source: Except as noted, figures are from Joint Committee on Taxation, “Estimated Revenue Effects of Various Provisions Described as the ‘George W. Bush Tax Reduction Proposal,’ ” May 3, 2000.
ADDENDUM (8/2000): With more recent official revenue projections under current law, cost of Bush tax plan will be higher.
ADDENDUM: 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 10 yrs
Surpluses per CBO (July 2000), excluding Social Security & Medicare (A) $ 70 $ 86 $ 103 $ 114 $ 132 $ 180 $ 223 $ 254 $ 301 $ 361 $ 1,824
Bush tax cut uses 31% 70% 93% 122% 143% 126% 115% 112% 103% 93% 105%
Surpluses if appropriations keep up with the economy $ 56 $ 59 $ 60 $ 55 $ 49 $ 72 $ 91 $ 94 $ 107 $ 127 $ 769
Bush tax cut uses 39% 101% 160% 252% 384% 315% 281% 305% 290% 266% 250%
Addendum: Regarding Bush's Claim That His Tax Plan Favors the Poor
According to the "Fact Sheet" accompanying George W. Bush's Dec. 1, 1999 announcement of his tax plan, "The Bush tax cuts benefit all Americans, but reserve the greatest percentage reduction for the lowest income families."
This statement is false. Bush's proposed tax cuts do not benefit all Americans, and they do not provide the largest percentage reduction to lower-income people. In fact, more than a quarter of taxpayers would get nothing at all from the Bush plan. Moreover, as a share of current federal taxes, the Bush plan (as revised in May 2000) amounts to:
a 5.5% reduction for the bottom 20%,
an 7.3% reduction for those in the middle and
a 13.6% tax cut for the best-off one percent.
In dollars, the Bush plan would cut total federal taxes for the lowest fifth from an average of $756 a year now to $714, a reduction of only $42 a year. Taxpayers in the middle of the income scale would see their average federal tax liability cut from $6,195 to $5,742, a reduction of $453. But those at the top would see their taxes cut by an average of more than $46,000 a year.
Over-spin: To assert that his tax plan favors those at lower income levels, Bush chose to misleadingly focus on only one federal tax, the personal income tax. But because the income tax is progressive, it imposes little or no burden on lower income taxpayers now. In fact, most of the federal taxes that lower- and middle-income people pay reflect Social Security payroll taxes and excise taxes, neither of which is affected by Bush's plan.
Measuring the fairness or unfairness of any tax proposal by its percentage change in taxes for different income groups is almost always a misleading exercise because the current federal tax system is modestly progressive. Much more relevant measures are to look at proposed tax cuts for different income groups: (a) in average dollar terms, (b) as shares of the total tax cuts, and (c) as shares of income. By any of these measures, Bush's plan is clearly targeted at the upper end of the income scale:
Average Dollar Cut Share of Total Cut Tax Cut/Income
Lowest 20% $ 42 0.8% 0.5%
Middle 20% 453 8.4% 1.5%
Top 1% 46,072 42.6% 5.0%
Bush also gave you this... The Bush administration and Congress have scaled back programs that aid the poor to help pay for $600 billion in tax breaks that went primarily to those who earn more than $288,800 a year.
To offset the loss of the tax revenue, the administration has amassed record federal deficits and trimmed social spending.
The affected programs — job training, housing, higher education and an array of social services — provide safety nets for the poor. Many programs are critical elements in welfare-to-work initiatives and were already badly underfunded.
A six-month Detroit News investigation showed that as a result of the withering government assistance, working poor and destitute Americans are increasingly likely to be placed on waiting lists for help, receive reduced services, or be denied service entirely.
The News, after interviewing scores of people across the United States and examining thousands of pages of federal and state financial records, determined the loss of services cost many poor Americans more money than they saved from the tax cuts.
In many cases, the poorest lost services and got no tax cut at all.
The analysis of the three Bush tax cuts is based in part on estimates by the Center on Budget and Policy Priorities, using data from the nonpartisan Congressional Budget Office.
The poorest 20 percent of workers, who earn on average $16,600 annually, will get a tax break of $250 this year, which is less than 2 percent of their income. That amounts to about 68 cents a day.
By comparison, the richest 1 percent, with average incomes topping $1.1 million, will receive $78,460 in tax cuts this year. That is nearly 7 percent of their income.
For the poor, inequities of the Bush tax cuts are further exacerbated by the long-standing disparities in the Social Security tax, which has increased nine times since 1977.
Earnings are taxed for Social Security at a rate of 6.2 percent on income up to $87,900. But there is no Social Security tax on income above that amount. For America’s poorest workers — those who struggle to make ends meet — every dollar is subject to the Social Security tax.
The richest 10 percent, who make on average $288,800, will pay less than 2 percent of their income for Social Security.
In fact, while most workers pay into Social Security all year, millionaires — who pay less than half a percent — would be finished paying it by the first four weeks of the year.
For taxpayers who earn more than $87,900, it amounts to an estimated $85 billion break.
Meanwhile, the Bush tax breaks for the richest 10 percent this year alone will total $148 billion.
That is twice as much as the government will spend on job training, $6.2 billion; college Pell grants, $12 billion; public housing, $6.3 billion; low-income rental subsidies, $19 billion; child care, $4.8 billion; insurance for low-income children, $5.2 billion; low-income energy assistance, $1.8 billion; meals for shut-ins, $180 million; and welfare, $16.9 billion.
The reduction in government assistance that accompanied the tax cuts couldn’t come at a worse time.
The number of Americans living in poverty has risen 10 percent since 2000, after falling in the late 1990s. Nearly 36 million Americans — one in eight — now live in poverty and tens of millions more are considered working poor.
The economy has lost nearly a million jobs — 241,000 in Michigan alone — since it slid into recession in March 2001.
That has increased the demand for government programs from millions of Americans who are now more likely to know hunger, homelessness and chronic need.
America’s working poor — its secretaries, cooks, laborers, clerks and others — are finding it difficult to meet even basic needs.
For the poor, child care and housing can consume more than 80 percent of their income. And 45 million Americans, most of them low-income, have no health insurance.
Housing in many cities is so unaffordable that although 39 percent of the homeless work, they can’t pay for even a substandard apartment, according to a 2003 survey by the country’s mayors.
Compounding the problem, massive budget shortfalls have forced states to pare back their contributions to federal programs. At the same time, charitable contributions declined.
Those mired in poverty, hoping to wean themselves from public assistance, have received little help from Congress in their struggle to earn a living wage. Government is now offering job training to fewer people than in years past.
Nearly 6 percent of all U.S. workers earn minimum wage, $5.15 an hour.
Based on a 40-hour workweek, the annual minimum wage of $10,700 places a single parent of two well below the poverty level. Minimum wage earners got very little under the Bush tax cuts. Key social program cuts have left them with fewer places to turn for help.
Not to be whiny, even though I might be, uh, why was I quoted in your last post? Did I say something wrong there? I am just a little confused as to my inclusion there. Sorry, for the trouble.
Thank you for proving my point. People don't understand progressive taxes. Say the cutoff was at exactly $50,000. The first 50k would pay $12,500 in taxes, the next 50k would pay $15,000 for a total of $27,500 instead of $25,000. That's a small increase for an amount of money that could go a lot further in the hands of the needy than in someone's IRA.
Your tax rate is not 30% for all the money you make, only the money above that threshold. So while you pay a slightly higher % of your income in taxes, your income is going to be higher than those who pay less. The extra 5% on your next $50,000 isn't going to affect you as much as an extra 5% on someone making less money. A person making $15,000 needs as much of their money as possible to survive, a person making $150,000 obviously needs a lower % of their income to survive. Without a progressive tax system, people at the lower rates would go bankrupt or we'd run out of money for government services like Defense and Roads.
This depends on the cost of living of the area, which the Federal income tax doesn't take into account. A person living in the midwest could have a 50k-60k job while a person in CA might need 100k to be able to afford a slightly smaller house on a smaller lot than the person in the midwest. The midwesterner would actually have a better standard of living.
Not to be whiny, even though I might be, uh, why was I quoted in your last post? Did I say something wrong there? I am just a little confused as to my inclusion there. Sorry, for the trouble.
Actually, I sorta forgot that I'd left you there hanging. Well, first, I agree with your thoughts about a flat tax, obviously. Second, I was referencing the insult you absorbed and noted in my request that leftydan stop hurtling the "stupid" insult. Nothing aimed at you. My bad! Sorry for the confusion; I'll try to do better.
To elvislives: I'm impressed. A great summary. I'm gonna actually read it all in detail. Good stuff. Of course, it's a bit of an indictment against our current prez (and/or his fun advisors). But if the shoe fits, eh? Where DID you find all this info?
To elvislives: I'm impressed. A great summary. I'm gonna actually read it all in detail. Good stuff. Of course, it's a bit of an indictment against our current prez (and/or his fun advisors). But if the shoe fits, eh? Where DID you find all this info?
It's not his own analysis, it's copied verbatum from the Citizens for Tax Justice Home Page CTJ website. CTJ is a liberal tax advocacy group, which demands that "the wealthy [] pay their fair share."
It's not his own analysis, it's copied verbatum from the Citizens for Tax Justice Home Page CTJ website. CTJ is a liberal tax advocacy group, which demands that "the wealthy [] pay their fair share."
And therefore, thanks for that, zman0! A veritable hive of information here!
I guess the big question is: are the percentages etc. provided in that verbatim review correct? I can understand a biased perception of the specific info, but I'd like to know exactly and accurately what the specific regulations are.
Last edited by rifleman; 11-07-2008 at 08:26 AM..
Reason: typos
And therefore, thanks for that, zman0! A veritable hive of information here!
I guess the big question is: are the percentages etc. provided in that verbatim review correct? I can understand a biased perception of the specific info, but I'd like to know exactly and accurately what the specific regulations are.
I posted several links and i never alluded that those were my words but they did proved a point right???
I posted several links and i never alluded that those were my words but they did proved a point right???
Actually, you didn't post the links. What you did is called copyright infringement, and it is generally not allowed on this forum.
The information you posted is not unbiased information, but much like everything you post, you purported it to be so.
There are plenty of unbiased tax centers out there that praised the Bush tax policies and are denouncing the Obama policies. Raising taxes on everyone who makes over $42,000/year is not a strategy that is going to improve the economy, no matter how much you hope.
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My apologies...
Well, first, I agree with your thoughts about a flat tax, obviously. Second, I was referencing the insult you absorbed and noted in my request that leftydan stop hurtling the "stupid" insult. Nothing aimed at you. My bad! Sorry for the confusion; I'll try to do better. 
Thanks!
