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Old 10-09-2010, 10:51 AM
 
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From the article linked in the OP (Why the Wealthy Are Paying Less of America’s Taxes - The Wealth Report - WSJ):

Quote:
The data show that in 2008, the top 1% of tax returns paid 38% of all federal individual income taxes and earned 20% of adjusted gross income.

That marked a big drop from 2007 — the peak of the boom — when the wealthy earned 40.4% of income and paid 22.8% of taxes.
Notice the one-year switch, from earning 40% of income while paying only 23% of the taxes to earning 20% of income while paying 38% of taxes. Wow, those poor top 1% wage earners!

Of course, 2008 was a normal year. Nothing unusual happened...except maybe for that slight stock market crash in October 2008...which just might have affected the wealthy and their predilection for earning the bulk of their income via exercising their stock options, holding their subsequent stock for a year and a day, and then selling said stock to realize a long-term capital gain, taxable at 15% instead of the top income tax rate of 36%.

Still, I wonder whether a cherry picked point in time might be relevant today. The Wall Street Journal's Robert Frank based his blog entry (aka non-reviewed opinion) on an October 6, 2010 'non-partisan' Tax Foundation research paper utilizing data no later than 2008. Perhaps as true non-biased reporter Mr. Frank pursued the concept further by researching some more up-to-date information and thus prove that the 2008 trend continued into 2009 and 2010.

Quote:
Originally Posted by Robert Frank
And of course, 2009 and 2010 may tell a different story.
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Old 10-09-2010, 11:03 AM
 
9,803 posts, read 14,378,293 times
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Quote:
Originally Posted by texdav View Post
its the old method of liberals that they can let the rich pay for everyhting and still have a viable economy. The first falacy of that is if you don't ahve skin in the game then you make bad decisons.It ends up with the income gap widing as now because it broadens the lowest class in wealth.

----if you don't have skin in the game----

Like college students , living in college dorms that pay no real estate taxes, turning out in huge numbers to vote --yes-- on the school referendum that raises real estate taxes.

Easy to vote yes when you don't have to contribute $$$$.
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Old 10-09-2010, 05:56 PM
 
Location: Troy, Il
764 posts, read 1,459,088 times
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Quote:
Originally Posted by djmilf View Post
From the article linked in the OP (Why the Wealthy Are Paying Less of America’s Taxes - The Wealth Report - WSJ):



Notice the one-year switch, from earning 40% of income while paying only 23% of the taxes to earning 20% of income while paying 38% of taxes. Wow, those poor top 1% wage earners!

Of course, 2008 was a normal year. Nothing unusual happened...except maybe for that slight stock market crash in October 2008...which just might have affected the wealthy and their predilection for earning the bulk of their income via exercising their stock options, holding their subsequent stock for a year and a day, and then selling said stock to realize a long-term capital gain, taxable at 15% instead of the top income tax rate of 36%.

Still, I wonder whether a cherry picked point in time might be relevant today. The Wall Street Journal's Robert Frank based his blog entry (aka non-reviewed opinion) on an October 6, 2010 'non-partisan' Tax Foundation research paper utilizing data no later than 2008. Perhaps as true non-biased reporter Mr. Frank pursued the concept further by researching some more up-to-date information and thus prove that the 2008 trend continued into 2009 and 2010.



In a 2008 debate Obama admitted that capital gains tax doesnt increase the tax revenue for the US, but he still endorsed it because "it was fair." In other words, wealth redistribution and class warfare. Would you like it if your total taxes were 50%? No? Then why is it right to do it to anyone else? Fair treatment means treating everyone EQUALLY!!!!

Last edited by maschuette; 10-09-2010 at 06:07 PM..
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Old 10-09-2010, 09:25 PM
 
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Geez, Maschuette, calm down.

I was pointing out the fact that Mr Frank cherry picked his data to support his obviously biased opinion.

I didn't advocate for a capital gains tax rate of 50%. I didn't propose "wealth redistribution" and "class warfare".

But I was intrigued by your assertion about Barack Obama admitting that government revenues went down when the capital tax rate was raised. What Obama actually said during the April 16, 2008, presidential debate was:

Quote:
I would look at raising the capital-gains tax for purposes of fairness. We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year -- $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That's not fair.
It was actually the debate moderator, Charles Gibson, who insisted that raising the capital gains tax would lower government revenues, and tried his best to make Mr Obama speak that statement. While Mr. Gibson may still believe in the absoluteness of the Laffer Curve, any serious economist would point out the serious flaws in this theory.

Massachuette, you're the one screaming that "Fair treatment means treating everyone EQUALLY!!!!"

Please elighten me as to how it's fair that a hedge fund manager who makes half a billion dollars a year pays a tax rate that's about half of the tax rate that's imposed on his secretary's wages?
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Old 10-10-2010, 02:14 PM
 
8,265 posts, read 11,216,864 times
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Quote:
Originally Posted by djmilf View Post
Please elighten me as to how it's fair that a hedge fund manager who makes half a billion dollars a year pays a tax rate that's about half of the tax rate that's imposed on his secretary's wages?
Say the secretary paid 10% of her wages on 50k, so she contributed 5k to the community for things like roads, trash pickup and B-2 bombers. Hedge fund manager paid 5% of his wages on a half a billion, so he contributed 25 million to the community. Surely one could make a case that the hedge fund manager uses more community resources but I can't imagine it is anywhere near the disparity in their contributions to it.

Yes, I realize it is sexist assuming the hedge fund manager is male and the secretary is female, just going with the odds.
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Old 10-10-2010, 05:10 PM
 
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Originally Posted by slackjaw View Post
Say the secretary paid 10% of her wages on 50k, so she contributed 5k to the community for things like roads, trash pickup and B-2 bombers. Hedge fund manager paid 5% of his wages on a half a billion, so he contributed 25 million to the community.
So fairness is an extremely regressive tax plan?

You need to acquaint yourself with the concepts of discretionary income and of the marginality of money.

Quote:
Originally Posted by slackjaw View Post
Surely one could make a case that the hedge fund manager uses more community resources but I can't imagine it is anywhere near the disparity in their contributions to it.
"When you've got nothing, you've got nothing to lose" - Bob Dylan

The hedge fund manager didn't aquire his fortune in a vacuum. To be fair, the secretary didn't earn her pay in a vacuum either. Both rely on a functioning society to help provide their incomes. I would posit that while the secretary only has a $50,000 income and modest possessions to lose, the hedge fund manager has a $500,000,000 income and a vast quantity of wealth to lose. Who actually has the greater need for a functioning system of property rights, of government, and of law enforcement, the secretary or the manager?
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Old 10-10-2010, 05:34 PM
 
Location: Troy, Il
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"Who actually has the greater need for a functioning system of property rights, of government, and of law enforcement, the secretary or the manager?" I would say that they both do. So you think everything should be fair across the board? I will agree about the hedgefund managers, they should pay the SAME rate as their secretary. If you want everything equal also then i guess we agree on everything. So what rate should everyone pay....i would suggest 13%. What say you?
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Old 10-10-2010, 06:43 PM
 
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Quote:
Originally Posted by maschuette View Post
"Who actually has the greater need for a functioning system of property rights, of government, and of law enforcement, the secretary or the manager?" I would say that they both do.
And I'd say you completely missed my point that a hedge fund manager losing his hundreds of millions is not the same as the secretary losing her tens of thousands.

Quote:
Originally Posted by maschuette View Post
So you think everything should be fair across the board?
I honestly believe that we each have a different idea about "fairness". Can you spot the satire in this quote?

"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." (from The Red Lily, 1894)

Quote:
Originally Posted by maschuette View Post
I will agree about the hedgefund managers, they should pay the SAME rate as their secretary. If you want everything equal also then i guess we agree on everything. So what rate should everyone pay....i would suggest 13%.
I would first ask you to not put words in my mouth. I never said that the manager and the secretary should pay the same rate. In fact I favor a progressive tax rate - but I hesitate to defend my stance. It's not that I don't believe that I can't defend it as much as I believe that you cannot be dissuaded from your flat tax position. At best, we must agree to disagree.

I would then make note that 13% is even less than the 15% long term capital tax rate currently being paid by the hedge fund managers.

I'd also point out that 13% is less than the 19% effective tax rate that Warren Buffet paid on his 2006 income and much less than the 33% effective tax rate Mr. Buffet estimated that his employees paid on their 2006 income.

Even the Fair Tax Act co-authored by Georgia congressman John Linder, while a sales tax and not an income tax, still sets an effective tax rate of 30%.

In 2009, the median house-hold income was just about $50K and there were roughly 115 million house-holds. A flat tax rate of 13% would yield about $750 billion dollars. In 2009, the cost of the Department of Defense was $515 billion and the interest paid on the Federal debt was $260 billion - for a total of $775 billion. Even without paying social security, medicare and all of the other entitlement programs, even without funding the day-to-day functioning of the federal government (including law enforcement), even without funding the Global War on Terror, a 13% flat tax rate still leaves a federal deficit of about $25 billion.

Quote:
Originally Posted by maschuette View Post
What say you?
What do I say to your 13% flat tax rate? I'd say that you either conjured the number out of the air without any prior thought or that you actually believe that 13% is a fair rate. In the former, you're not being serious about the discussion and in the latter I would say you're not dealing with reality.

I'll only consider further discussion with you if you can convince me that you are neither a foolish troll nor an anti-tax, starve-the-beast reactionary.
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Old 10-10-2010, 08:46 PM
 
8,265 posts, read 11,216,864 times
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Quote:
Originally Posted by djmilf View Post
S
You need to acquaint yourself with the concepts of discretionary income and of the marginality of money.
You need to stop assuming people who's opinions don't align perfectly with yours don't understand basic money concepts.

Quote:
I would posit that while the secretary only has a $50,000 income and modest possessions to lose, the hedge fund manager has a $500,000,000 income and a vast quantity of wealth to lose. Who actually has the greater need for a functioning system of property rights, of government, and of law enforcement, the secretary or the manager?
Maybe so, maybe not. I submit the secretary has just as much relying on the wealth she has built up as anyone else, she could have a million bucks after 30 years and be counting on that for a retirement just as much as finance guy is counting on his to maintain his lifestyle.

Either one would face an unexpected hardship without the system in place to protect their wealth.
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Old 10-10-2010, 08:48 PM
 
20,950 posts, read 17,302,192 times
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Nice try.
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