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I saw [but can't find] a comment that "Obamacare will make the US a welfare state for the first time." While not true, I wondered if we are all on the same page regarding the definition of welfare state.
A basis for governing, “welfare-state” is often used as a derogatory label. There are different flavors of managing a welfare state but the premise is the same. For instance:
“A welfare stateis a concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens.It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal provisionsfor a good life. …[1]”
OR
A political system based on the premise that the government (and not the individual, corporations,or the local community) has the responsibility for the well-being of its citizens,by ensuring that a minimum standard of living is within everyone's reach. This commitment is translated into provision of universal and free education, universal medical care, insurance against disability, sickness, and unemployment, family allowances for income supplement, and old age pensions.[2]
It is funded through redistributionist taxation where taxation usually includes a larger income tax for people with higher incomes, that helps to reduce the income gap between the rich and poor.[3]
A political system based on the premise that the government (and not the individual, corporations,or the local community) has the responsibility for the well-being of its citizens,by ensuring that a minimum standard of living is within everyone's reach. This commitment is translated into provision of universal and free education, universal medical care, insurance against disability, sickness, and unemployment, family allowances for income supplement, and old age pensions.[2]
It is funded through redistributionist taxation where taxation usually includes a larger income tax for people with higher incomes, that helps to reduce the income gap between the rich and poor.[3]
It's a misconception that a progressive income tax, such as described above (in bold), reduces the income gap. The exact opposite is true.
For example, in the U.S., the top 1% earns 18.7% of the income, but pays 35.1% of the federal income tax revenue, roughly twice their fair share which is 4 times what the middle class pays (the middle class pays only about half of their fair share of the federal income tax compared to their share of the income). The problem with our country's progressive tax system is that it creates a perverse incentive for the federal government to enact policies that promote as wide of an income gap as possible in order to maximize tax revenue.
Others have noticed, too...
Quote:
"[Economist Anatole] Kaletsky argues that over-reliance on progressive taxes creates "a perverse incentive for governments to promote income inequality. Ifthe solvency of the stateand the ability to fund basic services for the poorest people in society depends on the rich getting even richer, it is tempting for even the most progressive politicians to support widening inequalities."
As long as the U.S. has a progressive tax system, the incentive remains to keep the income gap as wide as possible, and this is why: When the top 1% loses income share, the federal government loses twice that much in tax revenue. But when the top 1% gains income share, the federal government consequently gains twice that much in tax revenue.
That's a good analogy. Given that such folks have managed to corrupt society to bring about a doubling of economic inequality over the last generation, and are making in-roads toward doubling economic inequality over the coming generation, their ridiculous nonsense is easily dismissed as vacuous deflection of attention away from how they support and promote regression of American civilization back to a more barbaric state, where power could be more readily abused to subjugate the most vulnerable in society to the aggrandizement of the powerful.
Given that such folks have managed to corrupt society to bring about a doubling of economic inequality over the last generation, and are making in-roads toward doubling economic inequality over the coming generation...
Read my post on our progressive tax system (above) to understand why our federal government, including politicians on both sides of the aisle, promotes as much income inequality as possible. That is indeed exactly what has happened, is it not?
Read my post on our progressive tax system (above) to understand why our federal government, including politicians on both sides of the aisle, promotes as much income inequality as possible. That is indeed exactly what has happened, is it not?
No.. the theory misses one key point:
The top 0.1% (who the government theoretically should extract the most from in taxes), pays less as a % of income than the rest of the top 50% of taxpayers. That wasn't the goal of progressive taxation.
Our tax rates are currently fine. The only tweak I would make is to tax capital gains and all income at the same rate as earned income, and enact a 50% millionaire tax for super-high income earners ($5 million+ per year). Offset the small(er) business hit with a small business tax credit.
The top 0.1% (who the government theoretically should extract the most from in taxes), pays less as a % of income than the rest of the top 50% of taxpayers.
Completely false.
The top 0.1% pays an effective federal income tax rate of 22.82%.
The top 50% of taxpayers pays an effective federal income tax rate of only 13.8%. And that INCLUDES the top 0.1%'s 22.82% effective tax rate. Strip out the effective tax rate the top 1% pays, and the rate the top 50% pays excluding the top 1% is MUCH lower than even 13.8%.
Question to you, ErikBEggs... from where are you getting your completely warped assertions? Factual data proves your assertions completely false. So who is spoon-feeding you lies? And why do you believe them so readily?
The top 0.1% (who the government theoretically should extract the most from in taxes), pays less as a % of income than the rest of the top 50% of taxpayers. That wasn't the goal of progressive taxation.
Our tax rates are currently fine. The only tweak I would make is to tax capital gains and all income at the same rate as earned income, and enact a 50% millionaire tax for super-high income earners ($5 million+ per year). Offset the small(er) business hit with a small business tax credit.
Well hello there Hitler ! Wow you sound like a fool.. So you dont mind if your boss cuts your pay check in half? You always complain about the 1% but that percent the Dems and Repubs work for. Time for you to wake up.
Well hello there Hitler ! Wow you sound like a fool..
He has faulty info. Not sure why he swallows manipulative lies hook, line, and sinker without verifying the accuracy of the data. But then again, duping fools easily wins elections for Democrats. The ignorance of their voter base is a plus for them.
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