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One possibly overlooked rebuttal to the idealist view of having everyone employed is that it could destroy businesses and industries built around helping people get jobs. For example, if every workable person in my home state of AZ was employed, so many staffing agencies, be it AZ-based or local offices of an agency not based in AZ, would go out of business.
Why do people believe that falsehood? Look at the CRS chart (Figure 2) on page 11, here. You're looking for the light blue bars, which shows the actual effective tax rate each income group pays.
Here's the REAL problem: 45% (62.1 million) of all US 1040 filers pay no federal income tax whatsoever. Making up a subset of that group are the 27% (37.3 million) of all US 1040 filers who pay neither federal income tax nor payroll tax (FICA).
138 million US 1040s were filed for tax year 2018. Only 75.9 million of those US 1040 filers had a total annual federal income tax liability of $5 or more. That's why the US runs deficits and racks up national debt: insufficient tax revenue due to way too many US 1040 filers not having to pay, the low-income and many in the middle class.
while I would - and many could - disagree that undertaxing the low end isn't our issue, I do wish more people would at least use the numbers you've provided.
Counting FICA and some attempt to assume excise taxes (sales, gas, etc) as part of tax burden has nothing to do with tax policy, especially towards the rich. FICA and excise taxes are actually a "fair tax" - everyone pays the same. Should we change the FICA cap, and just acknowledge the higher amount as a "rich tax" (since they don't get that FICA contribution back down the road)? If one wants - sure. Just be philosophically honest about it.
Here's another simple chart for folks to consider, which covers "How many people itemize?"
You itemize when your deductions exceed the standard. Itemizers are down - meaning the standard deduction exceeds what they would itemize.
About 14% of taxpayers itemize. It was/would have been 31% under old tax law - so some portion of 17% of people did better through the higher standard deduction. Part of the tax change was to simplify taxes. Taking a standard deduction (think 1040-EZ) instead of itemizing is simplifying.
an estimated 11MM taxpayers would exceed the SALT cap but STILL itemize. Since it was an ESTIMATE, followup information is needed. But 11MM of 150MM returns is a small %. And it's hard to see the EXACT effect without knowing how the lowering of those taxpayers marginal rates offset exceeding the SALT cap.
But if folks had taxable income from 80 - $350K, they got a break anywhere from 3% to 9% on their rate. And just 4% of
300K is $12,000
I exceeded the SALT cap last year, and I'm not in a particularly high tax area. But the SALT cap would also very much be a "fair tax" - no one got to enjoy more than that amount.
Last edited by BoBromhal; 01-04-2020 at 09:06 AM..
Lets say you have a hypothetical village with 5 people and 5 houses available. They all make $50k per year, so the houses only cost $150k each.
Now lets add a 6th person, but keep those same 5 houses available. This 6th person is a millionaire. So now, the price of the houses has gone up to $600k. The first 5 people can now no longer afford to buy and now have to rent because of this 6th persons higher ability to pay driving the price up
One possibly overlooked rebuttal to the idealist view of having everyone employed is that it could destroy businesses and industries built around helping people get jobs. For example, if every workable person in my home state of AZ was employed, so many staffing agencies, be it AZ-based or local offices of an agency not based in AZ, would go out of business.
job fluidity?
Let's say every single person is employed. Let's say company A decides their company has grown and needs 1 more employee. How are they going to get it? They're going to have to find an employee at another company, and lure them away with money and/or opportunity.
while I would - and many could - disagree that undertaxing the low end isn't our issue, I do wish more people would at least use the numbers you've provided.
Counting FICA and some attempt to assume excise taxes (sales, gas, etc) as part of tax burden has nothing to do with tax policy, especially towards the rich. FICA and excise taxes are actually a "fair tax" - everyone pays the same. Should we change the FICA cap, and just acknowledge the higher amount as a "rich tax" (since they don't get that FICA contribution back down the road)? If one wants - sure. Just be philosophically honest about it.
Here's another simple chart for folks to consider, which covers "How many people itemize?"
You itemize when your deductions exceed the standard. Itemizers are down - meaning the standard deduction exceeds what they would itemize.
About 14% of taxpayers itemize. It was/would have been 30% under old tax law - so some portion of 17% of people did better through the higher standard deduction. Part of the tax change was to simplify taxes. Taking a standard deduction (think 1040-EZ) instead of itemizing is simplifying.
an estimated 11MM taxpayers would exceed the SALT cap but STILL itemize. Since it was an ESTIMATE, followup information is needed. But 11MM of 150MM returns is a small %. And it's hard to see the EXACT effect without knowing how the lowering of those taxpayers marginal rates offset exceeding the SALT cap.
But if folks had taxable income from 80 - $350K, they got a break anywhere from 3% to 9% on their rate. And just 4% of
300K is $12,000
I exceeded the SALT cap last year, and I'm not in a particularly high tax area. But the SALT cap would also very much be a "fair tax" - no one got to enjoy more than that amount.
You posted: "while I would - and many could - disagree that undertaxing the low end isn't our issue"...
Actually, I and the European Socialist Democracy countries would consider undertaxing the low end to be the problem. The US tax base is too narrow. More info on that including a Washington Post article and a link to research in this post:
Because you have to choose: Either extreme income and wealth inequality or democracy. You can't have both. The more money the few have relative to the vast majority, the more power they have over the vast majority.
When the political system is flooded with money, you have less power and they have more. What's so great about that? There will always be some inequality and that is inevitable, but extreme income and wealth inequality should be given a wide berth.
By democracy you mean a pack of wolves and two sheep vote to decide what to eat for dinner?
A true democracy means majority rule but the rights of the minority cannot be violated. You cannot violate other people's property rights to satisfy your own needs/wants.
One possibly overlooked rebuttal to the idealist view of having everyone employed is that it could destroy businesses and industries built around helping people get jobs. For example, if every workable person in my home state of AZ was employed, so many staffing agencies, be it AZ-based or local offices of an agency not based in AZ, would go out of business.
How so? Wouldn't people want more money and better jobs?
Currently, this country is at full employments. The recruiting agencies are BUSY because businesses are trying to "steal" from either other to fill their voids.
None of those countries have anywhere near the level of income and wealth inequality of America.
You've advocated for a Mexican style tax system in the past which is no surprise since you adore oligarchy.
Please explain why wealth inequality is a problem first.
You can't just say "Well, the earth is round. That's a problem because it's round."
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