Well, the Democrats are hoping to make another big gain this next election cycle. And they're already talking about how they're going to increase taxes on the rich. They need to pay their fair share!

Well, what would their fair share be? According to data released by the US Treasury:

The top 1% pay 40% of all taxes
The top 5% pay 60% of all taxes
The top 10% pay 70% of all taxes
The bottom 50% pay 3% of all taxes

Gee, seems like the rich really aren't paying their fair share.

And the Republicans will win the elections again.

The REAL rich people don't pay taxes at all. Their corporations do that for them... :rolleyes:

Then we need a flat tax syatem with everyone that makes over 30,000.00 paying 15 percent a year on whatever they earn.

Guess what? We have a tax system over here (Estonia) that taxes 22% of everything over about 2200$ a year (and moving to 20% of everything over 3200$ a year over the next two years). It seems that according to some people, we really really need a progressive tax system to tax more of the rich :Db

The top 1% pay 40% of all taxes
The top 5% pay 60% of all taxes
The top 10% pay 70% of all taxes
The bottom 50% pay 3% of all taxes

Gee, seems like the rich really aren't paying their fair share.
The rich aren't paying their fair share, when you consider the massive inequality of income in America.

The top 1% of Americans account for 57% of income in America, which means that their 40% tax contribution is indeed too low. The top 5% account for 73% of income, making their 60% tax contribution lower still. The 3% tax contribution of the bottom 50% isn't at all surprising, since the bottom 50% only accounts for 3% of the wealth. Hmm...it looks like the bottom 50% is the only group that is actually paying a proportional amount of taxes!

In fact, if you were to make the top 1% pay just 10% more in taxes you could completely eliminate taxes for the bottom 50% of Americans! If you doubled the current taxes paid by the top 1%, you could eliminate taxes for the bottom 95% of Americans! Since the top 1% is receiving 58% of the nation's income, I somehow suspect that they could afford it.

There's also the question of what's "fair." The flat tax people tend to thing that paying a flat percentage of income is fair. Under more extreme definitions, paying the same amount per person is fair, regardless of wealth (hence not paying an "income" tax at all). From the standpoint of "sharing the burden equally" I tend to think that the rough goal is to impose some roughly equal guesstimate of the disutility generated by taxes on each taxpayer.

Under that version of "fairness" It tend to think that the rich (in which I include myself) should be paying a higher percentage of the taxes than the poor. If you earn $1MM per year and pay a 30% tax...that's a lot of money, but it still leaves you with a net income of $700K for that year. Assuming you're reasonably sane and have no extraordinary expenses, that is a lot of money by most people's standards and the difference between how happy you'd have been with $1MM and how happy you are with $700K is probably not overwhelmingly large. All things have a diminishing marginal utility, even cash, especially when you get past the point where all your basic needs and basic desires for comfort are met (and $600K is well beyond that point for most people).

If your earn $50,000 and pay a 30% tax, you're left with just $35,000. If you were to take the difference in your utility function (U(x)) between x = $50K and x = $35K, and I suspect that difference would be a *lot* greater than the difference between x= $1MM and x = $700K.

In real economic terms, as a result, flat taxes are a boon to the wealthy, because they ignore the law of diminishing marginal utility with respect to cash. Then again, the whole income tax system really ignores "wealth" in general. which in some cases skews the results (especially if estate taxes are eventually eliminated or the current moratorium extended). From the standpoint of utility, the "source" of the income doesn't matter, as the cash in fungible. So to be completely "fair," in my view, we should probably consistently tax all significant wealth transfers as if they were income.

A bit of trivia: Did you know that income tax was unconstitutional until the early 20th Century?

A bit of trivia: Did you know that income tax was unconstitutional until the early 20th Century?

As far as I know its still unconstitutional.

I wish! 16th Amendment took care of that.

I wish! 16th Amendment took care of that.

You are treading into the dangerous waters of those who believe it was never properly ratified, and that there's a conspiracy to conceal that "fact."

You are treading into the dangerous waters of those who believe it was never properly ratified, and that there's a conspiracy to conceal that "fact."

Yah, I know there's a whole counterculture out there that believes paying income tax is unconstitutional and purely voluntary. Had a client once who sought advice on avoiding taxes on such grounds. Provided me a bunch of literature, and as I read it, all the cites to US Supreme court holdings were taken out of context and antiquated to pre-16th amendment conjecture and dicta. It was like reading the Book of Mormon (no offense to Mormons); you just kinda go, "huh??"

BTW, I and my managing partner at the time declined representation.

'Flat tax' systems don't exist in isolaton. They are implemented in economic systems that use entitlements to maintain progresive social systems. The issue has been tosed about more in Canada and Europe where there are monthly child paymnets, universal health care, maternity benefits for mom and dad, fitness encouragement credits, etc. Otherwise: a family may pay 20% in flat taxes...lets say $5,000 a year but they also receive back $15,000 in direct checks from the government. A wealthier person pays 20% in flat taxes ...lets say $15,000 a year but only receives back $3,000 in direct entitlements.

No modern economic system is going to implement a tax that changes the balance line at the bottom of the national budget. There is revenue and spending... if more is spent than taken in then the national debt increases andthere is even LESS room for tax changes. The American government needs to take in MORE revenue if it insists on staying in Iraq and spending 190 billion annually for the privilege ...or even in peace time spending a half trillion on the military. Yesterday in Canada the federal gvernment announced more tax cuts BUT this is because of over a decade of federal government surpluses. Australia is in the same position with federal government surpluses and tax cuts. The USA, in contrast has massive deficits in recent years and that demands more money increases in expenditure to service the growing debt. Tax cuts by the US governmnet are suppose to be offset by increased economic growth but that only makes sense when the government also decreases spending....it hasn't. ... the pot is empty. The US government needs foreign support by China, Arab governments etc. to finance the current American debt or the dolar will collapse further and along with it the real value of american assets such as housing.

I wouldn't look at it as an increase, rather as rolling back the major tax cuts the Republicans recently passed for the rich. Some call them the elite, Bush calls them his base. (He really said that).

In fact, if you were to make the top 1% pay just 10% more in taxes you could completely eliminate taxes for the bottom 50% of Americans! If you doubled the current taxes paid by the top 1%, you could eliminate taxes for the bottom 95% of Americans! Since the top 1% is receiving 58% of the nation's income, I somehow suspect that they could afford it.

I think the subject would be quite popular among populist parties (perhaps not with the system US has, but more elsewhere), that could claim to remove all taxes for the majority of the population, and I would suspect that even though major businessmen and corporations would oppose the idea completely, the support from the general population would be enough win elections by a large margin, if it were not for the problem of tax-evasion that would most certainly arise as soon as the system was implemented. I would expect the tax-collections to fall by tens of percentages even if very strict rules were used to keep people from evading taxes.

I think the subject would be quite popular among populist parties (perhaps not with the system US has, but more elsewhere), that could claim to remove all taxes for the majority of the population, and I would suspect that even though major businessmen and corporations would oppose the idea completely, the support from the general population would be enough win elections by a large margin, if it were not for the problem of tax-evasion that would most certainly arise as soon as the system was implemented. I would expect the tax-collections to fall by tens of percentages even if very strict rules were used to keep people from evading taxes.

Maybe...but on the other hand, if the IRS only had to process and investigate 1% as many tax returns as they currently do, they could probably do a much better job catching tax evaders and enforcing the tax laws.

If your earn $50,000 and pay a 30% tax, you're left with just $35,000. If you were to take the difference in your utility function (U(x)) between x = $50K and x = $35K, and I suspect that difference would be a *lot* greater than the difference between x= $1MM and x = $700K.
Most flat tax plans have a level below which you pay no taxes. Suppose you have a 20% flat tax with no deductions, but it doesn't start until you hit 20k. So your 50K dude would pay taxes on only 30k. His tax burden would be only 6k or 12%. Leaving him with 44k.

Your millionaire would pay taxes on 980k. His tax burden would be 196k or 19.6%. So his tax rate is 1.6 times that of the 50k guy.

See, even a flat tax is "progressive".

Most flat tax plans have a level below which you pay no taxes. Suppose you have a 20% flat tax with no deductions, but it doesn't start until you hit 20k. So your 50K dude would pay taxes on only 30k. His tax burden would be only 6k or 12%. Leaving him with 44k.

Your millionaire would pay taxes on 980k. His tax burden would be 196k or 19.6%. So his tax rate is 1.6 times that of the 50k guy.

See, even a flat tax is "progressive".

i don't think you understand his logic

i don't think you understand his logic
Sure I do. I just don't buy it.

He's bitching because the millionaire is left with more money to spend after paying his taxes. What the fuck does he want, 99% taxes above 50k?

I'm just pointing out that a flat tax is actually progressive.

I'd say the millionaire paying nearly 200k in taxes while the other guy pays only 6k is more than fair.

Tax the Dead

Sure I do. I just don't buy it.

He's bitching because the millionaire is left with more money to spend after paying his taxes. What the fuck does he want, 99% taxes above 50k?

I'm just pointing out that a flat tax is actually progressive.

I'd say the millionaire paying nearly 200k in taxes while the other guy pays only 6k is more than fair.

yep i was right you don't understand what he is saying

Maybe...but on the other hand, if the IRS only had to process and investigate 1% as many tax returns as they currently do, they could probably do a much better job catching tax evaders and enforcing the tax laws.

I think you may be underestimating the amount of money and the things people are ready to go through to keep it :D After all, you are talking about the total amount of income taxes in the US, and although I do not have exact numbers, it will be a huge amount of money, just required to be given away. The highest tax rates are currently around 35%, leaving 65% to the taxpayer. If you doubled the tax rate, it would only leave 30% of the income to the taxpayer, and that, I think, would be too little for a lot of people.

yep i was right you don't understand what he is saying

Oh thank you for saying that Mr. Useless-Post-Man.

No tax system is perfect.

In essence, the much maligned Poll Tax was the fairest tax. Everyone paid the same amount. You can't get fairer than that!

Why should one elderly old woman pay as much tax as a family of 6 living next door?

Why should one elderly old woman pay as much tax as a family of 6 living next door?
Why should a family of 6 pay as little tax as one elderly old woman living next door?

Tax the Dead

Amen.

Tax the Dead

Ever heard of "inheritance tax?"

Sure I do. I just don't buy it.

He's bitching because the millionaire is left with more money to spend after paying his taxes. What the fuck does he want, 99% taxes above 50k?

I'm just pointing out that a flat tax is actually progressive.

I'd say the millionaire paying nearly 200k in taxes while the other guy pays only 6k is more than fair.

First of all, I wasn't "bitching." Second, I wasn't making any statement about wanting 99% taxes on the wealthy (you'd have to be hysterical to read any such thing into my post). My point was that taxes generate "disutility" and that, in my mind a perfectly "fair" tax would generate roughly comparable levels of disutility in everyone. Because of the law of diminishing marginal utility, though, you if you inflict pain X on the guy making $50K which you impose a $15,000 tax on him (a 30% tax), then in order to inflict something roughly akin to disutility X on someone earning $1 million, that tax rate will need to be much, much greater than 30%.

In other words "fair" to me means we set up a system where taxes are imposed only to the extent necessary to pay for essential government programs (as determined by the legislature) and levied in such a way that they are expected to cause everyone roughly equal levels of pain. Under that definition of fairness, and because of the law of diminishing marginal utility, only progressive tax schemes can be "fair" under my interpretation. Looking at the absolute amounts they pay is irrelevant, because they two taxpayers are likely to value money very differently.

Your point that flat taxes have a certain progressivity built into them is well taken, but I would suggest that at a deep level, it's because even flat tax advocates realize that only progressive taxes are fair. In effect the level of progressivity that is ideal would depend on the rate at which the marginal utility of money decreases at varying levels of income. In your flat tax example, the level of progressivity is very limited at higher incomes. The effective rate is 19.6% if you earn $1MM a year, and just 19.9996%—a scant 0.3996% difference—if you earn 100 times that amount. My intuition is that this would be "too flat" to account for the diminishing marginal utility of income at those levels. (Still, it may be perfectly appropriate to capture the difference between an income of $50K (effective tax at a 12% rate) and $100K (effective tax at a 16% rate).)

In any event, I am all for simplifying the tax code, but a simplified tax code need not be "flat", nor would flattening the tax rate structure make the code much simpler by itself (it would simplify Section 1 of the Internal Revenue Code, but only Section 1).

inheritance? tell me, you oppose racism because people are born into a race, they have no choice over it and therefore it promotes inequality, right? well is being born into wealth not the same thing? if you allow inheritance then why not other forms of discrimination?

Yup inheritance is the reason for a LOT of inequality in the world. Really, an ideal state would find a way for each person to have to make their own way in the world. Of course this is impossible...

My point was that taxes generate "disutility" and that, in my mind a perfectly "fair" tax would generate roughly comparable levels of disutility in everyone. Because of the law of diminishing marginal utility, though, you if you inflict pain X on the guy making $50K which you impose a $15,000 tax on him (a 30% tax), then in order to inflict something roughly akin to disutility X on someone earning $1 million, that tax rate will need to be much, much greater than 30%.
What rate then? Apparently 99% is too high, but 30% is much, much too low. So what rate would, in your opinion, be fair?

In my opinion, the purpose of not taxing the first 10 or 20k of your salary is to not take money from people just barely making enough to survive. Not taxing everyone's first 20k makes it fair. And I also believe nothing is more fair than everyone paying the same %.

Also, how would eliminating all deductions and instituting a flat tax on all income not be simpler?

inheritance? tell me, you oppose racism because people are born into a race, they have no choice over it and therefore it promotes inequality, right? well is being born into wealth not the same thing? if you allow inheritance then why not other forms of discrimination?

I think the reason you allow inheritance is not for the inheritors, as it is effectively a form of positive discrimination in their favor that greatly skews, in their favor, the opportunities available to them. (Paris Hilton, if you're lurking, I am looking at you here.)

I think the reason we allow it is because we have a tradition of respecting people's private property rights, and if someone wants to give property away, or spend it on philanthropy, or on a wild pre-death party followed by a kick-ass funeral, or have it buried with him, we view it as being his right to choose what to do with his property. If he decides he wants to leave it for the people he loves, so he can be sure they'll have the opportunity to live a certain sort of lifestyle, so be it. It's an understandable impulse, and been a part of the culture for so long that abandoning it would be difficult. certainly that impulse is absolutely understandable when it comes to one's spouse and dependents.

That being said, if we were to ever abandon it, I'm sure it would be on the grounds that it's decidedly unmeritocratic to inherit substantial wealth. Assuming there were a reasonable carve out for spouses, and some ability to provide for dependents until they are ready to support themselves, it would probably be a boon for society overall if everyone had to earn their own keep rather than wait to sponge off the folks post mortem.

My point was that taxes generate "disutility" and that, in my mind a perfectly "fair" tax would generate roughly comparable levels of disutility in everyone. Because of the law of diminishing marginal utility, though, you if you inflict pain X on the guy making $50K which you impose a $15,000 tax on him (a 30% tax), then in order to inflict something roughly akin to disutility X on someone earning $1 million, that tax rate will need to be much, much greater than 30%.

On a side note, there are some countries (Finland, for example) where fines for minor crimes like traffic violations scale according to one's income. So a person who makes $25k/year might only get a speeding ticket for $100, while a person who makes $500k/year might be ticketed $2000 for the same violation. Whether or not that's fair is a subject of some controversy, since arguably the marginal utility of $100 for the person who only makes $25k might be much higher than the marginal utility of $2000 for the person who makes $500k.

I think the reason we allow it is because we have a tradition of respecting people's private property rights, and if someone wants to give property away, or spend it on philanthropy, or on a wild pre-death party followed by a kick-ass funeral, or have it buried with him, we view it as being his right to choose what to do with his property. If he decides he wants to leave it for the people he loves, so he can be sure they'll have the opportunity to live a certain sort of lifestyle, so be it. It's an understandable impulse, and been a part of the culture for so long that abandoning it would be difficult. certainly that impulse is absolutely understandable when it comes to one's spouse and dependents.
Well said.

What rate then? Apparently 99% is too high, but 30% is much, much too low. So what rate would, in your opinion, be fair?

In my opinion, the purpose of not taxing the first 10 or 20k of your salary is to not take money from people just barely making enough to survive. Not taxing everyone's first 20k makes it fair. And I also believe nothing is more fair than everyone paying the same %.

Also, how would eliminating all deductions and instituting a flat tax on all income not be simpler?

Eliminating deductions is not part and parcel of the tax being "flat." You can eliminate deductions and keep the rate wildly progressive. As I said, simplification is not a bad thing.

As for specific percentages I do not personally know. i would want to conduct very intricate econometric/psychometric studies before I would be ready to declare my personal vision of fairness (and even then compromises between perfect fairness and practicality would need to be made, as in theory there should be different tax rates for every different income, from $ up to $100 billion and beyond).

The other problem (actually the primary problem) with setting rates, apart from spreading the pain of taxes equally is getting enough revenue to run the government. If I determine that an 20% effective tax on the Bobs of the world and a 45% on the Sallys of the world inflicts comparable pain on both groups, but those rates leave me collecting too much or too little tax to pay for the operations of government, then it's back to the drawing board on rates.

My tax policy goals are really as follows (i) raise the revenue needed to run government, then (ii) spread the pain around so that everyone bears the burden roughly equally, then (iii) make it simple, to further reduce the pain.

On rates, my intuition having give from very poor to very wealthy and having seen the changes it's brought in my valuation of money, is that it would be very progressive. Flat taxes have always struck me as a way for the very wealthy to increase their overall satisfaction, because they know that flat rates will result in their paying what will seem to them to be trivial amounts of income as tax.

As for your personal, equal-rates, view of fairness, there's no way for me to gainsay it, but it does by its very nature suggest that the less money you make, the more painful paying taxes will be and the richer you are, the less painful it will be, because of the law of diminishing marginal utility.

What rate then? Apparently 99% is too high, but 30% is much, much too low. So what rate would, in your opinion, be fair?

In my opinion, the purpose of not taxing the first 10 or 20k of your salary is to not take money from people just barely making enough to survive. Not taxing everyone's first 20k makes it fair. And I also believe nothing is more fair than everyone paying the same %.

Also, how would eliminating all deductions and instituting a flat tax on all income not be simpler?

Personally, I think the rates are fair, deductions and credits sound, and their is no reason to change the tax code or IRS regs. Lot of policy goes into income tax, and Congress will never let loose of its influence over society by a flat tax. In addition, a flat tax does not account for diminishing capital returns of a higher income bracket. So income tax, like the death tax, is a capitalistic means of spreading the wealth, and getting more money into the marketplace. Flat tax would cause those who are most wealthy to hoard, and the middle class to scrape by and be happy with the occasional marginal raise or bonus check.

You should audit a tax law course; it's truly unbelievable how much policy goes into shelters, deductions, capital gains, etc.

Most flat tax plans have a level below which you pay no taxes. Suppose you have a 20% flat tax with no deductions, but it doesn't start until you hit 20k. So your 50K dude would pay taxes on only 30k. His tax burden would be only 6k or 12%. Leaving him with 44k.

Your millionaire would pay taxes on 980k. His tax burden would be 196k or 19.6%. So his tax rate is 1.6 times that of the 50k guy.

See, even a flat tax is "progressive".

Not progressive enough.

This is what the liberals want, instead of a flat tax they want to tax to rich so that the rich pay for the poor, they say stealing money from the rich and giving to the poor is ok, they want to government to pay for everything, expand welfare, give free medicare, etc...like a socialist society

Why not have a fair tax, get rid of the IRS and income tax? Thats the best system, it doesn't jeapardize anyone

Lot of policy goes into income tax, and Congress will never let loose of its influence over society by a flat tax.
You should audit a tax law course; it's truly unbelievable how much policy goes into shelters, deductions, capital gains, etc.
Oh, I know that Congress loves to micromanage our lives thru the incentives and disincentives it builds into the tax code. And I agree they would be loath to give up that power.

But I think their meddling distorts and disrupts the economy and causes people to behave in irrational ways. Not to mention the billions of dollars US taxpayers spend every year trying to comply with the complex tax code and avoid paying taxes.

Going to a flat tax would greatly decrease Congress' power to meddle in our lives (which would be great), and would free up billions of dollars now wasted on compliance with the insanely complex tax code.

A progressive tax is the fairest. The rich want to benefit from society, but they don't want to give anything back, it's human nature, I understand it, but it's not their money. I guarantee if the government didn't pay for roads, schools, courts, police, firefighters, the military...there would be little opportunity to get rich.

Why should a very productive and able individual be penalized more than someone who gets a big check from daddy?

As for specific percentages I do not personally know. i would want to conduct very intricate econometric/psychometric studies before I would be ready to declare my personal vision of fairness

As for your personal, equal-rates, view of fairness, there's no way for me to gainsay it, but it does by its very nature suggest that the less money you make, the more painful paying taxes will be and the richer you are, the less painful it will be, because of the law of diminishing marginal utility.
"Fairness" should not require a degree in economics and a computer model to understand.

Nothing is fair about income tax, it is an oppressive system used to pay for big government, which in turn further takes away more power from the people paying for it. A snake eating it's own tail.

Going to a flat tax would greatly decrease Congress' power to meddle in our lives (which would be great), and would free up billions of dollars now wasted on compliance with the insanely complex tax code. Most of the complexity of the tax code revolves around determining the income to be taxed in the first place.

A flat tax won't solve that.

Also, a flat tax that covered all the expenditures of government - including such off budget items as the Iraq war and Social Security - would require raising taxes on the rich, who are currently paying a lower percentage of their gross income in taxes than anyone except possibly - in a no sales tax state - the very poor. Raising taxes on the rich has proven very difficult, in recent years.
Why should a very productive and able individual be penalized more than someone who gets a big check from daddy? Taxation is payment for services rendered, not "penalty".

Isn't Paris Hilton's millions in property and assets, guarded by the U.S military(the largest service) like everyone elses?

Not to mention the billions of dollars US taxpayers spend every year trying to comply with the complex tax code and avoid paying taxes.

Going to a flat tax {. . . .} would free up billions of dollars now wasted on compliance with the insanely complex tax code.

Another great reason to audit a tax law course!

Why should a very productive and able individual be penalized more than someone who gets a big check from daddy?

A Tax is not a punishment. One good reason is that money is power, and too much power in the hands of too few is a threat to Democracy.

The reason I usually give is that rich people, especially productive people, use the "commons" more than others, therefore they should pay more. You see, they have already used the infrastructure of this country to gain wealth. Taxing them is simply billing them for what is due. It's like going into a store and eating a candy bar. If you already ate it, you have to pay for it.

Well, the Democrats are hoping to make another big gain this next election cycle. And they're already talking about how they're going to increase taxes on the rich. They need to pay their fair share!

Well, what would their fair share be? According to data released by the US Treasury:

The top 1% pay 40% of all taxes
The top 5% pay 60% of all taxes
The top 10% pay 70% of all taxes
The bottom 50% pay 3% of all taxes

Gee, seems like the rich really aren't paying their fair share.

I make that 173% taxes paid by only 66% of the workforce, those figures seem pretty fucked up to me.

"Fairness" should not require a degree in economics and a computer model to understand.

That's absurd. Nothing about fairness suggests that it needs to be a gut level reaction and require no thought or inquiry into pesky "facts" whatsoever.

Suppose a man snaps and shoots four men in the head and back. They sue him, but find that he has limited means. Between the four of them, they are only able to locate $100,000 worth of assets. Each man has different injuries and levels of pain: (i) one has only mental anguish and a small scar but substantial pain, (ii) one is completely paralyzed from the waist down and suffers moderate onloing pain, (iii) one is paralyzed from the neck down and suffers limited pain and (iv) one is in a vegetative state. So how do you, as fairly as possible, allocate the $100K. My answer involves medical examinations, whioch poresumably don't meet the "you don't need a medical degree to determine fairness" test.

The tests (medical, econometric or otherwise) are there to gather data about the levels of pain people would feel in different scenarios. Those are factual questions that I cannot accurately answer in a vacuum. Your response seems to assume that the relative perceived hardships different tax rates would impose on people is either (a) obvious, and hence no study is needed or (b) irrelevant, though it plainly is relevant to my utility based view of tax fairness.

Facts matter in judging questions of fairness, and some facts require study to discern.

"workforce"?

The rich use proportionally more of the commonly supported services of the nation, as well as more of the natural resources.

Also, a flat tax that covered all the expenditures of government - including such off budget items as the Iraq war and Social Security - would require raising taxes on the rich, who are currently paying a lower percentage of their gross income in taxes than anyone except possibly - in a no sales tax state - the very poor. Raising taxes on the rich has proven very difficult, in recent years.

That's the irony. When people complain that a flat tax lets the rich off too easy, they've got it completely backward. It's our current system that lets the rich off too easily.

Who has the money to pay teams of accountants and lawyers to figure out how to avoid taxes? Who can afford to pay off politicians to create loopholes created especially for them. The very rich, that's who. Which is why they pay too little in our current system.

A flat tax, with no deductions, would have no loopholes and it wouldn't be worth hiring teams of lawyers to avoid paying it.

That's the irony. When people complain that a flat tax lets the rich off too easy, they've got it completely backward. It's our current system that lets the rich off too easily.

Who has the money to pay teams of accountants and lawyers to figure out how to avoid taxes? Who can afford to pay off politicians to create loopholes created especially for them. The very rich, that's who. Which is why they pay too little in our current system.

A flat tax, with no deductions, would have no loopholes and it wouldn't be worth hiring teams of lawyers to avoid paying it.

I deleted my rate structure because I kept questioning parts of it...I need more time to structure it.

In any event, again, a flat tax is not a "simple tax". A flat tax is a tax system with a flattened rate structure. That is one very short section of the tax code. If you want to simplify taxes, great, but you do not need a flat tax for that.

There will always need to be rules and loopholes though. There are issues like foreign source income (and where it is "really" earned), allocation of profits and losses by agreement in a partnership, "double" taxation of corporate income (let me guess, you'd eliminate the corporate income tax?), when income is officially recognized, taxation of intercompany transactions (that may or may not be made at their "real' value), how you value property acquired as "income," whether or not borrowed money used to acquire assets is a part of your tax basis in those asset, how you calculate basis in general, etc. The tax code didn't become a nightmare solely because Congress and the IRS like their laws long. It became a nightmare because people found ways to use/abuse (depending on your point of view) the simplified rules, which prompted revisions to those rules to cut off the 'loopholes.'

Making lots of money is being "well-paid"...perhaps sometimes you could get "rich" doing this.

The rich are 100s of millions, millionaires. The billionaires. You know, the people that OWN EVERYTHING. Guess how much they pay in taxes("revenue" for the government). Basically what gets jacked off your cheque and my cheque pays for everything and these guys have the relatively small corporate(not even) tax or royalty tax or whatever local tax there might be in the countries they really just plain own. They benefit from the services of western governments FAR, wayyy fuckin far more than ANY of us. Why the government sometimes even does their bidding, with the proper campaign contribution.

And you want to talk about those "rich" people making 100000 a year. Fuck me...

I make that 173% taxes paid by only 66% of the workforce, those figures seem pretty fucked up to me.
LOL. You're forgeting that the top 5% includes the top 1%, and the top 10% includes the top 1% and the top 5%, etc.

Suppose a man snaps and shoots four men in the head and back. They sue him, but find that he has limited means. Between the four of them, they are only able to locate $100,000 worth of assets. Each man has different injuries and levels of pain: (i) one has only mental anguish and a small scar but substantial pain, (ii) one is completely paralyzed from the waist down and suffers moderate onloing pain, (iii) one is paralyzed from the neck down and suffers limited pain and (iv) one is in a vegetative state. So how do you, as fairly as possible, allocate the $100K. My answer involves medical examinations, whioch poresumably don't meet the "you don't need a medical degree to determine fairness" test.Well, you don't need a medical degree to determine fairness here. 100k, no matter how you split it up, isn't nearly enough to compensate any of these men for the injuries inflicted by this man. Two guys are paralysed, one in a coma, another with a stiff neck. Now the stiff neck guy clearly is the best off, but even he may had suffered 25k in damages. Regardless, cutting him out would only give the other guys an extra 8k anyway. So just split it four ways and throw the guy in jail. Case closed. Next.

All your tests would probably eat up the whole 100k and leave nothing for these guys.

A flat tax, with no deductions, would have no loopholes and it wouldn't be worth hiring teams of lawyers to avoid paying it. Again, most of the complexities of the tax code, including the loopholes etc, are in the determination of income. Most deductions are for determining income, etc. A flat tax does not even address that.

Simplification of the tax code would be a good idea, probably. The rich should be taxed at much higher rates, for sure, in the US. But we can't even roll back the tax cuts of the past few years, to pay for a war - so this cause has a grim future.

I make that 173% taxes paid by only 66% of the workforce, those figures seem pretty fucked up to me.

no you just screwed up the math

Again, most of the complexities of the tax code, including the loopholes etc, are in the determination of income. Most deductions are for determining income, etc. A flat tax does not even address that.
Really?

* Americans spent 6.65 billion hours in 2006 complying with the tax laws; the IRS accounts for nearly 4 out of every 5 paperwork burden hours imposed by the entire federal government.
* Approximately 3.45 billion of those hours were incurred by businesses. The value of this time is $156.5 billion -- an amazing 44 percent of total corporate income taxes collected in 2006!
* When examining all individual taxpayers, from those who file the simplest 1040EZ to those using the 1040 long form, the average compliance time (not including tax planning or minimization strategies) surged past a full day (24.2 hours), according to the most recent data. However, individual situations varied greatly. According to a 2006 IRS estimate, self-employed taxpayers had to toil for over 80 hours to satisfy filing requirements.
* Counting expenses for software, tax preparers, postage, etc., along with time, individuals incurred an incredible $102 billion in expenses to meet the IRS's tax-filing rules.
* Although computers and printers have gained dramatically in capacity over the past 10 years, this efficiency has likely been overwhelmed by complexity. The average fee charged by H&R Block increased roughly 150 percent during that period (unadjusted for inflation), even as the ratio of taxpayers using computers or paid preparers rose from 7 in 10 to 9 in 10.
* Between the 108th and 109th Congresses, the Joint Committee on Taxation's General Explanation of Tax Legislation went from 593 to 841 pages -- a 42 percent increase.

http://www.ntu.org/main/press.php?PressID=927&org_name=NTU
6.65 billion hours wasted. Hundreds of billions of dollars wasted. Instead: What's your income? Subtract 20k, multiply the remainder by .2. Send it in.

Well, the Democrats are hoping to make another big gain this next election cycle. And they're already talking about how they're going to increase taxes on the rich. They need to pay their fair share!

Well, what would their fair share be? According to data released by the US Treasury:

The top 1% pay 40% of all taxes
The top 5% pay 60% of all taxes
The top 10% pay 70% of all taxes
The bottom 50% pay 3% of all taxes

Gee, seems like the rich really aren't paying their fair share.

There are rich people who have wealth beyond avarice. These people pay lawyers, and politicians, so they don't have to pay taxes. Watch that Tom Cruise lawyer movie to see an example.

Then there are working stiffs and businessmen/women who work their asses off to make around $100,000 up to $500,000/yr only to get reamed in taxes. These people are who Hillary et al point the finger at as rich people who need to pay more.

Then there are people making less than around $70,000 who pay some to no taxes but think people who make more money than them need to pay more.

If I could find a place to live where the people hate taxes as much as the founding fathers of the US I'd seriously consider moving there because with this tax the rich mentality many poor people seem to think society owes them 3 hots and a cot for them and their children.

Really?

http://www.ntu.org/main/press.php?PressID=927&org_name=NTU
6.65 billion hours wasted. Hundreds of billions of dollars wasted. Instead: What's your income? Subtract 20k, multiply the remainder by .2. Send it in.

Well, is this money spent because corporations cannot figure it out themselves, or they have enough surplus to contract with CPA groups to do it for them? 1040 long forms are not really that complicated mathematically. I think people get too tripped up by the definitions -- that's what needs to be simplified.

Learned

Well, you don't need a medical degree to determine fairness here. 100k, no matter how you split it up, isn't nearly enough to compensate any of these men for the injuries inflicted by this man. Two guys are paralysed, one in a coma, another with a stiff neck. Now the stiff neck guy clearly is the best off, but even he may had suffered 25k in damages. Regardless, cutting him out would only give the other guys an extra 8k anyway. So just split it four ways and throw the guy in jail. Case closed. Next.

All your tests would probably eat up the whole 100k and leave nothing for these guys.

Clearly we will never agree on a definition of fairness, as that strikes me as more arbitrary and capricious based on an astonishing oversimplification of the issues these men face. Again, I can't really gainsay your (imo, unsophisticated) view of fairness, as it's entirely subjective, but my view is that facts matter and need to be counted in judging fairness.

personally i think we need a higher marginal tax bracket for for the megarich like say 40 to 45 percent. and i hope everyone knows what i mean by marginal tax bracket

Clearly we will never agree on a definition of fairness, as that strikes me as more arbitrary and capricious based on an astonishing oversimplification of the issues these men face. Again, I can't really gainsay your (imo, unsophisticated) view of fairness, as it's entirely subjective, but my view is that facts matter and need to be counted in judging fairness.
I figured you'd say that. But I'll bet if these were four real guys, splitting it evenly is what they'd do. It's possible the stiff neck guy might forego his share since he can probably still work. But even if he gets nothing, that's just an extra 8k for the rest. They'll blow thru that in medical bills so fast they won't even notice it.

If we were talking about a billionaire who could fully compensate these guys and pay for thousands of dollars of testing, it might be worthwhile to determine what the exact level of damages is for each guy. But, when you come down to it, it's all pretty damned arbitrary.

What's the value of life? What's the value of pain? What's the value of conciousness? It's very hard to say, but I know the value is so far above any fraction of 100k, as to make arguing over how to split it up meaningless.

So, an even split.

Again, most of the complexities of the tax code, including the loopholes etc, are in the determination of income. Most deductions are for determining income, etc. A flat tax does not even address that. ”

Really?
* Americans spent 6.65 billion hours in 2006 complying with the tax laws; the IRS accounts for nearly 4 out of every 5 paperwork burden hours imposed by the entire federal government.
- - - -
http://www.ntu.org/main/press.php?Pr...7&org_name=NTU
6.65 billion hours wasted. Hundreds of billions of dollars wasted. Instead: What's your income? Subtract 20k, multiply the remainder by .2. Send it in. Determining the income to be taxed used up 99% of that time and effort.

A flat tax does not address the determination of income in the first place. So it won't help, in itself. If you want to talk about eleminating deductions, that can be done immediately with the current setup. That's a separate issue.

I figured you'd say that. But I'll bet if these were four real guys, splitting it evenly is what they'd do. It's possible the stiff neck guy might forego his share since he can probably still work. But even if he gets nothing, that's just an extra 8k for the rest. They'll blow thru that in medical bills so fast they won't even notice it.


The might split it evenly as a means of saving on the costs of doing a more exacting job, if expert witnesses and lawyers were free and trails instantaneous, I'd bet that they would not come to an even split. That they might satisfice by accepting a particular solution/*, does not make that particular solution the fairest one, it's simply a compromise that's made because it's fast and inexpensive (and "fast and inexpensive" are hardly the criteria that define "fair").

---------
/* In this case, you propose that they'd adopt what is basically a Schelling point. It would be a Schelling point not because the men can't communicate at all (as is the typical example), but because in the absence of detailed study, the lack of information means that none of the men can communicate the relevant costs he faces and damages to him in a precise enough way to easily compare it to that of the others.
---------

In the case of a nationwide tax policy though, the costs of study would be trivial on a per person basis.

Why should a very productive and able individual be penalized more than someone who gets a big check from daddy?

They aren't. They have to pay just as much taxes as anyone else. I have had to file taxes since I was 11 years old because my parents gave me a considerable allowance and started my IRA at 16.

The might split it evenly as a means of saving on the costs of doing a more exacting job, if expert witnesses and lawyers were free and trails instantaneous, I'd bet that they would not come to an even split.
Well sure, if there were no transaction costs they might behave differently. But in the real world, there are always transaction costs. Like in a divorce. My sister and her now ex-husband have been fighting for a more than a year over thier divorce. No doubt running up tens of thousands of dollars in legal fees (and they weren't fighting over some vast estate, just normal middle class people). Now they're both in debt and my sister is an emotional and physical wreck. If they had just agreed at the begining to split things down the middle, they'd have both been far better off.
That they might satisfice by accepting a particular solution/*, does not make that particular solution the fairest one, it's simply a compromise that's made because it's fast and inexpensive (and "fast and inexpensive" are hardly the criteria that define "fair"). The great is the enemy of the good. You can fight it out, spend thousands of dollars and, in the end, arrive at a solution only marginally better than an even split. Meanwhile, the pot you're fighting over is a lot smaller thanks to the transaction costs.
/* In this case, you propose that they'd adopt what is basically a Schelling point
Agreed. In any such situation the assumption going in is an even split.
In the case of a nationwide tax policy though, the costs of study would be trivial on a per person basis.The costs of hiring some guy to calculate a mathematical definition of "fairness" based upon your idea of the marginal utility of money may be trivial, but the disincentives and perversion of the economy such a system entails have a very steep cost.

but the disincentives and perversion of the economy such a system entails have a very steep cost.

I think the same of your solution. My solution is an attempt to roughly track actual marginal utility on which all economic decion-making is based. Your solution will necessarily allocate a lot more pain per person to the middle class than it does to the rich. How is the middle income people bearing a greater real cost per person (in terms of disutility generated by taxes) going to be a boon to the economy?

In my system, there is at least an effort to keep the per person disutility level, which should lead to less of a perversion of economic incentives caused by taxes. Relative to your system, it will also lead to somewhat happier set of middle income earners and somewhet less happy set of rich people, but simply "favoring the rich"/* is not the touchstone of economic efficiency.

-------
/* In this case, the favor being granted to them is (on average) a lower overall allocation of disutility generated by taxes (because, again, losing 10% of a meager income is usually much more painful than losing 20% of a vast sum). In "real" terms what matters is not the absolute amount of money they spend, nor the percentage of their incomes taken in taxes...what actually affects and perverts economic behavior is the loss of utility (disutility) that accompanies the loss of income. There's no reason to believe that removing some of that real burden from the shoulders of the rich and placing it on the shoulders of the middle income taxpayers makes the system more efficient, and that is what a flat tax would do. (Unless, of course, people have much flatter preferences for income than I believe they do...and my proposal for study of the issue might well show just that. I doubt it, but it's possible.)

Taxing people in any formula would not help if the government wastes money everywhere

Well sure, if there were no transaction costs they might behave differently. But in the real world, there are always transaction costs. Like in a divorce. My sister and her now ex-husband have been fighting for a more than a year over thier divorce. No doubt running up tens of thousands of dollars in legal fees (and they weren't fighting over some vast estate, just normal middle class people). Now they're both in debt and my sister is an emotional and physical wreck. If they had just agreed at the begining to split things down the middle, they'd have both been far better off.


Agreed. In my state, 50/50 is the presumption in the law, and trying to deviate from it after years and years of marriage with no pre-nup is really quite difficult. I tried to counsel my cousin about the downsides of a contested divorce, but every thing just seemed to be so tooth and nail with both spouses on the most minute detail that it kinda just went in one ear and out the other. Some people, I guess, just really need to have their day in court to vent in a public forum. It's like the furies become satisfied or something.

Personally, when I counsel divorcee's, the first thing I tell them is that you're not going to be happy with the result; no one ever is, and whatever you have in your head upstairs on how things are gonna go down, take an eraser to it immediately and let me use the drawing board. . .

I think the same of your solution. My solution is an attempt to roughly track actual marginal utility on which all economic decion-making is based. Your solution will necessarily allocate a lot more pain per person to the middle class than it does to the rich.
I guess we'll have to agree to disagree. In my mind, 10% is 10%. Be it 10% of $10, or 10% of $1,000,000. The fact that the millionaire is left with more money doesn't mean the government has the right to take more of it. He started with more. It's his money!

I guess we'll have to agree to disagree. In my mind, 10% is 10%. Be it 10% of $10, or 10% of $1,000,000. The fact that the millionaire is left with more money doesn't mean the government has the right to take more of it. He started with more. It's his money!

You'd make one hell of an aristocrat!! :p

I guess we'll have to agree to disagree. In my mind, 10% is 10%. Be it 10% of $10, or 10% of $1,000,000. The fact that the millionaire is left with more money doesn't mean the government has the right to take more of it. He started with more. It's his money!

I've never advocated taking so much money that the rich wind up having the same amount of money as the middle class. Assuming ratcheted tax rates (as we presently have), they'd never wind up in that position. That's why the rates are "marginal."

Is it that you don't believe in the law of diminishing marginal utility or that your utility curve for money is that flat? Too take an extreme example: Imagine that you had only $50,000 in the world. A thief find your checkbook and steals $25,000. Now imagine that you are homeless, but have access to $100,000,000. When you go with collect some of your money, you find a thief has stolen $50,000,000. Would you be "just as upset" in both cases simply because the percentage is 50% in both cases?

To me, I'd be upset in both instances, but far more bummed in the former case than the latter. The difference in lifestyle between having $100 million and "only" $50 million is minuscule. The difference between having $50K and $25K is much more noticeable.

\
Is it that you don't believe in the law of diminishing marginal utility or that your utility curve for money is that flat? Too take an extreme example: Imagine that you had only $50,000 in the world. A thief find your checkbook and steals $25,000. Now imagine that you are homeless, but have access to $100,000,000. When you go with collect some of your money, you find a thief has stolen $50,000,000. Would you be "just as upset" in both cases simply because the percentage is 50% in both cases?

To me, I'd be upset in both instances, but far more bummed in the former case than the latter. The difference in lifestyle between having $100 million and "only" $50 million is minuscule. The difference between having $50K and $25K is much more noticeable.
Who's more upset when the pension fund goes belly up and all his money is gone? The guy who didn't contribute much and loses $5000 (even though it's his entire savings), or the guy who busted his ass putting away every cent he had and loses $500,000?

You see, in this situation the guy who lost only the 5k feels that the other guy was an idiot for busting his ass. A similiar situation exists with high marginal tax rates. Why bust your ass? Why work the extra hours? Why invest? It will just push you into a higher tax bracket and you'll end up giving the money to the government.

High marginal taxrates are a strong disincentive and therefore decrease productivity. No one wants to be a sucker.

Who's more upset when the pension fund goes belly up and all his money is gone? The guy who didn't contribute much and loses $5000 (even though it's his entire savings), or the guy who busted his ass putting away every cent he had and loses $500,000?

You see, in this situation the guy who lost only the 5k feels that the other guy was an idiot for busting his ass. A similiar situation exists with high marginal tax rates. Why bust your ass? Why work the extra hours? Why invest? It will just push you into a higher tax bracket and you'll end up giving the money to the government.

High marginal taxrates are a strong disincentive and therefore decrease productivity. No one wants to be a sucker.

most european countries have high margibal tax rates then we do but are as productive if not more than us. how do you explain that

most european countries have high margibal tax rates then we do but are as productive if not more than us. how do you explain that
Um, it's not true.

One fact is indisputable. Over the past decade the US has stolen a march on its competitors so marked that it can no longer be dismissed as a statistical blip. ... The trend had been obvious for some time before that. ... The US has not always held so unassailable a lead. In the 1950s and 1960s, European per capita incomes steadily rose towards US levels, spurred on by the rapid recovery from the devastation of the second world war and the successful integration of European economies.

Europeans accept that lower incomes are the price of spending more time at home. If they worked US hours, ... European GDP per capita would increase from 73 per cent of US levels to 86 per cent. ... A second drag on European living standards is the share of its population that is working. Unemployment dogs Germany, France and Italy .. http://economistsview.typepad.com/economistsview/2006/01/why_is_us_produ.html

Um, it's not true.

Clarify--are you saying that Europeans don't pay more taxes or that they aren't as productive?

As for the tax burden, it's pretty clear that it's greater for Europeans:
http://www.taxpolicycenter.org/UploadedPDF/1000976_Tax_Fact_05-08-06.pdf

If you're saying that productivty is lower in Europe than in the US, that is true for some countries but not for others. For example in terms of growth Ireland & Latvia have been kicking the US' ass. But overall growth in Europe has been slower than in the US.

If you're saying that productivty is lower in Europe than in the US, that is true for some countries but not for others. For example in terms of growth Ireland & Latvia have been kicking the US' ass. But overall growth in Europe has been slower than in the US.

see link (http://www.thunderlake.com/Latvia_EU.doc)

Latvia will remain attractive investment target with favorable ratio of labor cost to productivity. Latvia score well in terms of labor costs (1.5 EUR per hour). However, labor productivity in Latvia is also low. The EU economy is about 2.5 times more productive than Latvia’s – although labor productivity in Latvia is growing approximately twice as fast as in the EU. Both labor cost and labor productivity are expected to increase with enlargement. On top of this, Latvia scores well in terms of skills.

But U.S. Productivity is a whole different matter. While the UN says that U.S. Productivity is the highest in the world...some question:

If the U.S. had adequate productivity then why should its manufacturing base shrink - - instead of grow?

See Link (http://mwhodges.home.att.net/product.htm)

Just tax everyone that makes more than 30,000 USA 15%. No deductions for anything.

see link (http://www.thunderlake.com/Latvia_EU.doc)

Latvia will remain attractive investment target with favorable ratio of labor cost to productivity. Latvia score well in terms of labor costs (1.5 EUR per hour). However, labor productivity in Latvia is also low. The EU economy is about 2.5 times more productive than Latvia’s – although labor productivity in Latvia is growing approximately twice as fast as in the EU. Both labor cost and labor productivity are expected to increase with enlargement. On top of this, Latvia scores well in terms of skills.

Interesting link. I was going on the world bank claim that Latvia's "Real GDP has grown on average by nearly 6 percent annually over the period 1995-2003"

PDF Link (http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2004/06/09/000009486_20040609151450/Rendered/PDF/wps3307latvia.pdf)

based on per an hour worked europe compares well to the us mainly because they are healthy and less stressed in absolute term the us is considered more productive but that is misleading beacuse the average american has to work more hours

When you are starting from the bottom, a high number is just natural. Look at Dell, how it grew the first few years. Even Namibia which does not have an engineering college is growing at 4.5% while 60% are unemployed.

On the other hand Latvians are hard working, I am sure they will do great.

High marginal taxrates are a strong disincentive and therefore decrease productivity. No one wants to be a sucker.

I work, every single day, with people earning upwards of $50 million a year, and I've really never heard anyone suggest that only the "suckers" work hard enough to make it to the higher tax brackets.

Even with the higher marginal tax rates, the "suckers" still have more money than the "canny" individuals who earn less. I'd suggest that if you can find someone who tells you that he is limiting his income because he's trying to avoid the higher marginal tax rate, then you just found someone who doesn't understand how marginal tax rates work. I can't even imagine what I would think of someone who asserted, "I could be rich, but then I'd have to pay more taxes, so I prefer to remain poor." I'd probably assume he was kidding...or an idiot.

Again, if you make more money, then after taxes you will have more money to spend. There is no point, in a marginal tax system, where earning more money leaves you with less after tax income, nor has anyone suggested that people who earn more should receive no benefit from that.

In my experience, by the way, the ultra-rich do not really work for the money. The money for them is a nice way of keeping "score" but, at the end of the day, they just throw it on the pile that they previously accumulated. They work for the feeling of power, influence, prestige and because they enjoy the process of closing deals. The government did start taxing them at a 100% marginal rate (after they threw a hissy-fit) they'd go back to work...because sitting around not working is not really an option for them. Some of them might start working on more philanthropic or otherwise different things, but they're not the sort of people to sit idle.

In a 100% marginal tax rate world, I think many of them would start competing to acquire the coolest assets (especially companies). They already do that to a large extent (especially when it comes to yachts aand aircraft), but I suspect that would be the new benchmark my which score was kept.

... Again, if you make more money, then after taxes you will have more money to spend. There is no point, in a marginal tax system, where earning more money leaves you with less after tax income, nor has anyone suggested that people who earn more should receive no benefit from that. ...I agree with most of your post, especially why the very rich continue to work, but as a "registered senior" you should appreciate more than most that one "spends time" also.

Some are happiest when at their work. I liked mine so much I would have done it for free, but some others get more pleasure from other activities. For example, my first wife, a Norwegian, could only go to her dentist in the even months. In those six months he earned more than he really needed and did not get much joy from fixing cavities etc. all day. If he were to work all year, the marginal rate taxes being so high, it seem to him that would be like becoming a slave working for the government, so he spent his time more wisely fishing, hunting, and sking in the mountains mainly, I think.

As they say: You can't take it with you. I am giving regularly to my chidren and grand children now. It will not spoil them as until they were in their 40s I let them know they were on their own - told everything I had would go to my university as I never paid a cent of tution. One daugher is like you - an invstment adviser to clinets with at least 10 million to invest. Prior to that she managed 4 Billion (yes billion) for Delta Airlines fixed benefit retirement plan. She wisely took an "early out option" before they went bankrupt, but as it was the fixed benefit (not fixed contribution) plan, the gains and losses went directly to Delta's bottom line. Several years she was the greatest profit maker for Delta - more than their airplane operations brought in.

When she was about 11 she wanted badly a new thing called a "skate board" - dinky little thing for $20 back then. I did not want here to have one, but agreed that I would pay her a dollar for every bucket of small stones she dug out of the yard. After 16 buckets, in a month or two of after school working she asked if she could dig in the neighbor's yard as we had no more stones. I relented and gave her the last 4 dollars after extracting the promiss that it would only be used on our dead end street, with knee pads, etc. - I am sure that was the most productive $20 I ever spent.

The Flat Tax, to me, is an obvious Fraud.

Assuming revenue Neutrality/we need 'X' amount of dollars to run the country...

If Bill Gates, Michael Eisner, and everyone else over 150,000 pays less.. WHO Pays more?

'Tax simplification' Schemes are all Top Down proposed by the Rich.

Bod Dole (R) "The Flat Tax gets rid of all the little Loop holes and Replaces them with one Giant one."

Why not Bottom -up 'simplification'?
Starting with no one under $50,000 pays any Taxes.
This would even incentivize many non-workers to move and make the economy more productive.
It would also give those at the bottom more disposable income to spend and stimulate the economy/Growth; the 'growth' the Top seems so concerned about when justifying their cuts.

That's much simpler and would eliminate 1/3 of the IRS paperwork by just plain dropping loads of people off the roles, saving Billions.

But-- no one with that income has a Lobby to buy congressman with.

In the last 8 years..
Capital Gains tax has gone DOWN from 28 to 15%.. for the Rich.
Tax on Dividends the same -- down to 15%.
Estate Tax on inheritance over 2 Million has dropped dramatically- for the Rich.

IOW, if you earn income by Working you pay a much higher rate than by sitting collecting Interest.

Since even Democratic Senators are usually Millionaires.....

most european countries have high margibal tax rates then we do but are as productive if not more than us. how do you explain that ”

Um, it's not true. It is generally true, under the normal meaning of "productivity" as output per manhour.

The US leads in total product, but only as a consequence of having a higher percentage of our citizenry employed, more citizens with multiple jobs, and many more hours worked per job per year on average.

In per hour productivity, several European countries have caught up and passed the the US in the past twenty five years or so.

I thought so. does this include the E.U as a whole or what though?

Eliminate the IRS and income tax--make a national sales tax.

And if you really want to help out the poor, dont tax necessities like bread, water, etc. That way we make sure the poor arent throwing all their money away on booze.

Eliminate the IRS and income tax--make a national sales tax.

And if you really want to help out the poor, dont tax necessities like bread, water, etc. That way we make sure the poor arent throwing all their money away on booze.

I have no problem with this in theory, but I fear the transition would cripple the US economy. Perhaps if there were some way to implement the change from an income based tax to one based on spenfing slowly it might work. BTW, it's Mike Gravel's position on tax reform and he wisely adds a tax refund for people earning under a certain amount.

I personally think what we should do is slaughter the middle class and use the meat to feed our lower class slaves!

Eliminate the IRS and income tax--make a national sales tax. Because taxing the poor more heavily than the rich is just one of those ideas whose time has come ?

Or is it that introducing the complexities and hassles of tax formulation into every aspect of everyone's daily life is something no ambitious bureaucrat can resist ?

i say tax the rich for all their worth i doubt most of them got their money ethically any way

Because taxing the poor more heavily than the rich is just one of those ideas whose time has come ?

Or is it that introducing the complexities and hassles of tax formulation into every aspect of everyone's daily life is something no ambitious bureaucrat can resist ?

If done properly it would not tax the poor more than the rich--a rebate based on income would compensate. The fact is that the rich spend more and so they would be paying the bulk of the tax. It would also have the benefit of encouraging savings and helping stop the vast levels of personal debt that are crippling the middle class and poor.

Such a tax would also be no more of a hassle (and probably less) than the current tax code. There is already a system in place in every state except Deleware for sales tax and all businesses are able to handle it OK. It would require a new enforcement system but I think it would be less intrusive and complex than that of the IRS.

If done properly it would not tax the poor more than the rich--a rebate based on income would compensate. The fact is that the rich spend more and so they would be paying the bulk of the tax. It would also have the benefit of encouraging savings and helping stop the vast levels of personal debt that are crippling the middle class and poor. So you are giving tax advantage to people who can more easily delay or avoid expenditures - the rich

and multiplying the already significant economic advantages of large retail corporations over smaller, higher margin concerns,

and leaving in place the hassle of having to calculate and verify one's income - the major hassle of the current system, and the major area of IRS activity

and reducing still further the discretionary income of the lower classes, from which all savings must be drawn, as your way of encouraging savings

and glossing over the major features: mortgage interest deduction? - on a furnished or unfurnished version of the house? Do the rich have to pay sales tax on services ? On purchase of things like corporations, machinery, infrastructure, buildings, and business vehicles?

Aside from the immediate creation of a huge black market in everything, and a large reduction in the percentage of income paid as tax by the very rich, the effects of such a bureaucratic and regulatory nightmare are hard to imagine - but they don't look pretty.

So you are giving tax advantage to people who can more easily delay or avoid expenditures - the rich

and multiplying the already significant economic advantages of large retail corporations over smaller, higher margin concerns,

No. As I said before I don't support the change from an income tax to a sale tax because I believe it would "cripple the US economy." The US economy relies too much on consumer spending and the attempt to curtail it would cause too much damage. Also States would probably eliminate their sales taxes and increase their income taxes to compensate. It would probably also cause major problems for the US tourist industry but to compensate would improve foreign investment.

However, I was objecting to your reasons for slamming it.

The rich are much more capable of manipulating the tax code to their benefit than the poor. The rich also spend substantially more on non-essentials & I don't see any reason why they would stop doing so (otherwise what's the point of being rich). As I suggested, if done properly the poor would be given a prebate or rebate to cover taxes on the first $35,000 of expenditures (or whatever figure would be appropriate).

I'm not sure of the effect on corporate taxes but I can't believe that it would be any worse than the current imbalance in which huge corporations get away with small tax bills.

and leaving in place the hassle of having to calculate and verify one's income - the major hassle of the current system, and the major area of IRS activity

and reducing still further the discretionary income of the lower classes, from which all savings must be drawn, as your way of encouraging savings

Your biggest problem with the tax code is having to add up and verify your income? Mine is the fact that people can manage to manipulate deductions and hide income so they don't pay a fair share of the tax.

A national sales tax wouldn't reduce spending by the poor--they wouldn't be paying any tax on the majority of their expenditures. If they earned anything above that they might be less likely to spend it but that, believe it or not, would encourage savings.

and glossing over the major features: mortgage interest deduction? - on a furnished or unfurnished version of the house? Do the rich have to pay sales tax on services ? On purchase of things like corporations, machinery, infrastructure, buildings, and business vehicles?

You can still give a rebate for 1st time homebuyers and of course services, business investments, etc. should be taxed.


Aside from the immediate creation of a huge black market in everything, and a large reduction in the percentage of income paid as tax by the very rich, the effects of such a bureaucratic and regulatory nightmare are hard to imagine - but they don't look pretty.

A sales tax might lead to a black market in some areas but it would also manage to tax people who are currently involved in activity that isn't taxed (people working under the table, people involved in the drug trade, etc., etc.).

I used to believe that a sales tasx was inherntly regressive too but it depends on how it's administered. While the tax structure is certainly regressive in that the poor pay a much larger percentage of their actual wealth.

The rich are much more capable of manipulating the tax code to their benefit than the poor. The rich also spend substantially more on non-essentials & I don't see any reason why they would stop doing so (otherwise what's the point of being rich). As I suggested, if done properly the poor would be given a prebate or rebate to cover taxes on the first $35,000 of expenditures (or whatever figure would be appropriate). The rich are also far more capable of arranging the circumstances and situations of their discretionary expenditures than the poor.

And these are lots harder to track and monitor than sources of income.

The only reason sales taxes work now, anywhere, is that the percentages are small and tolerance of beating them is great. Otherwise even these little demo taxes would be a regulatory and bureaucratic morass, on top of the burden they place on the cash-strapped poor.

The central issue is that the rich spend less of their income, as well as having more control over expenditures than income. So if you tax expenditures rather than income, you are giving the rich a serious structural tax advantage - and all the rebates, etc, will just complicate the matter.

Just on a side note, who decided to call the graduated income tax a "progressive" tax?

As if penalizing the people who make a positive impact on society with a higher tax rate encourages progress...

the problem i see with any kind of system where the rich pay a higher percentage is that it encourages mediocrity and failure while penalizing success. It is like something straight out of Atlas Shrugged or socialism.

The "progresive" income tax is a manifestation of the "From each according to his ability, to each according to his need" philosophy, which I believe is the most destructive idea to progress as any ever imagined.

Just on a side note, who decided to call the graduated income tax a "progressive" tax?

Progressives came up with that name, but the concept is generally attributed to Adam Smith.

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The only reason sales taxes work now, anywhere, is that the percentages are small and tolerance of beating them is great.

I agree here. I think a national sales tax at a level high enough to replace income tax would foster a huge black market. And the "prebate" sounds like a major pain in the ass.

I favor a flat tax with no taxes at all below a certain level (20k or something like it) with zero deductions. Play with the deduction and the rate to get to the amount of funding you need. Also, a balanced budget ammendment with a mechanism for across the board cuts in all programs if the budget is not balanced (in the amount necessary to balance the budget.)

The "progresive" income tax is a manifestation of the "From each according to his ability, to each according to his need" philosophy, which I believe is the most destructive idea to progress as any ever imagined.

There is an element of that too it, but, guess what? So is the income tax in general. If that's your problem you should be arguing for *really* flat taxes: per capita taxes, like $8,000 per person per year, assuming we tax every man woman and child. (And why should children have it easy, just because they don't have the means? Spreading their tax to others is a punishment to the childless. :D)

No one is suggesting straight egalitarian ideals for distribution. Or doing it to such an extreme that it "punishes" the wealthy.

I don't want to publish my annual compensation, but suffice to say that if you took away 60% of it, pre-tax or post-tax, it wouldn't really impact my consumption all that much, except at the margins. It might significantly impact my future consumption (as much of that 60% would cut into my retirement savings), but mostly it would cut into my future kids' overly large inheritance. (If you want an economic disincentive of nightmarish proportions, look at what inheritances do to families.)

It would not greatly affect my day-to-day behavior, and in that sense it would have limited economic consequences.

Take even 20% of the post-tax income of someone earning $50,000, though and he's likely to feel that pinch very acutely. Imagine that you raised my 70% figure though, to say 90%. at that point there would be more significant sacrifices for me. I'd still have more money than the guy who went from 50K to 40K (by a lot), but the pain I'd feel at the constraint on my consumption would be somewhat more comparable.

I'd still be flying first-class, mind you, and he would not. I'd still be attending the U.S. Open on days where he has to work. I'd still be sending my kids to college where's he'd be living hand-to-mouth in Manhattan and praying his kids get financial aid. I'd still be better off, even though we both grumbled about taxes equally.

Take even 20% of the post-tax income of someone earning $50,000, though and he's likely to feel that pinch very acutely. Imagine that you raised my 70% figure though, to say 90%. at that point there would be more significant sacrifices for me. I'd still have more money than the guy who went from 50K to 40K (by a lot), but the pain I'd feel at the constraint on my consumption would be somewhat more comparable.

I'd still be flying first-class, mind you, and he would not. I'd still be attending the U.S. Open on days where he has to work. I'd still be sending my kids to college where's he'd be living hand-to-mouth in Manhattan and praying his kids get financial aid. I'd still be better off, even though we both grumbled about taxes equally.

Is it that you don't believe in the law of diminishing marginal utility or that your utility curve for money is that flat?
Suddenly your previous arguments make sense. I didn't realize you were like "Kennedy" rich. I make a pretty good living, but apparently no where near what you do. So, perhaps I haven't hit the point where my marginal utility curve stops being flat.

And I know plenty of guys who live quite comfortably on 50k, by the way. They would be offended by being described as living "hand to mouth", even after taxes.

Anyway, I'd be happy knowing you multi-millionaires were actually paying the same rate of taxation as the rest of us. As it is, I assume multi-millionaires can afford to pay lawyers, accountants, and politicians to avoid paying even the same amount.

Suddenly your previous arguments make sense. I didn't realize you were like "Kennedy" rich. I make a pretty good living, but apparently no where near what you do. So, perhaps I haven't hit the point where my marginal utility curve stops being flat.

And I know plenty of guys who live quite comfortably on 50k, by the way. They would be offended by being described as living "hand to mouth", even after taxes.

Anyway, I'd be happy knowing you multi-millionaires were actually paying the same rate of taxation as the rest of us. As it is, I assume multi-millionaires can afford to pay lawyers, accountants, and politicians to avoid paying even the same amount.

50K less 20% in Manhattan means you have decide: rent or food? :D Maybe it's not that bad (ignoring taxes after that 20%), but $2K per month gets you a 400 sq ft studio in Manhattan unless you live in a rent controlled building.

I would think my marginal utility curve is the flat one. After all, if I see a $1 blow swiftly past me in the wind, am I going to chase it? No. Not worth it. The same is true iof $5, $10 and maybe even $20. I might go for the $20, but I'd probably think about whether it was worth my time and the delay would cost me. When I was a poor college student, even the $1 would have had me running, and the $20 would have had me knocking the elderly out of my way. For me now, the different between a $20 and a $1 bill isn't that great. It seemed more significant when I was poor.

50K less 20% in Manhattan means you have decide: rent or food? :D Maybe it's not that bad (ignoring taxes after that 20%), but $2K per month gets you a 400 sq ft studio in Manhattan unless you live in a rent controlled building.
I've always wondered how normal people can afford to live in places like New York or California. I'm sure the average salary is higher, but is it that much higher?

I hear about one bedroom ranch houses selling for over a million dollar in California. The same house where I live would go for 100 grand or less. I presently live in a four bedroom house with a basement in one of the best school districts in my state. It's valued at about 170k.

I'm thinking of upgrading to a nicer house, and I can get what I'd consider practically a mansion for $250-400k (4-5 thousand square feet plus a finished walk out basement). And the prices are dropping right now.

Many people in my neighborhood make around 50k, and the kids at my son's high school are derided around town as "the rich kids".

Interestingly, I just looked up the median household income for New York City verses where I live. It's $38,293 in New York City verses $36,518 in Fort Wayne, Indiana. So I say again, how in the hell can people afford to live there?

I've always wondered how normal people can afford to live in places like New York or California. I'm sure the average salary is higher, but is it that much higher?

I hear about one bedroom ranch houses selling for over a million dollar in California. The same house where I live would go for 100 grand or less. I presently live in a four bedroom house with a basement in one of the best school districts in my state. It's valued at about 170k.

I'm thinking of upgrading to a nicer house, and I can get what I'd consider practically a mansion for $250-400k (4-5 thousand square feet plus a finished walk out basement). And the prices are dropping right now.

Many people in my neighborhood make around 50k, and the kids at my son's high school are derided around town as "the rich kids".

Interestingly, I just looked up the median household income for New York City verses where I live. It's $38,293 in New York City verses $36,518 in Fort Wayne, Indiana. So I say again, how in the hell can people afford to live there?

rationing there are also some other spots where land is really expensive like lake geneva

Interestingly, I just looked up the median household income for New York City verses where I live. It's $38,293 in New York City verses $36,518 in Fort Wayne, Indiana. So I say again, how in the hell can people afford to live there?

For starters, the percentage of people who own their home is much, much lower than the national average. There's also rent control programs and housing projects.

For starters, the percentage of people who own their home is much, much lower than the national average. There's also rent control programs and housing projects.Sure, and probably a lot of people don't own cars either in New York City. So you don't own your home, you don't own a car, what the hell do you own? Anything?

This may go a long way towards explaining why big cities tend to be so liberal and the rest of the country so conservative. Where I live, everyone owns their home, a couple of cars, a big screen TV,, etc. And there's not that much disparity in income. Pretty much everyone considers themselves "middle class".

In a big city, the average guy owns nothing while living among giant buildings and vast wealth. The income disparity is much larger. It makes it seem like the "little guy" doesn't stand a chance and needs government to help him out.

In a big city, the average guy owns nothing while living among giant buildings and vast wealth. The income disparity is much larger. So if the big buildings and vast wealth are not directly in front of your face, you sort of go along pretending that they - and the income disparity - don't exist?

That may indeed explain a lot.

So you don't own your home, you don't own a car, what the hell do you own? Anything?

Your retirement account would be the big one.

So if the big buildings and vast wealth are not directly in front of your face, you sort of go along pretending that they - and the income disparity - don't exist?

That may indeed explain a lot.
You're missing the point. In middle America, damn near everyone is middle class. Some a little weathier, some a little less. In big cities you have millions of peons who own nothing and a few mega rich people.

We see a continuum with most people in the middle and a few on the top/bottom. We are almost all property owners and so have a stake in the system. Denizens of big cities are more like peasants living on their feudal lord's land. They are much more willing to turn to the crown to protect them (in their helplessness) from their lords and masters.

You're missing the point. In middle America, damn near everyone is middle class. Some a little weathier, some a little less. In big cities you have millions of peons who own nothing and a few mega rich people.

Uh, not really. The home ownership rate in Manhattan is still around 33%, and most cities are not nearly as unaffordable, and so display home ownership rates closer to the national average of 66%. Generally, the people who work in cities are more skilled, and so make more money, and so can afford more expensive real estate. It's only in extremely desirable locations that the housing prices get too far out in front of the median wage.

Moreover, given that federal taxes and spending amount to a national program of taking money away from city-dwelling blue-staters and spending it on country-dwelling red-staters, your characterization seem very much at odds with reality. The political differences between the two groups have less to do with how big or active they want the government to be, and more to do with which exact areas they want to activism to show up in (social welfare on the one hand, defense and cultural issues on the other).

Some say, rich are rich because they are smart. Until society finds a way to make everyone to have exactly the same smartness - the division will remain.

Some say, rich are rich because they are smart. Until society finds a way to make everyone to have exactly the same smartness - the division will remain.Yes, that "smartness" is usually exhibited very early. (By selecting a wealthy family to give birth to them. ;) )

This (http://news.yahoo.com/s/nm/20071101/lf_nm_life/wealth_millionaires_dc) article is pretty interesting at how there are many more people who are millionaires but are still associating themselves with the middle class. I can't blame them because they have more cash flow on hand.

Suddenly your previous arguments make sense. I didn't realize you were like "Kennedy" rich.
- - -
"So if the big buildings and vast wealth are not directly in front of your face, you sort of go along pretending that they - and the income disparity - don't exist?

That may indeed explain a lot. ”

You're missing the point. In middle America, damn near everyone is middle class. Some a little weathier, some a little less. In big cities you have millions of peons who own nothing and a few mega rich people. This basic pattern explains a lot about conservative politics in the US, IMHO.

Lets at least tax 100% these guys (and gals):

"...Even for an industry where pay has always been sky-high, the numbers have become stratospheric - like a $161-million (U.S.) retirement package for Stan O'Neal after he was ousted from Merrill Lynch & Co. in October, or $200-million in signing bonuses and pay granted to Citigroup Inc.'s brand new chief executive officer Vikram Pandit.

The amazement, however, is quickly turning to anger as major investment banks - most notably Bear Stearns Cos. Inc. - have seen profits and share prices tumble due to their exposure to subprime mortgages and complex derivatives.

Investors are facing the realization they not only paid hundreds of millions of dollars for deeply flawed oversight, but those pay packages may have actually fuelled the high-risk business practices that are toppling giants today. ..."

Sub-prime mortgage are another example where the writter got richer the more they wrote, with ZERO risk as they sold them junk away.

From:
http://www.globeinvestor.com/servlet/story/GAM.20080321.RCOMPENSATION21/GIStory/

I have not read through the whole thread but I just find the idea of taxing the rich higher rates unfair (I'm not rich by any means!).

Most rich people have worked VERY hard for their wealth. Why should the people working in McDonald's not pay a lot of tax. They're the people who will be needing the health care and other things because the rich will all have private health care...etc. This is just one example but you can't expect the rich to pay more because poor people are too lazy to be smart and innovative therefore making more cash.

Barry

Most rich people have worked VERY hard for their wealth.

First, an aside, I will spare you a detailed discussion of diminishing marginal utility (which I think does explain why the rate of taxes on McDonald's workers should be lower than on people like me). Short form: If you pay 25% of $10,000 in taxes, that generally causes a lot more pain to the average person than paying 25% on $100,000,000 would. I discuss that above.

Second, regarding the quote above, what makes you think that? I ask not because you are wrong, but because I have no idea if you are right or wrong. Frankly, I make a *lot* of money every year and I feel that I work hard for it. That said, my father was a firefighter for 47 years and earned jack shit. I felt he worked pretty hard too. If you measure the effort I put in, and the effort he put in, there is no way I should be earning 100+ times as much as he did in his best year, but I am. He was also as smart or smarter than I am, so surely it's not based on that either.

Add to that that my co-workers, to varying degrees, also work pretty hard, but their kids and many relatives don't. I happen to be in a place where a number of people are from "old money" and we nouveau riche still have a slight stigma having worked our way up. I tend to see a number of hard working rich people in my daily life complaining about all their good for nothing, lazy (but still very rich) relatives, spouses, friends, etc. For every Stephen Schwarzman (or two) there is a Paris Hilton (or two). Paris earns money too, because her vast inherited fortune earns it for her, without her working at all.

Whether the average wealthy person "works hard?" I don't know, and I count myself and work among them. To me, their efforts seem mixed. There are a large number of workaholics who definitely work hard and earn vast sums, but there are also those who do nothing who's money came from some combination of inheritance or pure luck. My honest impression is that the rich, as a group, work no harder (nor significantly less hard) than anyone else, just that you have to average out a number of very extreme individuals to realize that.

...Most rich people have worked VERY hard for their wealth. Why should the people working in McDonald's not pay a lot of tax. ...Do you have any evidence for the belief expressed in the first sentence of yours I quoted? It is my impression that there is a very strong correlation between the wealth of the parent and the wealth of the children. This would tend to contradict what you assert. I.e. the wealthy are rich because they had the capital to become wealthy. As they say: "It takes money to make money."

As far a "working hard" have you tried to dig ditches for a living? Or to get up at 5AM in an urban ghetto to be able to catch the 5:30 bus and ride out to the suburbs and cook and clean some rich person's house while they sit in front of a computer in air conditioned office and make more than 10 times what they pay you. True they may have gone to an "Ivy league" school whereas the 5:30AM bus riding maid did not even finish high school; but what does that have to do with "working hard"?

And yes the privileged by birth and much richer should pay more than the McDonald's worker IMHO, in part because they can and still have much more left over to see that their kids go to good schools and never need to get up at 5AM just to put some potatoes and cheap meat on the table.
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A personnel note:
I am one of the rare few who was very poor, worked hard as a “full needs” scholarship student thru the Ph.D. and now have a few millions in my old age, mainly because I can foresee things coming before most people do and “act before the crowd.” I too was lucky or “privileged.” My father was a smart rural West Virginia MD, a “country doctor” paid in jars of pickles or piece of venison more often than cash, if paid at all. He stayed near where he was born to serve those in need. My mother was smart too. She was a “liberated woman” far ahead of her time and in conflict with my father. Because of this, their divorce etc. she became an alcoholic school teacher, who was fired annually from each school she managed to get work in. My father could not help his “women are to serve men” attitude as his father died when he was about three and his mother moved in with four of her sisters. The five of them raised him, attending to his every wish as he grew up. But I was still “privileged” as both parents taught me to love learning.

As I was very poor until nearly 30, but as I am not dumb, and had the direct experience, I understand what a handicap not being “born to wealth” is. I have not forgotten that period of my life – it no doubt “colors” my current POV. Imagine what it is like to be born female with black skin of ill educated parents. If you can’t – I will tell you: IF you lucky and very hard working, you will rise at 5AM and ride the bus to the suburbs, work very hard all your life and when you die, probably partially from lack of medical care, a few of your friends will chip in to pay for your funeral. IF you are not lucky, and are in your 30s or older you probably have several hungry kids, no in-house man, and must do a few "tricks" each month to feed them as your public wealfare check mainly goes to the rich slum landlord in suburbia.

It is improbable my children or grand children will ever be poor as I am very frugal (life time habits are too hard to change). I did have the good sense to let them struggle as they were growing up. They worked hard for everything they got, except education. Until they were about 35 they were convinced that everything I had accumulated was going by my will to Cornell and JHU as compensation for the free education I received. One daughter is much richer than I am – made entirely by her hard work. She has MBA, CFA, etc. She several years ago managed the defined benefits retirement plan for a major airline company, often making more for the company’s “bottom line” than the pilots and their airplanes did. (Defined benefit retirement plans are company assets and liabilities, as Enron employees sadly learned.) She retired from that and now is a private investment councilor to people who do not mind, or at least will hardly notice, losing a million dollars. You must have at least 20 million to invest to be her client. Her clients also know: “It takes money to make money” and few of them do any work, unless you count swinging a golf club at a very exclusive country club.

SUMMARY: Get real.

Well, the Democrats are hoping to make another big gain this next election cycle. And they're already talking about how they're going to increase taxes on the rich. They need to pay their fair share!

Well, what would their fair share be? According to data released by the US Treasury:

The top 1% pay 40% of all taxes
The top 5% pay 60% of all taxes
The top 10% pay 70% of all taxes
The bottom 50% pay 3% of all taxes

Gee, seems like the rich really aren't paying their fair share.

Those numbers don't indicate reality. First, Add, state, local, fees, and and payroll taxes. After doing that the numbers look very different.

Also many of the very rich play games to hide income. Some of the poor and some middle class self-employed also hide income but the very rich do it on a larger scale.

The advocates for the rich will say you can't add payroll taxes because they fund a welfare/insurance program. So far the payroll taxes fund the general fund and promises for the future retirement of the young are not even legally binding. If you want to disqualify certain taxes because they fund programs for certain classes then you must disqualify taxes that fund programs that don't benefit the poor. Our trade policies favor the rich over the poor in a massive way. Do we hold all Americans responsible for programs that benefit nobody or do we blame the rich because lobbyists work for the rich? Lobbyists work for specific rich not all rich? Better that we don't get into what the taxes are for.

Who pays property tax on rented housing? The landlord pays but he passes the cost on to his tenants.

If the poor are legally required to subsidize the car insurance of the rich is that a tax? When a thousand dollar car hits a forty thousand dollar car and "totals" it the cost of the $40,000 car is born by the insured whether they be rich or poor. When the $1,000 car is hit and totaled by the $40,000 car only $1000 is born by the by the insured. Car insurance for everybody would be much less expensive if nobody owned expensive cars. The poor do subsidize the rich in car insurance but the poor have no far fewer people paid to whine on their behalf than the rich do so we don't here about the ways in which the poor subsidize the rich.

The rich would pay a lot more for their nannies and lawn care if we enforced our immigration laws in the USA. Lobbying by big employers of cheap labor is why we don't enforce our immigration laws.

Private ownership of land is necessary to encourage investment in improvements on land, but every new baby born has as much right to own the land as anybody else does. All land is stolen property. Asking the children of the landless to honor the inheritance rights of the the children of those that own land is asking the poor to subsidize the rich.

What should be taxed, income, wealth, or expenditures? The top 5% probably own more than 60% of the wealth of America.

This recent fall in housing prices is going to make a big change in wealth ownership statistics. Home equity, would change faster than home prices because the mortgage owed is not changed by the the falling home price unless there is a default.

Stop your whining you crybaby rich. As for all of the non-rich who parrot the whining of the rich and their lobbyists, talking like the rich does not make you rich or smart.

I have not read through the whole thread but I just find the idea of taxing the rich higher rates unfair (I'm not rich by any means!).

Most rich people have worked VERY hard for their wealth. Why should the people working in McDonald's not pay a lot of tax. They're the people who will be needing the health care and other things because the rich will all have private health care...etc. This is just one example but you can't expect the rich to pay more because poor people are too lazy to be smart and innovative therefore making more cash.

Barry

Some rich inherited wealth and don't work hard. Some poor are lazy and don't work hard.

Some rich work very very hard. Some poor work very very hard.

The opportunity and ability to work smart is what separates the rich from the non-rich.

You can't ask people at McDonald's to pay a lot of taxes because they are not paid enough to live on their incomes if "a lot" of taxes are taken out of their pay. If we had a different immigration policy McDonald's would have to pay a lot more for employees and then the McDonald's employees could pay more taxes.

As for all of the non-rich who parrot the whining of the rich and their lobbyists, talking like the rich does not make you rich or smart.

Ted Rall had a good cartoon about ten years ago. In one of the panels, a man sitting in a run down room was saying to his friend, "The rich shouldn't have to pay any taxes. That way, when I'm rich, I won't have to pay any taxes!"

The tax cut in 1963 dropped the top tax rate from 91% to 70%. That seems almost confiscatorily high by todays standards, but that's how it was during the "good old days".