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Subject: Taxes; regressive, progressive or equitable?
Posted by: sarge33rd
- [372291615] Mon, May 16, 2011, 10:12
The Obama thread (like many), was fast derailing and I'll admit to mea culpa on that count. The paper I found and linked in that thread this morning, I think deserved its own thread/discussion in order to stem the derailment and allow for further dissection.
I link it again here, to facilitate referencing the source data:
America's Tax System, not as progressive as you think
The top 1% of wage/salary earners for example, represents 20.3% of ALL wages/salaries paid. Their total tax liability, represents 21.5% of ALL taxes paid. Not really what one could call disproportionate.
This same income group,($1.254 m/yr) pays 30% OF their income, in one form or another of taxes. ($376,200)
Compare this to the "middle class" (those in the 41st thru 60th percentile with an avg annual income of $40,700), whose income on the whole represents 11.6% of all wages/salaries paid and whose total liability is 10.3% of the total tax bill paid.
This middle class, then pays 25.1% of their income, in one form or another of taxes. ($10,215)
So that top 1%, earns a gross income of approx 30 times that middle class earner. (1,254,000/40,700 = 30.8)
If we subtract the two tax liabilities from each income:
1,254,000-376,200=877,800
40,700-10,215=30,485
Now divide the after tax income of that top 1% by the after tax of the middle class:
877,800/30485=28.79
So the one grp grosses 30.8 times the other and nets 28.79 times as much.
Is that REALLY, all that inequitable?
I would argue that those on the right need to cease focusing on solely federal income tax, while those on the left need to do likewise. Overall, it looks to me like a progressive fed inc tax, simple offsets the regressive nature of state/local taxes; with the end result amounting to a pretty much equitable scenario. |
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| 113 | weykool
ID: 53446220
Wed, Jun 01, 2011, 02:06
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Seriously DW You think people are foregoing the liability protections offered by C-corps and forming LLC's and still paying the double taxation of a C-corp?
Get real.
As for my assertions on LLC's I have made none.
When I think of an LLC I think of a law or accounting partnerships that were already taxed as a pass through.
Even though I work for a LLC I make no other assertions as to how many there are or what affect they have on the corporate tax picture.
I have made assertions about S-Corps as there was a significant shift in corporate taxation during the 1980's but you continue to gloss over this fact.
PD:
You keep saying corporate taxes are historically low.
I will ask again...based on what?
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| 114 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 02:36
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Did you not read the article linked in #93? Or the one linked in #110?
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| 115 | boikin
ID: 532592112
Wed, Jun 01, 2011, 11:08
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Re 110: It is interesting that the country on the bottom, germany, is also one of more successful manufacturing countries in Europe.
Re 114: actually no where does is show that corporate tax rates are historically low, what they do show is that the % of GDP from corporate taxes have stayed relatively constant since the early 80's when then hit another "historical low"
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| 116 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 11:12
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#115: I didn't say corporate tax *rates* are historically low--that is mixing up two different things.
I've stated (and the articles have both stated) that corporate tax revenue as a share of GDP has dropped to historic lows. In other words, as we produce more and more in this country, the amount of taxes paid against that his dropped lower and lower.
As for the country list, it very well could be that more companies pay taxes, making it lower for everyone. We have oodles of very large companies in this country which pay no taxes at all, forcing their fair share of taxes onto other companies who do pay taxes (and, as weykool points out, onto pass through organizations).
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| 117 | boikin
ID: 532592112
Wed, Jun 01, 2011, 11:27
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In other words, as we produce more and more in this country, the amount of taxes paid against that his dropped lower and lower.
or companies in general could be just contributing less and less to GDP. With out knowing what they actually contribute to the GDP then knowing what they contribute in taxes is meaningless.
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| 118 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 11:32
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How could companies be contributing less and less but GDP be going down? GDP is a measure of domestic production--when it goes up it means that companies are making more.
Remember that we are speaking in aggregate terms, not for any particular company or industry: If companies are making more (and they are--GDP is rising and has been for some time) their share of taxes has not, and in fact has dropped.
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| 119 | boikin
ID: 532592112
Wed, Jun 01, 2011, 11:41
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Maybe a the refresher on what the GDP will help:
GDP-The monetary value of all of a nation's goods and services produced within a nation's borders and within a particular period of time, such as a year.
You will notice that nothing in the definition of GDP includes the word corporations. also note though not mentioned here but government spending is also included in the calculation.
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| 120 | DWetzel
ID: 31111810
Wed, Jun 01, 2011, 11:55
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Re: 113 -- I'd welcome the opportunity to critique your data supporting what you believe, but for the umpteenth time, YOU DON'T HAVE ANY.
At this point it's completely pointless to attempt to have a rational discussion with you, because you refuse to attempt to actually support your arguments (while insisting, apparently on blind faith and nothing else, that everyone else is lying or distorting the data that DOES exist, because it doesn't support what you already believe).
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| 121 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 13:15
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#119: So you believe that corporation contributions to GDP have dropped several fold since the 1950s? That isn't demonstrated by the data, which shows that increases in the GDP are largely made up of domestically purchased personal goods & services (2010 table only, but feel free to play with the date ranges).
If the goods and services being purchased in increasing numbers are not being provided by companies then where are they coming from?
Meanwhile, Corporate profits (not revenue or income, but profit) reached 11.24% of GDP last fall.
So corporations are making very very good profits (11.24% of GDP) but paying a near-record low 1.9% of the tax revenue as a share of that same GDP.
I'm not begrudging corporate profits. I do begrudge corporations who pay no income tax, as 55% of companies didn't at least one year of the previous seven.
As I've mentioned before, it seems silly to talk about the tax rates when corporations utilize a variety of tax avoidance strategies to make their effective tax rate virtually (and in some cases actually) disappear.
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| 122 | Khahan
ID: 373143013
Wed, Jun 01, 2011, 13:29
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121, PD now you are talking sense (and even bridging that gap between focusing on tax/gdp ratio and actual taxes being paid by individuals or corps).
Step 1 has to come with more responsible spending and budgeting by the government. Absolute must.
Step 2 has to come with closing tax loopholes. For example, why do corporations get to figure out how much they are taxed on, then take deductions out of that? Wouldn't it make more sense to have the amount of profits taxed by the last step? In otherwords: My company makes $1,000,000 a year. All expenses - payroll, electric bill, TP for the bathrooms, advertising, gets deducted, leaving a true net profit of $300,000. That $300,000 is what my company should be taxed on. Instead they get to figure their taxes on the $1,000,000 then reduce that taxed amount wirh certain loopholes.
Or simply make the taxable income the amount a company announces to shareholders as its profits. No company should be able to pay a $0.00 tax bill then announce millions if not billions in profits.
Same accounting principals for individuals.
Step 3 - adjust tax rates accordingly to close gaps still left by a) responsible spending and b) a simplified tax code.
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| 123 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 13:39
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Absolutely. I've said the same thing about property taxes on the local level. Some cities (like Philadelphia) haven't done a city wide property tax valuation in decades.
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| 124 | Building 7
Leader
ID: 171572711
Wed, Jun 01, 2011, 13:45
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corporate lobbyist money and campaign donations >>>>> congress >>>>> tax laws that reduce corporate taxes
Wash, rinse, and repeat.
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| 125 | Boldwin
ID: 12554112
Wed, Jun 01, 2011, 13:54
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If we can have reasonable lobbyist laws why can't there also be laws against proposing lines of tax code benefiting your own campaign donors?
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| 126 | boikin
ID: 532592112
Wed, Jun 01, 2011, 13:56
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Re 121: the first link is meaningless, but the second one is relevant, and it answer my question.
why even tax corporations at all?
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| 127 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 14:09
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We tax corporations for a lot of reasons, but mostly because they consume government benefits. Our society has an assumption that those who gain the benefit for government services will pay for them, assuming that they can afford to do so.
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| 128 | boikin
ID: 532592112
Wed, Jun 01, 2011, 14:24
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let me rephrase the question why do we tax corporations instead of taxing the income the people receive from them more?
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| 129 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 14:29
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For the same reason--corporations are the ones receiving the benefits. Sure, it trickles down to the workers in some ways, but if we treat corporations as entities with certain rights distinct from their individual workers (or shareholders), those rights need to be paid for.
Otherwise, we should do away with corporations entirely and just have LLC's or other partnerships.
Among other things, corporations enjoy tax benefits by setting themselves up as corporations (separate from partnerships or other entities). One of those benefits shouldn't be the avoidance of all tax, particularly when the corporation is getting the benefit of roads, police, educated workers, firemen, safe transport, etc., all of which are tax supported.
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| 130 | Boldwin
ID: 12554112
Wed, Jun 01, 2011, 14:36
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Boikin
Control.
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| 131 | boikin
ID: 532592112
Wed, Jun 01, 2011, 14:44
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Among other things, corporations enjoy tax benefits by setting themselves up as corporations (separate from partnerships or other entities).
so we tax them in order to give then tax benefits, did that not seem a bit irrational when you typed that?
corporations are the ones receiving the benefits.
then I guess you have no problem with corporations give the right to vote or at least right to campaign for politicians?
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| 132 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 19:02
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Corporations have a lot of the rights of citizens already. But not all citizens have all rights. I'll continue to think of corporations like convicted felons They have the right to speech, to work, and to petition their government about policies. But they can't vote.
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| 133 | weykool
ID: 343561414
Wed, Jun 01, 2011, 20:48
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PD:
So are you suggesting the individuals and corporations should pay taxes based on the amount of government benefits they receive/consume?
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| 134 | Perm Dude
ID: 5510572522
Wed, Jun 01, 2011, 21:00
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No, I'm saying that entities which consume government benefits are ethically bound to pay taxes. Put another way, assuming the ability to pay (that is, that benefits in question aren't the result of a social safety net) that both companies and individuals should pay taxes.
That's it. I'm not saying anything about rates or amounts. Only that companies should not escape taxation entirely, because they continue to enjoy the fruits of government benefits paid for by taxes.
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| 135 | Boldwin
ID: 14557416
Sat, Jun 04, 2011, 18:11
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Here's the real lesson of taxes/GDP.
That ratio stays nearly the same no matter how punitive we make taxes.
Cooking the golden goose produces no new taxes, it just kills jobs and businesses.
That the ratio stays virtually the same is so invariant it's even been given a name. Hauser's Law.
What part of this phenomenon do liberals not get? How do we need to restate it before it sinks in?
No, raising taxes to infinity on political class enemies will not raise tax revenues or fix anything.
No Hauser's Law does not recommend raising taxes. Just the opposite. Empower individuals at all economic levels by keeping taxes low and fair for everyone.
Sticking it to rich guys and business may make you feel good [for whatever sick and twisted reason] but it doesn't help the poor people you put out of work. It doesn't help anyone.
A good lesson in a depression. Get real, face the facts.
Unfortunately the Dem meme for the next election cycle 'target the greed and unfairness', won't spend a moment looking at their own counterproductive powerlust.
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| 136 | Perm Dude
ID: 5510572522
Sat, Jun 04, 2011, 18:29
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Raising tax rates to what they were in the 90's is "sticking it to the rich guys?"
Cutting taxes too much for those best able to pay them is, unfortunately, a right wing neuroses. A good lesson in a depression. Get real, face the facts. A lesson lost on the Right, who continue to believe that the best thing for a government to do is (1) cut more taxes for the wealthy and (2) reduce spending to a bare minimum.
It is as if facts don't matter to them anymore--only attitude.
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| 137 | sarge33rd
ID: 372291615
Sat, Jun 04, 2011, 18:41
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My thoughts precisely PD as I read 135. I keep waiting, hoping, praying that one day, SOME day; the Right will indeed "face the facts". Capitalism, unfettered by regulation, puts HUGE sums into pockets of a very select few and deprives the majority of ANY life.
Look at late 1800s and early 1900s worker conditions, pay etc. The great republican experiment has been tried, and failed miserably. (slave labor conditions, unsafe working conditions, etc etc etc All because the bottom line was the SINGLE determining factor)
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| 138 | Boldwin
ID: 14557416
Sat, Jun 04, 2011, 18:43
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The Reagan Revolution was a smashing success.
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| 139 | Perm Dude
ID: 5510572522
Sat, Jun 04, 2011, 21:42
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As usual, the Right is learning the wrong lessons from whatever success they might have had in the past.
Cafeteria Reaganists are unlikely to understand the contexts necessary to draw any conclusions to today's conditions.
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| 140 | Boldwin
ID: 14557416
Sat, Jun 04, 2011, 22:35
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Success is when thirty years later your enemies feel they must claim to be better at your game and more faithful to you than your actual supporters.
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| 141 | Perm Dude
ID: 5510572522
Sun, Jun 05, 2011, 00:05
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Who, exactly, is saying this? It is certainly a fact that Reagan would be called a RINO these days. This doesn't make it "your game" nor that somehow the Right is doing things the same way Reagan did.
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| 142 | Boldwin
ID: 14557416
Sun, Jun 05, 2011, 01:16
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See
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| 143 | weykool
ID: 53446220
Sun, Jun 05, 2011, 02:09
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Look at late 1800s and early 1900s worker conditions, pay etc. The great republican experiment has been tried, and failed miserably. (slave labor conditions, unsafe working conditions, etc etc etc All because the bottom line was the SINGLE determining factor)
And yet people from all over the world did everything they could to get to America in order to better their lives.
Why?
Because they were fleeing they same kind of government that you want to impose on the country today.
I will take the record of America with all of its imperfections over the USSR, China and Cuba any day of the week.
I feel sad for you that you choose ignore all the good in America and only focus on the bad.
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| 144 | Perm Dude
ID: 5510572522
Sun, Jun 05, 2011, 10:00
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And yet people from all over the world did everything they could to get to America in order to better their lives.
Absolutely. And they did so, in no small part, because of worker guarantees in this country.
I fail to see why American exceptionalism has to exclude the many great things done by the Left over time.
Right or wrong, we're a great country, in no small part because the workers of this country made it so.
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| 145 | Boldwin
ID: 14557416
Sun, Jun 05, 2011, 12:36
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It could have even better had workers not been prevented or discouraged in many cases by their unions and government from ambitious risk-taking and the potential for individual achievement and commensurate reward. In most cases american exceptionalism was achieved by those who operated outside those shackles.
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| 146 | Boldwin
ID: 14557416
Sun, Jun 05, 2011, 12:55
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What leftist cocoon produced your business, PD?
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| 147 | Perm Dude
ID: 5510572522
Sun, Jun 05, 2011, 14:14
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Still stuck in the 70s, eh?
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| 148 | sarge33rd
ID: 372291615
Sun, Jun 05, 2011, 14:19
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Peoples the world over WK, want to come here for the freedoms we offer and are guaranteed by our BoR.
Rights, which it quite frankly appears, THE right wants to take away from any/all who dare to disagree with their narrow positions.
The Evangelical Right will play a HUGE role, in naming the Rep Pres candidate. They claim to want "smaller, less intrusive" government. They ALSO want, the Fed Govt to intrude into the most intimate of personal affairs, and dictate who can/cant wed whom.
In short, the right wants smaller govt, until it means not having everyone follow your own narrow set of rules. Once someone, anyone else, wants to lead their independent lives, the Right wants to legislate away that other persons rights to do so.
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| 149 | weykool
ID: 53530517
Sun, Jun 05, 2011, 22:40
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Sarge:
People for the most part are coming here for the economic opportunities.
My guess is most of them are not coming here for the chance to pay higher taxes that you advocate.
As for the rights being taken away by the boogie men on the right you sound like the political sage Cher.
Please name all the rights taken away by the right that you speak of.
If you want to talk about rights being taken away what about the rights of taxpayers who have more and more of their money being taken away.
The right to spend your money how you want to spend it is being taken away year after year to fund the social experiment foisted upon us by the left.
Money equals economic freedoms and the left's desire is to take away as much of our freedoms as possible.
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| 150 | Perm Dude
ID: 5510572522
Sun, Jun 05, 2011, 23:04
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Taxes have fallen for virtually anyone making under $250,000 year, weykool.
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| 151 | Khahan
ID: 54138190
Sun, Jun 05, 2011, 23:38
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Please name all the rights taken away by the right that you speak of
Read the patriot act. Of course, the left is just as bad. Its not an issue of right or left wanting to take our rights. The only issue is how they want to take our rights away from us.
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| 153 | Mith
ID: 23217270
Mon, Jun 06, 2011, 00:21
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Which rights, or what qualifies as a right.
Foreigners come here for all sorts of reasons. Included among them are the entitlements and provisions afforded by taxes they pay. Since we're using the term loosely, I'm quite sure that most undocumented aliens who live and work here would gladly exchange that status for the right to pay all applicable taxes.
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| 154 | Khahan
ID: 373143013
Mon, Jun 06, 2011, 08:50
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Since we're using the term loosely, I'm quite sure that most undocumented aliens who live and work here would gladly exchange that status for the right to pay all applicable taxes.
Whole different topic, but I doubt that MITH. If they'd gladly do it, then why don't they?
Maybe if we actually took away these 'rights' to undocumented illegal aliens there would be an incentive to pay taxes and become documented.
As long as my tax money is going to pay for people who come here illegally and suck up our resources I have the right to demand better/more responsible spending habits by our government.
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| 155 | Mith
ID: 23217270
Mon, Jun 06, 2011, 09:22
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I was responding to the first sentence of #149.
I have to admit I'm quite shocked at the ignorance of someone I usually regard as a bright person who thinks it's as simple as just "becoming documented" like it's an afternoon spent in line at the DMV. If you aren't wealthy or highly educated it takes somewhere between years and never. The various processes are well beyond the means (financial, logistical, etc.) of most poor Latin Americans.
I'm sorry but the notion that any large portion of undocumented workers actually prefer not having green cards or current work visas is a doozy.
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| 156 | Khahan
ID: 373143013
Mon, Jun 06, 2011, 09:29
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The various processes are well beyond the means (financial, logistical, etc.) of most poor Latin Americans
And now we suddenly come back to the race issue. This isn't about Latin American or Mexican or Hispanic immigrant workers. I don't care if they're undocumented from Canada. This is about undocumented workers. Yes, its believed the majority of these are Latino. But if somebody is starting the process, even if it takes the process years, they're fine by me. The undocumented workers people talk about are those who come here and have no intention of joining the system.
I even include American citizens who duck out on their taxes. While they may not be 'undocumented illegals' the result is the same. Their work and their pay is undocumented and unaccounted for.
So don't presume to know that I don't understand the process or that I'm talking about a select racial group, either.
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| 157 | Mith
ID: 23217270
Mon, Jun 06, 2011, 11:23
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Khahan you are embarrassingly clueless. That they would rather live and work here undocumented than be unable to keep their families unsafe and/or unfed does not mean that they wouldn't jump at the chance to do so in compliance with our immigration laws. Doing so and paying income taxes and receiving all of the associated benefits - chief among them being free from having to hide and always worry about getting caught and deported - would be a terrific option if they were ok with subjecting their families to the hardships of their home countries for the that long. The sad fact is that many people who try to get in through the front door simply never do.
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| 158 | Frick
ID: 5310541617
Mon, Jun 06, 2011, 14:55
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I agree with MITH on this one. By starting the process to become legal, illegals run the risk of being deported. This is why the amnesty programs have been proposed. I'm sure there are plenty of illegals here who would like to change their status, but are afraid to due to the fact that it could result in their deportation.
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| 159 | boikin
ID: 532592112
Mon, Jun 06, 2011, 16:02
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Doing so and paying income taxes this is only a guess but I bet that if you are coming to American to work at job that makes enough to pay income taxes you ability to get citizenship is much easier then those who are coming here to make minimum wage. I guess my point is that some people probably prefer the system the way it is since undocumented workers are paying into state taxes through taxes on sales, gas, cigarettes,...and not taking much out because of fear of deportation, While amnesty programs in the view of these people would only mean that these people would now qualify for benefits with out paying much more in taxes.
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| 160 | weykool
ID: 343561414
Mon, Jun 06, 2011, 19:55
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ummm...they already qualify for benefits documented or not.
The biggest benefit is the free education for their kids.
In California it is "illegal" to deny a free education to the children of "illegals".
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| 161 | Perm Dude
ID: 5510572522
Mon, Jun 06, 2011, 21:34
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Some they do, yes. But educating kids is probably a benefit to all of us, I think.
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| 162 | sarge33rd
ID: 372291615
Tue, Jun 07, 2011, 02:07
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The way our political right treats education/teachers PD; it is clear the right considers ewducation an expense and not an investment.
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| 163 | Boldwin
ID: 1353071
Tue, Jun 07, 2011, 02:33
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The PC propaganda part is sure expensive.
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