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| Why we need a middle-class tax increase | |
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| Tweet Topic Started: Apr 11 2010, 04:50 PM (1,309 Views) | |
| jon-nyc | Apr 11 2010, 04:50 PM Post #1 |
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Cheers
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I mean generally speaking, I don't mean right now. ![]() In my view that 'middle quintile' should represent right around 20% of total income tax receipts. I'm happy to have the top quintile pay more so that the bottom two quintiles pay less, but having the median income household pay the average tax bill will prevent the agency problem which plagues our democracy and our fiscal situation. (i'm happy to add in payroll tax in the total, which I'm sure is omitted in this graph) |
| In my defense, I was left unsupervised. | |
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| John D'Oh | Apr 11 2010, 05:43 PM Post #2 |
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MAMIL
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It's long been claimed that taxing the rich is a huge disincentive for them to work harder, since having their hard-earned cash taken away means there's really no point to them working extra time, or travelling on a Saturday, recording another album, or playing in that golf tournament and what-have-you, since they hardly get to see any of it. Turning this idea around, the biggest incentive to working harder is when one doesn't have enough money to live. Hence, the obvious solution is to totally reverse the current structure, and tax the lowest earners the most, and the highest earners the least. Someone earning $10K per year, for example, would get a tax bill of $50,000, which would force the lazy, uneducated bastard to really put in some extra time, and earn the other $40K he owed the government to avoid being thrown in the poor house. Of course, once he'd earned the money, he would move down two or three tax brackets, and so would no longer be in debt, since his tax would be reduced to about $10K. This would leave him $40K clear, which he could spend on luxury items such as decent cuts of meat and expensive bottled water. A second benefit to this would be that charities would benefit enormously. Bill Gates already donates huge quantities of money to worthy causes - with a salary of, say, $100 million a year, tax free, he would have even more money available to donate to the charities - he might even be willing to pay the tax bill of some of the people who work in the charity shops, thereby keeping them out of prison, at least in the short term. |
| What do you mean "we", have you got a mouse in your pocket? | |
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| Mark | Apr 11 2010, 06:19 PM Post #3 |
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HOLY CARP!!!
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Hey jon, Instead of that. why not just cut the government down in size and get rid of this crap. |
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___.___ (_]===* o 0 When I see an adult on a bicycle, I do not despair for the future of the human race. H.G. Wells | |
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| Piano*Dad | Apr 11 2010, 06:32 PM Post #4 |
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Bull-Carp
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If Jon's notion were adopted, government would indeed shrink. The agency problem that Jon notes is the tendency for those who don't pay much in taxes to demand services because others will have to pay for them. This has always been a reason NOT to remove the people at the bottom end of the income distribution from paying taxes completely. As long as the poor and the middle class see a relationship between increasing the size of government, and increases in the amount that THEY will have to pay, you will have more people thinking clearly about costs as well as the benefits of new government spending programs. |
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| Mark | Apr 11 2010, 06:44 PM Post #5 |
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HOLY CARP!!!
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No need to play psychologist at the risk of the government getting used to even more of our toil. Just cut the damn government down in size. |
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___.___ (_]===* o 0 When I see an adult on a bicycle, I do not despair for the future of the human race. H.G. Wells | |
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| Luke's Dad | Apr 11 2010, 07:28 PM Post #6 |
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Emperor Pengin
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The more I think on it, the more a national sales tax seems to be the best way to go, as well as a budget cap for the federal government based off a percentage of GDP. |
| The problem with having an open mind is that people keep trying to put things in it. | |
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| Jeff | Apr 11 2010, 07:47 PM Post #7 |
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Senior Carp
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Obamacare avoids this rather than tripling this how, exactly? |
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| ivorythumper | Apr 11 2010, 11:18 PM Post #8 |
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I am so adjective that I verb nouns!
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No doubt Jon has carefully calculated his own tax situation and decided that the increase should only affect folks below his income level. |
| The dogma lives loudly within me. | |
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| jon-nyc | Apr 12 2010, 02:39 AM Post #9 |
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Cheers
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I agree with P*D that minimizing the agency problem will ultimately reduce the size of government. In the mean time, remember we have several trillion of debt to pay off. |
| In my defense, I was left unsupervised. | |
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| jon-nyc | Apr 12 2010, 02:40 AM Post #10 |
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Cheers
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This proposal isn't about lowering my own taxes, its about raising them on the middle class. (really on the 'average voter'). I'm fine with paying much higher taxes than the average voter. I just think its important for the health of our democracy that the average voter pay the average tax. Specifically, the attitude of the average voter toward his government should be that of a responsible steward, not that of a supplicant or child looking up to a parent. |
| In my defense, I was left unsupervised. | |
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| John D'Oh | Apr 12 2010, 03:52 AM Post #11 |
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MAMIL
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| What do you mean "we", have you got a mouse in your pocket? | |
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| PhJ | Apr 12 2010, 04:01 AM Post #12 |
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Senior Carp
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still, I find the graphic a bit misleading ..? Do you pay that much more % of your income(s) than the average voter ? Or is it just net $ ? And how are profit on shares taxed versus job salaries ? I mean, if the highest bracket has an income of 1000 $ and pay 50$ of tax, the next bracket earns 10$ and pays 3.5$, the lowest one earns 1$ and pays 20 cent, you can say that the highest earners have "most of the burden on their shoulders", but it's rather meaningless. |
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| jon-nyc | Apr 12 2010, 04:28 AM Post #13 |
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Cheers
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It isn't meaningless, PhJ. Look at the point I'm trying to make (whether you agree with it or not). I'm not trying to make some generic point about our tax system being too progressive. I'm not saying a thing about tax rates being too high at the top. Rather, the point is that - for the health of the democracy - we should have households at the median national income pay the average tax amount (not rate). Anything less and you create an agency problem which fundamentally alters the relationship between citizen and government. As I said before, the goal is that the attitude of the average voter toward his government be that of a responsible steward, not that of a supplicant or child looking up to a parent. |
| In my defense, I was left unsupervised. | |
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| John D'Oh | Apr 12 2010, 04:43 AM Post #14 |
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MAMIL
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My attitude towards government is that I wouldn't piss on it if it was on fire. I hope my kids don't feel that way about me - they probably don't since I give them pocket money. |
| What do you mean "we", have you got a mouse in your pocket? | |
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| jon-nyc | Apr 12 2010, 04:49 AM Post #15 |
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Cheers
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Its some of each. Our income tax rates are progressive, nominally they range from 10% to 35%, but with deductions and tax credits many people pay far below 10% - in fact almost half of American households pay no income tax whatsoever. (actually that's misleading because we have a 'payroll tax' to finance pensions and health care for the elderly which is essentially an income tax, so many of those families that pay no income tax probably pay 6-7% of their earnings in payroll tax). |
| In my defense, I was left unsupervised. | |
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| JBryan | Apr 12 2010, 04:56 AM Post #16 |
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I am the grey one
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While I agree in principle about the agency problem (it was recently reported that 47% of Americans pay NO taxes) I would have to say there is no problem on my part with getting more than I kick in. Far from it. I pay enough, thank you very much. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| jon-nyc | Apr 12 2010, 05:24 AM Post #17 |
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Cheers
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Yeah, you're probably not in the middle quintile either. In fact I'm sure you're in the top quintile. (88k HH income puts you in the top quintile says Wiki) |
| In my defense, I was left unsupervised. | |
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| jon-nyc | Apr 12 2010, 05:25 AM Post #18 |
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Cheers
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I linked to that article above, but thats a misinterpretation. THey pay no *income* taxes. But most of those households would pay payroll taxes equal to 6-7% of their income. |
| In my defense, I was left unsupervised. | |
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| JBryan | Apr 12 2010, 05:31 AM Post #19 |
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I am the grey one
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Yes, but those payroll taxes are for very specific programs that we all pay into (I pay the full 15.3%). It is very difficult to make the argument that they would agitate for smaller government because of the FICA they pay. The real problem with which I am sure you would agree is that there is no resistance among the general electorate to tossing big piles of cash in the air like candy at a parade since none of it is their's. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| jon-nyc | Apr 12 2010, 05:33 AM Post #20 |
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Cheers
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Indeed, that's the point of this thread. |
| In my defense, I was left unsupervised. | |
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| PhJ | Apr 12 2010, 05:40 AM Post #21 |
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Senior Carp
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I suspect it's how things are in Belgium.. (not sure if I should laugh or cry.. )Top marginal rate (50%) kicks in at 32.860 EUR of taxable income (against 357.700 $ in the US (at 35%)). Add to that a 21% VAT, and you have paradise. Have you considered moving here ? source: http://ddata.over-blog.com/xxxyyy/0/18/96/12/KpmgTauxiImpots.pdf Edited by PhJ, Apr 12 2010, 05:40 AM.
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| RosemaryTwo | Apr 12 2010, 05:44 AM Post #22 |
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HOLY CARP!!!
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We just got our tax bill today. I am angry and frustrated. Edited by RosemaryTwo, Apr 12 2010, 05:44 AM.
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| "Perhaps the thing to do is just to let stupid run its course." Aqua | |
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| jon-nyc | Apr 12 2010, 05:58 AM Post #23 |
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Cheers
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Ha. At least you get health care for your troubles. THe disparity isn't as great as you think - I pay 47.62% in income tax - 35% fed, 8.97% NYS, 3.65% NYC. Add to that a payroll tax of a little over 1.5% and that puts me just under 50% in effective income tax. (edit: the above are marginal rates, effective rate would be a bit shy of those #s) We don't have VAT (yet) but the sales tax here is 8.5%. |
| In my defense, I was left unsupervised. | |
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| JBryan | Apr 12 2010, 06:04 AM Post #24 |
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I am the grey one
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Our sales tax is 8.3%. |
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"Any man who would make an X rated movie should be forced to take his daughter to see it". - John Wayne There is a line we cross when we go from "I will believe it when I see it" to "I will see it when I believe it". Henry II: I marvel at you after all these years. Still like a democratic drawbridge: going down for everybody. Eleanor: At my age there's not much traffic anymore. From The Lion in Winter. | |
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| Klaus | Apr 12 2010, 06:05 AM Post #25 |
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HOLY CARP!!!
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I guess health care is not included in PhJ's calculation. In Germany you have a top marginal rate of about 50%, and on top of that you have to pay social insurances, which adds up to another 40% of your income (half of which your employer has to pay). It becomes better if you earn _lots_ of money because then you can opt out of the social insurances. Or you have to become a civil servant (like me), because then you don't have to pay for social insurances at all
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| Trifonov Fleisher Klaus Sokolov Zimmerman | |
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4:54 PM Jul 10