Why on earth does the highest tax bracket cover from ~$375,000 and up? We should have many more brackets above 375k. A small business owner making $400,000 and an athlete making $4,000,000 shouldn't be taxed at the same rate.

Given that a progressive tax system is here to stay, I'm wondering if this is something on which we can all agree.

[Edited on January 11, 2010 at 9:21 AM. Reason : ]

1/11/2010 9:16:31 AM

or perhaps everyone should be taxed equally?

1/11/2010 9:23:44 AM

If we're going to have a progressive tax structure, you're probably right. The super rich are treated the same as someone that really doesn't make all that much.

1/11/2010 9:32:24 AM

^^

Quote :

"Given that..."

I also think the capital gains rate should be zero until into the upper middle class, then become sharply progressive.


And there's plenty of precedent for my original opinion. There was only one person rich-enough to place in the highest tax bracket when the 16th Amendment was first passed.

[Edited on January 11, 2010 at 9:47 AM. Reason : ]

1/11/2010 9:43:33 AM

I agree with Boone.

1/11/2010 10:05:18 AM

Even if the gov't took away Every last red cent of income from the top 1/3rd of earners, you still wouldn't keep up with the runaway spending.

Let's first reign in these spend-crazy politicians before finding new ways to rape the citizenry.

1/11/2010 10:44:35 AM

I mean, I'm down with that and all, but you could take some of the tax burden off of the lower portion of the highest tax bracket if you added a little more granularity in the brackets we have.

1/11/2010 10:45:56 AM

Quote :

"or perhaps everyone should be taxed equally?"

This is the answer. Why discriminate? Just have ONE bracket, or no brackets and a national sales tax.

But if you are going to keep a progressive system, I agree there should be more brackets.

1/11/2010 10:47:42 AM

bracketology

1/11/2010 10:50:17 AM

Steal from the rich and give to the middle class. More brackets.

1/11/2010 11:16:19 AM

Ideally, should be 3 tax brackets:

1. Those earning/consuming below X, where X is the quota of basic needs.
2. Those earning/consuming below Y, where Y is the highest level of consumption that every human on the planet could sustainably have at the same time.
3. Those earning/consuming above Y.

Unfortunately, not only is Y pretty much impossible to determine, but also probably well below the median income of Americans. X is no picnic either.

1/11/2010 11:28:45 AM

The rich in this country pay the majority of taxes, why should they be punished more?

1/11/2010 11:33:08 AM

i really loathe that argument. no matter what system the rich are always going to pay more. even with a flat tax of 15% they will still pay more. if I make 100K my 15% will be 15k. If I make 30K my 15% will be 4.5k. i'm not saying the point you're attempting to convey isn't valid, but at least use some decent reasoning.

1/11/2010 11:38:41 AM

GGMon already acknowledged that the Rich pay more taxes, he's just wondering why they should pay even more, given that they already shoulder the burden.

I agree with Boone, the tax rate should increase linearly with income.

1/11/2010 11:56:56 AM

Quote :

"The rich in this country pay the majority of taxes, why should they be punished more?"

Because that's the price they pay for living in a system that allows them to make so much money.

1/11/2010 12:50:30 PM

Quote :

"Just have ONE bracket, or no brackets and a national sales tax."

Is there any proof at all that a national sales tax alone could fund our standing obligations to defense, social security, medicare, and medicaid?

I'm not talking about continuing them, I'm just talking about fulfilling the obligation to those currently in the system, and to those defense projects and tasks currently at hand.

I lived in Tennessee and worked in the education system there, and if I remember, their sales tax based system (no income tax) played havoc with budget projections, especially when people's spending on stuff crashed in 2008.

Texas and Florida have the same situation, but they also depend more on the capital gains tax and a lot more wealthy people to pay those.

1/11/2010 12:56:48 PM

Quote :

"I'm just talking about fulfilling the obligation to those currently in the system,"

Well since we dont have just a national sales tax, we dont have any proof. However, we do have proof that the current system cannot do what you ask. Keep on pushing the burden/discriminating against a smaller and smaller group of people, they will leave. For proof, look at california, maryland, etc.

Yep, Tenn has no income tax. They are also benefiting from the influx of jobs from California. The internet and selby county hurt tenn books more than the current downturn.

My point, PinkandBlack, is we get into trouble when we, as a govt, treat people differently under law. This discrimination is never easy to swallow, unless you are the one benefiting from it. I dont care if its taxes, schools, labor, education... Just have one set of rules. If you want to work 80 hours, give up your free time to make more income fine. If you choose to work 15 hours a week and spend the rest fishing, so be it. But why expect the guy working 80 hours a week to support the guy who only wants to work 15? Treat them all equally. I personally like the fairtax or a national sales tax, but would be ok with a flat tax.

The problem is you have the people setting the stupid rules/limits on what gets a penalty and what doesnt. Whats the cap on Roths now? 150k joint? Why?

[Edited on January 11, 2010 at 1:22 PM. Reason : .]

1/11/2010 1:21:49 PM

But the problem is, there are people out there making 300 million dollars a year who work 15 hours a week and spend the rest of their time doing cocaine. We're not talking about the people who make an above average income. It's the people who are making a disgusting, sickeningly high amount of money (and as we've seen in the past 2 years, they aren't even doing a good job). No one wants to tax the doctor who makes 400k a year while paying back 200k in student loans. Or the mechanic who puts in 80 hours a week who owns his own shop and takes home 200k because he's willing to work so hard. We're talking about the Wall Street executives who take home $20 million dollars because they're raping the system.

1/11/2010 1:41:19 PM

But they have to be doing SOMETHING to be making that kind of money. (other than get the govt to hand them the money) Its not really OUR place to say how much someone else is worth, as long as someone is willing to pay them. From a policy standpoint, just treat them all the same. Still, whether its a flat tax of 15% of 300M or a sales tax, they will still pay more. (probably, I doubt they are buying civics with that income)

1/11/2010 1:46:57 PM

It's kind of like how Congress pays itself. Does anyone think they actually deserve to get paid as much as they do IN ADDITION to all the perks that come with their jobs? Hell. Fucking. No. But who's going to get them to stop? No one. That's because they've made it to the top and they can't be stopped now. Who can possibly stop them? They're the bosses. Once you make it to the top of the ladder, it's incredibly hard to fall off. They get to make the rules, and you better believe they're making them to rig the game.

Just google "Myth of Upward Mobility" and read up on how it's actually harder to move up in social class in America than it is in Europe.

If it's not completely obvious to you that the people at the top are raping the system, you need to get your eyes checked.

1/11/2010 1:54:51 PM

Quote :

"But they have to be doing SOMETHING to be making that kind of money."

I'd argue that money doesn't always follow merit.

And really. Can we just acknowledge that 35% for a millionaire isn't the same as 35% for a working class family and move on?

1/11/2010 1:55:38 PM

or that one can be working class with a family and earn a million bucks. Why discriminate?

1/11/2010 2:16:22 PM

Quote :

"Why discriminate?"

Because the distinctions proposed here do actual work?

1/11/2010 2:19:15 PM

and at what income range do you no longer EARN your income? Just curious

1/11/2010 2:20:42 PM

It's not about earning or not earning. It's about spreading the tax burden in an equitable manner.

1/11/2010 2:23:23 PM

That's not what its about at all actually. If you did equal tax distribution whereas the lower income bracket were to contribute as much as the upper income bracket then there wouldn't be a progressive tax system. The point of a progressive tax system is to move the tax burden to the wealthy who can presumably afford it and reduce the burden on the lower and middle classes.

1/11/2010 2:32:17 PM

Things like the national sales tax do discriminate. Poor people have to spend a higher proportion of their income than rich people, which means a higher proportion of their income has to be paid to taxes.

Even super-wealthy extravagant spenders who buy jewel-encrusted statues of themselves are likely going to be investing or otherwise saving a larger portion of their income than lower class families who have to spend virtually everything they take in.

Then there's the fact that a national sales tax leaves at least as many loopholes available for those with the means to exploit them as the current system does. They can go abroad to buy things or, more easily, order them on the internet. We haven't even figured out how to deal with that on a state level yet.

---

Make more tax brackets, if only so I can keep enjoying my laughter every time someone claims that the super wealthy are being "punished." If nothing else, they're paying for their own protection. I remember lessons about the French and Russian revolutions, even if no one else seems to.

1/11/2010 2:35:53 PM

What lessons would those be, exactly?

1/11/2010 2:36:29 PM

Quote :

"The point of a progressive tax system is to move the tax burden to the wealthy who can presumably afford it and reduce the burden on the lower and middle classes."

Which is exactly what I meant when I chose "equitable" over "equal."

1/11/2010 2:46:44 PM

Quote :

"Poor people have to spend a higher proportion of their income than rich people, which means a higher proportion of their income has to be paid to taxes. "

Isnt this the case for EVERYTHING grumpy? So I guess the cost of a bigmac discriminates by your definition.

A national sales tax treats every equally. People are treated by law the same, no matter what they make only by what they buy.

1/11/2010 2:50:43 PM

even income tax or the capital gains tax are kind of dumb because rich people are going to be better at hiding their income. Taxes on wealth and property are by far the most fair and the most effective.

[Edited on January 11, 2010 at 2:53 PM. Reason : s]

1/11/2010 2:52:44 PM

Let's talk about the brackets in the Fair Tax plan, then. It's true that families making under a certain income will receive tax refunds, yes?

Imagine what that'll do to encourage working class people. Make $25,000 and you'll get $10,000 back (IIRC). Make $35,000 and you get nothing.

What a terrible plan.

But let's face it-- it's a plan designed to be so putrid that it'll necessarily reduce government spending; not to better our system of taxation.

1/11/2010 2:56:07 PM

Your example shows your ignorance about the fairtax boone.

Everyone is treated equally, meaning EVERYONE gets the prebate.

And using your example of a terrible idea. Dont we already do this with our current tax structure? Income caps for stim money, student aid, tax free savings, etc?

1/11/2010 3:17:31 PM

I posted a link on the fairtax plan a long time ago that compared it with progressive systems and found FairTax to be unusually regressive.

1/11/2010 3:32:32 PM

^^You keep throwing around "equal" as if is self-evidently optimal.

Equal is not necessarily the best plan unless you can prove that it is.

Heck, I'll one-up your equality and call for a plan where everyone, regardless of income sends a check to the IRS for $25,000 each year. That's equal.





[Edited on January 11, 2010 at 3:36 PM. Reason : ]

1/11/2010 3:34:28 PM

I agree, equality is usually overrated. haha, geez.

In a country of over 300M, 140M federal tax payers, over a third of those pay little to no federal taxes. So yes, anything that makes them pay anything will be considered unusually regressive to what we have now. Thanks for the insight.

If the progressive system is so optimal boone, how come we have run deficits in all but 3 yrs in the last 40? How come the states with the most progressive taxes are the ones with the biggest red ink? Interesting huh. Maryland just passed a millionares tax to close thier gap, but found that some left the state and are collecting less now. I love it. Serves them right.

Here is a good article, sobering on just how bad things are.(and probably supports your call for more brackets boone)

http://www.taxfoundation.org/publications/show/25415.html

1/11/2010 3:44:30 PM

Quote :

"Make more tax brackets, if only so I can keep enjoying my laughter every time someone claims that the super wealthy are being "punished." If nothing else, they're paying for their own protection. I remember lessons about the French and Russian revolutions, even if no one else seems to."

I remember them too. Tax rates on the rich were significantly higher than here in America. How else do you think the French regime managed to keep all the politicians in castles waited upon hand and foot? Sure, the King lived tax free, but the productive economy of France was heavily taxed, heavily regulated, and heavily rigged in favor of politicians and their friends. The description of Czarist Russia is very similar. The people of these countries were not poor because tax rates were too low.

Quote :

"Because that's the price they pay for living in a system that allows them to make so much money."

Absurd. Even higher tax rates are found in countries where it is impossible to make so much money. As such, the truth is "that's the price they pay for living in a system that allows the government to take so much money."

Quote :

"We're talking about the Wall Street executives who take home $20 million dollars because they're raping the system."

[Citation needed] When Congress passed a sur-tax on wallstreet bonuses paid by bailed out firms at 40%, the response was to jack up the bonuses to compensate. These people's wages do not conjure from nothing, they are clearly not raping the system, otherwise they would have jacked up their pay anyway, without waiting for Congress to provide an excuse. The fact is, if no plumber will work for less than $200, then a service tax of 50% just jacks up the price paid by the consumer to $300. The same goes for Wallstreet; these people for whatever reason have alternatives available to them that make them eager to quit unless you pay them absurd salaries, and the firms need them, so they pay it, whatever it is. Given this, it would seem higher taxes would do nothing but increase their salaries even more. A great mechanism for boosting the tax collections of the IRS, but bad for the rest of us who pay the higher prices.

1/11/2010 3:46:43 PM

^^We all get the Laffer Curve. Thanks.

But to suggest that a progressive taxation system cannot bring in sufficient revenue is silly. We run deficits because we insist on having both more services and tax cuts. It's a problem inherent to American politics; not a progressive taxation system.

Quote :

"I agree, equality is usually overrated. haha, geez."

Let's agree that there's a huge distinction between "human equality" in the grand sense of things and in systems of taxation.

And given that the laffer curve applies to progressive and flat taxes alike, you're still not justifying why your flat sales tax is better than a progressive tax system, or better than my ultramega-equal flatter than flat tax system



[Edited on January 11, 2010 at 3:55 PM. Reason : ]

1/11/2010 3:50:04 PM

Quote :

"If it's not completely obvious to you that the people at the top are raping the system, you need to get your eyes checked."

But you want to give them more money and power? That doesn't make any sense to me.

1/11/2010 3:51:34 PM

Quote :

"What lessons would those be, exactly?"

It doesn't matter whether or not wealth redistribution is "fair" or "right," to some extent it's going to happen. You can choose whether to do it peaceably through taxes or not-so-peacefully at the end of a bayonet. Left unchecked, income inequality leads to violence, and the trend through history seems to be that the people who want redistribution win.

Quote :

"Isnt this the case for EVERYTHING grumpy?"

No. With progressive income taxes the poor pay a smaller proportion of their income in taxes than do the rich. Certainly there's discrimination, but it's against people who can afford to be discriminated against some.

I made it very clear that "poor people have to spend a higher proportion of their income," which is fine. This is inevitable; there's no use bothering with it. What isn't inevitable is where the tax burden gets laid.

You see a billionaire paying a higher percentage in taxes, you call it a burden on him. I say a billionaire is, by definition, not too terribly fucking burdened. I see a poor person paying a higher percentage of his income in taxes, I see a guy who is seriously impacted, who is pretty goddamned burdened.

1/11/2010 3:57:44 PM

Quote :

"It doesn't matter whether or not wealth redistribution is "fair" or "right," to some extent it's going to happen. You can choose whether to do it peaceably through taxes or not-so-peacefully at the end of a bayonet. Left unchecked, income inequality leads to violence, and the trend through history seems to be that the people who want redistribution win."

Aparently I read different history books. Inequality was much worse in 19th century America than was found in France, while at the same time U.S. redistribution was minuscule compared to French efforts, yet it was France that had a revolution and the various U.S. Governments continued not helping the poor. It seems to me that if anything, redistribution and equality are positively correlated with revolution, so if you want more violence you should engage in more redistribution (which we saw, as redistribution in this country skyrocketed in the 60s, along with violence and corruption).

No, it is a coincidence. Revolution is a cultural product, and it is counter intuitive to argue that a lack of redistribution could produce either a cultural trait or the economic collapse that triggers it.

Odd coincidence: the discussion begins and the economic papers arrive at the same time! "the number of new businesses we get seems limited by the number of folks personally wealthy enough to start new businesses. So having more really rich folks benefits everyone via innovation."

Quote :

"Since richer entrepreneurs make larger investments and expect to have more wealth in the future, it is the relatively poor entrepreneurs who decide to take more risk and would be more likely to exit from business in the future. As a result, the model predicts that survival of entrepreneurial business is positively related to entrepreneurial assets, which is consistent with empirical findings. … Since agents enter entrepreneurship with relatively low wealth levels, our model also implies that young businesses exhibit lower survival rates, and, conditional on survival, small (younger) firms grow faster than larger (older) ones. All these implications are in line with strong empirical evidence from the literature on firm dynamics."

http://www.iza.org/conference_files/ESSLE2009/silva_o2442.pdf

1/11/2010 4:11:53 PM

At the time of the French revolution, the United States were barely out of the womb. Nobody grabs a torch and pitchfork just because they're poor right this exact second. They do it because they've been poor forever, their family has been poor forever, and they see no way to escape being poor.

If people feel like they're getting something useful from the government they are less likely to attack it violently than if they feel like they're getting nothing.

1/11/2010 4:18:18 PM

Grumpy, and with the fairtax, you still dont think the rich will pay more compared to the poor? You are kidding yourself. Whats the tax on a million dollar home vs a 30k trailer. Now one who spends more than they make, will certainly pay more. But no taxes on savings, working, or business will create a boom and, gasp, an incentive to save.

again, your pretty goddamn burdened guy should be spending less than the evil rich billionare. Would you agree?

Quote :

"Certainly there's discrimination, but it's against people who can afford to be discriminated against some. "

Hahah, they deserve the discrimination. I know what you are getting at, but I love the subtle arrogance of this sentence.

Boone, I agree that the problem with spending has more to do with politics. However, when you combine the two, you get this run away spending. You ten vote for me, Ill give you this... and we will make this guy pay for it. Works well until the guy being discriminated against, leaves or hides his money. Everyone wants something for nothing, its human nature. Having everyone pay SOMETHING in will prevent this trend in spending. Just look at cali. They all vote for increased programs and vote down the taxes to pay for it. At some point, people have to grow up.

1/11/2010 4:24:04 PM

Goddamn you're a fucking moron.

1/11/2010 4:31:26 PM

I think you've completely missed the point.

Yes, the rich will pay more in absolute terms than the poor. However, they will pay a lower percentage of their income.

There are people who cannot really save anything, or who can save very little -- not because they buy unnecessary things, but because they make barely enough to cover necessities.. If they start having to pay more taxes on things they need, they will not be able to save anything. They will be stuck.

Quote :

"Hahah, they deserve the discrimination. I know what you are getting at, but I love the subtle arrogance of this sentence. "

No one in this thread has suggested a program that doesn't discriminate against someone. Either it discriminates against the poor (your suggestions) or it discriminates against the rich (Boone's suggestions).

If we absolutely have to stick the bill to somebody, I say we stick it to the person who can best afford to pay the bill.

1/11/2010 4:32:56 PM

Thanks IMStoned420

1/11/2010 4:33:35 PM

You're welcome you fucking moron.

1/11/2010 4:34:00 PM

I understand percentages Grumpy. The rich pay less percentage for everything than someone with less income. Due to thier larger income. (goods, services)

Allowing people to keep what they make without the countless taxes applied to them will allow them to take more money home. Now what they do with that money isnt up to us, and it shouldnt be. But them being allowed to save thier money, tax free, will only create more wealth for those who choose to do that. Sure, some will blow it all, so let them face their consequences.

The arguement of the prices of goods skyrocketing isnt valid. Yes, they could go up, but not the full extent of the tax itself. As the cost of doing business will be less.

Im suggesting a plan that doesnt discriminate, but treats everyone as equal. How can you argue that a plan that by law treats everyone the same is discrimination?

The prebate, which im not sold on, actually insures that the poor will still not have a fed tax burden.

1/11/2010 4:42:33 PM

It sounds very nice and equal, but it has the effect of maximizing the ability of one group to save while eliminating the ability of another group to save. That's discriminatory. "Separate but equal" supposedly treated everybody equally, too; that doesn't mean it did.

Quote :

"Allowing people to keep what they make without the countless taxes applied to them will allow them to take more money home."

We do allow people to keep some of what they make. Your plan would allow them to keep some of what they make. Either way, though, they're having to pay some of it to the government.

To what extent do you think the supposed benefits (in terms of investment, etc) will be offset by the fact that people will be willing to buy less when prices go up? Presumably any national sales tax that is going to support the Federal government -- even a truncated version of that government -- is going to be pretty high. I know I personally won't buy expensive school stuff (computers, etc) unless it's a sales tax holiday, and that's with just NC's sales tax.

1/11/2010 4:48:26 PM

I'd like to know how we propose to cut the taxes of those who are already paying zero or receiving money? Just FYI, that's about 1/3 of those paying taxes. The upper 5% already pay about 60% of the income tax while only earning about 36% of total income, how much more would you like to burden them?

In my opinion a couple of things need to happen in order to fix taxation in this country:

1 - Pass a balanced budget amendment/surplus amendment so we can finally start paying down the national deficit. Yes I realize that shit happens, but we don't need to continue the dollar weakening deficit increasing pattern we have been in for the last 50 years.

2 - Put a cap on the amount of tax credits and rebates people receive. No one should ever get more back in tax credits and deductions than they pay in. In other words, no one should ever pay less than $0 in federal income tax and no one should ever receive money. I'm not talking about people getting a refund because they were over taxed, I'm talking about people with negative tax liability, who get everything they paid in back plus some.

That's pretty much it. If you force #1 to happen then the rest sort of follows naturally. Government spending will have to decrease, and taxation will have to increase, at least for a time. There's really no getting around it. Pauls can demand that we take more from Peters, but once it reaches the point that the top 50% of earners feel overly put upon it will stop. Clearly though, we cannot continue on our present course.

[Edited on January 11, 2010 at 4:54 PM. Reason : asdfsdf]

1/11/2010 4:53:07 PM