What could raising taxes on the top 1% do?

[summer]

NY Times

When it comes to paying taxes, most Americans think the wealthy do not pay their fair share.



There is a sharp divide, however, between Republicans and Democrats when it comes to taxing the rich, who provide most of the cash for political campaigns.



All the Republican tax proposals, in fact, cut taxes for the wealthiest Americans. Democrats, on the other hand, are prepared to raise taxes at the top, though they have not been very specific about how they would do so.



“Right now, the wealthy pay too little,” Hillary Rodham Clinton said at this week’s Democratic debate in Las Vegas, “and the middle class pays too much.”



But what could a tax-the-rich plan actually achieve? As it turns out, quite a lot, experts say. Given the gains that have flowed to those at the tip of the income pyramid in recent decades, several economists have been making the case that the government could raise large amounts of revenue exclusively from this small group, while still allowing them to take home a majority of their income.



It is “absurd” to argue that most wealth at the top is already highly taxed or that there isn’t much more revenue to be had by raising taxes on the 1 percent, says the economist Joseph E. Stiglitz, winner of the Nobel in economic science, who has written extensively about inequality. “The only upside of the concentration of the wealth at the top is that they have more money to pay in taxes,” he said.



The top 1 percent on average already pay roughly a third of their incomes to the federal government, according to a Treasury Department analysis that takes into account the entire menu of taxes — including income tax, payroll taxes that fund Medicare and Social Security, estate and gift taxes, excise and custom duties as well as investors’ share of corporate taxes. The tax bite on the top 0.1 percent is a bit higher. Most of those taxpayers insist they are already paying more than enough.



By comparison, the band of taxpayers right below them, in the 95th to 99th percentile, pay on average about $1 out of every $4. Those in the bottom half pay less than $1 out of every $10.


Sidestepping for the moment the messy question of just which taxes would be increased, how much more revenue could be generated by asking the rich to pay a larger share of their income in taxes?



To get the most accurate picture possible, throw in all the scraps of income, from the most obvious (like wages, interest and dividends) to the least (like employer contributions to health plans, overseas earnings and growth in retirement accounts). According to that measure — used by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution — the top 1 percent includes about 1.13 million households earning an average income of $2.1 million.



Raising their total tax burden to, say, 40 percent would generate about $157 billion in revenue the first year. Increasing it to 45 percent brings in a whopping $276 billion. Even taking account of state and local taxes, the average household in this group would still take home at least $1 million a year.

If the tax increase were limited to just the 115,000 households in the top 0.1 percent, with an average income of $9.4 million, a 40 percent tax rate would produce $55 billion in extra revenue in its first year.



That would more than cover, for example, the estimated $47 billion cost of eliminating undergraduate tuition at all the country’s four-year public colleges and universities, as Senator Bernie Sanders has proposed, or Mrs. Clinton’s cheaper plan for a debt-free college degree, with money left over to help fund universal prekindergarten.



A tax rate of 45 percent on this select group raises $109 billion, more than enough to pay for the first year of a new $2,500 child tax credit introduced by Senator Marco Rubio, Republican of Florida.



Move a rung down the ladder and expand the contribution of those in the 95th to 99th percentile — who earn on average $405,000. Raising their total tax rate to 30 percent from a quarter of their total yearly income would generate an additional $86 billion. That’s enough to cover the cost over eight years of repealing the so-called Cadillac Tax on high-cost health plans, which Senator Sanders and Mrs. Clinton have endorsed.



A 35 percent share produces $176 billion — roughly the amount that the Federal Highway Administration has estimated is needed each year to improve conditions significantly on major urban highways.



Alternatively, those tax increases could be used to help reduce government borrowing: Some combination of those raises could go a long way toward wiping out this year’s estimated federal deficit of $426 billion.



“Most economists today would agree that raising taxes modestly would bring in more revenue” without doing any serious damage to the economy, said Roberton Williams, a fellow at the Tax Policy Center. The big question is how much is too much, because at some point, higher tax rates would discourage extra investment and work.



All the Republican candidates share the party’s traditional opposition to raising taxes on the wealthy, arguing that it would ruin the economy by sopping up money that would otherwise be used to create jobs. Lowering taxes, they say, will unleash a torrent of economic activity that will in the long run spur growth and revenue.



But most mainstream economists, including some on the conservative side of the divide, concede that even with optimistic projections about growth and spending cuts, the Republican plans would leave a whopping budget gap, requiring more borrowing, not less. Revamping the tax code along these lines would also decrease the share paid by those at the top.



The argument for raising tax rates on the rich tends to focus on the vast gains that this group has enjoyed in recent years compared with everyone else. The top 0.1 percent of American families — each with net assets greater than $20 million — own more than 20 percent of the all the household wealth in the country. In the 1970s, that same sliver of the population controlled 7 percent.



That shift is behind Senator Sanders’s repeated vow to compel Wall Streeters and others in the Rolex-and-Maserati set to pay more than they do now.

“Let me tell you, Donald Trump and his billionaire friends under my policies are going to pay a hell of a lot more in taxes today — taxes in the future than they’re paying today,” he declared in Las Vegas.



Middle-income families make substantially less money than they did 15 years ago, once inflation is taken into account. The economist Thomas Piketty blames, among other things, “the spectacular lowering of top income tax rates” for the sharp rise in inequality.


The lower rate — generally a maximum of 23.8 percent — on capital gains, or profits from investments, is particularly problematic, Mr. Piketty argues. Estimates show that nearly 70 percent of capital gains benefits go to the top 1 percent. A recent study by Adam Looney at Brookings and Kevin B. Moore at the Federal Reserve found that “the reduction in the long-term capital gains rate is the primary reason” that the income tax system had become less effective in reducing wealth inequality.



Aided by a phalanx of lawyers and accountants, the rich have become adept at figuring out ways to shift earnings that would normally be taxed at the top 39.6 percent rate on ordinary income into capital gains, said the economist Gabriel Zucman of the University of California, Berkeley, who is researching the link between widening inequality and tactics — legal and illegal — used by the wealthy to sidestep taxes.



Shifting earnings from one tax category to another is part of the reason that even the top 0.1 percent pay on average no more than a quarter of their income in federal individual income taxes — despite that top tax bracket of 39.6 percent, according to a Treasury Department analysis.



“Why give a blank check to all of these guys?” Mr. Stiglitz, the liberal economist, asked. He pointed out that current tax law makes no distinction between, say, investing abroad, speculating in land or building a new factory. A better approach, he said, is to say: “We’ll give you generous deductions if you invest in America.”



Eliminating the preferential rates on capital and dividends would generate $1.34 trillion over the next 10 years, according to the nonpartisan Congressional Budget Office.



Other breaks that critics say subsidize wealth inequality include one that allows people to avoid capital gains taxes on inherited assets. Getting rid of that adjustment would generate $644 billion over a 10-year period, according to the Congressional Budget Office.



Ending the deferral on corporate profits kept overseas — a boon for the wealthy that Robert S. McIntyre, the director of Citizens for Tax Justice, calls “the biggest corporate loophole” — would generate $900 billion over 10 years. (Mr. Trump also supports shutting down that deferral.)





Although an overwhelming proportion of Americans complain that many wealthy people don’t pay their fair share in taxes, Democratic voters are more likely to be upset about it than Republicans. According to the Pew Research Center survey, nearly three out of every four Democrats said it bothers them “a lot” compared to 45 percent of Republicans.



Yet the problem that any president — Democrat or Republican — is going to face in altering the tax code is getting Congress to agree. Researchers have repeatedly found that a top priority of the wealthy is reducing their tax burden and that they largely prefer, unlike a majority of the general public, to cut spending rather than raise taxes.



Senator Ron Wyden, the top Democrat on the Finance Committee, said maneuvering any tax overhaul “through that gauntlet of special interests is a herculean task.”



Correction: October 16, 2015

An earlier version of this article misstated the estimated amount of federal tax revenue that would be generated by ending the deferral on corporate profits kept overseas. It is $900 billion, not $900 million.



It also misstated the amount of additional tax revenue that would be produced by raising the total tax burden of the top 1 percent of taxpayers to 45 percent. It would bring in $276 billion, not $267 billion.

[ttt]

Oct 17, 2015 8:54:40 GMT -5 summer said:

Correction: October 16, 2015

An earlier version of this article misstated the estimated amount of federal tax revenue that would be generated by ending the deferral on corporate profits kept overseas. It is $900 billion, not $900 million.

This is a pretty big difference! 

[Deleted]

I would be willing to pay more in taxes if I really believed that it would go towards what they say it will - UHC, universal prek, free community college, etc. But has that ever happened in the past? How much of our taxes now go towards congressional pork? In other words, waste and inefficiency? You scratch my back and I'll scratch yours politics. I just don't believe what politicians say anymore.

Also, why do new social programs always have to be paid with *new* tax revenue? Why can't we reproritize what we already have coming in? I mean that seriously, I really want to know why that isn't an option. Less in the Guns coulmn and more in the Butter column.

Lastly, why is it always increased income taxes that is under consideration? Why isn't the closing of corporate loopholes and the end of corporate subsidies under real consideration? Think how much money we could save right there. I mean, I know why. Big business has politicians in their pockets, including the Clintons and Obama (Sanders too? Idk). But still. They should have enough backbone to do the right thing.

[WOT?*]

Oct 17, 2015 10:52:11 GMT -5 CheeringCharm said:

I would be willing to pay more in taxes if I really believed that it would go towards what they say it will - UHC, universal prek, free community college, etc. But has that ever happened in the past? How much of our taxes now go towards congressional pork? In other words, waste and inefficiency? You scratch my back and I'll scratch yours politics. I just don't believe what politicians say anymore.

Also, why do new social programs always have to be paid with *new* tax revenue? Why can't we reproritize what we already have coming in? I mean that seriously, I really want to know why that isn't an option. Less in the Guns coulmn and more in the Butter column.

Lastly, why is it always increased income taxes that is under consideration? Why isn't the closing of corporate loopholes and the end of corporate subsidies under real consideration? Think how much money we could save right there. I mean, I know why. Big business has politicians in their pockets, including the Clintons and Obama (Sanders too? Idk) and the Bushes and the Reagans and... But still. They should have enough backbone to do the right thing.

FTFY. You really think it's a Democrat thing? Sorry to disillusion you.

[Deleted]

Oct 17, 2015 17:26:39 GMT -5 WOT?* said:

Oct 17, 2015 10:52:11 GMT -5 CheeringCharm said:

I would be willing to pay more in taxes if I really believed that it would go towards what they say it will - UHC, universal prek, free community college, etc. But has that ever happened in the past? How much of our taxes now go towards congressional pork? In other words, waste and inefficiency? You scratch my back and I'll scratch yours politics. I just don't believe what politicians say anymore.

Also, why do new social programs always have to be paid with *new* tax revenue? Why can't we reproritize what we already have coming in? I mean that seriously, I really want to know why that isn't an option. Less in the Guns coulmn and more in the Butter column.

Lastly, why is it always increased income taxes that is under consideration? Why isn't the closing of corporate loopholes and the end of corporate subsidies under real consideration? Think how much money we could save right there. I mean, I know why. Big business has politicians in their pockets, including the Clintons and Obama (Sanders too? Idk) and the Bushes and the Reagans and... But still. They should have enough backbone to do the right thing.

FTFY. You really think it's a Democrat thing? Sorry to disillusion you.

Haha, no of course not. It goes without saying the the GOP is in the pocket if big business. It's their piece de resistance.

eta: And as much as I doubt that Sanders' plans are actually practical, I do really admire that he appears ideologically pure and puts his money where his mouth is. We went to lunch at a friend's house and they are big Bernie friends. The more I hear about him, the more I find to like. It's just that I really really doubt whether he can implement such radical changes.

[WOT?*]

CheeringCharm

ETA: He won't be able to. Too ideological and the right/conservative will skewer him as a Socialist. That's an epithet for Obama (because it's racist to call him "that black President" they have to call him *something* and socialist is as bad as it can get without tainting the insults with pigment) and he isn't even a socialist anywhere near the level of Bernie. Imagine when some even closer to the Socialist spectrum tries to accomplish goals. He wants universal anything and it will be bogged down for full term. I do wish he had a chance to implement some of them, though.

[Deleted]

^ this reminds me though, we were talking about this topic with some friends today and one of them said something that solidified for me what I usually find pretty off putting about these kinds of articles, including the one posted above. It usually takes the premise that the rich should be taxed more because they don't already pay their "fair" share and that it's intended to be punitive: in other words, the implication is you have so much more than everyone else, there must be something wrong with you or how you garnered this money. Instead of: here are goals that we as a society all say we want and need so we as a society should pull together and collectively fund them with everyone chipping in according to their ability. I agree whole heartedly with the latter but not the first. And I feel like BS does a better job getting that message across (that we're all in this together, we need to pull together and socialize our funding goals) better than HRC. Maybe it's just because we know that he's walked that walk all these years. He hasn't been taking money from hedge founders and corporate lobbyists while publicly lambasting them.

[Deleted]

CheeringCharm I agree with you on the above. We've had numerous debates back in the day on this board about what the rich owe and why, and as a business owner who is already busting my ass to make stuff happen and will have to continue to do so - if I ever make it bigtime to where I am earning 6-digits or more, I'd definitely want to invest back into society around me... but not when people are shoving in my face that "it's not fair that you earn this much, you're such a cheat and trying to make me be less than you!"

Are there douchebag rich people like that? Of course. Are all rich people douchebags? Nope.

And we do need to address tax laws and loopholes. Because I'm betting every person on this board is looking for the best return possible at tax time and will take every credit available. Not that we're all in the rich bucket being alluded to above, but we all pay our taxes. (Right???)

[ttt]

Oct 17, 2015 17:44:00 GMT -5 CheeringCharm said:

It usually takes the premise that the rich should be taxed more because they don't already pay their "fair" share 

I think it boils down to what you think a "fair share" is. That's where the disagreement lies. You often hear the argument "but rich people pay 70% (or whatever the number is) of all taxes!" And that sounds like a lot and it sounds unfair, but then if you know that rich people pay 70% of the taxes, but have 95% of the money, it doesn't sound so unfair. 

So what's a fair share? How should a fair share be measured? Some people say that 33% is a lot, period, and if rich people are paying that, that's more than enough. Some people would put a fair number at 50%, some people more, some people say rich people should be paying less. 

Everyone likes the idea of 'fair share' but nobody can quite agree on what that means, even as a concept. 

[Deleted]

I agree @ladydisdain. The other thing is, if someone asked me tomorrow to pay an extra 5% on our highest income bracket and that *every* penny would go to paid maternity leave, UHC, and Uprek, I'd say sign me up. I truly mean that. But I just doubt that that would actually happen. It seems that we always need more and more money and yet none of the things that actually benefit people happen. We always hear about welfare funding being such a small percentage of the whole and that it's always being chipped away at, there's not enough things like section 8 housing, etc. etc. But the government pulls in trillions of dollars. Where is this money going?? Why can't we reprioritize it to where people actually need it? Instead of costly mistakes meddling in other countries' affairs and spying programs on our own people and five hundred dollar hammers for the DoD and on and on. Congressional pork.

[emisi]

$900 billion? That's crazy. That would reduce the deficit a LOT right there, and we'd be able to enact all sorts of programs. We also need to increase the amount of taxes on dividends, since that's what a lot of hedge fund managers make as their income, not salary. 15% for that is just crazy.

[Deleted]

Oct 17, 2015 18:06:35 GMT -5 ttt said:

Oct 17, 2015 17:44:00 GMT -5 CheeringCharm said:

It usually takes the premise that the rich should be taxed more because they don't already pay their "fair" share 

I think it boils down to what you think a "fair share" is. That's where the disagreement lies. You often hear the argument "but rich people pay 70% (or whatever the number is) of all taxes!" And that sounds like a lot and it sounds unfair, but then if you know that rich people pay 70% of the taxes, but have 95% of the money, it doesn't sound so unfair. 

So what's a fair share? How should a fair share be measured? Some people say that 33% is a lot, period, and if rich people are paying that, that's more than enough. Some people would put a fair number at 50%, some people more, some people say rich people should be paying less. 

Everyone likes the idea of 'fair share' but nobody can quite agree on what that means, even as a concept. 

When people say things like that - that you're not already paying your "fair share" -  it kind sounds like they are implying you are taking advantage of loopholes or credits somehow. Doing something dodgy or exploitative. Taking advantage of people somehow. Instead of just paying the taxes that the government asks currently for.

Someone wrote into the comment section of the article and wrote this, which I agree with. It has to do with the tone of these kinds of discussions, which I noted above. I would rather see a message of: we need to pull together to get this stuff done and *everyone* needs to contribute. People who happen to have more will pay more. But everyone will pay what they can. I guess what I am trying to say is that I don't like this message of us vs. them (99 vs. 1%) that often comes across in these articles and discussions.

This is the quote:
I believe we all have to pay our fair share of taxes. The tenor of this article, however, is disturbing. The problem is that many on the left start from the position that the money of the wealthy is theirs to take. This is the disconnect between the Dems and the Republicans. The Republicans believe the money is owned by the people that figured out how to earn it. The Dems feel that it is an asset to be used to improve society. The idea that it is someone else's property doesn't seem to come into play. The conversation of arbitrarily raising the marginal tax rates because it helps the treasury seems confiscatory and entitled. Perhaps the rhetoric needs to be a little more sensitive to the people that are earning money and creating wealth.


Anyway, do I think we should pay more? Yes. A lot more? I really don't know. Our effective federal rate is around 30% (I only know this because I saw our tax return recently). When you add in state and payroll taxes it's probably somewhere in the upper thirties. I personally would have no problem with an effective tax rate that extends up to 50%. Fwiw I really do think things like healthcare and parental leave should be socialized (and that a year or two of prek should be added on to the school schedule). But it seems like a lot to ask people to basically work half the year before they start making any money they can keep. That might be going too far.

[Deleted]

This is another good comment to the article. I agree wholeheartedly with this too.

For everyone arguing that people shouldn't be punished for a life of hard work by high taxes, I assume would therefore have no problem with a very high inheritance tax. Being born to a billionaire is not hard work. If we made the inheritance tax on all wealth over 1 million 50 % and 10 million 90% this would also solve a lot of problems.

[NewOrleans]

Oct 17, 2015 18:21:41 GMT -5 CheeringCharm said:

Oct 17, 2015 18:06:35 GMT -5 ttt said:

When people say things like that - that you're not already paying your "fair share" -  it kind sounds like they are implying you are taking advantage of loopholes or credits somehow. Doing something dodgy or exploitative. Taking advantage of people somehow. Instead of just paying the taxes that the government asks currently for.

Someone wrote into the comment section of the article and wrote this, which I agree with. It has to do with the tone of these kinds of discussions, which I noted above. I would rather see a message of: we need to pull together to get this stuff done and *everyone* needs to contribute. People who happen to have more will pay more. But everyone will pay what they can. I guess what I am trying to say is that I don't like this message of us vs. them (99 vs. 1%) that often comes across in these articles and discussions.

This is the quote:
I believe we all have to pay our fair share of taxes. The tenor of this article, however, is disturbing. The problem is that many on the left start from the position that the money of the wealthy is theirs to take. This is the disconnect between the Dems and the Republicans. The Republicans believe the money is owned by the people that figured out how to earn it. The Dems feel that it is an asset to be used to improve society. The idea that it is someone else's property doesn't seem to come into play. The conversation of arbitrarily raising the marginal tax rates because it helps the treasury seems confiscatory and entitled. Perhaps the rhetoric needs to be a little more sensitive to the people that are earning money and creating wealth.

Those people often had privilege, luck, or existing wealth on their side to "figure out how to earn it." They don't work harder than others or think smarter and more creatively than others.  I don't really want to talk about "it's mine" or "government hands off" at this juncture, but I take issue with the social assumption that wealthy people, the Donald Trumps of this world, just have more chops than I do.  Yeahno.  

[Deleted]

NewOrleans I agree, luck or good fortune, whatever you want to call it, plays a big role in any person's success. Including the certain type of luck of being born into a wealthy family. If they're being honest, they will acknowledge as much. I don't think that was that commenter's point though.

[Deleted]

NewOrleans I will agree that mentality exists. But not everywhere or with everyone. You need to define "often" more before I'd want to paint with a broad brush that anyone who is rich didn't work harder, or think smarter, or operate with more creativity than others did. Now, there will be people like Amy Grant who I think is an awful singer who was in the right place at the right time and gained fame as a singer (flame away, Amy Grant fans). But there are absolutely instances where people use their innovation or ideas or any means at their disposal to make their way to monetary success.

Some of them do have more chops than I do. That's just a fact. I know I'll never be Madonna or Michael Jackson, and I'm OK with that.

[marriedfilingjoint]

Oct 17, 2015 10:22:41 GMT -5 ttt said:

Oct 17, 2015 8:54:40 GMT -5 summer said:

Correction: October 16, 2015

An earlier version of this article misstated the estimated amount of federal tax revenue that would be generated by ending the deferral on corporate profits kept overseas. It is $900 billion, not $900 million.

This is a pretty big difference! 

Yeah. In general I just can't with the NYT and anything tax related. Signed, a CPA. Sorry not sorry.

[NewOrleans]

Oct 17, 2015 19:09:53 GMT -5 @ladydisdain said:

NewOrleans I will agree that mentality exists. But not everywhere or with everyone. You need to define "often" more before I'd want to paint with a broad brush that anyone who is rich didn't work harder, or think smarter, or operate with more creativity than others did. Now, there will be people like Amy Grant who I think is an awful singer who was in the right place at the right time and gained fame as a singer (flame away, Amy Grant fans). But there are absolutely instances where people use their innovation or ideas or any means at their disposal to make their way to monetary success.

Some of them do have more chops than I do. That's just a fact. I know I'll never be Madonna or Michael Jackson, and I'm OK with that.

I think MJ and Madonna were uniquely talented individuals.  I do not, however, see Donald Trump, Mitt Romney, or Waltons as uniquely talented.  I guess I don't view making money as a special gift, nor do I think moneymaking people work harder than the teachers, zoologists, social workers, and Sephora makeup artists of the world.  

[ttt]

Whether people who are rich deserve it or have earned it fairly is completely beside the point, IMO. The fact of the matter is that we as a society need to pay for things like roads and bridges and clean water and the military and everything else required to keep the country running. So, whose responsibility is it to pay for these things? Should those who have more pay more? Or should everyone pay the same?

I really do not think the government should be in the business of deciding who deserves what they have and who doesn't. Make - AND ENFORCE - laws and rules so that people aren't getting rich off exploiting and cheating others. That's where these things should be done, not the tax code.

[LadySusan]

Thanks for posting this one summer!

[10nille]

I'll go against the grain, I do think inheritance taxes are just stealing on the government's part. You earned the money, it was taxed at some point, you decide to leave it to your heirs. The government is not your heir.

You will never solve problems by taxing more until you figure out how to make the government accountable. I certainly did not raise my children's allowances when they over spent or spent foolishly. Sure, it is a smaller scale, but there is so much abuse and this coming back for more every time has got to stop.

[WanderingWinoZ]

Hmmm...I do think that rates on the super rich are at historical lows & generally need to be raised.

However, I'd advocate simplifying & closing loopholes (as an easier & more necessary step) before or at least in tandem with raising rate. I think the capital gains tax should be higher. I as an "earned income" taxpayer feel it's wrong that I show up every day 9-5 & work and use my skill/talent to make money, while those that already have tons of money just use that money to make more money which is taxed at a lower rate.

I get that we want people to invest/save & it's good for companies to have money for funding capital projects, but the super rich don't really "earn" their income, their money simply works for them.

Andplusalso again- I think many of these analysis fail to take into account other taxes that people pay (sales, property, etc) that are very regressive & actually bump up the % that the poor do pay.

Here are some good charts

I'd like to see a 3rd column in this bar chart showing % of income &  I'd bet that the $250K & up group is receiving more than 50% of the nation's income






www.washingtonpost.com/news/wonkblog/wp/2015/06/04/as-the-rich-become-super-rich-they-pay-lower-taxes-for-real/


Hmmm...this is the chart I was looking for but it shows that the very top % still pays a larger % than it earns. Can't embed

www.washingtontimes.com/multimedia/image/3_1_2015_b3-moore-chart-03028201jpg/

[Deleted]

Someone else who was at lunch yesterday said the reason he fears all this stuff is that he suspects the government is generally not content just to raise taxes on the super rich and that inevitably people who make a good living comparatively but don't have a lot of extra money lying around (maybe people who make ~ 100-250k? You know, good salaries but can still struggle to get by in hcol cities) will be taxed as well.

What do you think about this?


I see his beef about being included in a tax that is supposed to be leveling the super rich (the government theoretically could address this by creating more tax brackets but they seem loathe to do this, idk why). But otoh, if you agree that we need certain type of social programs like UHC and paid parental leave, shouldn't you be cool with chipping in too?

[ttt]

Oct 18, 2015 7:13:10 GMT -5 CheeringCharm said:

Someone else who was at lunch yesterday said the reason he fears all this stuff is that he suspects the government is generally not content just to raise taxes on the super rich and that inevitably people who make a good living comparatively but don't have a lot of extra money lying around (maybe people who make ~ 100-250k? You know, good salaries but can still struggle to get by in hcol cities) will be taxed as well.

What do you think about this?


I see his beef about being included in a tax that is supposed to be leveling the super rich (the government theoretically could address this by creating more tax brackets but they seem loathe to do this, idk why). But otoh, if you agree that we need certain type of social programs like UHC and paid parental leave, shouldn't you be cool with chipping in too?

I do agree that we need more tax brackets - there should be additional (higher) rates at, say, $500k, $750k and $1M. $385k is a lot of money, no doubt, but $1m a year is a LOT of money. 

[laurack]

There should definitely be a sliding scale, where tax amounts become steeper the more you make. If you are in the 150-200 per household area, that's a lot of money. But it's not like having 10 million coming in each year. One can easily struggle to pay daycare and bills on a household income of 150k in a hcol area. I doubt there is much struggle or cutbacks in a 10 million household. Or even 1 or 2 million

We pay a lot of tax already being "middle class" but I'd be happy to pay a percent or two more as long as I saw a true sliding scale situation was being implemented

Seeing that the richest contribute 45% toward income tax isn't like whoa they ARE paying a ton! To me. No they make 90% percent of the total income of this country and contribute half that in % of taxes going into the country. How is this fair?

[laurack]

Subsidizing the incomes of people working for a big business like Walmart or Mac Donald's or whatever is something that also infuriates me. Businesses are making a shit ton of money and getting away with not paying people enough to live on despite them working full time, so that the tax payers have to subsidize it. And they are paying less overall taxes than they should as well. So they are screwing us every way. This should not be allowed.

[aurora]

“Why give a blank check to all of these guys?” Mr. Stiglitz, the liberal economist, asked. He pointed out that current tax law makes no distinction between, say, investing abroad, speculating in land or building a new factory. A better approach, he said, is to say: “We’ll give you generous deductions if you invest in America.”

I do like the idea of somehow tying lower tax rates to actual economic stimulation, but that seems like it would be very hard to set rules for and measure.

I hate so much that the uber wealthy get to cry job creation when we're living out the scenario that their lower taxes are making them wealthier and keeping the middle class at aboutthe status quo. I have that the "jobs" the uber wealthy are creating are so often so low paying that their employees need public assistance to survive.

[aurora]

Oct 18, 2015 8:50:10 GMT -5 laurack said:

There should definitely be a sliding scale, where tax amounts become steeper the more you make. If you are in the 150-200 per household area, that's a lot of money. But it's not like having 10 million coming in each year. One can easily struggle to pay daycare and bills on a household income of 150k in a hcol area. I doubt there is much struggle or cutbacks in a 10 million household. Or even 1 or 2 million

We pay a lot of tax already being "middle class" but I'd be happy to pay a percent or two more as long as I saw a true sliding scale situation was being implemented

Seeing that the richest contribute 45% toward income tax isn't like whoa they ARE paying a ton! To me. No they make 90% percent of the total income of this country and contribute half that in % of taxes going into the country. How is this fair?

Do you mean more tax brackets? Because they are our sliding scale, and if you make $200k a much smaller portion of your income is taxed at the highest rate than if you make $1M, so the math works.

Not saying I don't want more brackets, just trying to understand your point.

[laurack]

Oct 18, 2015 9:13:09 GMT -5 aurora said:

Oct 18, 2015 8:50:10 GMT -5 laurack said:

There should definitely be a sliding scale, where tax amounts become steeper the more you make. If you are in the 150-200 per household area, that's a lot of money. But it's not like having 10 million coming in each year. One can easily struggle to pay daycare and bills on a household income of 150k in a hcol area. I doubt there is much struggle or cutbacks in a 10 million household. Or even 1 or 2 million

We pay a lot of tax already being "middle class" but I'd be happy to pay a percent or two more as long as I saw a true sliding scale situation was being implemented

Seeing that the richest contribute 45% toward income tax isn't like whoa they ARE paying a ton! To me. No they make 90% percent of the total income of this country and contribute half that in % of taxes going into the country. How is this fair?

Do you mean more tax brackets? Because they are our sliding scale, and if you make $200k a much smaller portion of your income is taxed at the highest rate than if you make $1M, so the math works.

Not saying I don't want more brackets, just trying to understand your point.

I'm saying taxes should be increased a ton on the wealthy but that I don't think it should be "if you make more than 250k in your household you are getting hit up with the 50% tax"

I feel the top 1% should have a much higher tax burden than they do now. I'm not sure about those making say 100-300k depending on costs of living that could be a ton of money or seem like not enough to cover bills and child care etc.

I assume a fear many have with tax increase plans is that "oh no are we considered too rich because we make 200k between us and we'll have nothing left after the dems finish with their increase taxes on the rich plan"

[aurora]

Oct 17, 2015 17:58:15 GMT -5 @ladydisdain said:

CheeringCharm I agree with you on the above. We've had numerous debates back in the day on this board about what the rich owe and why, and as a business owner who is already busting my ass to make stuff happen and will have to continue to do so - if I ever make it bigtime to where I am earning 6-digits or more, I'd definitely want to invest back into society around me... but not when people are shoving in my face that "it's not fair that you earn this much, you're such a cheat and trying to make me be less than you!"
...

Do you really mean 6 digits? Or 7? I clearly live in a bubble, but I've never heard anyone saying that the small business owner who pulls in a whopping $100k and still pays middle class taxes is a greedy a-hole. That's not the type of income that allows you to take advantage of major tax breaks, generally. And I say that with some experience, given that my H is a small business co-owner who has created 2 local jobs (so far).

If what you actually meant was 7 figures, well, then I do agree that lot of people think that those in the million dollar salary range should pay more.