FACT CHECK: Are rich taxed less than secretaries?

[ElNono]

Can't say as I blame them as this point. The still employ more people than any of Obama's jobs initiatives.

You don't need to apologize for subsidizing their move to China, yoni.

[ElNono]

They are getting less than ever because they have run the jobs out of this country.

Nope. The current tax rates are historically the lowest ever.

[ElNono]

I don't know if that's true but, if so, good.

So you don't know what you're talking about. Again. See what I mean when I talk about reasonableness?

[Wild Cobra]

Nope. The current tax rates are historically the lowest ever.

Are you saying the unemployment rate has no effect of tax revenues?

[Th'Pusher]

Are you saying the unemployment rate has no effect of tax revenues?

Of course it does. Please provide your specific proposals for reducing the unemployment rate. Let me guess, tariffs so we can bring all those manufacturing jobs back to the US? A good healthy dose of protectionism?

[Wild Cobra]

Of course it does. Please provide your specific proposals for reducing the unemployment rate. Let me guess, tariffs so we can bring all those manufacturing jobs back to the US? A good healthy dose of protectionism?

I see you have forgotten things I have said in the past.

We need to lower the taxes on the rich and corporations, but eliminate most deductions. Make things equal.

We need to alter these trade agreements as needed to protect jobs here. Our founding fathers specifically mention tariffs.

We need to do all we can within reason to bring manufacturing jobs back. This petty quibbling and class warfare makes things worse. not better. Alkof you advocating taxing the rich more, are part of the voices sending jobs overseas.

all of you with that at ude.

The truth is so simple. We need more tax payers. Not higher tax rates.

[Yonivore]

So you don't know what you're talking about. Again. See what I mean when I talk about reasonableness?

That I don't know whether or not tax revenues are at their lowest point ever doesn't change my position the government is still getting too much in taxes if they're able to throw $535 Million at a company they knew would belly up.

[Yonivore]

You don't need to apologize for subsidizing their move to China, yoni.

I don't intend to.

Now, if Obama would let Boeing move to the Carolinas.

[scott]

Quite clearly, Obama was not trying to infer that all billionaires paid less in income taxes than all their secretaries. It's as intellectually dishonest to make such an absurd statement as it is to accuse someone of making the statement. And of course it all stems from a statement Warren Buffet made that, without context, sounds more damning than it really is:

Buffett wrote in a recent piece for The New York Times that the tax rate he paid last year was lower than that paid by any of the other 20 people in his office.

Of course, I'm willing to bet that the other 20 people in his office make quite a bit of money (even his secretary) and Buffet does quite a bit of charitable giving to offset quite a bit of his income (in addition to other ways of offsetting income).

I, and everyone else with a brain, understood the point to be one that I believe Wild Cobra has been making for quite some time: the tax code is full of loopholes that distort the original intention of the tax code.

Some of these loopholes are progressive (the standard deduction and personal exemption, child credit, marriage credit) meaning that their significance is diminished as one's income increases; whereas others are regressive (their impact increased as income increases) either explicitly (social security & the separate rate for capital gains, for example) or implicitly (the home interest deduction chief among them - since people on low ends of the income spectrum generally cannot afford to buy a house thus cannot ever have this exemption).

So, in the context of a discussion of increasing revenue (which is not a discussion of cutting spending) - there are generally two options (ignoring the theoretical Laffer Curve for simplicity): 1) Raise rates 2) Reduce exemptions.

The United States has one of the lowest effective tax rates in the world and the top marginal rate kicks in at the highest level of the world, (a very good study on tax rates across the world here) and it has only been getting lower at the top end. Take a look at what's happened to the effective rate paid by the Top 400 Richest Filers.

Since 2001, the top earners have enjoyed lower effective tax rates and have gained an increasingly large share of the nation's wealth, but have actually have seen their share of individual federal income taxes collected increase.

Some historical data (I wish I could just insert a table, would make this a lot easier. Source: http://www.cbo.gov/publications/coll...m?collect=13):

In 1979, the top 20% of earners in the US accounted for 45.5% of the nation's income and accounted for 64.9% of the nation's federal income tax receipts paying an effective federal income tax rate of 15.7%.

In 1997, the top 20% of earners in the US accounted for 52.6% of the nation's income and accounted for 78.2% of the nation's federal income tax receipts paying an effective federal income tax rate of 16.4%.

In 2000, the top 20% of earners in the US accounted for 54.8% of the nation's income and accounted for 81.2% of the nation's federal income tax receipts paying an effective federal income tax rate of 17.5%.

In 2001, the top 20% of earners in the US accounted for 52.3% of the nation's income and accounted for 82.4% of the nation's federal income tax receipts paying an effective federal income tax rate of 16.3%.

In 2003, the top 20% of earners in the US accounted for 52.1% of the nation's income and accounted for 84.8% of the nation's federal income tax receipts paying an effective federal income tax rate of 13.7.

In 2007 (the last year for which the study has been completed), the top 20% of earners in the US accounted for 55.9% of the nation's income and accounted for 86.0% of the nation's federal income tax receipts paying an effective federal income tax rate of 14.4%.

Meanwhile, in quite the interesting conundrum, the 3rd Quintile (the middle 20% or "median" group) have seen their effective federal income tax rates fall (7.5% in 1979, 5.6% in 1997, 5.0% in 2000, 3.9% in 2001, 2.8% in 2003, 3.3% in 2007) as well as their share of the tax burden (10.7%, 7.2%, 5.7%, 5.3%, 4.7%, 4.6%) but the gain of wealth in top 20% has come at their partially expense.

One thing the data seems to illustrate is that our top earners, effective tax rates are operating at a point along the Laffer Curve which is relatively inelastic, and thus increases or decreases to effective tax rates will have little impact on the tax base (the income of those earners).

In my opinion, it is important for the United States to maintain its relatively low tax rates compared to the rest of the world. However it is also important to raise more revenue and the data indicates the top earners could withstand an increase to their effective rate. One way to do that is closing loopholes and exemptions, which effects all tax payers, but would likely have a progressive effect (have a larger effect on high earners than low earners).

[ElNono]

What does this:

Nope. The current tax rates are historically the lowest ever.

has to do with this:

Are you saying the unemployment rate has no effect of tax revenues?

????

I know you're dying to take the conversation somewhere else. Either that, or your English classes were really terrible.

[ElNono]

I don't intend to.

You already did.

[scott]

We need to lower the taxes on the rich and corporations, but eliminate most deductions. Make things equal.

Just so I'm clear, you understand this would likely result in a higher effective tax rate for this payers, correct? And you are okay with that?

This isn't a gotcha question, this is a sincere one.

[Wild Cobra]

What does this:



has to do with this:



????

I know you're dying to take the conversation somewhere else. Either that, or your English classes were really terrible.

It seems to me you are atrributing the loss of revenue to tax rates, when history would say otherwise. I am pointing out that not just unemployment, but the loss of so many blue collar jobs, are the reason we have such a poor revenue. We lost too many tax payers, and you simply cannot make it up with higher rates. It will work the first year or two, then drop again as the economy adjusts to higher tax rates and lower personal spending.

Buy a clue...

Look at the root problems, and stop applying bandages to symptoms.

[Yonivore]

Quite clearly, Obama was not trying to infer that all billionaires paid less in income taxes than all their secretaries. It's as intellectually dishonest to make such an absurd statement as it is to accuse someone of making the statement. And of course it all stems from a statement Warren Buffet made that, without context, sounds more damning than it really is:



Of course, I'm willing to bet that the other 20 people in his office make quite a bit of money (even his secretary) and Buffet does quite a bit of charitable giving to offset quite a bit of his income (in addition to other ways of offsetting income).

I, and everyone else with a brain, understood the point to be one that I believe Wild Cobra has been making for quite some time: the tax code is full of loopholes that distort the original intention of the tax code.

Some of these loopholes are progressive (the standard deduction and personal exemption, child credit, marriage credit) meaning that their significance is diminished as one's income increases; whereas others are regressive (their impact increased as income increases) either explicitly (social security & the separate rate for capital gains, for example) or implicitly (the home interest deduction chief among them - since people on low ends of the income spectrum generally cannot afford to buy a house thus cannot ever have this exemption).

So, in the context of a discussion of increasing revenue (which is not a discussion of cutting spending) - there are generally two options (ignoring the theoretical Laffer Curve for simplicity): 1) Raise rates 2) Reduce exemptions.

The United States has one of the lowest effective tax rates in the world and the top marginal rate kicks in at the highest level of the world, (a very good study on tax rates across the world here) and it has only been getting lower at the top end. Take a look at what's happened to the effective rate paid by the Top 400 Richest Filers.

Since 2001, the top earners have enjoyed lower effective tax rates and have gained an increasingly large share of the nation's wealth, but have actually have seen their share of individual federal income taxes collected increase.

Some historical data (I wish I could just insert a table, would make this a lot easier. Source: http://www.cbo.gov/publications/coll...m?collect=13):

In 1979, the top 20% of earners in the US accounted for 45.5% of the nation's income and accounted for 64.9% of the nation's federal income tax receipts paying an effective federal income tax rate of 15.7%.

In 1997, the top 20% of earners in the US accounted for 52.6% of the nation's income and accounted for 78.2% of the nation's federal income tax receipts paying an effective federal income tax rate of 16.4%.

In 2000, the top 20% of earners in the US accounted for 54.8% of the nation's income and accounted for 81.2% of the nation's federal income tax receipts paying an effective federal income tax rate of 17.5%.

In 2001, the top 20% of earners in the US accounted for 52.3% of the nation's income and accounted for 82.4% of the nation's federal income tax receipts paying an effective federal income tax rate of 16.3%.

In 2003, the top 20% of earners in the US accounted for 52.1% of the nation's income and accounted for 84.8% of the nation's federal income tax receipts paying an effective federal income tax rate of 13.7.

In 2007 (the last year for which the study has been completed), the top 20% of earners in the US accounted for 55.9% of the nation's income and accounted for 86.0% of the nation's federal income tax receipts paying an effective federal income tax rate of 14.4%.

Meanwhile, in quite the interesting conundrum, the 3rd Quintile (the middle 20% or "median" group) have seen their effective federal income tax rates fall (7.5% in 1979, 5.6% in 1997, 5.0% in 2000, 3.9% in 2001, 2.8% in 2003, 3.3% in 2007) as well as their share of the tax burden (10.7%, 7.2%, 5.7%, 5.3%, 4.7%, 4.6%) but the gain of wealth in top 20% has come at their partially expense.

One thing the data seems to illustrate is that our top earners, effective tax rates are operating at a point along the Laffer Curve which is relatively inelastic, and thus increases or decreases to effective tax rates will have little impact on the tax base (the income of those earners).

In my opinion, it is important for the United States to maintain its relatively low tax rates compared to the rest of the world. However it is also important to raise more revenue and the data indicates the top earners could withstand an increase to their effective rate. One way to do that is closing loopholes and exemptions, which effects all tax payers, but would likely have a progressive effect (have a larger effect on high earners than low earners).

You just spent more time on a reasonable response than this forum deserves.

While it is your opinion the top earners could withstand an increase to their effective rate, is it also reasonable to hold the position it is irresponsible to tax top earners more when it is obvious the government does not plan to employ the additional revenue in any manner that will improve our economic position?

[ElNono]

It seems to me you are atrributing the loss of revenue to tax rates, when history would say otherwise.

No, I'm stating that the current tax rates are the lowest historically ever. That undeniably affects the tax receipts.

I don't know what's not clear on this:

The current tax rates are historically the lowest ever.

[ElNono]

You couple that with out of control spending, and it's a recipe for disaster. But you can't just fix this with just one side only. You're going to need both cuts and higher taxes.

[Yonivore]

You couple that with out of control spending, and it's a recipe for disaster. But you can't just fix this with just one side only. You're going to need both cuts and higher taxes.

Sure you can. If you go back to just 2004 spending levels, you arrive at a budget that would result in a surplus of revenue.

[scott]

We need to alter these trade agreements as needed to protect jobs here. Our founding fathers specifically mention tariffs.

Okay, so I actually have a few more questions I want to ask.

I'm largely against trade restrictions of all kinds, based on the general theory of trade that it allows for a greater consumption possibilities frontier (and I believe consumption is the true measure of standard of living, not production - if there is disagreement we can discuss).

Building restrictions to trade for protectionist reasons may sound good, but it will eventually restrict the consumption possibilities available to us, and thus lower our standard of living. Why is this something we want?

We need to do all we can within reason to bring manufacturing jobs back. This petty quibbling and class warfare makes things worse. not better. Alkof you advocating taxing the rich more, are part of the voices sending jobs overseas.

Why are manufacturing jobs so important? I realize because of your profession you may put an emphasis on them, but why do you want to be a nation of manufacturers? What is the appeal? Physical capital will continue to replace human capital in the manufacturing process worldwide (especially where it is more cost efficient to do so) and eventually "manufacturing jobs" will be altogether obsolete. Why cater to that rather than focus on the next era of employment? Keep in mind, even if human capital were not less expensive on a real basis abroad, physical capital is compe ive with human capital at home - so unless American workers want to accept lower real wages, they are going to have a hard time competing.

The truth is so simple. We need more tax payers. Not higher tax rates.

When I hear "tax rates" I always think of real, effective rates - not the marginal rates that we allow so much wiggle room in, so I'll allow you to answer my other question before I add more. However, I did want to point out that a recent study showed that the proposed tax increase on earners over $250k would generate $700 billion in tax revenue of 10 years. Meanwhile, if we took 50% of all of the assets owned by the ~50% of people who pay no income taxes we would generate... $700 billion.

So my question is this: obviously it isn't about generating the most revenue (since the small increase on the "wealthy" would generate the same as taking half of what the bottom 50% owns), so is it simply a matter of principle? Serious question.

[ElNono]

Sure you can. If you go back to just 2004 spending levels, you arrive at a budget that would result in a surplus of revenue.

Nope.

[vy65]

There's a difference between the tax rate an individual pays vs. the rate a business pays. Not always. But I don't think you can say cutting rates for the wealthy individual will trickle down to Joe Schmoe because it's corporations, not individuals, that create jobs.

That being said - why not keep corporate tax rates for cap gains at 15% if a corporation can show it created x amount of jobs in a given time period? If not, crank that up to 35% or whatever. Is that socialistic?

Also, and I can't believe I'm saying this, but Yoni has a point that everyone has ignored - when will people be satisfied that the rich have paid their fair share? What is a fair share for someone like me who is a young professional? Should I be lumped in with WB?

[Th'Pusher]

You just spent more time on a reasonable response than this forum deserves.

While it is your opinion the top earners could withstand an increase to their effective rate, is it also reasonable to hold the position it is irresponsible to tax top earners more when it is obvious the government does not plan to employ the additional revenue in any manner that will improve our economic position?

Why not address the issue of government's inability to employ the additional revenue in a manner that will improve our economic position?

[Wild Cobra]

No, I'm stating that the current tax rates are the lowest historically ever. That undeniably affects the tax receipts.

I don't know what's not clear on this:

I say it doesn't matter that they are historically low. It makes such a small difference in revenue. Less taxes equal more spending power, which in turn generates jobs and more tax revenue. In the end, it's close to revenue neutral.

Again, it seems to me that you think tax rates are more important than tax payers.

[ElNono]

Also, and I can't believe I'm saying this, but Yoni has a point that everyone has ignored - when will people be satisfied that the rich have paid their fair share? What is a fair share for someone like me who is a young professional? Should I be lumped in with WB?

I think I answered this: Some are paying their fair share.

The problem is those that abuse the system and skip paying what they owe and get away with it. It's not your case (I don't think), but looking at the billions (trillions?) parked overseas, you can tell it's fairly widespread.

I don't like to pay X in taxes either, but I can't opt out of it.

[scott]

You just spent more time on a reasonable response than this forum deserves.

You just described all of my posts, Yoni.

While it is your opinion the top earners could withstand an increase to their effective rate, is it also reasonable to hold the position it is irresponsible to tax top earners more when it is obvious the government does not plan to employ the additional revenue in any manner that will improve our economic position?

An altogether different question than the one I was addressing, but a valid point. However, should we just let our country go to because we think they are incapable of doing anything to fix it? Doing nothing has a 0% chance of fixing things.

I think it is irresponsible of Democrats to think we do not need significant budget cuts. I think it is irresponsible of Republicans to think we do not need significant increases to our revenue stream. I think it is irresponsible of any American who thinks it isn't our collective reponsibility to pay the debts we've racked up over the years RIGHT NOW.

We don't just need a balanced budget. We need a surplus budget. It's time to pay off the credit card bills rung up by our great grandparents, grandparents, parents and us. Since 1936, we've had a total of 12 years with a surplus budget, and the last 10 years have proven to be the most irresponsible in our history, at an alarmingly increasing rate. If people think it will hurt to do this now, it's going to hurt a lot more later.

[ElNono]

I say it doesn't matter that they are historically low. It makes such a small difference in revenue.

Since you claim it's a small difference, let's see what is it, and what you're basing that on. Show me the numbers.