A budget proposal: towards a balanced budget and for the people - the Progressives

[halik]

Right in the summary of the budget, it totals the revenue:

You do understand that $1.7T of cuts + $1.7T of "public investments" = 0, right? The plan is "tax $4T"

 

[ProfJohn]

You are wrong here, that's not how marginal progressive rate works. You'd be paying 49% on anything in the excess of 1M. Essentially extra 6% on anything over 500K

Yes, you are correct about the income tax rate thing since it only kicks in at that level of income. The plan calls for a return to the Clinton tax rate though which was 39.5% on anything over $160k or so. (don't remember exact number)

However the 6% increase in SS would kick in starting at $108,000 which means a guy making $1,000,000 will pay an additional $54,000 in SS taxes plus any other increase.

Plus another 4% on all income over say $200,000 which is another $32,000.

So a person who earns $1,000,000 per year in salary will see their taxes go up by $86,000 over night. Or about a 9% increase in their effective tax rate.

BTW if you are self employed your SS tax rate is 12.4%, not 6.2%, so a self employed person making $1,000,000 per year would see their taxes go up by $140,000 per year.

 

[Craig234]

You do understand that $1.7T of cuts + $1.7T of "public investments" = 0, right? The plan is "tax $4T"

Yes?

On another note, funny thing is people get used to the current rates.

So a change to those rates up or down seems 'crazy', while they forget much different rates were 'normal' before.

The numbers for the country, in everything from debt to concentration of wealth and more, really took a wrong turn with Reagan that it's still on. Before him - from FDR to Carter - the rates were higher. The country did just fine - plenty of 'rich people', economic growth, a strong middle class, anti-poverty programs, a man on the moon for fun.

During Reagan's Presidency, the top 1% income went up 80%; the bottom 99% up 3%.

You don't fix that without raising taxes on the rich.

In the last year of economic recovery, 88% of the recovery went to corporations; 1% went to wages. Workers are flat; The biggest 200 corporations' CEOs are up 23% in a year.

 

[halik]

Yes, you are correct about the income tax rate thing since it only kicks in at that level of income. The plan calls for a return to the Clinton tax rate though which was 39.5% on anything over $160k or so. (don't remember exact number)

However the 6% increase in SS would kick in starting at $108,000 which means a guy making $1,000,000 will pay an additional $54,000 in SS taxes plus any other increase.

Plus another 4% on all income over say $200,000 which is another $32,000.

So a person who earns $1,000,000 per year in salary will see their taxes go up by $86,000 over night. Or about a 9% increase in their effective tax rate.

BTW if you are self employed your SS tax rate is 12.4%, not 6.2%, so a self employed person making $1,000,000 per year would see their taxes go up by $140,000 per year.

Well I was referring strictly to the extra tax brackets, which aren't a bad idea IMO. Family of four making 350K (say two attorneys) probably shouldn't be paying the same rate as a trader pulling in 40M. Extra dollar to them is worth far more than to the trader.

The ssoc tax is bullshit, it's an insurance program and there's no argument to justify progressive rate. Not any more than my car insurance should go up when I get a raise.

 

[dali71]

In other news, profjohn goes on ignore.

 

[halik]

Yes?

On another note, funny thing is people get used to the current rates.

So a change to those rates up or down seems 'crazy', while they forget much different rates were 'normal' before.

The numbers for the country, in everything from debt to concentration of wealth and more, really took a wrong turn with Reagan that it's still on. Before him - from FDR to Carter - the rates were higher. The country did just fine - plenty of 'rich people', economic growth, a strong middle class, anti-poverty programs, a man on the moon for fun.

During Reagan's Presidency, the top 1% income went up 80%; the bottom 99% up 3%.

You don't fix that without raising taxes on the rich.

In the last year of economic recovery, 88% of the recovery went to corporations; 1% went to wages. Workers are flat; The biggest 200 corporations' CEOs are up 23% in a year.

I'm not disagreeing with the progressive tax policy, I'm with Warren Buffet on that one.

However you mean to tell me that after one of the biggest expansion of federal gov't budget, taxing 100% to make up for the difference is the right decision?

Even ignoring the impact on the economy etc; after spending more than you have in an emergency, not cutting back spending is the right choice? It's patently obvious you like your world-view with a a far left bias, but use some common sense here...

 

[ProfJohn]

YThe numbers for the country, in everything from debt to concentration of wealth and more, really took a wrong turn with Reagan that it's still on. Before him - from FDR to Carter - the rates were higher. The country did just fine - plenty of 'rich people', economic growth, a strong middle class, anti-poverty programs, a man on the moon for fun.

During the FDR to Carter years there were 8,000 different tax breaks that allowed people to write everything off.

NO ONE paid the 90% income tax rate under FDR just as NO ONE paid the 70% rate under Carter.

In 1980 the top 1% had a total tax rate of 34.6%
In 2000 the top 1% had a total tax rate of 33%
In 2006 the top 1% had a total tax rate of 31.3%

Rates for the top 5%
1980 30%
2000 31%
2006 29.1%

Total tax rate for ALL incomes
1980 19%
2000 20.9%
2006 20.7%

So even though current tax rates are MUCH lower than in 1980 Americans are sending more of their money to the government than ever before? (pre-recession)
Data for 1979-2005
http://www.econdataus.com/efftax05.html

 

[ProfJohn]

They want to increase capital gains taxes by $1 trillion over 10 years...

Anyone have any idea what that will do to the economy?

I wish we could put these guys on an island and watch them fail...

 

[Craig234]

I'm not disagreeing with the progressive tax policy, I'm with Warren Buffet on that one.

Good.

However you mean to tell me that after one of the biggest expansion of federal gov't budget, taxing 100% to make up for the difference is the right decision?

Even ignoring the impact on the economy etc; after spending more than you have in an emergency, not cutting back spending is the right choice? It's patently obvious you like your world-view with a a far left bias

That last bit is pretty clueless, stick to the issues.

but use some common sense here...

The current budget should not continue spending in the same areas. But economists say we would benefit from more spending in the right areas.

So yes, raising the right taxes, and shifting spending, can be a good thing. Spending good for the economy and people, while balancing the budget.

 

[ProfJohn]

Second to last page
http://epi.3cdn.net/55d8ba5873e5bd097e_avm6b8rb1.pdf
Expected tax receipts as percent of GDP
Receipts………………… 14.9% 14.8% 18.7% 20.7% 21.5% 21.6% 21.5% 21.9% 22.0% 22.1% 22.2% 22.3% 20.9% 21.5%


Someone should tell these fools that we have never exceeded 21% of GDP in the history of our country. And our longer term average is only 18.1%.

 

[Craig234]

Paul Krugman on the Progressive Budget

http://www.nytimes.com/2011/04/25/opinion/25krugman.html?_r=2&ref=opinion

My bolding.

All of this, combined with spending cuts mostly focused on defense, is projected to yield a balanced budget by 2021. And the proposal achieves this without dismantling the legacy of the New Deal, which gave us Social Security, and the Great Society, which gave us Medicare and Medicaid.

But if the progressive proposal has all these virtues, why isn’t it getting anywhere near as much attention as the much less serious Ryan proposal? It’s true that it has no chance of becoming law anytime soon. But that’s equally true of the Ryan proposal.

The answer, I’m sorry to say, is the insincerity of many if not most self-proclaimed deficit hawks. To the extent that they care about the deficit at all, it takes second place to their desire to do precisely what the People’s Budget avoids doing, namely, tear up our current social contract, turning the clock back 80 years under the guise of necessity. They don’t want to be told that such a radical turn to the right is not, in fact, necessary.

But, it isn’t, as the progressive budget proposal shows. We do need to bring the deficit down, although we aren’t facing an immediate crisis. How we go about stemming the tide of red ink is, however, a choice — and by making tax increases part of the solution, we can avoid savaging the poor and undermining the security of the middle class.  

 

[Paul98]

Oh missed this part:
Eliminates the individual Social Security payroll cap to make sure upper income earners pay their fair share

So 45% of income to the Feds in income taxes and another 6% in SS taxes. So now we are at 51% of your income going to the Federal government.

Add that 8-10% for local and state and if you are a millionaire 60% of your income goes to government.

What a fucking joke! Hey I made a million dollars last year... after taxes I still have $400,000....

I wish I could tell if any of these posts were trolling or not.

If the top tax rates are 45% you only pay that for money made that's past a million dollars. So if you make two million you would pay 45% on only that second million. So if there were no other changes in taxes, if you just made a million dollars you wouldn't have to pay any more taxes.

 

[davmat787]

Regardless of the specific numbers, I don't understand how one could be in favor of such drastic tax increases when the Republicrats and Demopublicans in DC can't even balance budget. I'm not going to pretend to understand the intricacies of tax politics as much as some here, but come on.

It is just throwing more money into the abyss. This does not appear to address the core problem in regards to the debt anyway, but what do I know?

 

[Genx87]

Just to be clear for those who don't want to read this garbage.

1. Capital gains will now be taxes as regular income.
So if you earn $1 million per year in capital gains you tax rate will go from 15% to 45%

2. As noted income tax rates on millionaires goes from 35% to 45% under Clinton it was 39.5%

3. The elimination of the SS cap will result in an immediate 6.2% tax increase on anyone making over $100,000 a year

So a millionaire will be looking at a tax increase of between 16% to 36% per year depending on whether their income is salary or capital gains.

Dont forget saddle whoever is paying the salary with another 6.2%.

So what does "fair share" in an entitlement program mean anyways? It isnt like the rich pay into SS to the cap at ~105K then pull out at their income rate. Their benefits also cap at the max. .

 

[PokerGuy]

Yawn. Without even having to look at the band of idiots' budget proposal, I can guarantee you it is based on jacking up taxes. That's their mentality - take money from those who earn it, give it to the government, and have them squander it the way the bureaucrats see fit.

Pretty much the usual stupidity.

 

[Anarchist420]

If they absolutely have to raise taxes, then they should just raise excise taxes as Thomas M Hoenig suggested (quintuple all of them except for the firearms taxes which should be repealed), which would give at least an additional 180B and have 5-25% tariffs which could give another additional 180B. At the same time though, they'd need to give medical expense deductions for personal income taxes (which would reduce income tax revenues 150B), and repeal the corporate tax (revenue neutral) or not make it more than a 4% flat rate. So, the federal government would get $210B more in revenue. They would have to slash spending by ~1.46T for the following fiscal year.

There is no way in hell the Federal government is going to get any more revenue from taxing top earners directly, and even if they did, then that would reduce the number of jobs.

 

[Craig234]

Regardless of the specific numbers, I don't understand how one could be in favor of such drastic tax increases when the Republicrats and Demopublicans in DC can't even balance budget. I'm not going to pretend to understand the intricacies of tax politics as much as some here, but come on.

It is just throwing more money into the abyss. This does not appear to address the core problem in regards to the debt anyway, but what do I know?

You can't understand raising taxes that balance the budget, when they can't balance a budget. Doesn't make a lot of sense. Try reading the budget some more.

Actually this goes a long way towards 'addressing the problem in the debt', including to the point of balancing the budget.

Your comments don't fit the facts and come across as rhetoric - paying debt is abyss?

 

[Craig234]

There is no way in hell the Federal government is going to get any more revenue from taxing top earners directly, and even if they did, then that would reduce the number of jobs.

Complete nonsense. Of course they can tax those who have had their taxes slashed greatly increasing their income - and no, it doesn't cost jobs.

Stay a bit informed - tax cuts for the rich create few jobs and cause a lot more problems than they help. Jobs are created with money in other places, like consumers' hands.

You buy into the right-wing propaganda of 'job creators needs tax cuts', eh? That's gone well.

 

[piasabird]

All the president's men can not even present a plan for a budget. All the White House has done since they have been in office is to produce problems and overspending. All the budget people working for the White House seem to quit! Why is that? It is because the president is purposely causing problems in the government so he can raise taxes and grow the government. This is what progressive communists do.

No one can predict the future. What about all the unforseen events that raise prices on everything; Wars, Famine, Drought, Earthquakes, Volcanoe's, Floods, terrorism, nuclear disaster, Sunami's, Disease, Financial Turmoil? Some of or all of these are likely to occur. All of them require spending extra money. We are lucky if we can go 2 years without some major event. History will repeat itself.

We would be better off if we spent more money on reasearch and development, hoping beyond hope that we can save ourselves.

 

[Craig234]

All the president's men can not even present a plan for a budget. All the White House has done since they have been in office is to produce problems and overspending. All the budget people working for the White House seem to quit! Why is that? It is because the president is purposely causing problems in the government so he can raise taxes and grow the government. This is what progressive communists do.

No one can predict the future. What about all the unforseen events that raise prices on everything; Wars, Famine, Drought, Earthquakes, Volcanoe's, Floods, terrorism, nuclear disaster, Sunami's, Disease, Financial Turmoil? Some of or all of these are likely to occur. All of them require spending extra money. We are lucky if we can go 2 years without some major event. History will repeat itself.

We would be better off if we spent more money on reasearch and development, hoping beyond hope that we can save ourselves.

While that isn't about the budget, I agree with spending a lot on research.

 

[Fear No Evil]

So at what point will the progressives have 'enough' money? It's like public schools. Give them $10k per student they say they need 15, give them 15, they need 20, give them 20 they need 25.. there is never enough and it never stops or solves anything.

 

[CycloWizard]

So, according to a progressive think-tank (the Economic Policy Institute), the progressive budget will solve all of the nation's problems? I'm shocked!

Economic Policy Institute

A nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy.

I think someone wrote a song about this many years ago...

Tax the rich
Feed the poor
'Til there are no
Rich no more

Tax increases never increase revenue according to projections because every new tax bill introduces new loopholes and increased incentive to avoid or cheat.

 

[hal2kilo]

You are wrong here, that's not how marginal progressive rate works. You'd be paying 49% on anything in the excess of 1M. Essentially extra 6% on anything over 500K

The Prof and like minded conservatives always get this wrong.

 

[ichy]

Jesus, Craigonomics at its worst.

 

[Craig234]

So at what point will the progressives have 'enough' money? It's like public schools. Give them $10k per student they say they need 15, give them 15, they need 20, give them 20 they need 25.. there is never enough and it never stops or solves anything.

Answer is in the budget.