"Fair Share"

[Bowfinger]

Originally posted by: CADsortaGUY

Originally posted by: Engineer

Originally posted by: CADsortaGUY

Again, this isn't about rate. Try again.

OK CAD. Someone pointed out in this thread that you would just repeat the dodge until people wore down and quit and they were right. You can define progressive however you want but you know the damn truth and won't admit it. The tax code is not more progressive, period and evidence has been given to support that.

No, look at the OP. It's not about rates. So while you and others try to make it about other things - I'm trying to stick with what was presented.

Of course you are, because it's the only way you can sell your snake oil. Unfortunately, the OP is deceptive and fundamentally dishonest which is what we are showing.

You may not want to accept a broad view of "progressive" and stick to a narrow "rate" view if you wish but it doesn't change anything.

Cry me a river. That's like me insisting the sky is green, then whining at everyone else for not accepting my "broad view of green". Having the very rich pay a lower rate than much of the middle class is not progressive, not matter how badly you want to redefine the term.

 

[IGBT]

..the liberals enjoy punishing successful income earners. And the liberals are obligated to pander to the "dole" people. what else is new.

 

[Fern]

Originally posted by: Rainsford
I don't want to wade hip deep into tax return data, but that article (and CSG's commentary on it) has the potential to be pretty misleading. The year to year comparison is done on income percentiles without doing a comparison on how much actual income is accounted for in each percentile. A single data point comparing the two is given on the included graph on the page, demonstrating that the tax structure is indeed progressive, but no proof is offered to show that it's MORE progressive than it was before the Bush tax cuts, which is the implication of the article.

If someone else wants to look this up, they're more than welcome to, but I'm suspicious of this article because it looks like funny math to get the desired outcome. A very simple way to prove (or disprove) their point would have been to compare percentage of total income to percentage of income tax burden. If it went up for higher percentile groups, that would indicate an increase in how progressive the tax system is. But instead the article compares income percentiles to tax burden, which is an unbelievably clumsy way of doing it unless they're trying to fudge the numbers.

I'm having some difficulty following you, I think.

See your bolded remark above? When I look at the chart and read the article, looks to me exactly like what they've done.

The nearby chart shows that the top 1% of taxpayers...paid 40% of all income taxes in 2006, the highest share in at least 40 years.

AND

the Carter years -- the rich paid only 19% of all income taxes, half of the 40% share they pay today

I.e., it did go up for the higher percentile group. So, it's either gottem more progressive or this statement is wrong - "paid 40% of all income taxes in 2006, the highest share in at least 40 years."

Fern

 

[Engineer]

Originally posted by: Fern
I.e., it did go up for the higher percentile group. So, it's either gottem more progressive or this statement is wrong - "paid 40% of all income taxes in 2006, the highest share in at least 40 years."

Fern

Did their incomes go up more (as a percentage of overall income) or their taxes? There lies your answer. Their rates actually went down, but because they made SO MUCH MORE money than everyone else, their share rose. It's not difficult.

Their income share rose far more than their taxation share.

 

[Fern]

Originally posted by: Rainsford
-snip-
That's almost what you said, but not quite. "More progressive" (which was the claim) implies that the rich pay a greater percentage of their income in taxes than they used to. The fact that their share of the tax burden went up doesn't mean anything if their share of the total income went up even more. Their effective tax rate could have actually DROPPED in that situation, which wouldn't quite support your point very well.

(Sorry, I don't mean to pick on you, just too many others talking about disposable income and such irrelevancies).

See the bolded section above.

No, progressive means they pay a greater share of the (combined/total) tax burden. That is different from them paying a greater (or lessor) rate than before.

If we raised the top bracket from 35% to 36%, and all the lower brackets went up to 34% that would be LESS progressive. Just because the rich's tax bracket went up doesn't mean it became more progressive.

Likewise, just because the "rich" bracket went down doesn't mean LESS progressive.

How "progressive" taxes are (or have become) requires that we look at the total picture, and then compare the portion of (total taxes) recieved from rich vs. others. It is a comparative measure, not absolute.

Someone above mentioned loopholes etc enjoyed by the rich. Well, there aren't any, not legal anyway. They were done away with in 1986 IIRC (under Reagan).

Moreover, the personal exemptions and itemized deductions are phased out for the rich. Also, their AMT exemption is also phased out. What these things (phase-outs) do is effectively raise your tax rate. They are just "back door" rate increases and done purposefully so as not to attract the kind of attention that outright tac rate increases do. So, the rates for the rich are understated if one looks merely to the tax rate charts.


But here's the grip, and some may consider it legitimate. Look at the tax rate chart below (BTW: That damn thing was a PITA to format):

If Taxpayer's Income Is... Then Estimated Taxes Are...
Between But Not Over Base Tax + Rate Of the Amount Over

$0-----------------$15,650-----------$0-----------10%---------- $0
$15,650-----------$63,700-----------$1,565.00---15%--------$15,650
$63,700----------$128,500-----------$8,772.50---25%-------$63,700
$128,500--------$195,850------------$24,972.50--28%------$128,500
$195,850--------$349,700-----------$43,830.50---33%------$195,850
$349,700------------------------------$94,601.00---35%-----$349,700

Now if I cut every bracket who gets the *biggest benefit*?

Well, those who have the biggest potential gross dollar amount of benefit are those few whose income far exceeds $349,700.

Why?

If we cut a few percentage points off the 10, 15, 25, 28 or 33% brakets, there is a limited amount of dollars that can benefit because each of those brackets is limited in the amount dollars taxed therein. E.g., the 15% only covers about $50K, so you cut that bracket by 2% what do you get? About $1K in savings.

But what about those above $349K? It's theoretically unlimited. The very very wealthy could have $20 million or more receiving a benefit. And obviously, 2% of $20M is far more than $1K.

But as the chart in the OP demonstrates, there is so few people making that much that their combined tax savings, although great in each invidual case, on aggregate is far outweighed by the aggregate of savings of poorer taxpayers. Thus, greater progressivity results.

I.e., the great big fuss is all about a very very small number of taxpayers (probably a very small fraction of 1%) who (individually) got a big tax break.

IMO, that completely misses the mark. The ones who make about a $100M - hedge fund managers -are only paying LT cap gain rates on their income. Even the Dems (Charles Shumer in particular) refuse to repeal that tax loophole.

So, I think you who bitch about the Bush tax cuts have fallen prey to a typical Washington DC's *pea in a cup* mis-direction game - AKA "Republicans tax cuts only favor the rich" crap.

So, get rid of the hedge fund manager cap gain crap. If you wanna create another bracket that add a few % points to people making above $1M I doubt anybody would really care.

Problem is, I highly doubt that is what will be done. Hehe, Bill Clinton's "milion $ income rate bracket" actually kicked in at about $250K IIRC. Washington DC bull shit.

Fern

 

[Fern]

Originally posted by: Engineer

Originally posted by: Fern
I.e., it did go up for the higher percentile group. So, it's either gottem more progressive or this statement is wrong - "paid 40% of all income taxes in 2006, the highest share in at least 40 years."

Fern

Did their incomes go up more (as a percentage of overall income) or their taxes?

You're not following the statistics properly.

Percentage of income is by mathematical definition constant. Top 1% means top 1% no matter income distribution.

You are either in the top 1% as compared to total income, or you are not.

If some others started getting a lot more money, they'd push somebody else out of the top 1%.

.

Bolded - Fern

 

[Engineer]

Originally posted by: Fern
No, progressive means they pay a greater share of the (combined/total) tax burden. That is different from them paying a greater (or lessor) rate than before.

Fern

So if everyone had the same rate across the board (flat) and the top 1%'s income rose to 2X what it was the year before therefore causing them to pay 2X the previous year's share of total taxes, the flat rate is now MORE PROGRESSIVE.

LOL.

 

[Engineer]

Originally posted by: Fern

Originally posted by: Engineer

Originally posted by: Fern
I.e., it did go up for the higher percentile group. So, it's either gottem more progressive or this statement is wrong - "paid 40% of all income taxes in 2006, the highest share in at least 40 years."

Fern

Did their incomes go up more (as a percentage of overall income) or their taxes?

You're not following the statistics properly.

Percentage of income is by mathematical definition constant. Top 1% means top 1% no matter income distribution.

You are either in the top 1% as compared to total income, or you are not.

If some others started getting a lot more money, they'd push somebody else out of the top 1%.

.

Bolded - Fern

You're stating that the fact that their share of income rose 28% from 2002-2006 while their share of taxes rose 18% during that same time frame doesn't matter?

 

[Fern]

Originally posted by: Engineer

Originally posted by: Fern
No, progressive means they pay a greater share of the (combined/total) tax burden. That is different from them paying a greater (or lessor) rate than before.

Fern

So if everyone had the same rate across the board (flat) and the top 1%'s income rose to 2X what it was the year before therefore causing them to pay 2X the previous year's share of total taxes, the flat rate is now MORE PROGRESSIVE.

LOL.

Rich people cannot pay less in terms of the percentage of their income because because their marginal rate is always higher than that of lower income taxpayers.

Then, for those who have a lot of income taxed at the highest bracket (35%) their average rate of tax will be higher than any person who has less income.

Here the reverse of my example above where the very very rich come away with a big gross dollar tax break from a rate cut. The poorer tax payer will have most of their taxed at 10 or 15%. Thwe very rich will have a lot of their income taxed at 35%.

I think the whole concept of "wage gap" (or whatever they call) is confusing people.

The chart in the OP clearly shows increased progressivity in taxes.

Fern

 

[Engineer]

Originally posted by: Fern

Rich people cannot pay less in terms of the percentage of their income because because their marginal rate is always higher than that of lower income taxpayers.

They can't? Warren Buffet made 46 million last year and paid 17.7% on it. Long Term Capital Gains Taxes capped at 15% is far lower than my marginal rate. Who owns more capital (stock) and makes more money from selling it (capital gains)?

Edit: Corrected Buffet's income and effective rate figures.

 

[Fern]

Originally posted by: Engineer
-snip-
You're stating that the fact that their share of income rose 28% from 2002-2006 while their share of taxes rose 18% during that same time frame doesn't matter?

I don't see that figure. Are we looking at the same chart/article?

(I may have to answer tomorrow, I've gotta log off here in a minute).

Fern

 

[Engineer]

Originally posted by: Fern

Originally posted by: Engineer
-snip-
You're stating that the fact that their share of income rose 28% from 2002-2006 while their share of taxes rose 18% during that same time frame doesn't matter?

I don't see that figure. Are we looking at the same chart/article?

(I may have to answer tomorrow, I've gotta log off here in a minute).

Fern

It's not in the article. I took the time to look up the income gains and the taxation gains and gave percentage increases in a post on first few pages. The calculations are given also. The reason income isn't given in the article is because their income grew far faster than their taxation (all shares) and that just didn't jive with the OP's intentions of showing MORE Progressive taxes.

 

[piasabird]

Remove the SS Cap and make the millionaires pay their fair share of SS!

 

[Bowfinger]

Originally posted by: Fern

Originally posted by: Engineer

Originally posted by: Fern
No, progressive means they pay a greater share of the (combined/total) tax burden. That is different from them paying a greater (or lessor) rate than before.

Fern

So if everyone had the same rate across the board (flat) and the top 1%'s income rose to 2X what it was the year before therefore causing them to pay 2X the previous year's share of total taxes, the flat rate is now MORE PROGRESSIVE.

LOL.

Rich people cannot pay less in terms of the percentage of their income because because their marginal rate is always higher than that of lower income taxpayers.

Then, for those who have a lot of income taxed at the highest bracket (35%) their average rate of tax will be higher than any person who has less income.

Here the reverse of my example above where the very very rich come away with a big gross dollar tax break from a rate cut. The poorer tax payer will have most of their taxed at 10 or 15%. Thwe very rich will have a lot of their income taxed at 35%.

I think the whole concept of "wage gap" (or whatever they call) is confusing people.

The chart in the OP clearly shows increased progressivity in taxes.

Fern

You are way, way off. Please read some of the other information in this and the other thread. Also take a look at the actual data presented here.

 

[fskimospy]

Fern it seems like your definition of what 'progressive' means in terms of taxation is simply incorrect, much like CAD. The dollar amount of total taxes that the rich pay has absolutely nothing to do with how progressive the taxes are.

Here's the wiki article on progressive taxation. The first paragraph tells you exactly what you need to know, that whether taxes are progressive or not is based upon tax rate, not percentage of total tax revenue a group pays.

So simply because the rich are paying a greater percentage of the total tax base of the US speaks in no way to how progressive taxation is in America. Literally, that chart cannot give you that information.

If you want to show that the tax code has become more progressive in the last 8 years or whatever, you have to show the average tax rate of the top 1% in 2000, and compare it to the average tax rate of the top 1% in 2008. If they paid a higher percentage of their total income then the tax rate has become more progressive. The actual dollars paid are completely irrelevant.

I have yet to see an article that argues the tax rates of the rich have gone up under the Bush administration. If you have such an article I would like to see it. (Oh, and no... the OP doesn't say anything about that.)

 

[First]

Jesus, this is some impressive willful ignorance from the OP. Though perhaps I give him too much credit, and he really doesn't understand grade school mathematics. Sad either way.

Ironically enough, posts like the OP is why good publicly-funded primary education is so important to this country. :laugh:

 

[Orsorum]

Originally posted by: Engineer

Originally posted by: ElFenix

Originally posted by: Orsorum
I would like to see a study that uses not just IRS data but FICA/FUTA collections, sales and use taxes, gasoline taxes, etc., to truly capture the percentage of gross income each taxpayer pays in taxes. Using just the IRS data (for FIT paid) is misleading.

that too

Well, that would be the true tax burden of every single person in society, not just income tax burden. SS payroll tax would effect anyone up to $100,000 more than it would effect people earning millions as their payout would end at the $100,000 (or whatever the payout limit is on SS for that year). That's another thead though as this one is about income taxes from the OP

The OP wasn't talking about just income tax. The issue, as discussed colloquially, is each taxpayer's tax burden, and that encompasses all taxes paid, all taxes that affect a taxpayer's net paycheck, not just FIT. To take FIT data and pass that off as determining what is or isn't a person's "fair share" is just misleading. Yes, taxpayers who make less than $102k do pay 7.65% of their gross wages to FICA. That significantly affects their take-home pay.

 

[ElFenix]

Originally posted by: piasabird
Remove the SS Cap and make the millionaires pay their fair share of SS!

will they be allowed to withdraw their fair share off SS as well?

 

[Brainonska511]

Originally posted by: piasabird
Remove the SS Cap and make the millionaires pay their fair share of SS!

And that just hurts the professional - those that make between 200k and 1m a year.

Plus, IIRC, SS tax isn't paid when you're making money off of capital gains.

Edit:
Also, the idea behind the cap is that only so much money can be returned from SS in the end, that's why it's capped.

 

[Engineer]

Originally posted by: Brainonska511

Plus, IIRC, SS tax isn't paid when you're making money off of capital gains.

That's right. That's why Warren Buffet made 46 million last year but didn't pay out on SS. His base salary is $100,000 per year which was lower than the $102,000 payout on SS.

I don't think that Medicare tax portion of FICA has a payout limit though.

 

[piasabird]

The poor man making $20,000 per year pays his SS Tax???

So if you make $20,000.00 or 20,000,000,000.00 you should still have to keep paying your set percentage of SS Tax.

The reason for the Cap is flawed. All the SS $$$ goes into the General Funds and all the excess is spent by Congress. The real reason for the Cap is to give rich people a break. Everyone knows this. If your SS $$$ all went into your private account the Cap might make sense. However, we dont have private investment accounts to send our money to. So the whole concept of a Cap or a maximum amount of SS payout is pure baloney.

Take people who go to college and earn a degree and work for a living and become teachers. If you work for the State or the Feds in an education job like teacher or programmer or administrator, you may have already payed enough in to qualify to receive your SS (i.e. total number of quarters to qualify for SS). However, because you work for the state in the education field they will reduce your social security if you receive a pension. Even if it is a pension plan that you payed into. i.e. payroll deduction/matching plan.

This is because in education you dont pay SS. The reason for this is the State is too cheap to have to pay the matching funds it would be required to pay for you as your employer. So for taking that lower paid education job, you get the shaft at retirement also.

 

[Jaskalas]

Originally posted by: Engineer

Originally posted by: dmcowen674
Somebody listened to Rush today. :roll:

Not stating that CSG listened to Rush or not, but if I were Rush, I would want taxes frozen at current levels or lowered too. He's a rich ole bastard now (er...well, he was always a rich ole bastard but only richer now! )

One does not have to be a rich old bastard (you forgot to mention he's WHITE too) to appreciate the damage and loss of freedoms that occur the more you feed our government money/power.

The damage they can do with tax money is enough reason for me to be against higher taxes.

 

[Fern]

Originally posted by: Bowfinger

Originally posted by: Fern
-snip-

You are way, way off. Please read some of the other information in this and the other thread. Also take a look at the actual data presented here.

Well, somebody's way off. But it ain't me.

Looks to me like the chart in the OP's link, and your link wildly disagree with each other.

The OP's chart says top 1% pay 40% of income taxes (at least in '06).

Your chart looks to say they pay only 22.8% (or will pay in 2015).

But uhh, why not use 2005, or 2006 etc? Why 2015?

But I do see that your chart, at least the part with actual figures (unlike the *made up* 2015 stuff) shows the top 1% paying only 18.8% of federal income tax in 2001.

If the OP's chart is to believed, the tax cuts were wildly progressive as they paid 40% of the taxes in 2006. I.e., they went from 22.8% to 40%.

Double check my math, otherwise looks like the data you linked confirms the OP's assertion (not the other way around as you would have us believe).

Fern

 

[Fern]

Originally posted by: Engineer

Originally posted by: Fern

Rich people cannot pay less in terms of the percentage of their income because because their marginal rate is always higher than that of lower income taxpayers.

They can't? Warren Buffet made 46 million last year and paid 17.7% on it. Long Term Capital Gains Taxes capped at 15% is far lower than my marginal rate. Who owns more capital (stock) and makes more money from selling it (capital gains)?

Edit: Corrected Buffet's income and effective rate figures.

Yeah, but that's fund manager thing I've already addressed.

Fern

 

[RightIsWrong]

Originally posted by: Fern

Originally posted by: Bowfinger

Originally posted by: Fern
-snip-

You are way, way off. Please read some of the other information in this and the other thread. Also take a look at the actual data presented here.

Well, somebody's way off. But it ain't me.

Looks to me like the chart in the OP's link, and your link wildly disagree with each other.

The OP's chart says top 1% pay 40% of income taxes (at least in '06).

Your chart looks to say they pay only 22.8% (or will pay in 2015).

But uhh, why not use 2005, or 2006 etc? Why 2015?

But I do see that your chart, at least the part with actual figures (unlike the *made up* 2015 stuff) shows the top 1% paying only 18.8% of federal income tax in 2001.

If the OP's chart is to believed, the tax cuts were wildly progressive as they paid 40% of the taxes in 2006. I.e., they went from 22.8% to 40%.

Double check my math, otherwise looks like the data you linked confirms the OP's assertion (not the other way around as you would have us believe).

Fern

It doesn't confirm the OP's premise that the tax is regressive. What it does is make a fallacious argument based on only data that will dishonestly lead you to that conclusion.

You cannot claim that the tax is regressive if you do not take into account income and effective rate. Simply saying that they pay more now than they did in the past without including that they are making even more and their effective tax rate has dropped is intellectually dishonest.

That is the position that the OP, the author of the article in the OP and you are trying to take and it is flat out wrong.