Mind Blowing Charts From Senate Income Inequality Hearing

[OneOfTheseDays]

http://m.motherjones.com/mojo/2012/02/mind-blowing-charts-senates-income-inequity-hearing

 

[monovillage]

What do you expect from Motherjones ? Mind-blowing bias and partisanship is what you get. Try going to more balanced media next time.

“I get sick and tired of the demagoguery that goes on in Washington about taxing higher-income people,” said Sen. Chuck Grassley (R-Iowa), a former Finance Committee chairman. “How high do taxes have to go to satisfy the appetite of people in this Congress to spend money?”

Sen. Jon Kyl (R-Ariz.) added that it would be a bad sign if the purpose of the hearing, which focused on whether tax burdens and benefits are equitable, was to see how to even out income across the country.

“It’s a fool’s errand,” Kyl said. “It’s immoral. It’s not what we should be about.”

The new data cited by the GOP committee members came from the nonpartisan Joint Committee on Taxation, which forecasted that roughly 51 percent of taxpayers had zero federal income tax liability or had received a refundable credit in the 2009 tax year.

Sen. Orrin Hatch (R-Utah), the panel’s ranking member, also cited a 2008 study from the Organization for Economic Cooperation and Development that said that the U.S. had a more progressive tax system than other industrialized countries. (That study also said that income inequality had been rapidly increasing in the U.S.)

http://thehill.com/blogs/on-the-mon...nate-republicans-the-wealthy-pay-enough-taxes

 

[Anarchist420]

I don't like Orrin Hatch, but he's right. If you want the welfare everyone is going to have to pay close to the same rate of their income for it.

That's why I argue that the socialist welfare state in europe causing equality is an illusion. The Europeans just work harder than many americans do and they're a much less heterogeneous population. That's why a lot of the native born Europeans are up in arms about all the immigrants. What they don't seem to realize is that they'd be just as well off if they allowed the immigrants in and had a free market.

Since there is the MIC and since the regulations are probably worse here than they are in Europe, getting rid of the state would not cause the wealth inequality here to change (or anywhere else for that matter). People are inherently unequal, and some groups of people are smarter than others. There would not be complete happiness if we were all the same anyway because opposites tend to interbreed and a government could and would never mandate that all rich white people with high IQs interbreed with Bushmen, but it happens occasionally anyway. Some might view that as good others would view that as bad. Government cannot even change the overall happiness of society. Some people benefit, others lose. Those cancel each other out, and ethics is why you should not have government because it doesn't work as a utility to create equality (or inequality for that matter).

 

[Jhhnn]

What do you expect from Motherjones ? Mind-blowing bias and partisanship is what you get. Try going to more balanced media next time.

So, uhh, if the same charts appeared in World Nut Daily, they'd be fine, I suppose... or is it just that Facts have a Liberal Bias?

 

[monovillage]

It's just that Democrats have an orgasm every time they see that 90%+ tax rate. It's the Democrat trickle down theory.

Government takes all the money you earn and then let's a small amount trickle down to you.

 

[monovillage]

So, uhh, if the same charts appeared in World Nut Daily, they'd be fine, I suppose... or is it just that Facts have a Liberal Bias?

They very carefully only showed one side of a Senate hearing. It's a typical motherjones tactic, they only give 1/2 the facts.
If you read and trusted this story then stupid has a Liberal bias.

 

[fskimospy]

It's just that Democrats have an orgasm every time they see that 90%+ tax rate. It's the Democrat trickle down theory.

Government takes all the money you earn and then let's a small amount trickle down to you.

What about the charts do you think is incorrect? The info in them is all sourced to reputable places.

 

[monovillage]

What about the charts do you think is incorrect? The info in them is all sourced to reputable places.

I'm sure the charts are correct for what they show, just like the Motherjones article was correct in what it said.

 

[fskimospy]

I'm sure the charts are correct for what they show, just like the Motherjones article was correct in what it said.

So you believe the charts to be biased? In what way?

 

[JEDIYoda]

That's why I argue that the socialist welfare state in europe causing equality is an illusion. The Europeans just work harder than many americans do and they're a much less heterogeneous population.

You really don`t know what you are talking about.....
I have lived in Germany and Poland and I have property in Poland and my son in law is one of the largest textile manufacturers in all of Europe.

I can tell you that in countries such as Hungary,Poland and Czech Republic....the everyday worker with no college degree makes less money then a person in the states with the same exact education. In Poland and other countries most vacation time is paid by the employer and they get more vacation days than we do. Do they work harder?? You cannot make that generalization. The ones who want more than just survive work alot as would a single mother with a family to sup[port here in the states.

But a college degree will get you places in Europe that a college degree in the states use to get you. Plus there is no such thing as being over qualified. There also is very little haggling over wages when you are hired. Good jobs are not plentiful.

That's why a lot of the native born Europeans are up in arms about all the immigrants.

Oh really -- a lot?? The ones I know do not even care....unless you can link to support what you just stated.....

What they don't seem to realize is that they'd be just as well off if they allowed the immigrants in and had a free market.

Are you sure? How can you possibly make that statement without experiencing it yourself? Unless you have supporting links.....

 

[cubby1223]

What about the charts do you think is incorrect? The info in them is all sourced to reputable places.

The charts are correct. It's the conclusions people reach that are in dispute.

Is the wealth distribution in the 70's a result of the tax rate, or that America was more globally competitive in manufacturing back then?

Taxes went from 94% in 1944 to 80% in 1980, yet "the rich" went down in their percentage of national wealth.


What is more important to this country, income distribution, or quality of living? I would argue most people have a better quality of life today than they did 40 years ago.

 

[Anarchist420]

One thing I'd like to know is how much overall federal revenue was paid by the wealthy (not just high income earners) and the poor (people with negative savings) during 1928 because tariffs were a huge source of revenue in the 20s (and even huger before which put the middle class southerners at a disadvantage from the beginning of the Federal Republic) and redistribution to the poor was not nearly as high as today. Not only that, society was happier in the 20s regardless of what inequalities in wealth then were. I mean, my great grandmother was alive in the 1920s and she didn't ever live in anywhere near a rich household but she was happy with what she had. She also didn't speculate like it was her job in the 20s, so she and my grandmother did fine during the GD. She did have some great skills, but how much can a seamstress and a factory worker (her husband) really make? They were always happy with what they had according to my mother and my grandmother never conciously (misspelled) spent anything she inherited from her mother in 43 years (I say conciously because she had alzheimers and was tricked into giving it all to my grandfather and uncle). My dad came from very little and is a medical doctor. That's probably because he didn't inherit any mental illnesses that are so common in his family.

 

[Anarchist420]

You really don`t know what you are talking about.....
I have lived in Germany and Poland and I have property in Poland and my son in law is one of the largest textile manufacturers in all of Europe.

I can tell you that in countries such as Hungary,Poland and Czech Republic....the everyday worker with no college degree makes less money then a person in the states with the same exact education. In Poland and other countries most vacation time is paid by the employer and they get more vacation days than we do. Do they work harder?? You cannot make that generalization. The ones who want more than just survive work alot as would a single mother with a family to sup[port here in the states.

But a college degree will get you places in Europe that a college degree in the states use to get you. Plus there is no such thing as being over qualified. There also is very little haggling over wages when you are hired. Good jobs are not plentiful.

Oh really -- a lot?? The ones I know do not even care....unless you can link to support what you just stated.....


Are you sure? How can you possibly make that statement without experiencing it yourself? Unless you have supporting links.....

Maybe I don't🙂

IIRC, there were some riots in France several years ago that were all over the news here and it had to do with immigrant moslems. Maybe things have changed since then. Maybe LePen isn't still competitive with Sarkozy, but it looked to me like she was going to beat him not more than 6 months ago.

I've read on wikipedia that 50% of France's governmental revenue comes from the VAT. Most of the countries of the EU have income tax rates' that are much higher (and which start at a much lower amount of money). If the middle class (in Europe) paid half of what they did in taxes, then they could easily take quality paid vacations themselves. We don't have many consumption taxes here. Gas tax is $2.50/gal or something like that in the netherlands, so only the rich can afford to drive a car of their own. Only the wealthy can pay for private health care in UK and in EU countries as well.

As for regulations, no country that I know of in Europe was about to get SOPA, isozone is in the Netherlands (or at least my subscription payment goes to someone in the netherlands). They are also actually more against road regulations in the Netherlands than in the United States according to the UKIP. Poor people definitely don't benefit from road regulations, that's for sure. For example, in VA, the red light cameras were to enrich a private company in a state with a somewhat narrow income tax.

 

[Patranus]

And?

 

[fskimospy]

The charts are correct. It's the conclusions people reach that are in dispute.

Is the wealth distribution in the 70's a result of the tax rate, or that America was more globally competitive in manufacturing back then?

Taxes went from 94% in 1944 to 80% in 1980, yet "the rich" went down in their percentage of national wealth.


What is more important to this country, income distribution, or quality of living? I would argue most people have a better quality of life today than they did 40 years ago.

A bunch of problems there. I don't believe that many people (if any?) believe that income inequality is primarily a result of our tax system. I believe that first chart was just showing that our current tax rates for the wealthy are extraordinarily low by historical standards.

Secondly, there is no correlation whatsoever between marginal tax rates on the rich and economic growth. (that's why the talking point of how we need to cut taxes for the wealthy to grow our economy is such crap) If the argument is that such inequality is necessary in order to drive our overall higher standards of living, I would say that the rest of the industrialized world stands as a counterpoint to that as well.

 

[Matt1970]

All higher taxes are going to do is create a larger government.

 

[cubby1223]

A bunch of problems there. I don't believe that many people (if any?) believe that income inequality is primarily a result of our tax system. I believe that first chart was just showing that our current tax rates for the wealthy are extraordinarily low by historical standards.

Secondly, there is no correlation whatsoever between marginal tax rates on the rich and economic growth. (that's why the talking point of how we need to cut taxes for the wealthy to grow our economy is such crap) If the argument is that such inequality is necessary in order to drive our overall higher standards of living, I would say that the rest of the industrialized world stands as a counterpoint to that as well.

Okay, so then I am safe to assume you have never made a connection between the Bush Tax Cuts and income inequality.

 

[Rainsford]

All higher taxes are going to do is create a larger government.

Not necessarily, because taxes can be raised on one group and lowered on another so the whole thing is revenue neutral. Raising taxes SLIGHTLY on the rich and lowering them on the middle class could result in the same government spending with less impact on the economy as a whole, IMO.

As this thread demonstrates, taxation and wealth distribution just turn into incredibly tedious moralizing debats on both sides any time they come up. But it's not like we're talking abstract concepts here. I don't see a reason the discussion can't be conducted in a more practical and less emotional day.

 

[Rainsford]

And?

If the economy grows but the fruits of that growth are ONLY distributed to the top few percent, it means that a growing economy does not reinforce its own growth by increased income resulting in increased spending. If the rich get much richer but the middle class stays basically the same, you're not going to see much growth in consumer spending in the middle driving the economy even higher.

 

[the DRIZZLE]

So you believe the charts to be biased? In what way?

I'll give you a number of reasons they are misleading and not particularly useful from the standpoint of making policy. First, effective tax rates vary enourmously from top marginal rates and would have been much more useful. Providing the top two graphs implies to the reader that there is a relationship between the effective tax rates of the 1% and the marginal tax rates.

In fact those extremely high marginal tax rates from the 40's through the 60's applied to far fewer Americans that the 35% rate does today. For example, in 1946 the top rate of 91% applied to earners over $2.3 million. At the time the median household income was $3000. So the top rate applied to people making 766 times the median income.

Today the top rate applies to families making over $379,000 or around 7 times the median income. The tax code has changed so much over the years that the top marginal rate chart is worse than meaningless because it leads to false conclusions.

edit: I'll add that I do believe the growing income inequality is a real problem but that the marginal tax rates are not the cause or the solution.

 

[Patranus]

If the economy grows but the fruits of that growth are ONLY distributed to the top few percent, it means that a growing economy does not reinforce its own growth by increased income resulting in increased spending. If the rich get much richer but the middle class stays basically the same, you're not going to see much growth in consumer spending in the middle driving the economy even higher.

Incorrect.
These charts are all about percentages but a percentage of what is what is key.

If I get 50% of a 12oz soda (6oz) and then only get 25% of a soda but that soda is now a 2 litter (32oz) am I getting less soda because my overall percentage decreased?

 

[fskimospy]

I'll give you a number of reasons they are misleading and not particularly useful from the standpoint of making policy. First, effective tax rates vary enourmously from top marginal rates and would have been much more useful. Providing the top two graphs implies to the reader that there is a relationship between the effective tax rates of the 1% and the marginal tax rates.

One of them is about marginal tax rates, the other is about share of national income. I'm not sure how you were getting something about effective tax rates from that.

In fact those extremely high marginal tax rates from the 40's through the 60's applied to far fewer Americans that the 35% rate does today. For example, in 1946 the top rate of 91% applied to earners over $2.3 million dollars. At the time the median household income was $3000. So the top rate applied to people making 766 times the median income.

Today the top rate applies to families making over $379,000 or around 7 times the median income. The tax code has changed so much over the years that the top marginal rate chart is worse than meaningless because it leads to false conclusions.

I agree that the tax code today is far different than it was in the past, and that is a valid criticism. It is only a valid criticism of the top marginal rates graph however. (which is the least important one from a societal perspective) The other graphs speak for themselves.

 

[the DRIZZLE]

One of them is about marginal tax rates, the other is about share of national income. I'm not sure how you were getting something about effective tax rates from that.



I agree that the tax code today is far different than it was in the past, and that is a valid criticism. It is only a valid criticism of the top marginal rates graph however. (which is the least important one from a societal perspective) The other graphs speak for themselves.

See my edit. I have no objection to the income concentration chart.

 

[fskimospy]

Incorrect.
These charts are all about percentages but a percentage of what is what is key.

If I get 50% of a 12oz soda (6oz) and then only get 25% of a soda but that soda is now a 2 litter (32oz) am I getting less soda because my overall percentage decreased?

You realize that the inflation adjusted median income for the average American family is not very much higher than it was in the 1970's, right?

 

[DCal430]

What is funny is we see during Clinton's "tax increases" the wealth of the top 1% increased, and can anyone guess why.


The reason is because Clinton slashed Capital Gains tax by 8% lowering it from 28% to 20%, giving the super rich a major tax cut. People remember Clinton's tax increases but they forget his tax cut.