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Obama's Tax policies ? Good or Bad

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DLeRium

Lifer
Feb 19, 2001
20,158
20
81
Originally posted by: jpeyton
The bottom 95% drive the American economy.

The bottom 95%, through sheer numbers, buy nearly all the consumables, the cars, consumer electronics, gas, groceries, homes, vacations, etc.

If the bottom 95% is doing better, they spend more, and the companies selling those goods do better. If the bottom 95% struggle, the economy struggles.

Trickle down DOESN'T WORK. Build it strong from the foundation up.
Perhaps but if they can't drive anything, then that's pointless. Giving handouts doesnt work either. Look at Bush's 2001 tax rebate checks. Then look at this year's rebate checks. What happened? Obama's tax breaks for the poor are really handouts and giveaways. Sure its great to help the middle class, but when many don't pay income tax already then what?
 

DLeRium

Lifer
Feb 19, 2001
20,158
20
81
Originally posted by: Engineer
Originally posted by: spidey07
Originally posted by: jpeyton
The bottom 95% drive the American economy.

The bottom 95%, through sheer numbers, buy nearly all the consumables, the cars, consumer electronics, gas, groceries, homes, vacations, etc.

If the bottom 95% is doing better, they spend more, and the companies selling those goods do better. If the bottom 95% struggle, the economy struggles.

Trickle down DOESN'T WORK. Build it strong from the foundation up.
The bottom don't pay taxes anyway. We need to tax them more for what they cost us.

Obama's tax plan is nothing more than wealth redistribution. He has even said himself to Joe the plumber.
They may not pay federal taxes, but they pay something in the form of sales and other state/city/local taxes. Just to get that straight.
So our federal government gets screwed, so then what? We take more from the rich to make that up.
 

JS80

Lifer
Oct 24, 2005
26,260
4
81
Originally posted by: BigDH01
Originally posted by: Atomic Playboy
Originally posted by: Fern
Top 5% pay 57% of income taxes

So, the other 95% pay 43% (Ed. fixed your math for you).
Honest question (to which I don't know the answer): How much money do the rich control compared to the poor? Do the top 5% have 5% of the overall wealth in the country, or do they have 50% (or more)?

Overly simplistic scenario: Imagine a system with 100 people. 99 of these people have $1,000.00. 1 person has $1,000,000.00. 1% of the population holds 91% of the wealth. Would we expect that person to pay 1% of the taxes or 91%? If we phrase it as "1% of the population pays 91% of the taxes," it seems incredibly unfair. But given the distribution of wealth, that would be the fair share...

So, what is the distribution of wealth in the top 5% versus the remaining 95% in our country?
Don't let anyone here fool you, the rich pay more in taxes because they control the vast amount of the wealth. You can read more here.

In terms of wealth, the top quartile has 87% of this country's wealth. The bottom quartile accounts for 0%. Income is not quite as bad as the top quartile account for 65% of total income where the bottom quartile accounts for 4%. There is a real reason so many people don't pay taxes. You can't squeeze blood from a turnip.
Why shouldn't people who earned the wealth be able to "control it"? And what do you mean by "control the wealth"? Why should people who don't earn anything control other people's money?
 

JS80

Lifer
Oct 24, 2005
26,260
4
81
Originally posted by: Throckmorton
Originally posted by: jpeyton
The bottom 95% drive the American economy.

The bottom 95%, through sheer numbers, buy nearly all the consumables, the cars, consumer electronics, gas, groceries, homes, vacations, etc.

If the bottom 95% is doing better, they spend more, and the companies selling those goods do better. If the bottom 95% struggle, the economy struggles.

Trickle down DOESN'T WORK. Build it strong from the foundation up.
Exactly. Isn't that what economic stimulus packages are all about? Conservatives are quick to point out that the top brackets create jobs, but they ignore the source of the business that they actually do.

But also, the rich don't create jobs as charity, like emperors on high putting the minions to work. They hire people to do jobs that are worth more to them than the salaries they pay out. The idea of not hiring or firing because your taxes are higher seems like a fallacy to me.

"Oh dear, my taxes went up, so I better fire my employees who cost more than they benefit me. Why oh why did I not fire these costly employees when my taxes were low so that I'd be even richer? I must lack common sense!"
Wrong. It's entrepreneurs that drive the economy. The "low class" are just riding the coattails of someone who's willing to risk their money and provide them a job.
 

JS80

Lifer
Oct 24, 2005
26,260
4
81
Originally posted by: heyheybooboo
Originally posted by: BigDH01
Originally posted by: Fern
Originally posted by: Atomic Playboy
Originally posted by: Fern
Top 5% pay 57% of income taxes

So, the other 95% pay 43% (Ed. fixed your math for you).
Honest question (to which I don't know the answer): How much money do the rich control compared to the poor? Do the top 5% have 5% of the overall wealth in the country, or do they have 50% (or more)?
-snip-
We do not know. There is no way to know. We don't ask our people/citizens for that data.

It's private information.

Anybody who says they "know" is only guessing.

(Note: Taxable income does not neccesarily = rich people. I.e., you can have a ton of wealth without much income showing up on your tax return, or vice-versa.)

Fern
Yes, we do. The Federal Reserve has the Survey of Consumer Finances. The sample size is relatively small but not inconsequential. You can read more here.


That would be correct. The Survey for 2007 should be available in early 2009. There are also the Statistics of Income (SOI) from the Internal Revenue Service.


The FUD factor is off the chart in this thread - but that is to be expected. Let's start with the Biggest Lie:

Originally posted by: ProfJohn
The gap between rich and poor grew under Clinton and shrank under Bush.
The United States has witnessed only one such time of unequal wealth distribution than that during the term of George W. Bush ? 1928. Period. To argue otherwise is utter crap. There has been a huge redistribution of wealth upward in the United States over the last 8 years not only in income distribution but net worth.

Not only is the middle class being 'squeezed' in income distribution, net worth is declining as the value of residential real estate and personal vehicles fall.

I laff at the pranksters who whine that the 'rich' pay 50%+ of income taxes. That's because they have 50%+ of all income and rising as the percentage of income tax revenue has fallen over the last 8 years. The top 1% in the Untied States control 35% of net worth - the top 5% over 60% of net worth - the top 10% control 75% of the net worth in the United States.

The 'middle class' (or 70% of the population) control 25% of net worth. Twenty percent of the United States population has zero or negative net worth.


Increase in Individual Income Tax Receipts - Presidential Term

21.42% Increase in Individual Income Tax Receipts - George Bush
111.03% Increase in Individual Income Tax Receipts - Bill Clinton


Individual Income Tax Receipts (millions of dollars)

2008 . . . . . . $1,219,661
2007 . . . . . . $1,163,472
2006 . . . . . . $1,043,908
2005 . . . . . . . .$927,222
2004 . . . . . . . .$808,959
2003 . . . . . . . . $793,699
2002 . . . . . . . . $858,345
2001 . . . . . . . . .$994,339

2000 . . . . . . . $1,004,462
1999 . . . . . . . . . $879,480
1998 . . . . . . . . . .$828,586
1997 . . . . . . . . . .$737,466
1996 . . . . . . . . . .$656,417
1995 . . . . . . . . . .$590,244
1994 . . . . . . . . . . $543,055
1993 . . . . . . . . . .$509,680



% Increase in Nominal GDP - Presidential Term
GDP (in billions of dollars)

1993 - - - $6,657.4
1994 - - - $7,072.2
1995 - - - $7,397.7
1996 - - - $7,816.9
1997 - - - $8,304.3
1998 - - - $8,747.0
1999 - - - $9,268.4
2000 - - - $9,817.0

2001 - - - $10,128.0
2002 - - - $10,469.6
2003 - - - $10,960.8
2004 - - - $11,685.9
2005 - - - $12,433.9
2006 - - - $13,194.7
2007 - - - $13,807.6
2008 - - - $14,400 (est)


% Increase in Nominal GDP - Presidential Term

47.46% Increase in GDP - Bill Clinton
42.18% Increase in GDP - George Bush (and declining)


Feel free to explain as to the meaning of GDP increasing 42% while individual income tax receipts only increase 21% in the last 8 years. Extra credit will be given if your response includes reference to the doubling of the Federal Debt over the last 8 years with an 'IOU' obligation to social security now approaching $3 trillion.

VooDoo Economics does not work.

Tax cuts, tax cuts, tax cuts, tax cuts, tax cuts is not a coherent fiscal policy.
Since "tax cut tax cuts" doesn't work you're going to assume "tax increase tax increase" is the way to go?
 

heyheybooboo

Diamond Member
Jun 29, 2007
6,278
0
0
Originally posted by: DLeRium
Originally posted by: jpeyton
The bottom 95% drive the American economy.

The bottom 95%, through sheer numbers, buy nearly all the consumables, the cars, consumer electronics, gas, groceries, homes, vacations, etc.

If the bottom 95% is doing better, they spend more, and the companies selling those goods do better. If the bottom 95% struggle, the economy struggles.

Trickle down DOESN'T WORK. Build it strong from the foundation up.
Perhaps but if they can't drive anything, then that's pointless. Giving handouts doesnt work either. Look at Bush's 2001 tax rebate checks. Then look at this year's rebate checks. What happened? Obama's tax breaks for the poor are really handouts and giveaways. Sure its great to help the middle class, but when many don't pay income tax already then what?
Standard economic theory holds that those 'rebate' checks bounce around the economy 7 times

And btw - if you make minimum wage and have no dependents (claim yourself) this is what your paycheck looks like ...

Gross pay: $286.00
Federal income tax: $17.80
Social Security: $17.73
Medicare: $4.15
North Carolina: $14.00
Net pay (take home): $232.32


Payroll Withholding Tax Calculator

There is a withholding of 10% (or 6% if you claim yourself) for Federal tax unless the individual pays no withholding the previous year (no tax liability) and files an updated W-4 claiming exempt status.

Originally posted by: JS80
Since "tax cut tax cuts" doesn't work you're going to assume "tax increase tax increase" is the way to go?
You avoided my question.

Here. I'll type it very slowly for you ...

Feel free to explain as to the meaning of GDP increasing 42% while individual income tax receipts only increase 21% in the last 8 years. Extra credit will be given if your response includes reference to the doubling of the Federal Debt over the last 8 years with an 'IOU' obligation to social security now approaching $3 trillion.

VooDoo Economics does not work.
 

OCGuy

Lifer
Jul 12, 2000
27,220
26
91
Originally posted by: heyheybooboo
Originally posted by: DLeRium
Originally posted by: jpeyton
The bottom 95% drive the American economy.

The bottom 95%, through sheer numbers, buy nearly all the consumables, the cars, consumer electronics, gas, groceries, homes, vacations, etc.

If the bottom 95% is doing better, they spend more, and the companies selling those goods do better. If the bottom 95% struggle, the economy struggles.

Trickle down DOESN'T WORK. Build it strong from the foundation up.
Perhaps but if they can't drive anything, then that's pointless. Giving handouts doesnt work either. Look at Bush's 2001 tax rebate checks. Then look at this year's rebate checks. What happened? Obama's tax breaks for the poor are really handouts and giveaways. Sure its great to help the middle class, but when many don't pay income tax already then what?
Standard economic theory holds that those 'rebate' checks bounce around the economy 7 times

And btw - if you make minimum wage and have no dependents (claim yourself) this is what your paycheck looks like ...

Gross pay: $286.00
Federal income tax: $17.80
Social Security: $17.73
Medicare: $4.15
North Carolina: $14.00
Net pay (take home): $232.32


Payroll Withholding Tax Calculator

There is a withholding of 10% (or 6% if you claim yourself) for Federal tax unless the individual pays no withholding the previous year (no tax liability) and files an updated W-4 claiming exempt status.

Right. But then guess who gets a refund check?
 

DLeRium

Lifer
Feb 19, 2001
20,158
20
81
Originally posted by: heyheybooboo
Originally posted by: DLeRium
Originally posted by: jpeyton
The bottom 95% drive the American economy.

The bottom 95%, through sheer numbers, buy nearly all the consumables, the cars, consumer electronics, gas, groceries, homes, vacations, etc.

If the bottom 95% is doing better, they spend more, and the companies selling those goods do better. If the bottom 95% struggle, the economy struggles.

Trickle down DOESN'T WORK. Build it strong from the foundation up.
Perhaps but if they can't drive anything, then that's pointless. Giving handouts doesnt work either. Look at Bush's 2001 tax rebate checks. Then look at this year's rebate checks. What happened? Obama's tax breaks for the poor are really handouts and giveaways. Sure its great to help the middle class, but when many don't pay income tax already then what?
Standard economic theory holds that those 'rebate' checks bounce around the economy 7 times

And btw - if you make minimum wage and have no dependents (claim yourself) this is what your paycheck looks like ...

Gross pay: $286.00
Federal income tax: $17.80
Social Security: $17.73
Medicare: $4.15
North Carolina: $14.00
Net pay (take home): $232.32


Payroll Withholding Tax Calculator

There is a withholding of 10% (or 6% if you claim yourself) for Federal tax unless the individual pays no withholding the previous year (no tax liability) and files an updated W-4 claiming exempt status.

Originally posted by: JS80
Since "tax cut tax cuts" doesn't work you're going to assume "tax increase tax increase" is the way to go?
You avoided my question.

Here. I'll type it very slowly for you ...

Feel free to explain as to the meaning of GDP increasing 42% while individual income tax receipts only increase 21% in the last 8 years. Extra credit will be given if your response includes reference to the doubling of the Federal Debt over the last 8 years with an 'IOU' obligation to social security now approaching $3 trillion.

VooDoo Economics does not work.
Bush's 2001 rebates didnt work so well. That's why he pushed harder for the cuts that came in 2003. Marginal rates cuts have more of an effect. Now whether the effect is good or bad is up to you to decide.

Don't expect much from the 2008 rebates either.

Although press stories emphasizing that the rebates induced additional consumer spending were technically correct, they missed the important point that the spending rise was very small in comparison to the size of the tax rebates.
 

First

Lifer
Jun 3, 2002
10,518
271
136
The following is a repost from an email discussion I had less than two years ago, but still pertinent data nonetheless.

Originally posted by: Evan Lieb

The Congressional Budget Office shows that the lowest and second lowest classes of Americans have seen an aggregate increase of 4.7% in their incomes between 1979 and 2003, while the highest and second highest tiers of Americans have seen an aggregate increase of 28.1%. This means that the richest people in the U.S. have been getting richer at a pace nearly six times that of the poorest people in the U.S. What makes this case most compelling is that these statistics are of the lowest and second lowest earners and highest and second highest earners, not just the very bottom and very top earners, where the discrepancy in increased income is 0.7% for the poor and 49.7% for the rich. In other words, only one class, the middle class, is left out of my calculations of 4.7% for the lower classes and 28.1% for the upper classes, which gives tremendous weight in terms of just how many Americans this inequality is affecting.

Also, in the mid-1970s, the top 1% of all income earners held 20% of the wealth in the U.S. Nowadays the top 1% of all income earners hold 33% of all wealth in the U.S. Growing inequality in income distribution can also be found in data collected by the U.S. Census Bureau in 2005, which found that those in the top 20% saw their pretax income rise by 52% while those in the bottom 20% of earners saw their pretax income rise by only 8% between 1978 and 2001 (www.census.gov). There is a remarkable 46% difference in relative income increases, which Democrats conclude is proof positive that growing inequality is an issue that requires immediate attention.

However, the case can be somewhat made for inequality not significantly rising over the past several decades. These people would argue that while those at the higher echelons are seeing their incomes increase at a much faster pace than those with low incomes, people with low incomes are still seeing their incomes increase over time, just at a slower pace. For example, the case made above shows that the bottom 20% of earners saw their income rise by 8% between 1978 and 2001. These people would argue this is obvious progress and that, as we will see later, taxes will make up for this discrepancy.

On that point, they would argue that an equalizing effect has taken place when noting the fact that the top 10% of income earners are taxed at a rate of 65.7%, up significantly from 46.7% in 1960. What this means is that, while inequality is still rising over the past 3-4 decades, the upper classes? higher rate of income growth (cited earlier as 4.7% for the poor and 28.1% for the rich) is being mitigated with 19% higher taxes on the top 10% of the nation?s earners.

My conclusion is that there seems to be a good deal more support for the notion that inequality is increasing at a rate noticeable enough that it must be addressed more urgently before it gets out of hand. The data on these issues of inequality speak for themselves, where large percentages of the U.S. population are seeing their incomes increase, but at a much lower rate than the affluent. There?s also the issue of an accumulation of total wealth in the U.S. rising near levels not seen since the 1920?s and 1930?s, eras known for their inequality and hardship, which eventually led to FDR?s New Deal federal programs. I think it's quite clear that, in the end, inequality must be mitigated as much as possible.
 

alphatarget1

Diamond Member
Dec 9, 2001
5,710
0
76
No, not when our economy is in a sh!thole. Government shouldn't raise taxes when the economy is bad.
 

Cattlegod

Diamond Member
May 22, 2001
8,687
1
0
I'm a supporter of trickle down, but I wonder if any studies have been done to show that they are essentially equal. What I mean is that if you tax the rich/businesses more, they hire less but the lower people spend more so they rich can hire more and make more money. Or if you tax the rich/business less, they hire more, creating more jobs for lower income people and the now the lower income have more jobs and income thus buy more.

Seems like it doesn't matter what way it is executed so long as it is done in moderation -- is there a tipping point somewhere?
 

BigDH01

Golden Member
Jul 8, 2005
1,627
73
91
Originally posted by: JS80
Originally posted by: BigDH01
Originally posted by: Atomic Playboy
Originally posted by: Fern
Top 5% pay 57% of income taxes

So, the other 95% pay 43% (Ed. fixed your math for you).
Honest question (to which I don't know the answer): How much money do the rich control compared to the poor? Do the top 5% have 5% of the overall wealth in the country, or do they have 50% (or more)?

Overly simplistic scenario: Imagine a system with 100 people. 99 of these people have $1,000.00. 1 person has $1,000,000.00. 1% of the population holds 91% of the wealth. Would we expect that person to pay 1% of the taxes or 91%? If we phrase it as "1% of the population pays 91% of the taxes," it seems incredibly unfair. But given the distribution of wealth, that would be the fair share...

So, what is the distribution of wealth in the top 5% versus the remaining 95% in our country?
Don't let anyone here fool you, the rich pay more in taxes because they control the vast amount of the wealth. You can read more here.

In terms of wealth, the top quartile has 87% of this country's wealth. The bottom quartile accounts for 0%. Income is not quite as bad as the top quartile account for 65% of total income where the bottom quartile accounts for 4%. There is a real reason so many people don't pay taxes. You can't squeeze blood from a turnip.
Why shouldn't people who earned the wealth be able to "control it"? And what do you mean by "control the wealth"? Why should people who don't earn anything control other people's money?
Control in this case is analogous to "own." And there are a multitude of reasons why the concentration of wealth is a bad idea.

To start, especially for the free market capitalists here, you might want to look up the Heckscher-Ohlin model of international trade. Because the US is factor rich in capital, capital does very well with free trade. However, most Americans have little to no capital. This applies even more so if you consider that most Americans' only real equity is their home, which is now an extremely illiquid asset. Those Americans that labor for a living will get destroyed by countries that are labor rich, such as China, as they can produce goods more efficiently.

Secondly, money is not just a cotton cloth with pretty ink. Money represents much more. Money is the means to influence, power, and control. To concentrate so much power and control in the hands of very few people is to replace one governing entity with another.

Thirdly, we have no protection from the ruling class. As much as conservatives despise the government, at least we have a constitution to protect us from it. Many corporations (and therefore board of directors) work with budgets and power that many countries would envy. The government is our only counter-valence to protect us from the ruling class. By promoting the concentration of unregulated power, you put your fate in the hands of people who are not personally accountable to you. I'd choose the entity that at least is supposed to have our united interests at heart.

Fourth, history is littered with societies that failed when too much power was concentrated in the hands of too few. Do you really think it's a good idea to have a small class of rulers and a large class of peasants? The funny thing you'll see is that the true rich and ruling class don't constantly complain about the poor or welfare. The truly powerful understand that it is better to ensure that the poor have food and distraction rather than discover that the only thing that stands between your home and an armed angry mob is a piece of paper that claims you are the owner.

Fifth, since you didn't read my article, I'm assuming you also ignored my post. The bottom quartile of wage earners only earned 4% of all income. They did earn something. These are the working poor. Their labor contributes to A) their corporations and B) their society. In some ways, handing capital to these people is acknowledging that they are going to get f**ked by the international free market while taking capital from people who are benefiting greatly. This is done for the aforementioned reasons. Judging by the pace of wealth concentration, I'd hardly consider taxation to be a huge burden.


If you'll notice, the constant rambling of people who hate wealth redistributions usually comes from those firmly in the middle-class. It's a ruse. The middle-class, along with the working class, has fared worse since the adoption of trickle down economics. Faster than the wealth pie has been growing, the rich have been gobbling it up. In our international economy, people who have no capital in our country are placed in an extreme disadvantage. Taking some of that wealth (certainly not a crippling amount) and giving it to those without capital is a method to promote the general welfare.

Listen, I despise the idea of "welfare queens" abusing the system and leeching off the system. People should not be rewarded for having children, etc. I just recognize the reality of the present situation. The poor aren't in control, the wealthy are. My cause is the cause of the working poor and the middle-class and we have far more to fear from the ultra wealthy than we do from welfare recipients. Jesus, look at how their poor decisions have almost sent our country into another depression. I also recognize that a society where wealth is so unevenly distributed is a society destined to failure or adopt slavery.

Besides, the discussion is moot. Even under a flat tax system, the rich are going to end up paying most of the federal tab. Simple mathematics. And we do need at least some federal tax, right?
 

Xellos2099

Platinum Member
Mar 8, 2005
2,277
13
81
Wow, for once we can have an intellect discussion here. Here is my 2 cent. I believe that during economy hardship, increasing tax rate made the situation worse most of the time. I will give an example, in Chicago, we have the highest sale tax rate in the whole country, 10.25%. If one were to made a major purchase like a HDTV or furniture, people would try to get out of the Cook Country limit for the purchase so they can save on the tax. Something cost $1,000.00 would cause $102.5 tax in Cook county, not a pretty sight. Base on this, we can tell higher tax rate would only push business opportunity away into other. The same can be apply to income tax, if we increase the tax rate on the business that with a profit of $250,000.00 or above, they would react in a way to keep their profit high in order to please the stockholder or the value of the stock would tumble. They would try laiding off people or made the price of the goods higher in order to cover the cost in the tax. Which is not really good to the already slow economy.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,591
5
0
Originally posted by: Throckmorton
Originally posted by: spidey07
Originally posted by: jpeyton
The bottom 95% drive the American economy.

The bottom 95%, through sheer numbers, buy nearly all the consumables, the cars, consumer electronics, gas, groceries, homes, vacations, etc.

If the bottom 95% is doing better, they spend more, and the companies selling those goods do better. If the bottom 95% struggle, the economy struggles.

Trickle down DOESN'T WORK. Build it strong from the foundation up.
The bottom don't pay taxes anyway. We need to tax them more for what they cost us.

Obama's tax plan is nothing more than wealth redistribution. He has even said himself to Joe the plumber.
What part of "drive the economy" do you not understand?
Why give another handout to those that are all ready getting handouts?
The small amount is not being turned into spending that will create new jobs and it is not being pooled with other handouts to increase economic activity.

How many plan on living on handouts because they know that the government will provide a safety net?

 

fskimospy

Elite Member
Mar 10, 2006
73,670
25,723
136
Originally posted by: Genx87
I do find it interesting our income tax system has become more progressive over the ~20 years yet the gap in wealth continues to grow at ever faster rates while wages remain stagnant.
Our tax system has not become more progressive. I'm not sure if you were the one trying to argue this in another thread a few months back, but it's simply not true.

As far as trickle down economics goes, it's been widely discredited for going on two decades. Simply put, giving rich people more money has not made the rest of us more rich. Shocking, I know.
 

Xellos2099

Platinum Member
Mar 8, 2005
2,277
13
81
Well, gave more money to the rich is not suppose to made normal people richer. Rather, it is to promote business growth for the rich so they would hire more people, thus increase employment in the working class.
 

Genx87

Lifer
Apr 8, 2002
41,063
495
126
Originally posted by: eskimospy
Originally posted by: Genx87
I do find it interesting our income tax system has become more progressive over the ~20 years yet the gap in wealth continues to grow at ever faster rates while wages remain stagnant.
Our tax system has not become more progressive. I'm not sure if you were the one trying to argue this in another thread a few months back, but it's simply not true.

As far as trickle down economics goes, it's been widely discredited for going on two decades. Simply put, giving rich people more money has not made the rest of us more rich. Shocking, I know.
The overall system may not when you include capital gain but the federal income tax system has. The % of federal income tax recipts paid for by the lower income earners is decreasing and will continue to do so under Obama when he passes his refundable credits.

And nowhere in my response was I arguing about trickle down or supply side economics.
 

bctbct

Diamond Member
Dec 22, 2005
4,868
1
0
Originally posted by: Xellos2099
Well, gave more money to the rich is not suppose to made normal people richer. Rather, it is to promote business growth for the rich so they would hire more people, thus increase employment in the working class.

So if a plumbing company that has 10 drains to clean each day, gets a tax cut, and hires more plumbers to clean the same 10 drains?

NOPE

imo tax breaks turn into profit not jobs.
 

BigDH01

Golden Member
Jul 8, 2005
1,627
73
91
Originally posted by: Genx87
Originally posted by: eskimospy
Originally posted by: Genx87
I do find it interesting our income tax system has become more progressive over the ~20 years yet the gap in wealth continues to grow at ever faster rates while wages remain stagnant.
Our tax system has not become more progressive. I'm not sure if you were the one trying to argue this in another thread a few months back, but it's simply not true.

As far as trickle down economics goes, it's been widely discredited for going on two decades. Simply put, giving rich people more money has not made the rest of us more rich. Shocking, I know.
The overall system may not when you include capital gain but the federal income tax system has. The % of federal income tax recipts paid for by the lower income earners is decreasing and will continue to do so under Obama when he passes his refundable credits.

And nowhere in my response was I arguing about trickle down or supply side economics.
Yes, this is because wealth inequality is growing more extreme. As more wealth is concentrated in fewer hands, fewer people will comprise the bulk of federal taxation. As wages for middle and lower income Americans remain stagnant or decline, they will be paying a lesser percentage of federal taxes. This has nothing to do with tax structure, it merely speaks to wealth inequality.

The tax structure itself has grown more regressive.

In other words, the tax structure has grown more regressive and wealthy inequality is growing rapidly.


 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
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Originally posted by: bctbct
Originally posted by: Xellos2099
Well, gave more money to the rich is not suppose to made normal people richer. Rather, it is to promote business growth for the rich so they would hire more people, thus increase employment in the working class.

So if a plumbing company that has 10 drains to clean each day, gets a tax cut, and hires more plumbers to clean the same 10 drains?

NOPE

imo tax breaks turn into profit not jobs.
Those that play the tax credit game, hope that if the credit is for another plumber, the company will go out and find an extra few drains for that plumber.

 

Fern

Elite Member
Super Moderator
Sep 30, 2003
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Originally posted by: heyheybooboo
Originally posted by: BigDH01
Originally posted by: Fern
Originally posted by: Atomic Playboy
Originally posted by: Fern
Top 5% pay 57% of income taxes

So, the other 95% pay 43% (Ed. fixed your math for you).
Honest question (to which I don't know the answer): How much money do the rich control compared to the poor? Do the top 5% have 5% of the overall wealth in the country, or do they have 50% (or more)?-snip-
We do not know. There is no way to know. We don't ask our people/citizens for that data.

It's private information.

Anybody who says they "know" is only guessing.

(Note: Taxable income does not neccesarily = rich people. I.e., you can have a ton of wealth without much income showing up on your tax return, or vice-versa.)

Fern
Yes, we do. The Federal Reserve has the Survey of Consumer Finances. The sample size is relatively small but not inconsequential. You can read more here.


That would be correct. The Survey for 2007 should be available in early 2009. There are also the Statistics of Income (SOI) from the Internal Revenue Service.
-snip-
I still contend we do not have the data to answer Atomic Playboy question.

1st is only a survey.

But the real problems are much deeper.

When you get to wealthy preople, the picture is very highly complicated for a number of reasons:

1. Who owns the assets?

Unlike most of us, with stock accounts and a home or two that we own in our own name, Their assets are usually spread out through many different kinds of entities. This is done for estate tax and liability reasons, among others.

An example would be irrevocable trusts. While we might consider those assets "theirs", legally they are not. They won't show up on any form/survey. Technically, we might consider their beneficial interest as their property, but it will be valued very rarely (like upon death or gift) and is rather complicated. We'll never be able to get that quantified.

2. Closely held corporations etc

Assets held in corps or LLC's ("C" and "S" types) and partnerships; and I don't mean publically traded as those values are readily obtained. But closely held corps, and these are extremely difficult to value. While some value for their stock would be included, if that outside value (the stock) matched up with the inside value (net assets held within the corporate entity) it would be a miracle. Inother words, the combined value of the outstanding shares would not likely equal the value of (net) assets held within the company.

3. What value to use?

Book/cost vs FMV. While an age old controversy, we in the US still mandate book or historical cost accounting in finances. I.e., even if there were NO seperate entity complications, the only available value for assets for assets (in most cases) in the cost value; again if that matched actuall FMV is would be a miracle.

3. Who paid what in taxes?

Many of the sperate legal vehicles used to *hide* or protect assets pay their own income taxes. Even if you could somehow allocate all those asets held with in to an actual person, it would be another tremendous task to allocate all those entities tax payment further to the individuals.

BTW: That survey goes to the fed, no? Well they can't get individual IRS/tax info as it is illegal.

I've worked in a number of other countries, we are by far the most likely to employ complicated structure.

Many other countries have a wealth tax in addition tp income tax. The wealth tax is part of the tax return. Nothwithstanding the ownership and valuation complications, they have a pretty convenient and effective method to determine the data Atomic Playboy asks about. We simply don't. The best we have are guesses.

Fern
 

Muse

Lifer
Jul 11, 2001
31,762
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I like what he's saying will be his tax policies. I'm not so sure about his health care proposals. However, I think he may be taking the expedient tack on health care. He doesn't want to get up the dander of the insurance industry or the AMA, now does he? We shall see what transpires.
 

heyheybooboo

Diamond Member
Jun 29, 2007
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Originally posted by: Fern
.....

When you get to wealthy preople, the picture is very highly complicated for a number of reasons:
....

2. Closely held corporations etc

Assets held in corps or LLC's ("C" and "S" types) and partnerships; and I don't mean publically traded as those values are readily obtained. But closely held corps, and these are extremely difficult to value. While some value for their stock would be included, if that outside value (the stock) matched up with the inside value (net assets held within the corporate entity) it would be a miracle. Inother words, the combined value of the outstanding shares would not likely equal the value of (net) assets held within the company.

3. What value to use?

Book/cost vs FMV. While an age old controversy, we in the US still mandate book or historical cost accounting in finances. I.e., even if there were NO seperate entity complications, the only available value for assets for assets (in most cases) in the cost value; again if that matched actuall FMV is would be a miracle.

3. Who paid what in taxes?

Many of the sperate legal vehicles used to *hide* or protect assets pay their own income taxes. Even if you could somehow allocate all those asets held with in to an actual person, it would be another tremendous task to allocate all those entities tax payment further to the individuals.

BTW: That survey goes to the fed, no? Well they can't get individual IRS/tax info as it is illegal.

....
I think the issue of a closely held c corp is that it most likely carries substantial assets and unrealized gains that have most likely never been taxed - simply carried forward for years. Even with declining real estate values this year major assets built 10 or 20 years ago are being written off at their original basis (except for those that may have fallen in the whole 1980's ACRS stuff). The asset may have 1/25 of the original 1988 value left on the books today in a closely held corp because they have depreciated the actual cost over the last 20 years. That thang is worth a boatload, now.

IIRC, the slick move 20 years ago would have been to hold the asset personally and lease it back to the corp. The lease payments retire your debt and the income is offset by depreciation and interest on the loan. Upon disposal the individual would only be taxed at the current capital gains rate on the accelerated basis and wouldn't have to deal with the 'double taxation' c corp thing.

Most likely the decision was made years ago not to convert to s status. Everybody has their own strategies. I tend to want to take my tax 'bite' now because you never know what the future holds - but I go the other way, too. I've got a little of that useless mountain dirt in the Blue Ridge that I bought 20+ years ago. If you're from the western piedmont you know how that's going.

If I was smart I'd bundle it up, unload it, take my tax bite and move on, but that's not gonna happen. I could say "Obama's going to raise my taxes 33%!" but all things being relative that's nothing compared to the gains I hope to realize down the road.

btw - The Fed study is pretty good - as is the IRS information. The 'information' is available in the way that it is bundled without identification of any specific individual.
 

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