NationStates Jolt Archive

This came up in a thread about Katrina. Apparently there are some that think that the rich actually pay fewer income taxes than the middle class. Of course, to get to that point, the middle class was redefined to include wage-earners that make up to $132,000/year and the calculations need to be fudged.

If you're interested in that argument, look at this thread (http://forums2.jolt.co.uk/showpost.php?p=9556229&postcunt=220).

Is there really proof that the top 10 percent of wage earners?

If you look at the data in the CBO reference (http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0) from the thread above, you will find these conclusions. Table II, Share of Individual Income Taxes shows that the top quintile pays 79 percent of all individual income taxes. in 1999. The top 10 percent of wage-earners pays 63 percent of all individual income taxes. The same table, Share of Total Federal Taxes, shows that the top quintile pays 65 percent of federal taxes and the top 10 percent pays 49 percent of federal taxes.

So, the wage earners making the most money, do indeed, pay a disproportionate percentage of federal taxes, including payroll,etc. They pay a majority of all federal income taxes.

I've got to get on a plane now, but I'll check in later to see if this has drawn any interest. Hopefully the antagonists in the Katrina thread will figure out where this one is and bring the discussion out where it belongs.

The rich ought to pay considrably less tax anyway, since they work remarkably hard, but see little of their tax money, which is given to those who lack the inclination to work.

The rich ought to pay considrably less tax anyway, since they work remarkably hard, but see little of their tax money, which is given to those who lack the inclination to work.

Maybe, but some people that are STUPIDLY rich don't work very hard, having won the lottery or having shares in a company with an enormous turnover. You get the idea.
But the amount of tax you pay is relative to the amount of money you earn per annum - or at least it is in Britain. There are two different tax "brackets," the 21% and the 40%.
For arguements sake, if you fix the 21% bracket at £50,000/annum and the 40% bracket at £100,000/annum*

So, the first £5,000 is untaxable. Then you pay tax at 21% on the first £45,000, and then 40% on the remaining £50,000. So, the more you earn, the more tax you pay. Makes sense to me.

*I know these aren't the actual brackets, but as I don't know what they are, I'll use these for ease and simplicity.

Oh, and I agree that taxes paid do benefit those who can't be bothered to work. That does anger me.

But if you earn £1,000,000 per annum, your take home pay is still going to be something around £500,000 - £600,000 per annum. Not that bad if you ask me.

their share of Texas? :confused:

their share of Texas? :confused:

Where does it say Texas?

Where does it say Texas?
In my head for a minute

Where does it say Texas?

It says Texas on a whole buncha signs in and around Houston. But then, you'd expect that. :D

It's actually not as bad as it looks. You can't just compare the % of taxes that come from a particular percentile. You also have to look at the % of the wealth they own of the country.

That is, if I myself own 50% of a country's wealth, and the other 50% is spread out among 200 million people, what should I pay in taxes? The obvious answer is 50% of the government budget. I own half the wealth in the country, so I pay half the operating costs.

If you look at it from this perspective, taxes for the "rich" aren't really too bad.

This is also why a flat tax wouldn't work under such a system as we have now. A flat tax can only work when the government budget is capped. (For instance, we decide that everybody gets taxed at 10%, and whatever we bring in is our budget for the year.) Under the system now, where the government just pulls a number out of the air for how much they want to spend, flat taxes benefit the rich. I could own 50% of the country's wealth and end up paying a low % of the bill, so to speak.

Oh, and I agree that taxes paid do benefit those who can't be bothered to work. That does anger me.

But if you earn £1,000,000 per annum, your take home pay is still going to be something around £500,000 - £600,000 per annum. Not that bad if you ask me.

But entirely ridiculous when one considers that th majority of tht money is used for purposes that one never sees. Why should the rich aid the poor financially when the poor deride them, and a reasonable proportion of the needy simplyak the inclination to work and prefer to live on benefits. If the supposedly dprived can afford sky televison, they do not need benefits or free healthcare.

rich deserive to keep there money

But entirely ridiculous when one considers that th majority of tht money is used for purposes that one never sees. Why should the rich aid the poor financially when the poor deride them, and a reasonable proportion of the needy simplyak the inclination to work and prefer to live on benefits. If the supposedly dprived can afford sky televison, they do not need benefits or free healthcare.
Hold it right there.

All the poor lack inclination to work? That is the most horrible generalization ever. If anything I think they have more inclination to work.

So, the first £5,000 is untaxable. Then you pay tax at 21% on the first £45,000, and then 40% on the remaining £50,000. So, the more you earn, the more tax you pay. Makes sense to me.


It's never made sense to me, even before I was in the top tax bracket here in Canada - which, incidentally, isn't super high. It really burns my ass that because I work hard, I have to throw a larger percentage of my money away to support other people.

The way that I think would be most fair would be to figure out the minimum people need to essentially survive. A good guide might be the cutoff line below which you'd get welfare. For a single person in Canada, that's about $12000 I think, so for the sake of illustration, the first $12000 you make is tax free.

After that, you pay a flat percentage. There are no deductions or other jiggery-pokery, so for illustration, let's say 25%. Every year the numbers could be adjusted as needed. Not only would it manifestly more fair with everyone paying their share, it would grossly reduce the cost of tax collection.

This way, everyone pays there share, nobody is left hanging with not enough cash to survive, and the person who makes $500,000 a year still pays more ($122,000 in tax) than the guy who makes $13,000 a year ($250 in tax), but they pay the same RATE on their money after the survival deduction... unlike the current system with the $500,000 guy gets raped for 40% of his money while the $13,000 guy consumes all the resources the government can throw at him for free.

The argument that the $13,000 guy's $250 tax bill is more serious to him than the $122,000 tax bill is to the $500,000 guy is specious, in my opinion.

There's a couple of straw men to deal with here before any real discussion can take place (not that I expect any real discussion--straw men are so much easier to topple on both sides).

The first is the myth that the people who receive government assistance are lazy bums who can't be bothered to work, or are welfare queens who drive around in Cadillacs while splurging with their food stamps. That's crap, and the people who started those stories knew it was crap from the moment they started it. The vast majority of people who receive federal assistance are the aged, the displaced, and the disabled. Yes, there are welfare cheats, but they are disproportionately bitched about in comparison to their numbers.

The second has to do with this idea that there's a set of numbers between which we can put middle class Americans. Myrmidonisia complains because the number jumps up to $132,500 a year, and in much of the country, he'd be right to say that that number is high to be considered middle class. But not if he lives in one of the major metropolitan areas of the country.

Home ownership is one of the hallmarks of the middle class, but try buying a house today in Miami or San Francisco or New York or Boston or Houston or Atlanta if your household only brings in $132,500 a year. You'll be lucky to afford a condo in some of those markets. Now in Fayetteville, AR, you can afford a house for half that income--not a McMansion, but a decent, sturdy house. $132,500 could easily be considered wealthy there. My girlfriend and I make $60K a year between us--in some places that would be considered a solid, middle class income, and I confess to having problems believing it isn't, until I look at real estate around here and discover that condos in my neighborhood start at $800K and go up from there.

The US is too large a country with too much variation economically to be able to argue for a one-size-fits-all "who's rich and who's middle-class." But if we use those numbers that everyone seems to grasp for, there is one point--the group I would call the upper middle class, that group near the top of that wage scale, is getting screwed by taxes right now. The ones getting off scot-free are the people at the very top, the top 1% of wage earners, and the people who are clamoring for the end of the estate tax. They're the ones who aren't paying enough.

It's never made sense to me, even before I was in the top tax bracket here in Canada - which, incidentally, isn't super high. It really burns my ass that because I work hard, I have to throw a larger percentage of my money away to support other people.
Well first of all it's not throwing away.

And it's not because you work hard. It's because you earn much.

The very rich always pay less taxes...why Mr. Burns pays $3 a year.

In Ireland anyway the richer get slightly more tax breaks and can get enormous amounts back on things like denistry.
To get braces is expensive anywhere in Ireland the entiret thing will cost just under E5000. My parents have to pay this even tho they are on the lower rate of tax. Meaning they will only 22%tax back instead of 44% which is the higher rate of tax. My dad is self employed, he works harder than anyone I know, but was qute ill in the past few years so our income has reduced. my sister still needs braces tho. Some people on this thread are saying that the rich work harder. This is absurd :mad:

I could own 50% of the country's wealth and end up paying a low % of the bill, so to speak.

No, you'd pay the same percentage as everyone else. If you owned 50% of the wealth, you'd pay essentially 50% of the tax bill... that's why it's called a flat tax.

Currently, in Canada, if you had 50% of the wealth, you'd pay 99% of the tax bill while the whole rest of the country paid the other 1% because you had the audacity to become rich. Of course, then the rest of the people complain when their tax bills jump because you left for Grand Cayman because you got sick of being punished for success.

"Progressive" tax is not fair and doesn't benefit anyone because it encourages you to take your 50% of the wealth to some place that won't tax the bejeezus out of you. It really hoses the people who aren't so much rich as "well-off" because they will pay more tax than they should, but won't be wealthy enough to get up and move to the Caymans and have Swiss bank accounts.

Hold it right there.

All the poor lack inclination to work? That is the most horrible generalization ever. If anything I think they have more inclination to work.

In Britain a considerable amount of the percieved deprived live upon benefits money since it facilitates an easier lifestle than working. I never implicated all the poor as workshy, only those who are capable but refuse to work.

No, you'd pay the same percentage as everyone else. If you owned 50% of the wealth, you'd pay essentially 50% of the tax bill... that's why it's called a flat tax.

Currently, in Canada, if you had 50% of the wealth, you'd pay 99% of the tax *cough*bullshit*cough* bill while the whole rest of the country paid the other 1% because you had the audacity to become rich. Of course, then the rest of the people complain when their tax bills jump because you left for Grand Cayman because you got sick of being punished for success.

"Progressive" tax is not fair and doesn't benefit anyone because it encourages you to take your 50% of the wealth to some place that won't tax the bejeezus out of you. It really hoses the people who aren't so much rich as "well-off" because they will pay more tax than they should, but won't be wealthy enough to get up and move to the Caymans and have Swiss bank accounts.
Progressive tax is very fair on the poor, because they need help. The rich do NOT need help

No, you'd pay the same percentage as everyone else. If you owned 50% of the wealth, you'd pay essentially 50% of the tax bill... that's why it's called a flat tax.

Currently, in Canada, if you had 50% of the wealth, you'd pay 99% of the tax bill while the whole rest of the country paid the other 1% because you had the audacity to become rich. Of course, then the rest of the people complain when their tax bills jump because you left for Grand Cayman because you got sick of being punished for success.

"Progressive" tax is not fair and doesn't benefit anyone because it encourages you to take your 50% of the wealth to some place that won't tax the bejeezus out of you. It really hoses the people who aren't so much rich as "well-off" because they will pay more tax than they should, but won't be wealthy enough to get up and move to the Caymans and have Swiss bank accounts.

If we are capable to relocate to tax havens, possess Swiss bank accounts and withold our finances for ourselves, why shouldn't we? We are derided, abused and lambasted by the poor for daring to be affluent, and yet are obliged to pay for their benefits. The "well-off", or middle classes, are always the true victims of such a taxation system, and amelioration is necessary.

In Britain a considerable amount of the percieved deprived live upon benefits money since it facilitates an easier lifestle than working. I never implicated all the poor as workshy, only those who are capable but refuse to work.

And going by that logic, a considerable amount of the rich are idle shareholders and live off their dividend payments. But it's okay for them to be lazy because they have money, see.

There are lazy people from all classes.

No, you'd pay the same percentage as everyone else. If you owned 50% of the wealth, you'd pay essentially 50% of the tax bill... that's why it's called a flat tax.

Currently, in Canada, if you had 50% of the wealth, you'd pay 99% of the tax bill while the whole rest of the country paid the other 1% because you had the audacity to become rich. Of course, then the rest of the people complain when their tax bills jump because you left for Grand Cayman because you got sick of being punished for success.

"Progressive" tax is not fair and doesn't benefit anyone because it encourages you to take your 50% of the wealth to some place that won't tax the bejeezus out of you. It really hoses the people who aren't so much rich as "well-off" because they will pay more tax than they should, but won't be wealthy enough to get up and move to the Caymans and have Swiss bank accounts.
Dude, there's a hell of a difference between income and wealth, and I suggest you learn it before you spout off about the flat tax again, lest someone point out how uninformed you sound.

In Britain a considerable amount of the percieved deprived live upon benefits money since it facilitates an easier lifestle than working. I never implicated all the poor as workshy, only those who are capable but refuse to work.
Could you give me some figures and not just your opinion?

Progressive tax is very fair on the poor, because they need help. The rich do NOT need help

No, whereas its entirely just to acquire hideous sums of money from the rich, redistribute to the poor, who use it for a variety of frivolous and unnecessary cause.

I prepare income taxes for a living. I did 370 returns last tax season. I can tell you that there are some problems with the tax code but, I don't agree that the rich need to pay any more than they already do. They pay a lot, because capitol gains are taxed at a different rate I had a client who ended up paying 35% of his income in taxes. I also had a family of four that made 60,000 that ended up not paying any taxes at all. I see a lot of families that come in and end up not paying in any taxes (not having any taken out of their checks) and not having any tax liability, you would think they would zero out but no they get a 4,500 refund. (thanks to the eic) I would like to have a flat tax rate or even a consumtion tax, but it's not going to happen since I run intio people who always believe what they are told about the tax situation.

...who use it for a variety of frivolous and unnecessary cause.
It's called living. Buying your sixth Jag isn't exactly necessary either.

And going by that logic, a considerable amount of the rich are idle shareholders and live off their dividend payments. But it's okay for them to be lazy because they have money, see.

There are lazy people from all classes.

My point entirely, in a capitalist nation the affluent deserve to enjoy their wealth, irrespective of the means by which they procured it. And generally, the middle classes are the opposite of lazy, since they neither qualify for benefits nor have the means to live unaided by a vocation.

Currently, in Canada, if you had 50% of the wealth, you'd pay 99% of the tax bill while the whole rest of the country paid the other 1% because you had the audacity to become rich. Of course, then the rest of the people complain when their tax bills jump because you left for Grand Cayman because you got sick of being punished for success.
You're preaching to the choir here. Under our current system, the easiest tax scheme I could come up with would be:

(Your Wealth) / (Total Country's Wealth) * (Government Budget)

And the last two numbers are provided for you. Wouldn't that be easy to fill out come tax time? =P

It's called living. Buying your sixth Jag isn't exactly necessary either.

But if the poor are afforded the means to live beyond their income, why lambast the rich for doing so when they earn that right?

But entirely ridiculous when one considers that th majority of tht money is used for purposes that one never sees. Why should the rich aid the poor financially when the poor deride them, and a reasonable proportion of the needy simplyak the inclination to work and prefer to live on benefits. If the supposedly dprived can afford sky televison, they do not need benefits or free healthcare.
"the poor are poor because they choose to be there"
"the rich are rich because they work harder than the poor"

yeah right :rolleyes:

first off, what a fucking overgeneralisation. second off, the rich tend to start off on their path of getting rich from an advantaged environment (bill gates went to harvard for example; and, yes, this isn't always true etc etc)
i grew up in Winchester - an 'old money' town. hardly anybody there worked particularly hard, but fuck me they were rich. why? because they inherited daddy's few million and the family estates. did they work to earn that? no. do they deserve that? no.

i mean how else do all these rich people, who work so hard, manage to spend so much of their time playing golf for hours on end in the middle of the day ;)

second off, the rich don't pay enough tax.

thridly, everybody deserves a certain minimum level of quality of life. if the poor are too poor to afford this for themselves, then it is societies' job to afford them it. the rich, having more than their fair share of societies' wealth, must pay more than their fair share of tax - hence a progressive tax system.

and does anybody else smell a troll here?

But if the poor are afforded the means to live beyond their income, why lambast the rich for doing so when they earn that right?
What right?

It's actually not as bad as it looks. You can't just compare the % of taxes that come from a particular percentile. You also have to look at the % of the wealth they own of the country.

That is, if I myself own 50% of a country's wealth, and the other 50% is spread out among 200 million people, what should I pay in taxes? The obvious answer is 50% of the government budget. I own half the wealth in the country, so I pay half the operating costs.

If you look at it from this perspective, taxes for the "rich" aren't really too bad.

This is also why a flat tax wouldn't work under such a system as we have now. A flat tax can only work when the government budget is capped. (For instance, we decide that everybody gets taxed at 10%, and whatever we bring in is our budget for the year.) Under the system now, where the government just pulls a number out of the air for how much they want to spend, flat taxes benefit the rich. I could own 50% of the country's wealth and end up paying a low % of the bill, so to speak.

Here in Australia...

Tax rates 2005-06

Taxable income
Tax on this income

$0 – $6,000
Nil

$6,001 – $21,600
15c for each $1 over $6,000

$21,601 – $63,000
$2,340 plus 30c for each $1 over $21,600

$63,001 – $95,000
$14,760 plus 42c for each $1 over $63,000

Over $95,000
$28,200 plus 47c for each $1 over $95,000

- Plus a Medicare Levy of 1.5%

Company Tax is a flat rate of 30%. But sole traders and partnerships are taxed at personal income rates (as the business is not considered a seperate legal entity).

These are the tax rates that the government has wanted to push through.

The average wage earner in Australia tends to fall in the $21 601 to $63 000 bracket. Keep in mind, though that many people are on about $52 000 here in Sydney (the old tax brackets meant there was an awful lot of bracket creep going on...

Essentially, we use a progressive tax system.

But hey, it's better than a regressive one...

My point entirely, in a capitalist nation the affluent deserve to enjoy their wealth, irrespective of the means by which they procured it. And generally, the middle classes are the opposite of lazy, since they neither qualify for benefits nor have the means to live unaided by a vocation.

Give me a list of reasons why the idle rich deserve their money.

So, the wage earners making the most money, do indeed, pay a disproportionate percentage of federal taxes, including payroll,etc. They pay a majority of all federal income taxes.

If one has $1000 and must pay 10%, he still will have $900 to spend on himself. If one has only $100 and must pay 10%, he will have $90 to spend. To me, those who can afford to pay taxes should be happy to contribute since the society makes their wealth possible. Those who have very little should pay far less. Whereas it is true that the rich man in the example will pay $100 while the poor man will pay only $10, the value of that $10 is far more to the poor man than it is to the rich man.

In the US, the system works like this: under Reagan, Bush, and Bush II, massive tax cuts benefitted the rich. The result was federal deficits. To offset those deficits, the federal government expanded regressive taxation by passing the responsibility for federal programs to the states. State taxes are generally regressive (income taxes, sales taxes, gas taxes, etc.). Thus, the poor get poorer while the rich get richer. The American dream of life in the middle class - according to the US Census Bureau - has disappeared for large portions of the US population. Upward mobility (that hope that a poor man can become 'comfortable' if not rich) has all but disappeared. And the gulf between rich and poor, thanks to US government taxation policies, is now as great as it was during the era of the robber barons (Rockefellers, etc.).

Perhaps one should not consider the plight of the poor working class in this country, but I think that economic problems like these eventually cause social upheaval.

thridly, everybody deserves a certain minimum level of quality of life. if the poor are too poor to afford this for themselves, then it is societies' job to afford them it.
Nope.
the rich, having more than their fair share of societies' wealth, must pay more than their fair share of tax - hence a progressive tax system.
How much is a "fair share" of the wealth? Apparently, you're still living under the delusion that wealth is a static quantity to be shifted from one person to another, and when one person has too much wealth he's exploiting the system.

"It's not fair that some people live in mansions while other people only have small apartments! I won't be happy until everyone lives in a mud hut equally!"

"the poor are poor because they choose to be there"
"the rich are rich because they work harder than the poor"

yeah right :rolleyes:

first off, what a fucking overgeneralisation. second off, the rich tend to start off on their path of getting rich from an advantaged environment (bill gates went to harvard for example; and, yes, this isn't always true etc etc)
i grew up in Winchester - an 'old money' town. hardly anybody there worked particularly hard, but fuck me they were rich. why? because they inherited daddy's few million and the family estates. did they work to earn that? no. do they deserve that? no.

i mean how else do all these rich people, who work so hard, manage to spend so much of their time playing golf for hours on end in the middle of the day ;)

second off, the rich don't pay enough tax.

thridly, everybody deserves a certain minimum level of quality of life. if the poor are too poor to afford this for themselves, then it is societies' job to afford them it. the rich, having more than their fair share of societies' wealth, must pay more than their fair share of tax - hence a progressive tax system.

and does anybody else smell a troll here?

I don't dispute that, and generally inheritance tax reduces any inheritance immensely. In a modern society, however, very few are utterly incapable of supporting themselves, and I simply believe that the poor ought to be encouraged to seek employment rather than live off benefits, since the oppurtunities are present. And in what respect do those who inherit money not deserve it? It is theirs by birth right, and if you propose witholding all inheritance money and "redistributing" it, it is somewhat unfair on those who lose the money. They hardly assualted countless other babies in the sky to be born into their family, they ar simply lucky, as are lottery winners.

Nope.

How much is a "fair share" of the wealth? Apparently, you're still living under the delusion that wealth is a static quantity to be shifted from one person to another, and when one person has too much wealth he's exploiting the system.

"It's not fair that some people live in mansions while other people only have small apartments! I won't be happy until everyone lives in a mud hut equally!"
Fair share as in average I think. Because when it comes down to it, we are all equal.

Fair share as in average I think. Because when it comes down to it, we are all equal.
Equal in rights, not equal in ability, motivation, or capabilties.

You have the right to work for your own benefit.
You do not have a right to have food dropped into your mouth.

Give me a list of reasons why the idle rich deserve their money.

-A proportion of the idle rich have worked previously to earn it, and taken early retiremnt to enjoy their money. If they have worked ridiculously hard in earlier years, why punish them now?

-At some point one member of an affluent family worked to obtain their money, why punish them for their work, irrespective of if their descendants elect not to work?

-Any of the lower classes, if in the position of the "idle rich", would seek to retain their money, and feel no compulsion to work, why punish the rich if they are born into money, they didn't ask to be

Equal in rights, not equal in ability, motivation, or capabilties.

You have the right to work for your own benefit.
You do not have a right to have food dropped into your mouth.
It's called a right to live.

bill gates went to harvard for example
Actually, Bill Gates has a worse education than me; he didn't even finish his degree.
Took me 17 months on the dole to find a job (~200 applications, ~50 interviews) afterwards. Just as well I live with my parents (who're quite well off, also fortunately).

I don't understand how people manage to live on the dole (£45 per week?!). I also don't understand why they get free money... After a while I was shipped off to work for a charity. I think this is perfectly fair; People say they are capable of and willing to work, so why should they not be required to work for not-for-profit organisations in return for their benefits?

They get work experience and money with which to survive, charities get free labour. Win-win.

Well, I personally think that it would be more equal if everybody payed a flat tax rate, not the wealthy having a higher tax rate.

It's called a right to live.

Incidentally, what political label would you apply to yourself?

So why should they not be required to work for not-for-profit organisations in return for their benefits?

They get work experience and money with which to survive, charities get free labour. Win-win.
It's called qualification and/or heart for the job

Incidentally, what political label would you apply to yourself?
Somewhere between socialist and communist

It's called a right to live.
No, it's a right to "life". That is, someone can't come and kill you. You have the right to make as much out of yourself as you see fit.

Food/Shelter/Clothing is a product of work. If you want those things, you will have to work for them. You don't simply have a right to them because you showed up on the planet.

"Don't go around saying the world owes you a living. The world owes
you nothing. It was here first." - Mark Twain

Actually, Bill Gates has a worse education than me; he didn't even finish his degree.
Took me 17 months on the dole to find a job (~200 applications, ~50 interviews) afterwards. Just as well I live with my parents (who're quite well off, also fortunately).

I don't understand how people manage to live on the dole (£45 per week?!). I also don't understand why they get free money... After a while I was shipped off to work for a charity. I think this is perfectly fair; People say they are capable of and willing to work, so why should they not be required to work for not-for-profit organisations in return for their benefits?

They get work experience and money with which to survive, charities get free labour. Win-win.

People live off the dole because they recieve henious ums of money for having 7 children and being a single parent.

And the point about the charities is actually relevant, if the poor claim to be willing and capble, why not give them jobs? I was under the impressio that numerous British industries and organisation need labour, and yet there are millions of unemployed.

. In a modern society, however, very few are utterly incapable of supporting themselves


the cost of living in the UK is very high.
but more than that you need to understand that many people who need benefits don't need (or take) them throughout their whole life. people make mistakes, bad shit happens - and when it does there needs to be a suitable safety net for those people to keep living an acceptable standard of life.


and I simply believe that the poor ought to be encouraged to seek employment rather than live off benefits, since the oppurtunities are present.


well i agree that those who can work, really ought to. thats why in the UK you can only get on the dole if you are actively seeking employment, and at that only for 8 months (i think it is)

And in what respect do those who inherit money not deserve it? It is theirs by birth right, and if you propose witholding all inheritance money and "redistributing" it, it is somewhat unfair on those who lose the money. They hardly assualted countless other babies in the sky to be born into their family, they ar simply lucky, as are lottery winners.

it benefits more people to disbenefit one person and redistribute their wealth.
yes, i am an advocate of equality.
they did not earn that money - what claim do they have to it? being born into it is not enough of a reason for me - it doesn't outweigh the utilitarian fact i stated above, for me.

and many rich people aren't nice people. with wealth comes power, and corruption... the greed that drives many of these people to become rich also drives them to do whatever it takes to achieve their ambition - be it lie, cheat, steal,
now of course not all rich people are like this, by any means. but i have dealt with enough rich people in my life already to know that the business dealings that go on behind closed doors for many of the rich - certainly many of the aristocracy - often tend to be highly unpleasant. stepping on others on your way to the top may not be as bad as assaulting babies, but it is still not a fair way to get rich, and (depending on the extent) can be wholly immoral - hence they have more than their fair share.

Somewhere between socialist and communist

Well that would explain it then. :mp5:

-A proportion of the idle rich have worked previously to earn it, and taken early retiremnt to enjoy their money. If they have worked ridiculously hard in earlier years, why punish them now?

Well, if they started with scratch; it's highly unlikely that they've retired early after working "ridiculously hard". Very rarely does someone set up a business and 10 years later find themselves a multi-millionaire. When they do, it's mostly a lucky investment, and not reflective of "work" on their part. The only way this lifestyle is really feasible is if they're born with wealth, which brings me to the next point...


-At some point one member of an affluent family worked to obtain their money, why punish them for their work, irrespective of if their descendants elect not to work?

Their descendants are dead. How can you punish a dead person?

-Any of the lower classes, if in the position of the "idle rich", would seek to retain their money, and feel no compulsion to work, why punish the rich if they are born into money, they didn't ask to be

"they didn't ask to be"

Oh noes; they are so hard done by...having to give up a proportion of their wealth to pay for the necessities of the lower classes. My heart bleeds for them- that's cruel!

Which is worse, being born with wealth and having to pay some of it in tax....or being born poor and having nothing?

People live off the dole because they recieve henious ums of money for having 7 children and being a single parent.

you really think a single parent trying to raise seven kids is really capable of suitable employment to support such a large family? :p

oh god, i'd love to see you try :rolleyes:


they made a mistake by having 7 kids. they deserve societies' support.

It's called qualification and/or heart for the job
I'm not sure I understand properly, but:

1) Qualifications not necessary. I have a degree, so they found me something reasonably technical to do (looking after a stack of computers, helping people with them, etc.). Other people worked in charity shops. Some worked for an organisation that did environmental work/maintenance, where they got all the training for the equipment they'd need on-site. Many of the people had no qualifications whatsoever.

2) Most people, myself included, only go to work for the money. It poses the odd interesting challenge, and I'd rather do this than work downstairs in the factory, but if I wasn't paid I'd be at home playing computer games.

the cost of living in the UK is very high.
but more than that you need to understand that many people who need benefits don't need (or take) them throughout their whole life. people make mistakes, bad shit happens - and when it does there needs to be a suitable safety net for those people to keep living an acceptable standard of life.





well i agree that those who can work, really ought to. thats why in the UK you can only get on the dole if you are actively seeking employment, and at that only for 8 months (i think it is)



it benefits more people to disbenefit one person and redistribute their wealth.
yes, i am an advocate of equality.
they did not earn that money - what claim do they have to it? being born into it is not enough of a reason for me - it doesn't outweigh the utilitarian fact i stated above, for me.

and many rich people aren't nice people. with wealth comes power, and corruption... the greed that drives many of these people to become rich also drives them to do whatever it takes to achieve their ambition - be it lie, cheat, steal,
now of course not all rich people are like this, by any means. but i have dealt with enough rich people in my life already to know that the business dealings that go on behind closed doors for many of the rich - certainly many of the aristocracy - often tend to be highly unpleasant. stepping on others on your way to the top may not be as bad as assaulting babies, but it is still not a fair way to get rich, and (depending on the extent) can be wholly immoral - hence they have more than their fair share.

And yet the poor joke and gloat as to the manner in which the abuse the benefit system. Such deplorable individuals are present in all facets of society, indeed the middle classes are appallingly uncaring in the pursuit of their ambitions at times.

No, it's a right to "life". That is, someone can't come and kill you. You have the right to make as much out of yourself as you see fit.

Food/Shelter/Clothing is a product of work. If you want those things, you will have to work for them. You don't simply have a right to them because you showed up on the planet.

"Don't go around saying the world owes you a living. The world owes
you nothing. It was here first." - Mark Twain
As an animal you indeed do not have that right. But we are hardly animals anymore, are we?

And the world doesn't owe anything or anyone. People owe people.

Well that would explain it then. :mp5:
So nice of you to keep an open mind :rolleyes:

it benefits more people to disbenefit one person and redistribute their wealth.
yes, i am an advocate of equality.
they did not earn that money - what claim do they have to it? being born into it is not enough of a reason for me - it doesn't outweigh the utilitarian fact i stated above, for me.
"Only the man who does not need it, is fit to inherit wealth—the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one, would not bring back the dead virtue which was the fortune." - Francisco d'Aconia

As an animal you indeed do not have that right. But we are hardly animals anymore, are we?

And the world doesn't owe anything or anyone. People owe people.
No actually. I don't owe you anything. Nor do you owe me anything. Isn't it great?

Well, if they started with scratch; it's highly unlikely that they've retired early after working "ridiculously hard". Very rarely does someone set up a business and 10 years later find themselves a multi-millionaire. When they do, it's mostly a lucky investment, and not reflective of "work" on their part. The only way this lifestyle is really feasible is if they're born with wealth, which brings me to the next point...




Their descendants are dead. How can you punish a dead person?



"they didn't ask to be"

Oh noes; they are so hard done by...having to give up a proportion of their wealth to pay for the necessities of the lower classes. My heart bleeds for them- that's cruel!

Which is worse, being born with wealth and having to pay some of it in tax....or being born poor and having nothing?

I was referring to the premise of taking all inheritance money from the rich, which another author suggested earlier.

So nice of you to keep an open mind :rolleyes:

Communism leads to economic collapse, economic collapse leads to sale of government assets at reduced prices, recession, rise of the Oligarchs, and th creation of an economically crippled Russia. I'll keep capitalism an the conservative party thankyou.

I'm not sure I understand properly, but:

1) Qualifications not necessary. I have a degree, so they found me something reasonably technical to do (looking after a stack of computers, helping people with them, etc.). Other people worked in charity shops. Some worked for an organisation that did environmental work/maintenance, where they got all the training for the equipment they'd need on-site. Many of the people had no qualifications whatsoever.

2) Most people, myself included, only go to work for the money. It poses the odd interesting challenge, and I'd rather do this than work downstairs in the factory, but if I wasn't paid I'd be at home playing computer games.
1) Good point. But still you will always need to have the higher educated in charity organisations. To teach the unqualified etc. Most don't because they can earn more working for a business

2) My point exactly. You can do a job you do not like doing........for a while. If you press on you'll get depressing and grumpy.

Communism leads to economic collapse, economic collapse leads to sale of government assets at reduced prices, recession, rise of the Oligarchs, and th creation of an economically crippled Russia. I'll keep capitalism an the conservative party thankyou.
But that wasn't communism under Stalin (aside from the fact that he was a total madman).

Take it off the footballers/sports stars.

This came up in a thread about Katrina. Apparently there are some that think that the rich actually pay fewer income taxes than the middle class. Of course, to get to that point, the middle class was redefined to include wage-earners that make up to $132,000/year and the calculations need to be fudged.

Is there really proof that the top 10 percent of wage earners?

If you look at the data in the CBO reference (http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0) from the thread above, you will find these conclusions. Table II, Share of Individual Income Taxes shows that the top quintile pays 79 percent of all individual income taxes. in 1999. The top 10 percent of wage-earners pays 63 percent of all individual income taxes. The same table, Share of Total Federal Taxes, shows that the top quintile pays 65 percent of federal taxes and the top 10 percent pays 49 percent of federal taxes.

So, the wage earners making the most money, do indeed, pay a disproportionate percentage of federal taxes, including payroll,etc. They pay a majority of all federal income taxes.

I've got to get on a plane now, but I'll check in later to see if this has drawn any interest. Hopefully the antagonists in the Katrina thread will figure out where this one is and bring the discussion out where it belongs.

Um... out of curiosity do you have comparative figures for the percentage of all money earned in america by the top 5%?

As I understand about 95% of americas wealth is owned by about 5% of the population, which if true would indicate that the top 5% should pay approximately 95% of the taxes where here it seems to be only 79%. I'd say theyre getting off quite lightly.

It is even worse if you look at disposible income - someone on minimum wage loses a significant amount of their wages in tax compared to their disposible income (income left over once you feed, clothe and house your family) compared to the disposible income of the better off.

Now if you want the lower classes to pay more tax then perhaps you could ask for them to be paid a wage that covers more than just food, clothing and shelter.

Maybe, but some people that are STUPIDLY rich don't work very hard, having won the lottery or having shares in a company with an enormous turnover. You get the idea.
But the amount of tax you pay is relative to the amount of money you earn per annum - or at least it is in Britain. There are two different tax "brackets," the 21% and the 40%.
For arguements sake, if you fix the 21% bracket at £50,000/annum and the 40% bracket at £100,000/annum*

So, the first £5,000 is untaxable. Then you pay tax at 21% on the first £45,000, and then 40% on the remaining £50,000. So, the more you earn, the more tax you pay. Makes sense to me.

*I know these aren't the actual brackets, but as I don't know what they are, I'll use these for ease and simplicity.

it makes sense, if you wish to punish success/entrepreneurialism.

"the more you make, the more we'll steal from you."

(i'm nit-picking... i don't think anyone should haev to pay more than one-third of what they earn)

Um... out of curiosity do you have comparative figures for the percentage of all money earned in america by the top 5%?

As I understand about 95% of americas wealth is owned by about 5% of the population, which if true would indicate that the top 5% should pay approximately 95% of the taxes where here it seems to be only 79%. I'd say theyre getting off quite lightly.

It is even worse if you look at disposible income - someone on minimum wage loses a significant amount of their wages in tax compared to their disposible income (income left over once you feed, clothe and house your family) compared to the disposible income of the better off.

Now if you want the lower classes to pay more tax then perhaps you could ask for them to be paid a wage that covers more than just food, clothing and shelter.

here, let's just simplify things and move to Communism, giving everyone the same job and the same wage, forever.

That way, the dumb, unlucky or undriven won't have to be jealous of the successful.

This came up in a thread about Katrina. Apparently there are some that think that the rich actually pay fewer income taxes than the middle class. Of course, to get to that point, the middle class was redefined to include wage-earners that make up to $132,000/year and the calculations need to be fudged.

If you're interested in that argument, look at this thread (http://forums2.jolt.co.uk/showpost.php?p=9556229&postcunt=220).

Is there really proof that the top 10 percent of wage earners?

If you look at the data in the CBO reference (http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0) from the thread above, you will find these conclusions. Table II, Share of Individual Income Taxes shows that the top quintile pays 79 percent of all individual income taxes. in 1999. The top 10 percent of wage-earners pays 63 percent of all individual income taxes. The same table, Share of Total Federal Taxes, shows that the top quintile pays 65 percent of federal taxes and the top 10 percent pays 49 percent of federal taxes.

So, the wage earners making the most money, do indeed, pay a disproportionate percentage of federal taxes, including payroll,etc. They pay a majority of all federal income taxes.

I've got to get on a plane now, but I'll check in later to see if this has drawn any interest. Hopefully the antagonists in the Katrina thread will figure out where this one is and bring the discussion out where it belongs.


For the record, those were tax stats from Pre-GWB. The numbers have severely changed since 1999. According to the Bush Tax Plan, the top 10% of wage earners will be given a 95% return of their income tax dollars by 2010. Meaning they will pay little more than 3% of the total national income tax collected.

Um... out of curiosity do you have comparative figures for the percentage of all money earned in america by the top 5%?

As I understand about 95% of americas wealth is owned by about 5% of the population, which if true would indicate that the top 5% should pay approximately 95% of the taxes where here it seems to be only 79%. I'd say theyre getting off quite lightly.

It is even worse if you look at disposible income - someone on minimum wage loses a significant amount of their wages in tax compared to their disposible income (income left over once you feed, clothe and house your family) compared to the disposible income of the better off.

Now if you want the lower classes to pay more tax then perhaps you could ask for them to be paid a wage that covers more than just food, clothing and shelter.
This is ridiculous. In a country with a middle class as fucking enormous as ours, there is no way on either side of hell that "5%" of our citizens control "95%" of the wealth.

Also, if you want to talk about lowering cost of living and paying a fair wage, you might want to re-examine things like Government imposed rent regulations and Government imposed business restrictions that cost us jobs every time they're enacted, like minimum wage increases.

But to answer the original question, I'm unimpressed with the concept of taxation in the first place, so fuck if I care who is "paying their 'share' of taxes." It should be noted that taking money without one's consent is theft, and that's exactly what I'm seeing the government do.

The richer you are the less taxes you should pay.
The poorer you are the more likely you are too be a strain on your country.

The richer you are the less taxes you should pay.
The poorer you are the more likely you are too be a strain on your country.
Brilliant. So when the poor die out from starvation because they can't afford to pay taxes and eat and buy medicine and food and utilities, all that will be left is rich people, and what the hell will they do? I suppose alot would have to go for broke and work or something.

Those who are wealthy rely disproportianately on the society remaining functioning to keep them in that position.

They rely not only increasingly on the police (and do tend to receive better service) but they also rely heavily on medicare, welfare, and all of those other things that we provide to the poor. "What? The rich rely on welfare? Is this guy a lunatic?"

Think about it, the poor don't conveniently disappear. And if they get hungry, what are they going to do? If there is no way for them to survive legally, they will turn to illegal means to survive. This means breaking into other peoples homes and taking their stuff. The rich, those who think anyway, realize they have a choice. They can pay a percentage of their income to keep the poor just above subsistence level, or they can risk increased crime and having things of much more importance taken from them, such as their peace of mind at home and when they walk down the street showing evidence of being wealthy.

"Yeah, but if they just got off their bums, they could survive legally," someone might argue. I'd point out that this is crap, espoused by someone who's never really been in the situation where you're stuck in a town with no jobs at or below your skill level and mounting bills.

When you really understand the creed "There ain't no such thing as a free lunch" you see that supporting the poor at a basic subsistence level isn't charity, it's just good sense, and it makes more and more sense the higher up in society you are.

Brilliant. So when the poor die out from starvation because they can't afford to pay taxes and eat and buy medicine and food and utilities, all that will be left is rich people, and what the hell will they do? I suppose alot would have to go for broke and work or something.
Picking up garbage in their armani-suit....

I don't advocate socialism, so I think the folks who are saying "you people won't be happy until everyone is forced to live at the same level" are off base.

I like a progressive tax because:

1) A flat tax is a greater burden on the poor. Why? If someone making a decent amount of money (not even a "rich" person, just someone who's middle-class like me) is taxed higher, they may not be able to go out to the movies as many times, or may have to buy an Accord instead of a Mustang, but they can still live comfortably. If a poor person is taxed higher, they may have to go without eating, or miss a rent payment.

2) On the upper end of the scale, like I said, I don't advocate socialism--but honestly, does anyone believe that a higher tax rate for a higher income is keeping people from trying to make money? They still end up with more net income (the way the tax structure is, it's impossible to net less if you're grossing more)--and I don't see Bill Gates shutting down his empire and going off to live on welfare.

3) The taxes from rich people aren't just going towards the poor--they're going towards government structures that help the rich, too, like police and fire protection, the military, schools, highways, and so on. And the fact is that the rich folks are benefitting most from living in this society, so it's fair that they have a greater stake in it as far as taxing is concerned. (edit: Waterkeep made this point much more eloquently than I did...)

"Yeah, but if they just got off their bums, they could survive legally," someone might argue. I'd point out that this is crap, espoused by someone who's never really been in the situation where you're stuck in a town with no jobs at or below your skill level and mounting bills.

Really, now? I lived for a year on $600 a month. On my own. No welfare, no fucking food stamps, no goddamn handouts at all. When I lost my job, I could not find one in the same city and I had no car. I earned $40 in my last month in town.

What did I do? I fucking moved and found a job in another city. As a general rule, it is not difficult to find a job in this country. It can be in some places, but I guarantee you that everyone with the will and capacity to work will be able to find a jobif they put their minds to it.

Really, now? I lived for a year on $600 a month. On my own. No welfare, no fucking food stamps, no goddamn handouts at all. When I lost my job, I could not find one in the same city and I had no car. I earned $40 in my last month in town.

What did I do? I fucking moved and found a job in another city. As a general rule, it is not difficult to find a job in this country. It can be in some places, but I guarantee you that everyone with the will and capacity to work will be able to find a jobif they put their minds to it.

This is true, if the people are actually capable of pulling this off, which many (like my dad) aren't.

Brilliant. So when the poor die out from starvation because they can't afford to pay taxes and eat and buy medicine and food and utilities, all that will be left is rich people, and what the hell will they do? I suppose alot would have to go for broke and work or something.

What a wonderfull World this could be ..................

Really, now? I lived for a year on $600 a month. On my own. No welfare, no fucking food stamps, no goddamn handouts at all. When I lost my job, I could not find one in the same city and I had no car. I earned $40 in my last month in town.

What did I do? I fucking moved and found a job in another city. As a general rule, it is not difficult to find a job in this country. It can be in some places, but I guarantee you that everyone with the will and capacity to work will be able to find a jobif they put their minds to it.
Congratulations. You had no family or credit to encumber you.
Now try the same trick with three kids and a credit card bill.

Actually.. nix that, while the point I think is valid, the tone was poor.

The reality is, if it is seen as easier and less risk to obtain a living illegally than it is legally (and moving has a definite risk to it) then that is what will happen. This is why, on further reflection, we can't even use "subsistence level" as a base, but have to use whatever level it is at which a significant portion of the poor find it easier to commit criminal actions than not. Fortunately,we've seen that most people won't go to that level unless it really is a subsistence issue.

This is ridiculous. In a country with a middle class as fucking enormous as ours, there is no way on either side of hell that "5%" of our citizens control "95%" of the wealth.

Also, if you want to talk about lowering cost of living and paying a fair wage, you might want to re-examine things like Government imposed rent regulations and Government imposed business restrictions that cost us jobs every time they're enacted, like minimum wage increases.

But to answer the original question, I'm unimpressed with the concept of taxation in the first place, so fuck if I care who is "paying their 'share' of taxes." It should be noted that taking money without one's consent is theft, and that's exactly what I'm seeing the government do.

The top 5% were paying 37% of the federal tax burden in 1999. At that time I believe they were in control of roughly half of the wealth in the US. You are correct. It is nowhere near 95% of the wealth. The poster you were replying to also overstated the tax burden paid by the top 5% and top 10%. Again, it's 37% and 50%, respectively. Tax burden is the appropriate number to look at, not income tax (to the poster you replied to, not to you).

By the way, Myrm, here is my reply to your tax statements in the other thread -

Wake up, get some coffee, and re-read. Sinhue implied that I was one of those that thought the rich paid the most tax. I said the top ten percent paid almost half of all taxes. Sinhue responded with her erroneous calculations that were based on income taxes and her own definition of middle class. I corrected those calculations and showed that I was, indeeded, correct when considering income taxes alone.

You shifted gears to include payroll taxes, but kept her generous definition of middle class. I agreed with your calculations, but not necessarily with the definition of middle class.

I shifted gears to include the entire tax burden. Income taxes are a small part of the tax burden, less than half of it. Not the point. You're right. I did wake up, I don't drink coffee, but I did re-read and you are correct, you said the top 10% pay half the taxes, and it is a fairly accurate statement (49%). I stand corrected. However, I will again note that the top 10% includes middle class.

Anyhow, the fact is that the top 5 percent of wage earners pay either 50 percent of all income tax or 37 percent of all federal tax. This is hardly a proportional amount in either case.

It is a proportional amount when you look at the percent of money controlled by that top 5%. When you factor in that lower class people in general can't really afford a higher tax burden, excluding nearly 30% of the people from the tax burden, it's puts a great strain on everyone above that amount in proportion to the amount of money controlled by them. Have you ever looked up the amount of wealth controlled (controlled is a term the government uses to refer to all of the money they made in addition to their total assets. Net worth plus wage, I think.) by them? The lowest figure I've ever seen was 30% and some place it at more than half. When considering this, their tax burden is proportionate to the wealth they control, perhaps even on the low side.

If we choose my definition of middle class, which excludes the top 10 percent of wage earners, the middle class certainly pays less in taxes than the top 10 percent. The top 10 percent has an average income of $136,000, I think. I don't think $136,000 is an unreasonable break point between middle and upper class. I think $276,000 is too high. We could settle on a number like $150,000, but the income vs population figures that Sinhue provided are not easily manipulated to do that sort of calculation.

You are looking at the average wage. That means many in the group fall far below that number. I showed you the figures. The first 5% have an average income of 276,000. In order for the first 10% to have an average income of 188,000 the second 5% have to have an average income of %100,000. That means that in the second 5% you have many, many people who make less than 100,000/year. So it's clear that only the top 5% should be considered in the upper class, particularly if you agree on settling on 150,000.

Sorry guys, your argument is wrong. The facts don't support it. I notice that Sinhue has bailed out of this and I'm going to do the same.

I gave you the part where you were correct, but you need to look at the numbers better on the rest of it.

Here's what I think is amazing about the concentration of wealth and income in this country. Look at the numbers in 1999.

The top 1% averages 719,000/year. The top 5% drops down to averaging 176,000/year. The top 10% averages 188,000/year. And the top 20% averages 136,000/year.

If you do the math, it looks like this.

1% - 719,000/year
2-5% - 168,000/year
5-10% - 100,000/year
10-20% - 76,000/year
20-40% - 53,000/year
40-60% - 35,400/year
60-80% - 21,200/year
80-100% - 8,400/year

Remember, these are family incomes, not individual incomes. That's a crazy concentration of wealth in a country where the average income is 49,500/year.

From 1977 to 1999, the average income of a family only went up 42,900/year to 49,500/year. To put this in perspective, I believe generally we attribute inflation a 3%. At a 3% rise since 1977, the average income should have been 82,200/year, for the average person to be doing the same. The top 10% of the country kept up with an inflation rate of 3%, which means the majority of the country, the vast majority of the country has seen their wages drop off for 22 years. The lower 60% of families saw a real-dollar decrease in average wage since 22 years ago even if you don't consider inflation to be a factor. These are astonishing numbers.

For contrast here is the concentration of income of 1977 compared to 1999.
1977..............................................1999
1% -........356,000/year...................1% -......719,000/year
2-5% -.....121,000/year...................2-5% -...168,000/year
6-10% -.....84,000/year...................5-10% -.100,000/ye
11-20% -...63,600/year...................10-20% - 76,000/year
21-40% -...49,300/year...................20-40% - 53,000/year
41-60% -...36,400/year...................40-60% - 35,400/year
60-80% -...23,700/year...................60-80% - 21,200/year
81-100% - 10,000/year...................80-100% - 8,400/year
All -...........42,900/year...................All -.........49,500/year

Sure looks to me like this horrible system that is so hard on the rich sure doesn't seem to be keeping them from continuing to increase the disparity between them and the poor.

EDIT: If anyone knows how to format the above table better, please do.

This came up in a thread about Katrina. Apparently there are some that think that the rich actually pay fewer income taxes than the middle class. Of course, to get to that point, the middle class was redefined to include wage-earners that make up to $132,000/year and the calculations need to be fudged.

Since you're referring directly to the post I made, I'd like to clarify.

The 'middle class' holds the middle ground between poverty and wealth, no? Those below the poverty line are not middle class, and those in the top tiers are not middle class. The middle class, the largest class, IS IN THE MIDDLE. I don't see how including the entire group is 'fudging' the numbers...unless you have a different definition for middle class? Up to what point can you earn and still be middle class? What is the lowest wage you can earn and still be middle class?

I'll post the original post in question, just in case people didn't really take a look at it:


I don't know about where you live, but in the US, it is a very big mis-nomer that the middle class carries the highest tax burden. The reality is that taxes are too high for everyone, particularly given what kind of return we get on our investment. But, the top 10% of income earners are responsable for nearly 50% of total IRS revenues.
Ah...but that depends on your definition of middle class. Let me outline some stats for you:

An enormous percentage of taxes are payed by a minority of Americans:
o The Top 1% of taxpayers pay 29% of all taxes.
o The Top 5% of taxpayers pay 50% of all taxes
That sure sounds like the really rich are being taxed to death. However, when you look at the figures provided by the IRS, these figures don't hold up to even basic adding and subtracting. One chart shows the top 10%, 5% and 1% of taxpayers paying a whopping 146% of total taxes! (yes, overlapping exists, but no matter how you work the numbers, it just doesn't add up to even 50% of all taxes paid) Since this is patently impossible, the numbers must be viewed with suspicion. I investigated further, and looked at the raw data available at http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0.

Let us just look at the top 5%, since they look to be the ones paying the most taxes.

There are 5.9 million families included in the top 5% tax bracket. They earn an average of $276,000 per family before taxes. Source: Congressional Budget Office, "Preliminary Estimates of Effective Tax Rates" (September 7, 1999) (all statistics to follow are also taken from this source, which can be viewed by visiting the site in the above quote)

These people are wealthy, no doubt about it. However, the 'filthy' rich aren't even factored in here. The top 1% earn in excess of $719,000 (on average). Let us now look at the more 'traditional middle class', the families that earn from $21, 000 to $132, 000 a year. I am basing this idea of the middle class by factoring out those living below the poverty line, and those making more than an average educated 2 income family could. Middle class, in this case meaning neither rich, nor poor.

There are 84.9 million families that belong to this middle class. They pay a combined 42% of federal taxes. Now, the middle class has a 55% share of the total family income. The top 5% has a 28% share.

Let's compare the numbers again: 5.9 million families who have a 28% share of the total family income, compared to 84.9 million families who have a 55% share of the total family income. What the heck does that all mean? You can't just multiply the total amount of income tax paid by these percentages and get an accurate amount. You need to break it down further.

You do that by multiplying the number of families (in millions) by the average income, getting a total and multiplying that by the federal tax rate (done each time for each separate tax bracket). This gives you a real dollar amount paid in each tax bracket.

Let's look at actual tax rates. The top 5% pay 19.6% of their income in taxes. That works out to about: $316 billion dollars a year.

The middle class pay various rates of income tax, depending on their tax bracket. In any case, it works out that the middle class pays $498.7 billion dollars a year.

Yes, the rich pay higher income taxes, but it is the middle class that pays the most income taxes in real dollars. The middle class therefore bears the brunt of taxation, because of sheer numbers.

Edit: decimal error...from $3.16 to $316...quite the error...so the difference is not as great as I thought.

Including families who make just shy of, or just over $100,000 a year in the 'rich' category is ridiculous. Which is why I put them in the middle class.

By your definition of rich, I am fabulously wealthy.

But I'm not. My family is just middle class.

I'll post the original post in question, just in case people didn't really take a look at it:



Ah...but that depends on your definition of middle class. Let me outline some stats for you:


That sure sounds like the really rich are being taxed to death. However, when you look at the figures provided by the IRS, these figures don't hold up to even basic adding and subtracting. One chart shows the top 10%, 5% and 1% of taxpayers paying a whopping 146% of total taxes! (yes, overlapping exists, but no matter how you work the numbers, it just doesn't add up to even 50% of all taxes paid) Since this is patently impossible, the numbers must be viewed with suspicion. I investigated further, and looked at the raw data available at http://www.cbo.gov/showdoc.cfm?index=1545&from=4&sequence=0.

Let us just look at the top 5%, since they look to be the ones paying the most taxes.

There are 5.9 million families included in the top 5% tax bracket. They earn an average of $276,000 per family before taxes. Source: Congressional Budget Office, "Preliminary Estimates of Effective Tax Rates" (September 7, 1999) (all statistics to follow are also taken from this source, which can be viewed by visiting the site in the above quote)

These people are wealthy, no doubt about it. However, the 'filthy' rich aren't even factored in here. The top 1% earn in excess of $719,000 (on average). Let us now look at the more 'traditional middle class', the families that earn from $21, 000 to $132, 000 a year. I am basing this idea of the middle class by factoring out those living below the poverty line, and those making more than an average educated 2 income family could. Middle class, in this case meaning neither rich, nor poor.

There are 84.9 million families that belong to this middle class. They pay a combined 42% of federal taxes. Now, the middle class has a 55% share of the total family income. The top 5% has a 28% share.

Let's compare the numbers again: 5.9 million families who have a 28% share of the total family income, compared to 84.9 million families who have a 55% share of the total family income. What the heck does that all mean? You can't just multiply the total amount of income tax paid by these percentages and get an accurate amount. You need to break it down further.

You do that by multiplying the number of families (in millions) by the average income, getting a total and multiplying that by the federal tax rate (done each time for each separate tax bracket). This gives you a real dollar amount paid in each tax bracket.

Let's look at actual tax rates. The top 5% pay 19.6% of their income in taxes. That works out to about: $3.16 billion dollars a year.

The middle class pay various rates of income tax, depending on their tax bracket. In any case, it works out that the middle class pays $498.7 billion dollars a year.

Yes, the rich pay higher income taxes, but it is the middle class that pays the most income taxes in real dollars. The middle class therefore bears the brunt of taxation, because of sheer numbers.
Yes, but we showed in the other thread that you made a decimal point error and the rich pay 316 Billion.

Yes, but we showed in the other thread that you made a decimal point error and the rich pay 316 Billion.
Shite :D

It shall be fixed.

Jocabia, could you please do me a favour and put all the posts dealing with issue into this thread? I see some of what you posted in the other, but not the whole shebang, and I'm having trouble following what was discussed after I left yesterday...

I could do it too, but I have a staff meeting in 15 minutes, and I'd like to examine this further...and you so rock...*puppy eyes*...

Progressive tax is very fair on the poor, because they need help. The rich do NOT need help

Maybe they need it, but they don't all deserve it imo.

If you are content to sit on your ass and live off the work of others, you do not deserve to receive welfare. You must at least try to provide for yourself and be a responsible member of society.

If, on the other hand, you cannot work (mentally or physically disabled), then it's society's job to help you.

secondly, this "attack the rich for they are evil" rhetoric is just wrong.

If success is unduly punished, it will thwart the drive in others to succeed, which will have horrible effects on the economy.

also

The more you crack down on the rich, the more you hurt the poor man... by limiting the number of available jobs, investment opportunities, etc.

We need to encourage people to get out and work and try to be productive and successful... we do not need to encourage people to do nothing. Welfare does the latter.

Here are the pertinent replies to Sin's post.
Reply to Sin's tax post -
I lied, it's too irritating to see someone make a bad argument then calls it good. Look at your own assumptions and the CBO figures. Table II, Share of Individual Income Taxes shows that the top quintile pays 79 percent of all individual income taxes. in 1999. The top 10 percent of wage-earners pays 63 percent of all individual income taxes. The same table, Share of Total Federal Taxes, shows that the top quintile pays 65 percent of federal taxes and the top 10 percent pays 49 percent of federal taxes.

Your calculations are wrong. I don't know how you broke down the quintiles to accomodate your assumption about middle class, so lets just look at the figure for the upper 5 percent. I get a figure of about $319 billion for total taxes paid -- $276,000 income * 0.196 tax rate * 5.9 million families. Yep. That's right.

Total taxes paid is $642 billion, so that makes the share by the upper 5 percent almost 50 percent. That matches what's in Table II.

Wow, it's nice to be right.


Okay, your turn.

My reply to Myrm -
Okay MY turn. I agree with you about it being irritating when people take a bad argument and call it good, like you just did.

You're looking at income tax rather than actual tax burden which is a much better measure as you said, the rich pay half the taxes, not half the income taxes.

Sin, remember that the incomes in each quintile is an average so you need to remove some of the people in the second quintile because they are making less than $21,000/yr.

The top quintile is a little weird. Given that the top 20% averages 132,000 and the top 10% averages $188,000, you can extract the second 10% (11%-20%) averages around 76,000/year. You can do the same and figure out that the top 5% is at 276,000 and the top 10% is 188,000, so the second 5% (6%-10%) averages at 100,000/year.

So basically you just want to extract the top 5% of families as upper class and consider everyone below that and above poor as middle class.

I figured it out to be about $857.6 Billion in taxes by the middle class and $517.8 Billion in taxes by the top 5%. The remaining $30+ Billion is paid by the lower class.

The total burden was around $1.4 Trillion in 1999. The middle class still carries the lion's share of the burden.

Wow, it's nice to not know what you're talking about.

Next.

The rest has been restated here including Myrm's reply where he pointed out that he was originally claiming that the top 10% of the population pay have the federal tax burden and he was correct.

secondly, this "attack the rich for they are evil" rhetoric is just wrong.

If success is unduly punished, it will thwart the drive in others to succeed, which will have horrible effects on the economy.

also

The more you crack down on the rich, the more you hurt the poor man... by limiting the number of available jobs, investment opportunities, etc.

We need to encourage people to get out and work and try to be productive and successful... we do not need to encourage people to do nothing. Welfare does the latter.

The point is there is no attack on the rich. No one is cracking down on them. They are, in fact, getting wealthier while the poor get poorer as shown in the figures. 60% of the population in 1999 made less money than they did in 1977 WITHOUT considering inflation. That's ridiculous.

But entirely ridiculous when one considers that th majority of tht money is used for purposes that one never sees. Why should the rich aid the poor financially when the poor deride them, and a reasonable proportion of the needy simplyak the inclination to work and prefer to live on benefits. If the supposedly dprived can afford sky televison, they do not need benefits or free healthcare.

the majority of the money does not go to healthcare, or to social welfare.

the majority of the money goes to areas that benefit either everybody, or expecially the rich (sometimes including upper middle class), such as defense, police - you can't really steal from the poor and make a living - roads (I don't know how privatized are they in the US, here they are not), etc.

secondly, this "attack the rich for they are evil" rhetoric is just wrong.

If success is unduly punished, it will thwart the drive in others to succeed, which will have horrible effects on the economy.

also

The more you crack down on the rich, the more you hurt the poor man... by limiting the number of available jobs, investment opportunities, etc.

We need to encourage people to get out and work and try to be productive and successful... we do not need to encourage people to do nothing. Welfare does the latter.

Welfare does not encourage people to do nothing. On the contrary, it boosts the economy as a whole to have a system whereby all people have a chance to succeed. Having people with many billions on offshore accounts is less productive than taxing it and putting it into welfare - so it can be spent. A good economy is where money is being spent, not hoarded.

I have yet to find someone on state benefits who drives a ferrari and lives in a 5 bedroom detached. The drive to 'succeed' (by your definition) is not taken away.

The point is there is no attack on the rich. No one is cracking down on them. They are, in fact, getting wealthier while the poor get poorer as shown in the figures. 60% of the population in 1999 made less money than they did in 1977 WITHOUT considering inflation. That's ridiculous.

good.

the more economically free we are, the better.

as the great man Abe Lincoln said, "You cannot raise up the poor by bringing down the rich."

hehe

now let's cut down on pork so we can actually balance a budget some time soon.

good.

the more economically free we are, the better.

as the great man Abe Lincoln said, "You cannot raise up the poor by bringing down the rich."

hehe

But apparently you can bring down the poor by raising up the rich which is exactly what's happening in this country. To the point, I was brought in the lower third of wage-earners and now fall into the top five percent. I don't hate the rich. I think there is plenty of opportunity in this country. But this crap about how the rich are overburdened in this country is exactly that, CRAP. The rich aren't overburdened. In fact, they aren't even burdened in proportion to their wealth.

The second has to do with this idea that there's a set of numbers between which we can put middle class Americans. Myrmidonisia complains because the number jumps up to $132,500 a year, and in much of the country, he'd be right to say that that number is high to be considered middle class. But not if he lives in one of the major metropolitan areas of the country.

Turns out my memory sucks. The actual average income for the top 10 percent of wage earners in the 1999 CBO figures is $188,000. I think that is sufficently high to be considered a good break point anywhere in the country.

Um... out of curiosity do you have comparative figures for the percentage of all money earned in america by the top 5%?

As I understand about 95% of americas wealth is owned by about 5% of the population, which if true would indicate that the top 5% should pay approximately 95% of the taxes where here it seems to be only 79%. I'd say theyre getting off quite lightly.

It is even worse if you look at disposible income - someone on minimum wage loses a significant amount of their wages in tax compared to their disposible income (income left over once you feed, clothe and house your family) compared to the disposible income of the better off.

Now if you want the lower classes to pay more tax then perhaps you could ask for them to be paid a wage that covers more than just food, clothing and shelter.


Not sure what you're after. Did you look at the income tables in the CBO reference?

For the record, those were tax stats from Pre-GWB. The numbers have severely changed since 1999. According to the Bush Tax Plan, the top 10% of wage earners will be given a 95% return of their income tax dollars by 2010. Meaning they will pay little more than 3% of the total national income tax collected.
Damned easy to make a claim for years where data isn't available, isn't it?

Turns out my memory sucks. The actual average income for the top 10 percent of wage earners in the 1999 CBO figures is $188,000. I think that is sufficently high to be considered a good break point anywhere in the country.

You're still ignoring that half of them don't make anywhere near that amount of money. That's an average. The bottom half of them average at around 100,000/year. You've never addressed that point.

The only way to know is to scrap the income tax and go with a consumption tax.

Since you're referring directly to the post I made, I'd like to clarify.

The 'middle class' holds the middle ground between poverty and wealth, no? Those below the poverty line are not middle class, and those in the top tiers are not middle class. The middle class, the largest class, IS IN THE MIDDLE. I don't see how including the entire group is 'fudging' the numbers...unless you have a different definition for middle class? Up to what point can you earn and still be middle class? What is the lowest wage you can earn and still be middle class?
The "fudged" numbers were your incorrect calculations of what the top 5 percent paid in income taxes. You should have calculated about 300 billion, where you only showed 3 billion. Put some new batteries in your calculator, or pay more attention to decimal points. Your definition of middle class is pretty broad. I recall the average income of the top 10 percent of wage earners, where the discussion starts on my side, is about $188,000. Now my memory sucks, but I think that's pretty close. That's way above middle income territory. But that's subjective. The top 5 percent of wage-earners still pays 50 percent of income taxes.

Let's look at actual tax rates. The top 5% pay 19.6% of their income in taxes. That works out to about: $316 billion dollars a year.

The middle class pay various rates of income tax, depending on their tax bracket. In any case, it works out that the middle class pays $498.7 billion dollars a year.

Yes, the rich pay higher income taxes, but it is the middle class that pays the most income taxes in real dollars. The middle class therefore bears the brunt of taxation, because of sheer numbers.

Edit: decimal error...from $3.16 to $316...quite the error...so the difference is not as great as I thought.
You still have one more error. The total income tax collected in 1999 is calculated by multipling the number of families by the average income by the average tax rate. That yields around 600 billion. That's how much everyone pays; forget about trying to break out your middle income groups. The quotient of 300/600 is about 50 percent. That's what the top earners pay in income taxes.

The "fudged" numbers were your incorrect calculations of what the top 5 percent paid in income taxes. You should have calculated about 300 billion, where you only showed 3 billion. Put some new batteries in your calculator, or pay more attention to decimal points. Your definition of middle class is pretty broad. I recall the average income of the top 10 percent of wage earners, where the discussion starts on my side, is about $188,000. Now my memory sucks, but I think that's pretty close. That's way above middle income territory. But that's subjective. The top 5 percent of wage-earners still pays 50 percent of income taxes.

Why do you keep making the same point over and over when it's wrong? The average for the top ten percent 188,000, but the vast majority of them make nowhere near that much. The lower half of that 10% make an average of 100,000/year. By your logic there is no lower class, because the whole population makes around 49,500/year.

Including families who make just shy of, or just over $100,000 a year in the 'rich' category is ridiculous. Which is why I put them in the middle class.

By your definition of rich, I am fabulously wealthy.

But I'm not. My family is just middle class.
I think this is addressed to me. If you look at the pre-tax income tables in the CBO figures, you will find that the 1999 estimates for average income in the top 10 percent is $188,000 dollars. US, not CD. That's a far cry from $100,000. Almost double, as a matter of fact.

and i whould like to make the point that money in the hads of a citizen is better spent then in the govt so and the top 20% make pay for 80% of our Budget so you chould cut spending by 20% and have no taxs on the bottom 80% of the nation so yes the rich and every one is paying to much but you can't cut spending with out looking bad as a leader there will be an ad on you saying you cut schools or welfare ect ect so money in a rich person is better the the govt

I think this is addressed to me. If you look at the pre-tax income tables in the CBO figures, you will find that the 1999 estimates for average income in the top 10 percent is $188,000 dollars. US, not CD. That's a far cry from $100,000. Almost double, as a matter of fact.

Someone doesn't know how to do math and it's not Sinuhue.

how about an income cap
say... anything over a predetermined amount goes as tax at 100%
so if the limit was $500,000 anything over this goes as tax

You're still ignoring that half of them don't make anywhere near that amount of money. That's an average. The bottom half of them average at around 100,000/year. You've never addressed that point.
You gotta draw the line somewhere. $100K is a good figure outside some enormously expensive areas. Even in those expensive areas, people are reasonably well off because they rent, rather than own. I don't think most reasonable people consider the top 10 percent of wage-earners to be middle class.

But that's just minor bickering. Fact is that the top earners pay a very disproportionate amount of income tax on their income.

Support the Fair Tax.

how about an income cap
say... anything over a predetermined amount goes as tax at 100%
so if the limit was $500,000 anything over this goes as tax
No. Even I'd disagree with that.

Tax rates at 100% are counterproductive (though it's amazing how many NationStates around here have them. :) as that really is a disincentive to trying to earn any more.

However, progressive tax rates rarely go anywhere near that, and even when they do, the typical system is built so that only the stupid have to pay the full amount. Those with the brains (or the money to afford someone with the brains) can find various tax shelters that dramatically lower their tax burden.

Why do you keep making the same point over and over when it's wrong? The average for the top ten percent 188,000, but the vast majority of them make nowhere near that much. The lower half of that 10% make an average of 100,000/year. By your logic there is no lower class, because the whole population makes around 49,500/year.
Spell it out. Give me a better income distribution table than was provided in the CBO figures.

But that's just minor bickering. Fact is that the top earners pay a very disproportionate amount of income tax on their income.
You're right. And as pointed out, they also have a disproportionate reliance on the systems that everybody's tax dollars support.

Support the Fair Tax.I do. It's called progressive taxation.

You gotta draw the line somewhere. $100K is a good figure outside some enormously expensive areas. Even in those expensive areas, people are reasonably well off because they rent, rather than own. I don't think most reasonable people consider the top 10 percent of wage-earners to be middle class.

But that's just minor bickering. Fact is that the top earners pay a very disproportionate amount of income tax on their income.

Support the Fair Tax.

What you're not looking at is the middle class can expand and contract based on the economy. So you don't look at their place compared to other people, i.e. top 10% of wage earners, you look at their familial wages compared to cost of living. Those averaging 100,000/year for a family belong in the middle class. In the places where MOST of the middle class in this country live, that is not enough of a wage to place them in the upper class. You already admitted that those making 100,000/year belong in the middle class. Are you now changing your mind because it doesn't fit your point?

Plus, who cares about income tax? Who cares about income? TAX BURDEN should be proportionate to WEALTH. The top earners are paying less taxes than the wealth they have amassed would merit.

Spell it out. Give me a better income distribution table than was provided in the CBO figures.

I did. I posted it above.

I did. I posted it above.
I see the results, but not the calculations or the data that produced them.
The top 1% averages 719,000/year. The top 5% drops down to averaging 176,000/year. The top 10% averages 188,000/year. And the top 20% averages 136,000/year.

If you do the math, it looks like this.

1% - 719,000/year
2-5% - 168,000/year
5-10% - 100,000/year

Are these breakpoints for the income levels? How did you produce that?

I want to see how many people earned $100K and above. That's not available in the CBO figures. When I looked at census data, it looks like the 10 percent point is around $115K, or so. Still, this detracts from my main point that the income tax burden is borne disproportinately by the highest wage earners.

Communism leads to economic collapse, economic collapse leads to sale of government assets at reduced prices, recession, rise of the Oligarchs, and th creation of an economically crippled Russia. I'll keep capitalism an the conservative party thankyou.

If capitalism is the best humanity can come up with then I think we have a low opinion on the abilities of people. Also, Although Soviet Socialism( Russia was never true socialism or communist) was brutal, the economy of the USSR grew enomously between 1917 and 1940.

Vittos Ordination: I also like the idea of a consumption tax.

You're right. And as pointed out, they also have a disproportionate reliance on the systems that everybody's tax dollars support.

I do. It's called progressive taxation.
Yeah, they rely on welfare much more than anyone else.

Progressive taxation is just another one of the Marxist steps to take over an economy.

so seriously how much does one person need to earn to support their family
lets say at most 1,000,000 or is that unreasonable and the money after that need not be a tax but just not required
i mean come on even a herroin injecting cocaine sniffing whore loving super successful high flyer does not need more money he needs help (not saying all high flyers are herroin injecting cocaine sniffing whore loving or successful just using it an example of a high load on their income)

so seriously how much do you need to be able to earn
because we know so many get by on so much less and can still be happy...
so seriously how much do you need to be able to earn.....

I see the results, but not the calculations or the data that produced them.
The top 1% averages 719,000/year. The top 5% drops down to averaging 176,000/year. The top 10% averages 188,000/year. And the top 20% averages 136,000/year.

If you do the math, it looks like this.

1% - 719,000/year
2-5% - 168,000/year
5-10% - 100,000/year

Are these breakpoints for the income levels? How did you produce that?

I want to see how many people earned $100K and above. That's not available in the CBO figures. When I looked at census data, it looks like the 10 percent point is around $115K, or so. Still, this detracts from my main point that the income tax burden is borne disproportinately by the highest wage earners.

Simple math. 4x + 719000 = 5 * 276,000 gives you the average for 2-5%.

x + 276,000 = 2 * 188,000 for the second 5%.

x + 188,000 = 2 * 136,000 for the second 10%.

That's how averages work. If half the people taking a test average a score of X and the other half of the people average Y then the overall average is X + Y = 2 * Z where Z is the overall average.

They aren't break points. They're averages. It means that at the 10% point, people are making less than 100,000/year. You can't be sure EXACTLY where that happens, but based on the layout of the other figures and the speed at which they taper off, you can be relatively certain that the vast majority of the second 5% are making at or around 100,000/year (say between 110,000 and 90,000/year).

Vittos Ordination: I also like the idea of a consumption tax.Unless very carefully done, a consumption tax ends up being a regressive tax scheme, for the simple reason that poor people can't afford to buy quality goods. As such, they end up buying cheap crap that doesn't last as long, and, over the long term, end up spending more on basic goods than people who are well off do.

Yeah, they rely on welfare much more than anyone else.Good to see we agree.

Progressive taxation is just another one of the Marxist steps to take over an economy.I'd suggest you first read up on Marx to see that the two have nothing to do with each other, and second, stop trying to use ad hominem and irrelevant arguments.

Good to see we agree.

I'd suggest you first read up on Marx to see that the two have nothing to do with each other, and second, stop trying to use ad hominem and irrelevant arguments.
So when Marx demands a "heavy progressive income tax" in his Manifesto, that has nothing to do with what?

Well I think it's bloody disgraceful that the rich have to pay ANY money to anyone else. After all, you know how hard it is to sit around in an office for hours on end?! It's a lot harder than working 12 hour shifts in a factory, I can tell you!

Sure, poor people usually have had little chance in life, but that's thier own fault for being born into a poor family/being disabled/being old. My daddy got me a $500,000 year job because God loved me enough to give me this privilage - i'm worth 10 people who earn $50,000 a year! After all, let's face it - if there was a choice between saving the lives of 100 homeless or the life of Bill Gates, anyone with any sense would save Gates!

The other day, on the way back from work at 3pm, I saw a 80 year old veteran of WW2 on the streets, and did the only moral thing and lectured him on how inferiour he was and how he was dirtying up the place for good hard working folks like myself.

So, in conclusion - TAX THE POOR AND BUILD COUNTRY CLUBS FOR THE RICH!

-Any of the lower classes, if in the position of the "idle rich", would seek to retain their money, and feel no compulsion to work, why punish the rich if they are born into money, they didn't ask to be

No one asked to be born poor either....like the way you somehow see the rich as victims of all this.

I endorse strongly progressive taxation.

Two arguments:

1. This one has already been made. The wealthy, whether they want to admit it or not, enjoy the best benefits of the laws and policies of the nation in which they live. But you say, "they have earned their money through hard work." Not always true... but fine. I'm willing to admit that many of them have. Nevertheless, however hard they work, they benefit from a stable society that rewards the sort of initiative they possess, and which supports an economy in which they can thrive.

Just consider wealthy businesspeople in the United States. Perhaps they are hard workers... and perhaps, had they been born in an impoverished nation, they would have been more successful than their neighbors. But would they have made nearly as much money as they can here? Almost certainly not. Would their wealth be as secure? Doubtful.

Thus, since the rich -- and not the poor -- owe a great part of their success to the maintenance of the society in which they live, they also owe the greatest debt -- in taxes -- to the government that manages that society.

2. Marginal utility.

"Marginal utility" is the term used to describe the value to an individual of additional goods, given a particular amount. "Diminishing marginal utility" is an economic rule stating that for most goods, the marginal value decreases as the consumed portion increases.

An example: Imagine a hot summer day. You see a stand charging $5 for a lemonade and, dying for a drink, you rush over and purchase one of them. Wow! It seems like the most refreshing drink you have ever had! After downing it, you buy another... but to your disappointment, it is not nearly as pleasing as the first. You are unwilling to pay $5 for a third, even though you are still thirsty. The third drink is not worth as much to you as the first one.

Now, let's translate this into taxation.

Suppose you live in a desert community, and it is decided that taxes will be collected in the form of your most valuable exchangable resource: jugs of water. First, you decide that there is a certain minimum amount of water that people need to survive. (I think we all agree on this.) Say one jug per day. So, anyone who "makes" one jug per day or less will not be taxed at all.

Now, some people have two or three jugs to themselves per day... but each drop is still very valuable to them. Sure, they could hydrate themselves on one jug, but they would not be very happy, and they would hardly be able to bathe or cook. Still, they should (and want to) contribute to the community. It is decided to tax them at the rate of one quarter-jug per day. This does not significantly impact their lifestyle.

Of course, other people have various other incomes... and at each level, the rule is the same: people should feel the same "pinch", and generally speaking it should be a tax that does not significantly impact their lifestyle.

In the top tax bracket are people with, say, 100+ jugs of water per day. They have more than enough to drink, more than enough to bathe frequently, plenty for cooking.... Hell, let's face it: they have more water than they could ever possibly use. The community can take 30 or 40 jugs, and it really doesn't change the way these people live. Indeed, giving up 30 or 40 jugs amounts to about the same "pinch" for them as that quarter-jug for the lowest tax-bracket.


Admittedly, money is slightly more complicated, since seemingly one can always buy something more -- another house, another car, another boat -- but one has to admit that the same general rule applies: a dollar is worth far more to a person who has $10 than it is to a person who has $1000.

Thus, in progressive taxation all people are asked to give up an amount of equal value to themselves. They all feel the same "pinch" in their wallet.

Well I think it's bloody disgraceful that the rich have to pay ANY money to anyone else. After all, you know how hard it is to sit around in an office for hours on end?! It's a lot harder than working 12 hour shifts in a factory, I can tell you!

Sure, poor people usually have had little chance in life, but that's thier own fault for being born into a poor family/being disabled/being old. My daddy got me a $500,000 year job because God loved me enough to give me this privilage - i'm worth 10 people who earn $50,000 a year! After all, let's face it - if there was a choice between saving the lives of 100 homeless or the life of Bill Gates, anyone with any sense would save Gates!

The other day, on the way back from work at 3pm, I saw a 80 year old veteran of WW2 on the streets, and did the only moral thing and lectured him on how inferiour he was and how he was dirtying up the place for good hard working folks like myself.

So, in conclusion - TAX THE POOR AND BUILD COUNTRY CLUBS FOR THE RICH!

LOL .... too bad most won't get the joke

Unless very carefully done, a consumption tax ends up being a regressive tax scheme, for the simple reason that poor people can't afford to buy quality goods. As such, they end up buying cheap crap that doesn't last as long, and, over the long term, end up spending more on basic goods than people who are well off do.

That is a problem for the poor, no matter what taxation system is used. The level of taxation will not be so great that it changes it significantly.

I endorse strongly progressive taxation.

Two arguments:

1. This one has already been made. The wealthy, whether they want to admit it or not, enjoy the best benefits of the laws and policies of the nation in which they live. But you say, "they have earned their money through hard work." Not always true... but fine. I'm willing to admit that many of them have. Nevertheless, however hard they work, they benefit from a stable society that rewards the sort of initiative they possess, and which supports an economy in which they can thrive.

Just consider wealthy businesspeople in the United States. Perhaps they are hard workers... and perhaps, had they been born in an impoverished nation, they would have been more successful than their neighbors. But would they have made nearly as much money as they can here? Almost certainly not. Would their wealth be as secure? Doubtful.

Thus, since the rich -- and not the poor -- owe a great part of their success to the maintenance of the society in which they live, they also owe the greatest debt -- in taxes -- to the government that manages that society.

2. Marginal utility.

"Marginal utility" is the term used to describe the value to an individual of additional goods, given a particular amount. "Diminishing marginal utility" is an economic rule stating that for most goods, the marginal value decreases as the consumed portion increases.

An example: Imagine a hot summer day. You see a stand charging $5 for a lemonade and, dying for a drink, you rush over and purchase one of them. Wow! It seems like the most refreshing drink you have ever had! After downing it, you buy another... but to your disappointment, it is not nearly as pleasing as the first. You are unwilling to pay $5 for a third, even though you are still thirsty. The third drink is not worth as much to you as the first one.

Now, let's translate this into taxation.

Suppose you live in a desert community, and it is decided that taxes will be collected in the form of your most valuable exchangable resource: jugs of water. First, you decide that there is a certain minimum amount of water that people need to survive. (I think we all agree on this.) Say one jug per day. So, anyone who "makes" one jug per day or less will not be taxed at all.

Now, some people have two or three jugs to themselves per day... but each drop is still very valuable to them. Sure, they could hydrate themselves on one jug, but they would not be very happy, and they would hardly be able to bathe or cook. Still, they should (and want to) contribute to the community. It is decided to tax them at the rate of one quarter-jug per day. This does not significantly impact their lifestyle.

Of course, other people have various other incomes... and at each level, the rule is the same: people should feel the same "pinch", and generally speaking it should be a tax that does not significantly impact their lifestyle.

In the top tax bracket are people with, say, 100+ jugs of water per day. They have more than enough to drink, more than enough to bathe frequently, plenty for cooking.... Hell, let's face it: they have more water than they could ever possibly use. The community can take 30 or 40 jugs, and it really doesn't change the way these people live. Indeed, giving up 30 or 40 jugs amounts to about the same "pinch" for them as that quarter-jug for the lowest tax-bracket.


Admittedly, money is slightly more complicated, since seemingly one can always buy something more -- another house, another car, another boat -- but one has to admit that the same general rule applies: a dollar is worth far more to a person who has $10 than it is to a person who has $1000.

Thus, in progressive taxation all people are asked to give up an amount of equal value to themselves. They all feel the same "pinch" in their wallet.

I at least partially agree with all of this.

The problem is, however, both of these arguments for a progressive tax deals with the amount a person withdraws from society, while the income tax is based on how much a person contributes to society.

So while there may be directly related trends between these arguments and the application of the income taxm it is not completely accurate. In the end it just shows that the income tax is not an accurate way of gauging how much the person owes to society. That is why I support the consumption tax.

In the end it just shows that the income tax is not an accurate way of gauging how much the person owes to society. That is why I support the consumption tax.

What do you do about wealthy people who earn their money in-country, but spend it elsewhere? They get their wealth "out of" our society, but they only owe money if they spend it here? That doesn't make any sense.

They owe their income, in some sense, to the society in which they live. Yes, they may earn money for their "contribution" to society, but the same contribution elsewhere might not get them anywhere. Income is a rather decent way, I think, to measure how much a person benefits from living in a given society.

And if it measures how much they benefit, it should also measure how much they owe.

What do you do about wealthy people who earn their money in-country, but spend it elsewhere? They get their wealth "out of" our society, but they only owe money if they spend it here? That doesn't make any sense.

They owe their income, in some sense, to the society in which they live. Yes, they may earn money for their "contribution" to society, but the same contribution elsewhere might not get them anywhere. Income is a rather decent way, I think, to measure how much a person benefits from living in a given society.

And if it measures how much they benefit, it should also measure how much they owe.

The very nature of income is that society is repaying the individual for his or her contribution. You are seeing trends that are directly relational between how much someone contributes and how much they benefit, and assuming that income measures benefit, when it doesn't.

To use your example, if someone goes elsewhere and makes no income offering the same service or product, it is because they are not contributing society.

And yes, I feel that it does make sense that, if someone wanted to purchase the goods or services from another society, they should not be taxed as if they had bought them from this society.

That is a problem for the poor, no matter what taxation system is used.Totally agree, and that's the shame of it.

The level of taxation will not be so great that it changes it significantly.Well, that's why I said "Unless very carefully done". I like the idea of a consumptive tax in general. I've just seen how it's been applied in Canada with our GST. It really is a tax that hurts the poor as much or more than the rich, and if it were the sole form of taxation, it would have to be much, much higher and the problems with it would become very obvious.

Ideally what you want to tax isn't consumption or income, but wealth. Problem is, that's a real tough one to measure.

One thing that will turn a person off to a progressive tax system is getting a raise at work, and having less take home then you did before the raise. This has happened to me on occasion and several people i know.

Flat tax is the way to go. I've seen studies (I'll try and find them again) about where a everyone pays 'X' taxes, and every one receives a refund for 'X' of the first 30K. Even if you made less than that. Equal porptional tax burden, and those on the bottom end of the scale would recieve more back than they paid in. In the last study the tax rate was 16%.

In the United States, the Congressional Budget Office produces a number of reports on the share of all federal taxes paid by taxpayers of various income levels. Their data for 2002 shows the following: (Table 2)

The top 1% of taxpayers by income pay 33% of all individual income taxes, and 22.7% of all federal taxes.
The top 5% of taxpayers pay 54.5% of all individual income taxes, and 38.5% of all federal taxes.
The top 10% of taxpayers pay 67.4% of all individual income taxes, and 50% of all federal taxes.
The top quintile pays 82.5% of all individual income taxes, and 65.3% of all federal taxes.
Their numbers also show, that when broken down by quintile, the social insurance taxes are regressive on an effective tax rate basis only for the highest quintile, though that quintile pays the largest share of social insurance taxes (44%).

In the United States as of 2004 there are six "tax brackets" that are used to calculate the percentage of taxable income that must be paid to the United States Treasury. For the unmarried, these percentages in 2003 and 2004 are:

10%: $2,651 - $9,700
15%: $9,701 - $30,800
25%: $30,801 - $68,500
28%: $68,501 - $148,700
33%: $148,701 - $321,200
35%: $321,201 and up

Some examples - 10% of $9,700 is $970. 33% of $148,701 is $49,071. Yes, the rich pay their far share of taxes. And though I am moderate, I think the Democrats bellyaching about Bush giving money back to the rich (you know, those that spend money on consumer goods and invest in banks/stocks, as well as employ others, usually after themselves working to the top) need to read up tax law every once in a while.

The very nature of income is that society is repaying the individual for his or her contribution.

No. Unless you live in a communist society, the very nature of income is that it is what one individual (or corporation) pays for the services of another. Making a lot of money does not mean one contributes to society.

income measures benefit, when it doesn't.

Sure it does. What else would measure benefit?

To use your example, if someone goes elsewhere and makes no income offering the same service or product, it is because they are not contributing society.

Or it is because the other society has an economy that simply does not generate great wealth. One cannot accumulate wealth where it does not exist.

In the final analysis, the consumption tax is a kind of flat tax: it charges citizens the same tax for the same things in the same amounts.

It completely defeats the notion of paying according to marginal utility... unless, of course, you charge the wealthy a different sales tax than the poor. And no, luxury taxes alone do not accomplish this, since they do not differentiate between the person who spends loose change on a luxury good and the person who saves for years to buy the same good.

They pay the same tax, and for no good reason.

That is a problem for the poor, no matter what taxation system is used. The level of taxation will not be so great that it changes it significantly.
If you look at what has been introduced as HB 25, the Fair Tax bill, you will see that everyone gets a rebate check for expenses up to the poverty line.

This is a well thought out proposal that deserves support from anyone that wants to see the economic growth in the US explode.

No. Unless you live in a communist society, the very nature of income is that it is what one individual (or corporation) pays for the services of another. Making a lot of money does not mean one contributes to society.

The person exchanges a monetary value equal or lesser to the value they assign to the utility of the good or service will provide. So the collection of individuals in a society decide, through their purchases, how much of a contribution a producer or service provider is making. Unless, of course, they are wasting their money, but I don't think that the "society isn't responsible enough to know what it truly needs" argument holds up too well.

Sure it does. What else would measure benefit?

The amount of resources a person pulls from society. You cannot eat money.

Or it is because the other society has an economy that simply does not generate great wealth. One cannot accumulate wealth where it does not exist.

One does not accumulate wealth by contributing to society, one generates it through labor. One will generate wealth that is equal to the value society assigns to the contribution. If you provide a service or good that society does not need or cannot afford, you are not contributing.

In the final analysis, the consumption tax is a kind of flat tax: it charges citizens the same tax for the same things in the same amounts.

It completely defeats the notion of paying according to marginal utility... unless, of course, you charge the wealthy a different sales tax than the poor. And no, luxury taxes alone do not accomplish this, since they do not differentiate between the person who spends loose change on a luxury good and the person who saves for years to buy the same good.

They pay the same tax, and for no good reason.

Marginal utility is accounted for before the consumption is made, so marginal utility is accounted for in the tax.

With a consumption tax, the individual determines the value of the good or service they withdraw from society. They should be taxed on the value that they assigned to it.

Sure, poor people usually have had little chance in life, but that's thier own fault for being born into a poor family/being disabled/being old. My daddy got me a $500,000 year job because God loved me enough to give me this privilage - i'm worth 10 people who earn $50,000 a year! After all, let's face it - if there was a choice between saving the lives of 100 homeless or the life of Bill Gates, anyone with any sense would save Gates!

Bill Gates gives more money to charity than you will ever see in your lifetime. Damn that capitalist pig. Always making tons of wealth to spread around. Society would be so much better off if people like him would learn not to succeed, and just sponge off society instead. I mean, if I can barely pay my bills each month because I pump gas for a living, surely I can afford to help other people out too.

Bill Gates gives more money to charity than you will ever see in your lifetime. Damn that capitalist pig. Always making tons of wealth to spread around. Society would be so much better off if people like him would learn not to succeed, and just sponge off society instead. I mean, if I can barely pay my bills each month because I pump gas for a living, surely I can afford to help other people out too.

WHAT?! I knew nothing of this.

I take it all back. Helping people is immoral - it encourages people to be bloody leeches and sponge, like those damn people with disabilities - don't they realise they should be shot instead of allowed to live off the backs of others?

Therefore, Bill Gates isn't a good man at all - he's a dirty philanphropist. Altruism is the cardinal sin and greed the chief virtue in my book! It's a good thing that on average most rich people donate a smaller percent of their total income to charity than those dirty poor - yet more proof of their superiourity as a class.

It's called a right to live.

Which you don't have.

Well, if they started with scratch; it's highly unlikely that they've retired early after working "ridiculously hard". Very rarely does someone set up a business and 10 years later find themselves a multi-millionaire. When they do, it's mostly a lucky investment, and not reflective of "work" on their part. The only way this lifestyle is really feasible is if they're born with wealth, which brings me to the next point...

What a crock of crap. You do not end up a multi-millionaire because of a lucky investment. You end up a multi-millionaire by pouring blood and sweat and into your career or your business coupled with luck. It doesn't matter whether you get lucky or not, you need to have already placed yourself in the position with the ability to take advantage of that luck, ie, be prepared. If you are, and you then take your luck and capitalize on it with more work and effort. THEN you get rich. The only people in this world that maintain the rich are just lucky are those that have no drive and need to find some solace for why they don't have what others do.

Which is worse, being born with wealth and having to pay some of it in tax....or being born poor and having nothing?

Being born poor and not having the guts to pull yourself out of it, and consequently blaming all your ills on the 'lucky' rich.

It's a good thing that on average most rich people donate a smaller percent of their total income to charity than those dirty poor - yet more proof of their superiourity as a class.
Oh, it all makes sense now. The $1 from a poor man is worth more in the hands of the needy than the $100 from the rich man, simply because the $1 is a higher percentage of the giver's income.

The rich sure as Hell don't pay their share of taxes in the US. Maybe they do other places, maybe they come up a little short - but nahhh, down there? Nahhh.

The rich sure as Hell don't pay their share of taxes in the US. Maybe they do other places, maybe they come up a little short - but nahhh, down there? Nahhh.

What a lovely, well researched, knowledgeable opinion on the subject :rolleyes:

If you look at what has been introduced as HB 25, the Fair Tax bill, you will see that everyone gets a rebate check for expenses up to the poverty line.

That is wealth redistribution, and while it strikes a heartstring, I am rationally and morally opposed to that.

Which you don't have.

You do have that right inherently, and the government cannot convey that right, only protect it. You have the right to live until you are no longer capable.

Now where we have problems is when people think that everyone has rights to certain standards of living. The right to a certain standard of living does not exist, and can only be conveyed by government through the restriction of rights.

That is wealth redistribution, and while it strikes a heartstring, I am rationally and morally opposed to that.
Not at all. The rebate is a refund of what you have already paid in sales tax. Everyone gets that refund.

Where is the income redistributed? Or maybe the question is "How is this worse than the current income tax?".

The top 5% were paying 37% of the federal tax burden in 1999. At that time I believe they were in control of roughly half of the wealth in the US. You are correct. It is nowhere near 95% of the wealth. The poster you were replying to also overstated the tax burden paid by the top 5% and top 10%. Again, it's 37% and 50%, respectively. Tax burden is the appropriate number to look at, not income tax (to the poster you replied to, not to you).

Ok... I was going from something I heard a while ago, which since doing some quick research I admit was wrong. However if the top 5% are in control of 50% of the wealth but pay only 37% of the taxes then they are still getting off lightly.

To a couple of others who replied:
No Tax?
So... Roads? Police to protect your stuff? Fire Brigade? Army?

Schools? Ok, you may have been educated entirely in the private system, but if you run (or benefit from) a business that employes skilled or educated labor then you also depend on/benefit from people educated in the state sector.

Doctors? If you removed every doctor who recieved a state highschool education how many would you have left? Would healthcare cost more or less with fewer doctors?

The Poor. Let them fend for themselves or starve. Look where that same attitude got the French Aristocracy... The poor VASTLY outnumber the rich and when they decide to motivate they sure can change things.. Given a choice between starving and watching their children die of poverty in the worlds richest country and breaking into your house and stealing stuff I don't think it takes a rocket scientist to work out what many will choose.

The Poor (part 2) You run a company and one of your workers is ill and cant afford treatment - it will cost a hell of a lot more to you in lost productivity (and replacement costs) than it will to give them some antibiotics or a cast for their leg.

Stuff about supply and demand, fruits of labor and being allowed to charge for services...
Say I come across you after you have been mugged and shot in the gut, I am the only person about on this quiet night, would I be fair in pricing the labor of dialing 911 to get you an ambulance at $100,000?, $1,000,000? even $10,000,000?

Not at all. The rebate is a refund of what you have already paid in sales tax. Everyone gets that refund.

Where is the income redistributed? Or maybe the question is "How is this worse than the current income tax?".

You are correct, if everyone recieves the tax break, then it is not wealth redistribution. I saw your post late last night and misread it. I read it as everyone under the poverty line recieved the tax refunds.

What a crock of crap. You do not end up a multi-millionaire because of a lucky investment. You end up a multi-millionaire by pouring blood and sweat and into your career or your business coupled with luck. It doesn't matter whether you get lucky or not, you need to have already placed yourself in the position with the ability to take advantage of that luck, ie, be prepared. If you are, and you then take your luck and capitalize on it with more work and effort. THEN you get rich. The only people in this world that maintain the rich are just lucky are those that have no drive and need to find some solace for why they don't have what others do.

Being born poor and not having the guts to pull yourself out of it, and consequently blaming all your ills on the 'lucky' rich.Actually, check over Forbes magazine's regular in-depths on the richest of the rich. The typical method of becoming one of the truly rich involves getting lots of money from older wealthy relatives, aka "inheriting it."

In general, the percentage of wealth that the wealthy own is significantly higher than the percentage of the tax burden they pay. Check it over sometime with that in mind. Those who earn high salaries are not per se the truly wealthy.

You are correct, if everyone recieves the tax break, then it is not wealth redistribution. I saw your post late last night and misread it. I read it as everyone under the poverty line recieved the tax refunds.
I think the only thing left to discuss on a consumption tax or retail sales tax, whichever you want to call it, is how to handle the tremendous growth that the country will experience.

The US will become a tax haven for every company that operates in a nation that pretends to tax corporations.

People will have to hide to avoid getting a good paying job. This includes all those out of work IRS agents and tax accountants.

Prices will fall as the cost of compliance with the tax code is nearly eliminated.

Well first of all it's not throwing away.

And it's not because you work hard. It's because you earn much.

Yes it is throwing it away. And it means I get less value per hour worked, percentage wise, solely by virtue of the fact that work at a more lucrative job. That is manifestly unfair, and it's a disincentive to improve one's self and one's situation.

Progressive tax is very fair on the poor, because they need help. The rich do NOT need help

Taxation is supposed to be about running the government, not redistributing wealth from people who earn it to people who don't.

A humble and modest suggestion:

Link (http://www.amazon.com/exec/obidos/tg/detail/-/0871137607/102-9164370-3292140?v=glance)

:D

You do have that right inherently, and the government cannot convey that right, only protect it. You have the right to live until you are no longer capable.

Now where we have problems is when people think that everyone has rights to certain standards of living. The right to a certain standard of living does not exist, and can only be conveyed by government through the restriction of rights.

A problem I have with Libertarianism is it seems to reliy on a lot of these blanket, black-and-white statements of which rights exist and which do not. You have the right not to be coerced through physical intimidation but any other type of exploitation is perfectly fine.

Instead of saying "you have this right, but this other right does not exist", it's far more practical to assume that all rights exist, but some are more important than others. Every conceivable right infringes on some other right, and the question is in how these are balanced. My right to life infringes on your right to kill people. However, society places great value on my right to life, and only values your right to kill people in very specific situations.

As for the right to live at a certain standard, as you say it infringes on other rights. The fact that welfare exists shows that society does place some value on this right.

So, the wage earners making the most money, do indeed, pay a disproportionate percentage of federal taxes, including payroll,etc. They pay a majority of all federal income taxes.

Not only that, but they employ the majority of the workers in AMerica, who then pay taxes. SO really, the rich generate the vast majority of the taxes taken in by the U.S. Government.

Antre_Travarious']Not only that, but they employ the majority of the workers in AMerica, who then pay taxes. SO really, the rich generate the vast majority of the taxes taken in by the U.S. Government.
It's sad that we aren't as fair with the 'doers' in the nation as we are with the 'takers'.

A problem I have with Libertarianism is it seems to reliy on a lot of these blanket, black-and-white statements of which rights exist and which do not. You have the right not to be coerced through physical intimidation but any other type of exploitation is perfectly fine.

Instead of saying "you have this right, but this other right does not exist", it's far more practical to assume that all rights exist, but some are more important than others. Every conceivable right infringes on some other right, and the question is in how these are balanced. My right to life infringes on your right to kill people. However, society places great value on my right to life, and only values your right to kill people in very specific situations.

As for the right to live at a certain standard, as you say it infringes on other rights. The fact that welfare exists shows that society does place some value on this right.

All rights do exist, they can be protected or taken away by government, but they do exist.

My point is that people confuse rights with citizenship privileges. Healthcare, for example, is a privilege of citizenship. No one has a "right" to healthcare, healthcare is a service, much like haircuts or drycleaning, but saying you have a right to a haircut is ridiculous.