The Real Problem with American Taxes? The Top 1%, According to Stiglitz

tsteiner

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Each person should be expected to provide in proportion to his or her ability, and should be given help in proportion to his or her need for it.

It would not be difficult to determine how the ability to provide and the need for help should be measured.

But it would be most difficult to garner widespread acceptance of the idea that there are those who should be helped. I perceive a common attitude that anyone who needs help can rise above that need simply by self-determination.

Our society is intrinsically unfair to each of us. It's basically doomed.

To some, it seems right that, because they pay taxes, worship a particular god, have a particular level of income, etc. etc., they have more rights than others.
To some, it seems to others that anybody who is wealthy has obtained that wealth from the sweat and labor of other people (hoi polloi) and provides solely for their own.

If there is one ethos that most loudly drives America, it is that each of us has rights that we should actively protect, but others have rights only if they fit a particular ideal and therefore should be denied.

We espouse freedom, but too often define it as something that others should enjoy only if they do as we believe they should.


It is difficult to see how the situation could be changed for the better without introducing more government. Because, as individuals, we continually demonstrate that we cannot be trusted to do right by others.
 
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deleted213967

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Now it's your turn to try and prove that somehow I'm not being factual... if you can.

Funny, even your writing style evokes the likes of Answers In The Bible.

Like your set, creationists prefer to be called "creation scientists", peppering their crackpot, ultra-simplistic, dogmatic propaganda with such buzz words as "facts", "science", "evidence", "logic" and "rationality". :biggrin1:

You and a li'l handful of UltraLeft© agitprop agents own this waning political forum, so the real debate really happens behind your back (in case you didn't know).

Who gives a hoot? Independents in this country wield more power than your fringe ever has and ever will, and by orders of magnitude.

Good night and good luck!


 

B_VinylBoy

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Funny, even your writing style evokes the likes of Answers In The Bible.

Like your set, creationists prefer to be called "creation scientists", peppering their crackpot, ultra-simplistic, dogmatic propaganda with such buzz words as "facts", "science", "evidence", "logic" and "rationality". :biggrin1:

You and a li'l handful of UltraLeft© agitprop agents own this waning political forum, so the real debate really happens behind your back (in case you didn't know).

Who gives a hoot? Independents in this country wield more power than your fringe ever has and ever will, and by orders of magnitude.

Good night and good luck!



So in other words, you don't have a damn thing to say or counteract the information I presented, using the same exact source you did to try to discredit me. Wow, that's a new one! LOL!! You know, you could have just said that instead of trying to ignorantly claim that I'm so "ultra Left" because contrary to belief, many of the ultra liberals on this board don't think I'm liberal enough due to my current support with Obama. Then again, I've come to expect that from people who just want to look like political blowhards who think their beliefs are the only thing they need to have relevance in a political discussion. :rolleyes:

The title "independent" doesn't suit you just because you condemn and embrace actions from both sides of the political spectrum. So please, don't banter about like you're above the rest because you proudly wear an "I" on your chest. Considering how you just handled yourself here, I could easily say that the letter stands for incompetent, impotent, or just plain ignorant. Take your pick... or, if you want to continue this mindless line of insults I can give you many more other options to choose from. I'm rather eager to please, even when I'm intellectually cutting someone down to size.

And BTW... I don't write like anyone but myself. I've been "writing" since I was sixteen and can adapt to many different tones and styles to get my point across. I can be very diplomatic in one sentence, intellectually & socially cryptic the next... or I can be rather blunt & crass and tell you that you have no damn clue what you're talking about and to shut your hole. Care to choose how I should continue here as well? :rolleyes:
 
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deleted213967

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So in other words, you don't have a damn thing to say or counteract the information I presented, using the same exact source you did to try to discredit me. Wow, that's a new one! LOL!!

:smile:
 

D_Davy_Downspout

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So let me try to repeat another line:

You are entitled to your own opinion but not to your own facts:


  1. Half of Americans are not poor, by any stretch of the imagination.
  2. Yes, compared to that of other OECD nations, US income and wealth concentration is very high, probably too high, but so is the concentration of the tax burden, a state of affairs that is not healthful either.
  3. The working upper-middle class pays comparatively far more than the truly rich (roughly those whose assets work for them), because the income of the latter group is far more likely to consist of capital gains, whose tax treatment is quite generous.







1) This is a debatable point. Poor, as measured by the FPL, says you're correct. However, more than half of the populace would be financially ruined by a serious medical problem. So these things are relative.

2) Partly right, partly wrong. The US has a huge concentration of wealth at the top. You could point at the top 10%, but that's really an attempt to distract from the immense wealth held by the top 1%. BECAUSE OF THAT concentration, they pay a large portion of the income tax. Because it's an income tax. Because it's designed so that people who aren't making enough don't have to pay. The idea that the huge concentration of income shouldn't be paying a huge concentration of income tax is silly. It's entirely the basis of a progressive tax system. You're whining about a mere symptom. Fix the wealth inequality and the tax situation will also be 'fixed'.

3) Correct. The tax system should be more progressive, so the rich should be paying even more. This point contradicts point 2, so you should probably examine the coherence of your argument.


You said earlier that the real problem is that a ton of people don't pay income tax. That's naive. The real problem is that a ton of people don't have the income to pay income tax.
 

Cuddler

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Is there no increment in tax rate relative to increases in earnings in the US?

The UK system is under A nothing, A to B x%, B to C y%, over C z%

There are 2 main income taxes in the US, the regular Income Tax, and FICA.

For the regular Income Tax, the first $5k-10k isn't taxed (depending on married, single, etc.). The next bit is at 10%, up to a max rate of 35% for income over $372k.

FICA, which covers Social Security and Medicare, is 6.2% for all income up to $102k, where it drops to 0%. No deductions or exemptions for this tax.

See Rate schedule (federal income tax) - Wikipedia, the free encyclopedia and Federal Insurance Contributions Act tax - Wikipedia, the free encyclopedia
 
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deleted213967

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Half of Americans Are Not Poor: This is a debatable point. Poor, as measured by the FPL, says you're correct. However, more than half of the populace would be financially ruined by a serious medical problem. So these things are relative.

By the same token, Donald Trump is "poor" compared to Bill Gates.

Right. Poverty is relative. Let's apply the term liberally so we're all poor.
:grumble:

In fact why are people still risking their lives crossing the borders of such a poverty-stricken nation? We are to wonder...:thinking:
 
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deleted213967

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You're whining about a mere symptom. Fix the wealth inequality and the tax situation will also be 'fixed'.

I noted that for a nation to rely on one half of the population to deliver free government to the other half may not be "healthful". That constitutes "whining"?

It is at least in part the predictable outcome of a tragically byzantine tax code.

American society, to the chagrin of your kind, is still a meritocracy, if an obviously flawed one.

Your bitter horde of extremists will not change that, not in your lifetime.

Get used to it.

:eek:
 
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D_Davy_Downspout

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By the same token, Donald Trump is "poor" compared to Bill Gates.

Right. Poverty is relative. Let's apply the term liberally so we're all poor.
:grumble:

In fact why are people still risking their lives crossing the borders of such a poverty-stricken nation? We are to wonder...:thinking:

You're avoiding my point. Why is that?

Having a most of the population being within a serious illness or a missed paycheck of poverty is not a good situation.

Do you care about the good of the country, or just the individual?

I noted that for a nation to rely on one half of the population to deliver free government to the other half may not be "healthful". That constitutes "whining"?

It is at least in part the predictable outcome of a tragically byzantine tax code.

American society, to the chagrin of your kind, is still a meritocracy, if an obviously flawed one.

Your bitter horde of extremists will not change that, not in your lifetime.

Get used to it.

:eek:

One half of the nation doesn't deliver free government to the other half, that isn't true at all. Literally, factually, untrue. You're talking about income taxes, which are based on income, but do not make up the entirety of taxes.

The answer is to have a more equitable income. But again, you didn't reply to that, you just made comments tangential to my post rather than actually engaging. Why is that?
 

Drifterwood

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There are 2 main income taxes in the US, the regular Income Tax, and FICA.

For the regular Income Tax, the first $5k-10k isn't taxed (depending on married, single, etc.). The next bit is at 10%, up to a max rate of 35% for income over $372k.

FICA, which covers Social Security and Medicare, is 6.2% for all income up to $102k, where it drops to 0%. No deductions or exemptions for this tax.

See Rate schedule (federal income tax) - Wikipedia, the free encyclopedia and Federal Insurance Contributions Act tax - Wikipedia, the free encyclopedia

In the UK you pay 40% on earnings over c. $65,000 and National Insurance of 11% or something (as does your employer). In the US you don't even go over 30% tax until you are earning treble the UK amount.

Stiglitz is interesting and the question of unearned income being taxed even lower is an issue, BUT IMO the US Middle Class is not paying enough tax. When they start paying 33% we start paying 50%. The Middle Class is where the big revenue comes from and the US Government will have to start taking a bigger slice of that pie if you are going to a/ deal with your debt and b/ address some of your social issues.
 
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deleted213967

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In the UK you pay 40% on earnings over c. $65,000 and National Insurance of 11% or something (as does your employer). In the US you don't even go over 30% tax until you are earning treble the UK amount.

Stiglitz is interesting and the question of unearned income being taxed even lower is an issue, BUT IMO the US Middle Class is not paying enough tax. When they start paying 33% we start paying 50%. The Middle Class is where the big revenue comes from and the US Government will have to start taking a bigger slice of that pie if you are going to a/ deal with your debt and b/ address some of your social issues.

We may be comparing apples and oranges.

The Income Tax brackets you cited only apply to the Federal Income Tax. Add Social Security (retirement) and Medicare (health) taxes, currently less than 10% for employees and well over 10% for self-employed individuals.

States, counties and even cities levy taxes as well. Some states, such as CA or MA, are particularly "taxing". In California, the State Income Tax alone routinely adds 10% to the burden. The Sales Tax (which unlike the VAT is only paid by the final user) is almost 10% everywhere there. Property Taxes are paid by most Americans as well, since the home ownership rate is still above 65%.

Trying to compare total governmental revenue as a % of GDP is tricky too, because in most of the EU payroll withholdings include government-sponsored health care insurance. In the US, although larger employers foot most of the private insurance bill, many employees still share in the cost, but it is not considered a "tax", because the premiums are largely collected by private insurers.

 
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deleted213967

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One half of the nation doesn't deliver free government to the other half, that isn't true at all. Literally, factually, untrue. You're talking about income taxes, which are based on income, but do not make up the entirety of taxes.

The answer is to have a more equitable income. But again, you didn't reply to that, you just made comments tangential to my post rather than actually engaging. Why is that?

I was referring to one half of the nation delivering free federal government services to the other half.

I was not referring to local government or entitlements.
 

Drifterwood

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We may be comparing apples and oranges.

I think that you can get close. All the things that you mention, we have.

National insurance 11%
Sales tax 20%
Random other sales taxes like Gas, 68%
Property tax c. 7.5% of the avrage household income.
I don't think we are allowed any deductions either any more, no company cars, tax on pensions etc etc.

I am not sure you will ever tie down the top 1%, attractive as it is, but I do think the US Middle and Upper Middle Classes get a good deal on the income tax side, relative to other developed Western Countries and to what your Government spends. I suspect these people wish to deflect their own relatively good position to the Corporations and the super rich.
 

D_Davy_Downspout

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I was referring to one half of the nation delivering free federal government services to the other half.

I was not referring to local government or entitlements.

That's true, but that's not what you said. You deliberately worded that to make it sound as if you were referring to all taxes and all government.

It's still a somewhat silly point to make, unless you think that taxes shouldn't be progressive.
 
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deleted213967

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I am not sure you will ever tie down the top 1%, attractive as it is, but I do think the US Middle and Upper Middle Classes get a good deal on the income tax side, relative to other developed Western Countries and to what your Government spends. I suspect these people wish to deflect their own relatively good position to the Corporations and the super rich.

That is the only clear consensus, at least in the US, when it comes to taxation: taxation is always "fair" when it hits someone else.

As for the capital gain tax, which evidently tends to favor the wealthier taxpayers, I am not certain an easy solution is within reach:

At 15% (or even lower, for assets held at least 1 year), it seems particularly generous in the US. But the US is not the only country that treats long-term capital gain more favorably than ordinary income, and a majority of mainstream economists still agree that low capital gain taxes stimulate / do not deter investment.

Markedly increasing that rate overnight would very likely dampen investment and certainly increase the cost of capital acquisition.

It is not a coincidence that the idea of increasing LT capital gain taxes has not figured prominently in recent elections.
 
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deleted213967

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That's true, but that's not what you said. You deliberately worded that to make it sound as if you were referring to all taxes and all government.

It's still a somewhat silly point to make, unless you think that taxes shouldn't be progressive.

Progressive to what degree?

Most Americans, regardless of persuasion, support little-to-no taxation for those who can barely subsist. That certainly does not include half the population of the richest nation in the world and one of the very richest on a per capita basis.

As for your point about 1-catastrophe-away-from-the-abyss, who isn't?

Even a $500k-a-year cardiologist could be sued into oblivion depending on the circumstances of the malpractice.
 

D_Davy_Downspout

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Progressive to what degree?

Most Americans, regardless of persuasion, support little-to-no taxation for those who can barely subsist. That certainly does not include half the population of the richest nation in the world and one of the very richest on a per capita basis.

As for your point about 1-catastrophe-away-from-the-abyss, who isn't?

Even a $500k-a-year cardiologist could be sued into oblivion depending on the circumstances of the malpractice.

A malpractice suit isn't a basic need like healthcare. If you think they're at all close, you have some very unusual priorities.

The point is not that the part of the country is paying no income tax. The point is that part of the country is poor enough to pay no income tax. You're attacking a symptom as if it were the problem.
 

Drifterwood

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Markedly increasing that rate overnight would very likely dampen investment and certainly increase the cost of capital acquisition.

It is not a coincidence that the idea of increasing LT capital gain taxes has not figured prominently in recent elections.

I suppose this underpins the rationale of capitalism.

There's a clear ladder to achieving the American Dream, and there has to be reward for getting to the top.

Your relatively low taxation on high earners ($150K +) allows these people to also keep climbing that ladder. At the expense however, of those for whom there is no cigar.