America - The Official Thread

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Danoff
What do you mean by "just as much"? Everyone's taxes are very unique, based on their personal use of items that were favored or disfavored by the previous and current tax code. The standard deduction going up should help everyone that it catches, which I think is something crazy, like 90% of people filing. Whether that help is offset by losses in other areas (like SALT deductions) is hard to say. That might be state-specific.
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Let me rephrase. Did the taxcuts benefit the 1% highest income more or less procentually then the rest of the 99%? and of the 99% did 90 benefit less or more then the top highest income of 10%?
 
PocketZeven
Let me rephrase. Did the taxcuts benefit the 1% highest income more or less procentually then the rest of the 99%? and of the 99% did 90 benefit less or more then the top highest income of 10%?
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Dunno, but it's not a super easy question to answer because how you have to normalize. I mean, the top 1% pays 40% of all taxes. The top 10% pays about 70% of all taxes. The bottom 50% (roughly) pays zero federal income tax.

If you reduce someone's federal income tax bill from $1000 for the year to $0, you reduced their taxes by 100%. If you reduce someone's taxes for the year from $500,000 to $400,000, you reduced it by 20%, but the dollar amount is much greater.

It gets so much more complicated though, because the top 1% are probably also paying corporate tax. And how do you define the top 1%? Very wealthy people can post zero income tax if they have zero taxable income for the year and look like they're at the bottom. I think the answers to your questions will probably be easier after the data for this year comes out, which may take a while.
 
Danoff
Dunno, but it's not a super easy question to answer because how you have to normalize. I mean, the top 1% pays 40% of all taxes. The top 10% pays about 70% of all taxes. The bottom 50% (roughly) pays zero federal income tax.

If you reduce someone's federal income tax bill from $1000 for the year to $0, you reduced their taxes by 100%. If you reduce someone's taxes for the year from $500,000 to $400,000, you reduced it by 20%, but the dollar amount is much greater.

It gets so much more complicated though, because the top 1% are probably also paying corporate tax. And how do you define the top 1%? Very wealthy people can post zero income tax if they have zero taxable income for the year and look like they're at the bottom. I think the answers to your questions will probably be easier after the data for this year comes out, which may take a while.
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The very rich are often not subject to income tax per se. They may not have "earned income" at all, but rather dividends, capital gains etc. These are taxed at a lower rate than earned income ... which seems unfair, on the face of it. It's what Warren Buffet implied with the comparison of his tax rate with that of his secretary. My understanding is that a large burden of taxes currently falls on the well-to-do: people earning around $200,000 - $500,000 in income. They are wealthy, but not "rich". They pay the same rate, or often more, than people who are making tens of millions a year. That is because the much more aggressively progressive tax rate, which was in place after the Second World War, was abandoned during the Reagan years & has been reduced several times since.
 
Biggles
The very rich are often not subject to income tax per se. They may not have "earned income" at all, but rather dividends, capital gains etc. These are taxed at a lower rate than earned income ... which seems unfair, on the face of it. It's what Warren Buffet implied with the comparison of his tax rate with that of his secretary. My understanding is that a large burden of taxes currently falls on the well-to-do: people earning around $200,000 - $500,000 in income. They are wealthy, but not "rich". They pay the same rate, or often more, than people who are making tens of millions a year. That is because the much more aggressively progressive tax rate, which was in place after the Second World War, was abandoned during the Reagan years & has been reduced several times since.
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You don't make it to the top 1% until you post something like $400k.

I think your sentiment is largely accurate, but might be somewhat misleading. You say that the large burden of taxes currently falls on that group, but you mean percentage-wise. Not the actual tax burden. If someone makes $10M in capital gains in a year and pays 15% (that'd be entirely long-term, not held and sold within a single year), that person would pay $1.5M in taxes for the year. That's 3 times more than the entire salary of someone who made $500k, whose tax burden is probably more like $150k. Maybe $200k depending on the circumstances. So who is bearing the "large burden" here? Percentage-wise it's the person making $500k. In terms of actual share of taxes, it's the person making $10M. I suppose you'd be happier if that person paid $4M in taxes, but I don't quite understand how that's their "fair share". I think everyone's fair share corresponds to their representational fraction of the government. If you want to get really picky about it, dividing the budget up among the population is probably "more fair" if you allocate it according to how much that portion of the population is using. But I'm not sure that progressives would like the outcome of that analysis.
 
Danoff
You don't make it to the top 1% until you post something like $400k.

I think your sentiment is largely accurate, but might be somewhat misleading. You say that the large burden of taxes currently falls on that group, but you mean percentage-wise. Not the actual tax burden. If someone makes $10M in capital gains in a year and pays 15% (that'd be entirely long-term, not held and sold within a single year), that person would pay $1.5M in taxes for the year. That's 3 times more than the entire salary of someone who made $500k, whose tax burden is probably more like $150k. Maybe $200k depending on the circumstances. So who is bearing the "large burden" here? Percentage-wise it's the person making $500k. In terms of actual share of taxes, it's the person making $10M. I suppose you'd be happier if that person paid $4M in taxes, but I don't quite understand how that's their "fair share". I think everyone's fair share corresponds to their representational fraction of the government. If you want to get really picky about it, dividing the budget up among the population is probably "more fair" if you allocate it according to how much that portion of the population is using. But I'm not sure that progressives would like the outcome of that analysis.
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Interesting proposition. What do you define as "using"?
 
PocketZeven
Interesting proposition. What do you define as "using"?
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Excellent question. It could potentially be a very complex analysis. You could try to keep it simple (Number of times the FBI has investigated you, number of times you called the cops, number of times you called 911, visits to the ER, use of public parks, number of tax forms filed, use of airport resources, use of food stamps, use of welfare, use of public educational services (federally funded that is), etc. etc.) but I think it could balloon from there (people that you caused to drive on interstate highways, police protection of your particular neighborhood, national parks in your state).
 
Shares in Kraft Heinz dropped 27% last night for reasons unrelated to Kraft himself.

No wonder he was looking for some comfort!
 
Touring Mars
Shares in Kraft Heinz dropped 27% last night for reasons unrelated to Kraft himself.

No wonder he was looking for some comfort!
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lol.

I know you're joking but I think it's a common mis-conception that Robert Kraft got rich off of Kraft foods. The two are completely unrelated.
 
Danoff
You say that the large burden of taxes currently falls on that group, but you mean percentage-wise. Not the actual tax burden. If someone makes $10M in capital gains in a year and pays 15% (that'd be entirely long-term, not held and sold within a single year), that person would pay $1.5M in taxes for the year. That's 3 times more than the entire salary of someone who made $500k, whose tax burden is probably more like $150k. Maybe $200k depending on the circumstances. So who is bearing the "large burden" here? Percentage-wise it's the person making $500k. In terms of actual share of taxes, it's the person making $10M. I suppose you'd be happier if that person paid $4M in taxes, but I don't quite understand how that's their "fair share". I think everyone's fair share corresponds to their representational fraction of the government. If you want to get really picky about it, dividing the budget up among the population is probably "more fair" if you allocate it according to how much that portion of the population is using. But I'm not sure that progressives would like the outcome of that analysis.
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The tax burden falls on the higher income earning group because, as a group they pay a lot of taxes - there are a lot more of them than there are people making $10m in capital gains.

Yes, in theory, I would be "happier" if the person making $10m in capital gains paid $4m in taxes. (I should add that the marginal individual tax rate in Canada used to be 46.25% ... & that was due on all income above around $80,000).

Yes, I have a fundamentally different view of society than you. I think it's not unreasonable to divide the budget up according to the ownership of assets.
 
Danoff
Geez you're right! Maybe we shouldn't do those. ;)
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That was a serious question though. In theory I am intruiged in a fee based system, but isnt that essentially what exists as "tax". However there will always be people who need more help then others and to be honest I have no faith in rich people being generous philantrpist. I prefer taxing them. Because the country provides them the resources to earn that money. In my opinion it is reasonable to give back a portion of it. For a healthy society there is just no way around it.
 
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Some feel the industrious should be rewarded by keeping the fruit of their labors. Others feel income should be redistributed according to need and the demands of justice. This conflict is near the heart of our political circus.
 
Dotini
Some feel the industrious should be rewarded by keeping the fruit of their labors. Others feel income should be redistributed according to need and the demands of justice. This conflict is near the heart of our political circus.
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In my opinion it isnt about justice or denying the fruits of labor. The industrious only benefit if wealth is distributed, otherwise it is unsustainable. there is only so much wealth to be earned. Otherwise wealth will be a 1 way street. The most wealthy will primarily spend that fruit to inrich themselves even more. What would you suggest in your proposition to have some redistribution of wealth?
 
PocketZeven
That was a serious question though. In theory I am intruiged in a fee based system, but isnt that essentially what exists as "tax". However there will always be people who need more help then others and to be honest I have no faith in rich people being generous philantrpist. I prefer taxing them. Because the country provides them the resources to earn that money. In my opinion it is reasonable to give back a portion of it. For a healthy society there is just no way around it.
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Philathropy is massive in the US. And it would be so much more the case without a safety net. Right now there are many in the US who do not donate more (and don't think about how or where to donate) because they feel like the government is doing the job.

A fee-based system doesn't eliminate the possibility of government handouts though. The fee just has to be collected for the handout at a different point. Finding that point can be tricky if your fee-based government collects fees only on official government transactions. Adding a welfare portion to everyone's driver's license or vehicle registration or house title assignment or passport renewal or airport security screening or what have you would be a bit onerous. If you consider a sales tax to be a fee though, which I'm not sure it is but it's closer than the income tax, then that's an avenue.

Danoff's preferred tax systems are something like this:

1) Fees
2) Endowment with Fees
3) Endowment with Fees and Inflationary control
4) Endowment with Fees, Inflationary control, and Sales Tax

PocketZeven
there is only so much wealth to be earned.
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That's not correct.
 
Danoff
Philathropy is massive in the US. And it would be so much more the case without a safety net. Right now there are many in the US who do not donate more (and don't think about how or where to donate) because they feel like the government is doing the job.

A fee-based system doesn't eliminate the possibility of government handouts though. The fee just has to be collected for the handout at a different point. Finding that point can be tricky if your fee-based government collects fees only on official government transactions. Adding a welfare portion to everyone's driver's license or vehicle registration or house title assignment or passport renewal or airport security screening or what have you would be a bit onerous. If you consider a sales tax to be a fee though, which I'm not sure it is but it's closer than the income tax, then that's an avenue.


Danoff's preferred tax systems are something like this:

1) Fees
2) Endowment with Fees
3) Endowment with Fees and Inflationary control
4) Endowment with Fees, Inflationary control, and Sales Tax



That's not correct.
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Half of the wealth in the world is possesed by 1%. The top 30% holds 97%. leaving 70% of the people only have 3% to be distributed (or earned). I do not believe that large philantropy in the USA is enough. There are many billionaires out there that themselves want higher taxes for the highest brackets. (Buffet/gates etc).

edit: in the US 20% owns 88% and 1% almost 40%.

How would that endowment work in the practical sense?
 
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Dotini
Some feel the industrious should be rewarded by keeping the fruit of their labors. Others feel income should be redistributed according to need and the demands of justice. This conflict is near the heart of our political circus.
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It's not an all-or-nothing question. It's about finding a reasonable balance.

Karl Marx anticipated that capitalism would destroy itself because the most successful capitalists would gradually monopolize all commerce, becoming ever wealthier, but eliminating the general prosperity that was required to purchase the goods created by the capitalists. That this didn't happen is due in large part to the re-distribution of wealth due to pragmatic "socialism", something that Marx could not have foreseen happening.

On the other hand, writing in "The Road to Serfdom" (in the early 1940's) Hayek anticipated the growth of totalitarianism in the West due to increasing government involvement in the economy. In reality, Western societies have been able to maintain civil liberties while increasing government participation in the economy & re-distributing wealth through social programs. The balance between individual liberty & collective security & prosperity needs to be constantly re-evaluated & adjusted. Big changes in technology & the growth of a global economy have made this a more pressing question than ever.
 
Biggles
It's not an all-or-nothing question. It's about finding a reasonable balance.

Karl Marx anticipated that capitalism would destroy itself because the most successful capitalists would gradually monopolize all commerce, becoming ever wealthier, but eliminating the general prosperity that was required to purchase the goods created by the capitalists. That this didn't happen is due in large part to the re-distribution of wealth due to pragmatic "socialism", something that Marx could not have foreseen happening.

On the other hand, writing in "The Road to Serfdom" (in the early 1940's) Hayek anticipated the growth of totalitarianism in the West due to increasing government involvement in the economy. In reality, Western societies have been able to maintain civil liberties while increasing government participation in the economy & re-distributing wealth through social programs. The balance between individual liberty & collective security & prosperity needs to be constantly re-evaluated & adjusted. Big changes in technology & the growth of a global economy have made this a more pressing question than ever.
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Productivity_and_Real_Median_Family_Income_Growth_in_the_United_States.png


This stat is very much representative.
 

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