“People ask how I can be a conservative and still want higher taxes,” Ben Stein wrote in a New York Times commentary. “It makes my head spin, and I guess it shows how old I am. But I thought that conservatives were supposed to like balanced budgets. I thought it was the conservative position to not leave heavy indebtedness to our grandchildren. I thought it was the conservative view that there should be some balance between income and outflow. When did this change?”
For those who counter that we need to cut spending, not raise taxes, Stein responds: “The sad fact is that spending rises every year, no matter what people want or say they want.”
And what about the cries of “class warfare” if you note that the rich pay a much smaller percentage of their income on taxes than everyone else does? Stein quotes what billionaire investor Warren Buffett told him: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
Posted by Phillip Brownlee
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96 Comments
The media likes to throw out the phrase “class warfare” whenever it involves taxing the rich. However when it comes to creating a larger financial burden on the working class and destroying the middle class it’s rendered as “economic incentives” or “stimulating the economy”.
Among the things the Bush crime family did was cut energy assistance so poor people wouldn’t freeze during the winter, increased the interest rates on student loans, refuse to raise the minimum wage, increase medicare costs on prescription drugs, and cut funding to low income health clinics. Bush even wanted to destroy Social Security, the most successful program in preventing poverty. Of course when it comes to the Democrats plan of removing all the massive tax cuts for the wealthy the corporate owned media shouts “CLASS WAR, CLASS WAR!” There was a time when the ultra rich paid a tax rate of 95%, and the economy was doing really well back then. Now we have a huge debt and record deficits and an increased tax burden on the middle class. Of course the media is silent about that class war.
I still want to win Ben Stein’s money!
Sigh. . .Ben, where the hell were you in the spring of 2001, when anyone smarter than furniture could see this coming?
Oh, right, you were cashing in. . .
Hey, thanks anyway for growing a conscience, dude. Amazing what one election can do.
I think the ‘c’ word is misspelled, but I’m way tired. ..
P.S. Credit where it’s due:”Could be mistaken for furniture”
Mr. C., a long time ago, referring to a long-forgotten legislative candidate.
Is this factually correct: “… the rich pay a much smaller percentage of their income on taxes than everyone else does?”
Doug, it’s a debate technique that USED to flummox me (long ago): accuse your opponent of precisely the same thing you’re doing, preferably before they do.
In the “class war” business, that’s easy enough: superficial attacks on progressive taxation note, accurately and tautologically enough, that the wealthier pay a higher percentage of their incomes. Stop the inquiry RIGHT THERE! CLASS WARFARE! CLASS WARFARE!
It’s been remarkably effective, because most people want to believe that everything is fair, even though that’s never been the case.
I should probably rant with more sleep, but I’m Rage, and I approved this message.
. . .in INCOME TAXES, anonymous. That’s the point.
Actually, with tax shelters and whatnot. . .
How about capital gains? Who among the working class gets a penny from such things?
What’s the rate of taxation now? It’s a different schedule.
“For those who counter that we need to cut spending, not raise taxes, Stein responds: “The sad fact is that spending rises every year, no matter what people want or say they want.””That is not an answer, Stein. it is the avoidance of one. The answer is to cut spending AND taxes.Also, Buffett is the “go to” guy when you need a quote from a rich guy who wants to raise taxes. The Taxers think it makes their point that the rich don’t pay enough taxes. Humbug.anon- I’m sure it is correct, but that is not the point. It is a way to use statistics in the Taxers favor.I bought the Eagle paper today for $1.50 and had to pay 11 cents tax extra. I was told that on December 1st, the tax on the paper began.We can cut spending and the hand-out, gimme programs should be first.
The problem is spending. We can’t give up on that – it has to be constrained, and it was when Republicans were disciplined and Clinton was President.
ANY tax increase creates a drag on the economy.
Oh, by the way, Phillip left out this important fact:
http://www.heritage.org/Research/Taxes/BG1415.cfmAccording to data from the Internal Revenue Service, 1 the top 1 percent of income earners pay nearly 35 percent of the income tax burden; the top 10 percent pay 65 percent; and the top 25 percent pay nearly 83 percent. The bottom 50 percent of income earners, on the other hand, pay barely 4 percent of income taxes.
The left would rather we not think about “the top 25 % pay 83%” of the income tax burden. It doesn’t work with the whole “income redistribution, Bush is killing the middle-class thing”.
Finally a true conservative. The little conservatives sure wanted their part of the Clinton surplus, refunded to them, but don’t want their share of the debt and deficit Bush has created.
Why should citizens be punished for making good choices and working hard? I think it should be a straight percentage across the board, everyone pay 25% no matter how much they earn, that’s only fair.This is the only country where you get rewarded for making bad choices. All you have to do get pregnant, drop out of school, stay uneducated, don’t get married, and the government will take care of you and however many offspring you have. You can get free health care, free food, low cost housing, and lots of other perks that those who work for a living have to pay for. The whole system needs to be revamped, because it’s the inept who suck the system that’s been set up for the cognitive and physically disabled. But OMG, we wouldn’t want people to have any consequences for their disfuctional behavior, that would mean they might be uncomfortable and have to go without. The problem is that when you do for others what they need to do for themselves, it takes away their motivation and encourages their dependancy on the government. Just like all the food pantries, shelters, etc in Midtwon have increased the homeless population and devalued property in that area. How has Johnson’s war on poverty worked out? Seems like we have more and more who only take and less and less of those who work and contribute.I’m madder than hell right now because the state is cutting back services for those who are disabled and can’t advocate for themselves, and in my work I see far too many who are able bodied and capable of working who take advantage of the system so they can have more money for illegal drugs, cigarettes, alcohol, etc. They’re passing on their sense of entitlement to their children, and teaching them by example that they are not expected to take care of themselves.Cut back on all those who are taking advantage of the system and quit invading other countries, that alone would save so much money that the tax burden could be reduced for everyone.Too bad it’s so politically incorrect to expect people to take responsibility for their lives, so let’s just keep giving them everything until they come to their senses and do something positive with their lives…..but don’t hold your breath.
It’s not about the tax rate, but about having the rich pay the taxes on a fair basis. What they do is hide their income in various schemes that is on the border line of ledal, because they can afford to do it.
This isn’t just rich business men or investors. The inheirted class that people would classify as liberals. Kennedy, Heinz-Kerry, Reid and the rest who use tax avoidance schemes.
But many people on the left are anti-capitalist and therefore target the corporations or the people who run them for blaming the ills of our society and not paying their fair share of taxes, which is warrented. But they pass their other class of rich just because they are brainwashed to believe that the other uber rich is on their side because their Democrats or ridicle Republicans. The limo-Hollywood left and the rest. Don’t think for a minute they don’t have their trust in tax avoidance schemes because they do.
If your advocating for the rich to pay a higher percentage on their income tax rate, target them all, not just the business class of the group.
Twenty six years ago, in a brief delusional moment, probably under the influence of illegal drugs, I considered voting for Ronald Reagan because he PROMISED to balance the Federal budget. Since then, the only time we have had a balanced budget was when that nasty “tax and spend” liberal” Democrat Bill Clinton was in office.
The Republicans constantly decry “spending” but Bush, the Sequel has raised spending at a rate far higher than an Democrat, and that does not consider the cost of the Iraqi Disaster. The spending for entitlement prgrams has kept pace with growth, but defense spending, unrelated to the War on Iraq, has spiraled upward year after year.
Bush the Dumber consistently over estimated the deficit and then claims that he has cut the deficit when the actual number is lower than “estimated.”
The net result is that we now have a nine trillion dollar national debt, growing by the moment with no end in sight. All Bush, the Sequel has promised is that he will cut the deficit in half by 2009.
Thanks, George.
BTW – For the reich-wingers that complain that Clinton gutted the military, etc – it was the GHWB that began the process of reducing defense spending after the end of the Cold War. The Armed Forces that GWB took to war was Clinton’s Army.
Someone is going to have to pay this massive debt. We cannot continue to borrow from China. Currently, just the basic interest service on our debt consumes $300 billion annually.
In addition to the massive debt, our Social Security surplus has been applied to the annual spending for decades. Currently, the is no SS fund – zero dollars. These dollars will have to come out of FUTURE tax receipts.
The bottom line is that we have a massive hole to fill, deep and wide, and those dollars have to come from somewhere.
Since the rich have been the ones to benefit from unnecessary tax breaks, it is only right that paying the bill should begin with them.
Corporate leaders get paid obscene amounts because they are usually sitting on each others compensation committees. They seem to get to their positions because of who they know, or who they are related to. I bet in any corporation of any size there are hundreds if not thousands of people more intelligent than their corporate leaders, working for a fraction of the executives pay. If you believe the system rewards based on merit and ability, you are the fool.
Return the tax tables to their state prior to the feudalistic engineering of Ronald Reagan.
I keep hearing about this ‘American dream” Funny, I don’t seem to find it accept among those who marry well.
Capital gains, along with most of the other taxes on the elite, are mostly gone, now. It’s clear that none of the participants in this discussion are of the uppper level incomes that would benefit from the current admonistration (yes, I meant that) and their tax cuts for the rich. Yet several still defend them. Amazing. Class warfare does indeed exist, and all of us are losing, even though some of us are on the wrong (Bush’s) side. Still more amazing.
And yes, it IS conservative to tax the rich. TRUE conservatism DOES stand for a balanced budget, something the false conservatives in power haven’t been concerned with for a long, long time.
“Why should citizens be punished for making good choices and working hard? ”
Blah blah blah etc. I don’t have time to categorize the factual inaccurracies in Mary’s ideological rant (e.g. most of Europe, in fact, spend far more on the poor people that Mary irrelevantly disdains).
The issue is in fact this: what is a fair, functional and substainable method of taxation? Taxation is not about “punishing” anyone, nor does it have a damn to do with redistributing wealth. It’s about pooling resources for the benefit of all. Federal notes receive both their power and value from the government, and it’s silly to pretend that the payment received for work is somehow divorced from government policies.
Those who are extremely wealthy are not just more comfortable, they tend to be healthier, more productive (if they choose–and they have that choice!), and, most importantly, have disproportionative influence on both government policies and the reporting of same. Indulging an hourglass-shaped income distribution is profoundly dangerous to democracy.
If one MUST view taxes as punishment, it naturally follows that someone who makes a mere $100,000 a year is punished far more by a 15% tax rate than someone makes a million is punished by a 20% rate: keeping $85,0000 vs. keeping $800,000. Moreover, essential government functions typically work to the benefit of all.
As George Lakoff has pointed out, the bewilderingly tragic Katrina debacle was not due to incompetence: it was precisely due to a ideology opposition to government spending, which inevitably produced that result. Jonah Goldberg was even making jokes about it. Why should we give a damn about a bunch of poor niggers, huh? They deserved it.
Prejudice (racial or otherwise) inevitably lies at the core of such thinking.
Those who gripe about progressive taxation usually have an experience wherein an increase in pay knocked them into a higher bracket, making their gain less substantial. Well, boo hoo hoo, folks. Life’s not fair. Why exactly should we feel so sorry for you?
P.S. Oh, and let’s not talk about the OTHER taxes, and “user fees”. . .
Gee – Money and Taxes, it is just ideology!Think about it, what is the purpose of money and what is the purpose of taxes?It all provides a system of values in trading for goods but the problem is how people are so hung-up about it that the very basics of the invention of money are completely lost.We value things with money that has nothing to do with the enhancement of human life.Give a trillion dollars of U.S. paper money to a tribe of natives in the middle of a Brazilian jungle and they will use it for a village camp fire, that would be the real value of it to them.We should always remember what the real values are when it comes to money; it is about trading of goods that will sustain your living, if we have too we may want to create a whole new money system that will be more equal for proper distributions that will serve only those that are middle classes and lower classes.If the rich man wants all that U.S. paper money than give it to the poor bastard and leave him out the rest of the human race.Think about it!
Since we’re talking about taxes, I’ll post this from the IRS website.
****2007 Inflation Adjustments Widen Tax Brackets, Expand Tax BenefitsIR-2006-173, Nov. 9, 2006
WASHINGTON — Personal exemptions and standard deductions will rise, tax brackets will widen and income limits for IRAs will increase in 2007, thanks to inflation adjustments announced today by the Internal Revenue Service.
By law, the dollar amounts for a variety of tax provisions must be revised each year to keep pace with inflation. As a result, more than three dozen tax benefits, affecting virtually every taxpayer, are being adjusted for 2007. Key changes affecting 2007 returns, filed by most taxpayers in early 2008, include the following:
*The value of each personal and dependency exemption, available to most taxpayers, will be $3,400, up $100 from 2006.
*The new standard deduction will be $10,700 for married couples filing a joint return (up $400), $5,350 for singles and married individuals filing separately (up $200) and $7,850 for heads of household (up $300). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
*Tax-bracket thresholds will increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket will be $63,700, up from $61,300 in 2006.
In 2007, for the first time, inflation adjustments will raise the income limits that apply to the retirement savings contributions credit, contributions to a Roth IRA and deductible contributions to a traditional IRA where the taxpayer or the taxpayer’s spouse is covered by a retirement plan at work.
http://www.irs.gov/newsroom/article/0,,id=164182,00.html
And here’s a little tidbit to keep in mind while gathering tax information as the year draws to a close.
***Special one-time federal excise tax credit in 2006 rebates tax overpayment on phone bills.
(From snopes.com)Taxpayers are eligible to claim a refund of the long-distance tax billed for any service (cell, fax, computer or land line) in the 41-month period from 28 February 2003 through 31 July 2006.
On its website, the IRS explains (http://www.irs.gov/newsroom/article/0,,id=161506,00.html) the refund and how to apply for it. Additional information can be found by following the links offered on its Telephone Excise Tax page http://www.irs.gov/businesses/small/article/0,,id=160214,00.html.
In a nutsell, rather than ask everyone to comb through their phone bills for that 41-month period to add up all the tax collected and then submit claims for those amounts, the IRS will offer taxpayers standard refunds of between $30 and $60 (the amount depends on the composition of the household) that they can apply for simply by entering the refund amount appropriate to them on a particular line on their 2006 tax returns. Those woh wish to go it the long way by adding everything up to emerge with the precise figure owed them may do so, but in their case applying for the refund will require them to complete and file Form 8913 with their returns.
This is a one-time tax credit, so those who fail to file for it on their 2006 returns will likely lose their shot at claiming it. It therefore makes very good sense to let your friends, neighbors, and co-workers know about this opportunity, lest they otherwise miss it. The only mystery in all this lies in the question of why the Internet drums only started to beat about this in November 2006, when the refund was announced in May 2006, a full six months earlier.
****
You can read the full sample email that has been passed around at http://www.snopes.com/business/taxes/excise.asp
I wondered how long it was going to take before some dimwit posted that red herring about how the “top 1 percent pay 35 percent of income taxes.”
Congratulations, Ed, the dimwit award goes to you.
When you’re taxing something, people who have more of that something pay more.
Let’s say you tax gasoline (which we of course do). People who own a fleet semi-trucks and drive them as much as they can are going to pay a lot more than somebody who only drives a Toyota Corolla.
Likewise, if you make some gigantic amount of income like a million a year when the average HOUSEHOLD only makes something like 35 thousand, why then you’re going to pay a lot more INCOME tax.
The only way you could reduce the amount of income tax collected from the rich as a percentage is to have the rich earn LESS and everybody else earn MORE.
Duh.
Apparently you Limbaugh listeners all got a personal letter informing you of this idiotic talking point because you keep bringing it up whenever the issue of tax fairness is discussed.
If you take a country like Brazil, let’s say, which has a tiny strata of very rich people and a huge underclass of very poor with hardly any middle class, what’s the percentage of income collected by the top 1 percent?
It would be very high . . . much higher than here. Because the poor are too poor to tax.
So let’s say it’s 90 percent.
Does that mean that the rich are paying too much in Brazil?
No. It means that the rich are just a lot richer than everybody else.
That’s what happening here by design of the CONservatives.
People like Stein and Buffet recognize that a healthy economy will benefit them in the long term. They realize that borrow-and-spend might give a short-term lift but that it leaves problems for the future. That is why these successful CAPITALISTS support reasonable progressive tax increases.
So I distain the poor, Rage? No, I distain the people who suck off the system who have the ability to do something about their lives. I distain our co-dependant society that enables physically healthy to be weak, dependant, and parasitic. I distain the ones who live totally selfish lives who manipulate and take advantage of resources that are meant for the truly disabled. I distain the state cutting back on resources for those who don’t have the ability to speak up or stand up for themselves.I’m glad you’re such an fucking expert on the subject, Rage.Kind of makes me wonder what choices you’ve made in your life.
Yikes Mary,
A little defensive?
The sting in any rebuke is the truth.
At least that’s what Benjamin Franklin said.
I gotta go with Rage here. It DOES sometimes seem as though you graduated from the Ronald Reagan school of economics and compassion. You do over and over the “personal responsibility” meme.
I should pay the same 25% tax as YOU?
My income is sufficiently high that I would expect to see my taxes increase under proposals made by the Democrats. I will NOT benefit from things like enhanced child credits etc. However, I support them. I see a serious need to deal with our ongoing deficits and astronomical debt. I also see a need to shore up Social Security and Medicare. I am old enough that my time horizon now includes those things not all that many years down the road.
When I think of educating young people to take good jobs one thing in the back of my mind is that I want them working and supporting the system when I retire. Economics is a two-way street.
capnAmerica shows that even though one may have attained the status of an assistant english teacher at a crummy junior college, some still can’t understand elementary arithmetic. And calls someone a dimwit, on top of that. Just look in the mirror to understand the definition of dim.
“Just look in the mirror to understand the definition of dim.”
What a useless and uncalled for post. The simple point that the good Capn’ was making is that the rich contribute (?) MORE of the total tax receipts because they receive more of the total income.
A reasonable point, and a fair accessment.
So why the personal attack?
Or do you have “something” for Rush Limbaugh?
That’s the wordiest post Susie ever favored us with.
USUALLY she just bashes kfg. Here she bashed Capn. Susie has YET to ever offer anything but attacks on others.
You know, when we consider that the majority of wars that America has engaged in have been for economic reasons it makes sense to tax the rich. It is rarely the rich who engage in any of these wars, the battlefield is littered with the bodies of the poor. The working people fight the wars and the rich make the money. If the working people can make a sacrifice certainly the rich who profit (like Prescott Bush who made millions off the slave labor of concentration camp Jews) can make a monetary sacrifice.
After reading the thoughtful comments I have a few questions:
1. How is it right for a person who works hard 5 or more days per week and makes his money from his labor to pay a higher percentage in taxes than a person who “manages”, making his money from many people through business ownership or money management. As an example: A person owns a business making widgets and hires 99 people to run widget machinery and 1 maintenance person to keep it all working and pays them each $25,000 per year. Then he goes out to the golf course every day and hones his golf game. At the end of the year he makes a million dollars selling the widgets to the government. Each of those employees pays earned income taxes on their $25,000. Why should the owner be allowed to go to a tax accountant that will find ways to pidgeonhole his money where it won’t be taxed and he ends up paying a far less percentage of his income in taxes than his employees? Note, he may pay more in taxes than any of his employees, but his savings on his taxes would be more than any of his employees total income! And if the golf course is between his house and his business, he could drive a company car and even his trip to work would be tax deductible! Try that if you work for a living!
2. How is it right for a person who works hard for a living and makes $50,000 per year to be taxed “earned income” and pay almost 30% of his money after his basic deduction in taxes (almost $15,000), while a person with a few hundred thousand can put that money in an interest bearing account, sit on his ass and make $50,000 per year from it and be taxed at a “capital gains” rate, thus acquiring a tax liability of less than $5,000 and still complain to his congressman that “capital gains taxes are too high!” and “we must get rid of the death (estate) tax so I can pass this money on to my son!”
3. Where does all this tax money go, by percentage? If there are so many people living off the government where are they? I have met a few. I have talked with my congressman. He makes his money off the government but to tell you the truth, he made more money in the private sector than he does in government. I know several people in the military, which gets the highest percentage of government spending. Their money comes from the government but they work for it and the job has it’s hazards. I know people who work for the state government but they are definitely not overpaid. Some of my relatives are on Social Security, but they are getting back what was paid in during their working years. They are definitely not living the high life on their government check. And I know a few people who get government assistance. They also have jobs. If they did not get assistance from somewhere they or their children would starve. Their assistance comes in the form of assistance for child care, housing or food. If they got fired or quit their job they would lose the little assistance they do get. It is not a lifestyle that I aspire to. Contrary to some opinions, they cannot sit on their butts and watch TV and smoke cigarettes all day.
4. Whose money is it anyway? The best hope I have in life is printed on it, “In God we Trust”. My only claim to use of money is in possession. If I have it in my hand I can use it once, then I have to go out and earn more. But I never “own” it. The government printed it, the government’s name is on it, government officials are pictured on it, the government can raise taxes and the government can take it. It is only a commonly traded, highly regulated item that represents an item of value or unit of work.
Economics, either personal or governmental, are only workable when they are fair and efficient.Personally, if you want more money, you must be fair and become more efficient. If you are not fair and get your money unlawfully, you may find that your livelihood is provided by the government. It will provide you a place to sleep, clothes to wear, and food to eat. If you don’t believe it, just ask Martha Stewart. Remember though, the government will not take your personal preferences into consideration. More money comes through efficient working, not harder working. If you work at a job with more money available, or one that fewer people can do, you are more valuable to those who pay your way. The government works the same way. When taxes are fair, most reasonable people will (grudgingly) pay them. When the government is efficient the needs of the people are provided with the lease possible outlay of funds, thus keeping taxes from being a large burden on citizens.
Personally, I think both fairness and efficiency needs to be stressed. Our current government on all levels have shortchanged us in both areas.
Mary, I fail to see why you insist on repeatedly conflating working people with those you regard as undeserving of government assistance, since most of them do not and have not collected a dime of the same.
But even if the programs for the poor were someone readjusted to achieve your exact goals (never mind how), that would not make it any more relevant to the issue of progressive taxation.
It’s truly odd how you throw unrelated issues under the same umbrella and, when someone such as myself dares to call you on it, you respond with a pointless and irrational personal attack. Your taxes and my taxes also pay for highways, you know.
Mary,” I distain the ones who live totally selfish lives who manipulate and take advantage of resources that are meant for the truly disabled.”In other words, you oppose the medical suppliers who charge a grand or so for a standard wheelchair or $7-25,000 for an electric model, and the ones who inflate the prices of other equipment and medications for them by 10-20X over cost. And how about therapists and doctors who file outrageous claims with medicare for services either not rendered or vastly overcharged? These are the people who commit, in dollar amounts, vastly more fraud than individual claimants possibly could! The profit margins in the health-care industry make drug-lords look almost charitable.
“This is the only country where you get rewarded for making bad choices. All you have to do get pregnant, drop out of school, stay uneducated, don’t get married, and the government will take care of you and however many offspring you have. You can get free health care, free food, low cost housing, and lots of other perks that those who work for a living have to pay for.”
Sorry, Mary, I saw this comment and I had to post, maybe someone above or even you, comment more on this. If this is such a great deal, Mary, why aren’t you pursuing it?
As a wise friend of mine once said, welfare takes away more from people than it ever gives them. I think you would agree with that. But, your way of expressing it could be improved.
I’d like for RustyFord to show me how and where I can deposit money in an interest-bearing account and have that interest be taxed at the capital gains rate.
Mary does indeed have a valid point. Maybe not quite the extent she portrays, but a valid point nonetheless. Having had to deal with Welfare long ago, thankfully, I know what it can and can’t do.
Yes, it can denigrate the individual, but it can also motivate. There are certainly individuals who take full advantage of the welfare system, and, in fact, make it their way of life.
It would be nice to believe people want jobs and to make things better for themselves, but the fact of the matter is there is a large population out there who are bascially lazy and have no desire to help themselves. They will use whatever means necessary to avoid work, and if welfare will support them, they are happy folks. I believe those are the ones Mary was referring to. They are the ones giving welfare a bad name, and they should be found out and cut off.
They should be forced into a working roll in order to live. Two years on welfare should be enough for anyone to aquire the skills necessary to join the job market. There is an unbelievable amout of trasining available to those on welfare, and much of the cost is born by the taxpayers.
Of course, there are always special circumstance people on welfare, and they may indeed need welfare in order to survive, but they are the minority, and I have no problem with that.
“Most of the nation’s total government benefits go to persons in the middle or upper classes, with only 14% of total government benefits going to the poor. Cash assistance payments account for just over 1% of all federal benefits programs.”
That’s from the Kansas SRS website. While it’s true that there are those who will always cheat the system, the largest group of recipients of “welfare for the poor” are newly single mom’s, who are on the welfare rolls for an average of 6 months, using it as aid to “step up” or bridge to a better life.
I was one of those 6-monthers once. It wasn’t fun and I wasn’t proud of it. It sure as heck wasn’t enough money to live on. I received a walloping $84 a month for two people. But that $504 did help keep a roof over our heads during a very iffy time, until we were stronger. And I’m sure I’ve paid more into taxes than I received.
Try your local stock broker.
I would just note that dropping the top tax rate to 25% would inevitably reduce federal revenues by a considerable amount, producing even larger deficits than we see now and, of course, considerably large cuts in federal funding.
Guess where those cuts would be made.
Susan Wilkins–
Excuse me, what are you talking about?
You can’t even cheap shot me accurately.
All this talk about how to make the tax code as equitable as possible. The proposed consumption tax is one way to do that. Why? Because those who can manage to have extra money are given two options. First, spend it and pay tax. Second, invest it in growing a business (hence the economy) without tax consequences. Both options fuel our particular environment either through consumption or investment.
I’m sure many of you realize that I’m talking about The Fair Tax ( http://www.fairtax.org ). If that plan were implemented all of the tax shelters are no longer necessary. All of the accounting games are in the past. Not to mention having to report a summary of your economic activity to the government each year will be over.
The poor don’t pay taxes and the government can no longer force me to fill out paperwork so that I can cut them a check. What’s not to love?
Isn’t consumption tax regressive in nature, since the poor may have to pay larger percentage of income to acquire basic necessities?
The current plan refunds that tax you would pay up to the poverty level. Hence the true ‘poor’ will not pay any federal tax.
BTW, in case this concept is too difficult for the Ed Smiley’s and Susan Wilkin’s to grasp, look at it this way.
Let’s say you have a society with three people in it and the Gross Domestic Product is 100 dollars. The taxation rate is 10 percent. In both scenarios, the gov’t will collect 10 dollars.
Scenario 1– A makes $45, B makes 30, C makes 25. How much does the “top third” income earners pay to the total collected? 4 dollars and fifty cents OR 45 percent of the income the gov’t collects.
Scenario 2– A makes 95 dollars, B makes 3 dollars, C makes 2. The gov’t now collects the same ten percent from each third. It makes 9 dollars and 50 cents for the top tier, 30 cents from the middle tier, and 20 cents from the bottom tier OR the top third pays NINTY-FIVE PERCENT of all the income collected.
According to Rush O’Hannity, scenario 2 is UNFAIR TO RICH PEOPLE.
Looks like it’s Susan Wilkins who needs a remedial math course at some crummy technical college . . .
ProudMan, the “prefund” thing bothers me. It (the “prefund”) doesn’t avoid the payment of tax; it, instead, “refunds” the taxes to be paid, based upon demographics, before the same is paid.
Another part of the plan also bothers me; no “consumption tax” on the sale of a “used” residence (and, I guess, on the purchase of any used property, real or personal), under the theory that this “consumption” has been taxed once (on original sale). I don’t pretend to understand the logic behind this, as any new purchase of tangible (or intangible) property is new “consumption” by the purchaser, and, to my mind, should be subject to the tax.
Believe it or not, I’m in favor of reforming our tax system; however, the “fair” tax, as presented, leaves me cold.
Right, Vaughn.
Everybody knows that a consumption tax is basically the same as a sales tax which is the most regressive kind of taxation one can have.
That’s why conservatives like it. Dick Cheney’s six houses are all “used” so they don’t get taxed when they are bought or sold but some two-job working mom’s kid’s milk is taxed.
Yup, that’s CONservative alright.
VT,
I haven’t considered if the prebate is money back before or after you pay the consumption tax. From the name I would think you get the money up front. I’m not sure why that would be troublesome. Unless someone is just going to sit back and never buy new items (impossible unless you buy used food) then the tax will be paid.
Used items are exempt under the current plan. You could expand the tax to include all sales and lower the tax rate. In the end no difference except that people willing to purchase used items pay less. Considering that the ‘poor’ would be the ones most likely paying for the not-so-new items it would be a boon to those in need.
At least you are thinking about it.
Capn: That is too simplistic. If your scenario were actual fact, certainly no high income producer would ever complain. However, since there are actually progressive tax rates, the high income producer pays a higher portion of his/her income to the government. And the lower might pay none. Thus, your example really doesn’t demonstrate anything, or certainly not what you were intending.
Beware where the Dems try to draw the line when they “tax the rich”. There has been mentioned a $100,000 level. That ain’t rich.
I agree with Proudman, the “Fair Tax” is worth taking a hard look at. http://www.fairtax.org
I’ve asked this question before.What is the definition of “rich”?I think it’s $750,000 per year.What say you?
Before we define rich, we should ask ourselves why it matters.
ProudMan, I’ve been thinking about tax reform for a _long_ time. It concerns me, as an individual, that the IRC has become so complex that an individual would rather pay $X to a tax-prep service than to do his own 1040. The complexity of the tax law has adversely affected, IMO, the concept of “voluntary compliance”.
The use of the IRC as a “social policy” tool has bothered me, too. I am aware that this has occurred since at least 1939, if not before; this does not mean it’s correct to so do, however. Examples of social policy encouraged by the tax law: home ownership (mortgage interest and property tax deductions, for those who itemize, keeping, IMO, mortgage interest rates and real estate prices higher than market equilibrium would otherwise set); charitable contribution deductions (encouraging giving as the social policy; but, perhaps, giving rise to questionable “charities”); capital gain preference (social policy, to encourage investment in means of production of goods and services; but, except for the initial stock purchaser, no $$ actually goes to the entity); exclusion of proceeds of sale of principal residence from income taxation, unless the gain is over $500,000 , or $250,000 , and then, the gain will be taxed at the lower “capital gains” rate; the tuition tax credit/deduction, availed of by my spouse and I (encouraging higher education, but really favoring the middle class who may/may not need the advantage); and other examples I won’t give.
I don’t pretend to have the answer; the fair tax is one method to consider; there are others, I am sure.
When ding-dongs cry “the rich get the tax breaks” or some such nonsense, the term needs defined.
Vaughn Tolle,
There are many things to consider. No system of taxation is perfect. I do favor this over the flat tax for two reasons:
1. A flat tax would still require me to report my income to the government2. Today’s income tax system started as a flat tax many years ago.
$100,000 a year is clearly “rich”.
True, ProudMan, true. I have, over time, favored a “flat tax”, a “consumption tax”, a “modified flat tax”, among other approaches. Each time, I find something that causes me to think ultimately, it (whatever I’m looking at) will not end up better than our current system.
And yes, the original income tax was a “flat tax”; didn’t take long for that to change, huh? :D
I would not consider 100k to be “rich” at all. Take a man and wife who both work at decent jobs and those combine to 100k pretty easily. I used to think 100k was “rich” many many years ago in highschool, but that was before mariage, home, kids….etc.
Probably about 200K/year. 100K is ‘upper middle’
I’d say “rich” starts at about $500k annual income.
100k per year rich?
sheeeyit.
Being “rich” is largely a matter of perspective as well I think. But yeah, 500k or above would currently feel rich.
I consider for our area 100k to be rich.
50-100 k is middle class to me.
Gawd, if 200k-500k a year is RICH to them, I must be ethiopian poor.
What’s “rich” depends on how you look at it. The vast majority of people make less than 100k a year, but they are mere paupers when compared with the decamillionaires and billionaires who control this country.
When one factors in house payments, college tuition etc., it is possible to have a tight budget at 100k a year. But most members of the working class would love to have such problems.
Rage,
No offense meant, but how would you define “the working class” in terms of income?
Interestingly, where “need-based” financial aid is concerned, students whose parents earn $100K are eligible for at least some aid at many schools; it all depends on the totality of the circumstances, as does the concept of being “rich”.
To be rich would start at $300K per year. At this number is when favorable high income taxation begins. You are in Bush’s base, so to speak.
At $100K a year one can feel, and literally be, pretty poor. But as Vaughn says, it depends on your circumstances. Certainly, the area of the country you live in can make a huge difference.
Rich – to be able to purchase more than you need to survive
By that definition, a single person could make it on even $25K/year. A family, on about $30k/year.
Those are much lower numbers than other opinions. But a lot of what is written here are very subjective opinions, not definitions with a numerical expression.
“That is too simplistic. If your scenario were actual fact, certainly no high income producer would ever complain.”
Bullshit, Outlander . . . it’s right on the money.
The rich bitch because they bought and paid for GW Bush. They expect tax breaks and they got them in spades.
I keep asking you CONservatives what would be a fair level of taxation for people who make 300,000 or a million a year, and you folks won’t tell me, because whatever it is, you want it to be lower.
My hypothetical is actually skewed in favor of the rich, for even though they do pay a marginally higher tax rate, they don’t pay SS on much of their income. The middle class pays some 6.2 percent for SS on ALL their income.
It doesn’t matter whether you have a progressive, regressive or flat tax. When you’ve got the top one percent earning an average of a million dollars a year, what ever income tax system you devise is going to generate a huge percentage of the total take from that top one percent.
BECAUSE THE INCOME TAX TAXES INCOME AND THE RICH HAVE A LOT OF INCOME.
Jeez, how can you rich people be so dumb as to not understand simple math? Do you have this much trouble with your stock portfolios?
Capn: I often wonder whether you write this fictional crap just to see if anyone calls you on it. You can’t forget about the progressive rates because that is the whole friggin’ issue! I don’t even have a particular opinion as to what is fair. I just know it is simplstic and typical knee jerk liberal to just say, the rich should pay more. And FYI,I am far from rich.
The same with your opinion on the Fair Tax proposal. I suggest that you read it before rejecting it.
Outlander–
Okay, I went to the source http://www.census.gov/prod/2006pubs/p60-231.pdf
Page 7 of the document shows data for 2005, the latest they’ve got.
The bottom quintile (20 percent) earns 3.4 percent of the total income. The second lowest quintile earns 8.6 percent. The third quintile earns 14.6 percent.
That means that SIXTY percent of the people in the United States at present earn only 26.6 percent of the income. Do you see where this “crap” is going, Outlander?
It’s only when you get to the fourth quintile (households making about 100K a year) that you get another 23 percent of income.
That means that the bottom 80 percent of income earners only generate HALF of all the income.
The top 20 generate the other 50 percent of all income, so of course they would then have to pay 50 percent of all income taxes collected.
And although I can’t find any statistics on the top 1 percent, it’s entirely likely that they generate 35 percent of all income–EXACTLY THE AMOUNT THAT YOU AND LIMBAUGH ET AL CLAIM IS TOO HIGH.
Time magazine had a really good graphic about this awhile back.
It was a block and bar graph of incomes from lowest to highest. The highest earners were a TINY block but on the bar graph they were in the stratosphere over everyone else.
Let us remember that taxes encourage those who have to give to those who do not or to other worthy causes in order to secure tax breaks.
Flat or “fair” taxes unfairly burden the poor.
It’s really simple. We can have managed capitalism or we can keep spiralling into feudalism. If you favor feudalism, know that IF you manage to avoid becoming a serf, there will be lots of other folks who will not and will be inclined to show their unhappiness.
If anyone is poor at 100k a year, they’re not doing something right. According to the census bureau, the median household income for families in Kansas(2003) is 43,113. Median household income for USA- 43,318
So at 100k, you’d be earning more than double the median income.
Capn: I never said the rich are paying too much.
I do encourage you to learn about the Fair Tax as an option.
“The FairTax plan is a comprehensive proposal that replaces all federal income and payroll taxes with an integrated approach including a progressive national retail sales tax, a rebate to ensure no American pays federal taxes up to the poverty level, dollar-for-dollar revenue neutrality, and the repeal of the 16th Amendment. This non-partisan legislation (HR 25/S 25) abolishes all federal personal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes and replaces them all with one simple, visible, federal retail sales tax – collected by existing state sales tax authorities. The FairTax taxes us only on what we choose to spend, not on what we earn. It does not raise any more or less revenue; it is designed to be revenue neutral. So it is also cost neutral – the final cost for goods and services changes little under the FairTax. The FairTax is a fair, efficient, transparent, and intelligent solution to the frustration and inequity of our current tax system.”
http://www.fairtax.org/index.htm
Thanks JM, at least you understand what I’m talking about.Jed, I agree with you wholeheartedly, I see so much overcharging from drug companies, medical suppliers, and doctors all getting rich off of insurance and government subsidies.I’m just so pissed this week that I can’t stand it. I see too many severely disabled people who are getting their services cut back, and even though they have advocates, it makes no difference to the state. All the government cares about is the bottom line, not they devastation they’re causing to people’s lives.It drives me crazy to see much needed services go to those who would be better off with a swift reality kick in the pants (and I know too many of them) to get off their butts and DO something to make their lives better. It’s all SO unfair…Anyway, I’m going down to Dallas to see the Dixie Chicks tomorrow, maybe I’ll come back with a better attitude toward my fellow man.BAH HUMBUG!!!
I don’t mind paying taxes as long as it’s not wasted on useless wars and irresponsible people. I like nice roads too, Rage.
Political_Mom”If anyone is poor at 100k a year, they’re not doing something right. According to the census bureau, the median household income for families in Kansas(2003) is 43,113. Median household income for USA- 43,318
“So at 100k, you’d be earning more than double the median income.”
I know it is hard to believe, but there are people who make $200K a year who make bad decisions about debt and thus can be in very bad shape. That is, they can owe much more than the bring in. I have seen it; it is possible.
One of my nephews, who graduated from the Wharton of Business, was an investment banker on Wall Street. The two room apartment, where he is able to take a fuzzy looking cell-phone photo of the Empire State building, costs him and his roommate $3K a month. He walks to most places he has to go, but cab expenses are high in New York city. Most things are high. I would say if he only made $100K per year he would be in very bad shape.
My point is national medians may not mean a lot in regard to individual circumstances.
On another thread, I believe, there was talk about a coming recession for 2007. I think the financing of debt has contributed greatly to the current economy. Many people, me included, have decided it is time to stop the spending frenzy and retire some debt. I am wondering if similar decisions are being made by other families. By design, our Christmas will be looking different this year.
Suppose I don’t have a stockbroker, RustyFord. Can you please tell me about these accounts that pay interest that is taxed at capital gains rates?
Does it sound like I am skeptical? That’s because I am.
If you don’t have a stock broker, how about calling a real estate agent? Go buy a big house in an area that is growing fast and costs are rising. Live there a couple of years and watch the value of your house grow…then sell it and get the second best tax break on capital gains. You can make a couple of hundred thousand on it and the taxes you have to pay is…ummmm….$0. Yep! That’s right! The only capital gains rate that is better is owning a business! Buying stock and holding it for more than a year is pretty good, too. Along with municipal funds (many are tax free).Don’t believe me? Look at http://www.fool.com. Check out taxes, capital gains, etc.The key is if you have money in the first place it is easy to make it earn more and our current tax system will let you keep more. If you are a poor sucker that works for a living the government will take every penny they can and won’t even kiss you when they are done!
“The two room apartment, where he is able to take a fuzzy looking cell-phone photo of the Empire State building, costs him and his roommate $3K a month. He walks to most places he has to go, but cab expenses are high in New York city. Most things are high. I would say if he only made $100K per year he would be in very bad shape.”
I’ve heard New York is one the most expensive places in the country to live, if not the Earth. I’ve heard you can’t even touch a crappy studio apartment for under, say, $1400.
I agree that, for practical purposes, we can define “rich” at the precise point that the huge tax savings were made. If that’s 300k, so be it.
In terms of the economic dynamics of power, perhaps that it would also be where the numbers are large enough to create, as you say, Bush’s base. Of course, it no doubt helped to have more than a few people at the other end of the scale, the ones who could probably have you or I killed! (I’m–mostly-kidding)
I’m also not interested in alienating any affluent allies, but particularly those who are not wealthy enough to be beyond monetary troubles or to really manipulate the system.
Kudos and shout out to these folks:http://www.responsiblewealth.org/
Thank you for the reply, Rusty.
The problem is, though, that you made an argument based on wealthy people earning interest and having it taxed at low capital gains rates.
It appears that you are not able to name any type of account that has these features.
I can think of one way you can do this, though. You could open an Roth IRA account, make contributions to it, have those contributions be invested in a variety of different security types, and upon retirement, you can withdraw this money and its earnings and pay no tax.
Earning interest is a lot different from owning something, be it real estate, stocks, or whatnot, and hoping it increases in value over time.
By the way, in areas of rapid real estate price increases, even people of modest income owning small homes have benefited, too. And the ability to pay no capital gains taxes on real estate gains applies to your residence only, not to multiple properties.
“Let us remember that taxes encourage those who have to give to those who do not or to other worthy causes in order to secure tax breaks.”
That’s called a deduction. You have to spend three dollars to save one dollar in taxes. Hence for those of us who can manage money it’s no reason to give to charity. Same goes for the mortgage deduction. It’s wise to buy a house verses renting in the first place. The tax break is just a side effect, not a reason to buy a house.
In the end, it is nothing but more social/society control through taxation.
Yup Proud
And EMINENTLY prefferable to feudalism.
Of course, rage throws a shoutout to responsible wealth.org. They are for the death tax and for the “living” wage. Another commie organization.Libs = making people happy with other people’s moneyLibs = welfare net = hammock
J R
At least you admit that you are not interested in people living their own lives and making their own decisions. Nope, you need to implement a government solution to ensure that they make the proper choice.
In the end you worry about feudalism while you advocate a similar system of top-down or centralized control, communism.
I prefer the freedom, and responsibility, of living my own life.
Yeah?
Tell your average working person all about it.
I am ALL for people living their own lives and making their own decisions. That is why greedy employers must be checked by government.
My guess “proud” is you make your way on the backs of others.
Here we go again.Did this amazingly stupid not apply for the job? Didn’t he accept the wage/benefits/conditions that the greedy employer offered?You are NOT all for people living their own lives. That is a lie.You want womb to the tomb.If you don’t like your job, find another.Or just go on welfare and bitch about your miserable life. Blame others, that’s your motto.
I keep seeing these phrases here: “…the working person…” What’s that? I work, is that me too?
“….off the backs of others..” What’s that? Someone who has employees? Damn those employers for hiring people!
“If anyone is poor at 100k a year, they’re not doing something right. According to the census bureau, the median household income for families in Kansas(2003) is 43,113. Median household income for USA- 43,318
So at 100k, you’d be earning more than double the median income.”
An utterly meaningless statistic, unless you live in the wasteland of western ks, where you can buy a house for 20 thousand. What is the median wage for Sedgwick county, and what is the median home price?
To get back to the original post–we should reduce gov’t spending to what it was under Clinton and we should raise taxes on the rich to what they were under Clinton.
Hell, let’s just bring Clinton back.
I don’t worship the man like you Bush dead-enders do Bush. But at least he balanced the budget.
“Ye shall know them by their fruits.” Jesus
I’m with you on lowering spending. Let’s lower taxes on everyone.
Worship Bush? Hardly.
Anonymous, you are right. I did say, “interest”. I wrote that in a feeble attempt at brevity. That, along with great wealth, is something I have failed to achieve. : )What I meant was the investments that are normally assigned to capital gains, including Roth IRA’s.Again, you are correct that the tax free sale of a home applies only to your “principle place of residence” and can benefit everyone who can buy a house. That leaves a lot of people out, especially on the East and West coast. It is also part of the tax code that benefits the wealthy more than the average person, because you are only required to maintain that house as a “principle residence” for 2 years out of 5 to be able to sell it, roll the profit over into another “principle residence” and start the whole process over again. Most low and middle income people do not work at building wealth in their residence. They buy a home, live there while it suits their needs, then move when they need to and take the money that has naturally acrued. Many business owners, especially real estate developers and residential construction company owners, use this system as a part of their plan to increase wealth.
Ok, I was going to make this post brief and I have completely failed! At this point a book I could recommend is “Rich Dad, Poor Dad” by Robert Kiosaki.