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> Different policies could produce a different outcome. My list would start with a tax code that does less to favor the affluent, a better-functioning education

> Different policies could produce a different outcome. My list would start with a tax code that does less to favor the affluent, a better-functioning education system, more bargaining power for workers and less tolerance for corporate consolidation. > less to favor the affluent We already have progressive tax brackets. For crying out loud, the top 20% of earners shoulder 84% of the tax burden of the federal government[1]. Where does that number need to be in order to silence the socialist rabble-rousers? 90%? 95%? 1. https://www.wsj.com/articles/top-20-of-earners-pay-84-of-income-tax-1428674384 https://www.wsj.com/articles/top-20-of-earners-pay-84-of-inc... Edit: I've only received 1 answer to my question, and it involved allusions to bloody revolution, so I'll ask again: Where does that number need to be?

bxrxaxdx 9y ago
I think its clear most people would like the distribution to look more like it did 1980 than 2014. I'm sorry I forgot what a socialist nightmare 1980s America was.
- tengbretson 9y ago
  The wealthy were responsible for a lower percentage of the total tax revenue in 1980 than they are currently. I get the impression thats not the point you're trying to make, however.
kfk 9y ago
Well, if the top earns more they pay more too. On a serious note, I don't think this is a tax issue, but more of a scary direction for our economy. Where does it stop? How do we deal with inequality? How do we keep things fair? I mean the "best" doctors can all be working for the 1% just by... asking exorbitant prices. Is this ok?
Footkerchief 9y ago
> the top 20% of earners shoulder 84% of the tax burden of the federal government Income tax is not synonymous with the tax burden. The article states it's less than half: > The individual income tax remains the most important levy in the U.S., providing nearly half of federal revenue.
neo4sure 9y ago
Well let's ease their burden and make sure the bottom 80% can pay more taxes by giving them a better wage.
justforFranz 9y ago
I dunno. Does 95% beat getting shot? BTW, your comment is yet another indication that Hacker News is infiltrated by people likely to be paid to post pro-hyper-rich propaganda. I mean, what's in it for you to oppose a more progressive tax rate except to prove your deep misunderstanding of the power of capitalism to push all the money to one corner? So what if the rich pay for everything. Look, man. The poor have nothing. There's nothing left. They're not going to retire. They'll work until they drop dead. They don't get decent health care. They'll die from avoidable, treatable illness. And if conservative Congress had its way, there'd be less Medicaid. Oh, and now they want to take away the right to sue elderly nursing homes. At what point do you decide that torturing your fellow American is enough?
- tengbretson 9y ago
  > I dunno. Does 95% beat getting shot? I'm not thin-skinned enough to consider this a threat, but I do think its inflammatory enough to be in violation of HN's guidelines. As for the accusations of astroturfing, I don't know what to say, but I hope this paranoia that is increasingly common on the internet goes away. It's downright unhealthy.
  - jetrink 9y ago
    I think he was referring to a violent revolution, not to you being shot in particular.
  - Balero 9y ago
    I didn't read this as a threat at all. It was quite bluntly put, but came across clearly to me as saying that the consequences of a small minority doing very well and the vast majority being worse off, is some sort of uprising. Such as the Russian or French revolutions. I'm pretty sure we all wouldn't like something like them to happen again. I do agree with your point on the astro turfing, your comment didn't come across as one to me, but I have been noticing myself thinking "oh, this must be a paid for comment" more and more. I'm not sure if this is healthy skepticism or not. On topic. I largely agree with both comments. The top 20% shouldn't be asked to even pay as much tax as they currently are. I like the idea of a progressive tax system, those with the strongest shoulders carry the heaviest burden. But this is clearly, to me, too much. Additionally this shouldn't be fixed by lowering taxes. The top 20% shouldn't be in a position that they make so much more than the remaining 80%. We need to fix a system of work not paying enough, large companies exploiting workers and poor healthcare and education systems.
maxfurman 9y ago
Clearly it isn't high enough to prevent what we see in the graphic presented here - a teeny tiny fraction of people running away with the entire country's economic gains.
tclancy 9y ago
>top 20% of earners shoulder 84% of the tax burden of the federal government Much like I'm going to ignore the ad hominem of suggesting anyone who sees the current American economy as less-than-perfectly fair is a member of the "socialist rabble-rousers", you seem to be ignoring the fact annual taxable income represents a smaller and smaller percentage of one's assets as income increases. There are hundreds of exceptions, loopholes and incentives that are tilted toward the better off. Why do I get to write off some of my mortgage payments on my taxes simply because I can afford to take on a mortgage?
- sokoloff 9y ago
  > Why do I get to write off some of my mortgage payments on my taxes simply because I can afford to take on a mortgage? A. Because it's popular with swing voters. B. Because it puts your purchase of a financed house on a more equal footing with a commercial landlord's purchase of that same house from a tax perspective. (Interest expense incurred in a bonafide profit-seeking business endeavor is tax deductible. If your private mortgage were not equally tax deductible, the tax policy would favor for-profit landlords over private homeownership. I believe that there are valid public policy reasons to encourage private homeownership at least to the extent of putting it on equal footing with commercial real estate leasing.) To be very specific, if tax policy didn't do this, commercial landlords could literally bid more to purchase a given house than a private buyer could for a given projected rent [real or imputed] and investment hurdle rate. You could argue "well, then disallow all interest deduction!", which is a policy change that's been floated somewhat frequently, including recently, but is more complex and needs study [IMO] rather than simplistically eliminating the mortgage interest deduction and assuming that would make housing more affordable or more evenly accessible.
Hasknewbie 9y ago
I didn't know Eisenhower, Nixon, and Ford were 'socialist rabble-rousers'.
bbctol 9y ago
The fact that a small percentage of Americans pay a large percentage of total taxes is a sign of income inequality, not an argument against it. The lower 80% don't pay nearly as much in taxes because for the past 30 years, they've been going broke, hence the article being responded to here. The top 10% of Americans own three quarters of the countries wealth; they aren't "shouldering more of the burden" when they pay most of the tax, they're being taxed reasonably in a system where they have unreasonable wealth.
- tengbretson 9y ago
  You are right. That figure absolutely is a sign of income inequality. The idea that the wealthy's tax burden should increase as a result of that is ridiculous, however. > X increasing is an indicator that Y is increasing. Therefore we need to increase X more in order to make Y decrease.
  - bbctol 9y ago
    Wait, are you implying that the logic in that last sentence is false? That makes perfect sense given what X and Y actually signify. That's like saying "The faster the boat fills with water, the faster you try to bail out! And you think bailing out even faster will somehow be a good thing?"
    - ebspelman 9y ago
      Yeah, I spent a few minutes going over the last sentence in tengbretson's comment. I would actually recharacterize Piketty's (and the author of this chart) argument as: "X increasing is a symptom that Y is increasing. Let's implement policy A. This may temporarily increase X, but it will stop Y from increasing, which will in turn stop X from increasing in the long run."
  - TheAdamAndChe 9y ago
    > The idea that the wealthy's tax burden should increase as a result of [growing income inequality] is ridiculous, however. The issue is that inequality is growing to a point that there is a potential for social, economic, and political destabilization. How do you propose the issue be addressed? Because it should be apparent that trickle-down economics isn't occuring, and I don't see how things can improve without some sort of wealth redistribution.
ekimekim 9y ago
Your metric is unhelpful. To start with, as of 2013 the top 20% of earners held 85% of the total wealth in the United States[1]. Let me err on the side of caution and say that this is close enough to your figure of 84%. So it seems the top 20% of earners are only paying what their 'fair share' would be if there was a flat tax rate, ie. proportional to wealth (admittedly, wealth != income, so things can be a bit fuzzy there). Secondly, the entire point of a progressive tax system is that the utility of wealth is not proportional to the amount of wealth. Doubling the wealth of someone below the poverty line can completely change their life, whereas someone with $10 million net worth lives much the same as someone with $20 million. Progressive tax rates allow us to extract more wealth from the rich (who don't "need it" as badly) for the benefit of society as a whole. You can call that socialist if you like. [1] http://www2.ucsc.edu/whorulesamerica/power/wealth.html http://www2.ucsc.edu/whorulesamerica/power/wealth.html
- savanaly 9y ago
  Who cares about wealth? If I want to save my income more than my neighbor and build up a relatively large amount of wealth, that's my business. If I go out and earn a very large income compared to my neighbor, I can at least see how that's the government's business and agree that the higher income earner should pay more. But I strongly disagree with the notion that wealth accumulation should be penalized.
  - ekimekim 9y ago
    I wasn't meaning to imply that wealth should be taxed, however it's a fair point that I'm rather badly conflating income and wealth in the OP - I'm basically using wealth as a proxy for income. I suspect that they are very strongly correlated though (a quick google shows [1]). Unfortunately I can't seem to track down a hard figure on the 20th percentile of income in the US. [1] http://www.visualcapitalist.com/relationship-income-and-wealth/ http://www.visualcapitalist.com/relationship-income-and-weal...
  - TheAdamAndChe 9y ago
    The issue is scale. It's one thing to have a few million dollars and give an inheritance to your family. It's another thing to make hundreds of millions if not billions of dollars a year at a time when the quality of life for most people in the country is declining. It probably wouldn't be as much of an issue if everyone was experiencing the growth that the top 0.1% is.
maxxxxx 9y ago
"the top 20% of earners shoulder 84% of the tax burden of the federal government" An easy way to lower that percentage would be to lower their share of income. If your income share grows disproportionately it's to be expected that your tax burden grows disproportionately too. You are also forgetting that their tax rates have gone down a lot in the last 30 years.
Lagged2Death 9y ago
...the top 20% of earners shoulder 84% of the tax burden of the federal government[1]. Where does that number need to be in order to silence the socialist rabble-rousers? 90%? 95%? "Percent of income tax burden landing on top 20% of income earners" isn't a figure anyone is particularly interested in engineering or specifying for it's own sake. Where do you think it "should" be, and how can you justify it? This is an emotional, not a rational appeal: "Won't someone think of the well-looked-after?" The top 20% of earners earn more than half of the earned income that exists to be taxed. You could increase taxes on the rest quite a lot without actually collecting much. Honestly I thought my household was in the top 20%. I was going to write that sometimes our financial situation feels tight, but that taxes aren't really the reason. But it turns out I was wrong; in 2015 we were probably third quintile. Should make it to fourth quintile this year. I suspect a lot of people think they're higher on the ladder than they are. It's hard to percieve just how high the ladder goes. http://www.taxpolicycenter.org/statistics/household-income-quintiles http://www.taxpolicycenter.org/statistics/household-income-q...
jackmott 9y ago
yoy better figure out what it takes before the rabble rousers burn you alive
dmode 9y ago
Is that a function of tax code or is that a function of income being cornered by top earners as demonstrated in the charts ?
jellicle 9y ago
"federal income tax" is not even close to "tax burden of the federal government". Income tax is less than half the revenue of the federal government. Payroll taxes are huge, and disproportionately borne by the poor. Excise taxes are huge, and disproportionately borne by the poor. Overall, including state taxes (which are strongly regressive as well) the US has very close to a flat tax system, not progressive at all.
mikestew 9y ago
For crying out loud, the top 20% of earners shoulder 84% of the tax burden of the federal government[1]. A few years ago I went to a seminar put on by Fidelity about trading options. A person asked about minimizing tax liability. The trader who was doing the seminar said something that stuck with me since: "if I'm being taxed, I'm making money. So I don't worry about the tax burden." All your stat shows is that the top 20% are making the money, and the rest aren't. As for an answer to your question, you should know that it isn't as simple as a single number. For instance, why come about October do I no longer make Medicare and Social Security payments? Of all people more capable of taking that hit, I instead get a discount. Everyone else gets taxed on every dollar they make, but myself (a relatively wealthy person in that 20%), I don't pay Medicare and SS tax on about 25% of my income. Why? I make a pretty good sum on capital gains every year. Why is that taxed at a lower rate than income, when all I did (at most) was click a mouse button a few times? IOW, any single sentence solution for a complex situation, be it the Middle East or taxation, should be ignored.
walterstucco 9y ago
Progressive only means that you pay more on the part exceeding the previous bracket So 98% at the higher level means 98% only on the amount exceeding the previous one. For example if we set a taxation of 99% over 1 billion dollars, you pay 99% only the parts exceeding that limit Assuming you earn 1 B and one dollar, you pay 99 c. more taxes, and that's it It is a simple way to discourage accumulation of improductive wealth Second: the bulk of state taxes income is not from salaries it's from corporate taxes, but corporation are very good at avoiding them.
MarkMc 9y ago
> Where does that number need to be? Many people would say: It needs to be whatever results in roughly equal income growth across all income percentiles.

bxrxaxdx 9y ago

I think its clear most people would like the distribution to look more like it did 1980 than 2014. I'm sorry I forgot what a socialist nightmare 1980s America was.

tengbretson 9y ago
The wealthy were responsible for a lower percentage of the total tax revenue in 1980 than they are currently. I get the impression thats not the point you're trying to make, however.

kfk 9y ago

Well, if the top earns more they pay more too. On a serious note, I don't think this is a tax issue, but more of a scary direction for our economy. Where does it stop? How do we deal with inequality? How do we keep things fair? I mean the "best" doctors can all be working for the 1% just by... asking exorbitant prices. Is this ok?

Footkerchief 9y ago

> the top 20% of earners shoulder 84% of the tax burden of the federal government Income tax is not synonymous with the tax burden. The article states it's less than half: > The individual income tax remains the most important levy in the U.S., providing nearly half of federal revenue.

neo4sure 9y ago

Well let's ease their burden and make sure the bottom 80% can pay more taxes by giving them a better wage.

justforFranz 9y ago

I dunno. Does 95% beat getting shot? BTW, your comment is yet another indication that Hacker News is infiltrated by people likely to be paid to post pro-hyper-rich propaganda. I mean, what's in it for you to oppose a more progressive tax rate except to prove your deep misunderstanding of the power of capitalism to push all the money to one corner? So what if the rich pay for everything. Look, man. The poor have nothing. There's nothing left. They're not going to retire. They'll work until they drop dead. They don't get decent health care. They'll die from avoidable, treatable illness. And if conservative Congress had its way, there'd be less Medicaid. Oh, and now they want to take away the right to sue elderly nursing homes. At what point do you decide that torturing your fellow American is enough?

tengbretson 9y ago
> I dunno. Does 95% beat getting shot? I'm not thin-skinned enough to consider this a threat, but I do think its inflammatory enough to be in violation of HN's guidelines. As for the accusations of astroturfing, I don't know what to say, but I hope this paranoia that is increasingly common on the internet goes away. It's downright unhealthy.
- jetrink 9y ago
  I think he was referring to a violent revolution, not to you being shot in particular.
- Balero 9y ago
  I didn't read this as a threat at all. It was quite bluntly put, but came across clearly to me as saying that the consequences of a small minority doing very well and the vast majority being worse off, is some sort of uprising. Such as the Russian or French revolutions. I'm pretty sure we all wouldn't like something like them to happen again. I do agree with your point on the astro turfing, your comment didn't come across as one to me, but I have been noticing myself thinking "oh, this must be a paid for comment" more and more. I'm not sure if this is healthy skepticism or not. On topic. I largely agree with both comments. The top 20% shouldn't be asked to even pay as much tax as they currently are. I like the idea of a progressive tax system, those with the strongest shoulders carry the heaviest burden. But this is clearly, to me, too much. Additionally this shouldn't be fixed by lowering taxes. The top 20% shouldn't be in a position that they make so much more than the remaining 80%. We need to fix a system of work not paying enough, large companies exploiting workers and poor healthcare and education systems.

maxfurman 9y ago

Clearly it isn't high enough to prevent what we see in the graphic presented here - a teeny tiny fraction of people running away with the entire country's economic gains.

tclancy 9y ago

>top 20% of earners shoulder 84% of the tax burden of the federal government Much like I'm going to ignore the ad hominem of suggesting anyone who sees the current American economy as less-than-perfectly fair is a member of the "socialist rabble-rousers", you seem to be ignoring the fact annual taxable income represents a smaller and smaller percentage of one's assets as income increases. There are hundreds of exceptions, loopholes and incentives that are tilted toward the better off. Why do I get to write off some of my mortgage payments on my taxes simply because I can afford to take on a mortgage?

sokoloff 9y ago
> Why do I get to write off some of my mortgage payments on my taxes simply because I can afford to take on a mortgage? A. Because it's popular with swing voters. B. Because it puts your purchase of a financed house on a more equal footing with a commercial landlord's purchase of that same house from a tax perspective. (Interest expense incurred in a bonafide profit-seeking business endeavor is tax deductible. If your private mortgage were not equally tax deductible, the tax policy would favor for-profit landlords over private homeownership. I believe that there are valid public policy reasons to encourage private homeownership at least to the extent of putting it on equal footing with commercial real estate leasing.) To be very specific, if tax policy didn't do this, commercial landlords could literally bid more to purchase a given house than a private buyer could for a given projected rent [real or imputed] and investment hurdle rate. You could argue "well, then disallow all interest deduction!", which is a policy change that's been floated somewhat frequently, including recently, but is more complex and needs study [IMO] rather than simplistically eliminating the mortgage interest deduction and assuming that would make housing more affordable or more evenly accessible.

Hasknewbie 9y ago

I didn't know Eisenhower, Nixon, and Ford were 'socialist rabble-rousers'.

bbctol 9y ago

The fact that a small percentage of Americans pay a large percentage of total taxes is a sign of income inequality, not an argument against it. The lower 80% don't pay nearly as much in taxes because for the past 30 years, they've been going broke, hence the article being responded to here. The top 10% of Americans own three quarters of the countries wealth; they aren't "shouldering more of the burden" when they pay most of the tax, they're being taxed reasonably in a system where they have unreasonable wealth.

tengbretson 9y ago
You are right. That figure absolutely is a sign of income inequality. The idea that the wealthy's tax burden should increase as a result of that is ridiculous, however. > X increasing is an indicator that Y is increasing. Therefore we need to increase X more in order to make Y decrease.
- bbctol 9y ago
  Wait, are you implying that the logic in that last sentence is false? That makes perfect sense given what X and Y actually signify. That's like saying "The faster the boat fills with water, the faster you try to bail out! And you think bailing out even faster will somehow be a good thing?"
  - ebspelman 9y ago
    Yeah, I spent a few minutes going over the last sentence in tengbretson's comment. I would actually recharacterize Piketty's (and the author of this chart) argument as: "X increasing is a symptom that Y is increasing. Let's implement policy A. This may temporarily increase X, but it will stop Y from increasing, which will in turn stop X from increasing in the long run."
- TheAdamAndChe 9y ago
  > The idea that the wealthy's tax burden should increase as a result of [growing income inequality] is ridiculous, however. The issue is that inequality is growing to a point that there is a potential for social, economic, and political destabilization. How do you propose the issue be addressed? Because it should be apparent that trickle-down economics isn't occuring, and I don't see how things can improve without some sort of wealth redistribution.

ekimekim 9y ago

Your metric is unhelpful. To start with, as of 2013 the top 20% of earners held 85% of the total wealth in the United States[1]. Let me err on the side of caution and say that this is close enough to your figure of 84%. So it seems the top 20% of earners are only paying what their 'fair share' would be if there was a flat tax rate, ie. proportional to wealth (admittedly, wealth != income, so things can be a bit fuzzy there). Secondly, the entire point of a progressive tax system is that the utility of wealth is not proportional to the amount of wealth. Doubling the wealth of someone below the poverty line can completely change their life, whereas someone with $10 million net worth lives much the same as someone with $20 million. Progressive tax rates allow us to extract more wealth from the rich (who don't "need it" as badly) for the benefit of society as a whole. You can call that socialist if you like. [1] http://www2.ucsc.edu/whorulesamerica/power/wealth.html http://www2.ucsc.edu/whorulesamerica/power/wealth.html

savanaly 9y ago
Who cares about wealth? If I want to save my income more than my neighbor and build up a relatively large amount of wealth, that's my business. If I go out and earn a very large income compared to my neighbor, I can at least see how that's the government's business and agree that the higher income earner should pay more. But I strongly disagree with the notion that wealth accumulation should be penalized.
- ekimekim 9y ago
  I wasn't meaning to imply that wealth should be taxed, however it's a fair point that I'm rather badly conflating income and wealth in the OP - I'm basically using wealth as a proxy for income. I suspect that they are very strongly correlated though (a quick google shows [1]). Unfortunately I can't seem to track down a hard figure on the 20th percentile of income in the US. [1] http://www.visualcapitalist.com/relationship-income-and-wealth/ http://www.visualcapitalist.com/relationship-income-and-weal...
- TheAdamAndChe 9y ago
  The issue is scale. It's one thing to have a few million dollars and give an inheritance to your family. It's another thing to make hundreds of millions if not billions of dollars a year at a time when the quality of life for most people in the country is declining. It probably wouldn't be as much of an issue if everyone was experiencing the growth that the top 0.1% is.

maxxxxx 9y ago

"the top 20% of earners shoulder 84% of the tax burden of the federal government" An easy way to lower that percentage would be to lower their share of income. If your income share grows disproportionately it's to be expected that your tax burden grows disproportionately too. You are also forgetting that their tax rates have gone down a lot in the last 30 years.

Lagged2Death 9y ago

...the top 20% of earners shoulder 84% of the tax burden of the federal government[1]. Where does that number need to be in order to silence the socialist rabble-rousers? 90%? 95%? "Percent of income tax burden landing on top 20% of income earners" isn't a figure anyone is particularly interested in engineering or specifying for it's own sake. Where do you think it "should" be, and how can you justify it? This is an emotional, not a rational appeal: "Won't someone think of the well-looked-after?" The top 20% of earners earn more than half of the earned income that exists to be taxed. You could increase taxes on the rest quite a lot without actually collecting much. Honestly I thought my household was in the top 20%. I was going to write that sometimes our financial situation feels tight, but that taxes aren't really the reason. But it turns out I was wrong; in 2015 we were probably third quintile. Should make it to fourth quintile this year. I suspect a lot of people think they're higher on the ladder than they are. It's hard to percieve just how high the ladder goes. http://www.taxpolicycenter.org/statistics/household-income-quintiles http://www.taxpolicycenter.org/statistics/household-income-q...

jackmott 9y ago

yoy better figure out what it takes before the rabble rousers burn you alive

dmode 9y ago

Is that a function of tax code or is that a function of income being cornered by top earners as demonstrated in the charts ?

jellicle 9y ago

"federal income tax" is not even close to "tax burden of the federal government". Income tax is less than half the revenue of the federal government. Payroll taxes are huge, and disproportionately borne by the poor. Excise taxes are huge, and disproportionately borne by the poor. Overall, including state taxes (which are strongly regressive as well) the US has very close to a flat tax system, not progressive at all.

mikestew 9y ago

For crying out loud, the top 20% of earners shoulder 84% of the tax burden of the federal government[1]. A few years ago I went to a seminar put on by Fidelity about trading options. A person asked about minimizing tax liability. The trader who was doing the seminar said something that stuck with me since: "if I'm being taxed, I'm making money. So I don't worry about the tax burden." All your stat shows is that the top 20% are making the money, and the rest aren't. As for an answer to your question, you should know that it isn't as simple as a single number. For instance, why come about October do I no longer make Medicare and Social Security payments? Of all people more capable of taking that hit, I instead get a discount. Everyone else gets taxed on every dollar they make, but myself (a relatively wealthy person in that 20%), I don't pay Medicare and SS tax on about 25% of my income. Why? I make a pretty good sum on capital gains every year. Why is that taxed at a lower rate than income, when all I did (at most) was click a mouse button a few times? IOW, any single sentence solution for a complex situation, be it the Middle East or taxation, should be ignored.

walterstucco 9y ago

Progressive only means that you pay more on the part exceeding the previous bracket So 98% at the higher level means 98% only on the amount exceeding the previous one. For example if we set a taxation of 99% over 1 billion dollars, you pay 99% only the parts exceeding that limit Assuming you earn 1 B and one dollar, you pay 99 c. more taxes, and that's it It is a simple way to discourage accumulation of improductive wealth Second: the bulk of state taxes income is not from salaries it's from corporate taxes, but corporation are very good at avoiding them.

MarkMc 9y ago

> Where does that number need to be? Many people would say: It needs to be whatever results in roughly equal income growth across all income percentiles.