4 ms·

The actual tax burden has basically gone opposite of what you imply in your many messages. The top 10% paid 49% of taxes in 1980 and the bottom 50% paid 7% of i

by opo 8y ago

The actual tax burden has basically gone opposite of what you imply in your many messages. The top 10% paid 49% of taxes in 1980 and the bottom 50% paid 7% of income taxes. In 2015, the top 10% paid paid 70% of incomes taxes and the bottom 50% paid 3%. (http://www.ntu.org/foundation/page/who-pays-income-taxes http://www.ntu.org/foundation/page/who-pays-income-taxes) The "top marginal rate" means very little by itself. What matters is the effective rate which takes into account the credits/deductions that are allowed, the other lower marginal tax rates, etc. Confiscatory high tax rates just result in politically connected groups getting tax breaks, lots of money spent in less productive ways to avoid the high rates and if those can't be done you get dead weight losses from economic activity that isn't done. There is a reason countries moved away from confiscatory high rates.

bitcoinbutter 8y ago
Comparing what the top 10% paid vs bottom 50% is silly. The issue at hand is wealth inequality. Clearly the top earners are paying much more in tax from a clear dollar to dollar perspective. They own all the wealth. Taxes are one of the only ways to curb wealth inequality within a capitalist system. Any other ideas? The problem is that wealthy people can afford to set up multinational tax avoidance schemes to avoid actually paying the amount they should be paying. One solution is to just jack up the rates. If 90% marginal rate on paper only actually results in 45% being collected, then that's still better than 39% marginal rate on paper vs. 15-20% truly collected. Taxes and public spending are obviously not perfect, there are plenty of inefficiencies throughout. Corruption must be targeted rigorously, otherwise inequality will actually increase. But there needs to be a constant effort to reduce wealth centralization.
- warbaker 8y ago
  Let's not conflate wealth with income. Generally, you get income by providing a service to the market in excess of that income (as perceived by the market, which can be wrong). If you have really high taxes, the only way to get rich is to be born rich. High estate taxes make a ton of sense from a social perspective. High income taxes, much less so.
- chrismcb 8y ago
  No one is comparing the top vs the bottom. The comparison is what the top and bottom pay now vs what they paid then
- opo 8y ago
  >...Comparing what the top 10% paid vs bottom 50% is silly. That isn't what was done. The comparison is over time. The claim is often made that the rich paid far more of a share of the taxes until Reagan lowered the rates. The data shows otherwise. >...Clearly the top earners are paying much more in tax from a clear dollar to dollar perspective. They own all the wealth. That is a somewhat simplistic and misleading way of describing the income tax system. Income is not the same as wealth, etc. but also the US has a more progressive tax system than just about any of the OECD countries. The top 10% in the US make about 33% of the market income and pay 45% of the income taxes: https://taxfoundation.org/news-obama-oecd-says-united-states-has-most-progressive-tax-system/ https://taxfoundation.org/news-obama-oecd-says-united-states... >...One solution is to just jack up the rates. If 90% marginal rate on paper only actually results in 45% being collected, then that's still better than 39% marginal rate on paper vs. 15-20% truly collected. There are reasons NO countries institute such policies for long. It isn't because high rates haven't been tried, it is because it ends up hurting the country. You need only look at France's experiment with a 75% marginal rate and a wealth tax in 2012 and was dropped in 2015. >...French economist Eric Pichet in a recent academic paper has found evidence of capital flight as a consequence of the French wealth tax, namely, that it has cut French GDP growth by 0.2% per year. https://www.forbes.com/sites/jonhartley/2015/02/02/frances-75-supertax-failure-a-blow-to-pikettys-economics/#153b6a375df2 https://www.forbes.com/sites/jonhartley/2015/02/02/frances-7... >...But there needs to be a constant effort to reduce wealth centralization. This probably isn't the only criteria that people should be concerned about. If the top 50 tech companies in the US had been started in Europe instead of the US, that would have measurably lowered the wealth inequality in the US but most people would say the US is better off being a tech leader.
  - undersuit 8y ago
    > You need only look at France's experiment with a 75% marginal rate and a wealth tax in 2012 and was dropped in 2015. Comparing France to the US in this situation is wrong. If people making more than $10 million a year or with a wealth of more than $50 million are going to leave the United States we have ways to handle this, namely the Expatriation Tax, which France doesn't have. You need to compare France to an equal situation like the US State of New Jersey applying a higher income tax and losing their state citizens to fellow states in the collective federal territory of the United States.
CPLX 8y ago
Before even clicking on that link I was going to say I bet this guy is citing an anti tax think tank disingenuously pretending income tax is the same as tax burden. And, lo and behold...
- vonmoltke 8y ago
  Do you have anything more substantial than an ad hominem to demonstrate that this statement is wrong or misleading?
  - CPLX 8y ago
    Yes. He says “the actual tax burden has...” but then cites something that doesn’t discuss the tax burden at all, but rather certain marginal income tax rates. FICA is also a percentage tax on income and it’s part of the tax burden. As are many other taxes. The word tax burden has a specific meaning and it’s not being used correctly here. It’s easy to spot because anti tax lobbyists have been making this intentional “mistake” in their argument for decades.
    - undersuit 8y ago
      >It’s easy to spot because anti tax lobbyists have been making this intentional “mistake” in their argument for decades. Look this smaller number of people pay more in total taxation than this larger number of people, and I'm going to use this "fact" to malign all taxation even though it's the intended effect of progressive taxation.
    - opo 8y ago
      The original article is about federal income tax rates. In one of your messages there was this comment by you: >> When Reagan lowered the tax rates in exchange for eliminating the tax shelters... >We got skyrocketing wealth inequality leading to a near breakdown of the political and social order 30 years later We have been talking about federal taxes in the linked article and in this discussion. It is disingenuous of you to now move the goal posts. That is a much more complex discussion since you need to add in all the other taxes paid - all of which have changed over time, but had little to do with Reagan.
danmaz74 8y ago
That mostly happened because the top 10% is today capturing a much higher percentage of GDP compared to 1980. What is really important isn't who pays more taxes, but who can benefit from all the wealth that is produced.
- opo 8y ago
  >That mostly happened because the top 10% is today capturing a much higher percentage of GDP compared to 1980. As a start, do you actually have a link that can back that up?
  - danmaz74 8y ago
    Sure: https://fred.stlouisfed.org/series/SIPOVGINIUSA https://fred.stlouisfed.org/series/SIPOVGINIUSA
    - opo 8y ago
      Interesting chart - it shows inequality slowing rising over the decades, but it can't tell you how much of the total market income the top 10% received. According to the OECD, the top 10% in the US now make about 33% of the market income and pay 45% of the income taxes. It would be interesting to find how that compares to 1980.

by opo 8y ago

bitcoinbutter 8y ago

Comparing what the top 10% paid vs bottom 50% is silly. The issue at hand is wealth inequality. Clearly the top earners are paying much more in tax from a clear dollar to dollar perspective. They own all the wealth. Taxes are one of the only ways to curb wealth inequality within a capitalist system. Any other ideas? The problem is that wealthy people can afford to set up multinational tax avoidance schemes to avoid actually paying the amount they should be paying. One solution is to just jack up the rates. If 90% marginal rate on paper only actually results in 45% being collected, then that's still better than 39% marginal rate on paper vs. 15-20% truly collected. Taxes and public spending are obviously not perfect, there are plenty of inefficiencies throughout. Corruption must be targeted rigorously, otherwise inequality will actually increase. But there needs to be a constant effort to reduce wealth centralization.

warbaker 8y ago
Let's not conflate wealth with income. Generally, you get income by providing a service to the market in excess of that income (as perceived by the market, which can be wrong). If you have really high taxes, the only way to get rich is to be born rich. High estate taxes make a ton of sense from a social perspective. High income taxes, much less so.
chrismcb 8y ago
No one is comparing the top vs the bottom. The comparison is what the top and bottom pay now vs what they paid then
opo 8y ago
>...Comparing what the top 10% paid vs bottom 50% is silly. That isn't what was done. The comparison is over time. The claim is often made that the rich paid far more of a share of the taxes until Reagan lowered the rates. The data shows otherwise. >...Clearly the top earners are paying much more in tax from a clear dollar to dollar perspective. They own all the wealth. That is a somewhat simplistic and misleading way of describing the income tax system. Income is not the same as wealth, etc. but also the US has a more progressive tax system than just about any of the OECD countries. The top 10% in the US make about 33% of the market income and pay 45% of the income taxes: https://taxfoundation.org/news-obama-oecd-says-united-states-has-most-progressive-tax-system/ https://taxfoundation.org/news-obama-oecd-says-united-states... >...One solution is to just jack up the rates. If 90% marginal rate on paper only actually results in 45% being collected, then that's still better than 39% marginal rate on paper vs. 15-20% truly collected. There are reasons NO countries institute such policies for long. It isn't because high rates haven't been tried, it is because it ends up hurting the country. You need only look at France's experiment with a 75% marginal rate and a wealth tax in 2012 and was dropped in 2015. >...French economist Eric Pichet in a recent academic paper has found evidence of capital flight as a consequence of the French wealth tax, namely, that it has cut French GDP growth by 0.2% per year. https://www.forbes.com/sites/jonhartley/2015/02/02/frances-75-supertax-failure-a-blow-to-pikettys-economics/#153b6a375df2 https://www.forbes.com/sites/jonhartley/2015/02/02/frances-7... >...But there needs to be a constant effort to reduce wealth centralization. This probably isn't the only criteria that people should be concerned about. If the top 50 tech companies in the US had been started in Europe instead of the US, that would have measurably lowered the wealth inequality in the US but most people would say the US is better off being a tech leader.
- undersuit 8y ago
  > You need only look at France's experiment with a 75% marginal rate and a wealth tax in 2012 and was dropped in 2015. Comparing France to the US in this situation is wrong. If people making more than $10 million a year or with a wealth of more than $50 million are going to leave the United States we have ways to handle this, namely the Expatriation Tax, which France doesn't have. You need to compare France to an equal situation like the US State of New Jersey applying a higher income tax and losing their state citizens to fellow states in the collective federal territory of the United States.

CPLX 8y ago

Before even clicking on that link I was going to say I bet this guy is citing an anti tax think tank disingenuously pretending income tax is the same as tax burden. And, lo and behold...

vonmoltke 8y ago
Do you have anything more substantial than an ad hominem to demonstrate that this statement is wrong or misleading?
- CPLX 8y ago
  Yes. He says “the actual tax burden has...” but then cites something that doesn’t discuss the tax burden at all, but rather certain marginal income tax rates. FICA is also a percentage tax on income and it’s part of the tax burden. As are many other taxes. The word tax burden has a specific meaning and it’s not being used correctly here. It’s easy to spot because anti tax lobbyists have been making this intentional “mistake” in their argument for decades.
  - undersuit 8y ago
    >It’s easy to spot because anti tax lobbyists have been making this intentional “mistake” in their argument for decades. Look this smaller number of people pay more in total taxation than this larger number of people, and I'm going to use this "fact" to malign all taxation even though it's the intended effect of progressive taxation.
  - opo 8y ago
    The original article is about federal income tax rates. In one of your messages there was this comment by you: >> When Reagan lowered the tax rates in exchange for eliminating the tax shelters... >We got skyrocketing wealth inequality leading to a near breakdown of the political and social order 30 years later We have been talking about federal taxes in the linked article and in this discussion. It is disingenuous of you to now move the goal posts. That is a much more complex discussion since you need to add in all the other taxes paid - all of which have changed over time, but had little to do with Reagan.

danmaz74 8y ago

That mostly happened because the top 10% is today capturing a much higher percentage of GDP compared to 1980. What is really important isn't who pays more taxes, but who can benefit from all the wealth that is produced.

opo 8y ago
>That mostly happened because the top 10% is today capturing a much higher percentage of GDP compared to 1980. As a start, do you actually have a link that can back that up?
- danmaz74 8y ago
  Sure: https://fred.stlouisfed.org/series/SIPOVGINIUSA https://fred.stlouisfed.org/series/SIPOVGINIUSA
  - opo 8y ago
    Interesting chart - it shows inequality slowing rising over the decades, but it can't tell you how much of the total market income the top 10% received. According to the OECD, the top 10% in the US now make about 33% of the market income and pay 45% of the income taxes. It would be interesting to find how that compares to 1980.