6 ms·

Income taxes are much less progressive than they were half a century ago.

WalterBright 7y ago
I don't know what the statistic for this was 50 years ago, but today 38% of federal income tax revenues come from the 1%.
- learc83 7y ago
  And the top 1% earn 2x as much of the income as they did 50 years ago, but don't pay 2x more of the share of income tax. Meaning that income tax is less progressive now. Also the 38% number that right wing groups like to throw around is very carefully crafted to avoid FICA taxes, which account for a much larger percentage of the tax burden for lower income earners. And the social security component goes away after the first $130k in income.
  - WalterBright 7y ago
    If you express FICA in terms of benefits received / contributions paid, it is quite progressive.
    - learc83 7y ago
      If you're only considering direct first order benefits then nearly all taxes are quite progressive. Even a flat 10% income tax would be progressive using that model because people's direct consumption of government services doesn't scale linearly with income. The only way to have a non-progressive tax was to charge everyone a flat rate. "Why should I have have to pay a penny more in taxes than that teacher over there. It's not like I'm consuming more units of military protection than they are." Hopefully you can see the problem with that.
- rhacker 7y ago
  Maybe it should be more like 50% because doesn't the 1% have 50% of all assets?
  - WalterBright 7y ago
    Maybe, but if you eliminate the 1%, then who is going to pay that 38%?
    - learc83 7y ago
      Taxing the 1% more heavily isn't really the same thing as eliminating the 1% though is it? And taxing wealth over a certain limit, which is what the person you were replying to is probably getting at, solves your problem taxing income preventing people from becoming wealthy in the first place.
      - WalterBright 7y ago
        > Taxing the 1% more heavily isn't really the same thing as eliminating the 1% though is it? Bernie Sanders has stated he wants to tax billionaires into non-billionaire status. So yes, it's about eliminating the 1%.
        learc83 7y ago
        There are only about 600 billionaires in the US. The top 1% is over 3 million people. Also they'll still be in the top %0.01 with $999 million. You're also making some weird assumptions that transferring money away from billionaires would just destroy that money, and that the current billionaires are using their resources in the most productive way possible. The real world isn't Atlas Shrugged. Look up income velocity of money.
        WalterBright 7y ago
        > You're also making some weird assumptions that transferring money away from billionaires would just destroy that money, and that the current billionaires are using their resources in the most productive way possible There's nothing weird about that. You don't get to be a billionaire by being bad at managing your money, nor do you get to be a billionaire by investing in less productive investments. By taxing the 1%, you are removing money from the most productive investments.

I don't know what the statistic for this was 50 years ago, but today 38% of federal income tax revenues come from the 1%.

learc83 7y ago
And the top 1% earn 2x as much of the income as they did 50 years ago, but don't pay 2x more of the share of income tax. Meaning that income tax is less progressive now. Also the 38% number that right wing groups like to throw around is very carefully crafted to avoid FICA taxes, which account for a much larger percentage of the tax burden for lower income earners. And the social security component goes away after the first $130k in income.
- WalterBright 7y ago
  If you express FICA in terms of benefits received / contributions paid, it is quite progressive.
  - learc83 7y ago
    If you're only considering direct first order benefits then nearly all taxes are quite progressive. Even a flat 10% income tax would be progressive using that model because people's direct consumption of government services doesn't scale linearly with income. The only way to have a non-progressive tax was to charge everyone a flat rate. "Why should I have have to pay a penny more in taxes than that teacher over there. It's not like I'm consuming more units of military protection than they are." Hopefully you can see the problem with that.
rhacker 7y ago
Maybe it should be more like 50% because doesn't the 1% have 50% of all assets?
- WalterBright 7y ago
  Maybe, but if you eliminate the 1%, then who is going to pay that 38%?
  - learc83 7y ago
    Taxing the 1% more heavily isn't really the same thing as eliminating the 1% though is it? And taxing wealth over a certain limit, which is what the person you were replying to is probably getting at, solves your problem taxing income preventing people from becoming wealthy in the first place.
    - WalterBright 7y ago
      > Taxing the 1% more heavily isn't really the same thing as eliminating the 1% though is it? Bernie Sanders has stated he wants to tax billionaires into non-billionaire status. So yes, it's about eliminating the 1%.
      - learc83 7y ago
        There are only about 600 billionaires in the US. The top 1% is over 3 million people. Also they'll still be in the top %0.01 with $999 million. You're also making some weird assumptions that transferring money away from billionaires would just destroy that money, and that the current billionaires are using their resources in the most productive way possible. The real world isn't Atlas Shrugged. Look up income velocity of money.
        WalterBright 7y ago
        > You're also making some weird assumptions that transferring money away from billionaires would just destroy that money, and that the current billionaires are using their resources in the most productive way possible There's nothing weird about that. You don't get to be a billionaire by being bad at managing your money, nor do you get to be a billionaire by investing in less productive investments. By taxing the 1%, you are removing money from the most productive investments.