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You may or may not agree with a progressive tax system, but I wonder how on earth so many people have been convinced that a regressive tax system is good for th

You may or may not agree with a progressive tax system, but I wonder how on earth so many people have been convinced that a regressive tax system is good for the country. It's patently absurd that politicians are fighting tooth and nail to preserve tax havens and loopholes that allow the filthy rich to pay a 15-20% income tax whilst the rest of the 'middle class' is paying upwards of 30. I was thinking the other day that people just don't understand how oppresive our current system of taxation is. We had a civil rights movement in the past, it's about time for a 'fiscal rights' movement.

Cushman 15y ago
Easy answer: Most people do not have an accurate idea of who has money. http://steadfastfinances.com/blog/2010/10/09/behavioral-economics-real-vs-perceived-wealth-distribution/ http://steadfastfinances.com/blog/2010/10/09/behavioral-econ... What's shocking about that chart is that the difference between what liberals and conservatives think the wealth spread should be is dwarfed several times over by the difference between the average of what they both want and what it actually is. We should be able to come together on bipartisan tax increases for the wealthiest quintile— but people just don't know the facts.
- ataggart 15y ago
  It's not clear to me why, if someone has a vastly incorrect notion about the actual state of the world, we should put much stock in their opinion of how the world ought to be. The best you could hope for is to infer some directionality. If I think the temperature of a room is 15C, and I say I think it ought to be 10C, but the actual temperature is 25C, then one should probably not infer anything beyond that I want the room cooler.
  - Cushman 15y ago
    How is that relevant to my comment? The point is that Americans are voting against their self interest, not because of values, but because of ignorance.
Tsagadai 15y ago
Most politicians families are in said tax bracket. Most of their personal friends are also in that bracket. Arguments about the issues/merits of cronyism and nepotism aside, that is a simple answer as to why they are fighting so hard. The amazing aspect is the people in the middle class arguing for the oppressive tax system. Perhaps it is American aspirationalism or some misguided belief in trickle-down economics. Either way it is a curiously unique situation.
- jeffreymcmanus 15y ago
  More to the point, the CEOs and shareholders of the big businesses who pay for politicians to be re-elected are in the highest tax bracket.
camiller 15y ago
What is patently absurd is the assumption that tax havens and loopholes are only for the filthy rich. I make less than $80K, I'm solidly in the "middle class", and my effective federal income tax rate last year was less than 6% after deductions etc. People just don't understand how to set down with a copy of Turbo Tax and ferret out the deductions.
- Tsagadai 15y ago
  What value does this actually create for the economy? You get some extra cash in your pocket, but for what actual gain? You spend hours, or days, or as is the case for some people I know week of their free time doing creative accounting. This is pointless busywork with no actual economic gain to a nation. The government gets less money from you, and you personally spend an amount of time on something that could be much better spent /generating/ or spending capital. I honestly think governments should remove all deductions and just charge a lower tax rate. I know it is an economic tool to get people to do or buy certain things but income tax deductions really add very little value to the economy and waste people's time. Note, that I am talking about income tax deductions, deductions can be put on other taxes to encourage purchasing but then it is your choice to buy it or not and the gain is immediate instead of at tax time.
  - camiller 15y ago
    My comment was just to point out that loopholes exist for every income level, not just the rich. I agree that a simpler tax scheme like the "fair tax" or a flat tax with the first $(poverty level annually adjusted for inflation) tax free would be wholly better.
InclinedPlane 15y ago
"The rich" pay a larger percentage of federal taxes than they did 20, 30, or 50 years ago. Moreover, we can't tax "the rich" enough to close the gap in our budgets and liabilities. We need to stop spending like sailors on shore leave first, then we need to simplify the tax system, then we need to make sure we're actually running at a surplus so we can pay down the debt. Everyone one of those steps will require hard choices and sacrifices by more people than just "the rich", there's no free lunch in balancing the federal budget.
- mberning 15y ago
  This is because through a regressive taxation system and very successful lobbying of government they have allowed themselves to amass an amount of wealth so vast that wealth of the 'have nots' simply pales in comparison. I consider your assertion to be one of the more damning pieces of evidence that our system of taxation and distribution of wealth is completely amoral.

Cushman 15y ago

Easy answer: Most people do not have an accurate idea of who has money. http://steadfastfinances.com/blog/2010/10/09/behavioral-economics-real-vs-perceived-wealth-distribution/ http://steadfastfinances.com/blog/2010/10/09/behavioral-econ... What's shocking about that chart is that the difference between what liberals and conservatives think the wealth spread should be is dwarfed several times over by the difference between the average of what they both want and what it actually is. We should be able to come together on bipartisan tax increases for the wealthiest quintile— but people just don't know the facts.

ataggart 15y ago
It's not clear to me why, if someone has a vastly incorrect notion about the actual state of the world, we should put much stock in their opinion of how the world ought to be. The best you could hope for is to infer some directionality. If I think the temperature of a room is 15C, and I say I think it ought to be 10C, but the actual temperature is 25C, then one should probably not infer anything beyond that I want the room cooler.
- Cushman 15y ago
  How is that relevant to my comment? The point is that Americans are voting against their self interest, not because of values, but because of ignorance.

Tsagadai 15y ago

Most politicians families are in said tax bracket. Most of their personal friends are also in that bracket. Arguments about the issues/merits of cronyism and nepotism aside, that is a simple answer as to why they are fighting so hard. The amazing aspect is the people in the middle class arguing for the oppressive tax system. Perhaps it is American aspirationalism or some misguided belief in trickle-down economics. Either way it is a curiously unique situation.

jeffreymcmanus 15y ago
More to the point, the CEOs and shareholders of the big businesses who pay for politicians to be re-elected are in the highest tax bracket.

camiller 15y ago

What is patently absurd is the assumption that tax havens and loopholes are only for the filthy rich. I make less than $80K, I'm solidly in the "middle class", and my effective federal income tax rate last year was less than 6% after deductions etc. People just don't understand how to set down with a copy of Turbo Tax and ferret out the deductions.

Tsagadai 15y ago
What value does this actually create for the economy? You get some extra cash in your pocket, but for what actual gain? You spend hours, or days, or as is the case for some people I know week of their free time doing creative accounting. This is pointless busywork with no actual economic gain to a nation. The government gets less money from you, and you personally spend an amount of time on something that could be much better spent /generating/ or spending capital. I honestly think governments should remove all deductions and just charge a lower tax rate. I know it is an economic tool to get people to do or buy certain things but income tax deductions really add very little value to the economy and waste people's time. Note, that I am talking about income tax deductions, deductions can be put on other taxes to encourage purchasing but then it is your choice to buy it or not and the gain is immediate instead of at tax time.
- camiller 15y ago
  My comment was just to point out that loopholes exist for every income level, not just the rich. I agree that a simpler tax scheme like the "fair tax" or a flat tax with the first $(poverty level annually adjusted for inflation) tax free would be wholly better.

InclinedPlane 15y ago

"The rich" pay a larger percentage of federal taxes than they did 20, 30, or 50 years ago. Moreover, we can't tax "the rich" enough to close the gap in our budgets and liabilities. We need to stop spending like sailors on shore leave first, then we need to simplify the tax system, then we need to make sure we're actually running at a surplus so we can pay down the debt. Everyone one of those steps will require hard choices and sacrifices by more people than just "the rich", there's no free lunch in balancing the federal budget.

mberning 15y ago
This is because through a regressive taxation system and very successful lobbying of government they have allowed themselves to amass an amount of wealth so vast that wealth of the 'have nots' simply pales in comparison. I consider your assertion to be one of the more damning pieces of evidence that our system of taxation and distribution of wealth is completely amoral.