4 ms·

> Indeed, let them eat cake. A time-tested strategy. "Let them eat cake" was a response to folks who didn't have bread. That's not the case here. > The artic

by anamax 15y ago

> Indeed, let them eat cake. A time-tested strategy. "Let them eat cake" was a response to folks who didn't have bread. That's not the case here. > The article pretty clearly contradicts your own argument. Actually, it doesn't. Try reading what you quoted again. The author is claiming that tax policy can do certain things. However, the "no tax policy" state contradicts what you've insisted is true. > Both articles cite the 47% figure, as I stated above. Your source uses a figure of 33%, which is why it (and you) conclude that the US tax system is more progressive. Your arithmetic is failing too. And, you still haven't explained why their numbers are more accurate.

vannevar 15y ago
You cited the article to support the argument that US income inequality is less than countries like Germany, Israel and Portugal. The article explicitly says the opposite. It doesn't get much clearer than that. But if you really need to be hit over the head with it (again, from your own reference): "Although income inequality is a global phenomenon, it isn't happening in all industrialized democracies; and in the places where it is happening it isn't, for the most part, as extreme as it is in the United States; and it isn't accelerating elsewhere as quickly, for the most part, as it is in the United States." I don't know whose numbers are more accurate. But you still haven't explained why, if Europe really does have a fairer tax structure (as you maintain they do), we shouldn't emulate them.
- anamax 15y ago
  The article explicitly states that pre-tax inequality is greater in Germany than the US. I don't know why you insist otherwise. And, I've never said that Europe has a fairer tax policy. However, I'm happy to say that the US should NOT emulate the EU's abysmal per-capita GDP. I'll come to the consequences of that at the end. You're the one who thinks that progressiveness is a virtue yet prefer a less progressive tax policy. Let's review. The original table (in http://www.taxfoundation.org/blog/show/27134.html http://www.taxfoundation.org/blog/show/27134.html) had international comparisons for the mid 2000s. It showed that the top 10% in the US got 33.5% of the income and paid 45.1% of the income taxes. The ratio, 1.35, was the highest of the (selected) OCED countries. (Yes, including the majority of the EU countries.) You found articles showing that the top 10% had a greater fraction of income in other years and assumed that that somehow contradicted the above table or at least the conclusion. (You implied that the original table's income numbers were wrong, but since they're for different years....) However, progressivity is a relationship between two numbers and you didn't bother to look for the second number, the tax revenue share. http://www.taxfoundation.org/news/show/250.html http://www.taxfoundation.org/news/show/250.html table 1 has the US numbers for 2009, when the top 10% had a higher fraction of income than in the mid-2000s. That fraction, 43.2%, is roughly the same as your articles. However Table 1 also has the fraction of income taxes. It's 70.5%. I'll do the math for you - the ratio is 1.63, or significantly more progressive than the mid-2000s. Oops. Of course, this ignores consumption taxes, which are a big deal in the EU. However, consumption taxes much less progressive than income taxes so including them makes the EU even less progressive.... You then launched into inequality. I pointed out that the US isn't the most unequal pre-tax and you pointed out post-tax was different. Well duh. However, that doesn't support your argument that US tax policy needs to change to address inequality. It actually weakens it. There are TWO factors - taxes and spending. The US doesn't spend (as much) to reduce inequality. Making the tax system even more progressive won't change that. (See http://lanekenworthy.net/2009/04/17/reducing-inequality-how-to-pay-for-it/ http://lanekenworthy.net/2009/04/17/reducing-inequality-how-... .) In anticipation of "but the US needs more revenue", I'll point out that the US has roughly the same tax revenue per person as major EU countries. It has more than Canada, just a little less than the UK, and way more than Japan. (See http://gregmankiw.blogspot.com/2010/03/taxes-per-person.html http://gregmankiw.blogspot.com/2010/03/taxes-per-person.html .) Yes, tax revenue is a smaller fraction of GDP in the US. Are you certain that you increase the fraction without decreasing the GDP? As someone put it, if I'm paying German-style taxes, why wouldn't I work German-style hours. The result is German GDP, which is significantly lower, and not much more tax revenue. Do you really want to argue that the US would spend tax revenue better if it had a lower GDP? Ah, but you don't believe that taxes affect the economy. But I'll bet that you believe that gas taxes affect gas consumption.... Back to Europe's abysmal (per capita) GDP - do you blame the tax policy or the spending choices? (Surely you're not going to argue that Germans are inherently less capable.)
- vannevar 15y ago
  Ok, now we've gotten to the point where we at least agree on the relevant numbers. And now I see what you're saying regarding inequality: that prior to redistribution, inequality is more or less universal. To use your phrase, well, duh. Remember that the point of my original comment was that Europe's more progressive tax structure addresses the problem of income inequality, where the less progressive tax structure of the US does not. You responded by saying the US tax structure is more progressive. Then you cited an article which explicitly argues my point, that other nations more effectively address income inequality with progressive taxation than does the US. And, I've never said that Europe has a fairer tax policy. You said (and repeated again here) that the US has a more progressive tax system, that the wealthy pay a greater share of taxes here than almost anywhere else in the world. I took that to be a criticism, that you believe progressive taxation is unfair. If so, then a country like Germany (which according to you puts less of a tax burden on the wealthy) is fairer overall than the US. I understand that you're trying to avoid saying they're fairer, but that's the inescapable conclusion of your argument that US taxes are more progressive. [Y]ou didn't bother to look for the second number, the tax revenue share. I didn't bother to look for it because it was already there in your source and I assumed it was a pretty solid number, since it's based on tax records. Judging the share of income seems a much more likely source of error since it requires more estimation. Now you've got me wondering how accurate that tax number is, too. Your source put the share of taxes at 45.1% in the mid-2000s. Yet the same source puts the 2009 number at 70%. Do you really believe that the share almost doubled in four years? It's a lot more likely that you're misinterpreting the numbers, or the source is simply wrong. This chart from the conservative Heritage Foundation is more consistent: http://www.heritage.org/budgetchartbook/top10-percent-income-earners http://www.heritage.org/budgetchartbook/top10-percent-income... . I found a reference for German taxes that puts their top 10%'s share at 60% in 2005 (http://www.google.com/url?sa=t&rct=j&q=germany+top+10%25+share+of+taxes&source=web&cd=3&ved=0CD0QFjAC&url=http%3A%2F%2Fwww.wiwiss.fu-berlin.de%2Finstitute%2Ffinanzen%2Fcorneo%2Fdp%2FBCS_EffectTaxRate_2011-06-20.pdf&ei=EfJpT9HEFfGCsgKn-7GyDw&usg=AFQjCNGTzjv8l2MV1uoCh_-3txMiEwEWpA http://www.google.com/url?sa=t&rct=j&q=germany+top+1...). The same source indicates that the top 10% in Germany earned 33% of the gross income, 29% net. So taking 60%/33% you get a ratio of 1.82, significantly higher than your US value of 1.63. Oops indeed.
  - 15y ago

by anamax 15y ago

vannevar 15y ago

You cited the article to support the argument that US income inequality is less than countries like Germany, Israel and Portugal. The article explicitly says the opposite. It doesn't get much clearer than that. But if you really need to be hit over the head with it (again, from your own reference): "Although income inequality is a global phenomenon, it isn't happening in all industrialized democracies; and in the places where it is happening it isn't, for the most part, as extreme as it is in the United States; and it isn't accelerating elsewhere as quickly, for the most part, as it is in the United States." I don't know whose numbers are more accurate. But you still haven't explained why, if Europe really does have a fairer tax structure (as you maintain they do), we shouldn't emulate them.

anamax 15y ago
The article explicitly states that pre-tax inequality is greater in Germany than the US. I don't know why you insist otherwise. And, I've never said that Europe has a fairer tax policy. However, I'm happy to say that the US should NOT emulate the EU's abysmal per-capita GDP. I'll come to the consequences of that at the end. You're the one who thinks that progressiveness is a virtue yet prefer a less progressive tax policy. Let's review. The original table (in http://www.taxfoundation.org/blog/show/27134.html http://www.taxfoundation.org/blog/show/27134.html) had international comparisons for the mid 2000s. It showed that the top 10% in the US got 33.5% of the income and paid 45.1% of the income taxes. The ratio, 1.35, was the highest of the (selected) OCED countries. (Yes, including the majority of the EU countries.) You found articles showing that the top 10% had a greater fraction of income in other years and assumed that that somehow contradicted the above table or at least the conclusion. (You implied that the original table's income numbers were wrong, but since they're for different years....) However, progressivity is a relationship between two numbers and you didn't bother to look for the second number, the tax revenue share. http://www.taxfoundation.org/news/show/250.html http://www.taxfoundation.org/news/show/250.html table 1 has the US numbers for 2009, when the top 10% had a higher fraction of income than in the mid-2000s. That fraction, 43.2%, is roughly the same as your articles. However Table 1 also has the fraction of income taxes. It's 70.5%. I'll do the math for you - the ratio is 1.63, or significantly more progressive than the mid-2000s. Oops. Of course, this ignores consumption taxes, which are a big deal in the EU. However, consumption taxes much less progressive than income taxes so including them makes the EU even less progressive.... You then launched into inequality. I pointed out that the US isn't the most unequal pre-tax and you pointed out post-tax was different. Well duh. However, that doesn't support your argument that US tax policy needs to change to address inequality. It actually weakens it. There are TWO factors - taxes and spending. The US doesn't spend (as much) to reduce inequality. Making the tax system even more progressive won't change that. (See http://lanekenworthy.net/2009/04/17/reducing-inequality-how-to-pay-for-it/ http://lanekenworthy.net/2009/04/17/reducing-inequality-how-... .) In anticipation of "but the US needs more revenue", I'll point out that the US has roughly the same tax revenue per person as major EU countries. It has more than Canada, just a little less than the UK, and way more than Japan. (See http://gregmankiw.blogspot.com/2010/03/taxes-per-person.html http://gregmankiw.blogspot.com/2010/03/taxes-per-person.html .) Yes, tax revenue is a smaller fraction of GDP in the US. Are you certain that you increase the fraction without decreasing the GDP? As someone put it, if I'm paying German-style taxes, why wouldn't I work German-style hours. The result is German GDP, which is significantly lower, and not much more tax revenue. Do you really want to argue that the US would spend tax revenue better if it had a lower GDP? Ah, but you don't believe that taxes affect the economy. But I'll bet that you believe that gas taxes affect gas consumption.... Back to Europe's abysmal (per capita) GDP - do you blame the tax policy or the spending choices? (Surely you're not going to argue that Germans are inherently less capable.)
vannevar 15y ago
Ok, now we've gotten to the point where we at least agree on the relevant numbers. And now I see what you're saying regarding inequality: that prior to redistribution, inequality is more or less universal. To use your phrase, well, duh. Remember that the point of my original comment was that Europe's more progressive tax structure addresses the problem of income inequality, where the less progressive tax structure of the US does not. You responded by saying the US tax structure is more progressive. Then you cited an article which explicitly argues my point, that other nations more effectively address income inequality with progressive taxation than does the US. And, I've never said that Europe has a fairer tax policy. You said (and repeated again here) that the US has a more progressive tax system, that the wealthy pay a greater share of taxes here than almost anywhere else in the world. I took that to be a criticism, that you believe progressive taxation is unfair. If so, then a country like Germany (which according to you puts less of a tax burden on the wealthy) is fairer overall than the US. I understand that you're trying to avoid saying they're fairer, but that's the inescapable conclusion of your argument that US taxes are more progressive. [Y]ou didn't bother to look for the second number, the tax revenue share. I didn't bother to look for it because it was already there in your source and I assumed it was a pretty solid number, since it's based on tax records. Judging the share of income seems a much more likely source of error since it requires more estimation. Now you've got me wondering how accurate that tax number is, too. Your source put the share of taxes at 45.1% in the mid-2000s. Yet the same source puts the 2009 number at 70%. Do you really believe that the share almost doubled in four years? It's a lot more likely that you're misinterpreting the numbers, or the source is simply wrong. This chart from the conservative Heritage Foundation is more consistent: http://www.heritage.org/budgetchartbook/top10-percent-income-earners http://www.heritage.org/budgetchartbook/top10-percent-income... . I found a reference for German taxes that puts their top 10%'s share at 60% in 2005 (http://www.google.com/url?sa=t&rct=j&q=germany+top+10%25+share+of+taxes&source=web&cd=3&ved=0CD0QFjAC&url=http%3A%2F%2Fwww.wiwiss.fu-berlin.de%2Finstitute%2Ffinanzen%2Fcorneo%2Fdp%2FBCS_EffectTaxRate_2011-06-20.pdf&ei=EfJpT9HEFfGCsgKn-7GyDw&usg=AFQjCNGTzjv8l2MV1uoCh_-3txMiEwEWpA http://www.google.com/url?sa=t&rct=j&q=germany+top+1...). The same source indicates that the top 10% in Germany earned 33% of the gross income, 29% net. So taking 60%/33% you get a ratio of 1.82, significantly higher than your US value of 1.63. Oops indeed.
- 15y ago