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>the top 400 tax payers today pay income taxes below 16%. According to the best available figures, the top theoretical tax rate during the 1950s was over 90%, b

by curt 14y ago

>the top 400 tax payers today pay income taxes below 16%. According to the best available figures, the top theoretical tax rate during the 1950s was over 90%, but the average tax rate paid by the top approximately 400 people was 51.2%. Big problem... You're comparing two completely different things. The 16% number is based on the fact that most of the wealth earn their income through capital gains which is taxed at a lower rate. So you're comparing income taxes to capital gains taxes. Two completely different items, apple to oranges. > But it is pretty hard to reasonably come to the conclusion that the rich today are paying similar tax rates to the rich 55 years ago. You're second point is also wrong. The rich actually pay a higher percentage of the tax burden when rates are cut. Look at the 20's. Taxes were slashed and the percentage of the income taxes paid by the rich doubled. Same today happened with the Bush cuts. The top 10% pay 71% of income taxes, and top 1% around 40%. Here's a chart to show you: http://www.heritage.org/federalbudget/top10-percent-income-earners http://www.heritage.org/federalbudget/top10-percent-income-e... How much more exactly should the rich pay? As for capital gains. You don't want to raise it, unless you're out to punish the rich, since when it's lowered it generates more revenue. When it's increase, it generates less.

hnhg 14y ago
I'm not sure your refutation of the second point holds. The OP is talking about percentage of an individual's income, not the percentage of overall income. The fairness of either can be disputed but you're making an apples to oranges comparison, as you call it. The first point is interesting. As someone who doesn't know that much about it, would it be useful to look at income tax + capital gains tax incomes to look at burden for the rich vs everyone else. That would be closer way to judge percentages of income taxed. If that's not a good way to look at it,why?
- curt 14y ago
  Sorry have quite a bit of overlap between the two points. Rates themselves are very abstract quantities since loopholes and deductions have a huge effect and change greatly with time. A good way to look at it is the percent of total tax payments. To answer your question if you take a look at the link in the post you replied to, the income tax + capital gain tax burden for the rich would be even higher. Likely with the top 1% around 45%-50% and top 10% around 80%+ of all income and capital gains taxes. As you can see the rich already pay a huge amount. Even if you were to raise the rates on the rich their numbers are so small that it would only cover a week or so of spending at the current levels.
  - tankenmate 14y ago
    I think you misunderstand what has been said, the IRS reported that the maximum marginal tax rate in the 50s was ~90%, but the effective rate was ~50%. Now the maximum marginal tax rate is 35% and the effective rate is ~16%. Rich people as a percentage of their wealth, and probably their income, spend less than poor people. Ipso facto one effective way to boost spending in the economy is to take money from the rich and give it to the poor, i.e. more taxes please.
  - Teckla 14y ago
    With all due respect, your insistence on constantly using the phrase "tax burden" instead of "tax rate" makes me doubt your honesty. It's a shameful rhetorical trick that degrades the HN experience.
dasil003 14y ago
> How much more exactly should the rich pay? This is an idealogical framing of the conversation. The opposing idealogical framing is: How much greater economic inequality can society tolerate?
- nirvana 14y ago
  One day, your side will realize that it is your attempts to "fight economic inequality" that have resulted in the economic inequality you rail against. It is this lack of understanding of economics that makes it easy to manipulate you come election time. And the more your policies destroy people's lives the more you demand even more centralized control.
  - dasil003 14y ago
    Whoah settle down there. You actually don't have the first clue what I think.
  - leot 14y ago
    Yes, an entire "side" profoundly misunderstands basic economic principles. Which side was it, do tell, that created faux think tanks in the 70s to espouse a particular economic philosophy? These would be the same think tanks that seem to simultaneously advocate for the "marketplace of ideas" and then shun their members when they show a lack of ideological purity.
  - leot 14y ago
    Yes, an entire "side" profoundly misunderstands basic economic principles. Which side was it, do tell, that created faux think tanks in the 70s to espouse a particular economic philosophy? These would be the same think tanks that seem to simultaneously advocate for the "marketplace of ideas" and then shun their members when they show a lack of ideological purity?
btilly 14y ago
Comparing the top 400 today and 55 years ago is actually an apples to apples comparison. The rules have changed in recent decades. As Warren Buffett has said, "If this is class warfare, my class is winning." As for your heritage foundation link, tax rates rise until you make something like $400k/year, and then start falling. Taxes paid by the merely rich have little to do with taxes paid by the super-rich. The big complaints have to do with the latter. We no longer have a tax bracket for what is in inflation-adjusted dollars income over 5-6 million/year. Might we be worse for that fact? And finally if dropping the tax rates on the very rich results in them paying more money, that says very strongly that dropping those rates increases income disparity by more than it helps anyone else. You call that "punishing the rich", I call that "proof positive that trickle-down is bunk". It is all a question of perspective.
eisa01 14y ago
Notice he said tax _rate_, not tax _share_. That the rich pay a larger share of the total taxes is a direct consequence of the fact that they have gotten richer as a group. Or in other words that the distribution of income has shifted to the top 10%. So basically you are saying that the top 10% should complain about the fact that they get a larger share of the income pie, with the consequence that they also pay a larger share of the tax pie. I would just be happy that I was earning more.
danmaz74 14y ago
"The rich actually pay a higher percentage of the tax burden when rates are cut": If this is true, mathematically it only means one thing. That, when rates are cut as in your examples, the rich capture a much bigger share of the economic pie.

by curt 14y ago

hnhg 14y ago

I'm not sure your refutation of the second point holds. The OP is talking about percentage of an individual's income, not the percentage of overall income. The fairness of either can be disputed but you're making an apples to oranges comparison, as you call it. The first point is interesting. As someone who doesn't know that much about it, would it be useful to look at income tax + capital gains tax incomes to look at burden for the rich vs everyone else. That would be closer way to judge percentages of income taxed. If that's not a good way to look at it,why?

curt 14y ago
Sorry have quite a bit of overlap between the two points. Rates themselves are very abstract quantities since loopholes and deductions have a huge effect and change greatly with time. A good way to look at it is the percent of total tax payments. To answer your question if you take a look at the link in the post you replied to, the income tax + capital gain tax burden for the rich would be even higher. Likely with the top 1% around 45%-50% and top 10% around 80%+ of all income and capital gains taxes. As you can see the rich already pay a huge amount. Even if you were to raise the rates on the rich their numbers are so small that it would only cover a week or so of spending at the current levels.
- tankenmate 14y ago
  I think you misunderstand what has been said, the IRS reported that the maximum marginal tax rate in the 50s was ~90%, but the effective rate was ~50%. Now the maximum marginal tax rate is 35% and the effective rate is ~16%. Rich people as a percentage of their wealth, and probably their income, spend less than poor people. Ipso facto one effective way to boost spending in the economy is to take money from the rich and give it to the poor, i.e. more taxes please.
- Teckla 14y ago
  With all due respect, your insistence on constantly using the phrase "tax burden" instead of "tax rate" makes me doubt your honesty. It's a shameful rhetorical trick that degrades the HN experience.

dasil003 14y ago

> How much more exactly should the rich pay? This is an idealogical framing of the conversation. The opposing idealogical framing is: How much greater economic inequality can society tolerate?

nirvana 14y ago
One day, your side will realize that it is your attempts to "fight economic inequality" that have resulted in the economic inequality you rail against. It is this lack of understanding of economics that makes it easy to manipulate you come election time. And the more your policies destroy people's lives the more you demand even more centralized control.
- dasil003 14y ago
  Whoah settle down there. You actually don't have the first clue what I think.
- leot 14y ago
  Yes, an entire "side" profoundly misunderstands basic economic principles. Which side was it, do tell, that created faux think tanks in the 70s to espouse a particular economic philosophy? These would be the same think tanks that seem to simultaneously advocate for the "marketplace of ideas" and then shun their members when they show a lack of ideological purity.
- leot 14y ago
  Yes, an entire "side" profoundly misunderstands basic economic principles. Which side was it, do tell, that created faux think tanks in the 70s to espouse a particular economic philosophy? These would be the same think tanks that seem to simultaneously advocate for the "marketplace of ideas" and then shun their members when they show a lack of ideological purity?

btilly 14y ago

Comparing the top 400 today and 55 years ago is actually an apples to apples comparison. The rules have changed in recent decades. As Warren Buffett has said, "If this is class warfare, my class is winning." As for your heritage foundation link, tax rates rise until you make something like $400k/year, and then start falling. Taxes paid by the merely rich have little to do with taxes paid by the super-rich. The big complaints have to do with the latter. We no longer have a tax bracket for what is in inflation-adjusted dollars income over 5-6 million/year. Might we be worse for that fact? And finally if dropping the tax rates on the very rich results in them paying more money, that says very strongly that dropping those rates increases income disparity by more than it helps anyone else. You call that "punishing the rich", I call that "proof positive that trickle-down is bunk". It is all a question of perspective.

eisa01 14y ago

Notice he said tax _rate_, not tax _share_. That the rich pay a larger share of the total taxes is a direct consequence of the fact that they have gotten richer as a group. Or in other words that the distribution of income has shifted to the top 10%. So basically you are saying that the top 10% should complain about the fact that they get a larger share of the income pie, with the consequence that they also pay a larger share of the tax pie. I would just be happy that I was earning more.

danmaz74 14y ago

"The rich actually pay a higher percentage of the tax burden when rates are cut": If this is true, mathematically it only means one thing. That, when rates are cut as in your examples, the rich capture a much bigger share of the economic pie.