Anyone proposing higher federal taxes these days — especially in an election year — is likely to have a political death wish. It wasn’t even possible for President Barack Obama and Congress to consider ending the Bush-era tax breaks for the wealthiest Americans.
Here in Maine, Gov. Paul LePage wants to feed surplus revenue into a budget mechanism that eventually rolls the income tax rate down to 4 percent from the current top rate of 8.5 percent. The governor has said his goal is to eliminate the income tax altogether.
No one likes paying taxes, of course, so such positions are appealing to voters. But contrast the “no new taxes” ethos that rules the day to the fact that Americans spent $1.5 billion on lottery tickets for a one-time drawing Friday night that paid out an estimated $650 million. The spending is, essentially, a tax, albeit one paid without the force of law.
It’s easy to understand the fun of spending a dollar on a ticket and joining in the excitement that sweeps the nation when such a jackpot is in play. But there is plenty of evidence that dollar bets were a minority. A Washington Post story reported that many spent much more.
“Twenty to thirty dollars won’t hurt,” A Las Vegas woman told the paper. “I think it just gives us a chance of maybe winning our dream.”
The Post story puts this freewill spending by people hoping to live the dream into perspective. The $1.5 billion would fill vehicle gas tanks for 685,000 households for a year. It would feed 238,000 American households for a year.
It’s a safe bet that many who slapped a $20 bill on the counter of their neighborhood convenience store for a Mega Millions tickets would squawk at a 1 percent hike in the sales tax, or a 5 percent increase in the income tax for those earning $200,000 or more — even though very few people buying lottery tickets are from that high-income group. Surveys have shown that the more economically desperate Americans feel, the more likely they are to buy lottery tickets or patronize casinos.
Back to that chance of “maybe winning our dream”: the odds against winning are 176 million to one. If Congress and the president were to agree to a comprehensive and equitable reconfiguring of the tax burden, there is no need to win a dream. Rather, a more fair and realistic distribution of the burden would revive the American dream.
Roads, bridges, sewer treatment plants and water systems would be in good repair. Police departments would be staffed well enough to keep our communities safe. Schools, too, would have enough teachers and books, and college tuition would be in reach of more of our young people. Those who serve our nation in the military would be well-equipped, educated and trained and given quality, lifelong health care. Our poor would be offered ladders out of poverty, and our disabled and unemployable would have a decent, if simple life.
And here’s another take on the dream for which so many Americans apparently are pining: millions of people living elsewhere in the world would risk their lives to be here. They would be ecstatic to live in a modest house or apartment, grateful to work hard in exchange for a paycheck that allows them to feed and clothe their families.
Many of those in developing nations who know they will never emigrate to the U.S. would be blissfully happy to live in buildings that are the equivalent of our wood sheds. They could thrive eating the food many of us throw out. They would view running hot and cold water as luxuries.
That $1.5 billion spent in a matter of weeks is a sad barometer of our national gratitude for all that we enjoy.
It seems the national ethos has become hyperbole. How else can you explain a push for a more equitable tax structure (not immensely higher taxes — taxes are currently lower than they’ve been in years) being referred to as “class warfare”? The screeches seem to equate closing loopholes and eliminating preferential deductions to asking the wealthy to enter into slavery. It’s pretty unfortunate.
I get that many people who are in the upper income brackets don’t want to pay more in taxes. The part that I find confusing is those in the lower income brackets (posters here) who provide dogged support for keeping the taxes of the wealthy lower than their own taxes.
But, the taxes rates for the wealthy aren’t lower, nor do they pay less in taxes….
According to the CBO, the highest quintile pays nearly 70% of all income taxes in this country. A number which in 1979 was about 45%, despite the fact that rates have gone down significantly for everyone.
So, since 1979 their rates have gone from the ~70% range to the current 35% range, yet they pay a greater percentage of the federal income taxes overall. Interesting.
I don’t know what you find so interesting. We are all paying lower taxes now (a few bucks for the average person and a lot of bucks for the higher income guy), and the Chinese are making up the difference. Our children will have to pay that back somehow.
The bottom line is that wealth is being concentrated in a smaller and smaller segment of the population. They, seemingly, would be the ones called upon to pay back the Chinese, but I see little willingness on their part to do so, and strong support from a segment of lower-income citizens for them not to take on that task. Why? Who is going to pay for our current greed and shortsightedness?
I am saying this in the most respectful way possible, but I feel that you do not understand what wealth is, or for that matter what money is. I know that you KNOW what those things are (obviously), but I feel that you do not understand what they actually represent. If you did, you wouldn’t be that bothered by wealth distributions.
Your statistics are irrelevant because you’re purposefully not providing the entire picture. The reason the wealthy is paying a higher percentage of the total income tax lot is because they hold much more of the nation’s wealth now.
Proportionally, the wealthy aren’t paying as much as they once were. Did you miss the news when Mitt Romney revealed his effective rate was around 15%? Far cry from 35% that people screech about being so high.
“The reason the wealthy is paying a higher percentage of the total income
tax lot is because they hold much more of the nation’s wealth now. ”
Wealth isn’t taxed income is.
Obviously. But my point remains, when you make more, you’ll hold more and you’ll be taxed more.
No, when you earn more you are taxed more. It has no relationship to your “hold”.
I said those that hold more are OBVIOUSLY going to be taxed more because they OBVIOUSLY are making more money.
You’re arguing over nothing. It seems like a convenient excuse to ignore the real issues at hand.
Then speak English.
But getting that wealth required income, enough income to increase net worth by over 300% since 1980. I don’t see a corresponding increase in wealth of the lower 90% that is equivolent.
No, obtaining wealth did not require income. If you believe so, you are not familiar with wealth creation. Money is only a way to transfer wealth, and has no bearing on wealth itself.
Wealth and income are two very different things. Secondly, Mitt Romney pays ~15% because that is the Capital Gains tax rate, for which he makes his money. Capital Gains and income, again, are not the same thing. The primary reason that capital gains rates are so low is because (in this case) that money came from dividends, dividends that have already been taxed at 40% (highest in the world), so to avoid double taxation, the rate is 15%. So really, the actual net rate for capital gains is actually higher than income tax rates.
No, it’s not just because of capital gains. He also gained a fortune through the capital gains loophole which allows brokers to take a cut of anothers’ gains and pay themselves that way — avoiding the traditional income taxation rate.
Also, the “double taxation” meme is illogical. Do I deny paying a tax on a table I buy at a furniture store because the store already payed a tax on it? Because the manufacturer was taxed on the raw materials? Etc?
Your 40% number is also wildly incorrect.
I don’t know the extensive details of Mitt Romneys taxes, I have more important things to do. However, if his income was income, then it is taxed as such, if it were capital gains it is taxed as such. There is no way to confuse the two, I don’t really know how we would claim income as capital gains, but if he did then that would be illegal (I would assume) and it should be dealt with on a per case basis. It should also be noted that, if I remember correctly, nearly half of his annual earnings are either given to charity or to the government in taxes. Either way, not sure what Mitt Romney has to do with my original comment, so moving on….
And no the “double taxation meme” is no illogical. If a business pays sales tax on good/materials such as a table then it is deducted from their total tax liability. Either way, yes you do pay for it, it is an expense.
Think of the double taxation thing like this, say a company has a total net income (before taxes) of $1 Million, if they pay all in dividends then they will distribute to their shareholders in which they will pay their capital gains taxes. Now, imagine that same $1 Million is taxed at 40%, now they are distributing $600,000 to the same people, in which it will be taxed as capital gains. Another thing you need to realize is that dividends are paid to shareholders, shareholders are owners of that company, therefore that net income is no different than a personal income.
Lastly, my 40% number is not wildly incorrect. 35% Federal, and generally 5% State (although sometimes higher or lower). And generally speaking, when doing any sort of tax related calculations regarding to business finance or accounting you use 40%.. And here in the good old state of Maine, we have some of the highest corporate taxes in the country, yeah!
Sorry, you’re wrong. The capital gains loophole allows those taking a commission to pay the gains rate and not the income rate.
And the double taxation meme is ridiculous. Imagine wood being taxed at x, then the labor at x, then the product at x, then the product at x, then the use at x. Oh my god, double taxation.
Your 40% number is clearly incorrect. You have a disregard for facts. That’s fine, but I’m not going to have a discussion with a person like that.
Congress, who for the most part are responsible for most of the mismangement of our general funds bears the blame for the mess we are in.
If I’m not mistaken, all but a handfull of Republican representatives in Congress have signed a pledge to Grover Norquist that bars them from raising taxes in any way, shape or form.
What is amazing is the number of people, who to all intents and purposes are living one paycheck to the next, are buying into the Republican rhetoric that the rich are downtrodden.
How is taxing the rich more going to increase said people paychecks?
When the government has massive deficits, they have to borrow money, most of that money comes from the federal reserve, the federal reserve prints money, when they print money it causes inflation and the prices of goods go up. This is what hurts those living paycheck to paycheck. In this way, I can kind of see why you may want to tax the wealthy more. You believe that if we tax the wealthy even more, then we can close this deficit and we will no longer have to print money.
That is great until you realize that tax rates in this country on the wealthy have been as high as 94% and as low as ~25%. Despite this tax revenues have ALWAYS been between 15-21%. With the condition of the economy being the factor that determines whether we are on the high or low side of that, NOT the tax rates.
Another thing to note is that since about 1980 the tax burden in this country has shifted very heavily to the wealthy to the point where the wealthy are paying nearly all of the income taxes in this country. And interesting we tax the rich more disproportionately from other income earners than any other country in the world, and yet you want more?
The major problem with depending on the wealthy to foot the bill is that their income is extremely volatile, when we go into a recession the number of rich people generally gets cut in half and we lose 30%+ of our federal tax revenues.
So what is my point? My point is that raising taxes on the wealthy will no generate any new revenues, and it will not increase the wages of those living paycheck to paycheck. Meanwhile our excessive deficits will continue to drive the costs of goods up hurting Americans more and more.
All of my statements are confirmed by the Congressional Budget Office, which (in case you don’t know) provides non-partisan analysis to Congress.
http://cbo.gov/publication/21938
So if raising taxes on the rich won’t generate any new revenue, the alternative has been to reduce taxes on the rich to increase revenues.
I believe we have been drastically reducing taxes on the rich since Reagan was in office. We were promised that the trickle down effect would generate more jobs and higher living standards for the rest of us.
So what is your point?
Is it that up is down and down is up?
We have bent over backwards for the rich. We have allowed them to take the wealth they accumulated in this country on the backs of our working people and the security supplied to them with the flesh and blood of our young. They, it seems, think that they should spread their wealth to the far reaches of the earth. In the meantime abandoning the very peoples who allowed them to amass such great fortunes.
You talk about income tax rates being onerous on the rich? When is the last time you’ve seen the rich making hard choices between medication or groceries? Or wether to pay the mortgage or the property taxes? Standing in the grocerie store agonizing over what they know is good for their family or what will fill their stomachs?
They’re pretty inconsistent with their logic. Raising taxes for the wealthy (or at least even eliminating deductions and loopholes) won’t generate new revenue, but still, we must “broaden the tax base” (code for raising taxes on the working class and poor) in order to….what? Generate new revenue?
They’re so full of garbage.
“We have allowed them to take the wealth they accumulated in this country
on the backs of our working people and the security supplied to them
with the flesh and blood of our young. They, it seems, think that they
should spread their wealth to the far reaches of the earth. In the
meantime abandoning the very peoples who allowed them to amass such
great fortunes.”
your post should say that we drove them out of this country, by taxing and regulations that eliminates their ability to make a reasonable profit. these people who have worked as hard as any are not in business to supply the government with money, they are in it to make a profit. which they should be able to spend as they wish, not as you would have them spend it.
No their greed made them move their wealth off shore. No one who moves their wealth off shore is in danger of endign up in the poor house if they pay their share of taxes, no one.
The so-called job creators say that we need to lower taxes so that they have the incentive to create new jobs. This is wrong on at least two fronts.
1.) 400 people own more wealth then 150 million people and have over $1.37 trillion in assets and corporations are sitting on over $2 trillion dollars in cash and yet they need even more money in their pockets to consider creating jobs?
2.) If we lower the tax rate that removes the incentive to re-invest their money into their businesses but instead to move their money off-shore or use the extra money to gamble on high stakes investments.
Businesses are not the government, when they have trillions of dollars they don’t just go and spend it for the sake of it. A business isn’t going to invest and create jobs if the economic climate does not favor any sort of reasonable return for their investment. This is why “trickle down” doesn’t necessarily work during recessions.
400 people own more wealth than 150 million. And your point is….? Wealth is not a “pie”, it is something that is created, and destroyed all of the time. Wealth and money are not the same thing, money is only a means of transferring wealth. Wealth does not need to be a physical asset, and in the case of much of the wealth of these 400 people, it isn’t. Their wealth is nothing more than a piece of paper somewhere that says they have a certain “right” to an incorporated entity. In order to turn that into cash, they have to sell it. Otherwise, they essentially have nothing.
In regards to people who have large sums of cash, they have cash because they exchange a good or service that has a specific value for money, which also has a specified value. Take Apple for example, they make the iPhone for say $150, yet due to market conditions it (easily) has a value of $200. Therefore people exchange a certain amount of their time for money, and then they trade that money for the iPhone. To that person, they “lost” $200 in cash that they obtained by exchanging their “time” for, but “gained” $200 of value or wealth in the form of an iPhone. As you can see, the $200 was only a means of exchanging their time for the iPhone.
That being said, you want to take a majority of that $200 from Apple and give it back to that person, because Apple has more than that person does, despite the fact that both parties entered into a mutually beneficial exchange of wealth. So by that logic, we should also give some of that iPhone back to Apple.
To your second point, no. A business is taxed on the money they make after they pay all of their expenses, so what you are thinking is that if we tax them at a higher rate then that will force them to invest more of that money into their business to avoid paying taxes. Well, this is simply not what happens. A company has to make a certain amount of money after taxes in order to meet goals that help them stay in business. If taxes are too high, and take too much out of their net income, then they will have to attempt to increase their after tax earnings. They will do this by laying people off, or by passing costs on to consumers (or both). Plus, a common practice for businesses is to leverage debt in order to reduce their tax liability.
“….reasonable profit…” Really? Do you have any examples of these mega-corporations that were “drove” out of this country to make these reasonable profits?
They are all over the place. Pick one with a foreign subsidiary that will not bring their foreign profits back because they will be taxed again a second time.
You apparently think wealthy people just sit back and do nothing while they use slave labor to make massive profits. Wealthy people are wealthy because they work very very hard, and take a lot of risks in which they could lose everything.
What is stopping these “working people” from doing what the person they work for did?
You really sound like Karl Marx. The rich making their money of the backs of the working class, is straight out of the Communist Manifesto. Interestingly under communism, as noted even by Marx himself, due to the reduced rewards there is (or will be) much slower economic growth, and much lower levels of innovation.
Communism in theory is an attempt to share happiness, and well being. Yet in practice, it has always been shared misery.
To your very last comment regarding the rich having to make hard choices between medication and groceries. I understand what you are saying, but how is taxing the wealth out of the wealthy going to make any bit of difference to those having to make such hard choices, since we know that raising their rates does not increase our revenues? And even if they did, are we supposed to just hand out their money to everyone? Life is what you make it, yes some people have it harder than others, but what is stopping any of those people from either obtaining more marketable skills or from risking it all and starting a business like the evil wealthy have done? Look at the history or many wealthy people, and you might find that that is their story.
These people didn’t make their money in a vacume. They made their money utilizing good hard working people. The founding fathers of most of these companies knew how to treat their employees and appreciated the environment that allowed them to flourish, the security of knowing that this country was stable and a nation of laws that protect their rights. They were the good farmers who understood that you have to put back into the land, nutrients needed to be put back into the soil in order to sustain their good farm.
The current crop of entepreneurs seem to want to follow the worst farming practices in the world where they slash virgin forests and burn them to garner a couple of cheap crops then move on to greener pastures.
If you call that something to be admired then you will enjoy the comforts of Mexico North if the current group in power have their way.
These good hard working people are trading their labor skills, and time, for money. That money is then used to trade for goods or services that said people find valuable and beneficial to them. Therefore they are losing money, but gaining something of equal or greater value.
If this model is unappealing to some, they can always disassociate themselves from the labor force and instead of trading their highly focused skills for money they can broaden their labor and grow their own food, build their own shelter, etc. Since that is the reason we work.
Toy story sounds like a used car salesman. Thank you for your response.
This argument really should be looked at. When the top brackets were taxed at higher rates our economy did much better. The so called job creaters have had ample opportunity help revive the economy.
Some how we need to get the money the large corporations and the wealthy hoard back out onto main street. Money sitting in banks or held in investments does not create the stimulus needed for the hard working, struggling middle class.
You can also find much from the CBO to support taxing the wealthy at higher rates.
How can anyone pity the investment bankers and hedge fund managers who dragged us into this mess and continue to do well while most of us pay the price for corruption?
So punish them all for the actions of a few?
The country has done well during high taxes, it has done bad during high tax periods, it has done good with low taxes, and it has done bad with low taxes. You are assuming that correlation is causation, it is not. Looking at historical data it is pretty convincing that tax rates have almost no effect on economic activity.
Either way, I just don’t see how you feel it is okay to take that much of someones income (up to 94%).
Government doesn’t need more money, government just needs to better budget the money they have.
When you are spending more money than you have, then you really DO need more money, and to cut the amount of money that you are bringing in, BEFORE you do that cutting, is irresponsible.
“Better budget” means different things to different people and the job of our elected officials is to come to some agreement on what “better budget” means. Not just do the easy thing.
Government does need more money, it is called inflation. The government buys the same gas, milk, and lumber as the rest of us and it is all going up at a steady rate. The reasons are the same for private citizens as for the government. Pay checks are stuck in the early 90’s while the super rich hoard billions. The result is that government sees a reduction in revenue. The people’s paychecks are getting eaten up by inflation with no raises to offset it. The super rich are funneling ever more to places like the Cayman Islands to avoid paying taxes on their ill gotten gains. You do not need a degree in economics to see what is wrong.
If you think things are tough now wait until wage inflation were to hit. Moreover wait a couple years to 2014-15 or so when the debt crisis hits. A lot of debt is coming do all at once personal and government. There will be competition for refinancing and the terms are projected to go through the roof. Source: The Economist magazine article last summer.
We have had 20 years of wage deflation already. If your pay is not going up around 3% a year to keep pace with the cost of living, it is the same as taking a pay cut. I wonder why $4 a gallon gas seems so expensive? Could it be that your only making $10 an hour? The same as 20 years ago? When gas was $1.50 a gallon. It always tickles me when people scream about gas prices, but never a peep about flat wages. When adjusted for inflation, gas prices are about where they should be. It is the wages that are not. You make an interesting point about the debt storm brewing. I hope we weather it.
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Never a peep about flat wages is the clearest tell of all that our media are a corporate machine that does not seek to inform us, but rather to train us to think in the way that will be most rewarding to themselves.
Agreed. I get most of my information from print media and the internet. While neither is as bad as television, everything must be put through a filter. The sheeple in America love to have their legs pulled. Just like if a politician came along and told the people what they needed to hear, as opposed to what they want to hear, they wouldn’t get 10% of the vote.
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That is a ridiculous threat. Look at the economic condition of high wage countries. Their people can afford a higher standard of living than ours can without the debt.
The Economist is a magazine I have read for years. They used to provide a balanced and global perspective on all things economic. That was true until about two or three years ago. Now they present neo-liberal economic witchcraft as if it were the basis of the science. It is not.
All of this debt crisis and austerity talk suggests cutting safety net programs that provide basic needs to the poor. Cutting these has a very detrimental effect on society as a whole. The real source of excessive and wasteful spending is the military and warfare. The military has not undergone an audit for waste in two decades. Think we might find waste? Maybe even a hundred billion a year? That would be more than the total cost of food stamps and “welfare” (TANF).
Many of the most stable economies in the world right now are those with higher wage rates than the US. The argument to hold wages to prevent inflation has dominated here for thirty years. American workers have stopped seeing higher pay for too long. Do you really think we can sustain a consumer economy for much longer with real wages unchanged in three decades and counting?
Remember, the rich do not keep the economy ticking along. It is the working consumer. The rich do not want to see workers make more but the entire country does better when they do. Why do you want to see 99% suffer at the expense of 1%. Are you that sure your children will all end up 1%’ers. Even if you are, is that the society you want to see for the masses?
You’re right, I don’t need a degree in ecomonics to see what is wrong. The problem isn’t ecomonics; our ecomonic model is fine. The problem is the US government BORROWS money from a private bank known as “The Federal Reserve” and is backed up by “Federal Reserve” legislation. They print the money from THIN AIR (nothing backs it up, no physical assets of any kind), and then “loan” it to the US government with debt instantly attached to it.
Why do we essentially pay a private bank to print money from nothing, when the US government could print all the money it wants, but without any debt immediately attached to it? That’s where inflation comes from, printing fiat money endlessly. The only thing holding the value of the dollar up, is the fact that people still think it is money and not worthless paper.
The editorial has made light of most of the reasons that government should not be in the gambling business.
I believe what the history of gambling in the US has demonstrated. It is ultimately very negative in its effects on our society which is why it has been made illegal from time to time, but then government decides that it is OK when it needs the money.
Actually this is fine with me. And for every dollar the fools throw away on the tickets and on the tables, there is just another dollar that people like me DON’T have to pay in taxes.
I like it when people stand in line to give their money to government.
Of course, you should be looking at the role of human nature and choice, not necessarily the government frame to the question. Humans are attracted to gambling. It may not be good for us but we like the thrill and the dream of the big win.
For all of its social ills, people are going to do it anyway. Even China allows their people to gamble. I am going to guess you are a conservative who cries about big government. Do you really think you should make the decisions for others? Gambling has been controlled for centuries and conducted for thousands of years. Like prostitution, you cannot legislate compliance around this issue. It will not work. At least regulation allows it be be conducted with some transparency so bookies and number runners are not making the rules.
We allow people to believe God will intervene in their lives in spite a complete lack of evidence that will ever happen. Why not let people dream they will win big? I have known people that live for that hour before the drawing when they dream of all they will do when they finally hit it big……
Folks, the problems are, in part, due to what you speak of in the comments, but on a larger, more deepening and saddening scale is the current and past development of US Foreign Policies and the amount of overseas spending going to countries overseas. You see, multi billions of dollars are being spent, and all you can do is simply go to some link and click it up to see just how much foreign spending is sent out to countries the world over by the United States. Most of this money is stolen before it reaches the desired-for end users. Allocations for “Human Rights Abolishment”, for instance, generally is what the State Department is wishing the money goes to directly, but they also realize the diversion goes to corrupt presidents and all their staffers below them. Sometimes, the US Aid and other funds, and “black funds” are used for weapons and other material and activities. To just eliminate “foreign allocations” altogether is easier said than done, with the current staff we have (and you sent ’em there) in Washington, DC. To eliminate this fiasco at least to the percentile of 60%, could assist greatly in eliminating high taxation, unwarranted and unnecessary taxation, and help the USA help itself out of the quagmires it already has slipped into. At the same time, check “List of Failed States”, and see how the US fares right now. I never have been successful in “buying friendship” with anyone, and if I tried, it always became a very hard lesson learned in what I thought would be, “friendship” and alliance. Life does not work that way, and I guess neither does massive foreign spending in the mega billions or can we say, “trillions”? By the way, I did not bother wasting my dollar on any lottery dream this or at any other time.
“Our poor would be offered ladders out of poverty, and our disabled and unemployable would have a decent, if simple life.” ~~~~BDN
I guess I don’t know what your point is. The majority of lottery ticket buyers are poor people many of which do not pay much tax anyway. Lottery dollars are in effect a tax on the poor.
BTW that “ladder out of poverty” doesn’t exist. It’s a “blue mind” construct.
It’s not a construct, it’s called social mobility. There are ways to promote it and ways to discourage it through the tax code.
You only believe its not a construct because you have a “blue mind”.
Poverty rate 1969 13.7 %
Poverty rate 1989 13.1%
Poverty rate 2009 14.3%
I reiterate the “ladder out of poverty” doesn’t exist.
You’re also reiterating your ignorance then. You’re going to pretend that a government can’t play a hand in allowing or discouraging social mobility? Get real.
After many hundreds of billions if not trillions of dollars spent by the state and federal and local governments and many hundreds of millions more in private money on poverty alleviation over the decades and the numbers barely budge. Obviously there is more to it than the government providing “social mobility”.
The ladder out of poverty doesn’t exist.
The poverty rate is determined by how much it costs to feed a family of four for a year. That misses the increase in the costs of shelter , clothing and other necessary items. If those costs were included in the poverty level you can bet our poverty rate would be much higher than it is now.
You may be right but these are government provided statistics. They are what they are.
Sorry to wake you, neighbor, but it seems you have been sleeping since the 1980s. Taxes have been cut not increased, especially on the wealthy and corporations.
We have been sold “trickle up” economics and constant war by our media.
The shrinking rates paid by the top have created greater poverty and inequality.
Income mobility is real. America used to be a leader in creating new millionaires from people once in poverty. That is no longer true. America is one of the worst countries in the world in mobility today.
Those who peddled the now dominant theory of taxation told us by cutting rates at the top, we would all do better. It was a lie, not an error. You still believe the lie because it was repeated enough. Too bad for you. Both parties are guilty of having adopted this destructive stance. Nobody has the political courage to tell the truth to the wealthy and working poor alike. We have gotten pretty far down a road to ruin.
The ladder out of poverty did exist, not very long ago. The GI Bill was a great example. That is why I get to go to college and grad school even though I was born poor to uneducated parents.
Of course to government haters, like yourself, these successes are very inconvenient and must be fought off with distortions and bumper sticker slogans. Argue for your limitations and they are yours!
Did you read my post?
The only part of your post that was relevant to the topic was your GI bill paragraph.. but even then that was something you earned through your service and not part of the governments “ladder out of poverty”. You earned and paid for it. Well done….
I stand by my comment. A governments “ladder out of poverty” does not exist”except in the minds of those that spend other peoples money perhaps for their own welfare.
Okay so government programs are not government programs when they are military programs……
What lengths you go to to keep your argument alive.
Welfare, in its original terms, was done away with in the 90s. Still, we have more falling into poverty. That is after conservatives got basically every tax break they have asked for for 20 years.
The true ladder out of poverty is education. that is indisputable. Take a poor person and give them a high quality education and there is nothing that can hold them back. This is the fear some have of educating the poor.
The cut everything mentality results in less educated people which means fewer avenues out of poverty. That is the greatest crime of the current political culture. We are giving way on the one thing that offers nearly infinite promise.
No need to respond.
“Blue Mind”
“Poverty” today includes a cell phone, internet, and cable TV. If there are more in poverty it is because the poverty pimps who make a living off of poverty keep changing the definition to include more “clients”
Poverty was in decline until we allowed the bankers to destroy our economic foundation. Now there is a much higher unmet need.
Old idiots often vote for the people who legitimize and facilitate the theft of trillions from the honest and hard working.
Indifference to the struggles of your neighbors may be celebrated by you and yours, but it defines greed and selfishness. Thank you for clarifying your values for us. Societies prosper through sharing and moving together, not through division and hoarding for ones self. The great generation felt obliged to pay their taxes and volunteer.
This republic cannot stand for long if greed and indifference are acceptable social norms.
I don’t know if lottery dollars are a tax on the poor so much as a tax on the stupid.
Most of the money comes from the lower income economic groups.
It doesn’t surprise me.
You also have to ask the questions, “Why are the so called rich paying most of the taxes in this country?” and “Why does it seem to just keep increasing while the middle class pays less and less (percentage wise) each year?” The answer is a simple one: those who are the top earners have seen their wages and salaries continuing to increase while the middle class has not. Therefore, if they have more earnings than the middle class, the upper class would obviously pay much more (its pretty simple math).
The answer is not as simple as you say. The fact is the average person earning $34,000 pays no tax or gets refunded more than they paid in. I know a single woman with two children who got back $6k more than she paid in taxes.
I know a single man (me) who made less than $36,000 and still paid in and you know what? I gladly pay my taxes because that is what a citizen does. It is part of the price of having everything America has.
Ummm, she made 34,000 and got a refund of 6,000 more than she paid in? Please enlighten me on how she can do that. I would love to get in on some of that action.
Refundable credits can get you back more than you paid in. Can’t speak as to Cheesecake’s story without specific details. But here’s a scenario I ran through my tax software:
Single parent, 2 minor children. Earns $33,050
Standard deduction of $5,800, and $11,100 in exemptions.
Leaves a taxable income of $16,150.
Tax liability = $2001. (Income tax is determined from tables.. not multiplication of income times a percentage. The tax on $33,049 income is $1,994. The extra dollar of income adds $7 in taxes!)
Child tax credit of $2,000 wipes out most of the tax liability. Just $1 left.
Refundable earned income credit of $1,661 now kicks in. The parent will receive a refund of $1,660 plus all of the withholding from their paycheck.
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Income Tax can be determined by tax tables or by percentage depending on the software progrm being used.
If you are using the percentage method the following site has a good explanation of the tax tables and how they effect your taxes.
http://www.moneychimp.com/features/tax_brackets.htm
If you use the tax table then yes $1 more can cause your taxes to go up more than the dollar that put you in the tax bracket because most tax brackets are in increments of $50 so someone who earns $33050 pays the same amount of tax as someone wo earned $33099.
Here are numbers from a real tax form, not a scenario.
Couple, 3 kids. 1 of the kids in college. Dad makes $40.347.
Standard deduction of $11,6000 and exemptions of $18,500 leave only $10,247 of taxable income.
Tax liability is $1,023.
The American Opportunity credit wipes out the $1,023 in tax and has another $1000 in refundable credits.
Taxpayer also gets refundable Earned Income Credit of $1843 and additional $1000 refundable child tax credit.
So, the family gets back all his withholding plus bonus $3,843.
I am not privy to the actual number but plug in average child care credit times two. Both children under 5.
Thanks, not being too bright, I’m not sure I understand how you can get back more than you pay out but I’ll take your word for it.
It always confused me also. These credits are “refundable”. Millions of taxpayers actually pay no tax and a large percentage of those get more “back” even when you consider Fica/Medicare tax paid in.
That’s why you can easily get to the figure that 50% pay no income tax.
It’s why you see others say things like “They pay tax when they buy their beer and cigarettes.” It’s their last refuge.
Us great unwashed also pay property, sales, exise tax, license fees, fuel tax, etc. etc. I would lay odds that the great unwashed pay more taxes than the top 1%.
Never the less 50 % of the populations pay Zero Income Tax and many millions get back more than they paid in and for some of those it probably includes all the taxes you mentioned.
I would take your odds. There are not as many write-offs on income as you might think on the personal side like their used to be in former decades. Another thing having a high income doesn’t excuse you from having to pay those same taxes.
have a kid…
NO, LOL, not at this stage of the game. Gandchildren and great grandchildren thanks.
Lottery issue in Maine settled several years ago by referendum. You lost on that issue get over it. Also helpful to think of it as a voluntary tax. No IRS or State Revenue agent forcing you to buy tickets or “get in to win.” Just poor psychology to help balance the budget. The original sales pitch to help education got lost in the attempts to “balance” the budget also years ago.
I still advocate raising taxes for every socioeconomic class – we can afford it!
When the government promises to limit it’s out of control spending I will look at the possibility of paying more taxes. Right now the government is credit crazy and I will not agree to throwing more money into that black hole.
The reason for the spending is simple, the solution, not so much. We are overspending because we are perpetually at war.
As long as America is engaged in war more than it is not, there will never be enough money to invest in the American people or enough to pay the bills.
The wars in Iraq and Afghanistan have cost more in the last ten years than food stamps have cost in fifty years.
The wealthiest country on earth has a poverty problem because we spend too much on war. That is the long and short of it.
The war is not the cause of our deficit spending. That began long before the war and will not corrected when the wars are ended.
Our Senate will not even submit or vote on a budget because they do not want to face decisions that need to be made. You should take a look at some of the CBO charts that show where our money is going and what the debt projections are over the next 10 years.
Even with a very optimistic growth index of 4% we are going to top out over 25 Trillion at this rate.
It needs to stop.
Well, I hope that philanthropy is not dead. I hope that the people who see their taxes lowered remember their local libraries and food pantries and public schools and historical sites and so on. I hope that their taxes being lowered will give them the freedom to choose which non-profit to support rather than choosing to buy an ATV or flat-screen TV…..
The people buying the flat screens and ATVs are the ones cashing the welfare checks.