5% Of U.S. Taxpayers Account For 60.6% Of All Tax Revenue, 47% Will Pay No Federal Tax In 2009
An interesting observation courtesy of Mint: of the 307,868,280 Americans out there, which compose 151,485,000 tax units, 46.9% will have zero federal income tax liability in 2009. Brilliant plan to keep the country happy: the poor pay no taxes, the rich get a massive stock market bubble to sell into, and the disappearing middle class...well, they can pay $20 for a hotdog and beer combo in Prague on that once-every-five-years vacation.
h/t John Connor
(8 votes)
on Tue, 11/17/2009 - 14:24
#133451
I'd like to think that when the VAT hits (to pay for healthcare), the Fair Tax discussion will resume.
Elimination of corporate and personal income tax, and introduction of a consumption tax, is the only way that the middle class will survive.
Should I dream of an end to fiat currency too?!
on Tue, 11/17/2009 - 15:36
#133555
consumption tax picks up the underground economy too.
on Tue, 11/17/2009 - 22:33
#134036
Well, given that the O-blunder economy is unresponsive and hooked up to a breathing machine, I say we double-down on the underground economy ASAP!
Shit, what do we have to lose at this point?
I've gotta think that a lot of underground 401k's will be the only things supporting anyone for the next 30+ years.
on Tue, 11/17/2009 - 20:21
#133915
I agree 100% that the Fair Tax is a tax system that makes sense and would be an important building block for more stable, long-term economic growth. However, implenting the Fair Tax would mean the elimination of many high-paying service jobs (CPAs, tax lawyers, consultants, etc.). It's hard to see how people in those professions would let such a system be enacted which mean the elimination of their jobs. Too much money and political power to let that happen.
on Wed, 11/18/2009 - 09:35
#134369
That simply means they would have to become "producers" instead of being parasitic leeches surviving off the energy and labor of others.
on Thu, 11/19/2009 - 09:19
#135658
In the contemporary world of high productivity there aren't many possibilities to find a job which is really productive.
I mean that very few workers are needed to produce all the goods that are needed for the rest of the society. The rest of the population that can't find a job in manufacturing probably are just not needed and according to your logic have to die. Would you like to see America with the population of just 3-10 million that are still needed to full up work positions that are left after all the outsourcing to China?
Sure it will make you happy that there will be no "parasitic leeches " to disappoint you.....
on Tue, 12/15/2009 - 15:38
#164940
Hey moron (I don't usually start out my responses this way, but yours deserves special attention)...
Because we ALL know that Henry Ford's invention of the assembly line caused the deaths of every single blacksmith, carriage maker, sanitary worker (that had to clean up after the horses), rancher (that raised horses), and a host of other occupations...
Get real dude, open your eyes, and look at how economies really work.
on Tue, 11/17/2009 - 22:44
#134046
wished the graph was made simpler to understand at first sight.
on Wed, 11/18/2009 - 02:33
#134230
I'd prefer to see a flat tax implemented. Not a flat rate tax - a flat tax.
on Wed, 11/18/2009 - 19:32
#135303
If we're going to adopt a new tax system, I say the only way is to follow the Constitution and abolish the income tax completely.
The income tax was adopted in 1913 in a shadey and underhanded way by Congress and ruled unconstitutional by the Supreme Court.
However, the Supreme Court has no power to carry out its rulings and Congress did nothing to repeal the amendment, and have done nothing but abuse it since.
The Fair Tax is not fair, as it puts the burden of taxation on the youngest generations, and would further cripple the economy by taxing those of us who would purchase items in order to be entrepreneurs. The FairTax only replaces one bad system with another bad system.
Watch "The Money Masters DVD" for the two step solution for our financial troubles.
Then you will see why the FairTax won't make a bit of difference.......
on Mon, 11/23/2009 - 10:01
#139290
The name implies exactly what it says--"FAIR" equal to all. If anything the fair tax takes money only from newly made products--used products are not taxed again. The young and old will pay the same, all necessities will be credited with a rebate each month; the old will pay the same just like the young--retirement accounts will be taxed as well (only when money spent)--I buy a new automobile, I pay the tax--you buy a used auto --no tax! only new products!. ..No IRS--no accountants, no jail time--no illegals not paying fair share; no underground economy; no state tax; no filing of tax; and collection will be done only by a shadow of the IRS. Read "Neal Bortz and John Linders" book "the Fair Tax" to get the complete answers. The only reason this bill HR.25 will not pass is Congress members will lose their power over us!!
on Tue, 11/17/2009 - 14:30
#133454
A splendidly fascinating breakdown of data -- there's a LOT of information impressively organized there. It would be interesting to see some time/trend data in the form of a similar breakdown from say the last two years (although I realize in practice Mint may not have that data).
I find it interesting that the $500k+ category (1% of the tax units) makes up for about 40% of federal tax revenues. This suggests that it would be illuminating to see that 1% broken into smaller pieces. You'd hope that that the top .1%, which generally kicks off the truly elite class percentile, makes up a majority of that 40% block, but with high powered accountants and tax shelter tactics I'm not so sure.
on Tue, 11/17/2009 - 14:44
#133472
Only the rich can hire tax specialists to evade taxes. Look at Wesley Snipes, Mike Tyson, half of the Democrats in the house and Turbo Tim.
on Tue, 11/17/2009 - 14:58
#133494
The third and fourth noted evaders are more scofflaws than users of professional tax planning. And Snipes had a very close call.
on Tue, 11/17/2009 - 15:24
#133528
...as well as Republicans, and various multinationals.
on Tue, 11/17/2009 - 18:15
#133793
Yes, having tax specialists is a necessity if you are wealthy. But, have you ever heard of AltMin? Do you even know what it is?
on Tue, 11/17/2009 - 14:32
#133455
The unemployment rate back in March 2007, just nine months before the recession started, was 4.4%. Compare this to the 7.5% unemployment rate nine months before recession of the early 1980s. According to Deutsche Bank economist Joseph LaVorgna, in relative terms "the current deterioration in the labor market is without precedent."
Philips said Congress will likely enact $250 billion in additional fiscal measures to support growth over the next three years, including $75 billion more in 2010. However, recent developments -- including the $45 billion law enacted last Friday to help homebuyers -- make this assumption look increasingly conservative.
http://articles.moneycentral.msn.com/Investing/top-stocks/blog.aspx?post...
on Tue, 11/17/2009 - 14:31
#133456
Friedman's shock doctrine begin's at 2:24 - wake up sheeples!
http://www.youtube.com/watch?v=aSF0e6oO_tw
on Tue, 11/17/2009 - 15:23
#133527
@dickweed: You are a freaking idiot. I can only hope you will last to see statisim in its true form. People like you, useful idiots, will be the first to go.
http://www.youtube.com/watch?v=g2kTy7glZ9s&feature=related
Milton Friedman's Ghost
on Tue, 11/17/2009 - 22:43
#134044
Why is it that the most critical posts always come from the same Anonymous user?
(Hmmmmmmmmmmmmmmm...)
on Tue, 11/17/2009 - 14:44
#133465
Hell yeah, that's why the don't try increase employment to a large degree. Help just enough to prevent a march on DC.
Great post, DC is diying because most of the layoffs are at that 100 k area supporting 26% of the income tax flow....the rest don't mater to them because the numbers don't change enough to effect Inc tax flows.
Lets look at this after Pelosi kills Bush tax cuts
nice
on Tue, 11/17/2009 - 14:46
#133473
Don't get me started!
on Tue, 11/17/2009 - 14:49
#133475
The poor don't pay any income tax, but pay tons of payroll taxes. If you look at the combination of federal tax, state tax, social security tax and medicare tax, thing look a little more balanced.
on Tue, 11/17/2009 - 16:42
#133664
Don't forget...payroll taxes (federal) are split between the employee and employer.
on Tue, 11/17/2009 - 18:33
#133827
Payroll taxes are paid 100% by the employee. Splitting the amount between employer and employee is nothing but a gimmick to make the employee think that the employer is getting hosed too.
on Tue, 11/17/2009 - 19:32
#133891
That's true.
But, supposedly, payroll tax (which includes social security and medicare) isn't really a tax, right? Paying the social security tax creates an obligation on the part of the government. So, either it's forced savings and not just a tax to support the vast welfare state - as the liberals like to claim - or it's just a tax. Liberals like to claim it as a tax when it's convenient and as a government retirement plan when somebody complains that it's just wealth redistribution.
Either way, it's not a lot more balanced. Higher earners pay way more even on an effective tax basis.
on Wed, 11/18/2009 - 01:38
#134207
Good point... the 47% is misrepresented as "no taxes" (instead of no Federal Income tax) by the right all the time... seems they never get called on it.
on Wed, 11/18/2009 - 15:01
#134908
The top 1% of taxpayers earn about 23% of adjusted gross income; they pay about 27% of *combined* federal income and payroll taxes. I don't like taxes, but if we're going to pay at these levels this breakdown seems reasonable, modestly progressive and hardly "soak the rich."
on Wed, 11/18/2009 - 15:24
#134950
And that's why they get up $5,000.00 in EIC and up to $1,000.00 per child for child tax credit. things look a little mor UN-balanced!
on Tue, 11/17/2009 - 14:49
#133476
Well, if it really hurts your feelings that the poor aren't paying a large portion of the taxes, just remember that while you enjoy your $20 hot dog, they're enjoying the remains of that pigs dirty cousin.
I get why there's the furor over the poor not paying taxes.... perhaps the middle class small business owner will think about that and cough up more than minimum wage.
on Tue, 11/17/2009 - 14:53
#133482
more likely is that they'll just hunker down and not hire anyone in the first place
on Wed, 11/18/2009 - 11:53
#134578
Si what he said.
on Wed, 11/18/2009 - 12:09
#134615
si what he said.
on Tue, 11/17/2009 - 15:00
#133497
yes, increase the pay for those who serve you, help the poor little proles shoulder their load. this article is crap. anyone in that top 1%, I ask you? how much do you have left as discretionary income after you pay your taxes? those toward the bottom do not even know the phrase "discretionary income".
on Tue, 11/17/2009 - 16:07
#133611
does discretionary income come before you fill up your gas tank or after
on Tue, 11/17/2009 - 23:42
#134101
Therefore take it from me???? Is the spelling of your alias correct?
on Wed, 11/18/2009 - 06:08
#134279
There are obviously some committed socialist here that will never admit the unfairness of the tax burden on higher income earners. They will always believe that the rich (whatever that means) don't pay their share of the taxes. When you present the with the facts, they still don't believe it.
It is said above they pay payroll and sales taxes as a defense. So what, people of higher incomes pay that as well, and more of them taxes also. Many poor don't pay payroll taxes because many choose to not work. I was a case manager for years, so I saw it first hand.
on Tue, 11/17/2009 - 15:00
#133498
Seriously?
Is that really how you think?
on Tue, 11/17/2009 - 15:03
#133504
Right, because it's middle class money-grubbing that's causing all the problems here.
Not to worry though...since misery loves company, the middle class will soon be joining the poor in the soup line. See, they really do believe in equality.
on Tue, 11/17/2009 - 19:32
#133892
Because there is no such thing as balance or middle ground? There is only left or right, up or down. Fence sitters, or "balancers", become expendable because they don't subscribe to extreme(ly) ambitious method? Surely you jest.
on Tue, 11/17/2009 - 15:15
#133506
You know, making a combined $80k or $100k is really not any more than just scraping by for a couple with two children in most urban areas. It won't even leave enough to save much for college or retirement. On the coasts even a combined $200k isn't going to make you rich. But it does get you a hefty tax burden.
Ultimately, though, it's not so much about whether the middle class has "enough," it's about basic fairness. When you see people with no education, no skills, and nothing really going for them but the ability to collect a check (welfare, unionized unskilled labor, or otherwise), getting more out of the system (whether as cash, vouchers, scholarships, interest-free loans, subsidized housing, or whatever) than people who have degrees and have worked their butts off from age 16 onward, you see a system that is grossly unfair. And becoming more reminiscent of the socialised economies that collapsed under their own misallocations. It's happening here, right now.
on Tue, 11/17/2009 - 15:20
#133524
the other problem we haven't mentioned here is that people who don't pay taxes still vote... the participate in the decision making for the system without bearing any of the cost. that is a HUGE problem. we talk about moral hazard around here a lot, we should be able to recognize the issue for what it is.
on Tue, 11/17/2009 - 15:41
#133563
as if your vote(or thiers) makes a difference. ROTFLMAO!!!
you're still sleepwalking.
on Tue, 11/17/2009 - 16:16
#133626
By your logic, illegal aliens who pay taxes are the ones really getting screwed.
Historically, land owners were the only ones with a "vote". IMO, The US got really strong by giving all people (no woman originally) the vote which fosters a sense of belonging and sharing in any national prosperity.
on Tue, 11/17/2009 - 18:05
#133778
land ownership is an abomination. this earth is not owned by anyone.
on Wed, 11/18/2009 - 02:36
#134232
Property rights are the foundation of law and individual rights. You must be a communist
on Wed, 11/18/2009 - 09:58
#134396
The illegal aliens can go back to where they came from if they are getting screwed.
It's easy for a citizen to want for free healthcare/welfare when they will never pay for it. It's like children running the parent's finances.
The liberal game plan is to get enough voters benefiting from their handouts to overwhelm the voters who are paying for them.
on Tue, 11/17/2009 - 18:18
#133800
This always make me think of the old saying, "Once people realize that they can vote themselves money, they will."
on Tue, 11/17/2009 - 20:58
#133952
We had a single parent Dad come to our public college Board Meeting and thank the college for all the free shite he got that made him able to attend college...as opposed to working I suppose.
on Tue, 11/17/2009 - 15:33
#133551
who are you getting your information from? is it glen beck, limbaugh, or are you channeling Newt Gingrich ala 1994? You're talking smack at worst, or just don't have a clue as to what you are talking about at all, at best...
I have generally made, on average, around 80K/yr, for the past twenty years. And you are right about one thing, 80K in 1989 allowed me to live large for a little people, 80K in 2007(last year I worked), I felt like I was barely scraping by.
As for the working or non-working poor though, and I know many poor people personally, family members included, they are not collecting checks, they might recieve food stamps and their children some medicare benefits, but not a single one is able to just live off the System. And not a single poor person I know is aspiring to live off the system, every single one has at least a part time, minimum slave job, that gives them just enogh so that can continue to serve ignorant degree clutching greedheads like those that espouse the kind of nonsense you just wrote.
I have done the only courageous thing thing that is left, I have dropped out of the sytem entirely, and I have no qualms of taking from the rich, THEY ARE THE PROBLEM. Of course if I take anything from the rich, it will not be done under any legal system set up by themselves.
I am here at zerohedge to make the rich and those who pretend to that their fate is in alliance with the rich - UNCOMFORTABLE. there are many more like me and our numbers are growing.
rockin the revolution!
on Tue, 11/17/2009 - 15:41
#133564
Viva la Revolucion, Comrade!!! Maybe you'll get a "Che" shirt with your face on it someday.
There's so much bias and absurdity in your post it isn't worth responding to. I have relatives at various pay and education levels and firsthand knowledge of how far money goes and who has done what to earn their "stuff," be it in cash or in (direct and indirect) government handouts.
on Tue, 11/17/2009 - 15:51
#133581
we are all biased. the way I look examine the bias is, of all the bias, which bias might help the most people suffer less? the bias of the rich and thier lackeys, benefits few.
wake from your long slumber friend and join the revolution. the courage is their within you if you look deeply enough. and it will be only through the courageous audacity to suffer the scorn of fools, that you might taste what it is to be alive.
to use the jingoism of the blogs theme -
on Tue, 11/17/2009 - 16:20
#133633
Meh. I checked out of the rat race without even realizing I was doing so. Sometimes good things in life come by surprise.
Revolutions are always taken over by people aspiring to be the new tyrants anyway.
on Tue, 11/17/2009 - 17:31
#133721
We'll let you rant a bit before we shoot you.
on Tue, 11/17/2009 - 20:55
#133948
The rich outsourced 10's of millions of middle class jobs to the turd world. Now they're busy taking the middle classes homes, bank accounts, and retirements via more job losses. This will not end well if not reversed.
on Wed, 11/18/2009 - 10:25
#134440
All the while, watching the middle class crumble at their feet, they collect their obese bonuses and ignore the outcry. After all, what would we do without their corporate leadership?
on Thu, 11/19/2009 - 07:23
#135623
They little, in the past, bought all the crap that corporations produced. Giving money to buy things. Corporations called this 'profit'. Profit allowed the owners of the corporations to pay themselves bonuses. Without the little people, there would have been very few rich people.
Long ago, in a time far, far away, lords and ladies depended on their serfs to produce the food, man their armies, and manufacture their goods. No different today. Without their serfs, the aristocracy would have penniless.
This is called symbiosis. The whole supply chain, as you will, takes care of each other. That chain is now broken. Bankers make phantom profits trading worthless pieces of paper.
You are goddamn right that the rich should give back to the little people who made it possible for the rich to have what they have. This is called 'common wealth'. Besides, what would do with a billion dollars? You are certainly not going to put it to real, productive use today in a stock market that has departed the realm of reality.
When there is a strong middle class, educated, and innovative, everyone may benefit. Welcome to today's America where that has almost been destroyed. Courtesy of a few globalists with too much money wanting too much power. As the aristocrats of yore.
It is always class warfare. War for resources. After that, religious warfare.
on Tue, 11/17/2009 - 15:55
#133591
Nicely put. I have a similar life history and understand your perspective.
I am always amused by those who think the trashmen who collect up their stinking garbage in 10-degree weather and 100-degree weather are lazy and need to pay more in taxes -- and that "the rich" are so put upon. (Including private equity fund managers who pay a 15% tax rate on "carried interest" which is absolutely NOT carried interest.)
on Tue, 11/17/2009 - 16:01
#133602
I've noticed, like you, many of my friends or relatives who lack a job or are barely getting by are not consciously choosing to job the system.
However, they are unconsciously. I know quite a few who haven't pursued jobs that would have helped them pay the bills (though not gotten them rich) because it was "beneath them".
There is a certain level of ego that goes into a job/career. When I was unemployed for 6 months I was alot more willing to dumb down my resume than when I was just laid off.
Fact is, I've lived in the NY Metro area for 25 years. My best earning years were the mid 90's, when my wife and I had a combined income in excess of $175k, and we had only 1 child. This ended quickly when we had our second a year later. At $175k, we weren't getting rich, and we had a very inexpensive house at the time.
3 years ago, we upgraded our house, took on more debt, and I'm making far less than I was then. She is not working.
All I can say, though, is that anyone (even 10 years ago) making $100-200k in the NY Metro area is solidly middle class. Property and Income taxes soak up more money than people realize. And if you're "lucky" enough to enjoy the low property taxes of NYC, then you've paid through the nose elsewhere on the cost of your apartment. Not to mention you'll HAVE to send your kid to private school (I know not one person who sends their kid to public school in NYC).
All I can say is that your cynicism is a bit much. While I can appreciate the candor and applaud your right to speak your opinion - it's seriously misguided based on my own personal experience. Plenty of people around here aren't jobbing the system deliberately...but plenty are jobbing it simply because they are unwilling to take the step back that is sometimes required of them in order to get ahead.
I'm as pissed off as anyone else here at 2 groups of people:
1. the Wall Street bonus babies who line their pockets each year with income otherwise stolen from productive people or from taxpayers who unwillingly gave them a "bailout"
2. the politicians who have developed an economic model that benefits only the very wealthy and the very poor.
It seems to me, when it came time for "stimulus" that the government should have looked for people like me. People who have a job, are making a decent but not outlandish wage, have little or no debt aside from mortgage (that they are meeting), but are in need of a little help. I could've used some stimulus money to buy that new car I've wanted for the last 2 years (my cars being 13 and 10 years old), improved the quality of my roof (which is notching on 20 years), or engaged a variety of other REAL STIMULI.
The package they've offered has basically done nothing. Because they gave money to people who don't need it (Wall Street) or people who don't know what to do with it (the people being foreclosed on).
One group does nothing with their stimulus, the other doesn't know how to spend it properly. Either way, the money has been wasted and people like me and my kids will be left holding the bag.
If you want to destroy a nation, undercut the hard working middle class. It's been proven time and again to be the most efficient way to destroy an economy. Bush AND Obama have done this most effectively with their bailouts and stimuli.
When somebody knocks on my door to pay the bill, I hope society will be so far gone that I can greet them with a 12 gauge and not worry about the repercussions of any actions that may follow.
on Tue, 11/17/2009 - 16:52
#133677
I have not had a full time job in a year. Tomorrow morning I am getting up at 4:00 am to count parked cars near the airport for an engineering firm doing some work on light rail to the airport (they want to monitor parking congestion). I previously managed a 75 million dollar brand. I live in a basement of a house I share with three other people - none of whom are related to me. I clip coupons. I shop at Goodwill. I send out 5-15 resumes every week for jobs as low as admin asst. and as high as business manager (the level I should be at).
The only place I have made money is in my retirement. And that is because (thanks to sites like ZH) I went reverse the market in late 2007 and then to cash last spring. If i can get to retirement I might do ok.
T.
on Wed, 11/18/2009 - 00:46
#134172
I don't think any of the probably about 60 percent of working aged people gainfully employed in living wage jobs truly gets what is like for the other 40 precent that are unemployed or barely scrapping by working min wage jobs. I know very talented and education mechicanical engineers, civil engineers, chemical engineers, architects, science types with 15-25 years or previously well off business guys that owned painting company, or electircal bus, or a small engineering deisgn firm that are making 40 percent of what they were 2 years ago...they are now decscending into poverty and lsoign their houses just cause they were working in the wrong industries at the wrong time and got laid off last fall or last winter or had their income dropp drastically and yet there are many average folks that have a job in a more secure company and that survived a cut or two that are doing just fine thank you, maybe no raise, maybe a slight cut in pay, but hey they got a good deal on a new car.
And then of course the ones who really don't get what its like for the 40 precent hurting like hell,,,and those clueless folks are in our Pres' admin and in Congress.
on Tue, 11/17/2009 - 16:52
#133679
+1. Well said.
on Tue, 11/17/2009 - 18:24
#133816
as long as MSM(owned and message controlled by Corporations, ie the top .01 percent) can still manipulate us(any couple(and that is another checkpoint you must learn/research for yourself) making less than $500K/yr) into believing that each other are the reason we are being oppressed, this fools game can go on forever. we scrap amongst ourselves whe we need to coalesce and bring their system to it's knees. then working together. first at a community level, and then regional, continent, and finally world level, the capacity is there to create a more equitable system. sure, there will always be tyrants, but history has toosed them to the trash heap time and time again. our country is an excellent example of this. and thomas jefferson was right, indeed eisenhower was right, and now it is time to clean up this mess.
yes, I think land ownership is an abomination, but that does not mean that I and others like me, are not willing to accept land ownership as part of the solution(this is just an example of many), in order to fashion a more just and humane system where the rights of all people and are respected. I will not tread on you unless you have decided your rights include the freedom to tread on me.
on Tue, 11/17/2009 - 23:34
#134092
The dickweed has a point there. The strategery: divide and conquer and watch the little people squabble amongst themselves while we rake it all in.
Say, any black, Jewish, female, lesbian, pro-life conservative Democrats in the house tonight?
on Tue, 11/17/2009 - 15:56
#133594
You're throwing a lot of stuff together there. First, "unskilled labor" are people who still punch a clock to earn their way through life. Sorry if they didn't make it through as much schooling as you, but they don't deserve your scorn. Working a low-skilled job 8+ hours per day is very often harder than working a white-collar one, believe me. Not always physically, but mentally in terms of tedium, low reward for your time, low morale, etc.
"Welfare" is now essentially restricted to people who have dependent children, and restricted to five total years in a lifetime. Long-term residence in public housing, and abuse of SS "disability" system are more serious problems than "welfare".
It's definitely not good to have so many people not paying in, but my question is how many local and state taxes these people pay. No one really escapes the taxman.
on Tue, 11/17/2009 - 15:57
#133597
amen brother!
on Tue, 11/17/2009 - 22:58
#134063
+1000
A well-informed, even-handed comment. Some badly-needed perspective.
on Tue, 11/17/2009 - 18:54
#133853
knowledge workers in expensive urban areas get screwed because so much of their income is really revenue covering expenses such as paying med school debt, higher houses costs in the area.....if they, a knowledge worker could do like a business, they could say, well I make more revenue in NYC but my costs are higher, and I make more as a doctor, but my education costs are higher, and then they would just pay taxes on the net profit. But 100-200k do get over with no FICA, but then get screwed by AMT.
on Tue, 11/17/2009 - 20:39
#133929
To an extent student loan interest is deductible. But if you did something useful with your student loans, your income is probably just over the limit at which the student loan interest stops being deductible. It's a great catch-22. It's like the government wants more art history majors who'll end up working at Starbucks while scrimping to pay their 30-year-consolidated student loans.
on Tue, 11/17/2009 - 23:10
#134073
Once again, you're painting pretty broad strokes. Granted, liberal arts majors are not necessarily terribly economically useful, and I have little pity for those who mindlessly took on loads of unpayable loans, but have some compassion, eh?
All most of these kids have heard all their lives that going to college is their ticket to the middle-class. Not everyone is cut out to be an engineer, but these kids have been told year in and year out by the education establishment that more schooling is always beneficial. Teachers and 'counselors' start pounding the "Go to college! Go to college!" mantra from elementary school these days, without ever talking about costs.
It's yet another facet of a society that systemically fails to understand the true nature of excess debt. The whole country has been on a borrowing binge in an widespread effort to keep up with an inflated standard of living; to single out students is unfair at best.
on Tue, 11/17/2009 - 23:35
#134096
I have pity for those people - I know a LOT of them - but that doesn't mean it's not a dumb system with perverse incentives. Why not make student loan interest deductible if you're an engineer, scientist, or nurse, but not if you're a lawyer or banker? One of the major effects of the silly college system is all these people who are moderately smart, think they're very smart, and can't get any decent job with their history degree. So they go to law school, or maybe business school after getting the requisite few years of $35k coffee-fetching on the resume. It's just another debt-funded bubble, and it too will explode at some point. If our public schools actually educated then you would be able to expect a high school graduate to be competent for a wide range of useful work, not just unskilled labor.
on Tue, 11/17/2009 - 23:59
#134125
I fully agree. Perverse incentives and mismanagement infect it at all levels. It's a serious issue for our national wellbeing and economic competitiveness.
on Wed, 11/18/2009 - 01:10
#134187
Mish had a good post on the education issue....if there are not jobs, such as manufacturing jobs that hired a lot of educated people like engineers, designers, marketing types etc...then all the education in the world will do no good for economy, even in things as seemingly practical as science and engineering. Computer majors are losing their jobs to Indians they are trainging, I have two friends here in MN, one has a CS degree and works for publishing company Thomson/Reuteres/West and was running a big software dept and another works in testing for a security software firm a job she got with 2 year comm college deg and lots of grit when computing skills were in demand...both of them are training Indians that will replace their dept...for now they are told they have jobs...
Mishes post included a PhD scientist saying how there were no private sector jobs for these well-educated graduates and they were all fighting over low paying post -docs that used to be a stepping stone.
I also know lawyers that keep working judge clerkships for 5 years or more (supposed to be like an internship right of school) for 25k for the local county cause its the only job they can find, they at least have health care benes, and the are at least working, gaining experience in law...
Also, we are losing a lot of white collar jobs that employed not so educated people in middle to upper middle class jobs. A lot of my high school mates that didn't go to college but were landed in computer business in the late 80s and early 90s, that is not a great option now, also a lot of people made insane money in mortage brokerage, realty etc...and that has seriously gotten reduced.
Look at countries in third world that have low performing economies, even thos few go to college, college grads often find they can make more moeny from tips driving taxis, waiting tables, being whores (yes, I had phillipino guy friends say some of their female classmate did that to support parents etc..)...I think this is where we are trending towards.
on Wed, 11/18/2009 - 12:03
#134601
don't be an idiot. This has nothing to do with "$20 hot dogs", it is all about what happens when 50.1% of the voting population is completely freed from the consequences of taxation. That is a pure tyranny of the majority.
At 46.9%, we are almost there.
on Tue, 11/17/2009 - 15:08
#133477
I shouldn't really be shocked by that after all I have read, but I was really really SHOCKED by the reality of it
Edit: Just had a rethink of the top 5% pay 60%......... they get to pay the most for the banksters
on Tue, 11/17/2009 - 14:50
#133479
Looks like incentive to me?!?!?!
Of course, if you are Turbo Timmy Geithner you can sign a note promising to pay on income earned and then say, 'Oh, THAT was income?'
on Tue, 11/17/2009 - 15:00
#133496
Turbo Tax Timmy in all his glory. Goes to show there are two sets of laws in America.
10 years ago I was invited by my friendly local IRS office to attend an anal exam, also know as an audit. I understood it for what it really was , a shakedown, and I made sure they found something so they'd go away happy they did their jobs.
I was fined plus I paid the tax and interest owed for a grand total of $300. Hardly worth their time but it was a shakedown after all, gotta come out of it with something.
Unfortunately I was invited back for an annual anal exam by the IRS 5 years running.
on Tue, 11/17/2009 - 15:17
#133520
Actually I believe after 3 years in a row it is grounds for harassment, if they aren't continuing to find discrepancies; but you should consult your attorney for more details.
on Tue, 11/17/2009 - 18:24
#133817
I haven't been audited in a long time, and I think it's because they got nothing from me the three times they did audit. In fact, one of those, we came up with deductions we had not used, and they had to pay us money.
You can do that as part of an audit, and they have to pay YOU. Save a few receipts each year for an audit, and then hit them with those. Doesn't need to be a lot of money. But if they see they don't get money out of you in a audit, I think you're less likely to look like a good candidate to audit. (I have nothing to prove this theory, it's just a hunch.)
on Tue, 11/17/2009 - 21:02
#133968
You helped the auditor shakedown artist make his numbers and get that 10% performance bonus. Way to redistribute!
on Tue, 11/17/2009 - 15:48
#133575
Good to see you here Davos (dcm)
on Tue, 11/17/2009 - 14:54
#133486
The commenters at that link brought up things like sales taxes, SS/Medicare taxes, payroll taxes, etc. to try and refute the numbers--that taking all those costs as a total percentage would show the rich don't really pay that much. I have a feeling they'd be surprised, considering that the upper incomes pay higher percentages of these taxes (save sales taxes) than the lower incomes.
There's no question that the study is incomplete, and the other factors mentioned by the commenters at Mint should have been included. Unfortunately, though, their comments seem to be riddled more with money envy than practical analysis, and don't seem to be aware that they are implying the lower incomes shouldn't be paying any taxes at all. Not even the most strident libertarian would be making that argument.
on Tue, 11/17/2009 - 15:51
#133582
No, SS/Medicare taxes are capped to the first 100K (or so) of income. So rich people pay a much smaller percentage if their income in these taxes.
on Tue, 11/17/2009 - 16:09
#133614
SS taxes are capped. The richer you get, the less as a percentage you pay. Ditto Medicare. Ditto Unemployment. You obviously have no idea what you're talking about.
on Tue, 11/17/2009 - 18:12
#133791
Medicare is no longer capped. But then again, it's only against salary, not dividends or cap gains.
on Tue, 11/17/2009 - 16:14
#133618
First off, payroll taxes refer to Medicare/SS, so they are the same thing. Secondly, both are regressive taxes and therefore your second sentence is completely wrong. Didn't read the rest of your glop, but let me know if you plan on editing it to create a salient point.
on Wed, 11/18/2009 - 01:29
#134198
i don't money hate, I do well, have lots of bones, pay lots of taxes as have no kids etc, not married to someone ...nothing wrong with being analytical and wanting a real picture...its just not who is bearing what percentage of tax burden, but what is the situation of those in 47 percent as many are likely young dependents, totally disabled, retirees, unemployed looking for work.
Good policy can only be formed based on good information, its right to disect this stuff....and typically the poor do not run media, but rather media is biased towards upper middle class and rich, so its good to ask questions about "common" wisdom that may just be sloppy thinking or media spin...
on Tue, 11/17/2009 - 14:56
#133489
"the great enemy of clear language is insincerity, when there is a gap between one's real and one's declared aims, one turns, as it were, instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink" - george orwell
http://www.youtube.com/watch?v=Cd-SLRyuRq0
on Tue, 11/17/2009 - 20:18
#133908
Here here! Ignore the blue pill pharmacists.
http://www.youtube.com/watch?v=k5JkHBC5lDs
and/or
http://www.youtube.com/watch?v=9XVVZPefbR4
on Tue, 11/17/2009 - 14:57
#133491
Ah....finally an elegant solution to US economic ills....
Create the situation to where the only entity that has any money to tax are a handful of people at GS....
Then the govt. can increase the tax take on the last remaining money makers....
There's just too many people that make money now....
on Tue, 11/17/2009 - 15:00
#133495
Those Lucky Ducky poor people!
Seriously tho, shouldn't the top 1% be paying more like 90% of the income tax, since that's the percentage of wealth they hold? The people who are clearly getting screwed are those of us in the dwindling middle class (80-95% top earners). But the solution is not to make the poor and working class - who already pay regressive sales taxes, property taxes and ss taxes - pay more, but rather the elites pay their fair share. It doesn't make any sense for the highest rate to top out at, what is it, $350k/year? How bout a higher rate - not too onerous, maybe 40% - for over $1mm, 45% for over 10MM, and 50% for over 100MM? Call me a Commie if you must, but I think it would be great to go back to the Eisenhower rates - 90%, but without looopholes this time - for those making over $1 billion a year. That way families like mine, making $150k on the coast, could afford to send our kids to college...
on Tue, 11/17/2009 - 15:59
#133598
in any given year, maybe 1 person globally will make a billion dollars, maybe two (e.g. sergey brin/larry page). I like the idea of raising the higher thresholds to say $500, $1mm, $5 or $10mm etc, but 90% is obscene. Also you should mention the debate about the (dis)incentives taxes represent; taxing people for acheiving financial success, instead of, for example, punishing people who've attained great wealth.
on Tue, 11/17/2009 - 20:54
#133947
I actually believe that 90% is not obscene for earnings at a very high level. The reason is that it would force money into more hands, increase the middle class and increase innovation.
on Wed, 11/18/2009 - 01:39
#134208
when the family business I work for was doing well, at the end of they year they sometimes gave us bonuses and almost always went on a mini spending spree, buying computers, building more facilities, spending money developing new products, hiring outside software vendors to make sales tools etc...and the management would always say, hey, the owners are going to lose 40 -50 percent to tax man so its better to plow it back into business, make their assets with more, increase their future income.
I'm sure the owners wouldn't agree, but I think that money did better the way they spread it around in the business then if it got spent at the spa, on a island vacation etc..
And 90 percent seems obscene compared to what we are used to, but Sweden survives it, we survived in the 50s. And when income in US was flattest (rich and poor closeest, great middle class) US had its best economic times.
on Tue, 11/17/2009 - 16:45
#133667
Why do the 'rich' always have an income above our own? Bet someone living off $40K thinks $150K would do right nicely....they might think the line gets drawn at, oh, say $75K. There's nothing to prevent you from voluntarily penning a little extra to your Uncle- bet he takes it. How about this: EVERYONE pays too much- let's stop the goddamn spending
on Tue, 11/17/2009 - 18:16
#133796
I second your last sentence!
on Wed, 11/18/2009 - 01:43
#134211
I agree, lets close down 1500 of the 2000 military bases/outposts we have all over the world and stop fighting wars and de-funded Blackwater....defense dept and war spending is our biggest single Federal expense....and of course, I hope we can agree, no more big business bailouts.
on Wed, 11/18/2009 - 05:49
#134274
Not a problem with me as long as we gut EVERYTHING else along with it. Enough is enough. Oh, and when some other media darling country screams help! help! this other country is being mean to us, help! we standby and watch them go into the shitter. Fair enough.
Me, I just want my money....oh, and Yayo too.
on Tue, 11/17/2009 - 15:00
#133499
Poor people don't pay taxes to the government because they don't have any money left. They are too busy making rich people richer by giving them all their money... or having it taken from them by the rich.
on Tue, 11/17/2009 - 15:01
#133500
Taxes are frustrating. How our taxes are spent is infuriating.
on Tue, 11/17/2009 - 15:01
#133501
Yeah, like history usually goes - give enough to the poor to prevent riots and revolution, let the rich plunder on, and hit the middle class for the entire bill. Destroying the middle class in the process. This killed Rome and probably 100 other nations. More of history repeating itself.
So, who's "Going Galt" after being reminded of this? See Denninger's rant today of "Dear China" for a touch on this subject.
on Tue, 11/17/2009 - 15:16
#133517
Going Galt here! Max the cards, BK to the nasty banks.
on Tue, 11/17/2009 - 15:44
#133567
Not I, for I believe that your form of strategic withdrawal (to destroy indiscriminately) will only paint a larger target on you.
on Tue, 11/17/2009 - 16:24
#133637
You can start checking out without attracting any attention... especially when your pay is at least loosely correlated to hours worked and you see a declining marginal return on additional hours.
on Tue, 11/17/2009 - 18:05
#133777
That's less "Going Galt" and more of a natural version of "work to rule".
When I hear of "Going Galt", I think of the unintended consequences that happen as a result of extreme amounts of spite.
on Tue, 11/17/2009 - 20:40
#133930
Whatever terms you like to put on it. Perhaps "starve the beast"? I'm not talking about anything illegal or (IMHO) immoral. Just recognizing a declining marginal return.
on Tue, 11/17/2009 - 22:52
#134049
In all honesty, Max, how much longer until the people at the upper crust who have been the driver of economic growth for the past 20 to 30+ years finally decide that, given the impending depression we're facing, the pseudo-Japanese demographic shifts, and the Federal Government's catastrophic unfunded liabilities (among other reasons), that maybe relocating to Zurich (while wintering in Singapore, obviously!) is more than worth the cost of uprooting and relocating their families?
on Tue, 11/17/2009 - 23:37
#134098
Which people are we talking about - those with 8-figure wealth and high-6 to low-7 figure income, or people who are supposedly rich by Obama's standards? Anyway, expatriating is getting more difficult by the day. Swiss banks won't open an account for a US citizen any more, almost regardless of the money to be deposited. There aren't many countries that have a completely open door for a US citizen looking to just move over there. This may well be deliberate.
on Wed, 11/18/2009 - 01:08
#134186
panama
on Tue, 11/17/2009 - 16:22
#133636
Already in progress for 3 years, left fortune 40 corp for small, local owned business (and turning down a 30% counter offer pay increase), big garden, farmers markets, barter, shop used/thrift/garage sales for as much as possible so not feeding the system buying new (sales tax, etc). We home school, so we can undo/disprove the propaganda. Also have increased my dumpster diving habit. Paying off my last credit card tonight after work....
The feeling of more freedom is worth not having the "stuff", and teaching our kids thrift/frugality and freedom via example...priceless.
on Tue, 11/17/2009 - 17:06
#133698
My path has been extremely similar. I think more people would find this path beneficial.
on Tue, 11/17/2009 - 19:23
#133887
"Paying off my last credit card tonight after work...." congrats tom!
wanna starve the beasts but do so guilt-free and legally? tom just told ya how to do it.
besides, dumpster diving is about as fun as it gets short of jumping out of a plane.
on Tue, 11/17/2009 - 21:09
#133973
Thanks tip e. What a great feeling, vehicles paid for, cc's paid off, earning FAR less than your ability and still happy, yes!...we also cancelled the satellite service (is CNBC worth paying for? lol) and some other, in all reality, useless services.
Dumpster diving is like a box of chocolates...ya never know what you are gonna get...which is the fun of it...:) My 16 year old and his friends do it. Middle class folks dumpster diving..aint the US great? roflmao...:)
Now, if I could figure out how to grow Sapphire gin and good german bier (used to home brew, saving up to get back into it, figure it may be a popular barter commodity in bad times...). So I will save the good stuff for the weekends, work week = PWT beers.
Just gotta pay my protection $$$ to the fed and state to stay out of target range (you always have to pay SOMEone SOMEhow, to be left alone).
Crack another
on Tue, 11/17/2009 - 22:06
#134019
one man's garbage is another's treasure yes? and that's a wealth that can never be taxed.
about to brew our 1st batch of homegrown absinthe (as if reality isn't already psychedelic enough already). maybe one day we can be left alone to do a trade...
on Tue, 11/17/2009 - 23:40
#134099
Might want to consider 26 USC s. 61(a) on your first sentence.
on Wed, 11/18/2009 - 07:17
#134290
i don't see anywhere in that clause that covers dumpster diving max.
on Wed, 11/18/2009 - 01:27
#134197
most of okay some of the people here seem pretty smart. its pretty easy to change your own oil, or get a few tools and fix your own leaky faucet, do your own drywall patch and painting. and cooking is a great place to experiment ( the dog will always eat it ) we can get a lot less dependant now while we have the choice and means. things have changed, I don't know if I will still live here in a year, or if I will be driving the same truck. I invest in what I can take with me at this point. maybe that will change later. I hope its not too much later.
on Wed, 11/18/2009 - 02:00
#134215
Going Galt...please, you think that is how to get a strong, big, well-off middle class??? I get you don't want to support other lazy non-working people but the only people on welfare now are moms with young children and that lasts 5 years max, and more kids get you nothing anymore...the rest are disabled people, retirees.
Look at US economic history since the 40s...when did the middle class do the best and why? It was in the 50s and 60s and beginning of 70s. How did we get such a broad, well paid middle class then? Rich paid very high taxes comared to now, even durign Reagan era, rich paid way more than now. In the 50 and 60s, social programs for the poor and seniors were about where they are now,so its not like the tax burden on middle class was way less then. Curioiusly, income/wages were very very flat (rich did not make much more than poor, poor were richer, rich were poorer) and unions helped raise wages and benefits for union and their competitors, non-union workers. A regular guy with a HS education could easily raise a family of four with mom at home. He could easily afford a new car on a regualr basis, a house that was paid for in 30 years or usually much less, buy food, gas etc..He had health insurance, vacations, sick days and he was supporting another adult who had free time to help community, raise children, help others with their kids (like the nieghbor hood single mom) or their elderly parent and his spouse could go into workforce and keep household together if he got sick, or spouse could take care of sick kid or parent.
We didn't get this primo situation by going Galt and being wicked selfish.. in fact businesses made less profit as they passed on a much greater percentage of their revenue with workers than business do now, people paid lots of taxes especially the rich, businesses had to tolerate unions cause law said so.
Now, people and businesses pay less in taxes, unions on decline and laws support them way less, incomes are gapped between rich and poor is more than in late 1920s, wage costs to businesses are way down, and how is the middle class doing? how are businesses doing? the businesses don't have middle class customers anymore
on Wed, 11/18/2009 - 13:20
#134719
So let me see if I understand your post, and please correct me if I am mistaken.
At the Fortune 40 company I used to work for, I was engineering technology to replace those "expensive workers" (to quote the VP, who had a look of fresh, glistening cat turd under her nose when speaking that phrase). And helping to offshore lots of clerical and IT jobs, so the C-level execs could make their profit (and bonuses) off the wage differential between the US and India/China. I was helping to destroy said middle-class jobs. So I am "wicked selfish" by refusing to assist meglo-corp in their destruction of the US middle class, by voluntarily simplifying my life, by choosing to step down from low upper-middle class to just middle class, by having a stay at home spouse to care for our children, by homeschooling to produce independant, critically thinking youth?
By growing my own food, I am saving thousands of gallons of petro products as my salad doesn't have to be transported 1500 miles, and teaching my kids where food REALLY comes from. And by getting the rest at farmers markets, CSA, etc, I am helping local, independant family farmers continue to exist. This is selfish?
By dumpster diving/thrift store/used items I am reducing landfill waste and energy used to produce new items (isnt "green" the meme of the times?). By barter, I am helping my local business person stay profitable (he tunes up my car, I tune up his LAN...value for value). Again, selfish?
So "going Galt" is selfish? I am just withdrawing my sanction (no I'm not a Randian, just that is such an apt description). They dont care about the middle class, in case you haven't noticed. The middle class is in their way now. I am just getting out of the way as much as possible, and assisting them as little as possible.
Are you telling me I should sacrifice my morals, my life, to assist them in destroying the life and class I grew up in? Yeah, in the 50's, 60's maybe businesses were more moral, but that aint the case now with the meglomaniac mega global corpgovs driven by the boomers (yes, I know, sweeping generalization, not all boomers are implied).
The taxes we pay enable a lot more than welfare, btw...
So, did I mis-understand you?
on Wed, 11/18/2009 - 04:25
#134253
*give enough to the poor to prevent riots and revolution* - that is it.
Just rise prices on booze and turn off all stupid TV shows and 24/7 sport translations and you will get a wave of violence and criminal activity.
Look at ex-soviet block. All their potential riots were drowned in the barrels of a cheap booze.
on Tue, 11/17/2009 - 15:11
#133511
"and the disappearing middle class...well, they can pay $20 for a hotdog and beer combo in Prague on that once-every-five-years vacation."
excellent. give my regards to ben chauncy gardner federal reserve smack down jake leg son of a sea bisquit azz hole twerp bernanke.
on Tue, 11/17/2009 - 15:19
#133523
You miss the point completely if you leave out a discussion of what the gov't does with the money in any debate about the fairness of this tax or that tax. I think even most of those shouldering the burden would complain less if the gov't spent only on its constitutional mandates (defense, infrastructure.....uh...*crickets*....). But the money is spent on this idiot's whim or that moron's backlash. It adds another layer to the question of fairness.
on Wed, 11/18/2009 - 01:32
#134201
full spectrum global domination. thats where the money is going. somewhere along the way our leaders forgot about leading us
on Wed, 11/18/2009 - 01:35
#134203
we're 5% of the world population, yet we finance a military budget, bigger than the rest of the world combined
on Wed, 11/18/2009 - 02:04
#134217
what part of empire do you not understand, you don't get half the world's resourses to go to 5 percent of the global population without might!
on Tue, 11/17/2009 - 15:21
#133525
Better solution: Let the writedowns hit on bonds, allow a writeoff for the middle class. Presto: Progressive bond haircuts. Now THAT would soak the rich (and furriners) and be proper capitalism and good economic policy all at the same time.
I flick thee, brilliant idea, into the abyss of Teh Intertubez.....gone
on Tue, 11/17/2009 - 15:27
#133534
As one that has trouble with being "sufficiently intelligent (or determined) to participate at Zero Hedge, I'd like to, at great peril of embarrassment, throw out some simple math:
Dude A = 0% (tax) of $25,000 leaves $25,000 to live off of.
Dude B = 50% (tax) of $250,000 leaves $125,000 to live off of.
I think the Dude B has far less to bitch about.
(Side note: slashing our war/military budget by 25% would end the aristocrat's malaise.)
on Tue, 11/17/2009 - 17:08
#133699
Do dudes A and B have equal capabilities and work ethics? Are they doing things of equal societal value?
There are many, many overpaid people who don't contribute to societal value, but the inverse is not necessarily true.
on Tue, 11/17/2009 - 17:49
#133751
Can a banker dig ditches? Can a ditch digger hustle the government for millions? Turn a profit on no-interest government loans? Interesting questions, Mad Max.
Sadly, as I'm sure even a swine like you realizes, societal value is subjective. But I'll agree: There are very, very few underpaid people who contribute to society. You, you sexy little genius, are certainly not one of them.
on Tue, 11/17/2009 - 21:42
#134003
Can you come down off your pedestal for a moment, Mr. Bag on the Head? I'd like to ask you a question.
How much do you aspire to make someday? I aspire to be a top earner someday with hard work.
When you get there, I think you'll find that maybe your views are not quite the same.
I'm done, so please, back on your pedestal you go. Let us know if it's lonely up there.
on Tue, 11/17/2009 - 22:04
#134017
your moniker and attitude seem sort of contradictory.
on Tue, 11/17/2009 - 22:45
#134047
You aspire to be a top earner someday, with hard work. Bag-face likely aspires to be a top earner soon, by government arranged armed robbery of the hard work of others. It seems that his/her type is becoming more and more common; 99% of the political class, and so much of the Baby Boomers and Gen Y it's somewhat surprising our country functions at all any more.
on Wed, 11/18/2009 - 02:15
#134221
who wants to be a roofer? You could offer my twice my very decent pay and I would not do it for more than a month, not that I woudl have a choice as I would not cut it physically.
I have a friend who is a public defender, she says most of her clients are roofers...as in that is the only job felons can get cause no one else wants to do it, hot dirty hard physical work.
Also, in a rich country during a good economy, most can succeed if they try...but even most educated Hatians, Chinese, Phillipino, Mexicans are not going to make nearly as much as uneducated people in US in good economy...and our lifestyle is dependent on them making less than us, them making very little from their mineral resources etc..we get cheap goods...notice how we complain about how expensive plumbers are compared to the cost of a computer...its because plumber is American citizen making a decent wage...
So I think its arrogant to think those making more money than lower wage workers to think they "deserve" it more cause they are so feaking special and apparently work so much harder than a roofer or a PhD taxi cab driver in Thailand...whatever...keep thinking you are special if you need that to get you thru they day, just don't get a leak in your roof
on Tue, 11/17/2009 - 15:31
#133545
Another point that I think may be getting less attention than it should, is that income taxes are only a (small? I don't know the numbers) part of federal revenues. Just for instance, the Fed's moneyprinting mechanism...the invisible tax. Get rid of this wealth-sucking monster, and the political desirability of massive spending programs gets reduced big-time, due to the fact that the true cost of said programs will be seen in the tax liability.
I get the feeling Obama had a little consult with Bernanke before he made his 'no raising taxes on the middle class' campaign promise. "Say, Ben, we can pay for this new budget can't we?" "No problem, Big O."
on Tue, 11/17/2009 - 15:55
#133593
What, raise current taxes to pay for Wall Street's 'triple bonus bailouts' instead of hiding it for our children to pay later? Intolerable honesty! Intolerable!
on Tue, 11/17/2009 - 16:32
#133649
End the Fed, Make Honesty Tolerable Again.
on Tue, 11/17/2009 - 18:54
#133852
While everyone is arguing the finer points of the income tax and payroll tax the federal government in collusion with the federal reserve continues to steal wealth from people of all income levels through the invisible tax known as inflation which is the direct result of the fed creating money out of nothing and loaning it to the federal government at interest. I still think that there should be no payroll deductions at all for any taxes and that people should have to send a payment to whatever taxing body lays a claim to a portion of ones wages either monthly or quarterly. This would force people to elect good stewards oof their money sent to the government in the form of taxes.
on Tue, 11/17/2009 - 15:34
#133553
They also receive 85% of government spending. So net-net it's a boon for them. We all pay for this welfare for the rich scam through inflation.
on Tue, 11/17/2009 - 15:41
#133566
National Debt passes $12T yesterday and nobody cares. Raising the $12.1T Statutory Debt Limit needs a Senate vote and its needed in days.
http://www.treasurydirect.gov/NP/BPDLogin?application=np
on Tue, 11/17/2009 - 15:53
#133586
The demise of the republic is upon us. Less and less voters contribute and more and more voters take a free ride. Corrupt politicians love to cater to free riders, brothers of sorts. Only a flat tax can alter this situation and return sanity to the financial well being of the country. Soaking the rich is counterproductive as much as supporting people with lower income with government subsidies. Such subsidies are corrosive to the dignity and well being of the people.
on Tue, 11/17/2009 - 16:05
#133609
The flat tax idea died when analysis was leaked to The Washington Post circa 1995 showing that it eliminates the mortgage interest deduction. Oops. Rarely has it been seen since.
Personally I think that proper, boring old progressive taxation is the foundation of the proper republic, the one fought for and attained for a brief time in the last century. We have simply allowed too many to scoff at it. I too would like to see a trend analysis of the data in the posted graphic. I bet the top brackets pay far less than their share today--a debate on fairness (and I do respect opposing viewpoints on such things) being one of the last things you'll ever hear in the media today. Even rarer, surely, than mention of the flat tax, or unicorns.
Vampires, now those we got plenty of! Vampires, baby, are sexy!!!
on Tue, 11/17/2009 - 16:08
#133612
Not paying federal taxes and getting a "free ride" are two different things. One could work everyday, with earnings so low that they owe no taxes, but not receive any additional subsidies or benefits.
While that person may be getting a "free ride" on paying for national defense, for instance, it's still a person who works full time, takes care of a family, etc. Plus, they can't avoid many state and local taxes, or a sales tax.
The true thing missing from this analysis is how the distorted tax revenue compares to income distribultion. How much of national income do those 5% of taxpayers account for? Naturally, people with much more income pay much more income tax.
on Wed, 11/18/2009 - 02:18
#134222
don't forget fica...you don't ahve to pay fica on dividends, capital gains, interest income, only on wages. You don't have to pay fica after 100k in wages.
on Tue, 11/17/2009 - 15:53
#133587
inflation is a tax, 39 cents a gallon gas tax 9% sales tax , property tax, social security deductions, if you live to collect it or not. they're not going to re-imburse your heirs. inheritance tax, state tax. local taxes and bond issues on your property tax bill.dmv fees way beyond reason, theres even tax fees on your cell phone bill. the poor get taxed, to the very limit of their ability to pay. and don't get me started on traffic fines, and court fees.
on Tue, 11/17/2009 - 23:31
#134088
+1
on Tue, 11/17/2009 - 15:55
#133592
Why anyone would trot out this tired old "the rich pay all the taxes" nonsense is beyond me. The upper 5% of the taxpayer base makes so much more then the rest of the tax base that it can't help but push the numbers that way. Take 10% of 30k and 10% of 3 million and tell me which one is bigger. Does that mean someone making 3 million(300k in taxes at 10%) is being "taxed to death) because he is paying 100 times what someone making 30k(3k in taxes at 10%) is paying? No, it just means that someone fails at basic math because they don't realize that taking a percent of a LARGER number will of course give a larger result then taking a percent of a smaller number. Epic fail.
on Tue, 11/17/2009 - 17:04
#133691
Epic fail is right, anonymous dumb-dumb! I haven't had a 10% tax rate since I was in college (although I guess I was just born to early...my nephew has a negative tax rate because he was bright enough to have a child whilst living without income). Try the same math with 30k @ 10% vs 3 mil at 39% (not 100% accurate blended rate, but close enough).
If you want to argue that no one should make 3M that's a different argument. Your side has won in France. Enjoy the food. A flat tax, no deductions/no shelters, is far more fair than a progressive tax system.
on Tue, 11/17/2009 - 17:21
#133709
If your head wasn't wedge in a certain orifice you might have realized that I just used 10% because it made the numbers nice and round...
The basic concept however works just the same irregardless of whatever numbers you would like to plug in. 10%, 15%, 25%, 34%, etc.
on Tue, 11/17/2009 - 17:45
#133747
Hop off the 'medical' maryjane, dude. The two don't pay the SAME percent...your entire argument is based on a premise that doesn't exist.
on Tue, 11/17/2009 - 18:26
#133821
I see your head is still lodged firmly in that dark hole.
The reason I used the same number was to illustrate my point. Even with the percents being EXACTLY THE SAME the "rich" top 5% are still going to pay the vast majority of the taxes. That's simply the way the math works.
X percent of small number = A. X percent of a huge number = B. B will always be much bigger. Whether you use 35% or 39% won't change that underlying dynamic much at all. The rich are going to pay more simply because they are the ones that HAVE more. Hell, reverse it and it will STILL be that way. Have the lower income bracket pay 39% and the upper income bracket pay only 30%. Guess what, the upper bracket will STILL pay most of the taxes because THAT'S WHERE THE BIG NUMBERS ARE. 30% of millions is going to beat the shit out of 39% of thousands. Basic math like this shouldn't be that hard to understand.
on Tue, 11/17/2009 - 21:15
#133978
Ha ha! I get it. You are arguing that the higher earners pay too much! Brilliant...your backhanded logic lost me for a while, but I am with you now. I just had to foget about the illogical point you were trying to make and focus on your 1st grade math. Yes, we agree that the high earners pay an unfair portion of Robin Hood's theivery, er, taxes. With a flat tax, it would be unfair, but with the progressive income tax it is even more so. *wink*
on Tue, 11/17/2009 - 15:56
#133595
Sorry, but it is quite futile just to look at "federal income" tax because it excludes the payroll taxes (hey yes, they are based in income, you remember ...!) and state income taxes.
Medicare is a flat income tax while Social Security is a regressive (!) income tax, i.e. the more you earn the less you pay percentage-wise.
If you factor these other two income taxes in, the picture is quite different:
The poor and middle class shoulder all of this part of the income taxes, while guys like Warren Buffett pay around 17% in total income taxes (federal income taxes plus payroll taxes).
And let's not forget that most state income taxes are flat taxes as well, meaning they hit the poor with a much bigger share of disposable income.
So this graph and unfortunately Tylor Durden's spin on it are, for once, not fact-based.
on Tue, 11/17/2009 - 23:35
#134093
Data is rarely useful without context. Thanks for the perspective.
on Tue, 11/17/2009 - 16:02
#133603
subsidies corrosive to dignity and wellbeing, try that one on a family surviving on food stamps. and voters you say, the last time I checked, our vote doesn't mean a fucking thing. re: tarp bailout medical marijuana eminent domain, you probably are a banker you pompous asshole !!
on Tue, 11/17/2009 - 16:03
#133606
Democrats' wet dream - a constituency that pays nothing and gets government handouts makes up almost 50% of the voting population, and the other 50+% are effectively disenfranchised but have to serve as the Dems' financial slaves.
on Tue, 11/17/2009 - 16:03
#133607
Payroll taxes don't count? Sales taxes don't count? Property taxes don't count? DMV fees don't count? The poor pay taxes, in most cases a greater percentage of their income than do the rich.
As for those who get by on handouts, do you really envy them? Would you like to try to get by on $12 or 15k/year just so you can lord it over your countrymen that you get a free ride at the price of your dignity?
And as long as you're giving the poor the business (as though they were facing a shortage of it), perhaps you'd like to spare some vitriol for the corporations that buy and pay for the US Congress and executive with pennies while pocketing their billions tax-free?
on Tue, 11/17/2009 - 16:12
#133617
These kinds of stats are misleading. They need to include FICA and Medicare taxes, of which the bottom 50% pay quite a bit.
on Tue, 11/17/2009 - 16:18
#133628
Sorry, I just can't get upset that people making under $40,000 pay only 3% of taxes....
on Tue, 11/17/2009 - 16:24
#133634
Sorry, but this is a misleading analysis: just to look at "federal income" tax because it excludes the payroll taxes (hey yes, they are based on income, too ...!) and state income taxes. And surprise ... check where it comes from. A grassroots-organization?
Medicare is a flat income tax while Social Security is a regressive (!) income tax, i.e. the more you earn the less you pay percentage-wise. State income taxes are mostly flat taxes.
If you factor these other three income taxes in, the picture is quite different:
The poor and middle class shoulder all of this part of the income taxes, while guys like Warren Buffett pay around 17% in total income taxes (federal income taxes plus payroll taxes).
So this graph and unfortunately Tylor Durden's spin on it are, for once, not fact-based.
on Tue, 11/17/2009 - 16:26
#133639
Republicans wet dream - Divide and conquer the constituency, outsource jobs, create fear and panic, de-regulate business, repeal prudent laws, deficit spending, then place their Country Club bills upon the door of the Middle and working class. Oh yes, allow/encourage and exploit illegal immigration to get their dirty work done for next to nothing.
on Tue, 11/17/2009 - 18:09
#133760
Well, that's truth - not junk.
The original ideas of Republicans tolerating illegal immigration and outsourcing were to spite unions and (later on) US citizens in undesirable regions of the nation (Carly "H1-b cheerleader" Fiorina, any offshore outsourcing organization in the world, Grigsby & Cohen).
on Tue, 11/17/2009 - 16:29
#133644
“46.9% will have zero federal income tax liability in 2009.”You know what this is called? It’s called representation without taxation.
People who are not paying any incomes taxes should be allowed to vote if they are not receiving any type of governmental assistance on which they have not made contributions. Otherwise, non taxpayers on public assistance can be taken care of by the taxpayers but they shouldn’t be allowed to vote.
on Tue, 11/17/2009 - 16:39
#133657
If you aren't paying the piper, then they shouldn't let you pretend to have a say in anything.
on Tue, 11/17/2009 - 16:51
#133674
That's a really good comment.
on Tue, 11/17/2009 - 17:36
#133687
Does that include stay at home parents?
I reread your comment more carefully JR. Your idea would allow most stay at home parents to vote, except for welfare mothers. A more blunt no pay/no vote approach gets rather dicey otherwise.
on Tue, 11/17/2009 - 17:36
#133736
Unfortunately, that is basically what is happening. The people at the low income levels tend not to vote.
Why make something coercive if you get the effect you want voluntarily?
on Tue, 11/17/2009 - 17:39
#133741
And those in the income bracket providing most of the federal revenues should be allowed to vote at least twice.
And contribute unlimited amounts to the politicians of their choice.
on Tue, 11/17/2009 - 21:10
#133974
Sounds more efficient to me. If you really want things to run smoothly, keep the meek silent.
on Tue, 11/17/2009 - 16:36
#133654
This is zero sum thinking but if the wealth of a country is relatively constant (who the heck is creating wealth these days?!!), the money supply simply circulates from one pocket to another. In an unfair system, it gathers in the top bracket of the populace and then there really is no choice but to tax the rich because they have most of it. I can hear Kudlow screaming, "Lower tax rates across the board!", as if that will solve the world's problems. Sounds convincing to me. Let's all put less in and expect more out. Let's go with that.
on Tue, 11/17/2009 - 16:42
#133659
Well here's the income distribution...
http://en.wikipedia.org/wiki/File:American_Society.jpg
on Tue, 11/17/2009 - 16:48
#133670
Google this bogus source of this hogwash- "Mint.com" Tyler, you got punked.
on Tue, 11/17/2009 - 16:50
#133673
That argument that only the rich pay taxes does an injustice to all economic thought. Specifying that the lower income brackets pay no "Income Tax" may be fine but let's not forget that all corporate taxes are ultimately paid by the consumer. Don't forget property taxes, fees, fines, sales taxes and tarrifs and duties that are not part of the income tax.
racket.
on Tue, 11/17/2009 - 16:57
#133686
How did the "Motel CR" crowd get in here? No math today?
on Tue, 11/17/2009 - 17:31
#133722
The question was "2+2=?" and the desired answer was "5".
on Tue, 11/17/2009 - 17:01
#133688
Check the income distribution
http://img44.imageshack.us/img44/458/81052027.gif
on Tue, 11/17/2009 - 17:13
#133702
Wow. Looking at all the comments, the banksters' propaganda is working too well at dividing the masses. Ladies and gents, let's keep our eyes on the ball and not fall for the usual shenanigans. Remember taxes are moot if we remember we'd be at least $2-3 trillion richer had the greatest theft in a generation not occurred. That's trillions in your pockets (repubs) or trillions for your healthcare (dems). In either case we get something. Here we get nothing. The banksters already have their slice of the pie while they have us fighting over the crumbs. We at ZH are supposed to be smarter than this.
on Tue, 11/17/2009 - 17:35
#133730
I'm fine with greater taxes on the rich, and shutting down abusive practices. I'm not fine with the idea that 47% of people don't pay any income taxes (with question marks as to other taxes apart from modest sales taxes [and some states don't levy those at all, or don't levy them on food and clothing]). Presumably some of those people either don't drain society (spouses supported by working spouses) or a temporary drain that will provide a benefit in the future (some college students; wish I could say all) but it's intuitively obvious that many of them are a current and future drain.
And I think it is seriously worth asking: if taxation without representation is unfair, then why is representation without tax payments fair without questioning? From some of the comments here I feel like I've been browsing a socialist website.
on Tue, 11/17/2009 - 17:51
#133755
Remember that when "taxation without representation" was a war cry, there was no income tax.
A lot of people don't pay estate tax - maybe their interests shouldn't be represented, after all it's not a government of the people, but only some of the people, the ones who pay.
I've been to that country in Anaheim - happiest place on earth, just can't get a beer.
You should read what you writing "... it's intuitively obvious that many of them are a current and future drain."
Yeah, if you don't understand how the country is constituted, then obviously you are a drain. But you still have the right to representation.
on Tue, 11/17/2009 - 17:37
#133737
+1
on Tue, 11/17/2009 - 17:44
#133746
This is a bit deceiving cause it does not include fica, whose funds eventually end up in the the general pot. People in the 100k+ range stop paying social security taxes after they hit that range.
on Tue, 11/17/2009 - 18:09
#133786
“An unlimited power to tax involves, necessarily, the power to destroy.” -- Daniel Webster
Taxes Taxes Taxes
Tax his cow, tax his goat; tax his pants, tax his coat.
Tax his crops, tax his work; tax his tie, tax his shirt.
Tax his chew, tax his smoke; teach him taxes are no joke.
Tax his tractor, tax his mule; teach him taxes are the rule.
Tax his oil, tax his gas; tax his notes, tax his cash.
If he hollers, tax him more; tax him 'till he's good and sore.
Tax his coffin, tax his grave; tax the sod in which he lays.
Put these words upon his tomb: Taxes drove me to my doom."
After he's gone he can't relax; they'll still go after
INHERITANCE TAX
on Tue, 11/17/2009 - 18:21
#133810
When 95% of Americans are making <$10,000/year, I assume the top 5% will then carry nearly all of the tax load.
It's a sure thing those top 5% will then still find the time to complain how unfair their share of the tax load is and how 95% of us are freeloading on them.
Most of us are making less than we were a decade ago while that top percentage has never had it so good. By presenting "data" intended to prove how unfairly taxed that top 5% are, you've only proven how much more concentrated wealth is becoming in that top population instead. "Gilded Ages" never end well for anyone.
As noted, the originators have taken income tax data and transformed it into something it's not: "all tax revenue".
on Tue, 11/17/2009 - 18:21
#133811
Take the rates up to 70% and bring back the loopholes-- where we are heading.
on Tue, 11/17/2009 - 18:46
#133834
Tyler - you have to be smarter than your headline and comments indicate....
Even a dog knows that this chart shows Fed INCOME tax only....it is very very wrong to say that someone who does not pay Fed income tax does not pay taxes at all or even, does not pay their fair share of taxes....I know Congress in their infinite word-smithing will deny it, but that 7.5 percent, (or 15 percent if you are self-employed) that the Fed govt rips out of wage earners pay checks, called FICA, it is a freaking tax.
FICA is the favorite Fed tax for charts like this to completely and idiotically ignore because it is a tax all poor and middle class wage earners pay, while higher end workers do not have to pay it on their income over 100k. So if you ignore FICA and say the money the Fed govt takes out wages is not a tax, it makes richer people look like they are paying so much more, as they are paying lots of income tax and less FICA, and poorer people are paying lots of FICA and less income taxes.
Many of those "poor people that pay no taxes" according to your intro, likely are paying at least 7.5 percent FICA, also sales tax, property tax (even renters help landlord cover the expense of prop. tax) etc...
This "Mint" graph could be much more informative if it explained two things clearly: demographics of these categories and showed total taxes of all forms, including FICA, these various income categories pay. I'm suprised you didn't stop to think about this.
I wouldn't think of kids, college students, non-wage earning spouses, and old retirees, grandmas watching the kids and nursing home folks as "poor leeches" leeching off of us hard working folks and that it is an outrage they are not paying Fed income taxes. Nor would I call those that are completely sick and severly mentally or physically disabled to the point they are incapable of working as poor leeches that are getting over by not paying their fair share of taxes. Really, how many of the 47 percent "free-loaders" are able-bodied, working age people?
If we count sales tax burden, FICA tax burden, other local and state taxes, than many of the low income people would be seen paying a much bigger share. FICA is the reason Buffet figures his secetary pays bigger percentage of taxes than him.
Even if you forget sales tax and just look a Fed taxes (income and FICA) the percentage of people paying nothing to Feds would likely go way way down to much lower than this decieving 47 percent, as you have to earn hardly nothing before they start taking FICA, FICA comes from wages, not from dividens, not from capital gains, only on wages.
Is 300 mill the number of adults?
How many of this 47 percentage is teenagers, or if its all adults, what percentage 18,-24 yr old min wage workers or college students still a part of a household headed by older workers, likely even listed as dependents on the tax forms.
What percentage are retired people over 55, 60 65 years old who are living off Soc and savings, equity in house, etc.?
What percentage of 47 are completely disabled people, too sick to work or too disabled to work.
What percentage of the 47 are unemployed people that have lost unemployement insurance, were freelancers/solo business people so they never get any unemployment insurance, or made so little income when working they get a small enough amount of unemplyoment insurance they don't have to pay fed income tax? If that is half the U6 15+ percent unemployed fits this category of non-Fed tax payers, then you lose a big chunk of the 47 percent right there. I don't consider unemployed people looking hard for jobs as leeches if they are not contributing to our Fed income tax "nut".
What percentage of this 47 percent are stay-at home-moms, with younger than school age children, earning nothing and are wholly dependent on another wage earner in the house, or child support (no exactly leeches if they are raising younger than school age kids for a few years with no wages).
What part of the 47 percent are “kept” spouses?
What percentage of these 47 percent are supporting themselves but likely hiding a good portion of their income (like a day laborer working for cash, people in completely illegal, cash only trades, sole proprietars that write off all of their income)
What I'd like to know is what percentage of abled-bodied, working-age people - not just recently laid-off, legit, un-employed (looking very hard/deligently for work but just not finding it) - what percentage of these abled bodied, working age people are paying almost no FICA/FEd income tax and/or living off the State?
Now that would be interesting figure, as that would be a group of people that could be contributing to the tax "nut" but is not. Betcha it is way way way less than 47 percent....
Tyler you do a ton of great deep thinking posts, but this one's headline and intro were sloppy thinking...
on Tue, 11/17/2009 - 19:03
#133864
Good post. Details ruin an otherwise simple story. How about all the freeloaders who work for the government, push paper all day and contribute squat. Different form of government assistance in my view.
It was a slow news day. Tyler needed to give the dogs some meat to chew on.
on Tue, 11/17/2009 - 21:51
#134009
Agreed, Tyler should get much slack as he does bring soo much to the information and does more than seems humanly possible in terms finding detailed info, analyzing markets and corruption. I do like that he provided this tasty morsel on a lean day, I like meat.
on Tue, 11/17/2009 - 19:36
#133896
I see Zero Hedge has fallen for the Steve Forbes BS train. You need to consider ALL federal taxes not just income tax. Build federal PAYROLL taxes into this, excises taxes, etc. and then tell me what the distribution is.
Come on Zero Hedge. Don't become Fox News.
on Tue, 11/17/2009 - 20:50
#133942
The first paragraph states INCOME TAXES dumbass.
Come on baghead, don't become a typical MSNBC troglodyte.
on Tue, 11/17/2009 - 22:24
#134027
Guess what? Payroll taxes are income taxes. Its a percentage applied times your income. Dumbass.
on Wed, 11/18/2009 - 02:28
#134228
FICA is not called a tax by our government...they say it is a payment to a mythical trust fund....but I say, if the govt rips it out of your wages and immediately spends it, it is a feaking tax.
This chart only includes Federal income tax, not the FICA "non-tax"
on Wed, 11/18/2009 - 07:30
#134293
Really, FICA, the Federal Insurance Contributions Act, is a tax? Gee, I thought it was used to fund insurance like SS, disability, etc. Maybe they should rename it and then IT WILL BE INCLUDED in the chart.
on Wed, 11/18/2009 - 09:08
#134342
Really, FICA, the Federal Insurance Contributions Act, is a tax? Gee, I thought it was used to fund insurance like SS, disability, etc. Maybe they should rename it and then IT WILL BE INCLUDED in the chart.
on Tue, 11/17/2009 - 20:06
#133907
We have been "undertaxed" over the last couple decades. Our taxes should actually have been much higher in order to support the spending of the government. The tax cuts that Bush made were all made with borrowed money. The middle class saw the equivalent of a 5% pay increase with those tax cuts. It helped disguise the fact that wages were stagnating. Well, it's time to pay the piper and it's all but certain we'll have a National VAT. A VAT tax falls more heavily on the middle and lower classes because they consume a larger percentage of their earnings than the wealthy.
on Tue, 11/17/2009 - 20:51
#133945
Yeah, I feel undertaxed, you're right. And dammit it's all Bush's fault.
You idiot.
on Tue, 11/17/2009 - 23:38
#134094
Well, we will have to pay for what Bush and now Obama are spending either now or later. So its either your taxes now or your kids taxes plus interest later to pay the debt. The only other option going forward to paying debt already incurred with increased taxes is to either default on the debt we took out to fight the wars and for the stimulus or keep taxes same and way way way reduce spending, which likely means no more wars for awhile.
Fighting between Clinton admin and Repub congress stalemated spending and tax reductions for awhile and the US budget was actually throwing off a surplus and we were paying down our debt into 2000, then came two wars in Mideast, Medicare Part D Pharma-full-subsidy program, and the Bush tax cuts and we were swimming in deficits and expanding debt again. And then came eocnomic meltdown, drastic reudction int ax revenue and huge outlay of stimulus bill, which almost half of was tax cuts, tax credits, and whole bunch of social safety net stuff like paying part of unemployed people's Cobra bills.
Of course, in the future, we can drastically reduce spending so its below existing tax revenues. We then could pay down debt, and then reduce taxes further. To make that great reduction in spending, without returning to say, the much higher tax regime during Reagan years (if we keep Bush tax cuts) we would have to seriously cutback Medicare, Soc Security and Defense because those are biggest budget items and remember the cost of Iraq and Afgan war spending are not even officially part of the Fed budget, go figure.. http://www.cbpp.org/cms/index.cfm?fa=view&id=1258
So if you want reduced taxes, these seem to be our choices: push off even more debt to the future as our current and former Pres and Congress have done for last 10 years, or, tax more, or, cut spending drastically to the point you are severely reducing fixed defense costs, not fighting wars and seriously cutting medicare and soc security. I think that last option is where Ron Paul is at, because when he advocates for smaller govt, he means it, including military spending.
Personally, I don't think the poster saying we are not adequately paying on the credit card bills we are racking up is not an "idiot" as you say but a grown-up facing reality. He/she seems to prefer going back to the higher tax rates we were paying during Reagan years (we seemed to survive that even if was harder on higher income people) or maybe the lesser taxes we were paying during Clinton years rather than even lower Bush2 tax rates, as an alternative to Ron-Paul-type cuts or just kicking the can down the road by running deficits. Maybe you prefer Ron Paul type solution to this poster... fair enough, but stating the fact we are spending more than we are taking in and advocating for taxing more to fix that is not idiotic, it is one way of asking us to be more responsible for our federal budget. Many people would find cutting social security and medicare spending radically ( greatly reducing services and income for seniors) and cutting the defense spending radically (removing ability to fight multiple wars) just as distasteful idea and seemingly stupid as you seem to find the idea of increasing taxes. I don't think perspective is stupid. I wouldn't call Ron Paul an idiot (except for his idea that businesses will behave without policing but thats another issue...).
on Tue, 11/17/2009 - 20:23
#133916
One concept we must all keep in mind is this: If the top 5% earners, according to this graphic, were the only ones left and the others simply disappeared, would they, could they continue to earn those astounding figures?
The rich need the poor and the poor need the rich. Progressive taxation make it a much more comfortable coexistence.
on Tue, 11/17/2009 - 20:44
#133934
All this talk of "regressive" taxation (which is a correct characterization), such as sales tax, tariffs, etc. makes me laugh. ALL taxation is regressive in that it HURTS the bottom rung of society, and in most cases the middle rung of society. The question is whether or not it's worth it for the population as a whole.There is a point at which all incentive for working hard for personal prosperity is destroyed.
You need to realize this: the people with the most money have the most options: they can move to a country that has less taxation, they can devote resources to buying politicians to create loopholes, they can afford the best tax attorneys and tax shelters money can buy, etc.
The question is whether or not you trust government, by virtue of taking tax money and doling it out as they see fit, or true freedom, where the markets decide the winners and losers (I know its not perfect), to decide the fate of people's personal economic well-being.
Looking at the proposals currently up for vote in the US; Cap and Trade which controls your right to consume energy, and Health Care Reform, which controls your individual right to health care, I for one am concerned. We are basically giving a giant, corrupt beauracracy control over two most basic NEEDS of life. If you are not scared shitless you have not read a history book.
I'll take my chances with anything but a goverment-run society. Period.
on Wed, 11/18/2009 - 00:18
#134148
Good points, as it seems everytime general US population has a problem that private sector seems not be a good solution, like out of control health care insurance costs and we then turn to govt, govt always manages to do the most cost-ineffective solution that helps businesses or at least does least harm to business (see sweetheart deal for Pharma - Medicare Part D which at very great cost got pills for seniors for only part of the year). In the case of health care, if we took private sector completely out of insurance side (still let doctors, hospital - the providers be private businesses) by essentially doing Canada's plan, we would cut our total health care "nut" which currently includes what employers pay, what individuals pay, and what govt pays, we could cut it in half at a min. But this would wipe out a whole very profitable industry of private insurers...so we won't do that, these businesses have way too much influence in congress.
I too fear the corruption of our govt, but unlike you I don't think we are better off with only private solutions with no check from govt/laws..to me that is a bit like saying "I don't trust our local police force because they have been corrupted by the mob, I'd rather just cede control to the mob and not ever think about having a democractically run govt police force again."
I do think there is a point where corrupted state is actually worse and more powerful than the just the corrupters without a state to control...but really the rich and powerful and low moral actors that running amok in an anarchic society without a democractically elected state does not sound that great to me either....so I do not give up on idea of government altogther, I just want to uncorrupt it.
New Zealand has a clean, low corruption govt that seems to serve its people well. Sweden has a socialist democracy that is low in corruption and their govt institutions seem to serve their people in many ways much better than our private solutions. Canadians seems to have decent lifestyles and services, even though they are much more liberal in their governing. And then there is Afghanistan or despotic states like Saudis or No Korea...they are technically govt/not private businesses, but drastically different entities from New Zealand or Canada or Sweden governments.
Dude, before you freak out, look at current situations around the world to inform you as well as history. Dogs get around, I have been to countries that are much more socialistic, bureaucratic than US and the citizens were not scared shitless, they seemed fine, happy, not going bankrupt, they have thriving markets, lots of shops and businesses in their neighborhoods and towns, freedom of expression etc. If you have the ability or inclination, go to a country socialist/liberal than ours before you freak out...Paris has businesses, a really nice subway system, loud protests/marches, and great restaurants and shops. Sweden is very wealthy, cosmopolitan and their middle class is doing at least as good as ours, and they are way more into taxes and green things than we are. Heck, visit Canada and talk to lots of folks...they allhave complaints, and these ocuntries bounce back and forth from more liberal to more conservative governments, but overall they stay far to the left of us because that is what their people want on the whole, it works for them. None of these govts may be your cup of tea, but its not like these people are living in former USSR type situations, they are doing just fine, thank you.
on Wed, 11/18/2009 - 07:23
#134291
To each his own, but before you extoll the virtues of said socialist states, be aware that their way of life is less sustainable than ours here in the US, for a few reasons:
First, they have a similar Ponzi scheme vis-a-vis their govmts running out of money to pay for their programs and not enough people at the bottom of the pyramid to keep it going.
Second, small countries with vast natural resources, such as Norway, etc. may be doing fine now, at this piont in history, but come the next global shitstorm, they will be in a much, much different situation once bigger countries become desperate and agressive.
Regarding historical perspective remember that this is just a tiny point in time that we are witnessing. Relative peace and prospertity in the West won't last. We will witness a much more dangerous world, one that looks more like the last turn of the century, in the coming years. Then we'll see how happy socialist countries are.
on Wed, 11/18/2009 - 21:41
#135442
good points, we as a whole culture can be very parochial about what we see at this time, not having a more sweeping view.
I do think we are in for some very very interesting times, however, if I had to bet, I think the anglo/saxon world will take it harder than other areas in the near term...maybe Japan too....
but please notice, I didn't reference Norway for the specific reason you mention, it is an outlier due to winning oil lottery like Saudis etc...I mentioned more mundane socialist states....what I didn't mention is their prosperity is dependent on third world and lesser states of east europe etc...sort of like neo-colonies...Sweden is not self-sufficient anymore than Japan, they both depend on economic arrangements with other countries that not equally reciprocal. Swedish banks have really gotten over on Latavia, very much like Goldman has done to US workers. Sweden can be a parasite. But some parasites use the money to govern like Saudis, and some govern like Norway....If I lived in a parasitical country I would prefer Sweden or Norway to Saudi Arabia...but I am biased, they like dogs better than Arabs and my mom likes how they treat women better.
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