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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
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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*
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.
Data is rarely useful without context. Thanks for the perspective.
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 !!
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.
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?
These kinds of stats are misleading. They need to include FICA and Medicare taxes, of which the bottom 50% pay quite a bit.
Sorry, I just can't get upset that people making under $40,000 pay only 3% of taxes....
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.
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.
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).
“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.
If you aren't paying the piper, then they shouldn't let you pretend to have a say in anything.
That's a really good comment.
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.
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?
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.
Sounds more efficient to me. If you really want things to run smoothly, keep the meek silent.
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.
Well here's the income distribution...
http://en.wikipedia.org/wiki/File:American_Society.jpg
Google this bogus source of this hogwash- "Mint.com" Tyler, you got punked.
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.
How did the "Motel CR" crowd get in here? No math today?
The question was "2+2=?" and the desired answer was "5".
Check the income distribution
http://img44.imageshack.us/img44/458/81052027.gif
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.
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.
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.
+1
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.
“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
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".
Take the rates up to 70% and bring back the loopholes-- where we are heading.
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...
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.
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.
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.
The first paragraph states INCOME TAXES dumbass.
Come on baghead, don't become a typical MSNBC troglodyte.
Guess what? Payroll taxes are income taxes. Its a percentage applied times your income. Dumbass.
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"
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.
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.
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.
Yeah, I feel undertaxed, you're right. And dammit it's all Bush's fault.
You idiot.
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...).
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.
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.
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.
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.
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.
"For many of the working poor, the implicit marginal tax rate is greater than 100 percent. The long-run consequence of undermining the positive incentive to work is, of course, the creation of an underclass acclimated to not working; the supplement of cash and noncash benefits with income from crime and the underground economy; and the government resorting to negative incentives such as mandatory work programs." Clifford Thies
http://mises.org/daily/3822
"He knows exactly what he wants and he's about to make a move to get it. And although his name is untranslatable to any Earth language, it would sound something like Zontar."
I gave up 3/4ths of the way down the comments, but I don't think anybody ever mentioned that the tax revenues can't even cover our spending. More than half the comments resorted to class conflict that would have mad Karl Marx proud. We'd be a finer class of people if we expected less from our government, had less taxes and regulations (including state-sanctioned monopolies like the FR) and quit worrying about how much more fun our neighbor is having than we are.
Agreed: America would have a finer class of people if pathetically weak Mommy-Nannies would stop sticking their nose into their neighbor's window worrying about whether their neighbor has too much or too little money.
These Mommy-Nannies somehow think hovering over the children will make the children less hapless; instead, the worry-warted Mommy-Nannies can only bred dysfunctional.
My only question is: Why do Mommy-Nannies always speak with a nasally, whining voice-like-crackling-hag?
Agreed: America would have a finer class of people if pathetically weak Mommy-Nannies would stop sticking their nose into their neighbor's window worrying about whether their neighbor has too much or too little money.
These Mommy-Nannies somehow think hovering over the children will make the children less hapless; instead, the worry-warted Mommy-Nannies can only bred dysfunctional.
My only question is: Why do Mommy-Nannies always speak with a nasally, whining voice-like-crackling-hag?
I don't believe I read any mention of this most salient point: the tax structure is designed to subsidize debt financing and debt leveraging, which encourages and profits the ultraleveraging from the securitization and credit derivatives and leveraged buyouts by those private equity firms (a k a sleazoids).
And don't corporations still receive tax breaks for laying off American workers and offshoring those jobs? So add labor arbitrage to the mix, as well.
All of this encouragement of debt produces debt-financed billionaires and debt-financed multimillionaires, who profit from disassembling the American economy.
This is the whole point of the matter. There is no longer an American economy, simply one ongoing financial engineering bubble.
very good points as it is more sophisticated analysis than just a left/right partisan take. The main issue is any regular working folks, poor or upper middle class are getting worked over by our economy...and this concentration of wealth is very unhealthy for general economy/common wealth
You can’t let people who don’t produce run a country with their policies and their votes. Why? Because they can’t pay for them.
When it gets to the point where non producers and non taxpayers are a majority of the electorate, voting themselves largesse the country can’t afford, the result in every “democracy” is collapse of the system due to loose fiscal policy, followed by a dictatorship.
Collapse is what these failing state budgets are all about. People, government and bankers are voting themselves more and more stuff, engaging in more and more irresponsibility and crime, creating bigger and greedier government, empire and corporate monopolies—all the while knowing someone else is going to have to pay for it. America is now to the point where widows, retired couples, young couples, singles, and wage earners victimized by corporations and politicians can’t pay for it anymore.
It’s not a social question, a diversity question or a racial question. It’s an economic question. You ask, will it ever be solved? Yes. Because it has to if America is to survive as that city upon a hill.
Michelle Obama in 2008 framed it quite simply: “The truth is, in order to get things like universal health care and a revamped education system, then someone is going to have to give up a piece of their pie so that someone else can have more.”
That someone who’s “going to have to give up a piece of their pie” is the producing American, and particularly under Obama the small businessman who represents more than 99 percent of all businesses in this country and employs himself and more than 50 percent of the private sector, nonfarm workforce.
His and now Michelle’s “pie,” of course, is the private property, savings and income he has earned from years of careful planning, hard work, pursuing ambition, innovation and, more often than not, a lifetime of sacrifice.
“There is only one sovereign method for the achievement of Socialism—the winning of a legal majority.” Jean Jaures: Studies in Socialism, 1902.
“That which is called Socialism, Marx named the first, or the lower phase, of Communism.” V.I. Lenin: Sochineniya, 4th ed., 1949
I think you forgot the bailout pie, the insurance industry pie, the military pie, the tax shelter pies, and assorted other pies. So perhaps you should rethink. There is plenty of pie to go around. Just have to shove a greedy snout or two aside.
Problem is, these particular politicians can only add snouts, not remove them apparently. This is a simple problem of factionalism and gutlessness in a representative democracy (cf. Federalist Papers), not socialism. We don't have time for canards and red herrings here, my friend. Unless your definition of socialism includes corporate socialism as practiced by the dwindling rump known as the "Party of No".
The Founding Fathers would have taken what we recognize as powerful multinational corporations out back and brained them with a shovel. Please incorporate this knowledge into your analysis. Of course softheaded liberalism is also a problem. But your social prescription appears to simply fawn at the feet of monied interests that are completely at odds with American values.
Forget the cartoons and get real. How do you plan to seperate the government from corruption by corporate interests? By voting for their most corrupt pawns? Your post starts out with an objective facade and then veers off into an obviously foregone conclusion. Irritating I calls it. But then I don't get enough sleep so it's probably my fault.
love your reply, funny to think some people think the poor are the primary ones getting over from the state, supposedly, way way more than big businesses/elites/rich. It would take a more single moms on welfare and working poor on food stamps than we have total population to come close getting as much out of the govt largesse or govt protection as much as Blackwater, Goldman Sacs, United Health,etc...
Good point about founding fathers economic views. Did you know the Leviticus bible verse quoted on the Liberty Bell is talking about liberty from personal debt/economic slavery?....conveniently ignored.
usury has been illegal for most of civilized history ( its in the bible )
it is funny how in many ways we get dumber with time.
Biblical injuntions notwithstanding, charging interest on loaned money has RARELY been illegal. What the actual percentage is here has been defined by some as Usury, like more than20% sometimes like Citibank plopped on their CCs lately. However in REALITY, any interest at all is Usury. You run into the problem of compounding and further the fact that you place a debt on a balance sheet greater than the actual amount of money out there t any given time. If I borrow 20 Gold American Eagles from you and promise to pay you back 21 Gold American Eagles at 5% Interst, how can I do that if the total supply of Gold American Eagles was only 20 to begin with? You would have to have Growth and the possibility that more Gold would be mined up somewhere. If there is no growth and no new sources of Gold are located, there is no WAY to pay this back.
We arent OUT of all these things yet, but in comparison to the population growth, there is far less spread around and fewer people can pay the interest on their debts. So the debt based syste collapses as a result.
RE
JR, so as a 100% disabled war veteran who no longer can contribute to my country I should have no say on how it is run?
You are one sick citizen and it is a tragedy that I find myself associated within the same society as you.
It is folks like you that make folks like me wonder why we ever chose to defend POS's like yourself with our lives and what remains of our health for those of us that actually survive.
I suggest you actually attempt to serve our nation rather than expect it to serve you.
Miles, as a 100% disabled war veteran you have my total empathy and deepest respect and heartfelt thanks. I consider myself, this country and her freedom to be in your debt, not only during your lifetime, but for the lifetime of this great nation.
Patrick Henry long ago expressed my views and the value I place upon the sacrifice you have made, a contribution for which you and others such as yourself can never be repaid monetarily: “As for me, give me liberty or give me death.” You have paid the supreme price for America’s freedom and continue to pay it daily; we who have been spared that price are forever in your debt.
That said, who should have a say in how this country is run, if not you? God bless you.
I'm curious what percentage each group pays in income tax.
That cleverly was omitted.
Those paying 28% may not be as cumulative as those at the top.
But it still hurts.
Perhaps more.
The 48% not paying taxes....shouldn't.
Too poor to afford anything.
But they still pay sales tax on whatever they spend.
So percentage-wise they may pay more then the top 1%
I am assuming that those "who don't pay income tax" means that they have a goose egg in the tax paid section of the 1040. This under reports the number of people who don't pay income tax. Please, can you revise this post and include all gov't employees in the number who pay no tax, including the ones paid to sit on their butts--welfare, unemployment and social security "employees?" Gov't workers do not pay taxes, they only eat them. It is accounting fiction to suggest otherwise. I suspect the number of people not paying income tax in the US is approaching 70%...
Socialists:
Let's get this straight. Someone who pays FICA but not income tax does not pay their "fair" share of taxes. And all "progressive" tax structures are inherently unfair.
What is "fair"?
Perhaps its taking the debt and dividing it per head. Everyone pays the same. That's one measure of fair.
Perhaps it is charging everyone the same rate of tax. Making the million dollar earner pay $100,000, and the $50,000 wage earner pay $5,000. The rich man pays more, but gives up the same percentage of his labors.
But charging the higher wage earner more just because he has it is not a fair system. Why should you pay zero percent income tax, while a rich person pays a 28% percent rate? Why is it fair to take from him to give to you?
After all, if you view your annual wages as what you receive for giving up a year of your life, then the tax man may take 28% percent of a rich man's life in the above example, and not a day from a poor man.
Who are you to take my labor--part of my life--and give it to someone else? Socialism--wealth redistribution--is theft, whether the recipient is a welfare parasite or a vampire squid.
But the poor have less? Why should that be the point. They have less because they made bad choices. I make more than a poor man, but I've earned it. While Joe Average was watching football in high school, I worked. I ground my way through school (in seven years of undergraduate and graduate school, I went to a bar once), and have worked consistently 2600 to 3000 hours a year my entire life. And, yet, some retard who huffed paint instead of studying calculus will whine about how "unfair" it is that I have more than he does.
The only way we'll ever achieve a rationally sized government is to tax everyone at the same rate. If a person making $40,000 has to give up $4,000 to the tax man, then he'll see the wisdom in smaller, less intrusive government.
What exactly would be the point of taxing the 47% who pay no taxes? The amount you could raise thru taxing them is minimal and would not pay da bills. From the chart, if you dropped a 20% Income Tax on the 47% of people not paying taxes and estimate their average income at $15000 each, you raise about $282B. They already cannot afford to live and you just took another $3000 out of their measely paychecks.
On the other hand, if you took the top 10% of taxpayers and estimate average income at $200K for this bunch and drop a 50% tax on them, you raise $1.5T. This does pay da bills. It also leaves these folks with $100K, which they should be able to live on, at least better than you can possibly live on $12K.
You can't soak the poor to pay da bills we have racked up here, if you are going to tax anybody you have to tax the people who have the money to pay the taxes. This is 6th grade math. MOST of the money is being made by the top 10% of the population, so that is what you have to tax. Taxing poor people makes no sense, they already don't have enough to live on, and it doesn't raise enough money to pay da bills.
You also have around 60-100 people making over $1B a year last time I checked Forbes. Tax them at 80%, and you still leave them with $200M or more pocket change, which hopefully they can scrimp by on. If you actually want to raise some money, the way to do it was by taxing the people who HAVE the money. Simple arithmetic, not ideology.
RE
being able to earn millions a year is not a right, it is a privelege, which should be lost if abused
the only thing in life that real wealth protects you from is.....poverty , we all cop the slings and arrows along the way
Be careful of the arrow breakers.
http://www.youtube.com/watch?v=JmIaT9sAtoc&feature=related
Someone is always finding the rock that can't be slung as well.
Rogue, you are correct about the 47%. We would get no money from them. Of course the when the top 10% owns 95% of the wealth of the country they are obviously the best quality of beer of which the Goob could drink from but you fail to address the fact that the Goob is TOO BIG and the rules are written by the top 10. Of course no one is going to write the rules in their own opposition so the cycle will ever be self perpetuating. You also don't account for the huge asset bubbles that are so enthusiastically inflated which makes it harder to live on the 100K you speak of, especially for those who want families. When you really get down to it there are only two classes, top and bottom. Middle class is an illusion with a glass ceiling to maintain the power base and the status quo. The rules are written for the TBTF and the Goob which is at this point almost too big NOT to fail. Maybe we need a better ideology. People are too complicated for simple arithmetic.
Of course we need a better ideology. The post I made was merely to demonstrate the foolishness of trying to extract money from people who simply don't HAVE money. In the subtext of the post you read that it is unconscionable that 47% of the population is paying No Taxes. How UNFAIR that is! LOL. Poor people should pay Taxes too, after all don't they use Police Services more than most since their communities have the most crime?
Its plain stupid. Numerous responses here call for regressive taxation on consumption, which clearly taxes the poor more than the rich on a percentage basis. Its an attempt to shift further tax burden to the poor, who can least afford it. I don't argue that the top 10% have not captured Da Goobermint and won't tax themselves, that is obvious. The point here is that everybody talks about Fiscal Responsibility here. Well, what is fiscally responsible is to tax people who can pay the taxes! Duh! If you actually want to pay for all the debts here and get outta da hole, the people who HAVE money have to do that. The people who DON'T have money CANNOT. So if you are fiscally responsible, you would have to advocate for a tax on the rich.
I'm all for cutting costs, and I am all for abrogating on debt accumulated here by Helicopter Ben in the name of the People taking trash assets from the rich and dropping them on J6Ps tax burden. However, the remaining debt AFTER that has to be paid for by the rich. They have the money, and they get the greatest benefits of the society.
Do I feel sorry for your Middle Class Taxpayer here? Not really, I AM a MCTP! I am getting Hosed, no doubt, but poor folks are getting Hosed WORSE. Even NOT paying taxes they are hosed worse. Good Grief, they live in POVERTY. I don't. The stupidity involved in thinking you can raise money by further taxing poor people astounds me. Tax people who HAVE money. Then you can raise some cash.
RE
As Anon said, the point wouldn't be to collect a lot of money, the point would be "If a person making $40,000 has to give up $4,000 to the tax man, then he'll see the wisdom in smaller, less intrusive government." You wouldn't want to tax them a high rate, but with zero taxes, they will always want a bigger government.
In your earlier post, you said to tax 50% to high earners - with the guaranteed tax hike in 2011, many states and cities will be there already. With the possible health bill surtax, it will be 55%+... So, wait 1-2 years, and you'll get your wish, although I find cheering for 50%+ taxes (of course not for you) a little odd. It's as though you think taxes are too LOW and the govt is not out of control with it's spending. As far as the 80% for extremely high earners (someone else said 90%), they will just leave the country... let's see how well that works out. BTW, your tax proposal sounds pretty socialist.
Welcome to the land of diminshed opportunity.
Just to add some clarity, FICA are taxes, but are not included in this chart. However, most revenue watchers look at the total revenues coming in, which include Income, personal and Corporate, payroll taxes and other misc government taxes like excise tax. Then there are some reimbursements, and whats left over is net tax revenue.
Basically, net tax revenue is the total money coming into the Government. From this money, we fund non-discretionary (entitlements) and discretionary spending. If we spend more than we take in we have a deficit. This deficit must be paid for in the current fiscal year by selling debt (Treasuries). After this we need to pay for additional government costs; interest payments on our debt and the Federal Reserve System. The Federal Reserve System likes to say that they are self funded, but really what this means is that they use money they created to pay themselves. So the American Tax Payer pays the FED bill, albeit hidden from view. The money they use is on the books as maturing Treasury Debt or Existing Debt interest payments. What interest is not used by the FED is sent to the US Treasury.
OK, sorry for that long winded introduction, but I wanted to have a good foundation before moving on.
The reality of the tax revenue base of the US is that there is no real opportunity to substantially increase revenue. An large increase in taxation either personal or corporate will produce diminishing returns. For example, a 10% change in the mid tax brackets may only produce a 2% change in net tax revenue. What does this mean? The US tax payer is tapped out. There is no way the Government will be able to make up for our budget shortfalls through taxation alone.
Let me say this another way. Economic health is very much tied to the ability to generate tax revenues through income and payroll taxes (FICA). If you are jobless, you do not pay FICA and your income tax burden is greatly reduced. A jobless recovery is a way to say a revenue-less recovery. It is evidence that our inability to enact prudent policies, from trade to fiscal to monetary, has gutted the middle class and created huge unemployment.
Thus:
You can't destroy the middle-class and then expect to increase tax revenues. The inability of the government to recognize this truth, is a form of oppression. A failure to understand the consequences of government actions on the people. At what point does the government have to destroy something until it recognizes the harm?
Mark Beck
Oh and more than 1/2 of all corps in the county pay no income tax. Time to right the ship. Imagine GE's effective tax rate was about 5%. Talk about a give away...
I wrote a more eloquent comment, but it seems to have disappeared into the ether, so let me get to the point:
Someone said tax those making 250K at 50%, leaving them 125K, which was "enough."
My 250K salary is what I earned over the course of a year. It is essentially a pool of money that I received for giving up a year of my life.
You want to take 50% of that money--half of a year of my life--and effectively give it to someone else.
How is that fair?
You want to tax me at 50%? Then make sure you tax everyone else at 50%, too. And if that doesn't leave them enough to eat, maybe they won't be so quick the next time to vote for tax increases. Maybe they'll even see the benefits of a smaller, less intrusive government.
A civil debate on fairness and pragmatism in tax policy. Such a thing would be really welcome.
A point of recent tax history: Maggie Thatcher tried for the oldest idea in tax policy, the 'head tax' or 'poll tax' as they called it. The resulting riots pretty much ended the Conservative Party's chances for governance for the next twenty years.
Reagan's more careful and obscure tax reforms, affectionately known as "The Battle of Gucci Gulch" by policy wonks, survive in most ways to this day. But of course it also laid the seeds for our current destruction or near-destruction as a functioning society. See the 1987 NY Times review of the classic "Showdown at Gucci Gulch" at http://www.nytimes.com/1987/07/05/books/and-they-said-it-couldn-t-be-done.html
Is fairness a moral issue? A religious one? Or simply an expression of authority, either legitimate or illegitimate? If a civil society has been established then compromise and searches for mutually acceptable outcomes are mandatory.
In almost all cases, the search for fairness under a legitimately constituted civil authority has resulted in progressive taxation. I mean this in all sincerity--it is far more fruitful to look for ways to reduce the scope of government than to attempt to persuade a society to abandon progressive taxation. Starting the search for more limited government with the areas of government intervention that you politically LIKE the most is a very educational and credibility-enhancing way to start.
Just some thoughts. My family is also under the gun here and I am as angry as anyone.
LITTLE RED HEN FAIRY TALE SUMMARY :
At each stage of her effort to grow wheat and bake bread, the Little Red Hen asks her barnyard colleagues for help. They refuse every request, so she does all the work herself. Until the last step… “She did not know whether the bread would be fit to eat, but--joy of joys!--when the lovely brown loaves came out of the oven, they were done to perfection. ... Then, probably because she had acquired the habit, the Red Hen called: ‘Who will eat the Bread?’ … “All the animals in the barnyard were watching hungrily and smacking their lips in anticipation, and the Pig said, I will,’ the Cat said, ‘I will,’ the Rat said, ‘I will.’ “But the Little Red Hen said, … ‘No, you won't. I will.’ “And she did.”
ABOVE EXCERPT FROM “The Little Red Hen” An Old English Folk Tale, written & illustrated by Florence White Williams
PRINCIPLE: If one member of a group does most of the work on a team project, then that person should have the most influence on decisions about the results. If someone delegates most of the work on a project to others, then those who do most of the work should most influence decisions about the results.
http://tlt-swg.blogspot.com/2006/10/little-red-hen-principle-teamwork-and.html
Wikipedia: The Little Red Hen is an old folk tale, most likely of Russian origin. The best known version in the United States is that popularized by Little Golden Books, a series of children's books published for the mass market since the 1940s. The story is applied in teaching children the virtues of the work ethic and personal initiative. It is so well known that it is frequently rewritten by pundits, bloggers, and band directors to illustrate their favorite points.
Wikipedia: The moral of the story is that those who show no will to contribute to an end product do not deserve to enjoy the end product..
In popular cultureRevisions of the story of The Little Red Hen are circulating around the Internet to frame a perceived policy of U.S. President Barack Obama of redistribution of wealth using the well-known story. In a current popular culture version, based on a Ronald Reagan monologue from 1976[1], the farmer claims that the hen is being unfair if she does not share her bread with the other animals, and forces her to share her bread with those who would not work for it. This in turn removes the hen's incentive to work, resulting in poverty for the entire barnyard…
MODERN LITTLE RED HEN STORY
11/9/09 | Howard Morrison
Posted on Monday, November 09, 2009 7:06:11 AM by Howard Morrison
MODERN LITTLE RED HEN
Once upon a time, there was a little red hen who scratched about the barnyard until she uncovered some grains of wheat. She called her neighbors and said, “If we plant this wheat, we shall have bread to eat. Who will help me plant it?”
“Not I,” said Rahm Emanuel the cow. “Not I,” said Nancy Pelosi the pig. “Not I,” said Harry Reid the goat.
“Then I will,” said the little red hen, and she did. The wheat grew tall and ripened into golden grain. “Who will help me reap my wheat?” said the little red hen.
“Not I,” said Rahm Emanuel the cow. “Out of my classification.” “Not I,” said Nancy Pelosi the pig, “I’d lose my seniority.” “Not I,” said Harry Reid the goat, “I’d lose my unemployment compensation.”
“Then I will,” said the little red hen, and she did.
At last, it came time to bake the bread. “Who will help me bake the bread?” asked the little red hen.
“That would be overtime for me,” said Rahm Emanuel the cow. “Don’t want to work that hard.” “I’m a drop out and never learned how,” said Nancy Pelosi the pig. “If I’m the only helper, that’s discrimination,” said Harry Reid the goat.
“Then I will,” said the little red hen. She baked five loaves and held them up for her neighbors to see. They all wanted some – in fact, they demanded a share! But the little red hen said, “No, these loaves are for me and my chicks!”
“Excess profit!” yelled Rahm Emanuel the cow. “Capitalist leech!” yelled Nancy Pelosi the pig. “I demand equal treatment!” yelled Harry Reid the goat.
Nancy Pelosi, the pig, grunted and they hurriedly painted “unfair – equal treatment under the law” signs and began to picket the barnyard and shout obscenities at the little red hen.
Then Obama, the donkey, came into the barnyard and said to the little red hen, “you must not be greedy. You must spread the loaves around!”
“But I was an entrepreneur, I worked hard and I earned this bread,” said the little red hen.
“Exactly,” said Obama the donkey. “That is the wonderful free-enterprise system…anyone in the barnyard can earn as much as he wants. However, under my imposed barnyard regulations, the productive workers must divide their product with the idle.”
The little red hen’s neighbors wondered why she never again baked bread!
http://www.freerepublic.com/focus/bloggers/2382088/posts
Nice, but on this blog you have to take out the interchangable and meaningless political names and insert corporate executive and financial regulators names. Then it makes more sense.
Also, strike "idle" and insert "predatory."
Thanks for your comment, you’re right. The politicos are just carrying out the policies of the oligarchs.
Don't be a fool. The "corporate executive and financial regulators" have bought and paid for the Pelosis, Reids, Obamas, et. al.
They are one and the same.
The top 400 tax payers paid half the federal tax in the 1950s. The highest marginal tax rate was 91% and applied to income over 400K per year. I like that arrangement much better than the current one.
The claim that half the people in the US pay no income tax is false. There is a social security (FICA)tax of 15.3% that applies to all income below 107K (for 2009) and there is a medicare tax of 2.9%. Employers typically pay half of these taxes so half of them may not be reflected in pay stubs. So, there is essentially an 18% flat tax on everyone except for those with over 107K in income in which case only the medicare tax of 2.9% applies to income above 107K. This does not even includes sales tax, state income tax, or property tax.
It's remarkable how regressive the US tax system has become over the past 5 decades. That is one of the fundamental causes of the decline of overall prosperity in the US.