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Only Tax Rich People?

Only Tax Rich People?

There are several great debates going on today, 3 by Brad (most of the posters are anonymous, but most are keeping it civil as well).  Then Moderateman has a good one going that is now starting to digress, and I did not want to drag that one farther off topic responding to one point made, but felt it should be addressed.  It would have been much better in one of Brad's Instapundit articles.

Sean Conners made this point:

but you are correct in knowing that no democrat has suggested that they want to balance the budget by raising taxes on anyone earning less than 200,000 dollars a year in their campaigns. in fact many have called for tax cuts for "the rest of us." and elimination of tax for more poor americans.

While I have not been paying attention to exactly what the democrats are saying, for I know they are not talking "raising" taxes, they don't have to do anything to raise them.  They just merely have to wait for the last tax cut to sunset, and viola!  The taxes are going up.  But I did not actually want to discuss even that here as that is a debate in itself.

Instead I want to concentrate on Sean's statement.  Let us for the sake of argument assume it is true and that democrats really do have a plan (that would be one).  So they eliminate taxes on all poor people.  OK, first we have to define what poor is, and then what we mean by eliminating taxes on them.

OK, for the sake here, lets say that poor is any family of 4 making less than $40k/year.

Now here starts the problems.  The first problem is that while today,  a person making $40k may be considered middle class, that was not so 50 years ago.  When the Income tax amendment was passed 100 years ago, it was only supposed to tax the wealthy, and then only 1%.  Well, any working American knows that is not true today.  So what happened?  Wages went up, but the tax stayed the same or went up in rate.  Not until Reagan did we get indexing for inflation, and then not totally.

So the democrats say they only want to soak the rich.  Rich being over $200k.  Today.  So we soak them.  In 20 years, $200k is going to be middle income, and then eventually poor, but the soaking will not stop.  There are 2 things certain in life - death and taxes, and to that you can add a third, a politician never has enough money to spend.  So tax cuts are rare, and not to be trifled with.

But the democrats will promise today to soak the rich and give to the poor (modern day Jesse James, aren't they?).  But they will not change that and in a few years, all of a sudden, they will be soaking the middle class, and wondering why couples need 2 incomes to merely stay even with the previous generation.

The second problem is that no democrat, OR republican can ELIMINATE taxes on any working person!  There are 2 reasons for that.  One is that they do not want to due to the most powerful lobby in America.  The second is that they cannot because they do not have the power.

The first reason, is the most regressive tax in existence, and one that will never go away, just get worse.  That is Social Security and the Medicare/Medicaid tax.  Both have cut offs that leave the richest Americans not paying it after a certain amount of time, but the poor never stop paying it.  And make no mistake, you can call it whatever you want to, but the truth is it is a tax.  That one will never be touched because it is the "third rail" of politics, and the most powerful lobby, AARP, will make any politician pay with their career if they do.  So forget about eliminating that tax.  It wont happen.

The second reason, is that the politicians do not have the power to do it.  What?  A tax they cannot touch? Yes, if you look at politicians as being either state, or federal.  Federal politicians cannot eliminate state income taxes, state sales taxes (the second most regressive tax in existence), personal property tax, real estate tax, and a host of other taxes levied by state and local governments.  They do not have the jurisdiction or the guts to tackle any of those.

So when you hear a politician saying they are going "to eliminate taxes on the poor", they are lying through their teeth, and they know it.  At best they can be honest in their intentions and ignorant of taxes (but I doubt they would get as far as they did being stupid) and at worse they are using sophistry to try to get votes, knowing they cannot.  And indeed, in the near future, that they will be taxing those same "poor" people again as wages and inflation push them out of the "poor" category and into the "rich" category.

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Reply #26 Top
I haven't seen where Dems argued that only the very rich got any sort of tax cut at all.


If you haven't seen or heard the claims by numerous Democrats that the tax cuts were for the rich, you haven't been paying attention. That has been almost a constant screech in the Democrat's objection to the tax cuts. "Tax cuts for the rich" You seriously can say you haven't heard that?

You state that the rich paid more taxes. But it wasn't because of the tax cuts; the rich pay more taxes because the percentage of our nations monies owned by the rich has risen significantly. This doesn't corrolate with the tax cuts, but with the cuts on Dividend taxes, which most certainly do not benefit all Americans equally.


That has no bearing on my statement. Tax rates went down and revenues collected went up. You admit this is so but somehow feel the specific mechanism changes the fact?


If you believe that taking money from one segment of society and giving what is left over to another segment of society (after considerable waste by the Federal Government, as is its normal method of operation) is proper and observes the tenets of equal rights for all, that is fine, but a tax cut is a tax cut, be it dividend or otherwise. To pretend that the type of tax cut somehow negates the fact that collections went up is a bit obtuse, if you'll allow the observation.


Granted I was being a bit facetious in my logic stream but only to show the blatant attempt by Democrats to portray tax cuts as something they are not. It is also not a secret that the reason tax cuts are mentioned (and usually outrightly correlated) along with the rich by the Democrats is to insinuate that only the rich get them and benefit by them. In truth everyone got a tax cut and benefited by them. This behavior by the Democrats has no other purpose than to try to elicit envy between segments of society for political gain. It is nothing short of trying to incite a financial lynch mob.

our nations monies


That is an interesting statement. It tends to suggest that you believe money is not owned by the individuals who earn it but rather a possesion of the collective (Government?). That would apply in a purely Communistic society perhaps but hardly seems appropriate to a Capitalistic Republic such as exists in the US.

Or perhaps you feel that is or should be the aim of the Democratic party; everything owned by the state and doled out to the subjects .. er .. citizens as deemed necessary by the ruling party.
Reply #27 Top
Oh, stop hyperventilating. By 'our Nations monies' I was referring to the size of the slice of the total pie that is held by the 'rich,' that is, the total picture of money ownership in America. Don't try to change this into some sort of conversation about communism, because it has nothing to do with that.

To begin,

That has no bearing on my statement. Tax rates went down and revenues collected went up. You admit this is so but somehow feel the specific mechanism changes the fact?


Of course the mechanism changes the fact. That's what non-corrollary statistics mean.

The intial claim was:

Now for the dirty little secret .. which is not really a secret.

Everyone got a tax cut (at least those earning an income of any amount) so everyone who got one of those tax cuts is rich by Democratic logic.

In actuality, as a result of those tax cuts, the rich paid even more taxes (tax revenues collected are up).


The problem is, there is a disconnect between your second and third sentence. Individual tax receipts haven't risen - corporate tax reciepts have risen. This isn't directly connected to tax cuts, but rather the massive profits made by corporations under the Republican administration over the last 5 years. The only real individual tax receipt rises have been in investment and dividend income - taxes which are not usually withheld from paychecks, and most certainly don't apply to the vast majority of Americans.

If you believe that taking money from one segment of society and giving what is left over to another segment of society (after considerable waste by the Federal Government, as is its normal method of operation) is proper and observes the tenets of equal rights for all, that is fine, but a tax cut is a tax cut, be it dividend or otherwise. To pretend that the type of tax cut somehow negates the fact that collections went up is a bit obtuse, if you'll allow the observation.


The argument that was made was that the tax cuts Bush passed for everyone lead to a rise in tax revenues. That argument is false. So it isn't obtuse to point out that the type of cut matters, because the tax relief passed for the majority of Americans was relatively tiny, especially when compared to the gains that the top 1% make off of the tax cut.

Bush has passed multiple tax cuts under his terms, and not all of them have been conducive to the needs of the middle class, that's for sure.

Granted I was being a bit facetious in my logic stream but only to show the blatant attempt by Democrats to portray tax cuts as something they are not. It is also not a secret that the reason tax cuts are mentioned (and usually outrightly correlated) along with the rich by the Democrats is to insinuate that only the rich get them and benefit by them. In truth everyone got a tax cut and benefited by them. This behavior by the Democrats has no other purpose than to try to elicit envy between segments of society for political gain. It is nothing short of trying to incite a financial lynch mob.


The rich benefited far, far, far more from Bush's tax cuts than any other section of society. Such statments are completely accurate.

For some reason, I'm having a hard time posting links; but google 'bush tax cut' and read the Brookings Institution article about the 2001 tax cut. Hardly a liberal organization. After that, think about the 2003 tax cuts, the dividend tax cuts, the corporate tax cuts. The rich have made out like bandits under Bush, and pretty much noone else has.



That is an interesting statement. It tends to suggest that you believe money is not owned by the individuals who earn it but rather a possesion of the collective (Government?). That would apply in a purely Communistic society perhaps but hardly seems appropriate to a Capitalistic Republic such as exists in the US.

Or perhaps you feel that is or should be the aim of the Democratic party; everything owned by the state and doled out to the subjects .. er .. citizens as deemed necessary by the ruling party.


Back to the subject of your hyperventilating. Do you know what IS owned collectively by the united states? That's right, the public debt. We are responsible for paying that money back. It is difficult to believe that you wouldn't already understand just how much your share of the debt has gone up in the last 6 years. Tax cuts are merely tax deferrents; the money is going to have to be paid sometime in the future. Ideas that we can 'grow it out' are completely idiotic and unsupportable by any real world numbers; our economy would have to grow faster than we rack up debt, and interest on that debt, which we are currently adding to at the rate of more than 500 billion dollars a year.

It's time for some fiscal sanity, folks. The debt isn't some arbitrary thing that doesn't belong to you. It belongs to you, me, everyone. As I said before, it's easy to make things look good when you buy everything on credit, but the reality is often a far grimmer picture.
Reply #28 Top
The only way to eliminate federal income taxes is to repeal the 16th amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Not going to happen. The "soak the rich" arguement was used to pass it in the first place.
Moral of the story: once the governments toe is in - expect to have a bumb in the living room forever.
Reply #29 Top

Wrong again; I did present a fact, namely, that Social Security has worked successfully for millions of Americans for decades. That isn't an assertion or an opinion, it is a fact. Such a universally recognized fact that noone even argues that it is true.

No, that again is your opinion.  It is not shared by all, and you provided no facts.

As for your "facts"just presented (and again they are opinion, not facts), you call a confiscatory tax "investment".  That is false.  Investors invest willingly.  They are not forced to.  And when they invest, they expect a return.  If you are lucky, you will pull out what you put in.  Hardly what one would call an investment.

Second, the fund is running a surplus, but every actuarial says it will go broke in 30 years or so.  Again, a definition of a ponzi scheme as when new "investors" dry up, the fund goes belly up.  That is what has been happening for the last 40 years, and each time, what has happened?  Simple, taxes raised.  To the point now that the rate is 12.6%

But we can debate that at another time.  This was not about the viability of SS, it was about how politicians lie by ommission.  Perhaps you would like to write an article on how great SS is.  But one thing is certain.  The tax is the most regressive tax in America, and no politician, of whatever stripe, has even dared mentioning cutting it for anyone, including the poor.

Reply #30 Top

Make social security voluntary and then we can talk about it working "successfully".

And call it an "investment".

Reply #31 Top

The issue of taxes have two elements. The first requirement is that the tax revenues must be equal to the spending -Balanced Budget.

The second issue is what mix of taxes is acceptable to achieve the first requirement.

I am impressed!  An excellant response.  As for the second issue, that really is the nut that Congress seems unwilling to crack, if there is indeed even any acceptable mix for everyone (I think not).

Reply #32 Top

Logic would suggest that if the rate is increased (sunsetting the tax cuts), tax revenues collected will drop to lower levels.

As has happened in all of history.  There are ways to hide income, legally.  And only the rich can afford to avail themselves of those methods.  Increase taxes, and they will hide more income, and the burden will fall upon the middle income and poor people.  That is not opinion, that is demonstrable fact.

Reply #33 Top

This is an idea that is not predicated on any solid logic. If you look at where the money goes in the Federal Budget you see defense and homeland security.

No, it is predicated on logic.  Defense, which covers both of your categories, is only part of the federal spending.  Much more goes for social welfare.  And in that, there is huge fraud and waste.  Better to take half your taxes and give to charity where more of it is actually used to benefit the poor than to see it wasted by the feds.

Reply #34 Top

Everyone got a tax cut who pays taxes, true. I haven't seen where Dems argued that only the very rich got any sort of tax cut at all. But the vast majority of people saw their taxes cut by several hundred dollars, whereas the rich's taxes were cut by dozens of thousands of dollars. The overwhelming majority of the monies that were cut from tax revenues, were returned to the richest Americans. Who, coincidentally, needed it the least, and certainly didn't need it any more than our gov't and nation need it.

Ok, good to see you back on topic.  First, a tax cut does not GIVE anything to anyone.  It just confiscates less.  You cannot confiscate less than 0, then it becomes a hand out.  So while I may have only gotten $5k in benefits, that is because I was only paying in about $20k.  Whereas Bill gates had been paying in Billions, so he got to keep a few million more of his own money.

Second, you say "who needed it least".  Who decides that?  Is that not very communistic of you?  Should it not be I who decides what I need, and then provide what I need based upon what I chose to do to earn it?  Since when is it our government's job to decide how much of my money I "need"?  Never.

You state that the rich paid more taxes. But it wasn't because of the tax cuts; the rich pay more taxes because the percentage of our nations monies owned by the rich has risen significantly. This doesn't corrolate with the tax cuts, but with the cuts on Dividend taxes, which most certainly do not benefit all Americans equally.

Again a false assumption.  The rich pay more taxes, as a percent, because the tax cuts eliminated a large number of low income earners from the tax rolls.

Tax revenues collected are up, but in large part this is because Corporate profits are way up over the last 6 years.

Sorry, Corporations are not some ulta secret entity that hides in children's closets to scare us in the middle of the night.  They are basically comprised of 2 types of PEOPLE.  One is the worker, who benefits with a job and wage.  The other is an investor who has more money coming in, and then (besides paying taxes on already taxed money), can spend it to create more jobs which in turn creates more taxpayers. So whether you want to kill the rich, or corporations, without them, there would be no jobs, no wages, and no taxes.  You never got a job from a poor man, and that is a fact.

Reply #35 Top

The GOP have proven they are the party of CHARGE and SPEND. The GOP has out spent the Democrats and then added it to the National debt so every year we can pay more and more interest because of the increased debt the GOP Policies have created!

Your statement only holds up if you switch between presidents and congress depending upon who is controlling them.  The FACT is that the democrats controlled the spending arm of the government for 40 years until 1994.  And in that time, the deficit was always as high as it is now.  When republicans got control, they managed to eliminate the deficit for a couple of years in 4 years.  Now, it has gone up again, partially due to republicans acting as you said, and partially due to the dot com bust and the war.

Reply #36 Top

our nations monies


That is an interesting statement. It tends to suggest that you believe money is not owned by the individuals who earn it but rather a possesion of the collective (Government?). That would apply in a purely Communistic society perhaps but hardly seems appropriate to a Capitalistic Republic such as exists in the US.

That dovetails with his statement on need.  It seems the democrats want us to believe that only they and the federal government can determine need, and who the money belongs to.  As bad as the republicans are, democrats are worse again due to their arrogance and unwillingness to acknowledge that our money is ours, and not theirs.

Reply #37 Top

The problem is, there is a disconnect between your second and third sentence. Individual tax receipts haven't risen - corporate tax reciepts have risen. This isn't directly connected to tax cuts, but rather the massive profits made by corporations under the Republican administration over the last 5 years.

And you have numbers to back you up?  I think not, for it does connect with my statement.  When it is no longer profitable to hide money from taxes (legally), the rich stop doing it.  They pay more in taxes, but they actually save more for not putting their money where it would not be taxed, but not earn much in return.

Reply #38 Top

The "soak the rich" arguement was used to pass it in the first place.

You are quite right, and that arguement is used today to soak the poor and middle income as a side effect.  But they do not tell you that.

Reply #39 Top
Dr Guy

First, the federal budget was only in balance in 2000 without subtracting the Social Security and Medicare Surplus. The annual deficit is reported NET of the $200 Billion annual surplus in those two trust funds. Thus, the actual General fund deficit is about $200 Billion each year larger then is being reported.

If you look at #23, you will see that the major increase in the National Debt started with Reagan when he convinced the Democratically controlled Congress to drastically cut taxes and increase spending. Reagan convinced everyone that his fiscal policy would BALANCE the budget by 1985. As you can see from #23, that did not happen. What Reagan did is create a structural deficit that took until FY 2000 to reverse. In fact if the "Read My Lips" Bush 41 tax increase had not taken place and the drastic cut in military spending during both Bush 41 and Clinton had not occurred, we would not have had a balanced budget in 2000.

In 2001, Bush 43 did the same thing as Reagan. He curt taxes and increased spending with the very same result. The fiscal policies of Reagan and Bush 43 will be responsible for ADDING $9 Trillion dollars to the National debt by 2010 per the projections of Bush and OMB. The interest American taxpayers are obligated to par EVERY year has gone from $80 Billion in 1980 to $405 Billion in 2006 and heading to $500 Billion by 2010.[/B]

At the end of the Bush term he plans to hand the new president an ANNUAL Budget deficit, not subtracting the Social Security and Medicare Surplus of about $400 Billion for FY 2009. That is what Reaganomics I and II have done to the taxpayers of America. Our Children and Grandchildren will be paying the interest these two misguided presidents gave us. In 1981 the Democrats went along with the Reagan promise to balance the budget. In 2001 it was the GOP that made the same error even after they had the evidence that that plan did not work under Reagan. Now Bush wants to make the tax cuts permanent and add $2.4 Trillion more to the national debt according to a sturdy by the Brookings Institute. [B]Bush 41 was correct. It was Voodoo economics.
I can not believe that was part of what George was taught at Harvard.
Reply #40 Top
Dr Guy

I know the fiscal policies we are following are not what I was taught when I attended grad school for my MBA. I also know it is not what is used to successfully manage several large organizations during my 35 year career in business. I also know the policies we are following will create catastrophic financial crises as the impact of the Baby Boomers retirement becomes reality. The combination of the added debt, funding the promises for Social Security and Medicare, funding our national defense and homeland security are like multiple runaway trains all heading for the exact same location. The policies we are following are not trying to either slow these trains or change their path. If anything we are increasing the speed of the trains like adding the Prescription Drug Entitlement to Medicare without adding additional funding!


Reply #41 Top
i guess since this discussion has regressed into a debate about social security and it's solvency that guy has conceded that people aren't lying when talking about wanting to eliminate (federal income) taxes (that aren't pre-fixed and mandatory, and i'm not going into a laundry list to be nitpicked)for poor people has been settled.

i'll probably be writing about ss in a few weeks with my own thoughts on the subject, so i'll leave ya'll to your debate.

have a nice day:)
Reply #42 Top

i guess since this discussion has regressed into a debate about social security and it's solvency that guy has conceded that people aren't lying when talking about wanting to eliminate (federal income) taxes (that aren't pre-fixed and mandatory, and i'm not going into a laundry list to be nitpicked)for poor people has been settled.

Yes, and I am trying to leave that part alone.  I got sucked into it and then decided that was for another day.  However, I have not conceded that politicians are not lying when they talk about eliminating taxes for the poor, as the only concession I will make is they may be woefully ignorant at best.  Granting that they mean federal, and not state (again a deception, but I will allow that), it still leaves SS. 

Reply #43 Top

In 2001, Bush 43 did the same thing as Reagan. He curt taxes and increased spending with the very same result.

Again, I reject your premise.  He PROPOSED, Congress did the deed.  Reagan did not propose to increase spending, he tried to make it a zero sum game, and increase defense spending (while reducing other expenses).  Congress (in the words of Tip O'Neal - The Budget is DOA) did not go along with him there.

Again in the 90s, Clinton Proposed, Congress disposed.  In 2001, the tax cut was worth $40 billion and could hardly have been the cause of the deficit.  But even stretching the imagination and saying it was, the fact remains.  Bush PROPOSED, Congress enacted.

Reply #44 Top
Dr Guy

The Reagan and Bush 43 tax cuts as well as the increased spending were a joint effort between Congress and President Reagan and Bush 43. Congress passed the measures and the presidents signed the bills.

The net result of the Reagan and Bush policies was NOT A ZERO SUM GAME. They resulted in many Trillions of added debt. There is saying-- When you find yourself in a hole, STOP DIGGING. Nether Reagan or Bush 43 followed that advice. They both just kept digging the hole DEEPER AND DEEPER! We will all pay for those mistakes!
Reply #45 Top
Dr Guy

In addition to BOTH Presidents Reagan and Bush approving all the tax cuts and spending bills, it was at the insistence of Reagan and Bush that the tax cuts took place. The tax cuts DID NOT originate in Congress. Congress rubber stamped the tax cuts proposed by both Presidents!
Reply #46 Top
Dr Guy

In addition to BOTH Presidents Reagan and Bush approving all the tax cuts and spending bills, it was at the insistence of Reagan and Bush that the tax cuts took place. The tax cuts DID NOT originate in Congress. Congress rubber stamped the tax cuts proposed by both Presidents!


Then the "congress" is just as much at fault for "rubber stamping" them.
Reply #47 Top
Then the "congress" is just as much at fault for "rubber stamping" them.


It does not matter who signed what or who rubber stamped what. This was not about who shot sam, but who plays politics with semantics. When you hear a politician say they are eliminating taxes on the poor, ask them about State and SS taxes. Chances are you will be rudely escourted from their presence as he preens his tail feathers for the cameras.
Reply #48 Top
When you hear a politician say they are eliminating taxes on the poor, ask them about State and SS taxes. Chances are you will be rudely escourted from their presence as he preens his tail feathers for the cameras.


you keep crowing this falsehood over and over. can you even provide an example of someone being "escorted out?"

this is nonsense guy and you know it. the conversation is usually a lil more specific. i made 1 gaff and wasn't specific enough for you, and you have used that as if that is what everyone says.
Reply #49 Top
you keep crowing this falsehood over and over. can you even provide an example of someone being "escorted out?"

this is nonsense guy and you know it. the conversation is usually a lil more specific. i made 1 gaff and wasn't specific enough for you, and you have used that as if that is what everyone says.


First, I know of no gaff that was made. I took a statement you made and took it on my own tangent, so I fail to see where you made a gaff. This is not about you, but I attributed you as my inspiration.

An example of someone being escorted out? Surely you jest. The reports are rife with examples on both sides of people, some actual hecklers, others just perceived by the guest of honor as being hecklers being escorted out for asking simple questions of their elected representatives. That is not a national problem, but happens even on the local level, as happened about 6 months ago at a board meeting in a nearby locality.

Besides, why are you resurrecting this? You stated your piece, pointed out an error in your name on my part, and that seemed to be it. I merely responded to Dr. Miller last friday on a point he was making.
Reply #50 Top
The Congress is just as much at fault as Presidents Reagan and Bush 43. In 1981 the Democrats believed what Reagan said that "IF CONGRESS WENT ALONG WITH HIS TAX CUTS THE BUDGET WOULD BE BALANCED BY 1985!" That did not happen. In 2001 the GOP controlled Congress and even after the experience with the Reagan tax cuts and spending increases did the very same thing at the insistence of Bush 43. Both times ended with the SAME result-- higher increases in the National Debt and in the interest we are required to pay EVERY YEAR!