Federal Taxes, paid by the few to be given to the many

The unethical concept of income redistribution

from JoeUser Forums

Most people pay hardly any taxes to the federal government. In fact, half the adult population (50%) only pays around 4% of the total federal tax burden. The other half pays the other 96%. Sadly, most of those taxes are poorly used.  The works of government that affect you on a day to day basis are handled by the state. My state income taxes (here in Michigan) is a flat 4% of income (not counting sales tax and property taxes).

Here's a chart of what you pay on a state by state basis: http://www.taxadmin.org/fta/rate/ind_inc.html

Federal Taxes are excessive

It is important to differentiate the state from the federal government. Most politicians running for the senate or house of representatives (or President) count on Americans being ignorant of who pays for what.  So here's the truth:  The basic services that most Americans consider the job of the government:  police, roads, schools, fire departments, etc. are handled by state or local governments -- not the federal government.  Remember that next time some politician tries to talk about how we need higher federal taxes in order to pay for "better" education.

For married people (which I am) the federal tax rate looks like this:

  Taxable Income

 

  Tax

Up to $12,000

  

10% of the taxable income

$12,000 to $46,700

  

$1,200 plus 15% of the excess over $12,000

$46,700 to $112,850

  

$6,405 plus 27% of the excess over $46,700

$112,850 to $171,950

  

$24,265.50 plus 30% of the excess over $112,850

$171,950 to $307,050

  

$41,995.50 plus 35% of the excess over $171,950

Over $307,050

  

$89,280.50 plus 38.6% of the excess over $307,050

So let's say you're a married couple, household income of $50,000. You're going to be paying up to $6,900 in taxes. Of course, that assumes you have no deductions. Throw in some kids and other deductions and that $6,900 largely disappears.

Let's say, however, you make $350,000. That's 7 times as much in income.  I think most people would consider it fair that they pay 7 times as much in taxes right? Of course, how many people think that they should pay 7 times as much for their phone? Or their cable bill? Or electricity? Probably not as many. Yet, does this family get any additional federal services? No. But guess what? They don't pay 7 times as much in taxes for making 7 times as much in income. No, they pay 14 times as much in taxes! That's right, on $350,000 of income they'd pay $96,000 in federal taxes.

Now, some people will say "Yea, but those rich people have all kinds of deductions." No, they don't. And as we shall see later, for all the claims of "the rich" finding "loopholes", they sure aren't doing a good job because people who make $350,000 or more are paying nearly all the federal taxes.

Federal Taxes: Not much bang for the buck

But you might say, "Well, the federal government doe a lot of things that helps everyone and the wealthy should pay more, after all, they can afford it." In fact, let's say you take the view Calor does. That the wealthy benefit disproportionately from the infrastructure of the United States and therefore should pay disproportionately.  The argument goes:  If Bill Gates was born in Somalia he'd be just another starveling. What makes Bill Gates Bill Gates is that he happened to be born in the United States where an educated work force, a strong and uncorrupted judicial and legal system protects businesses, and a good transportation and logistical system helps make it possible to bring products to market in over an entire continent.

Okay, let's say we accept that premise. That roads, education, a society that is based on rule of law, okay, let's go with that.  Unfortunately, that's not where your federal tax dollars go. They don't go to helping create a good criminal justice system or better roads or researching new technologies. No, they mostly go from you to some other individual. Here's a pie chart of where your tax dollars go.

Look closely at this.  Specifically: Social Security + Medicaid + Welfare + Medicare = > 50% of the federal spending.  Half of that federal taxes go from you to go to someone else.  All arguments over social justice and compassion aside, how exactly do these programs create opportunity? What exactly is the justification for spending money on these things from a governmental point of view? People like Michael Moore and Al Franken argue that those people buy things which in turn helps the economy and that "rich" people just waste it on fancy food and foreign cars. There's a technical term for people like Michael Moore and Al Franken, we call them "Dumb people". In the real world, most people who generate wealth do so because they are effective at utilizing capital. Blowing a significant portion of your capital on luxury items is not very effective. What these people do is take that capital and invest into things that will generate even more wealth which helps everyone.  I am not suggesting that taxes are universally bad. I am saying that income redistribution is bad because it is a less efficient use of capital. I certainly favor state programs that ensure that our citizens aren't starving or freezing out in the streets. But that's not where this money is going. In fact, programs that help ensure poor Americans don't go hungry are handled by (wait for it) THE STATES.

The original point of having the federal government was to "provide for a common defense, promote (not provide) the general welfare". Those things only use up a small percentage of the budget.  15% on defense, 2% on veterans benefits, 3% on natural resources, 3% on education and 8% on Misc.  Now, that 8% isn't all good stuff. That's where pork barrel programs fall into. You always hear about "corporate welfare". Well, that would fall into there somewhere.  But now you can see what a dishonest charge that is. It's hard to take people who cry "corporate welfare" seriously when that entire part of the budget falls under "Misc." and is only 8% while over half the budget is spent on real live welfare.

Even if you're one of the people who believe Social Security and Medicare are things "we pay into and thus should get something out", that still leaves 15% (Welfare and Medicaid) that are just pure give-aways.  Or put another way, it's charity. Which is ironic because the people who are most militant about increasing welfare are the same people who seem to detest the primary providers of charity historically - religious organizations. Rather than allow concerned volunteers to help their fellow man, we instead pay far away bureaucrats to administer money confiscated from the citizenry. But I digress.

Kleptocracy

The problem with income redistribution is that it opens a Pandora's box that can never be closed. Once you have convinced society of the need to take money from "the rich" to give to others you slide down a slippery slope.  Over time,  power of "democracy" comes in and the majority vote in leaders who increasingly take from the economic producers of society to hand over to everyone else. We already see that today:

This data is from: http://www.taxfoundation.org/prtopincometable.html

Total Income Tax Shares (percentage of federal income tax collections paid by each group)

Total

Top 1%

Top 5%

Top 10%

Top 25%

Top 50%

1980 100.00% 19.05% 36.84% 49.28% 73.02% 92.95%
1981 100.00% 17.58% 35.06% 47.96% 72.29% 92.55%
1982 100.00% 19.03% 36.13% 48.59% 72.50% 92.65%
1983 100.00% 20.32% 37.26% 49.71% 73.10% 92.83%
1984 100.00% 21.12% 37.98% 50.56% 73.49% 92.65%
1985 100.00% 21.81% 38.78% 51.46% 74.06% 92.83%
1986 100.00% 25.75% 42.57% 54.69% 76.02% 93.54%
1987 100.00% 24.81% 43.26% 55.61% 76.92% 93.93%
1988 100.00% 27.58% 45.62% 57.28% 77.84% 94.28%
1989 100.00% 25.24% 43.94% 55.78% 77.22% 94.17%
1990 100.00% 25.13% 43.64% 55.36% 77.02% 94.19%
1991 100.00% 24.82% 43.38% 55.82% 77.29% 94.52%
1992 100.00% 27.54% 45.88% 58.01% 78.48% 94.94%
1993 100.00% 29.01% 47.36% 59.24% 79.27% 95.19%
1994 100.00% 28.86% 47.52% 59.45% 79.55% 95.23%
1995 100.00% 30.26% 48.91% 60.75% 80.36% 95.39%
1996 100.00% 32.31% 50.97% 62.51% 81.32% 95.68%
1997 100.00% 33.17% 51.87% 63.20% 81.67% 95.72%
1998 100.00% 34.75% 53.84% 65.04% 82.69% 95.79%
1999 100.00% 36.18% 55.45% 66.45% 83.54% 96.00%
2000 100.00% 37.42% 56.47% 67.33% 84.01% 96.09%
2001 100.00% 33.89% 53.25% 64.89% 82.90% 96.03%

Take a close look at the bottom row. 

The top 1% of income earners in the United States already pay 34% of the federal taxes. The top 5% pay over half the taxes. Think about what that means once you have convinced society that it is ethical to confiscate money from one person to give to another.  We're not talking about taxes used to provide education to Americans. Or taxes being used to have a better police force. Or taxes to protect us from foreign enemies.  We are talking about taxes taken from one family to be given to another.  We are also not talking about taxes being used to feed starving people either. Instead, most of this money is now being used to either provide a life style that resembles "middle class" (without having earned it) or is used to provide health services.  Because now, health care is considered a "right".  In 1933, living to 65 was very unusual. Now, apparently, living to 80 is considered a right that should be guaranteed by the government or more to the point, guaranteed by the top 5% of income earners.

That is why so many conservatives abhor income redistribution. It has no end in sight. When 25% of the population pays 83% of the taxes, it becomes incredibly tempting for the other 75% of the population to just continually vote in new entitlements.  Today we debate whether prescription drugs should be provided for by the "government". I imagine a hundred years ago the idea of taxing people to give other people free medicine would have seemed absurd.  At the rate we're going it won't be long until the "government" is required to provide every adult with either a free automobile or annual vacation allowance. Or more to the point, that the 75% of the population that pays only a tiny share of the taxes votes in politicians who promise that the "wealthy will pay their fair share and provide them with free cars and free vacations!".

The usual counter argument is that the rich are "greedy". But who's really being greedy? Every demographic study of "the rich" show that they, on average, work longer hours and take greater risks than the rest of us. Moreover, statistically, those who oppose the welfare state are not much more likely to be rich than those who favor it.  It is an issue of principle, not greed. It is not the federal government's job to decide for us what an acceptable economic living standard is.  Besides that, it seems to me that those who demand free money are the ones who are being greedy --not the ones who are having to pay it.  You can almost imagine the politician saying "These greedy rich folks in their fancy houses and fancy cars think that the rest of us aren't entitled to have a nice car or nice home or a nice vacation! Well they are wrong. It's time for these greedy people to start pulling their own weight and ensuring that the rest of us are entitled to a decent Disney vacation too!"

Honest discussions about taxes rarely happen because the politicians are always so clever about hiding the truth from the average person. You hear things like "A big tax cut for the wealthy!" or "Bush's rich friends got most of the tax cut."  Of course they did because any serious tax cut is going to go to people who...pay taxes. Saying things like "The top 1% are getting 33% of the tax cut!" is like saying "20% of sick days are on a Friday". It's just dishonest politics. 

Moreover, what about the people who call for federal tax increases for things like "more money for education". Huh? The states provide nearly all of the education dollars. The federal government only pays something like 10% of the bill for public schools. And talk about inefficient use of capital - send money to Washington to send it back to go across the street? Duh? When people talk about raising taxes, what they really mean is bringing in more money to pay to other people in the hopes of making them dependents so that they'll keep voting for them.

So next time you hear politicians debate about taxes, tax cuts, the debt, and "entitlements", remember these things: (1) Most federal taxes are simply pay offs to other families. (2) One percent of the population pays a third of those taxes already. (3) Beware of entitlements, in a democracy, the majority of people can vote in any entitlement. And when that majority only pays 4% of the total tax burden, such entitlements are not a matter of IF but rather of WHEN.

32,975 views 56 replies
Reply #1 from JoeUser Forums Top
Whether redistribution is unethical or not all boils down to one question: Why do we even have a government? Sure, everyone agrees that it is needed to keep order and administer justice, ect. but the bottom line is that humans are stronger when united. The government provides a means for the strong to look out for the weak, improving our level of civilization. Looking back on history proves that societies that had great divisions among classes will fail. Helping out a fellow citizen should not be viewed as punishment.
I do agree that our precious tax reavenue is not just used inefficiently, its squandered. The only way to combat this is to elect competent officials with the right priorities, innovative ideas and the guts to fight for change. Elect Statesmen, not buisnessmen turned politicians.
Reply #2 from JoeUser Forums Top
Whether redistribution is unethical or not all boils down to one question: Why do we even have a government? Sure, everyone agrees that it is needed to keep order and administer justice, ect. but the bottom line is that humans are stronger when united. The government provides a means for the strong to look out for the weak, improving our level of civilization. Looking back on history proves that societies that had great divisions among classes will fail. Helping out a fellow citizen should not be viewed as punishment.
I do agree that our precious tax reavenue is not just used inefficiently, its squandered. The only way to combat this is to elect competent officials with the right priorities, innovative ideas and the guts to fight for change. Elect Statesmen, not buisnessmen turned politicians.
Start11 - Customize the Start Menu and Taskbar in Windows 10/11.
Reply #3 from JoeUser Forums Top
Nice article Draginol, and I am sure there aren't many people who would disagree with you that tax dollars are poorly spent. The rich pay a bulk of the taxes. So my question to you is, "What do you propose should be done about it?"
Reply #4 from JoeUser Forums Top
a long article on taxes. oh joy.

by draginol:
=====================
So next time you hear politicians debate about taxes, tax cuts, the debt, and "entitlements", remember these things: (1) Most federal taxes are simply pay offs to other families. (2) One percent of the population pays a third of those taxes already. (3) Beware of entitlements, in a democracy, the majority of people can vote in any entitlement. And when that majority only pays 4% of the total tax burden, such entitlements are not a matter of IF but rather of WHEN.
=====================

if the bottom portion is so dangerous to financial security for the top portion then why has the top tax rates mostly fallen since 1950? it has gone from 91% down to around 40%. it went down to 50% and then to 28% in the 80s and then had an upswing to just under 40% as of 2002(that's as far as the table goes)?

since it's a matter of WHEN and not IF, do you have escape plans to get out of america before the bottom poor half start eating the upper half of the us population? (hmmmmmmmmmmmmmmmmm...adult non-bottom 50% of americans based on income taxes paid...arhgahghghgaghagh)

social security is a regressive tax. so i don't know why that one is counted as being wasteful to the few. welfare, while there is corruption, is shown to on the whole be effective at being a temporary situation for most as they are in between jobs. hence increasing opportunity. since i'm not allowed to pull out the "compassion card", medicare, and medicaid help people live and...uh...they can usually buy stuff since they aren't dropping dead. oh...and...uh...if they don't drop dead, then productivity isn't lost from relatives mourning them and taking a day off work for the funeral. that's all i can think of now.

there was a similar question on taxes in another forum, and this guy posted what i thought was a good (if aggressive) response. to sum up the post: looking only at income tax distorts things. social security, sales, state, and local taxes usually even out the tax burden.

the original post has no links because the guy forgot to put ending brackets on the links. i corrected it so the links show up here. if you want to see them in the original post i linked to, you can most likely right-click and hit view source in your browser at the other site.

posted by Jason McCullough on some other forum:
====================================================
Hah. I'm the go-to guy!

This is often mentioned with a lot of smoke-and-mirrors hand-waving by a.....special kind of conservative. It's usually part of a hysterical argument that the poor are basically using the federal government to hold up the rich for ransom. Since there's more poor people than rich, they'll just democratically steal all the rich people's money! That's why the top half of wage earners pay 96% of the taxes!

Whenever you see a conservative talk about income distribution, you should triple-check their sources. For example, why isn't the amount of *income* earned by the top 50%, 10%, and 5% of earners listed on that page? Why aren't sales and payroll taxes included?

Basically, the top half of earners pay that much because they take in about the same share of national income. The third table shows that the top 50% of earners collect 87% of gross income, while paying 96% of the income taxes. For the top 1%, it's 20% of income, 37% of federal income taxes. The effective federal tax rates for the top 1% are higher, yes, but they're carefully avoiding that particular detail; after all, there's not many people horridly upset that the bottom half, people with an average income of 0-30k, pay 1/4 the federal rate the top 1% of earners (100k+) do.

Basically, the poor don't pay much in the way of federal income taxes, but they make so little anyway that it doesn't distort the effective income tax rates paid by the middle class all that much. An incredibly lower rate for the poor raises the top half's rate by the equivalent of 10 cents on the dollar.

That's for just federal income taxes, though. Although I can't for the life of me find exact numbers, the FICA and sales tax rates on the rich are effectively zero (social security taxes only apply to the first $300k of income or so, and the rich don't spend much of their money on taxable consumption), while for lower middle class and poor payroll taxes are usually much larger than their federal tax bill. As you can see , 46% of those earning under $30,000 a year pay more in payroll than income taxes; the number hits 99% below 10,000. Remember, that's a 7% or so off the top of the paycheck for the poor on all their income, but some guy making a million only pays an effective SS rate of 2% or so.

Sales taxes are extremely regressive too, as you can see in this incidence analysis for Texas.

The incidence of tobacco and alcohol taxes is interesting, but I'm unsure if they should really be included in progressitivity analysis; that gets into an extreme of the "are we taxing behavior or people" debate. If you do include it, the poor pay way, way higher proportions of their income on these than the rich.

In summary: when it comes to income and taxation distribution, conservatives lie. A lot. Especially when they talk about how a flat federal income tax or national sales tax "would be fair"; unless they're planning on revamping all the state & local tax systems too (hah, as if), such a system would be *extremely* regressive as a whole.

Edit: Steve, you owe me a beer for typing this up.
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Reply #5 from JoeUser Forums Top
This is an interesting presentation Brad. I think the government should give each citizen an itemized list at tax time, they could fill out the boxes of all the programs they are willing to support and that will speak volume about what type of government taxation is acceptable to each individual. There is too much waste in Washington, the answer is not raising taxes or punishing the successful, as most Democrats are proposing, the answer is consolidation and restructuring of programs that are full of waste, and rife with corruption. It’s time to reevaluate failed programs from LBJ’s war on poverty that stripped individuals of their pride and potential by giving them a welfare check. I also believe that the individual taxpayer should have the right to opt out of Social Security and invest that money in thier own personal account.
Reply #6 from JoeUser Forums Top
Russell: You've got some selective statistics use there.

Sure, our tax RATE is lower compared to 1950 when they were still near World War II levels. But taxes, as a % of GDP are actually higher.

But the tax RATE isn't the problem anyway, the problem is the concept of taking money from one family to give it to another via coercion.

I noticed that the person you quoted says that "Conservatives, lie a lot" when it comes to tax stats. You did note where I got my stats right? Not from Rush Limbaugh.

One common thing about the left I've noticed is that they try to change the subject when they get uncomfortable. Hence, rather than trying to argue whether it's a good thing or bad thing to transfer money from the economically most productive people to everyone else they try to say "Well, they're not transffering as much as the stats, for if you play around with the numbers enough you'll see that the top 10% are only paying for half the taxes instead of 70%" I mean hell, sales tax? That's a STATE tax for crying out loud. And payroll tax? I noticed that the guy you mentioned seemed to ignore who pays the other half of payroll tax (businesses).

In fact, if someone on the left wants to split hairs about honesty and not mentioning the payroll taxes then they should go the whole way: Demographically, most people in the top 5% of income earners are business owners. And those business owners not only get taxed more but have to pay for half the payroll taxes of their employees. In other words, far from making the liberal argument stronger, bringing in pay roll taxes only makes it worse.
Reply #7 from JoeUser Forums Top
Reply By: Anthony R.:
=============
I think the government should give each citizen an itemized list at tax time, they could fill out the boxes of all the programs they are willing to support and that will speak volume about what type of government taxation is acceptable to each individual.
...
I also believe that the individual taxpayer should have the right to opt out of Social Security and invest that money in thier own personal account.
=============

would this be what they actually pay or just an opinion poll? if it's what they want to pay for this brings up a bad situation: if a hippie votes $0 on the military, he will still get military protection from everyone else paying for it.
...
if someone gets their investment money stolen or lost through a bad investment, are they screwed?


Reply By: Draginol
================
Russell: You've got some selective statistics use there.

Sure, our tax RATE is lower compared to 1950 when they were still near World War II levels. But taxes, as a % of GDP are actually higher.
================

not exactly. Office of Management and Budget., Budget of the United States Government, FY2004. Historical Tables.

the 2002 percent of taxes taken out of gdp is 17.9%. before that in the years 1998-2001 it was higher at ~20% which put it at wwii highs.

(picked 1950 both here and before since it was the next round number after the great depression and wwii years) going back to the 1950 rate of 14.4% and forward to 2002, there are 27 years where the percentage of gdp was at or greater than 17.9%, pretty close to half. to make my argument look better allow me to pull more numbers out to confuse the simple minded: the number of times where the percentage of gdp was below 17% was 4. of course when talking about percentage of gdp, even one percent is a huge amount of money.

to get back to my question: since the lower 90% of voter population outnumbers the upper 10%, how come they have voted to lower the income tax on the upper brackets through the years?

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One common thing about the left I've noticed is that they try to change the subject when they get uncomfortable.
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i am now uncomfortable:

russellmz proceeds to do a skanky britney spears dance number and laser light show to distract people

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Hence, rather than trying to argue whether it's a good thing or bad thing to transfer money from the economically most productive people to everyone else
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your main beef appeared to be with "Social Security + Medicaid + Welfare + Medicare = > 50% of the federal spending" and how the rich pay so much more in income taxes and the bottom 51% will vote the top part into buying everyone disney vacations. so that is what i was arguing with.

russellmz wrote:
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welfare, while there is corruption, is shown to on the whole be effective at being a temporary situation for most as they are in between jobs. hence increasing opportunity. since i'm not allowed to pull out the "compassion card", medicare, and medicaid help people live and...uh...they can usually buy stuff since they aren't dropping dead. oh...and...uh...if they don't drop dead, then productivity isn't lost from relatives mourning them and taking a day off work for the funeral. that's all i can think of now.
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i can understand if you saw my medicare and medicaid response part as jokes, but i did respond about welfare and social security. here, let me be serious about medicare and medicaid: they help people survive. since they are alive, they have greater opportunity to do things than if they were hacking up blood on the street. the earned income credit is relatively successful at helping lower income people. and thus = good.

by draginol:
=================
In fact, if someone on the left wants to split hairs about honesty and not mentioning the payroll taxes then they should go the whole way: Demographically, most people in the top 5% of income earners are business owners. And those business owners not only get taxed more but have to pay for half the payroll taxes of their employees. In other words, far from making the liberal argument stronger, bringing in pay roll taxes only makes it worse.
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does it? i am asking this seriously. there are millions of self-employed and small business owners (mom and pop grocery, etc) and most of them are not in the top 5%. not to mention most big corporations are owned by stockholders, and not all of them are from the top 5%.

do you have a source for what percentage of social security is from the top 5%? also, even though social security taxes are capped, the rich still get social security checks, and they are larger than what most of the bottom population gets (since they made more they paid the top rate) i don't know what percentage of the social security gets sent back to the top 5% (the previous gerneration of top 5%).


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I mean hell, sales tax? That's a STATE tax for crying out loud.
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yes. but it still tends to be regressive. and people do pay, so saying it is a state tax will not make voters go, "ohhhhhhhh, a STATE tax. now i don't mind paying a regressive rate."

basically: i read an article a while back where if you included all taxes, the tax rate was fairly flat for all brackets. per bracket as a whole, not per individual obviously. if you want to lessen the burden on the upper portion of tax payers they are going to have to do several difficult things:

make most taxes at the local, federal, and state at the very least not regressive. (this will be the most difficult since so many different states and cities will be involved)

convince those who are getting opportunity or health care through government programs that they should either give it up or they are morally wrong for taking it.

find a basis for action other than: "even though a lot of taxes are regressive, we should fix the progressive federal income tax first so as to lessen the burden on the wealthy. i personally will save $200,000 on this pla-...hey, why are you guys leaving?"

otherwise expect very, very small rallies in support.
Reply #8 from JoeUser Forums Top
I love the complexity of your tax system!

6 tax bands!!!!!!

Accountants must love it! How much time and effort is wasted every year in the US trying to work out tax. Think of the money that could be saved.

My feelings on this are already clear, but to reiterate, I believe there should be 1 single tax band. Everyone should pay the exact same percentage of tax. If that means that the richest 1% of the population pay 90% of the tax then it's because they earn 90% of the money and is totally fair. I also believe that everyone in the entire country should get equal benefits. If 1 person gets social welfare then everyone should get social welfare. I've done the figures out in other threads but to recap.

Everyone taxed at 50%, 25% of tax on social welfare, everyone get free medical.
20k earner pays 10k tax and gets 20k social welfare => 30k income
300k earner pays 150k tax and gets 20k social welfare => 170k income

Totally fair system because everyone is treated equally. No 0% bands. No allowances. Just equal treatment for everyone.

Paul.
Reply #9 from JoeUser Forums Top
democracy really seems to scare you lately. i wonder why you still want to export it to the Middle East what costs quite a lot of your tax money as well ;)

i have no clue why it scares you so much. just look at your Senate or House of Representatives and you´ll see that every single one of your politicians, wether they call themselves conservative or liberal, comes from the upper 5% or a even smaller group. the ages old concept of divide and rule still works very well. it might get different if poor people get poorer and maybe get a charismatic leader one day. that happened in many European countries during the thirties.
Reply #10 from JoeUser Forums Top
I am a big believer in democracy. I'm not a fan of just giving a say to those who don't pay their share into the treasury getting to have an equal say in how that treasury is spent to those who provide most of it.

Re Sales Tax: sales taxes are at least fair. You spend money, a percent goes to the government. it affects everyone equally. But it's not germane to our discussion on FEDERAL taxes.

Re who make up the top 5%. There are plenty of small business owners who don't make much money. There are also plenty of basketball players who don't make millions of dollars each year.

Re Social Security: It is a pay as you goal system. You are aware of that right?

Re Medicaid and Medicare -- sure they help people live longer. So would round the clock nurse care for people. Where do you want to draw the line?

Re GDP - point being, our taxes are still near historical highs. What I'm saying is that you are playing statistical games which I think is a big disengenous. Why not start arguing where taxes were a century ago? Or two centuries ago when in both cases they were basically nil. You cherry picked numbers that fit your argument.

What you call "regressive" I call fair. I suppose you would argue that the wealthy should pay more for their cable bill and electrical bill?
Reply #11 from JoeUser Forums Top
by draginol:
===========
Re GDP - point being, our taxes are still near historical highs. What I'm saying is that you are playing statistical games which I think is a big disengenous. Why not start arguing where taxes were a century ago? Or two centuries ago when in both cases they were basically nil. You cherry picked numbers that fit your argument.
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i will try and respond to the other points later, but i want to tackle this one right away.

well, how far do you want me to go back? why isn't the last 50 years a long enough time to look at the numbers? i mean, ALL of the last ~50 years is "cherry picking"? the graph only goes back to 1940. if i go back less than 50 years it still supports my argument (unless you only "cherry pick" back to 1998). if i go back to 1940, then the number of times the gdp was greater than 17.9% is 29. but i didn't include the wwii years because that skews the results because of wwii.

i considered 1950 a nice round number an fair starting point since going back earlier puts you into the immediate post-war years, wwii, and before that the great depression (plus, as i mentioned the graph only goes back to 1940). i also considered 1950 to around when america started to "look" like it entered the "modern" age: lots of middle class popping up, a large standing military is considered the norm, the cold war developing, suburbs appeared, pizza was finally gaining popularity, new technology, tvs replacing radio, kitchen appliances are becoming common, etc.

before the us' entry into wwii, the tax percent of gdp was in single digits. but something tells me that those years are gone forever given the vast changes to american society. if i were to find make a listing of military expenditures as percent of gdp and went back to the 1700s when most of the military was composed of local militias, bemoaning how it increased so drastically people would laugh in my face for including time periods that bear little relevance to the modern era. if i went back to the 20s (or 30s i forget) when the army had something like 100,000 men and almost no budget for tanks while nazi germany was arming itself like a madman, people would STILL laugh in my face. if i included wwii people would laugh in my face yet again since paying to fight a world war would skew the results for military expenditure. a century ago, there wasn't even an income tax! do you think this data has any relevance to modern times?

i like to think i was being more than fair in giving the devil his due when i wrote out my argument.

i mean, i freaking WROTE that taxes as percent of gdp were at wwii levels. i linked to the freaking data. i started the year off at where the percent of gdp was at the lowest point since 1943 ((and partially explained my reasoning)). if i started it off at 1944 where it was at record highs i think you'd say i was padding the numbers to make my argument since it is so much higher than the rate of 2002. but i didn't because 1944 was wwii and circumstances thus skewed the data.

you could argue the part where i mention the confusing the simple minded was cherry picking since there is no reason to say why 17% has any importance as a % rate, but i meant that as a joke, hence the use of "confuse the simple minded".

posted by me:
================
not exactly. Office of Management and Budget., Budget of the United States Government, FY2004. Historical Tables.

the 2002 percent of taxes taken out of gdp is 17.9%. before that in the years 1998-2001 it was higher at ~20% which put it at wwii levels. ((picked 1950 both here and before since it was the next round number after the great depression and wwii years)) going back to the 1950 rate of 14.4% and forward to 2002, there are 27 years where the percentage of gdp was at or greater than 17.9%, pretty close to half. to make my argument look better allow me to pull more numbers out to confuse the simple minded: the number of times where the percentage of gdp was below 17% was 4. of course when talking about percentage of gdp, even one percent is a huge amount of money.
====================
Reply #12 from JoeUser Forums Top
Re cherry picking:

Well for starters, you COULD pick a date that was PRIOR to the existence of the redistribution programs: Social security, medicaid, medicare. That would be a nice start.

By cherry picking, I mean you literaly pick dates that all take place during the period that the issues I am lambasting exist. Most of American history existed without redistribution of wealth.

Is the federal government really doing that much more today for the average citizen to justify so much?
Reply #13 from JoeUser Forums Top
BTW, if you look at page 6 of that report, the trend on taxes is pretty clear. The current economic down turn may be bringing us "respite" (so those "rich folks" aren't making as much money and hence not as much money to tax) but the tax trend is pretty obvious.
Reply #14 from JoeUser Forums Top
"One common thing about the left I've noticed is that they try to change the subject when they get uncomfortable."--Draginol

Yes, and we all *know* that people on the right are *never* guilty of this. Draginol, when you say things like that you undermine your own posistion.
Reply #15 from JoeUser Forums Top
People on the right do it too. But having debated for many years on the net, re-direction is a favorite tactic of the left.

Right wingers have their own obnoxious habits. ;)
Reply #16 from JoeUser Forums Top
I feel uncomfortable and would like to change the subject, and I'm not even sure if I am right or left ;)

I, personally, don't like the fact that individually, neither I nor my husband would be in the tax bracket that we are, but since we are married, our combined income bumps us up. I think that the government shouldn't penalize married people by raising your tax bracket like that. I guess we could get divorced, I'll own the house and he can have full custody of the kid. I'm sure that we would pay less in taxes. ;)
Reply #17 from JoeUser Forums Top
oh great, the joys of discussing social security.


Reply By: Draginol
========================
In fact, if someone on the left wants to split hairs about honesty and not mentioning the payroll taxes then they should go the whole way: Demographically, most people in the top 5% of income earners are business owners. And those business owners not only get taxed more but have to pay for half the payroll taxes of their employees. In other words, far from making the liberal argument stronger, bringing in pay roll taxes only makes it worse.
========================


usa today sez:
==================
Four of five taxpayers now pay more in payroll taxes than income taxes. They don't necessarily realize it because half the payroll tax is paid by employers. That share of the tax falls on workers, too, in the form of reduced compensation, most economists agree.
==================

how can they say this? well, some crazy communist pinko hippie economist sez*: source:
========================
According to the government, payroll taxes for Social Security and Medicare are “paid equally by both employees and employers,” with each paying 7.65 percent.36 While that may be true for accounting purposes, economist Walter Williams explains how it really works:
[Y]ou probably already believe…that your employer pays half your Social Security. This lie may be demonstrated by pretending that you’re my boss. We agree to a wage of $7.00 an hour. You deduct 50 cents an hour as my Social Security contribution and add 50 cents as the “employer contribution,” ; making your cost to hire me $7.50 an hour. My question is: If it costs you $7.50 to hire me, what is my minimum hourly output for you to keep me on the job and stay in business? If you said $7.50 an hour, go to the head of the class, because you also know who pays all of the Social Security tax. The worker does.37*
========================

* source 37 : Walter Williams, “Medical Benefit Fact and Fiction,” Washington Times, Nov. 27, 1989, p. F3. i looked up the name "walter williams economist" and it turns out he's apparently a conservative writer (one example title result in google: "TownHall.com: Conservative Columnists: Walter Williams").


some website:
------------
According to the Social Security Administration, Social Security is a mixed or partially-funded system, with elements of both a pay-as-you-go and a fully-funded approach:

"Since 1983, the program has operated under a "partial reserve" method of funding. The intent is to have the system take in more than it pays out in order to build up the large reserve funds needed to help pay for the benefits of an increasing number of retired workers."
------------

could you elaborate on why whether social security is pay as you go is important?


Reply By: Draginol
===============
Re cherry picking:

Well for starters, you COULD pick a date that was PRIOR to the existence of the redistribution programs: Social security, medicaid, medicare. That would be a nice start.
===============

actually, i currently CAN'T because i couldn't find any data data/graphs/tables of gdp versus taxes going back before the great depression. social security was signed in the mid 1930s. medicare and medicaid was in the 60s. the income tax amendment was signed in 1913. the farthest i ever saw was 1929: the period of time guys were jumping out of skyscraper windows as their fortunes were being wiped out at the start of the great depression.

for the record, during the great depression, federal tax reciepts vs gdp was really really low. for some reason, economists, government officials, and private tax policy analyst places don't very often include taxes vs gdp going back to the 1900 in their data. if anyone can find the data they can post a link, along with any maps they include of europe with the ottoman and austro-hungarian empires...


Reply By: Draginol
=====================
BTW, if you look at page 6 of that report, the trend on taxes is pretty clear. The current economic down turn may be bringing us "respite" (so those "rich folks" aren't making as much money and hence not as much money to tax) but the tax trend is pretty obvious.
=====================

not so fast. while reading up on all this, i found out that tax income from capital gains tax is counted, but gdp doesn't include capital gains.

source:
==================
Moreover, measuring tax burdens as a percentage of GDP can be misleading, because GDP does not include capital gains income. The taxes paid on capital gains income are counted as part of total tax collections, but the capital gains income is not counted as part of GDP. In other words, the taxes are counted, but the income on which the taxes are paid is not. This means that when capital gains income and capital gains tax collections both rise sharply, as has occurred in recent years, tax burdens rise when measured as a percentage of GDP more rapidly than tax burdens are, in fact, increasing. With capital gains income now playing a major role in increasing federal revenues, this distortion in the measure of tax burdens as a percentage of GDP has taken on added importance.
==================

so during that nice big hump in '98-01, capital gains income was getting pumped up like a motherf--- but the gdp does not reflect that at all.

before i leave: how come the tax rates for the top brackets generally decrease over the years, even though the bottom 90% could have voted themselves free stuff any time?

more lies, damned lies, and statistics to come. don't all jump up and cheer at once.
Reply #18 from JoeUser Forums Top
hey draginol,

i read in another comment portion you tweaked author scores a bit. did you do the same for blog sites too? i compulsively check my blog site rank and i used to be 7th or something earlier today and now i am getting beat down by a site whose last article was over 3 weeks ago.
Reply #19 from JoeUser Forums Top
==========================
before the us' entry into wwii, the tax percent of gdp was in single digits. but something tells me that those years are gone forever given the vast changes to american society.
===========================

Vast changes such as the great society and the ever-increasing amount of social security payouts.

Prior to WWII wasn't most US tax income from tariffs?

Re: Solitair's system:

You do have a 0% tax band, retirees and non-workers. The brilliant part of the welfare spending is that it is a percentage instead of a fixed amount.
Reply #20 from JoeUser Forums Top
Reply By: Madine
=================
Vast changes such as the great society and the ever-increasing amount of social security payouts.
=================

right. (although the great society was in the 60s) and other such minor events as the great depression, wwii, rural electification, the cold war, nuclear weapons, the rise of a large standing military, the fall of isolationism, entangling allianes, women in the workplace, the civil rights movement, vietnam, the rising use of computers, tv, interstate highways, the development of suburbs, the internet, and the rises and falls of communism and the agriculture, manufacturing, and information industries, and 9/11. those things did some mild changes to american society. otherwise, america in 1913 is about the same as america in 2003.

tax income
taxes as percent of gdp since 1929: i listed this above. on the graph it's kinda hard to see, but "other" makes up a fairly large chunk in '29 then goes up and down. "peaked in the mid-1940s and have been in a similar steady decline." according to them: "Other federal taxes as a percentage of GDP—including federal estate and gift taxes and customs duties".

at least i found out why draginol is so set on finding dates before 1935. only showed up on the comments page:



if img doesn't show up click here

Reply #21 from JoeUser Forums Top
Madine,
my system doesn't have a 0% rating. It may have people who are not earning money and therefore not paying tax, but any money they do earn is taxed. The system is designed that the social welfare is also the pension, is also the child allowance, is also the tax credit. Very simple, but when you do the figures it actually works well. The precise tax rate, amount to be returned in social wefare, spending priorities, etc would all need to be tweaked depending on the wishes of the electorate. As everyone pays tax at the same level, there are no loopholes to exploit, no accounting tricks, no exemptions. A fair few accountants may be out of jobs though!

Paul.
Reply #22 from JoeUser Forums Top
"Reply By: russellmz2 Posted: Tuesday, October 28, 2003

hey draginol,

i read in another comment portion you tweaked author scores a bit. did you do the same for blog sites too? i compulsively check my blog site rank and i used to be 7th or something earlier today and now i am getting beat down by a site whose last article was over 3 weeks ago."

Brad has *very* little to do with the coding of the site. If you look at your site stats (not yours, but your sites) you will see that there is a total number of points and points for the last 30 days. the site standings are based on the last 30 days. When they made that change, I reacted the same way because I went from 10th to 2nd, but it was all due to a code change. The site point system is still being tweaked for fairness, so you may see it shift again before it's finalized.

Reply #23 from JoeUser Forums Top
ok, thanks for the info! happily, i am now just edging out the three weeks no update site :D
Reply #24 from JoeUser Forums Top
Anthony you call that a tax, , some day when I am not so tired I will put in our tax rates for then you will see what tax is my friend, (no this is not a competition), in our fair country it is the middle income people who pay a majority of taxs, so in some ways I do understand what you are saying. Our top rate is 48.7% which kicks in at 60k, however with the Australian tax system, the more you earn the more deductions you get, people who are on average income don't get the tax breaks, however they get free education, health dental and the list goes on. Interestingly though when you compare they graph on expenditure 50% on social services is identical to what Australia spends Sadly much of these services go to people who do not need the services, eg. people on high income using free education and health services, this is where the costs go up.

Sadly people will always exploit these things , thus denying those how do need these services, and therefore costing more for the rest of us.
Reply #25 from JoeUser Forums Top
You know what would solve this problem, wait for it, get rid of money , think about it do we really need money with the technologies we have today, no, it is a very outdated way of exchange. The reality is there is no reason to have this sought of system any more, and no I am not suggesting some form of communism, this is and always was a flawed concept based on forcing people to do the bidding of a small group how believed they new best. What I am saying is there are better ways to do things in a modern world, and yet we never even discuss these options, because of the blinkered view of the world in general or maybe its just that most areas of discussion that exist around this generally could only happen in the media, which is also owned by the wealthy few. Pushing it up hill with a pointy stick. Oh well it was a nice thought. I should say may countries, or at least communities do not use money as a form of exchange.