Draginol Draginol

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

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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.

32,976 views 56 replies
Reply #26 from JoeUser Forums Top
Great article. I was looking for some info on what the tax rates were and how the $$ is spent. I have to say though that is sad that opinions on the tax issue are devided by economic lines. It is obvious that those who make $400K a year feel that they are paying too much while the person who makes $12K sees it just. I think there is a small element of greed on this. Yes we don't all get the same benefits. taxes are used to raise revenue. Just because a person who makes 12K gets benefits that the 400K person doesn't can not constitute injustice. In the end the law of the numbers apply just like on insurance. The more at risk you are the more you pay. In the case of taxes the more you make the more you pay. It seems only fair that someone struggling with $5.50 p/h gets benefited from the taxes that , I for instance pay ( $10,000 a year btw). Yes, I totally agree that the tax rate is excessive . I'd also like my tax money to be better managed ( bigger and stronger military, better access to healthcare for some, Education etc ..) but I think there is a "whine" factor involved here. You make 400K you are wealthy. You pay more ( 14 times I think is very excessive) but that means that you keep 271K . That is 245K more than the average Joe. Sorry..thats the price you pay and I'd love to be the guy who keeps 271K out of 400K and not 40K out of 50K. I m assuming part of what makes the US population more affluent than most of the countries is that distribution of wealth. Without it then 50% of the population wouldn't be able to afford the basic needs...Just an opinion. Please enlighten me if u disagree.

Thanks
Reply #27 from JoeUser Forums Top
20/20 is on doing a show on myths and misconceptions.

One of the myths is that the rich don't pay much in taxes.

Reality check: The top 5% pay 53% of the taxes.

The bottom 95% of the population only pays 47% of federal taxes.
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Reply #28 from JoeUser Forums Top
I've tried following the logic and statistics posted on this site and realize the issues are important for understanding both the structure and the philosophical basis of taxation..... I will admit that the numbers and comparisons of % of GDP through time
are confusing to me. I am not an economist and have had a humble education. That being said I would like to comment on the philosophical side of the discussion with a real world illustration of how this unethical redistribution of wealth has affected my
family. A little background. I am Native American, my mother's father was fullblood Lakota but somehow not tracable to any Tribal
Roll. What that means is that even though it is apparent I and my family are Native American , I am not recognized as belonging to that Tribe, or any other. My maternal grandmother was Cherokee, but we can not trace that either. There are political underpinnings for how and why this occurs and is more common than most people think, but that is a different discussion. I mention this as I am sure everyone's ears perked up when I said I am Native. The point being is that I personally have NEVER received a dime or encountered an advatage (ie: preference in education or employment) for being Native. Wanted to get that out of the way, before everyones head exploded. Perhaps you wonder why I bring this up in the first place, what is the relevance? It is a partial basis to an explanation I will build.

To continue with this embarrassing narative my grandfather was ashamed of being an Indian so he told people he was Hawian back in the 1920's (he was born around 1908) and made his living early in life as a Hawaian musician on a carny circuit were he met his Cherokee wife, my grandmother Hazel Hicks a Hawian dancer (hootchie coo) on the carnival circuit. Yes those are my humble roots, I come from carny folk. (I can see ya'll smirkin') Sometime downline (probably as children came their way) they settled in various places, Lawrence Kansas to work at the Maytag plant assembling washing machines and eventually to Indianpolis Indiana to get employment at the General Motors plant. My grandmother told us stories that she heard when young about her people getting kicked out of the Carolinas and then again being evacuated from Oklahoma ( the desolate place the federal government relocated the Cherokees to) when oil was discovered (intelligent people then realized that the worthless land was too good for dislocated Indians) there is a whole history of land swindles and manifest destiny used as method and justification. Anyway I'm sure you're wondering what's the point, and I still ask for your patience. Grandfather too had his issues with being Indian as evidenced by being Hawian---- the result being he became
a very violent and abusive man---and though hard working---literally terrorized his family (my mother and siblings). Having this background my mother married an equally abusive man(my father) (as those things go, attempts to resolve childhood conflicts) who in turn terrorized his family (me and my sisters). My father had his own horror show of an upbringing and it was a perfect match to replay old scripts. I want you to know that my father worked extremely hard as a Union carpenter, was a veteran of the Korean war, and sent us to a Catholic grade school, but underneath the middleclass veneer of normalacy he was absolutely brutal
with his family in private. Blood on the kitchen floor was a weekly occurrence.Yeah I know, boo hoo, get over it. Again I hear a greek chorus of questioning relevancy. Well we're getting closer to the point, but I will ask one more indulgence of the readers
and ask them to consider the timeline of my narrative. The Black Hills were ceeded to the Lakotas (my grandfathers tribe) in
various Treaties back in the 1860's (yes I hear the groans of protest at yet another digression) and with glowing terms of rehtoric
were promised to stand as formal declarations and contracts with the Great White Brother and His people. Then Custer found
GOLD in them thar hills, and we all know what ensued, ya'll took the Black Hills. Again manifest destiny was the phlosophical
underpinning to the theft. And even though the resources of that theft could have ultimately made a difference in the succeeding
generations of the lawful owners of that property, the material resources WERE NOT what the LAKOTAS cared about. They were concerned with the cosmology and spiritual ramifications of the loss, as the Black Hills were central to their spiritual identity and considered Sacred Land and the center of the Universe. I feel a collective figurative smirk again in the readers concluding again the wisdom of their forbearers and agents in antiquity and concurring with the assessment that the dumb Natives didn't deserve a resource if they didn't understand its value as a commodity of exchange.

Again what is the point of this ancient history.

Well one point is, it is *not* so ancient. To those of you who think Vietnam is ancient, you will not understand, but to others in midlife, as I am, a span of 50 years is not so long.

And partial to my developing point is that the ramifications of these policys are still being played out in real peoples lives in direct generational legacys of disfunction and/or inclusion or alienation to the processes that enable one to accrue wealth.

These events I ask you to recall happened within 4 generations of my families history, ie: my great grandparents. Consider that also as you observe the Hip Hop culture of African slave decendants. Consider the generational legacy of grandparents facing
poll taxes in the south and colored drinking fountains in the 1940's. Consider at least some of these things when you see young black men selling drugs or belonging to gangs. How well would you be handling an upbringing of desperation and violence, a lack of education, being void of successful modeling, as a way of life?

Slavery and the civil war all played out in the same time frame of being 4 generations ago back in the 1860's.

I know we all want to believe that the American society provides an even playing field and all citzens have as good a chance as others, and there are examples of people risng above their circumstances but not nearly as often as people think.

OK, so here goes. These are two examples of how the wealth of the nation was created, two pinacles of foundation of collective prosperity, slavery and theft. Slavery and theft enforced and directed by the Government to take from the disenfranchised to give to those who had the political power and the provenance of law to enable the theft.

Laws are made by an aliance of the elite to enable them to control the processess that garner more fortune. Its still happening.

I've read the reports on Iraqi oil contracts being 40 year leases with garuateed right of renewal. Didn't George Bush just pass a capital gains tax? That must be nice for all you folks that have the luxury of having investments. I can't afford to pay my rent from month to month.
I see you all are concerned here that you are paying way too much and we the common people are Enslaving You by asking
you to pay for way too much. Things like medicare and social security being a redistribution of wealth and a theft of the top tier
of tax payers.

My mother went blind in the early 90's and yes we relied on certain medicaid and social programs to help her.
What would you have me do, put her out in the snow? I mean this *blindness thing* really *did* make her become unproductive and
therefore a burden.

Perhaps you think I should be more industrious so I could afford all of her up keep myself? Most people with my background either become crimnals or deranged. I so far have tried to keep myself from becoming a burden to society or an abuser, but frankly, as a result of my personal legacy, the violence in my formative years, I struggle with mental health.

My point in all of this embarrassing narrative is that the sons and daughters of fortune are receiving a legacy of Inherent Advantage , and that our system of government was designed to enable, enforce and perpetuate that priviledge.
Who are our law makers and how do we choose them.? George Bush, Ken Lay, John Kerry et. al.

As John Fogarty sang :" it aint me, it ain't me, I ain't no Senators son, I ain't no fortunate one."

If there are segments in our society that find themselves in the fortunate position to be of the Patrician Class, it would be my guess they did not arrive there completely on their own merits. There were the institutions of society and capital and all of the attendent advantage that brings, in having far greater choice and *oppotunity being made available* to those in the now fortunate position of being able to complain.

I believe they do have a social contract to help people less fortunate than themselves, in matters of health and to meet certain basic human needs.

Although that Disney Vacation line is a real cute analogy for the greed of the great common unwashed (all of those people that don't drive SUVs) and do have to *often decide* * between food, housing and health*. For instance I need medical attention right now but I can not afford it, so I do not go.

The taxess being represented as philosophical theft are used for other things too, like enacting fair housing and labor law,
preventing predatory lending and discrimination.

For the current fortunate generation to now complain about social security is being far too enamoured with your own worth and contribution to society in general. As if you arrived in a frontier and barehandledly forged the whole deal. We are living on the backs of our forefathers, for good or ill.

How dare these parasites take money from me to help fund their old age, what will they expect me to do or help pay for next,
their heat? Yeah thats a Real Disney Vacation to Many retirees deciding if they can splurge and turn up their heat a few degrees.

Besides at a certain level you need the common everyday folk to buy your consumer goods and fight your wars.

I guess some will cry foul that I am arguing on the concept of class and that it is very un-American to do so, but I will remind you that class distinction is totally American, it is what we are told is possible and it is what we all aspire to, the upward mobility and security of wealth. It is just the talking of it, even whiperings of class division, that is taboo.

And if the argument bothers you , you can also dismiss it at its source, as being the ramblings of an under educated dumb Indian.


Reply #29 from JoeUser Forums Top
This was the best post I've ever red.
Give it up for the dumb indians!

Peace

/Foolish Norse
Reply #30 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. 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).


One thing I've long advocated for wage reform is making all corporate benefits and contributions to their employees (wages, health care, IRA's, etc) 100% tax deductible. Corporate welfare? Not at all, but rather, common sense. For one thing, when the corporation pays taxes, then pays the employee, that's double taxation, which makes no sense. For another, obviously with the benefit of tax deduction, employee salaries and benefits would increase. I have yet to work for ONE employer who wouldn't like to pay their employees more without it affecting their bottom line (but in a consumer based economy, your wages must remain low to accomplish return on shareholder equity [or your stocks tank which is good for NOONE], and to still provide affordable products/services for your customer (or they don't buy your product; again good for noone).
Reply #31 from JoeUser Forums Top

Draginol - Great article.

Russellmz - that is a whole lot of very long rambling. I would feel honored that Brad spent time actually sifting through all that.

Reply #32 from JoeUser Forums Top
20/20 is on doing a show on myths and misconceptions.One of the myths is that the rich don't pay much in taxes. Reality check: The top 5% pay 53% of the taxes. The bottom 95% of the population only pays 47% of federal taxes.


What I find interesting, is that despite these huge increases in the proportion of taxes [if not the actual total] paid by the top 20%, this richest one-fifth of the population is basically the only ones with any gain in household income since 1975, according to the CIA world factbook. They are growing richer, the middle class is stagnating, and the poor are fading. I'd like to see someone come up with a unified hypothesis that made sense, for this strange phenomena. Is it because while the proportion paid by the rich has increased, their total taxes [relative to their entire wealth] has decreased, and that taxes as a percentage of GDP has decreased over this period?

Link

JW
Reply #33 from JoeUser Forums Top
Brad,

Sorry about coming in here with a TOTALLY irrelevent question, but i really didn't have any other idea on how to reach you or the relevent people. I have tried to create a new article and an "you are not authorised to access this page" warning shows up. Could you please let me know if this is just a clich and how to fix it or if there is some other reason that i should be aware of.

Sorry for the inconvenience and the barging into a forum thread. (Should I have asked this in the Bug report section of the forum?)

Marco
Reply #34 from JoeUser Forums Top
Oh, one other question I had. You refer to federal taxes, and make the statement that the top 1% pay 1/3 of the total federal taxes. But your chart says "income" taxes. Are there other sources of federal income (i.e. corporate taxes, dividend payments)? And how much "income" comes to the wealthy through sources other than "income", i.e. dividends, etc.?
Reply #35 from JoeUser Forums Top
Welcome to the world of Objectivism! Ayn Rand would be proud!

It's a fundamental principle of freedom that you can't be just a little bit free just like you can't be a little pregnant. You either are or you are not.

Any society where the majority can vote to take away the freedoms of the individual is an evil society. Our society simply has hidden this, much like Hitler did in WWII. Hitler said (originally before the whole chosen race crap) that the Jews were evil because they didn't let anyone else have a chance and thus had to be limited so that "orginary Germans" could have a chance. Translated that means "Jews are too hard working and too successfull. We have to stop them so that us lazy people get what they have."

And now we have the same thing in the Western world, it just happens to be in all of the "free" nations.

Democracies (and Republics in the case of the US) believing that they have the right to limit the freedom of individuals for the "greater good". No matter why a society limits freedom, it is evil by defintion (civilized people of course enter into an agreement to be part of a society where they will do no physical harm to another, on the understanding that the others won't do harm to them). What the socialists (i.e. almost all of the politicians) are saying now is "The rich should feel obligated to give their money to society because they have lots and it's the only way that us poor people are going to get a chance!" Translated: "Those damn rich people are too hard working and too successfull! We have to stop/leach from them so that us lazy people get what they have."

The only difference between WWII and now, is that the killing hasn't started.... unless you consider that the rich are killing themselves to become rich, so that others can prosper, as killing.... (which, since the intent is the same, I do.) Instead of gas chambers, we're now using peer pressure, TV ads, and a socialist policy the likes of which haven't been so powerfully used since the height of the Roman Catholic church.
Reply #36 from JoeUser Forums Top

Jay: The freer the market, the greater the relative distance between rich and poor.

Think of it like a race. If one guy runs faster than another, then over time, the distance between them will become greater.

The question is, is this good? It's not an easy question to answer because while the distance between rich and poor may grow, the standard of living for the poor improved.

Reply #37 from JoeUser Forums Top
Notsohighlyevolved: I ran into that too today.  I logged out and logged back in and closed by browser and I was fine.
Reply #38 from JoeUser Forums Top
Thanks Draginol. I'll give that a try.

Marco
Reply #39 from JoeUser Forums Top
As a matter of interest,

if the top 1% of tax payers pay 34% of the tax, what percentage of the income do they earn?

likewise

if the top 5% of tax payers pay 50% of the tax, what percentage of the income do they earn?

These are important questions as they will indicate how balanced or unbalanced the system really is. I hope that fraction of tax paid to roughly equal fraction of income received. Total income, not just taxable income.

Does anybody know?

Paul.
Reply #40 from JoeUser Forums Top
because while the distance between rich and poor may grow, the standard of living for the poor improved.


I don't believe this is the case. I think the standard of living for the poor has fallen; certainly the articles I recall reading suggested that the bottom two quintiles are getting poorer.

Yes, if the rich get relatively richer to the poor, but the poor get absolutely better off than they were before, it's hard to argue that things aren't generally moving in the right direction. But this isn't the case.

Except for those concerned only about their own lavish situation, it's hard to have a heart and be unconcerned when a fair proportion of the population grows poorer. It brings about memories of Scrooge in a Christmas Carol - “Are there no prisons? And Union workhouses?” - Charles Dickens
Reply #41 from JoeUser Forums Top
As a matter of interest,if the top 1% of tax payers pay 34% of the tax, what percentage of the income do they earn?likewiseif the top 5% of tax payers pay 50% of the tax, what percentage of the income do they earn?These are important questions as they will indicate how balanced or unbalanced the system really is. I hope that fraction of tax paid to roughly equal fraction of income received. Total income, not just taxable income.Does anybody know?


There's a chart at http://www.faireconomy.org/research/wealth_charts.html that shows that the bottom 50% of Americans owned 2.8% of the wealth in 2001. So it would seem that them paying 4% of the taxes is actually MORE than their "fair" share.

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.

Handled by the state and local governements, sure- but how many of these programs are paid for, in whole or in part, by (wait for it )... FEDERAL grants?
I don't believe this is the case. I think the standard of living for the poor has fallen....


Not entirely. My own informal survey turned up an interesting fact: with the vast improvements that have marked the cardboard box industry, the homeless are now able to build their shanties out of materials that are vastly more waterproof and durable than they were, say, just a few years ago.
Reply #42 from JoeUser Forums Top
Emoticon Man,

that's funny - improvement in the cardboard boxes they live in! But important to them too! Republicans are all too happy that these folks don't vote, I think.
Reply #43 from JoeUser Forums Top
littlewhip

Traditionally the purpose of democracy is to prevent tyranny (the accumulation of too much authority in the hands of one or a few). That is, democracy is not necessarily intended to give us "good" government, but to put some limits to the abuse of power, and to ensure that any bad government can be deposed and replaced peacefully.

Nonetheless, many people think that there is no system that can ideally order society and that democracy is not morally ideal.

Link

I'm more of Winston Churchill's view of the whole thing ...

"Dmocracy is the worst form of government except for all those others that have been tried."


Reply #44 from JoeUser Forums Top
vote for people who want change - not for the bastards who like this arrangement. Its a good start.
Reply #45 from JoeUser Forums Top
What is equally dangerous is the lower income people, who pay no taxes, vote for the "punish the rich politicians" . Soon enough they will be a majority with a common goal. Make the rich pay for it all. Its time for a flat tax or VAT. Anything is better than this mess.
Reply #46 from JoeUser Forums Top
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.
It is has been pointed out time and time again that employers' matching funds are directly attributed to lower wages, and currently, wages suffer because of the stratospheric rise in employers' share of health insurance. Your stats are beautiful but they don't tell the whole story. Your gripe should be with the big guys who evade taxes completely or with convoluted tax shelters. The blame should also go to an inefficient IRS. Notwithstanding, your article is powerful.
Reply #47 from JoeUser Forums Top
By the last few posts I think I must have missed the point of the Article because I thought it was saying WHY should THE RICH pay for the POOR. But maybe thats because I'm a full time student who has to work my ass off to make enough money to pay for my schooling because I don't get hand outs!
Reply #48 from JoeUser Forums Top
Jay Walker,
I don't know where you live but I think my city if not my state is run by those in their cardboard boxes.
Reply #49 from JoeUser Forums Top
the only choices are "interesting" or "insightful"??? wheres the 'retarded' button!?

of course the tax system is not designed to be "fair" in a 'i make twice as much, i should pay twice as much' way.
The point is that, if you take the income, and then SUBTRACT all the money people need to buy in order to live (lets call that number the net gain)
then you tax THAT amount.
(not that the government actually does this. implementation is too difficult. instead they simulate it with a graduated system on a curve.)

for a person near poverty, that value is close to zero.
for a person making 400, 000 $ per year, that number is... about 400,000 $. (ok, ill be generous and say that the actual required expenses for a person in a professional position like that are significantly higher. say double or triple. have to pay for buisiness suits and the like. we'll also include the money their parents spent on them for an education, since it's likely they will do the same for their children. but average it over 30 years, you end up with maybe 6000 a year for two kids at good schools).
so for this hypothetical rich person, the net gain per year is close to 300,000 $.
now, we compute what the ratio between his net gain and the poor guy's gain....
oops. whats a "DIV BY ZERO ERROR"?


'all talk of compassion and social justice aside'?
why certainly, lets argue from THAT position.
its almost the same as your opposition starting an argument with 'all talk about economics aside'.
the government isnt intended primarily to create opportunities for people.
the government is there almost entirely to protect people from other people.
this includes providing for a common defense.
it includes criminal prevention and law enforcement.
the fact that its a *democracy* (ok, partly a republic) means that it is also there to promote the common good.
of course, youre right, if we eliminate the ideas of compassion, and of social justice, then many of the governments programs are pretty senseless.
so is our governmental system.

"Rather than allow concerned volunteers to help their fellow man, we instead pay far away bureaucrats to administer money confiscated from the citizenry"
really? religious organizations are prohibited from aiding their fellow men?
Someone should really reform that law!
youre statement is blatantly false, though admittedly only by a few important words.
'Rather than' tells us that the two methods of helping people are mutually exclusive.
dont be ridiculous, any intelligent person can see that the churches help people.
the reason they cant be allowed to be the ONLY way to get help is because they give strong preference to
people of their own religion/denomination/church, and the US was founded on an idea of religious freedoms -
that people should not be forced to select a religion based on other factors than belief.


"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."
dont be absurd. its not a slope, its a curve.
if youve had economics (which i assume you have. several of your misconceptions seem the sort encouraged in college econ classes.)
hardly anybody believes that there should be complete income redistribution (that's called communism).
theres a slope to slide on, but it doesnt just keep going down.
besides, we've already slid down it, now we're near an equilibrium value.
(had any chemistry or physics? the concept would be simpler if you have. basically, theres some value above which a greater number
of people would consider to be too high. so the votes push taxation percentage toward some particular value, not toward 100%.)

i will agree with you that characterizing the rich as 'greedy' is certainly a gross overgeneralization, and probably mostly unfair.
"Every demographic study of "the rich" show that they, on average, work longer hours and take greater risks than the rest of us"
this is true. the words 'on average' make it so.
the rich do that so they can have extra money. you'll notice that they still do it, even though they have half as much extra money as they would have under a lighter tax system.
after a certain point, money isnt the reason to work anymore (for most, not all, clearly.)

"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. "
also, i will agree with you on both these points.
however, your charge of 'dishonest politics' is meaningless.
because of the heavy swing of the uneducated and thoughtless in elections (and i dont only include the poor there. not everyone who goes to college comes out educated),
politicians force each other to make promises they cant keep, and to promote ideas that arent true.

"And talk about inefficient use of capital - send money to Washington to send it back to go across the street?"
huh?
the physical location of a use of funding is completely and utterly unrelated to its efficiency.

now for your closing remarks.
(1) Most federal taxes are simply pay offs to other families.
the word 'pay-off' is used to refer to an unclean transaction, usually intended to prevent the recipient from doing something.
the proceeds from taxes are not used to 'pay off' families.
now, if you just meant the literal words, that yeah. taxes are paid off to other families.
you win the smart prize.

(2) One percent of the population pays a third of those taxes already.
yup! and hey, do you think they still might have the most money afterward, too?

(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.
Oh please.
Of course, the poorest group of people will always want more money, and of course they will always ask for it.
but dont insult everyone by pretending that the enormous middle class will always back them up on it!

Your points are NOT new.
Your thoughts on the matter have been said before, by more intelligent people capable of making better points,
writing articles and speeches that are NOT based on numbers games and red herring techniques .
You need a new title. You never, at ANY point, addressed the ethics of this topic.
Your arguments are based on the idea of 'fairness', which isn't really an ethics concept, so much as a child's vision of the way life ought to be.
Your post is inflammatory, and has no aim - you speak not to convince, or to explain, but only because saying the words again makes them feel more true to you.
Your 'evidence' is so flimsy and unsupported (not to mention in large part incorrectly interpreted) that you have no base on which to make most of your claims.
Frankly, i wish we could have a real formal debate.
I would love to cross-examine you.
Reply #50 from JoeUser Forums Top
I retract one of my claims:
your evidence is not unsupported, or terribly flimsy - there is a lot of evidence for either position on most of these points.
(as is evidenced by many of the above posts)

also, i failed to realize that your post may have been aimed at sparking a debate, in which case i also apologize for my comment that your post has no aim.
and the word 'inflammatory' becomes kind of a compliment.