A word about redistribution of wealth

"One question though are you saying that in the end the middle class pay less taxes on a percentage basis than the rich?"

I didnt say it, the data did. You having trouble reading?

Sorry you are right, my mistake. the income of the middle class has GONE DOWN. Please see table on the first page. There is your transfer


are you braindead? If someone's paycheck goes down, that doesn't mean that the money has to go somewhere else or that someone else took it.

Middle class incomes have not gone down on an absolute basis, ever. Pure bullshit to say otherwise. If you want to claim they have gone down on a percentage basis, it just illustrates my argument and the fallacy of your thinking.


Once again I'm not talking about the poor, im talking about middle class ,working, tax paying people.

it doesn't matter, argument is wrong either way

 

You need to stop fixating on the Federal income tax. 'Total tax burden' is the salient issue here.

 

You need to stop fixating on the Federal income tax. 'Total tax burden' is the salient issue here.



if you wish to play that game, then you must also include capital gains taxes along with payroll. That weakens the liberal case even further

 

FINALLY someone understands the word burden.

Between income taxes at the federal and state level, payroll taxes (double 'em if your self employed), Medicare taxes which ARE NOT capped, investment taxes, PROPERTY taxes, excise taxes, sales taxes..am I missing some taxes, the cost of government is immense, growing, uncontrollable via mandatory obligations and worst yet unsustainable due to economic constraints.

 

I played that game a few days ago:
"A genuine issue of fairness does arise when one questions why capital gains and dividends are taxed at a lower rate than the marginal income of a married person making as little as 65,100. Why should "sitting on your ass income" be given preferential treatment to "working" income? ('Conservatives' habitually spew an abundance of ill-conceived "answers" to this query.) Warren Buffet is unusual in the world of rich white guys in that he interconnects this question to a wide public audience.

The amount of progressivity in the income tax system could be attenuated by recognizing a simple mathematical truism: $1=$1, regardless of the origin. Of course, that would mean raising cap gains & dividend taxes...but, fair is fair & $1=$1."

This is something that may surprise you:

 

Earned income-wages-are the product of work. To me a man's toil is sacrosanct. Tax rates of course get complicated but I'd try to do something flat with graduated progressiveness.

I see the wisdom in fairly low capital gains rates. I'll give you an example of how tax policy-like Fed policy-is going to fuck investors. Muni bonds as we all know are Federally tax exempt. What else to we know about them? They're an accident waiting to happen and their impending defaults will have a much broader economic impact than anything we've recently seen. Ya know one OTHER thing you don't hear much about? How much does the mortgage interest deduction encourage folks to take on too much housing debt? This notion of targeting assets for special tax treatment must stop.

Since middle-class retirees are dependent upon dividends and/or fixed income investments to supplement their meager SS entitlement there must be a fairly high bar of deductibility. This gets back to some posts I've made on other threads. When Joe the plumber needs the stream off two or three million in assets to equal the retirement income of his mailman there's an inequity. The media as usual is so fucking complicit. NO ONE talks about it.

Back to the quote attributed to me. Do I think Buffet should be taxed at a higher rate on passive income than the Joe's of the world? Of course. The revenue has to come from somewhere and I agree with Buffet that value investors-the most important market participants-are seldom dissuaded from opportunity because of reasonable rates of taxation. I'd do something with cap gains like like 10% on the first 50k, 15% 50-100, 20% 100-200k, 25% to a million and 30% over a million.

 

this will ultimately cause THE CRASH:

George Will explains it very well here:

http://jewishworldreview.com/cols/will091108.php3

<b>The next financial crisis is already here</b>

By George Will
VALLEJO, Calif. — Mayor Osby Davis, who has lived in this waterfront city across San Pablo Bay from San Francisco for 60 of his 62 years, says: "If you have a can that's leaking two ounces a minute and you put an ounce a minute in it, it's going to get empty." He is describing his city's coffers.


Joseph Tanner, who became city manager after this municipality of 120,000 souls was mismanaged to the brink of bankruptcy, stands at a whiteboard to explain the simple arithmetic that has pushed Vallejo over the brink. Its crisis — a cash flow insufficient to cover contractual obligations — came about because (to use fiscal 2007 figures) each of the 100 firefighters paid $230 a month in union dues and each of the 140 police officers paid $254 a month, giving their unions enormous sums to purchase a compliant city council.


So a police captain receives $306,000 a year in pay and benefits, a lieutenant receives $247,644, and the average for firefighters — 21 of them earn more than $200,000, including overtime — is $171,000. Police and firefighters can store up unused vacation and leave time over their careers and walk away, as one of the more than 20 who recently retired did, with a $370,000 check. Last year, 292 city employees made more than $100,000. And after just five years, all police and firefighters are guaranteed lifetime health benefits.


Even the City Council has at last faced facts and voted 7 to 0 for bankruptcy. "The day after they voted," Davis says, "I didn't go out of the house — I was that embarrassed."

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In other states, municipalities can pay for improvident labor contracts by increasing property taxes. But Vallejo's promises were made in the context of Proposition 13, which 30 years ago wisely restricted California politicians' reach for property taxes. In 1996, the Navy base in Vallejo closed, which probably pleased some local liberals who share the anti-military mentality of San Francisco, to which some Vallejo residents commute by ferry. Liberals who, Tanner says dryly, "want Vallejo to look a certain way," were pleased when Wal-Mart moved to an adjacent town, which now reaps the sales tax revenue.


Vallejo is an ominous portent for other cities, and some states, few of which are accumulating financial resources sufficient to fulfill pension promises they have made to employees. Are you weary of the crisis du jour — subprime mortgages and all that? Get a head start on worrying about the next debacle by reading Roger Lowenstein's new book, "While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis."


"Next"? This crisis has arrived in Jefferson County, Ala., which includes Birmingham. Like Orange County, Calif., a few years ago, Jefferson County made risky investments in a desperate attempt to achieve asset growth commensurate with the cost of an infrastructure project. When San Diego was earning the sobriquet "Enron by the sea," firefighters could retire at 50 with 90 percent of their pensions — almost full pay for not working during half of their expected adult lives.


Credit Suisse estimates that state and local governments have a cumulative $1.5 trillion shortfall in commitments for retiree health care. But it is the pension crisis that most dramatically illustrates Lowenstein's thesis about the slow accretion of power by the unions. Pensions "are a perfect vehicle for procrastination; in the financial world, they are the most long-enduring promises that exist." Human nature — the propensity to delay the unpleasant — rears its ugly head: When pension benefits come due, the people who promised them, thereby buying labor peace and winning elections, are long gone.


Vallejo's unions contend that the city is solvent enough to meet its obligations. But last Friday a court disagreed, holding that the city is eligible for bankruptcy protection. A lawyer for Vallejo says the unions will have to negotiate a "plan of adjustment." Other cities are watching, perhaps including the one across the bay.


San Francisco recently reported that 184 of its employees made at least $30,000 apiece in overtime in the first half of this year. A nurse at the county jail made $128,000 in overtime, putting him on track to top his total 2007 compensation of about $350,000. Nice work if you can get it, and you can get it in many places.

 

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

Thats what makes me think he is on my side. I'm not one of those people who links to C&P links, but this column is by ben stein and his views/meeting with warren buffet. Of course we all know stein is a conservative and I think its very pertinent to our discussion. This is also in response to the ridiculous debt and spending we are incurring which I believe was the point above.

"NOT long ago, I had the pleasure of a lengthy meeting with one of the smartest men on the planet, Warren E. Buffett, the chief executive of Berkshire Hathaway, in his unpretentious offices in Omaha. We talked of many things that, I hope, will inspire me for years to come. But one of the main subjects was taxes. Mr. Buffett, who probably does not feel sick when he sees his MasterCard bill in his mailbox the way I do, is at least as exercised about the tax system as I am.
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Illustration by Philip Anderson

Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap.

Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.

It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”

Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”

This conversation keeps coming back to mind because, in the last couple of weeks, I have been on one television panel after another, talking about how questionable it is that the country is enjoying what economists call full employment while we are still running a federal budget deficit of roughly $434 billion for fiscal 2006 (not counting off-budget items like Social Security) and economists forecast that it will grow to $567 billion in fiscal 2010.

When I mentioned on these panels that we should consider all options for closing this gap — including raising taxes, particularly for the wealthiest people — I was met with several arguments by people who call themselves conservatives and free marketers.

One argument was that the mere suggestion constituted class warfare. I think Mr. Buffett answered that one.

Another argument was that raising taxes actually lowers total revenue, and that only cutting taxes stimulates federal revenue. This is supposedly proved by the history of tax receipts since my friend George W. Bush became president.

In fact, the federal government collected roughly $1.004 trillion in income taxes from individuals in fiscal 2000, the last full year of President Bill Clinton’s merry rule. It fell to a low of $794 billion in 2003 after Mr. Bush’s tax cuts (but not, you understand, because of them, his supporters like to say). Only by the end of fiscal 2006 did income tax revenue surpass the $1 trillion level again.

By this time, we Republicans had added a mere $2.7 trillion to the national debt. So much for tax cuts adding to revenue. To be fair, corporate profits taxes have increased greatly, as corporate profits have increased stupendously. This may be because of the cut in corporate tax rates. Anything is possible.

The third argument that kind, well-meaning people made in response to the idea of rolling back the tax cuts was this: “Don’t raise taxes. Cut spending.”

The sad fact is that spending rises every year, no matter what people want or say they want. Every president and every member of Congress promises to cut “needless” spending. But spending has risen every year since 1940 except for a few years after World War II and a brief period after the Korean War.

The imperatives for spending are built into the system, and now, with entitlements expanding rapidly, increased spending is locked in. Medicare, Social Security, interest on the debt — all are growing like mad, and how they will ever be stopped or slowed is beyond imagining. Gross interest on Treasury debt is approaching $350 billion a year. And none of this counts major deferred maintenance for the military.

The fourth argument in response to my suggestion was that “deficits don’t matter.”

There is something to this. One would think that big deficits would be highly inflationary, according to Keynesian economics. But we have modest inflation (except in New York City, where a martini at a good bar is now $22). On the other hand, we have all that interest to pay, soon roughly $7 billion a week, a lot of it to overseas owners of our debt. This, to me, seems to matter.

Besides, if it doesn’t matter, why bother to even discuss balancing the budget? Why have taxes at all? Why not just print money the way Weimar Germany did? Why not abolish taxes and add trillions to the deficit each year? Why don’t we all just drop acid, turn on, tune in and drop out of responsibility in the fiscal area? If deficits don’t matter, why not spend as much as we want, on anything we want?

The final argument is the one I really love. People ask how I can be a conservative and still want higher taxes. It makes my head spin, and I guess it shows how old I am. But I thought that conservatives were supposed to like balanced budgets. I thought it was the conservative position to not leave heavy indebtedness to our grandchildren. I thought it was the conservative view that there should be some balance between income and outflow. When did this change?

Oh, now, now, now I recall. It changed when we figured that we could cut taxes and generate so much revenue that we would balance the budget. But isn’t that what doctors call magical thinking? Haven’t the facts proved that this theory, though charming and beguiling, was wrong?

THIS brings me back to Mr. Buffett. If, in fact, it’s all just a giveaway to the rich masquerading as a new way of stimulating the economy and balancing the budget, please, Mr. Bush, let’s rethink it. I don’t like paying $7 billion a week in interest on the debt. I don’t like the idea that Mr. Buffett pays a lot less in tax as a percentage of his income than my housekeeper does or than I do.

Can we really say that we’re showing fiscal prudence? Are we doing our best? If not, why not? I don’t want class warfare from any direction, through the tax system or any other way. "

 

it looks like mav88's questions were answered. Thats good.

I like this line the best. "It changed when we figured that we could cut taxes and generate so much revenue that we would balance the budget. But isn’t that what doctors call magical thinking? Haven’t the facts proved that this theory, though charming and beguiling, was wrong?"

 

Unless one is fluent in Arabic I don't know how to read that weird font style prevalent throughout your post.....