Deductions definitely help and no one pays the 80% -- it's nothing more than a bracket. However, one of the reasons Reagan reformed the tax code in 1986 was because he was tired of paying such high taxes during his acting career. The word "disaster" was probably over the top but taxing the rich won't solve the financial problems the US is currently in. http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986
Yep. And earlier, inflation-adjusted prices during the 70s oil crisis were at a similar level. In both cases it killed the economy, and now in 2011, it's doing it again. The most reasonable bet seems to be that we'll hit a hard recession, demand dries up, oil prices plummet, lather rinse repeat.
I'm not in favor of high tax rates, who is? And I despise the current tax code and its nightmare implementation. There is no other means of raising government revenue that could possibly be worse than the IRS tax code! But I have to say the U.S. had a bigger middle class and was doing much, much better when rates were higher (on the last dollars of AGI, of course). It seems the Bush tax cuts combined with greatly accelerated spending (and perhaps the same is true of the Reagan cuts) have produced huge deficits and a shrinking middle class. as more and more of the economic pie flows to the highest earning few percent of the population. If we are going to be burdened with that nightmare tax code, then at least go back to the 40% upper bracket for the high earners. I don't mind paying that at all frankly, and there are plenty of high earners who agree with me. Who wants to live in a country where there is only the poor and the wealthy, and no middle class and no jobs? I want to see massive cuts in military spending as well, and efforts and spending diverted to infrastructure, research, and education. Put those defense contractors to work designing and building high speed rail. At least then we'd get something useful for our money! I desperately also want to see either a graduated flat tax or a national sales tax replace the current nightmare. Almost anything would be better then what we have now. Its essential to reform corporate taxes as well!
I'm gonna make sure I keep plenty of air in ol' Trek's tires. I can't trust the government, but I can trust ol' Trek!
Gastro...I never worry about being justified, these posts are my thoughts, they exist outside any concept of justification. They make sense or they don't, they are right or they are wrong, they are never justified. I am flattered, humbled, howerver that you remembered my comment and offered independent comment that agrees whith what I asserted. Thank you. On the issue of what I said about the special government securities that back up the U.S. obligaton to fund Social Security and Medicare, I have not gone back and reviewed my statements for quotes, and I appreciate your gist of what I said...but I don't think the issue revolved on the idea of a promise. My sense of it is that U.S. Treasury obligations are contracts with the public, ofter foreigners, that can be defaulted in the market sense of a breach of debt contract. In contrast I tried to make the point that our SS and Medicare obligations were intergovernmental accounting entries that did not have the same force of legal contract. IOU's to your self are not the same as contracts to pay real counter parties under terms and conditions. I don't want to restimulate that argument as I believe I already made the case. It is important to understand that the concept of 'promise' in legal sense is different when the supposed promise has no legal enforceability...I would suggest that there is difference between a legal promise and a supperficial non binding promise. The issue really goes to the basis of the theory of contract...and our supposed 'promise' with regard to SS and other entitlement obligations does not rise to the level of promise as a legal contract; it remains a political 'promise' with no force of law. That was the point I was making way back then. I would remind that that I suggested way back then that Treasury could manipulate the SS 'promises' in order to avoid the debt ceiling...I explained that this is what the Clinton Treasury did during the Gingrich shut down. So, now it has apparently come to pass, again. Contrast the lack of comment on the performance of SS special government securities with the comment on the restructuring of Greek debt going forward and you will begin to appreciate the difference between government obligations with outside investors and government 'obligations' with itself.
Ed, I could not agree more with what you posted! The scary part to me is that I have so many older relatives on SS and Medicare - yikes! BTW - thanks for the info! -gastropod - "the stomach with feet"
I am not in favor of high tax rates for anyone, including the wealthy, but the more I think about what you have written the more absurd it seems to me. Most businesses start small, and most people that start them just want to make a better living, they don't think: "Gee I better not start this business because if i'm very successful and should be lucky enough to eventually make an adjusted gross over 250K I'll have to pay more than half of everything over 250K to the government." What we should want is a good return for our tax dollar. Not merely low tax rates.
Breen's point is clear and has some merit, however the debt obligations held in the Trust Fund do have the force of the law behind them, and a default would be a contract violation, just as a default on other Treasury bonds would be a contract violation. I do agree, however, that because this loaning of Social Security contributions to the Treasury by the Trust Fund is an intra-government operation, there are additional legal routes by which the Treasury can, in effect, steal from the Trust. Unless the law protecting the Trust is changed, the Treasury cannot reach into the Trust directly and spend the money on anything other than Social Security. However the formulas used to determine Social Security payments can be altered, though it may take congressional action. This could have the effect of slowing the rate at which the Trust must redeem the bonds it holds. This would be a legal way of getting around the law that protects the Trust, as it would be political suicide to alter the latter law directly. There are legal mechanisms already in place for stealing both from the Trust fund and from Treasury bond holders. One is inflation, and another is to alter the formula used to compute the official inflation number that affects TIPS yield and Social Security colas. Incidentally, Social Security Administration actuaries have calculated that a 2% increase in contribution rate per dollar of earned income is needed to make the system sound into the foreseeable future. It's 2 cents per dollar! This is a 16% increase relative to the current contribution rate of 12.5 cents on the dollar. Those who want to kill Social Security quote the 16% figure, those that want to strengthen it quote the 2% figure.
Hurray! More free publicity for Ron Paul! Ppl, this is the man who will be sworn in as the 44th President of the U.S.A. in 2013 (Obama is the 43rd because Grover Cleveland was the 22nd and 24th President...) 44 means REAL change... It is Ron Paul who will bring about real change to the States, not Odumba, who is just number 43rd...
No they instead think " Gee i am doing well here it time to set up offshore and pay my tax in a place that wont tax me half of everything" Duh..