Much is said and written about the high burden of income taxes on the wealthiest Americans. The top 20% of earners contribute over three-quarters of federal income tax revenues, despite collecting about half of the overall nation’s income. At first blush, this seems markedly unfair. But “fair” depends on perspective.
For example, if I were in a room with Bill Gates, the average net worth of the people in the room would be about $25B. If the only information available was that there were two people in a room with an average net worth of $25B, and you were told that when they left, one would have $50B, and the other would have mere thousandths of a percent as much, that would sound unfair…until you gain the additional perspective of who those people are, and what they brought into the room.
Taxation fairness can be viewed from a few perspectives:
- Collecting the same number of dollars from each person
- Taxing at the same percentage rate, based on the value of something they have (property), or are collecting (earnings)
- Taxing at a rate determined by one’s consumption of government services
- Taxing at the same percentage rate, based on the marginal utility of the value of something they have or are collecting
This last one is the most complex to explain, and thus is unsurprisingly the least well understood. To gain an appreciation for marginal utility, let’s look at the “paradox of water and diamonds,” often associated with Adam Smith but conceptually discussed for centuries before him. Without clean fresh water, we die, yet we as a society value diamonds much more than water (at least for now). The fundamental reason for this is scarcity.
Today, clean fresh water is far more plentiful than diamonds. However, even if one is in possession of the Hope Diamond, if no water is available anywhere in the world save for one person in front of you with a gallon jug, and you are dying of thirst, that gallon jug is easily worth more than the diamond.
Marginal utility is based on a combination of need and scarcity. The greater the need and the greater the scarcity, the greater the corresponding marginal utility.
This concept applies to dollars in the same way that it applies to water or diamonds. The more dollars you have, the less each individual dollar is worth to you.
Intuitively, this should make sense. If all you have for the day is $20, a $15 steak will seem like a lot of money, and you’ll probably opt for something cheaper. If, on the other hand, you have $2,000 for the day, you will feel more inclined to splurge on the $50 steak, let alone the $15 steak. The same dollars provide less marginal utility per dollar. Or, to put it in simpler terms, spending $50 when you have $2,000 is less painful than spending $15 when all you have is $20.
What does this have to do with taxation? As I said before, one fair method of taxation is to tax based on marginal utility. Since each dollar has less marginal utility as you increase the number of dollars you have, in order to tax marginal utility, you must increase the tax rate as the number of dollars rises. This is the basis for progressive taxation.
Of course, all of the above begs an important question: how do you measure that marginal utility? After all, it’s going to be different for different people. To cite one obvious example, someone living in a place with a high cost of living will have lower marginal utility for the same number of dollars as someone living in a place with a low cost of living. But that’s the easy example; there are many other more esoteric ones that are equally valid.
I’m not going to pretend that the answer is easy or obvious. Rather, I suggest that it’s in many ways beside the point. Laws, by necessity, cannot account for all of the subtle nuances that differentiate each of us from the others. We set the age of majority at 18, despite knowing that some people are mature enough at 16 to make adult decisions, while others don’t reach that level of maturity until much later. As a society, we agree that the simplicity of one-size-fits-all rules is superior to the complexity of a more complex, customized set of rules, even though that one size will be ill-fitting for many.
Nonetheless, I wouldn’t object to a more complex set of rules to better fit the progressive tax rate to the marginal utility curve of each taxpayer. It becomes an argument about how to apply a marginal utility tax, rather than whether such a tax is appropriate in the first place.
The concept of “fairness” is pretty slippery. But there’s no more reason to consider a progressive income tax unfair than there is reason to consider unfair any of the other three tax models I outlined above. Rather, it’s an argument over which types of unfairness are the least egregious. And that is entirely a matter of perspective.
538 Refugees 
There are two arguably equitable means of paying taxes:
1) Everyone pays the same amount of taxes for the common government goods and services they all receive. This is how a free market works. If a bakery charged Bill Gates $2,000 for a loaf of bread for which everyone else was paying $2, Gates would have a complaint for price gouging.
2) Everyone pays the same percentage of their income (less basic living expenses) for the common government goods and services they all receive. Under this flat tax, the theory of equity is that you pay proportionately more based upon your ability to pay.
Progressive income tax systems which punish you with marginally higher rates as you earn more money has nothing at all to do with equitable payment of taxes, but rather is an attempt to redistribute what wealth is left over after equitable payment of taxes. Under no legitimate theory of equity can 1% of tax payers who earn 19% of income be expected to pay 28% of the taxes.
The intended end of redistribution of the wealth that is left over is perfectly crystalized in this paragraph above:
For example, if I were in a room with Bill Gates, the average net worth of the people in the room would be about $25B. If the only information available was that there were two people in a room with an average net worth of $25B, and you were told that when they left, one would have $50B, and the other would have mere thousandths of a percent as much, that would sound unfair…until you gain the additional perspective of who those people are, and what they brought into the room.
This envious POV has nothing to do equitably sharing the burden of funding our government and everything to do with taking someone else’s already taxed wealth because you think he has too much.
No Bart. There are more than two equitable means of paying taxes. Didn’t you read the article?
Your two ‘equitable’ means of paying taxes are unable to sustain society with bizarre income distribution (e.g. 4% super rich = to 40% sub middle class). The math doesn’t work.
BD: This envious POV has nothing to do equitably sharing the burden of funding our government and everything to do with taking someone else’s already taxed wealth because you think he has too much.
Eusebio Dunkle says: Your two ‘equitable’ means of paying taxes are unable to sustain society with bizarre income distribution (e.g. 4% super rich = to 40% sub middle class). The math doesn’t work.
Here is Exhibit 2 to prove my point.
Eusebio:
What is bizarre about folks who offer goods or services to far more people making far more money than those who do not?
For example, a teacher can communicate with maybe 150 children over the course of a school year. In contrast, Bill Gates sold tens of millions of items of software each year. Even if you believe that the service the teacher provides to a student is twice as valuable as an item of MS software, then Bill Gate still should receive far more income than the teacher because he is providing far more value for the money.
Unless a person is stealing or defrauding someone, the amount on money he or she makes should be none of your and certainly none of the government’s concern.
Barted:
For example, a teacher can communicate with maybe 150 children over the course of a school year. In contrast, Bill Gates sold tens of millions of items of software each year.
There’s where you’re wrong. Bill Gates sold nothing. He added no value to the economy. He supervised or perhaps even managed people who added value to the economy, but that’s not the same thing. It’s a valuable skill, but not inherently more valuable than doing or creating. The value of his skill is subject to debate.
The question is, does your assumption of a free market hold? That is, is this a market where our talents and skills are valued based on a market judgment? I would say the assumption does not hold. If your assumptions are bad, then everything else is trayf.
Michael,
As we all know (and as you have told us before), money, and therefore income, is not a measure of wealth. It’s the things we buy with money, not money, that matter. A fair and balanced taxation system would reflect that. But, in America today, the top 20 percent (measured in wealth, not income) own 84.6 percent of the wealth in the country.
They are dramatically under-taxed, if the goal is to be “fair”.
I would say that the US income tax hews pretty close to the line, at the lower income levels, of what you can extract from the already-paltry income these folks make, and then is designed to add enough money from those higher up the income ladder so that society doesn’t break down completely.
Blankshot, porn stars also make a lot more than teachers. Do you think porn stars are getting fair market value for what they contribute to society?
Blankshot, is it “free market” when the owner of a company promotes his kids into management ahead of people who are more qualified?
bb,
We’ve been over this before. Bart will simply assert that any company that promotes people who aren’t capable will fail, and so the “free market” will take care of this fairly.
(Yes, I know, we’ve seen centuries of evidence to the contrary, but that doesn’t matter in the face of Bart’s faith in the “free market”.)
I only ask because it is fun to make him post idiotic tripe.
BD: For example, a teacher can communicate with maybe 150 children over the course of a school year. In contrast, Bill Gates sold tens of millions of items of software each year.
Mono: There’s where you’re wrong. Bill Gates sold nothing. He added no value to the economy. He supervised or perhaps even managed people who added value to the economy, but that’s not the same thing. It’s a valuable skill, but not inherently more valuable than doing or creating. The value of his skill is subject to debate.
Typical Marxist perspective. All work necessary to provide a good or service for which consumers are willing to pay has intrinsic market value. Leadership and management is indispensable to translating ideas and labor into goods and services. No company can stay in business without leadership and management, while employees can come and go without affecting the company.
There have been hundreds of software companies which have come and gone. that employed very bright and able people Gates was key in making MS the standard in OS and office support. MS would have been an also ran to Apple without Gates. Gates deserved every penny he earned. The government has no business taking the money he earned and giving it to folks who neither earned it or deserve it.
True, but you can take that notion too far. Money by itself is not a measure of wealth. If you’re defining “wealth” as “net worth,” then money is certainly a part of it.
This is true when measuring marginal utility. One point of the article is to recognize that every “fair” method of taxation is also inherently unfair from multiple other perspectives. To pretend that there is only one “fair” form of taxation is to stick with an ideological viewpoint and ignore all that doesn’t fit within it.
I appreciate Michael Weiss’s clear presentation of what marginal utility is and why that is a reasonable measure for “fairness” in taxation. I also agree with him that it is sometimes a very difficult concept for some people to grasp. People often mistake “fair” for “equal,” and people obsessed with fairness often like simple, easy formulas. Marginal utility isn’t as simple and easy, because some people have trouble with the concept that the value of an individual dollar varies with circumstances. $5+$1 isn’t analogous to $5,000,000+$1.
Perhaps marginal utility is difficult for some people because the scales of wealth and income are so extreme that it’s difficult to comprehend. I see this in both directions, where people who make 6+ figures have trouble understanding why “a few bucks” matters to someone making far less, and people making lower-to-intermediate incomes have difficulty grasping that someone could drop $250K in cash on a car without making a substantial dent in their savings. (Whether that’s a wise use of their $250K is an entirely different matter, and they probably have enough extra cash that it doesn’t really matter to them any more than someone with $1000 splurging $60 on a new video game.)
Therefore, strict percentages aren’t as fair as they seem on the surface. Spending $50 is much more painful for someone who only has $100 than spending $500 is for someone who has $1000, and spending $500,000 for someone who has $1,000,000 is less painful still, or $5M for someone who has $10M… Yes, $5M is a big chunk of change–more than the folks who only have $100 or $1000 can probably understand, but the millionaire would still have $5M in his pocket, while taking $50 from the guy with only $100 might leave him starving.
I will confess to having occasionally fallen in love with various flat-tax+high deductible schemes, but that was mostly when I myself didn’t have more than two pennies to rub together. Now that I’ve seen both sides of the financial fence, so to speak, I can appreciate that those with more can afford to contribute more as a percentage of what we have.
Progressive taxation recognizes that sometimes 50%* of $5M is fair in comparison to 10% of $50K in terms of the marginal impact on their financial status and standard of living. We can argue about the scale, about the standard deduction, and about cost of living adjustments, but there really is no point in denying that the impact of marginal utility is a justifiable component of fairness in how we as a people contribute to the society that we all take part in.
* Before anyone pounces on me, please do not assume that I am suggesting 50% as an ideal tax rate. I’m merely using round numbers for convenience in making my point about the relative marginal utility.
MW: Since each dollar has less marginal utility as you increase the number of dollars you have, in order to tax marginal utility, you must increase the tax rate as the number of dollars rises. This is the basis for progressive taxation.
Why?
If you are assuming that money dedicated to basic living expenses (necessities) are more important that disposable income earned above and beyond necessities, then this is addressed with the basic and dependent deductions.
This theory of marginal utility of money has nothing at all to do with progressively more punitive marginal tax rates on the remaining disposable income.
Bart,
I don’t want to insult you, but asking “why” marginal utility is the basis for progressive taxation demonstrates a severe lack of understanding what the principle of marginal utility means. If economics is not your area of expertise, then I suggest that you follow Michael’s link and read the Wiki page. Some of the sources cited there are quite good for further reading if you’re still struggling with the concept.
The simple standard deduction that you suggest will help prevent taxes from digging into the limited funds of the already impoverished and will guarantee a minimum amount of take-home pay for taxpayers, but that only addresses the lowest range of the issue of marginal utility. Marginal utility doesn’t stop applying after $10,000 or $20,000 or whatever number you want to use for a standard deduction. It doesn’t stop at $50,000 or $1M or $10M. In fact, the effects of marginal utility expand asymmetrically as dollars increase.
Therefore, progressive taxation is an (imperfect) attempt to implement some fairness in light of the very real economic principle of marginal utility.
“This theory of marginal utility of money has nothing at all to do with progressively more punitive marginal tax rates on the remaining disposable income.”
This makes it clear that you don’t understand (or are ignoring) the concept of marginal utility. Progressive taxation is hardly “progressively more punitive” in fact, as MW clearly explained, because of marginal utility it is the opposite. “…spending $50 when you have $2,000 is less painful than spending $15 when all you have is $20.”
Another reason that progressive taxation is fair is that higher income earners make use of more of the services paid for by their taxes. If you are too poor to own a car, why should you contribute to our socialist federal highway system?
“Nonetheless, I wouldn’t object to a more complex set of rules to better fit the progressive tax rate to the marginal utility curve of each taxpayer.”
I agree with much of what you said in the article; however, I do take issue with this little nugget, although admittedly I may not have interpreted the message you were trying to convey. The last thing we need is a “more complex set of rules” with regard to taxation. It needs to be simpler.
I’ve outlined my ideas in here before….maintaining the structure; having fewer brackets; reinstituting a “millionaire’s” tax bracket; eliminating all adjustments/deductions but not taxing any income except for that above the median (i.e. a 0% rate on all income below the median; taxing all income (regular, dividend, interest, capital gains) the same; index the brackets to inflation; overhaul payroll taxes to be progressive and remove the income cap limits on them.
The following isn’t a perfect/ideal match to what I outlined above, but it’s something I would like to work towards as a starting point…
http://fairsharetaxes.org/default.aspx
D’oh!
That should read “maintaining the PROGRESSIVE structure”…
Sorry, it’s just very difficult for me to type that word 🙂
drfunguy says: “This theory of marginal utility of money has nothing at all to do with progressively more punitive marginal tax rates on the remaining disposable income.” This makes it clear that you don’t understand (or are ignoring) the concept of marginal utility. Progressive taxation is hardly “progressively more punitive” in fact, as MW clearly explained, because of marginal utility it is the opposite. “…spending $50 when you have $2,000 is less painful than spending $15 when all you have is $20.”
I asked Michael to clarify his theory. Let us assume that yours is a summary of this theory.
Equity requires the tax code code to be fair and impartial. Putting aside for the moment welfare state redistribution of wealth, government provides common goods and services which are available equally to all. Thus, a fair and impartial tax code which is based upon the value of the provided goods and services would require that everyone pay an equal amount. A fair and impartial tax code based on ability to pay would take an equal percentage of income with the income necessary to pay necessities is removed.
You cannot have a fair and most definitely not an impartial tax code if the government is making arbitrary decisions about how much financial pain you can endure under a system of progressively more punitive marginal tax rates.
In reality, as several posts above suggest, the real progressive concern is redistributing what you consider to be an unfair distribution of wealth. You just refuse to admit your goals because a supermajority of American voters loathe the socialist concept.
Bart, people are not disposable cogs that ‘come and go’. They are your neighbors.
Attitudes like yours are why we mere cogs need unions to exert our power as labor. That way we can come and go en mass and shut down abusive companies.
There are many reasons we have a progressive tax system. One was to prevent the amassing of dynastic wealth so it would not have a disproportional effect on our political system. But don’t worry, Bart, SCROTUS fixed that and now money equals free speech.
Mule,
My point there is that I don’t want complexity to be considered the death knell for progressive taxation. I doubt much complexity is needed, though something that takes into account the differences in cost of living in different places would be nice.
Bart, accounting for Marginal Utility is not the government being “arbitrary.”
Since Bart is so interested in his version of fairness of taxation, I wanted to post this link about how much of a fraud this push for a fair or flat tax is.
fairtaxfraud.com
Enjoy.
Mule,
I think Michael Weiss’s point about “a more complex set of rules to better fit the progressive tax rate to the marginal utility curve” was about a cost of living adjustment of some sort.
Perhaps, creating “brackets” for the standard deduction based on zip code… Having lived some place where it took four full-time minimum wage jobs to afford rent in the cheapest available apartment, I can appreciate why the cost-of-living adjustment has merit.
That said, I think your ideas of maintaining a progressive tax structure plus a “millionaire” bracket, raising the tax floor so that below-median workers are not taxed, taxing all income identically, and stripping out the deductions and other complexities has a lot of merit. Perhaps the formula for determining for determining whether or not one falls below the “median” could have a cost-of-living component (in the interest of admitting that making $25K might be great in Encino, TX but not so great in San Francisco). Pity that the political climate is such that this sort of conversation couldn’t even begin in Congress…
Bart said
“…government provides common goods and services which are available equally to all.”
A highway is not available to those who don’t own cars. They forbid pedestrian access to most interstate highways.
“progressively more punitive marginal tax rates”
Repeating your fallacy dowsn’t make it right, it just makes it propaganda.
Number Seven says: There are many reasons we have a progressive tax system. One was to prevent the amassing of dynastic wealth so it would not have a disproportional effect on our political system.
I doubt campaign finance reform was on the minds of the socialist/progressives when they first came up with the idea of using the tax code to redistribute income over a century ago.
mclever says: Bart, accounting for Marginal Utility is not the government being “arbitrary.”
Really? What is the objective scientific basis for deciding that the top rate should be at $200,000 rather than $500,000 and that rate should be 39% rather than 35%? These are by definition arbitrary decisions.
Didja ever notice that the people who want less government and less taxes tend to be conservative Republicans and the wealthy? Wonder why that is?
Gates and Co. left a slew of ruined companies in its wake on the way to becoming the behemoth that it is today. Lotus, Word Perfect, Netscape, and others were all either consumed, bought, or run out on a rail by Microsoft. Apple only survived because they redefined the music industry before Gates saw it coming. Same with Google. The bigger you get, the more lethargic you become. Eventually Gates himself came to the conclusion that he was too rich and gave away his fortune.
Yah, that was completely fair.
Okay, I’m with ya now on having rules/regs to account for COLA….I can agree, to some degree, as a $100,000/year job means two different things in New York, NY versus rural Kentucky. I’m all for fairness, but developing a new set of rules for every little thing is why our tax code is the monstrosity it currently is. A simplified and straightforward structure like the one I described above would bring more equity to the system and less of a need to account for arbitrary things such as where one lives.
Let me just say that, until we start to see a significant number of once-wealthy people (or their heirs) standing on the street pan-handling for change to buy a meal, the use of “punitive” to describe taxes is laughable.
“Let me just say that, until we start to see a significant number of once-wealthy people (or their heirs) standing on the street pan-handling for change to buy a meal, the use of “punitive” to describe taxes is laughable.”
Let me be the first to second this comment (somehow that felt weird to type; only the first/second part, not the agreeing with shortchain part…)
I have NEVER seen anyone taxed into poverty…that doesn’t mean that every tax is appropriately applied nor that we should always be looking for more ways to soak the rich just because they can afford it, but the only “punitive taxes” I’ve ever seen have been those paid by lower and middle class folks where money that could have been used for basic necessities or, at least, a few extra “wants” for a decent standard of living.
MR,
Hey, there’s a first for everything. And a last, too, but let’s not go there. This won’t be the last: I agree with your comments as well.
Why should tax rates be adjusted to cost of living?
The cost of living in an area is largely determined by demand created by those who choose to move there, the degree of local government mismanagement and the distortion of market labor costs by unions.
There is no reason folks living elsewhere should subsidize any of these things. If you choose to move to a city with high prices, poor government or unions, you pay the price of your choice.
There is no reason folks living elsewhere should subsidize any of these things.
And yet you wingnuts don’t seem to have a problem with the fact that your government services are subsidized by the people who live in Blue states…
Is it my imagination, or has Bart slipped over the line into outright social Darwinism?
SC:
Opposition to socialist theft is not social darwinism.
Bart,
Outside of the delusions of people like you, taxes are not theft. Opposition to taxes under the pretext that they are theft is a symptom of social Darwinism, dating back many years.
Let me tell you how it will be;
There’s one for you, nineteen for me.
‘Cause I’m the taxman,
Yeah, I’m the taxman.
Should five per cent appear too small,
Be thankful I don’t take it all.
‘Cause I’m the taxman,
Yeah, I’m the taxman.
(if you drive a car, car;) – I’ll tax the street;
(if you try to sit, sit;) – I’ll tax your seat;
(if you get too cold, cold;) – I’ll tax the heat;
(if you take a walk, walk;) – I’ll tax your feet.
Taxman!
‘Cause I’m the taxman,
Yeah, I’m the taxman.
Don’t ask me what I want it for
If you don’t want to pay some more
‘Cause I’m the taxman,
Yeah, I’m the taxman.
Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
‘Cause I’m the taxman,
Yeah, I’m the taxman.
And you’re working for no one but me.
Taxman!
Bartles, speaking of George Harrison ~ (((All Things Must Pass))) as he became quite spiritual and revised his politics in a short period of time, eh …
Awaiting On You All
You don’t need no love in
You don’t need no bed pan
You don’t need a horoscope or a microscope
The see the mess that you’re in
If you open up your heart
You will know what I mean
We’ve been polluted so long
Now here’s a way for you to get clean
By chanting the names of the lord and you’ll be free
The lord is awaiting on you all to awaken and see
Chanting the names of the lord and you’ll be free
The lord is awaiting on you all to awaken and see
You don’t need no passport
And you don’t need no visas
You don’t need to designate or to emigrate
Before you can see Jesus
If you open up your heart
You’ll see he’s right there
Always was and will be
He’ll relieve you of your cares
By chanting the names of the lord and you’ll be free
The lord is awaiting on you all to awaken and see
Chanting the names of the lord and you’ll be free
The lord is awaiting on you all to awaken and see
You don’t need no church house
And you don’t need no Temple
You don’t need no rosary beads or them books to read
To see that you have fallen
If you open up your heart
You will know what I mean
We’ve been kept down so long
Someone’s thinking that we’re all green
~~~~~
>
>
>
We were talking about the space between us all
And the people who hide themselves behind a wall of illusion
Never glimpse the truth, then it’s far too late, when they pass away
We were talking about the love we all could share
When we find it, to try our best to hold it there with our love
With our love, we could save the world, if they only knew
Try to realise it’s all within yourself
No one else can make you change
And to see you’re really only very small
And life flows on within you and without you
We were talking about the love that’s gone so cold
And the people who gain the world and lose their soul
They don’t know, they can’t see, are you one of them?
When you’ve seen beyond yourself then you may find
Peace of mind is waiting there
And the time will come when you see we’re all one
And life flows on within you and without you
~~~~~
take care, blessings
I am the very model of a modern libertarian
There isn’t any limit to how little self-aware I am
Austrian economists, who have never been correct
I can quote, and quote, and quote with never an effect
Taxes are theft! I cry, while sobbing in my beer
For the sad wealthy, with their billions (and their fear)
That some undeserving soul, with skin some dusky hue
Would get some slight advantage, which hardly is their due
The market should determine the value of a man
How much money in his pocket is the measure thru which we can
determine if that bypass or expensive drug so dear
should be withheld, answered with a shrug, just so it’s clear
My money is mine, and never will be shared
With worthless parasites who I wish never spared
Let them go to workhouses, and county poor farms, I say
And let the church (or someone else) support them in that way
I am the very model of a modern libertarian
There simply isn’t any limit to how little self-aware I am
—
Because one doggerel deserves another.
Brilliant, Shortchain, just brilliant :0)
SC:
Apart from Randians, most libertarians including myself do not believe that taxes per se are theft.
Taxes are only theft if a majority forces a minority to bear more than their equitable share of the burden of supporting the government.
Your view might change if a conservative majority compelled the progressive minority to pay a 39% tax rate and while everyone else pays a 10% rate on the grounds that progressives are the ones who created and desire the government behemoth.
Bart,
If that happened, I’d simply become a conservative. It’s not like it would pose any hurdles. I could simply act stupid, spout meaningless drivel — it wouldn’t even have to be germane — and pretend to value money over everything else.
If every one but Barthole will just keep going I may actually end up with a better understanding of this whole tax thing. I said back some time ago that I wanted to revisit some ideas that either Mule or Grog or both of them had put forth and now that we are I am finding myself seeing some of it fleshed out only to find it even more disheartening that instead of having this discussion in congress and making some moves to protect the American way of life we will instead finish screwing the vast majority of Americans and their way of life so that the Bartholes among us can prove once and for all that even some thing as grand as America can be destroyed by and for greed.
Keep it going folks there are those of us out here that still like to learn. Bart isn’t it time for your afternoon drunk tank/divorce court business troll? You could aways while away some time at the commons throwing rotten fruit at the debtors in the stocks. I must put going to Colorado on my to do list some day. My friends that live there say most of their neighbors are very nice people…………makes one wonder what environmental factors produced a Bart. A sociologist could most likely make his bones with that study.
Bart said: “______________”
I’ve said it before and I shall do so again.
We the People, for the past thirty years (no coincidence with Reagan and the supply siders), have asked for more government services than We the People have been willing to pay for. It’s simple, really.
We the People WANT government services. The vast majority of representatives we elect and re-elect are there because they vote FOR those services.
We the People do NOT want to pay the price for those services. The vast majority of representatives we elect and re-elect are there because they vote AGAINST taxing at the rate needed to pay for those services.
Just as did the consumers over the past dozen years when they listened to the banks and realtors who told them that house prices would rise and rise and rise, and that they could borrow and borrow and borrow, and it became a self-fulfilling prophecy.
Until the day the bubble burst.
NEITHER Democrats ?b?NOR Republicans have been honest. BOTH parties have sold their constituents a pipe dream.
Boehner and friends are about to find out the hard way what it means to have to govern instead of simply bitch.
Wow, Bart, you got me. I said Bill Gates had valuable skills, and you said I was a Marxist.
Way to argue, there.
Coincidentally Bartles, Harrison summed up your life in a nutshell …
I Me Mine
Isn’t It a Pity !!!
Forgetting to give back ~ Isn’t it a pity …
Bart says: I doubt campaign finance reform was on the minds of the socialist/progressives when they first came up with the idea of using the tax code to redistribute income over a century ago.
Are you sure about that? Progressives knew, even then, how money can influence politics.
People like you claim the current system is not fair, but it is, at it’s very core, very fair. Everyone’s income is taxed at exactly the same rate already per tax bracket and filing status.
Bill Gates pays 10% income tax on his first $16750, just like any married couple filing jointly, just like you and your wife. You all will pay 15% on the income you have from $16751 to $68,000. You all will pay 25% on income from $68,001 to $137,300, etc.
How is this unfair??? If I was to earn any money over $373,651, that bracket of income would be taxed at exactly the same rate as Bill Gates. Exactly. Not a percent more or less.
Bart, your talking points and those of the rest of the corporate media wish us to believe that all of Bill Gates money will taxed at 35% and that is a lie.
Another common complaint I hear from the mouth breathers is that it is unfair for half of all income earners to pay nothing in taxes and that they should pay their fair share. You see it as not paying their fair share. I and other progressives see it people who are sadly, not earning enough because of underemployment or unemployment.
What is not fair is that we no longer have enough jobs in America paying a decent living wage while Corporate America enjoys record profits.
Which reminds me…IT HAS BEEN ALMOST 10 HOURS!!! WHERE ARE THE EFFEN JOBS!!!
To get back on track, I think complexity isn’t the sine qua non except in so far as it makes it difficult to fill out the forms. I suggest that, if the IRS would simply pay Google to construct an on-line tax form, so we could fill out the forms more easily. It would automatically take line 5, multiply by .8175, and subtract, which ever is greater, line 3 or .6175 of line 2, and fill in line 7 for us.
My vast skills at constructing algorithms are available for the task. All I want is a piece of the action.
There in I see the problem shortchain. Any thing that requires an algorithm to work with the general public is too complex by a wide margin.
First, Bart says: Opposition to socialist theft is not social darwinism.
Then, Bart says: Apart from Randians, most libertarians including myself do not believe that taxes per se are theft.
Taxes are only theft if a majority forces a minority to bear more than their equitable share of the burden of supporting the government.
Honestly, is there any talking point you won’t post, Bart? First you post an outright contradiction, then claim some sort of minority is being asked to bear an unfair burden.
As I pointed out in my previous post, our tax system is very fair. All income is taxed at exactly the same rate as per bracket and filing status. Then you come up with this strawman:
Your view might change if a conservative majority compelled the progressive minority to pay a 39% tax rate and while everyone else pays a 10% rate on the grounds that progressives are the ones who created and desire the government behemoth.
Well duh, of course that would be unfair. That is a tax based on political positions, not on income earned. And you are a lawyer? Do these kind of arguments pass muster when you represent a client? I feel sorry for your clients, I really do.
Mainer,
Nah, there are already tax programs that are available. Problem is, they require a computer of your own. What I suggest would be accessible to the public on any computer — and the IRS, rather than supply forms to banks and libraries, could simply subsidize computers at these locations.
Oh, by the way, the reason I don’t use the available programs? They don’t run on linux. I don’t support Bill Gates in his ongoing theft from the heirs of Gary Kildall (who I had the privilege of speaking to personally when he was developing CP/M-86.
Who gets to define “equitable”?
What if the “majority” of 99% is OK with that definition and the 1% “minority” is not?
Where is the dividing line?
Does the tail wag the dog?
Does a majority vote of “We the People” count? A majority vote of our elected representatives? A majority vote of SCOTUS?
Bart, get real.
Number Seven says: First, Bart says: Opposition to socialist theft is not social darwinism. Then, Bart says: Apart from Randians, most libertarians including myself do not believe that taxes per se are theft. Taxes are only theft if a majority forces a minority to bear more than their equitable share of the burden of supporting the government.
Honestly, is there any talking point you won’t post, Bart? First you post an outright contradiction, then claim some sort of minority is being asked to bear an unfair burden.
Where is the contradiction in stating that taxes per se are not theft, but a majority forcing a minority to pay more than their share of taxes is theft?
Next, the top quintile of taxpayers earned 56% of total income, but paid 69% of all taxes under an effective total federal tax rate of 26%. There is your minority.
BD: Your view might change if a conservative majority compelled the progressive minority to pay a 39% tax rate and while everyone else pays a 10% rate on the grounds that progressives are the ones who created and desire the government behemoth.
No. 7: Well duh, of course that would be unfair. That is a tax based on political positions, not on income earned.
Why is making a minority pay most of the taxes unfair if Congress thinks your politics are wrong but fair if Congress simply thinks you earn too much?
Bart said:
Typical Marxist perspective.
Typical fascist answer.
Bart says “Why is making a minority pay most of the taxes unfair if Congress thinks your politics are wrong but fair if Congress simply [employs progressive taxation]?”
The first is obvious discrimination, the second is an application of marginal utility.
“…spending $50 when you have $2,000 is less painful than spending $15 when all you have is $20.”
I’ll tell you what is punitive taxation: lowering the minimum taxable income to $3500 as Reagan did during the recession.
drfunguy:
Taxes are per se painful.
That is why conservatives vote to keep them low for everyone, why progressives try to foist them on other people of which they disapprove and why the Obama Administration is full of people who simply avoided paying taxes they owed.
I think we should ask Warren Buffett and Bill Gates, Jay Rockefeller and the Kennedys, what would be a fair tax rate. They’ve got far more experience dealing with every aspect of this.
The Republican Party’s entire intellectual political theory:
Taxez Iz Badd.
Very wise and deep. A mantra for the hard of thinking.
Taxez Iz Badd.
The wealthy elites have always been all about fairness. The Laws of England, for instance, prohibit the rich as well as the poor from sleeping under bridges.
Bart Antoinette is right. If the poor don’t have bread, let them eat cake. It’s only fair.
How come taxes aren’t a flat percentage of ones earnings regardless of how rich you are?
Mr U asked:
How come taxes aren’t a flat percentage of ones earnings regardless of how rich you are?
Historically, for right or wrong, there are three main reasons:
1) A dollar to a poor man is more than a dollar to a rich man. 10% is more to a poor man than 10% is to a rich man. If you make under a certain amount, 100% (often, more like 200%) of your income goes to merely staying alive. If you are very wealthy, than perhaps less than 0.01% of your income goes to staying alive. A tax rate of even 5% on the first person would be harmful. A tax rate of even 50% on the second person would not even be noticed.
2) From the people who draw most from the culture — that is, the people who benefit the most from it — more is expected. Those who are wealthy have benefited far more than any of the rest of us. The only responsible and moral thing to do is to give back as much as one can.
3) The government encourages certain activities and discourages others. Home ownership is considered positive, and is encouraged — therefore, homeowners get to deduct mortgage interest. Business investment is viewed as a positive good because it creates jobs — so capital gains are taxed at a lower rate than earned income.
A person whom I respected greatly once told me “I don’t mind paying taxes. That means I’m making money.” But he lived through the Great Depression, what did he know about money?
Note the scientific method: Bart says “Taxes are per se painful.” My data disproves that.
@shortchain,
Your friend is wise, little grasshopper.
My income is comfortably in the six digits. I do not pay nearly enough taxes. My kids are scraping by. They pay too much.
Greedy mindless French-revolution-elite-era fascists really tick me off. The idea that a billionaire should pay the same rate as someone making minimum wage — or even the middle class — is one of the most obscene economic concepts imaginable, foisted on us by a Scrooge-like Dickensian mentality that borders on the pure evil. That such people often pretend to be the Party of Christian Morality is also blasphemous.
Fortunately, they’ll be the first up against the wall when the Revolution comes.
Bart said: “__________”
This time he stupidly opined that “taxes per se are painful”.
Well, taxes are just what We the People pay for the services the government, as We the people request, through the representatives that We the People elected provides.
Logically, Bart’s opinion is a valid as saying that it’s painful to pay for: the car we drive, the house in which we live, and the groceries we eat. Even the legal services we occasionally need. Sure it would be less painful if we didn’t have to pay for all those things.
Only thing different is the former is collective as a society and the latter is individual. If one wishes to go off an be COMPLETELY, and I do mean completely, self sufficient, then Bart’s philosophy is feasible.
Fact is, as a libertarian, Bart SHOULD be a strong believer in TANSTAAFL.
No more than you would allow the pacifist to avoid paying taxes that pay for the military, you haven’t the right to pick and choose what We the People, ie. American society, decide we want OUR government to provide otherwise.
But when it comes to taxes: pardon me, but your hypocrisy is showing. Again.
BTW Bart.
Those questions I posited above were not rhetorical. Give us some answers.
America thrived in the 1950s and 60s.
The peak tax rate for the uber-wealthy was 92%.
We paid off the huge debt from the Second World War. That debt was far greater, as a percentage of GDP, than is the current national debt.
Then we cut taxes for the rich. And kept cutting them.
The gap between the poor and the rich kept growing. In the Bush 2 era, the middle class, for the first time, had no increase in standard of living. For a decade. While the top 2% came to own nearly 80% of our country.
Finally, in 2008, the economy fell off a cliff, and we had the worse recession since the 1920’s.
Draw your own conclusions.
@Bart
“drfunguy:
Taxes are per se painful.”
Nope. It matters what the magnitude of the tax is in relation to your income.
For example, Reagan raised my taxes when I made less than $5000 per year (putting the lie to your consservative propaganda above). That was painful. When Bush I raised my taxes (again putting the lie to conservatives keep everybodies taxes low), I was making almost $10,000 per year; it wasn’t _as_ painful.
That is marginal utility (and Republican tax policy) at work.
@Max
Well, taxes are just what We the People pay for the services the government, as We the people request, through the representatives that We the People elected provides.
Ever since Reagan, Republicans have believed that we don’t actually have to pay for anything. Republicans borrow money (mostly from the Chinese) instead of paying for the tax giveaways to the wealthy. They only care about deficits when there is a Democrat in the Whitehouse, and the Republicans have already run up massive debt and tanked the world economy.
So it goes.
Mr U asked: How come taxes aren’t a flat percentage of ones earnings regardless of how rich you are?
DC: 1) A dollar to a poor man is more than a dollar to a rich man. 10% is more to a poor man than 10% is to a rich man. If you make under a certain amount, 100% (often, more like 200%) of your income goes to merely staying alive. If you are very wealthy, than perhaps less than 0.01% of your income goes to staying alive. A tax rate of even 5% on the first person would be harmful. A tax rate of even 50% on the second person would not even be noticed.
A) This is the purpose of a personal deduction and has nothing at all to do with progressively more punitive tax rates on disposable income.
B) So far as disposable income goes, it is not at all clear that a dollar is more important to those who earn less. The wealthy generally use their money to go into business to create more wealth whereas your average middle class person who does not invest pisses their money away.
2) From the people who draw most from the culture — that is, the people who benefit the most from it — more is expected. Those who are wealthy have benefited far more than any of the rest of us. The only responsible and moral thing to do is to give back as much as one can.
Marxist claptrap. Memo to progressives and socialists: Life is not a lottery nor a free lunch provided by government for which the winners should gratefully compensate the government. Quite the opposite. Investors and business owners create the wealth and jobs which the government taxes. If the top quintile of earners goes on strike, 3/5 of our non SS / Medicare revenues disappear.
3) The government encourages certain activities and discourages others. Home ownership is considered positive, and is encouraged — therefore, homeowners get to deduct mortgage interest. Business investment is viewed as a positive good because it creates jobs — so capital gains are taxed at a lower rate than earned income.
Think about what you just said. You have admitted that taxes are per se destructive and the government encourages economic activities it prefers by lowering or eliminating taxes on those activities. You have now accidentally discovered the insight of supply side. This is why it is a penny wise and a pound foolish to punish wealth creation with a progressively punitive system of marginal tax rates. The ideal tax system is neutral and widely shared so the destructive effects of taxes are minimized and the markets are not distorted.
Bart said: “______” even though he has had several opportunities (as usual) to answer a few simple Constitutional questions posed at 17:02 last night he refuses to do so.
Max:
Your 17:02 rants did not pose a single question concerning a provision of the Constitution.
Bart,
You assert (without a shred of evidence): “So far as disposable income goes, it is not at all clear that a dollar is more important to those who earn less.”
You not only don’t understand marginal utility, you don’t understand simply human psychology. Since there have been untold numbers of studies, (see here for a few hundred thousand links which contradict your inane worldview) all of which demonstrate exactly the opposite of what you assert, you have shown yourself, yet again, as a fool.
You assert: “The wealthy generally use their money to go into business to create more wealth whereas your average middle class person who does not invest pisses their money away. ”
Actually, here in Minnesota, the scions of families which gained wealth in business and then sold out or lost control generally go into politics. Also, “person who does not invest” would kind of make the rest of your statement a circular argument.
You assert (as usual, with no evidence): “If the top quintile of earners goes on strike, 3/5 of our non SS / Medicare revenues disappear.”
Randian blathering, and incoherent too. The top quintile of earners cannot “go on strike”. A) They’re not union. B) They’re a greedy bunch of money-grubbing a-holes, who, if they saw their fellows take their eyes off the prize, would walk over their own brother to grab another piece of the money stream.
SC:
I understand your marginal utility argument and reject it.
Folks who truly value money do not waste it on frivolous and unnecessary consumption. Rather, they use it as leverage to create more money and limit their consumption to a portion of the earnings.
The real world does not consist of your false dichotomy of desperately needy poor and middle class workers and unproductive plutocrats lighting cigars with $100 bills.
Bart:
Ken DeLay. Jeffery Skilling. Bernie Ebbers. Bernard Madoff.
Want more?
“If the only information available was that there were two people in a room with an average net worth of $25B, and you were told that when they left, one would have $50B, and the other would have mere thousandths of a percent as much, that would sound unfair…”
It would “sound unfair” until it was explained that the one with $50B was pretty much responsible for developing and delivering computer systems in an expeditious and user-friendly manner to people around the globe while the other was merely a misanthropic blogger.
🙂
Bart,
Sure, you can say “I understand your marginal utility argument and reject it.”
a) We see no evidence that you understand it.
b) Reject all the evidence, from all the studies that have been done? Fine. Come up with your own theory, find evidence to support it, and then you might be able to speak with some authority. As it is, you are just passing gas.
When you say: “Folks who truly value money do not waste it on frivolous and unnecessary consumption..”
Gosh, that sounds like a “No true Scotsman..”” argument. Another fallacy.
Oh, and BTW, people who truly value money over all other things are pathological, you know.
shortchain…. I’m very busy these days and don’t have much time for blogging, but I did read your “Gilbert and Sullivan” bit yesterday and thought it was brilliant.
Best of all, it gave me a welcome chuckle in the middle of a long hard day. I was most appreciative 🙂
MR,
You clearly do not know the history of Bill Gates and the theft of CP/M from Digital Research, or how the first Microsoft product was developed using Harvard University equipment, or any of the other examples where Microsoft appropriated technology, put a company out of business, and otherwise eliminated competitors.
Bartoinette says: Where is the contradiction in stating that taxes per se are not theft, but a majority forcing a minority to pay more than their share of taxes is theft?
For the umpteenth time, there is no minority being taxed unfairly. EVERYONE whose income reaches a certain level will have that PORTION of their income taxed at EXACTLY the same rate. Your argument is like saying stealing a gumball from everyone is ok but only stealing a bar of gold from the minority who actually have gold is really theft.
I actually think you get paid by the responses your obtuse comments create and not by your comments per se.
How about this for fair: You pay taxes on your wealth and not your income. You own more, you pay more. Same rate for everyone. A wealth tax instead of an income tax. How about it, Bartoinette?
“You clearly do not know the history of Bill Gates…”
Calm down now…I was just being a little bit facetious to get in a little dig at Michael. He was quick to assume I’m a sucker for conservative news propaganda the other day, so I thought it’d be cute to juxtapose his main “accomplishment” in life with that of Bill Gates….
I’m sure Michael’s done far more in his life than just be a “misanthropic blogger” just like I’m sure that Bill Gates has (wrongly) stepped on many toes and committed other misdeeds on his way to acquiring $50B in wealth.
Hey Muley… I posted at the NYT site yesterday to see if there’s anybody over there who hasn’t found us yet… and I used your name in my post. Hope you don’t mind.
(It’s in the blog entry on Obama’s approval numbers.)
PS… I also used Bart’s name, but I don’t really care if HE minds, since he insists on calling me “catty.”
Meow.
filistro,
Gosh (pulls his forelock, or would, if he had a forelock), ma’am. Bart’s sublime idiocy forced me into verse, as only poetry could capture the poignancy I felt.
Besides, all credit should go to the memory of Gilbert and Sullivan — and, of course, to Bart’s blithe rejection of reality, as an inspiration.
MR,
It’s OK. Some of us who have been “in the business” since the beginning and remember all the opportunities that Microsoft has crushed are a bit sensitive on the subject.
Bart, chickenshit as per his usual M.O., does not understand the difference between:
questions ABOUT the Constitution, and
questions asking for Constitutional relevance.
Ya know, a person born blind may well deserve sympathy, but a person who, on purpose, blinds themselves deserves only scorn, or worse.
p.s. thankfully he’s still dead!
Bart, Mr U asked why some people are taxed at different rates than others. I provided the historical arguments for doing so. You then criticized the arguments, having missed the context.
You are free to provide other historical arguments. Let’s see whose version of history is more credible, hmmm?
Barted:
Memo to progressives and socialists: Life is not a lottery
That’s right. The people who are born to billionaire parents worked very hard to achieve their wealth.
That’s right. The people who are born to billionaire parents worked very hard to achieve their wealth.
Touché! and “we” all can thank Bartles for one thing, eh …
Not having any children! Indeed a blessing. 😀
BD: Memo to progressives and socialists: Life is not a lottery
DC: That’s right. The people who are born to billionaire parents worked very hard to achieve their wealth.
1) That money has already been taxed and thus does not apply to our argument.
2) These few dozen folks only make up a tiny fraction of the millions in the upper quintile of earners you seek to loot.
“That wealth has been taxed.” Yes, but the money passed to the offspring has not. It’s simply dishonest to pretend that it has.
And this dishonesty is clearly deliberate, in an attempt to “frame” the discussion.
When you cannot argue your position honestly, you probably ought to examine your position.
Bart DeLiar said: “__________”
BD: “That wealth has been taxed.”
SC: Yes, but the money passed to the offspring has not. It’s simply dishonest to pretend that it has.
1) Actually, the money could very well have been triple taxed – tax on corporate profits, tax on net income from corporation and then death tax.
2) Even if you eliminated the corporate and death taxes, the income has been taxed once. If the earner was alive, he could spend every penny of that taxed money on his kids on whatever his kids wanted. The only difference between that and a bequest is the death of the earner. The income stream does not suddenly become untaxed.
Bart,
We don’t tax money. It’s income that’s taxed.
I understand this far better than you ever will, and I have no real economics background — I just read what Michael and a few other bloggers have written. You, on the other hand, seem incapable of actual understanding, since all you repeat are empty talking points.
Didn’t you say once that you minored in economics? It’s a wonder you could pass, even in these latter days of grade inflation.
Bart says:
No true Scotsman would inherit billions of dollars sitting on his ass.
No true Scotsman would use his wealth to destroy things that belong to other people, including their livelihoods, just to make more money.
No true Scotsman is a malefactor of great wealth.
(Tip o’ the hat to Shortchain for introducing me to the “no true Scotsman” style of argument, which is a perfect fit here.)
Bart, I still want to know your opinion on a wealth tax instead of an income tax. Or will you just avoid this question like you have with so many in the past.
Oh wait, I bet I already know the answer. It would punish those who create wealth. Never mind.
And really is the bottom line with Bartoinette. He considers taxation as some sort of punishment rather then the price citizens pay for living in a free society.
Number Seven says: Bart, I still want to know your opinion on a wealth tax instead of an income tax.
Please summarize your proposed tax.
Just to give you heads up, I am a proponent of eliminating all income taxes in favor of the FAIR tax.
So, then, one question, Bart.
Is Bernie Ebbers a true Scotsman?
If not, what qualities make him “true” vs “untrue”?
Consider your answer carefully, and remember that as a former resident of Jackson, Mississippi, I know several people personally whose lives were ruined by this man.
Ok Bart, here is goes. A flat tax on ones wealth. No deductions, no exemptions. Not sure what the rate would be but maybe we could work that out.
All the fair tax proposals I have seen are frauds, especially the one touted by Neal Boortz.
fairtaxfraud.com
No. 7: Ok Bart, here is goes. A flat tax on ones wealth. No deductions, no exemptions. Not sure what the rate would be but maybe we could work that out.
Is the income tax eliminated?
How often re you taxing one’s wealth? Annually?
You obviously know nothing about the FAIR tax.
Cheap shot aside, you are essentially reiterating my point, that there’s often other perspectives in scenarios, and additional information will add additional nuance.
Bart DeLiar said: “______”
Yes, the income tax would be replaced. And no, the wealth tax would be applied at the point of purchase. Investments would be considered wealth, as would any asset such as savings. Things you can consume would not be taxed.
Basically, anything that would increase one’s wealth would be counted.
It would be a bookkeeping nightmare though, and besides, our current system is already fair. If you earn a certain amount, that amount of income is taxed at the same rate as anyone else with that income with the same filing status. I really don’t know why you consider a progressive tax rated applied to everyone in the same fashion some sort of punishment for the rich. They should be thankful to live in a country such as ours.
If you are for the fair tax proposed by Boortz, then yes, I know enough about it to be able to comment. You just want to give the uber rich a free ride, don’t you?
Try out THIS “Fair Tax”:
All other taxes on individuals are repealed.
No deductions of any sort are allowed.
Income is defined as money received from ANY source (earnings, cap gains, gifts, bequests, I mean ANY)
First $35,000 of income is tax exempt. ($35k negotiable, actual target to aim at 20% of GDP revenue)
Corporations and all other created corporate entities, are treated as individuals for tax purposes. Hey, I didn’t declare corporate entities to have the rights of citizens. The right leaning SCOTUS did. With rights come responsibilities. Sorry, can’t have it both ways!
15% (or 19%, or 23%, whatever to hit that 20% of GDP target revenue) tax levied on income.
Budgets MUST be balanced annually except in the case of war or economic disaster.
In case of war or economic disaster, an annual surtax is added to the percentage tax sufficient so that debt incurred is paid off in 15 years.
Put that in your pipe and smoke it a bit.
No. 7:
The FAIR tax is a national consumption tax.
The first roughly $35,000 (I don’t have the book with me) in spending covering basic living expenses would be exempt, so the poor pay nothing.
There are no free riders as there are with taxes on unreported gray or black market income. Drug dealers and and tax evaders would be scooped up and the average tax burden would go down.
The insane tax code would be largely eliminated and the US would save several hundred billion dollars a year in tax compliance costs.
The idle wealthy who do nothing but spend money would pay about a quarter of that spending in taxes.
The productive wealthy who invest their money in businesses and creating jobs would not pay taxes on those investments.
Unlike the current tax code which encourages frivolous consumption and discourages wealth and job creation, the FAIR tax would do just the opposite.
Of course, there would be no opportunity for progressives and socialists to redistribute wealth or try to run our lives through the tax code.
The Scotsman’s Kilt
A Scotsman clad in kilt left the bar one evening fair
And one could tell by how he walked he’d drunk more than his share
He staggered on until he could no longer keep his feet
Then stumbled off into the grass to sleep beside the street.
Ring ding diddle diddle i de o
Ring di diddle i o
He stumbled off into the grass to sleep beside the street.
Later on two young and lovely girls just happened by,
And one says to the other with a twinkle in her eye
You see yon sleeping Scotsman who is young and handsome built
I wonder if it’s true what they don’t wear beneath their kilt.
Ring ding diddle diddle i de o
Ring di diddle i o
I wonder if it’s true what they don’t wear beneath their kilt.
They crept up to the sleeping Scotsman quiet as could be
Then lifted up his kilt about an inch so they could see
And there behold for them to view beneath his Scottish skirt
Ws nothing but what God had graced him with upon his birth
Ring ding diddle diddle i de o
Ring di diddle i o
There was nothing there but what God gave upon his birth
They marveled for a moment then one said we’d best be gone
But let’s leave a present for our friend before we move along
They took a blue silk ribbon and they tied it in a bow
Around the bonnie spar that the Scot’s lifted kilt did show
Ring ding diddle diddle i de o
Ring di diddle i o
Around the bonnie spar that the Scot’s lifted kilt did show
The Scotsman woke to nature’s call and stumbled toward a tree
Behind a bush he lifts his kilt and gawks at what he sees
Then in a startled voice he says to what’s before his eyes
“I don’t know where you’ve been lad but I see you won first prize”
Ring ding diddle diddle i de o
Ring di diddle i o
“I don’t know where you’ve been lad but I see you won first prize”
If the fair tax discourages consumption (ie lowers demand for products), how does that create jobs? It would do the opposite, by discouraging consumption and lowering demand the supply would have to fall with it which means less people in every position at a given company. It would mean less jobs and that ‘investment’ would be in guaranteed bonds that are, surprise surprise, guaranteed by ‘we the people’ and our taxes. The fair tax would kill off the economy.
Barted:
1) That money has already been taxed and thus does not apply to our argument.
We were talking about life being a lottery. You’re wrong.
And money is taxed when it changes hands. When someone inherits, it changes hands. So no, the income for the inheritor has not previously been taxed.
By your argument, there can be no tax. When I buy something, the money I pay is subject to sales tax, and the vendor has to pay income tax. So when he pays his employees, that money has already been subject to tax– twice. (More than that; I had to pay income tax on it when I acquired the money.) So the employees should not have to pay any income tax on it when they get paid, because ” That money has already been taxed.”
This argument of yours is intensely foolish.
2) These few dozen folks only make up a tiny fraction of the millions in the upper quintile of earners you seek to loot.
If you wish to view legal taxes as being “looted,” move to Somalia. The rest of us like our Constitution. It’s a shame you don’t.
But again, you claimed life is not a lottery. Clearly, my example proved otherwise. You’re simply wrong.
Barted:
The productive wealthy who invest their money in businesses and creating jobs would not pay taxes on those investments.
So, the people who work for a living pay tax. The people who do nothing live off of their “investments” (ie., buying and selling pieces of paper), don’t.
Why do you hate the American worker? Why are you in the pocket of these wealthy welfare queens? You view taxes as “looting” — you want to “loot” the American worker, “punish” us for working. Yet you will reward the lazy slob who produces nothing.
The true goal of the unabashed totalitarian fascist.
electrovibe11 says: If the fair tax discourages consumption (ie lowers demand for products), how does that create jobs?
There should be no particular effect on consumption.
The elimination of business income taxes and business income tax compliance costs will go to hiring workers and lowering the cost of our goods. This is no small issue. Our business taxes are some of the most burdensome in the world.
The overall per capita tax burden will go down as free riders start paying taxes. This is my favorite part. Tax evasion is a national pastime and we get stuck with the bill.
The money lost in income taxes will then go to a consumption tax and the money left over should go further in buying cheaper goods.
Cheaper goods and services would make our goods more competitive against foreign goods, which can only help our trade balance.
Of course, there are downsides. Roughly a million tax accountants, lawyers and bureaucrats will have to find gainful employment. And you will have to find something else to do other than fill out tax forms.
Bart says, of the job-killing “Fair tax”, that “There should be no particular effect on consumption.”
And unicorns should fly out of your ass.
I might be willing to believe this, until it was shown false, if someone with an ounce of integrity said it, but frankly, in the case of Bart, we have to assume it’s false until he shows some evidence — and even then, you should check the evidence, because he has a comprehension problem, and it is routine to find that his evidence indicates just the opposite of what he claims.
As with almost everything he Barts, don’t bother waiting for evidence. He won’t show any.
On a related note, Bartles recently got a building permit for the construction of the 1st Egyptian pyramid in Colorado as he will take his conservative fortune w/him.
Indeed, his only worry will be all those progressive we the people grave robbers!
Bart is currently flying in illegal aliens 😉 from Bumfuck, Egypt to help w/the construction …
We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
I’m the author of the website mentioned by Mule above as proposing a tax proposal that is more fair. One of the main points of the site is that federal income taxes can’t be considered in isolation. To look at the fairness of our tax system you need to look at all taxes at all levels of government, including the largely regressive social security, sales, property, state income taxes, gas taxes etc. Plus you need to account corporate taxes – most economists feel half are ultimately paid by investors while the rest fall on employees and consumers.
Do all that and you come up with this shameful fact: In this country billionaire Warren Buffett pays 11% total (federal, state, local, corporate) taxes on $8 billion annual investment gains while a single minimum wage worker pays 30% total (federal, state, local, corporate) taxes from her $14,500 annual salary. Under December’s tax deal, the average top 2% household got $74,000 while the average bottom 98% household got $5200 (and the national debt went up almost $1trillion dollars). See http://fairsharetaxes.org for details.
The top 1% in the US have gone from owning 22% to 40% of the nation’s wealth in the last thirty years. This is largely due to the tax cuts for the wealthy investor class, started under Reagan. They were supposed to encourage investment and strengthen the economy but have done the opposite. Since then, the average annual GDP growth dropped by one-quarter, and we’ve had multiple recessions triggered by investment bubbles, caused by the favored tax treatment of investment income (via the principles of supply-and-demand you learned in the first week of Econ 101).
I propose that all federal, state, and local government services are funded with a reformed, simplified income tax and a new wealth tax (about 1% of net worths over $1million). Income and net worth are the two true measures of ability to pay and extent to which households have benefited from the economic infrastructure governments provide. Eliminate all other (sales, real estate, social security) taxes which shift the total tax burden in this country from the rich to the poor and midddle class. See http://fairsharetaxes.org/ProposedReform.aspx
The reform would reduce each middle class annual total tax bill by thousands, slash the deficit, and eliminate the market-distorting tax breaks for investing that are ruining our economy and impoverishing all but the top few percent. Critics see http://fairsharetaxes.org/Talkingpoints.aspx
Bart Says “There should be no particular effect on consumption.”
Ummm… you just said “Unlike the current tax code which encourages frivolous consumption and discourages wealth and job creation, the FAIR tax would do just the opposite.”
So which is it?
Repeating for Bartles …
The top 1% in the US have gone from owning 22% to 40% of the nation’s wealth in the last thirty years. This is largely due to the tax cuts for the wealthy investor class, started under Reagan. They were supposed to encourage investment and strengthen the economy but have done the opposite. Since then, the average annual GDP growth dropped by one-quarter, and we’ve had multiple recessions triggered by investment bubbles, caused by the favored tax treatment of investment income (via the principles of supply-and-demand you learned in the first week of Econ 101).
~~~~~
Bart, why did Reagan and why do you hate America?
PeteG2,
It’s an interesting proposal, and one that addresses many of the concerns regarding the current state of taxation in the US. It doesn’t address my biggest concern, namely that of self-reporting. That said, it’s a far cry better than most of the tax systems in place in the US, and those proposed to replace them.
I’ll look into a more detailed, thoughtful writeup in the coming weeks.
Michael- Thanks for your comment. I don’t know that I have a work-around to completely eliminate self-reporting, but independent reporting to the IRS (by employers and financial institutions-perhaps more than we have now) is touched on – see the http://fairsharetaxes.org/TaxForm.aspx page:
“Under the proposed tax system, this form could replace all your federal forms and schedules and state income tax forms. (There would only be one additional schedule for those with a small business.) There would be no sales taxes, use taxes, property taxes, estate taxes, or tolls. Practically anyone could fill it out in about one hour without needing a tax preparer. There could be online and spreadsheet versions in which, after you fill out 20 lines, the calculations would be done for you. If fact, since almost all figures are from forms both you and the IRS would receive, the IRS could send you pre-filled form. You would need to confirm or correct and certify the information, with particular attention to lines 10, 21, and 22, sign the form, and send it back.”
The proposal is a work in progress. In fact I have a list of changes I’d like to make – many based on feedback to the site. If you have ideas to reduce self-reporting, I’d welcome them, either here or through my Contact me page. -Pete
@PeteG2
Thanks for the thoughtful post. The irony is that Warren Buffet wants to be taxed more appropriately. He said so himself. Crazy world, eh?
I also would like to thank PeteG2 for joining us. I havn’t had a chance to check out your website but I will ASAP. I will say this, just from what you have posted, it looks like a positive change, unlike the so called ‘fairtax’ proposed by Bartoinette. Two thumbs up for agreeing that Reagan’s changes were a form of reverse socialism in which wealth was redistributed from the middle and poor working class to the top tier wealthy.
PeteG2,
Thanks for stopping by and offering your insights. You make some very good points regarding growing wealth inequity and how taxation policy could address the issue if we were willing to completely revamp the current system.
And the silence from Bartoinette continues…
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