Taxes

The people support increasing taxes on the rich.

23 Polls Say People Support Higher Taxes to Reduce the Deficit | Capital Gains and Games

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The Shadow Economy

I'd think if taxes were really too high here in the US we'd rank better than dead last in size of shadow economy. Sure, corruption probably has more affect on the size of the shadow economy than tax rates, and many countries at the top of the shadow economy list specialize in corruption but many with lower corruption indices have larger shadow economies than us. This suggests that overall tax rates in the US are not exceedingly high by world standards, at least not high enough to drive business underground, so maybe we should stop seeing "Lower Taxes" as the solution to every problem.

Some Related Links:
[mahalanobis] [America's Shadow economy] [Shadow Economy #2] [Corruption Index ] [Corruption 2]

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Propaganda

This post tries to make a family income of $250,000 appear "not-rich" so that you'll feel bad about increasing taxes on these poor families.[Fiscal Times - down and out on $250,000]

A few comments.

A family income of $250,000 puts them in the top 2% of US households. 98% of families make less than this.

These families make about 5 to 6 times the median household income in the US which is about $50,000 [Wikipedia]

Look over the expenses shown and think about how your family compares. A few stand out.

Saving $33,000 for retirement and $8,000 a year for college? That's 16% of pretax income. Is  your family saving that much? That $41,000 a year that this family is putting in the bank is what about half of the families in this country make in a year.

A 4,000$ vacation, $235 a month for eating out + $1,000 a month for food and household supplies. Over $300 a month for entertainment (out and at home), $300 a month for clothes. Over $400 a month for maintenance on the house plus another $400 a month for cleaning the house? $1,000 a month for baby sitting. 9000$ a year out of pocket medical expenses. Sure, these people are spending everything they make but they're living damn good.

But the thing that really pisses me off about this is,....

If we raised taxes on incomes over $250,000 a year by another 3%, it wouldn't affect these "poor" families one god-damned bit. They wouldn't pay any more taxes, not a penny more. The increase would only be on income over 250,000. Someone looked up all these numbers, wrote this article about these poor folk and forgot to mention that the tax increase that the President is calling for wouldn't even apply to these people. odd, eh?

Sure, if they made $300,000, the increase would cost them a little more,.. about $1,500 more. The poor bastards would have to get rid of their dog.

tnb

Tax and Spend

Two good posts on taxes and spending.

First, The Baseline Scenario discusses what that "Washington" thing is that eats our tax dollars.

[The Baseline Scenario - What is this Washington]

Next, Conservative Bruce Bartlett looks at the 50% who don't pay any Federal income taxes.

[Who doesn't pay Federal Income Tax?]

of note is this

There are 78,000 tax filers with incomes of $211,000 to $533,000 who will pay no federal income taxes this year. Even more amazingly, there are 24,000 households with incomes of $533,000 to $2.2 million with zero income tax liability, and 3,000 tax filers with incomes above $2.2 million with the same federal income tax liability as most of those with incomes barely above the poverty level.

and this

Perhaps the right and left can at least agree that it is unseemly for those in the top 1 percent of income distribution, with incomes at least 10 times the median income, to pay no federal income taxes. It’s not socialism to ask them to pay something.

Tax rates on the super rich need to be raised.

tnb

Wealth and Income Inequality in the US

Here are several good charts showing that the super rich are taking more and more of US wealth and income. [Business Insider]

This charts shows that from the 40s to about 1980 income inequality was relatively stable. Then in the 80's we fell in love with cutting taxes to spur the economy and the money started piling up in the super-wealthy's hands. Now the super wealthy have the biggest slice of the American Wealth pie and the economy sucks for the rest of us.

So, go look through these 16 charts and then explain to me again why we should attack our current debt problem by cutting Social Security and Medicare and not raising the tax rate on the rich.

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Corporate Profits

A couple of links on Corporate profits.
Steve Sailer - Why are corporate profits so high compared to a generation ago?

You might think that regional monopolies and oligopolies that allowed higher profits than the risk adjusted cost of capital would have been worn down over the decades by increased competition caused by the huge improvements in shipping, communications, data processing, and globalization. But I don't see much evidence for that.

I'm not surprised that Apple has very high profit margins on innovative products, but why does, say, P&G do so well these days on toothpaste and detergent?

I mean, sure, we all know that corporate executives have been winning in the struggle with workers over pay. But why hasn't increased competition between corporations competed away the profits won away from employees?

Well,... my best guess is that it's because,... those monopolies and oligopolies own our government. They pay for laws that protect their interests over consumer and working class interests and for laws that add barriers to, or limit real competition. Both of which feed their profits.

Another on Corporate profits.

32 Corporations Spent More On Compensation For Top Executives In 2010 Than They Paid In Income Taxes

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Do Tax Cuts Raise Revenue

[EconoSpeak] with some evidence.

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A Republican On Taxes

[Bruce Bartlett on Taxes]

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What are Fair Taxes?

Here's a good take... [A Taxing Matter]

It's worth reading.

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Who pays Taxes?

[About Taxes]

This is the first time I've heard that the "51% of the people paid no income tax in 2009" story is an aberation caused by the recession. In most normal years, the number is between 35 and 40%, for example, 37.9 percent of households paid no Income tax in 2007. Of course this doesn't include social security and medicare taxes, gas tax, sales taxes, sin taxes, all of which hit the poor harder than the wealthy.

Conservatives, who are always pushing for tax cuts, were pushing this story like its a bad thing that so many don't pay any income taxes but wouldn't more tax cuts lead to even more housholds paying no income taxes?

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Is 250,000$ a year rich?

Debunking the "$250,000 a year isn't really rich" myth.

Taxes: Rich vs Poor

The chart below, and some good commentary, found here [Hullabaloo] and [Failed Empire]

but, The New York Crank says [Don't envy the Rich] their future may not be as bright as they think.

Increasing Taxes on the Wealthy

Economist's View: Increasing Taxes on the Wealthy is Unfair???

On the first point, it's debt, not spending, that is at issue. You can have high spending with little debt if you are wiling to collect the taxes to support it. In addition, the problem is mainly rising health costs, not spending in general -- so that's what we ought to be talking about. We shouldn't let deception over where the true problem is lead us to solutions that meet the ideological goal of Brooks and others of smaller government, but do little to help solve the main problem.

Some good links and comments below the post.

tnb

Tax The Rich?

Our leaders are not going to like this.

Poll: Taxing the rich favored over Medicare cuts - Jennifer Epstein - POLITICO.com

Only small slivers of the group of Americans surveyed for a Washington Post/ABC News poll released Wednesday said they support cuts to Medicare and Medicaid – 21 percent and 30 percent, respectively – and cuts to defense spending get the support of 42 percent of those surveyed. Seventy-eight percent of Americans are opposed to Medicare cuts, while 69 percent are opposed to Medicaid cuts.

... and the Fox News crew is going to hate it. I'd guess, in the next few days, they'll have a Rasmussen poll showing most do favor cutting Medicare.

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Congress: Spending-Deficits

We're pretty serious about cutting spending: [Spending Cuts]

Unless we're talking about this spending:

[Barak: U.S. aid significantly bolsters Israel's missile-defense capabilities - Haaretz Daily Newspaper | Israel News]

Defense Minister Ehud Barak welcomed Friday a decision by the U.S. House of Representatives to approve a budget which includes $205 million intended for continuing development of the Iron Dome anti-missile system

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Corporate Taxes

Some Back of the Envelope Nerdery on Corporate Taxes «  Modeled Behavior

I'm not against cutting or even killing corporate taxes but I see a couple of problems. I think their elimination would add to our already increasing wealth and income inequality and though there would be an economic gain initially, I don't think the gains would be that great in the long run.

The increased profits generated by the tax breaks would be shared by the owners, the workers, and the consumers but it's the owners than stand to reap the most. These same owners, our current political and corporate elite, already control most of the country's wealth and take the most of income so cutting the corporate taxes rate will just allow them to take more. This can be easily offset by increasing taxes on the rich but we know how that goes. So,.. cutting corporate taxes, without additional taxes on the wealthy, will mean the rich get richer while the rest of us wait for the trickle-down.

There would be an initial economic boost as companies move into the US to take advantage of the low (or zero) rates but it seems a temporary gain. Eventually others countries would follow with their own tax breaks, leading to a global race to the bottom of no corporate taxes anywhere. I think we already see some of this in the US as localities compete against each other, bending-over-backwards with tax breaks to lure companies into their areas. At some point, when the coporate tax rates have bottomed out around the globe we'll be back to competing on labor prices alone and we're not going to win that race.

Still, cutting corporate taxes to zero and taxing at the individual level seems like a better way to go, cleaner, simpler, no double taxation. We just need to make it fair.

tnb

Taxes are Too High?

Tax bills in 2009 at lowest level since 1950 - USATODAY.com

Federal, state and local income taxes consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

Food Speculation

Food speculation: People die from hunger while banks make a killing on food | The Observer

A couple of thoughts on this.

First of all, it's a good example of a problem with an unregulated, free-market, capitalist system. Greed. The pure capitalist will manipulate any market if there are profits to be made. There are never enough profits. It doesn't matter if millions of people are financially destroyed in the process, or if they die of warfare or starvation, it's OK if profits were created for someone.

There's a good argument here for increasing taxes on the wealthy. As the worlds richest groups have accumulated larger and larger shares of the world's wealth, they've created huge pools of money that rocket around the financial markets searching for profits creating havoc where ever they flow. We seen it in the Dotcom bubble, Enron and Electricity markets, the housing bubble, the derivitive bubble, Oil prices, food prices, etc. The excess profits that fill these coffers should be taxed at a level to reduce their abilty to corrupt markets.

tnb

Your Tax Dollars at Work

Your Tax Dollars at Work Crooks and Liars

Crooks and Liars has a somewhat rambling post about how the recent Tax bill. A few highlights.....

On Inheritance tax.

• There are very few farms or small businesses that are affected by it.
• It saves the Walton family of Walmart fame billions.
• It saves other super rich families billions.
• It does nothing for the vast majority of Americans.

On Income taxes.

• Obama and the democrats wanted to let the tax cuts expire, raising the top rate 3% for those making over 250,000 but the republicans fought it and won. The republican argument is that higher rates would hurt small businesses and the economic recovery and that the 250,000 amount was too low.
• Though 250,000 may sound like a "low" number to rich folk. If the rates were to increase 3% the first 250,000 of income would still be taxed at the old rate only amounts over 250,000 would see an increase. An income of 350,000 in a year would pay an additional 3,000$... BFD...
• Median household income in the US in 2008 was $52,029. 50% of all households make less than that. [link]
• These tax cuts have been in effect for several years now and it doesn't look like they've help the economy all that much. Maybe we should re-evaluate the "cut taxes for the rich to stimulate the economy" strategy.
• There really aren't many "small businesses" that have income's over $250,000
• The top Income tax rates are lower than they've been in 75 years.

 The super rich need to pay more.

tnb

Tax The Rich

"The top 1 percent now owns more wealth than the bottom 90 percent. That is not the foundation of a democratic society.”

Tax the bastards.

tnb