Taxes up for the wealthy. Do you favor confiscatory tax rates?

[Stinky The Clown]

Back in the day, the top tax rate on top earners was at or just over 90%.

Would you favor that today? A sliding tax rate that climbs steadily to that level.

I'll say it ..... do you favor this sort of redistribution of wealth?

(By the way .... to lower the rate at which taxes would NOT go up, now set at $250K, is, in my view, politically counterproductive. If we take that down to maybe $150K or even $100K, would get too many people we need on our side upset. To keep it at $250 was very smart. There are sufficiently few of them that they have no clout. And in today's job climate, the deluded morons who might imagine they would ever get to that income level must be way down, too.)

[Luminous Animal]

1. Yes I do...

but I do not see it as a redistribution of wealth. I see it as a user fee that maintains the infrastructure (both physical and intellectual) to acquire that kind of wealth.

[MercutioATC]

2. I don't.

I believe that anything over 2/3 (67%) is completely unreasonable.

[SoCalDem]

11. If you look at the time in our history when we "had it all", you'll notice that the rates

on the "high-earners" were 90% & up.. It worked..and they were still living high..jobs were union, companies prospered, there was profit-sharing for employees, they got regular raises, people could afford medicine and doctors, kids could afford college..

when you STARVE the government, you also starve the nation, and eventually it dies..

Money HAS to circulate to every part of society. If it's locked up by a few, and hoarded, it hurts us all.

Back then people invested in companies because they had a connection to the company.. Investment, these days, is sending money to the Wall Street Casino, and it hs not worker for most of us..

[Beavker]

33. Very well done

Lots of different view I share. Love the DU'ers.

[MercutioATC]

96. Imagine that YOU were gojng to have all income above a certain point taxed at 90+ percent...

Wouldn't you just give up once you hit that number each year? Why continue to earn money if you're keeping less than 10% of it?

I think the incentive to earn would end at about 67% taxation (no data, just my estimation). That's adequate and fair. Above that would be confiscatory, punitive, and would be a disincentive to earn.

[pnwmom]

3. No. n/t

[havocmom]

4. When big traders are paying a lower rate on their capital gains than secretaries pay on wages

there need to be changes. I am all for raising the rates on the wealthy and large capital gains, along with taxes on very large estates. Doesn't need to be 90% UNLESS they keep hiding money offshore.

[ThomWV]

5. First off this is not a redistribution of wealth

Its an interdiction of profits taken from the pocketbook of consumers being returned to them before every dime of it can reach the owners of the wealth - which if you recall from Economics 101 is the means of production, not the income from it.

[mike_c]

6. in principle, yes I support "redistribution of wealth...."

The details are important, but I completely support "redistribution of wealth" if it's done to achieve a decent standard of living for everyone. In practical terms though, I doubt that it can ever be implemented properly-- too many people will act selfishly whenever they get the chance, so maintaining social fairness and parity becomes a punitive process rather than an altruistic one, essentially defeating the purpose.

[Lyric]

7. Yes I do.

They benefit a hell of a lot more from America's system of government than we do. They should pay a hell of a lot more, too.

Edit: Also consider that the 90% tax rate did not and DOES not mean 90% collection rate. Wealthy people write-off taxes like crazy. If they're giving additional money/goods to charities in order to write them off on taxes, then everybody benefits.

[Doremus]

50. Good point. 31 of the top 400 wage earners pay under 10% in taxes.

NONE paid more than 34%. They're ALL supposedly in the 35% tax bracket but collectively paid a much lower effective tax rate.

GeeDumbya & his Dick are in the top bracket. Their effective tax rates run in the 20's%.

It's all in the loopholes and writeoffs.

[Coyote_Bandit]

8. I think that the bulk of the taxes

should be paid from corporate profits.

Health care should be provided to all through a single payer taxpayer funded system.

Individual taxes should be graduated with those having higher earnings bearing a larger burden but the top rates should not be oppressive.

Real estate taxes should be used exclusively to fund education.

Sales taxes should exempt necessities.

[sinkingfeeling]

9. Households with incomes of $250K and over made up 2% of all households in 2006.

To answer your question, no I don't think raising the top rates to 90% is right. People who have obtained their wealth legally shouldn't be punished for their success.

I really don't get this whole, "we shouldn't have to pay taxes" attitude that has overtaken the country in the last 30 years. I look back at the tax rates I paid as a single mother back in the 1970's and they are over twice what I pay now.
Did everybody forget those rates before Ronnie's and the Bushes tax cuts? Before child-care tax credits and child tax credits and EIC? I was shocked to see that a two parent family of 4 could still get EIC on a $38K income this year.


http://pubdb3.census.gov/macro/032007/hhinc/new06_000.htm

[tularetom]

10. I have no problem with a 90% incremental tax rate

but I think I'd raise the threshold to maybe $500k.

[Ichingcarpenter]

18. Anyone above $4 million pays 90% and incrementally less down to

the $250,000 baseline.

Something like Eisenhower did.

[Stinky The Clown]

22. That sounds about right to me

at the $250K level, taxes would still be relatively low. Ramp up from there at an accelerating pace such that anything over $4M in income nets to the earner at $40K. Averaged out, that person woujld still take home something over a million. Sorry, but that ain't poor.

[bluestateguy]

12. No I do not

Barring something like a WWII scenario--in which case taxes should be raised for everybody.

39.6% is fine.

[tammywammy]

13. No n/t

[leftstreet]

14. Fuck the Wealthy. Quadruple our Wages!

[Greyhound]

27. Raising wages from the bottom up is what fixes a nation's economy.

Why can't people get that?

[Fire_Medic_Dave]

32. Why don't we just raise the minimum wage to $40.00 an hour then?

[Sherman A1]

41. Okay by me...

[leftstreet]

42. Sounds good

:thumbsup:

[Zhade]

52. Index it to inflation too, and you're right on track.

NT!

[Greyhound]

62. One jump that big would be too sudden and the economy couldn't absorb it, but an immediate

rise to $12 - $14 followed by scheduled increases, adjusted to inflation, to about $25 (in current dollars), would generate a living wage and stimulate both production and consumption.

Remember that the minimum wage is just that, a floor or baseline. The last 30 year orgy of pushing all the wealth up to the top has put the economy so far out of balance that the system cannot sustain itself. A family making $40K simply cannot, for example, afford to buy a $300K house and maintain their standard of living. That's how we got this point in the first place. Ever heard the phrase "house poor"?

Alternatively to raising the bottom, we can let prices crash to achieve equilibrium, but that is very damaging to commerce and we risk too few businesses surviving the adjustment to provide needed goods and services in sufficient quantity.

[Fire_Medic_Dave]

67. It would be unwise for a family making $40k to buy a $300k house.

They would be much wiser buying a $60k house.

David

[Greyhound]

71. You're right, but in large parts of this nation, most notably blue parts, there is no such thing as

a $60K house, yet most families are still trying to live on that income, frequently the result of two adults working full-time. $40K is fine if you live in Lawrence, KS, but about half of this nation lives in New York, Seattle, Phoenix, LA, Chicago, etc. where a pretty dumpy house can easily cost $300K or more.

Our whole economy is out of whack and that is the direct result of 30 years or more of this insane program we've bought into. The real tragedy is that Carter & Co. had us nearly through the adjustment, and we were just too impatient, selfish, stupid, to see it through.

Now we have about 20% of the population that sees $100K as an adequate and common middle class income, while the average is still in the 40s. There's a disconnect, a fantastic belief that what they've experienced is typical and if others don't have the same experience, it is due to some deficit on their part.

[Fire_Medic_Dave]

75. True.

[wickerwoman]

81. Exactly. The extremely modest ranch house my parents bought in 1980

for $60,000 would sell for $300,000 today. You can't get a trailer anywhere near Seattle for $60,000. And if you did, you'd have a two hour commute each way with today's gas prices and no public transportation to speak of.

[alarimer]

97. Where are there houses for $60K?

Around here, those are houses in really bad neighborhoods or are very tiny or need serious work (like probably tearing down and rebuilding).

Maybe some townhouses or condos are that low but not single-family homes.

[Sherman A1]

40. Agreed

That is the real answer. The working class has faced stagnate wages for far, far too long and significantly raising wages is the way to fix this


That said.....I still believe taxing the rich to be a very good idea.


I am thinking somewhere in the range of over 100% taxation on the rich. I would tax them into the dirt.

just my opinion......

[Thothmes]

45. thats right, lets milk every red cent we can get out of the Kennedys

and the Soros. They dont deserve anything because they are wealthy.

[Greyhound]

63. Why do you think they would end up with nothing? That is simply impossible.

Taxes are paid out of new money coming in, they would have no effect on the billions they currently have.

Now, if you want to talk morality, consider where those fortunes you mentioned come from.

[kestrel91316]

15. Hell, yes. They will just have to learn to survive on the hundreds of

thousands or even millions that they take home AFTER those high taxes. No one is talking about taxing them into poverty.

[leftofthedial]

16. we've had redistribution of wealth every bit as extreme in the opposite direction

look what's that done.

Yes. I do favor radically increasing the top rate.

I also favor a maximum wage.

[T Wolf]

17. Absolutely. what benefit comes from individuals accumulating BILLIONS of dollars -

except to produce children (and grandchildren; and great grandchildren; and great, great grandchildren) who never have to work for a living.

There has to be a limit imposed or human greed will lead us to what we have now - economic chaos and inequality not seen since the dark ages of feudal lords and serfs. Of course, that is what the rich want.

[Thothmes]

46. Right, the Kennedys are not entitled to a damn think

because Joe made a fortune.

[closeupready]

19. If it was good enough for Eisenhower, why would we Democrats object?

No reason not to, that I can see, if we need the revenue.

[FKA MNChimpH8R]

35. Amen to that!

Ike must have been one of those scary socialists!

[closeupready]

36. Yeah, lol - Ike, the Socialist, lol.

:rofl:

[Warpy]

20. You bet I do

because that's half of what we need to do to get our country back. The other half is crushing the military industrial complex by slashing the Pentagon budget and making those old boys make real choices about defense for the first time in their overstuffed lives.

We have a moneyed aristocracy and a runaway imperial military. Both will need to be brought under our control for this country to survive as anything but just another semi feudal banana republic.

[bread_and_roses]

39. Well said! (n/t)

[jtrockville]

21. Absolutely.

[DBoon]

23. No

I favor fair tax rates that ensure the proportional burden of taxes falls on individual based on their ability to pay

Very high tax rates on income will result in income dodging schemes (of course you could deliberately build in tax avoidance schemes that would have positive rather than negative social effects - like allowing income to be sheltered in bona-fide charities, etc.)

Income and wealth equalization requires a coordinated approach, looking at trade agreements, security and financial market regulation, etc. High income tax rates by themselves will not assure this. I think that past a certain point they are ineffective in income distribution. What that point is should be determined by economists based on factual data.

[Greyhound]

24. Yes, but the devil is in the details.

First I think we need to eliminate all this "classification" of income. A hedge find manager that "earns" half a billion dollars or more as interest in the fund he manages pays the capital gains rate, far less than half of the normal income rate, while an assistant that has a salary of $75,000 pays at the max of 36%(?). That's just :crazy:. As is the trust fund that pays some parasite spawn a million a year but is taxed at yet another rate because it is considered something other than regular income.

Taxing business on profits (IOW, only the income they can't hide or reclassify) is even worse. At the end of WWII 45% of federal revenues were from taxes paid by business, today it is something around 5%. Published tax rates are irrelevant when the tax code itself is so complex and convoluted that nobody understands it and all payments and collections come down to opinion and how well connected the attorney you hire is.

One often forgotten fact; Raygun dramatically cut taxes (it's your money) but also eliminated virtually all deductions for people except for mortgage interest. This resulted in an increase in the taxes paid by people on the lower end of the income spectrum. Any DUers here old enough to remember how complicated the old 1040 was and how, if you kept good records, your taxable income was reduced to a fraction of what you brought home?

So, the reality is that the "top rate" is just a PR rate that allows politicians and other parasites to whine and pretend to have an argument against paying for the system that allows them to exist.

[Stinky The Clown]

26. Every point you make is a good one

You get no quarrel from me.

[backscatter712]

25. EAT THE RICH!!!

They're savory and succulent!

[Bigmack]

91. I just love telling a couple of RW acquaintances ...

"I don't want to tax the rich... I want to kill them and eat them."

Makes them sputter.

Incidentally, they have really taken it in the ass in this economy, but they still support Dumbya.

[jmg257]

28. I think expecting anyone to pay 90% of their income is crazy. Don't care how much they make. nt

[Zhade]

53. WEALTH. Not earned income.

NT!

[Incitatus]

56. No one 'earns' a billion dolllars.

I don't care what they do. That kind of wealth is created by exploiting others.

[cottonseed]

60. It was 50% on the income you make over about $150K during Reagan

We've got short memories in this country. Also, it's a marginal tax rate, meaning you never pay 90% flat rate on your income, it would be 90% on income over $250K for that tax year.

[Canuckistanian]

29. I'd settle for eliminating all the loopholes

The rich have the resources to hire crafty accountants who can squeeze the feds out of every allowable drop of tax money.

[Thothmes]

47. the operative work is "allowable". Maybe the thing to do

is to revamp the tax codes to simiply do away with "loopholes"

[Burma Jones]

30. No, but.......I do favor getting the income gap back to reasonable

and that's maybe our biggest cultural problem, the "Winner Take All" mentality we have adopted over the last 30 years or so. I think it's a reaction to diversity.


By the way, that 90% tax rate came with loopholes galore........for instance, you used to be able to deduct interest paid on Credit Cards......

I think Clinton Era Tax rates, maybe adjusted slightly upwards for the mega rich, should do the trick.

Or maybe, to quote a Monty Python skit, "I think we should tax all foreigners living abroad".....

[AndyTiedye]

31. I'd Settle for Clinton-Era Tax Rates

and the Clinton Era economy!

That was enough to generate a quarter-trillion dollar surplus.

Higher than that is OK only if it includes health care.

Raising taxes on the wealthy only to blow it in Afghanistan is NOT on.

[On the Road]

34. The System Works Best

when all parts of society find it tolerable, especially those with the political influence of the rich.

In addition to tax evasion, which is illegal by definition, legal tax avoidance and capital flight become problems when rates are raised to confiscatory levels. Even in the days of 90% brackets, the effective rate was much lower for that group. In countries that have had 90% rates for years, capital flight eventually becomes a problem.

I think the maximum federal income tax rate (not including state taxes) should be no more than 50%. That should be more than sufficient to balance the budget in normal times and fund necessary programs. It would allow people to grow wealthy and keep a lot of their money without causing some of the secondary problems.

On Edit:What's just as important is that the upper brackets affect only the rich, not regular white-collar couples. It is not fair IMO for a doctor married to a real estate agent to be paying the same percentage as the Forbes 100. There is no reason why the number of brackets needs to be so small.

[Vinca]

37. No. People shouldn't be penalized for being wealthy, but

they should be willing to pony up a few bucks extra for a country that has allowed them to thrive as they have.

[Thothmes]

48. the sanest statement on this thread

[Thothmes]

49. the sanest statement on this thread

[Raineyb]

90. They are not being penalized. They are being taxed as per their use of the commons.

Rich people use more of the commons than others do they should pay more to keep it up. Also, a marginal tax rate doesn't tax them into poverty. They would pay say 90% on every dollar over a certain amount.

To use Thom Hartmann's example, if you tax everything over 3 million dollars at a marginal tax rate of 90% they still had the original 3 mil plus what's left of the rest. If they can't live on that they have a problem. But they need to pay for their use of the commons and right now they are certainly not doing this.

Regards

[fed_up_mother]

95. Exactly!

[Lagomorph]

38. The bigger the economy...

...the more taxes the government collects. The more taxes they collect, the better they can help our disadvantagd citizens.

Keep the tax rates at a level that encourages productivity. I'd cap it at 50%. One for me, one for you sounds pretty high to me. If you're putting in 20 extra hours a week and receive no benefit, why bother?

On the other hand, if they spend those 20 hours sending the work offshore, tax the fuck out of them.

[Tesha]

43. Yes. (NT)

[bread_and_roses]

44. Why use the word confiscatory? There's a difference between income from work and income from wealth

I see posters here seeming to think that some wage income would be taxed at the highest level - which would be very unlikely. What would end up being taxed at those levels is very high income from wealth - from stocks, bonds, capital gains, etc. Do people realize the extent of the inequality we've fostered with our ridiculously unfair tax system, in which ordinary wage earners often pay more than the very wealthy in taxes? Do people think no one was wealthy when we had the highest rates? Or that no one is wealthy now in countries with more progressive rates? Why such tender concern for wealth generated by wealth? Because that's what we're talking about, not income from the sweat of one's brow.

I'm not familiar with this site but these graphs and figures look similar to others I've seen and it was the first link on a search so I'll use it:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

The Wealth Distribution

In the United States, wealth is highly concentrated in a relatively few hands. As of 2001, the top 1% of households (the upper class) owned 33.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 51%, which means that just 20% of the people owned a remarkable 84%, leaving only 16% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth, the top 1% of households had an even greater share: 39.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2004).

Table 1: Distribution of net worth and financial wealth in the United States, 1983-2001*
Total Net Worth
Top 1 percent Next 19 percent Bottom 80 percent
1983 33.8% 47.5% 18.7%
1989 37.4% 46.2% 16.4%
1992 37.2% 46.6% 16.3%
1995 38.5% 45.4% 16.1%
1998 38.1% 45.3% 16.6%
2001 33.4% 51.0% 15.5%

Financial Wealth
Top 1 percent Next 19 percent Bottom 80 percent
1983 42.9% 48.4% 8.7%
1989 46.9% 46.5% 6.6%
1992 45.6% 46.7% 7.7%
1995 47.2% 45.9% 7.0%
1998 47.3% 43.6% 9.1%
2001 39.7% 51.5% 8.8%

Total assets are defined as the sum of: (1) the gross value of owner-occupied housing; (2) other real estate owned by the household; (3) cash and demand deposits; (4) time and savings deposits, certificates of deposit, and money market accounts; (5) government bonds, corporate bonds, foreign bonds, and other financial securities; (6) the cash surrender value of life insurance plans; (7) the cash surrender value of pension plans, including IRAs, Keogh, and 401(k) plans; (8) corporate stock and mutual funds; (9) net equity in unincorporated businesses; and (10) equity in trust funds.

Total liabilities are the sum of: (1) mortgage debt; (2) consumer debt, including auto loans; and (3) other debt. From Wolff (2004).

In terms of types of financial wealth, the top one percent of households have 44.1% of all privately held stock, 58.0% of financial securities, and 57.3% of business equity. The top 10% have 85% to 90% of stock, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

*sorry about not lined up chart - there's also a good pie chart at link, but I've never figured out how to paste pictures here

[Zhade]

54. EVERYONE READ THIS POST.

Well done!

[Zhade]

51. Yep.

NT!

[noamnety]

55. anyone earning an obscene salary IS redistributing wealth.

I wish we would get in the habit of accurately describing this.

Taxing 90% of any income over a million (random number from thin air) is not "redistributing" wealth - it's preventing it from being redistributed. The person earning that amount is redistributing it from others to themselves.

[tritsofme]

57. If I were running payroll, and I found out that I was sending the government 90% of income

after a certain level, I'd probably recommend we not pay out these large salaries that basically serve as a gift to the federal government.

[cottonseed]

61. Bingo.. it would make more sense to pay it to employees or reinvest in the biz.

[Raineyb]

104. That's exactly the point.

When taxes on the rich are low we get these bubble economies. When they're higher in order to avoid the taxes the money is reinvested into the business or passed on to the employees as higher wages which allows them more discretionary income to spend. This is a win-win situation.

I wouldn't call it confiscatory at all.

Regards

[santamargarita]

58. Yes! And we should roll back the Reagan tax cuts too!

:think:

[cottonseed]

59. Actually it's going from about $360K to $250K

And the top marginal tax rate is being bumped up by about 3%. That's the rollback of Bush's tax cuts to Clinton era levels - which is still WAY below what it was during Reagan's day.

Also to comment on your question regarding redistribution of wealth. You've been reading to much Joe the Plumper. It's a progressive tax system that's been in place for a long time now. Seems that in the most recent 2 decades and the attempt to dismantle it has lead to the mess we're in today.

[Stinky The Clown]

68. **I'm** reading too much Joe the Plumber?????

Whaaaa? :shrug:

:crazy:

[dysfunctional press]

64. yes.

90% on ALL income above $10 million.

[Kansas Wyatt]

65. Those high of tax rates also offer an incentive for the rich to put MORE money into the economy.

Republican arguement... 'The rich already pay most of the taxes and taxing them more would take away money they have to invest in the economy, so there would be less economic growth.'

What Republicans fail to mention, is that it would indirectly be an incentive for the wealthy to invest even more into the economy, because they would rather invest in anything and everything around them, even their own communities, to avoid higher taxes and so they could determine where their money goes. Hmm... Could this have been part of the recipe for the BOOM that followed WW II?

The economy booms when the rich have higher rates, which pushes them into actually investing their money back into the economy. With 'trickle down economics,' they just run all the way to the bank, multiple houses, country clubs, various exclusive boards of connected wealth, resorts, etc. etc.

[roamer65]

66. The rates should go up to 60% on incomes over $1M.

[1]

69. we should do it like havana in 1959...

get all of our troops out of iraq and afghanistan. once home, we then have them march into the businesses and homes of the rich in a coordinated effort. arrest them all. confiscate everything. we win.

then we all fire our ak-47's in the air and drink a lot. from the liquor stores of the homes of the rich. bwahahahahaha!





madon...

[scrinmaster]

70. No.

[JanMichael]

72. Yes. NT

[Motown_Johnny]

73. to many loopholes, this answer is to simple

[Juche]

74. All the economic growth has gone to them in the last 30 years

So I'd like to see much higher tax rates. Maybe 50% income tax rates.

[No.23]

76. Nix the income tax. Implement a national sales tax.

Identify consumption as a "sin", and implement a national "sin" tax on consumption.

This way the folks who consume too much will pay more federal taxes.

And the people who save will pay the least.

[DFW]

79. States already impose sales taxes

If you impose a national sales tax in top of that, you'll toss an extra 15 million people out of work because their small businesses can't sell enough to survive, since no one can afford to buy anything from them. Many countries over here (Europe) already have 10% unemployment, in part because stuff over here is subject to 20% national sales tax (with no state sales taxes) and people can't afford it.

[No.23]

80. When you toss out a figure like...

15 million extra people out of work, I'm inclined to ask you how you came up with that figure. I'm sure that you're not throwing out large numbers just to support your position. Care to share how you crunched those #s?

State sales taxes are collected at every sales transaction. The Fair Tax model (or the one that I currently subscribe to) only collects a tax ONCE. Used goods or services are NOT taxed thereafter.

This also supports a recycling approach to consumption, an approach that I presently enjoy.

Want to buy a new good or service? Cool. Pay the federal sales tax please. Want not to pay that tax? Cool. Buy a used good or service.

Recycling... conservation... sustainability... etc. The Fair Tax would encourage a whole different way of consuming.

And I like that a lot.

[wickerwoman]

82. Sales taxes are regressive and have a disproportionate impact on the poor.

Do you really want to raise taxes on milk and beans and stop taxing people who make millions of dollars and hoard the money?

[No.23]

84. Glad you mentioned the economiclly disadvantaged.

The Fair Tax doesn't forget them at all.

http://www.mikegravel.us/?q=fair_tax

(excerpted)

"One of the most exciting features of the Fair Tax is the monthly payments to individuals and/or families to reimburse them for the tax they pay on the essentials of life (food, shelter, clothing, medicine). The amount of the prebate is calculated by multiplying the cost of essentials by the tax rate. The resulting tax is divided into 12 equal payments and sent on the first of each month to consumers who have registered annually for the program. The progressiveness of the Fair Tax can be determined by adjusting the amounts selected for the prices paid for essentials, which should not be taxed in the first place. However, giving these essentials an exception from the sales tax opens the door for wealth to game the system and we are back with the problems we have in the income tax system.

The Congress will never enact such a radical reform because it dilutes their power to control and focus the economy to accomplish social goals and ,of course, limits their ability of Congress to reward their special-interest friends who donate money to their political campaigns. In my judgment, Americans will have to vote to enact the National Initiative, becoming legislators like their elected lawmakers, in order to make the Fair Tax the law of the land."

BTW, here's another article that may be of interest to Dems who swim in DU's waters:

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/02/24/why_democrats_should_love_the_fairtax/
Why Democrats should love the FairTax

[eridani]

86. Any benefits from that go to the rural poor at the expense of the urban poor.

The prebate is pretty worthless considering the extra expenses of city living.

[DFW]

85. I used a rough calculation based on the 2004 census numer of small businesses

That was 25 million, say maybe 30 million by now, and figuring a 10% failure rate (maybe optimistic, maybe not) and five to six employees per small business. As it happens, one of my daughters just lost her first job with a company that had 4500 employees and is letting 80% of them go next month, so it's not only small businesses, but obviously also not only sales tax-related either.

Here in Europe sales taxes are indeed collected at every transaction, although wholesale sales within the same line (i.e. not at a different stage of production) can apply for a refund, as the tax gets collected at a later stage at some point, and the governments get to use the money interest-free while their refund applications are processed. As this is in the billions, it is not inconsequential.

I wonder if the Fair Tax excluding used goods would be used to extrapolate? Would day-old baked goods be exempt? Would inheritance taxes be abolished if it could be established that the estate of the deceased consisted of funds and goods on which all sales and income taxes had already been fully paid? It seems like an idea in the rough, but I'll see if more details are included when I get a chance.

As for recycling, it is already written large here in Germany. My wife, a social worker, works in an arm of the Diakonie, which solicits and accepts donations of furniture, bicycles, household machinery, anything of the sort, has a workshop of unemployed craftsmen (and women) who repair the objects into usable state and sell them at giveaway prices to the lower end income people in the area. They try to pay for their expenses this way, and serve as a sort of halfway house for unemployed while trying to place them back into the workforce. I have to assume similar organizations exist in the States, but I've been over here so long, I wouldn't know what you call them in America.

[Hugabear]

93. So you're a UNFAIR TAX supporter?

Sorry, but the "Fair Tax" is anything but. It's a fantasy fueled by Neil Boortz, a RW hatemonger. It places a sales tax on EVERYTHING - including food, medicine, even services are taxed.

Boortz claims that since businesses would not be taxed at all, they would turn around and pass that savings on to their customers, thereby neutralizing the sales tax. That's relying on every single business to act out of the kindness of their hearts, and not to take that savings and increase their profits. Bottom line is that there is NO guarantee that people wouldn't pay more, and the poor in this country would wind up paying a very disproportionate percentage.

So please don't peddle that bullshit here, it's been debunked and discredited so many times I'm surprised that anybody would still cling to it.

[No.23]

105. I have confidence...

in your ability to address the merits and/or demerits of a message (i.e. the Fair Tax) without resorting to derogatorily attacking one of its messengers (i.e. "Neil Bortz, a RW hatemonger"). I know that the temptation is a great one, and you may be particularly adept at it. But I believe that you can do it.

Unless, of course, you believe that everyone who supports the Fair Tax is a RW hatemonger too. Including former Senator Mike Gravel.

[Hugabear]

111. If you're going to defend RW hatemongers, then this is not the board for you

Neil Boortz is a HATEMONGER. If you don't like that, then perhaps you should check out the freeper boards.

[GreenTea]

77. Yes.

[DFW]

78. What's wealthy?

I think if I had to pay 90% or even 60% on some portion of my income, I just wouldn't bother
to try to earn it. Those kind of rates just encourage fraud and capital flight. I see it as all
a matter of incentives. Give people an incentive to make more, and I think most of them will
be more willing to declare their true income and pay taxes on it. Tell them that they only get
to keep 10% of a big portion of their income, and they'll look into citizenship in the Bahamas.
Let them keep at least half, and I bet more of them would stick around and pay up. I try to
imagine how I'd feel if I were suddenly in the position of receiving some huge income, and I
somehow can't imagine saying the government is automatically entitled to more than I am. It's
really easy for me to look at someone else who has way more than I do and want to take it from
them, but I'd have to justify it: Robin Hood, not Bonnie and Clyde.


Inflation has wrought its damage over the years. I don't consider myself wealthy. I make a low
six figure salary in the USA, have one daughter in college, one recent grad who had a job for
four months until her company went bankrupt, so I have to support her again for now. Plus, due
to my overseas posting, I live mostly in Euros, so I have slightly more than 50% of the purchasing
power I would have back home in Texas. My wife takes home maybe an additional 1500 euros a month
from her job as a social worker. That doesn't go far in Germany. We pay the bills, pay for food
and gas, and after my US taxes and supporting our children, we have jack shit left over.
Contributions to the DNC and Obama last year came out of savings.

I don't know anyone who makes $10 million a year (unless Peter Norton makes that--I never thought
to ask him, and I wouldn't blame him if he told me it was none of my goddamn business), but if I
were someone who made money like that by being brilliant or talented, like John Grisham or Oprah or Meryl Streep, I'd be pissed as hell if I had to give up 90% of everything over $500K to the
government. They give plenty to charity from what I understand, anyway (Oprah, at least).

If government is going to institute confiscatory practices, it could start by hitting those who
have cost the government in the first place. Oil companies for causing pollution and resulting
health care costs, companies like Halliburton or the Carlyle Group for encouraging the Iraq
invasion so they could profit while the country's finances (and people) bled, drug manufacturers
who don't plow large portions of profits back into research into new and better medications.
Just blind universally high (as in over 50%) tax rates on high incomes, especially if imposed
in one blow, will lead to as much, if not more, evasion and capital flight as it will in enhanced
revenue to the Government. I'd want any such measures well thought out so as to give those faced
with higher taxes a better incentive to pay them than just staying out of jail.

[eridani]

87. No one has ever had to pay 90% ot their income

You are confusing a flat tax rate with a marginal tax rate.

[wickerwoman]

83. It should never come to that.

When 25% of the American public is unemployed, the 75% remaining have to shoulder the entire budget with their taxes which would have to be raised to compensate. If we had 3% unemployment, taxes would go down, not up, because they would be shared across a greater number of people. So it's worth investing tax money to create jobs because it will grow the revenue base.

It should never be necessary for any segment of the population to pay 90% of their income, but it make sense for people who make more money to pay more taxes to encourage employment so they don't have to shoulder and even greater percentage of the costs.

[treestar]

88. Yes, without the slightest problem

I have worked very hard; yet not earned tons of money.

They are LUCKY, not talented or hard working or anything that constitutes "virtue" in their world. If not lucky, they are just thieves

If they have enough money to live well and cover healthcare, then they can give the surplus away to the unlucky.

that's what they'd do if they were really "Christians."

[olegramps]

89. Our nation's continued existence is as threatened as in WWII.

We are engaged in two wars and yet the Republicans demanded a tax cut for the wealthy and many Democrats went along with it.

During WWII the top tax rate was 94%. Prior to the war it was 75% in 1939. In order to pay off the debt it wasn't cut until 1964 to 91%. Yes, there were loop holes but the wealthy were asked to sacrifice just like the working class. The wealthy have not sacrificed, but actually have prospered in one of the largest transfers of wealth that the county has seen.

I am somewhat ambivalent about the plight of the working class. They bought management's propaganda and dumped the unions and now cry because their jobs have been out sourced, their health insurance canceled and their pensions cut. I really wonder how we are going to have an economic recovery when we don't manufacture a damn thing anymore. I wish Obama the best; he has inherited a disaster.

[CaptJasHook]

92. If Corporations aren't going to police themselves, it is the Gov's job

IMO, constitutionally speaking, the Federal government is supposed to create a level playing field for the pursuit of life, liberty and the pursuit of happiness. In my opinion, that would include the concentration of wealth amongst individuals and corporations.

[fed_up_mother]

94. No, but we could sure as hell still raise them quite a bit

[leftofthedial]

98. briefly,

prior to the terms on the prison work gangs

[hedgehog]

99. I think a lot of people here have no comprehension how much

a million dollars {i] a year really is. I'm not talking about having a million dollars in a 401K meant to provide retirement income over 15 or 20 years, I'm talking about having a million dollars a year coming in the door. How much can one person eat? How much can one person spend on couture clothes, or a cigarette boat, or a mansion, etc?

The other point people forget is that at a certain point, people work for the prestige of the job, not the money. It's easy to say that at a 90% tax rate the rich will stop working, but who cares who you are if you aren't the CEO of Super Corporation or the Chief Council at Dewy, Cheetum & Howe? These people need to keep working so they'll know how important they are.

Redistributing the wealth protects wealth and the wealthy. Not many here have noticed, but there is a good chance Mexico is about to become a failed state due to the drug cartels. The focus has been on drugs as the cause, but if the average person in Mexico had a chance at a decent living, would so many become involved with the cartels? In every place where there is a huge gap between rich and poor, the rich end up spending a small fortune on personal protection.

Finally, and most importantly, if the wealth isn't redistributed, everything comes to a grinding halt. Look around you for the proof.

[Gregorian]

100. No. Everyone should pay their percent.

I don't want to encourage nor discourage.

Does that equate to a flat tax, I don't know. I guess it does.

[margotb822]

102. The thing about the flat tax

is that a lot of the super-wealthy, who have tax shelters and the like, that they would end up paying more than they do now. I was talking with my dad (a CPA and payroll guy) the other day and he was explaining how so many of the rich can expolit the complex tax code to end up with a marginal tax rate of 3% or less. If we were to set a flat tax at 15%, they would all pay significantly more than they do now.

[Gregorian]

103. Absolutely. And we'd pay less.

I've been aware of that one for decades. I just don't know if the flat tax is frowned upon for some other reasons. I'm always cautious to express myself here, since there are so many experienced members who know way more then me.

To be honest, I've resisted starting a business just because the taxes are such a nightmare. I ran a corporation with my dad once, and man that accountant was some Chinese genius.

[wickerwoman]

109. I's say though that if the problem is loopholes, we should close the loopholes

not cut taxes on the rich (who will still find loopholes and pay 3%).

15% of a $12,000 salary leaves $10,200 which severely impacts that individual's ability to feed, clothe and shelter him or herself. Imagine eking by pay-check-to-pay-check, slowly going into debt and then suddenly having $100 less a month to make ends meet. This person would have to cut out regular meals or go into credit card debt to survive in most areas on this.

15% of a $12,000,000 salary leaves $10,200,000. This person's lifestyle will not be significantly impacted and they will not have to sacrifice luxuries let alone essentials.

The problem with the flat tax is it puts a clear and disproportionate burden on the poor. People should be taxed based on the impact that taxation has on their ability to live comfortably.

[vssmith]

101. Class warfare

All you ever hear is the evils of class warfare, as if it hasn't been going on for years--they are worried that the underclass may now get the upper hand. I am more than ready for that war--as Bush would say, "bring it on."

[leftstreet]

110. They only call it Class War when we fight back

:hi:

[paulsby]

106. absolutely not

i believe in treating everybody fairly, even if there are so few of them that they have "no clout".

do I think we can responsibly raise taxes?

absolutely.

90%?

hell no.

i also think we should raise the YEARLY limit on capital losses.

right now, we only allow people to offset 3k of their capital losses against their income, but they have to pay every $ of their capital gains. the former must be rolled over.

by raising the 3k cap, we'd encourage more investment by incentivizing risk.

but imo nobody should have to pay 90%.

[SOS]

107. Hedge fund manager John Paulson made $3.7 billion in 2007

If he paid 70% in tax he would be left with $1.1 billion.

When Pandit sold Old Lane to Citigroup he made $165 million in a day.
Less 70% = $49 million.

In both cases, it seems that the people involved would be able to scrape by, even at 70%.

[2feeedle2]

108. I'm pretty far to the left of the spectrum, but do NOT support that, sorry

[nichomachus]

112. Ask the question without the poison pill word "confiscatory" and you made get an answer

No I don't approve of confiscatory taxes -- just like I don't approve of a "death tax."

However, I do approve of an estate tax on estates above a certain amount and I do approve of a graduated income tax, where marginal income is taxed at a higher rate.

When there is a high tax rate on upper-level income, that higher percentage is not taxed on someone's entire income -- only on the amount above a certain level.

So, up to $250,000 you pay the same as everyone else. On the income from $250,000 to $1 million you pay more -- but that doesn't increase your tax on the first $250,000. From $1 million to $10 million you pay a little more, but that rate doesn't apply to the lower amount. And, maybe, if we did as we used to do, taxed income over $10 million at 90 percent, it doesn't mean everything the person made was taxed at 90 percent -- just the amount over $10 million.

So, it's not as bad as the hysterical "confiscatory tax" people would have you think.

None of these billionaires will be living in a box any time soon -- unless they were stupid and greedy enough to put all their money with Bernie Madoff.

[n2doc]

113. make it 40% with no deductions

Back in the day, there were many ways (still are) to hide money from taxation. I would be astounded if anyone paid 90% on their total income back then. Frankly, we need a simple tax code for the wealthy- 40%, off the top, no deductions, on all sources of income equally. And aggressive enforcement.

[Laelth]

114. Yep. n/t

:dem:

-Laelth