Gonna Kill Kill Kill Kill the Poor Tonight

I'm puzzled by part of John McCain's new stump speech, which is still heavy on JoethePlumber. This part:

Senator Obama says that he wanted to spread your wealth around. When politicians talk about taking your money and spreading it around, you'd better hold onto your wallet.

Fine so far.

Senator Obama claims that wants to give a tax break to the middle class, but not only did he vote for higher taxes on the middle class in the Senate, his plan gives away your tax dollars to those who don't pay taxes. That's not a tax cut, that's welfare.

But John McCain wants to do this, too! I don't think McCain has proposed eliminating the Child Tax Credit or the Earned Income Tax Credit. No, I don't see any promise of that on his economic page. I do remember that McCain wanted to double the Child Tax Credit, and I do see this from McCain's speech.

I will provide every single American family with a $5000 refundable tax credit to help them purchase insurance. Workers who already have health care insurance from their employers will keep it and have more money to cover costs.

Th-th-th-that's welfare! Why, some of those people don't even pay income taxes! John McCain wants to spread the wealth around! Alternatively he believes in using tax credits to assist Americans with low incomes, like every serious Republican (or reader of Milton Friedman) wants to do. Look, either he can come out for a Rothbardian dismantling of the functions of the state or he can explain how his use of tax credits is different than Obama's.

Related: JoethePlumber hasn't been a bad issue for McCain, as it allows him to make a positive case for his agenda instead of a smirky anti-Obama case. But it's too quickly become another example of the insufferable whininess that's characterized this stretch of the McCain campaign. People were mean to Joe because he asked a question, just like they were mean to Palin, just like Obama played the race card and has to apologize or he's going to bed with no supper.

It's like they're being advised by Chris Crocker.

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  • ||

    consulted by? maybe you mean "advised by"?

  • ||

    I find it quite comical when either one of the major parties calls out the opposing major party for too much spending/pandering/negative-campaigning/doing-pretty-much-anything-bad.

    It reminds me a lot of my 6- and 4-year-old screaming at each other about who bothers Mom and Dad the least.

  • ||

    I mistakenly thought this post was from my wonkette rss feed at first...

  • jackscrow||

    Sounds like France.

    Bribing the po' peeps so they won't riot or sumpthin'.

    Class warfare through redistribution schemes simply result in costs being passed on down the line, with the rich continuing to get richer, while the poor get poorer faster, and the middle class totally vanishes.

    But you knew that.

    McCain loses because he's NOT conservative.

    You knew that too.

  • ||

    Payroll taxes aren't taxes, for the same reason that military spending isn't real spending.

  • ||

    We've finally found the answer to the elusive question: when do conservative oppose tax cuts?

    When they're done in a progressive manner. Then, tax cuts are welfare.

  • ||

    I wish I could take more pleasure in watching the McCain campaign go down in flames. It certainly has all the hallmarks of hysterical collapse. But I can't help being scared shitless at the prospect of Obama and the 'we'll do anything you want us to' congress.

  • ||

    David, I wish to say fuck thank you very much for reminding me of Chris Crocker's existence. I had almost forgotten him. :-)

  • ||

    OK, people were mean to Palin, and were total dicks to Joe the unlicensed plumber. Michael Young was a dick about Colin Powell, and so on and so forth. When you make your politics about people rather than policy, you have to expect that.

  • Twisted Nerve||

    I assume by Payroll Taxes you mean that portion of your payroll taxer referred to as FICA ( Social Security and Medicare) right? FICA - Federal Insurance Contribtuons Act

  • ||

    Everyone hates the media. The media sucks and they are a bunch of assholes. Of course they were going to go after Joe when he had the terminity to ask the chosen one a bad question. But that is not the point. The point is that Obama had a rare bit of honesty and finally showed his true colors. The McCain campaign blew it by getting off that message and going after the media. Yeah, the media has no credibility and is facing bankruptcy. No kidding. There is not point in pointing that out. They let their opponents' appalling behavior distract them.

  • ||

    I don't believe you.

    I don't think anyone who recognizes the term FICA is the slightest bit confused about the meaning of the term "payroll taxes."

    If you've got a point, you just go ahead and shout it on out.

  • ||

    David, I wish to say fuck thank you very much for reminding me of Chris Crocker's existence. I had almost forgotten him. :-)

    I don't know about you, but I'm voting for the Jello Biafra/Chris Crocker ticket on Nov. 4th.

  • ||

    I can't help being scared shitless at the prospect of Obama and the 'we'll do anything you want us to' congress.

    Sorry, Warren, but how is that substantively different from BOOOOSH and a 'we'll do anything you want us to' congress?

    And- would somebody please let Queeg out of his bubble?

  • ||

    Of course they were going to go after Joe when he had the terminity to ask the chosen one a bad question.

    Uh, yeah, that's it. Joe Wurzelbacher was the first person to ask Barack Obama a tough question in the 20 months he's been running a national campaign. That's it, exactly.

    It had nothing to to with a coordinated media campaign across the conservative blogosphere, the McCain campaign, the RNC, Fox, and the conservative print media. It had nothing to do with the two dozen times John McCain mentioned him during the debate, or the two dozen times he mentions him daily on the stump.

    The only reason Mr. Wurtzelbacher got media attention is because he was the first person in the entirety of the 2008 election campaign to ask Barack Obama a question.

  • BDB||

    I like the OLS-izing of Joe the Plumber to JoeThePlumber.

  • ||

    Joe, you are assuming, of course, that McCain is a conservative, which is a bit of a stretch.

    Just a general question, but I think Bush proposed an actual "conservative" approach to health care last year - the Standard Health Insurance Deduction. Did that ever get anywhere? Just curious - haven't heard anything about it recently...

  • ||

    We could kill the poor and eat them, but they have such terrible eating habits, they'd probably taste horrible.

  • ||

    Nope, Don, I'm assuming nothing about John McCain's political philosophy, and how it fits into this or that definition of conservatism.

    I'm merely observing that the conservative noise machine has been set in motion on his behalf, and in coordination with his campaign.

    You're telling me that the Mighty Wurlitzer is being put into the service of someone who is NOT A TRUE CONSERVATIVE? OK, if you say so.

  • Twisted Nerve||

    Joe, believe me now or believe me later, I prefer to enter a discussion with the terms clearly defined. Thefefore, I submit that both aspects of FICA are federally mandeted policy premiums. Intentionaly and conceptually sepaerate from Federal Income tax.

  • ||

    Nope, they're not insurance premiums. They're taxes.

    Separate from the income tax, just as Massachusetts' sales tax is separate from the state income tax, but they are both taxes.

    The federal government collects FICA, just like it collects the income tax. It then spends the money it collects on current program expenses. Heck, they even put FICA taxes into the general fund.

  • Twisted Nerve||

    Joe, so sice the gov takes money specifically collected for FICA and misappriates it to the general fund, it all ducky. If it all the same thing why isnt it just rolled int one single tax?

  • SIV||

    One of those thing I agree with joe on here.
    FICA taxes are taxes.They aren't "premiums" on some sort of insurance program.Of course if tax credits exceed the amount of all payroll/income taxes paid they are welfare.

  • The Mystery Of Weigel||

    Why is Weigel criticizing McCain for only being LESS socialist than Obama, rather than criticizing Obama for being more socialist than McCain?

    Then we get some bizarre criticism that McCain shouldn't be defending Joe the Plumber's right to ask Obama tough questions. Why do I get the feeling if he'd suffered this after asking McCain a tough questions, Weigel would be all up in arms over this as An Important Libertarian Issue?

  • ||

    "Why is Weigel criticizing McCain for only being LESS socialist than Obama, rather than criticizing Obama for being more socialist than McCain?"

    I think it has something to do with what the parties have traditionally stood for. But maybe it has something to do with McCain's campaign accusing Obama of things that McCain may be guilty of. Who knows, its all so festive.

  • ||

    Twisted Nerve,

    The funds are misappropriated. The legislation creating Social Security in the 1930s mandated the government put the funds collected under FICA be placed in the general fund.

    If it all the same thing why isnt it just rolled int one single tax? It isn't the same thing. One is a flat tax (with a top cutoff) on gross income, and the other is a progressive tax on adjusted income.

    Why? Probaby because the two taxes were created a different times, and designed/sold to appeal to different political circumstances, and there's never been a good enough to reason to open up the cans of worms necessary to consolidate them.

    Most of government is like that, btw. What you're seeing is not the reflection of someone's idealized design, but one policy designed for a specific time and place piled on top of another. It's called muddling through. If there isn't some important reason to go back and reorganize everything, the government doesn't bother, because the government doesn't change anything unless there is some big push driving them to do it.

  • ||

    ER, are NOT misappropriated.

  • Fluffy||

    When they're done in a progressive manner. Then, tax cuts are welfare.

    joe, the earned income tax credit - which specifically allows for payments to the poor that exceed the amount of income tax paid, and do so without any reference to payroll taxes, can't really be described as a tax cut. It's a welfare payment using the administrative machinery of tax collection.

    I prefer the EITC to traditional transfer payments involving the mediation of welfare bureaucrats, but it's still a transfer payment.

  • Fluffy||

    They aren't "premiums" on some sort of insurance program.

    They'd be more progressive if they were treated that way, joe.

    If FICA payments were treated as premium payments towards "retirement income security", it would then make sense to deny payouts to persons whose retirements are already secure. For the same reason the car insurance people don't send out checks to people who haven't gotten in any accidents.

    Our failure to treat FICA taxes as insurance premiums leads people to conclude that they're somehow pension contributions.

  • ||

    I would imagine that the convenient fiction that SS funds go in to a lock-box, like what the vast majority of people believe, is also politically expedient as well. If most young people understood that the government is giving you an IOU written by your grandchildren, as opposed to "saving" money for you, the program would be even less popular.

    Let me opt out, you can even keep the money I already paid in. Let me opt out or means test the thing and reduce accordingly.

  • ||

    Fluffy,

    If the people talking about "redistribution" i/r/t Barack Obama's conversation with Joe Wurtelbacher were talking about the EITC, that would be one thing.

    But they're not - they're applying that term to a "redistribution" scheme that consists of cutting the income taxes of people who are paying larger amounts through FICA than the size of the cuts they would get under Obama's plan.

  • Gilbert Martin||

    "Sorry, Warren, but how is that substantively different from BOOOOSH and a 'we'll do anything you want us to' congress?"

    Really?

    I guess I missed the part where the congress "slavishly" passed the immigration "reform" legislation that Bush wanted them to.

  • ||

    Bush's deal with the Delay/Frist Congress after 9/11 was that they would give him whatever he wanted on the international, blowing-stuff-up end, and he would give them whatever they want on the domestic end.

  • jasno||

    Weigel,

    Aren't there supposed to be 5 kills in the title? I can't think of a line where there's only 4 kills in a row...

  • ||

    Alternatively he believes in using tax credits to assist Americans with low incomes, like every serious Republican (or reader of Milton Friedman) wants to do. Look, either he can come out for a Rothbardian dismantling of the functions of the state or he can explain how his use of tax credits is different than Obama's.



    You're right that he should explain it. But there is a significant difference between their two plans, which it doesn't seem that anyone on this thread cares about either.

    Sen. Obama is proposing several new tax credits which phase out by income, as well as bringing back phase-outs of other tax credits, like the personal exemption and other itemized deductions for high-income taxpayers. The net effect would be to
    sharply increase effective marginal tax rates
    at certain points-- not just at the high end, but also at certain middle end points like $45,000 AGI, where several new tax credits would phase-out. It's true that average tax rates would not increase much, but there are problems with increasing marginal rates.

    While phase-outs for deductions are attractive, they can create welfare traps just as welfare in general can. People can be put in situations where getting a better job or even getting a raise can cost them almost as much (or more, in some of the more absurd cases throughout the world) in lost benefits and tax credits than they gain in extra wage income.

    In that way, Sen. McCain's complaint has some validity. Tax credits with relatively low and sharp income phaseouts are like welfare, in that they suffer from exactly the same problem that welfare did and act economically similar.

    Milton Friedman certainly appreciated this problem for refundable tax credits. That's why his negative income tax proposals were still designed to try to minimize the marginal tax rate.

    Sen. McCain's health proposal does not have the defect of increasing marginal rates, while it is fairer to low and middle income taxpayers than the current system. (Excluding health care from taxes provides a larger dollar benefit to those in a higher tax bracket already.)

    But they're not - they're applying that term to a "redistribution" scheme that consists of cutting the income taxes of people who are paying larger amounts through FICA than the size of the cuts they would get under Obama's plan.



    No, joe, they're talking about refundable tax credits, which operate as the EITC does (though yes, he's not talking about the EITC) and can be paid out to people who owe no net tax.

  • ||

    Looks like an open tag, sorry.

  • ||

    John Thacker,

    Once again, defending McCain requires you to dodge the fact that PEOPLE PAY PAYROLL TAXES.

    See, look what you did here: No, joe, they're talking about refundable tax credits, which operate as the EITC does (though yes, he's not talking about the EITC) and can be paid out to people who owe no net tax.

    Who cares if you owe no net tax on April 15? Such people are still paying their payroll taxes.

  • ||

    It ought not surprise you that John Thacker pretends payroll taxes aren't taxes on income. It's necessary in order to maintain the fiction that poor people don't pay taxes - and that fiction is necessary to maintain the worldview that Obama is about rebating taxes to people who didn't pay any to begin with.

    It ought to make Mr. Thacker sleep ill at night, but it ought not surprise you.

  • Fluffy||

    It's necessary in order to maintain the fiction that poor people don't pay taxes - and that fiction is necessary to maintain the worldview that Obama is about rebating taxes to people who didn't pay any to begin with.

    If I employ someone who qualifies for one of Obama's new tax credits, owes no net tax, and is paid 1099 and therefore faces no FICA taxes, would that person end up getting a direct transfer payment greater than my total tax paid under Obama's plan, or not?

    [While asking that, let me differentiate my question from Thacker's point above, which I have a problem with. It sounds like Thacker is arguing that if Obama gives out a brand new tax credit to people who make $45000 or less, that means that the guy who makes $45001 is getting a tax "increase", because of the marginal greater amount he'll pay than the guy making $44999. And I don't agree with that. If your taxes stay the same, it doesn't matter what the guy making less than you is paying - it's inappropriate to call your experience a "tax increase", as the McCain camp apparently insists on doing.]

  • Fluffy||

    Sorry, that should say, "greater than his total tax paid" in order to make any sense whatsoever.

  • Gilbert Martin||

    Whether you are talking about payroll taxes, income taxes or both, unless the amount of tax "refund" each person gets is made directly proportional to the total dollar amount of taxes he or she orignally paid in relative to everyone else, it is still a redistribution scheme.

  • ||

    The sun beams down on a brand new day
    No more welfare tax to pay
    Unsightly slums gone up in flashing light
    Jobless millions whisked away
    At last we have more room to play
    All systems go to kill the poor tonigh

  • ||

    The basic problem with all the arguments over taxes is that there is no one attempts to articulate any principle that would help us decide how high they should be. The arguments on both sides just revolve around fairness, which is so vague it contributes nothing.

    Here are my thoughts on some principles that I think are libertarian. There are some legitimate functions the government should be paying for. Each function provides benefits to individuals. Individuals should pay the cost of those functions in proportion to their share of the benefits. Some functions benefit everyone equally, and others benefit some individuals more than others. To the extent some are benefited more, it fair to charge them more. And of course, there are administrative costs to figuring out the exact benefits and proportions, so schemes that reduce those administrative costs can be justified to the extent of those costs (i.e. gas tax instead of tolls for road construction and upkeep if sufficiently less expensive to administer). To the extent some absolutely necessary government services benefit people who cannot pay (severely disable, poor, etc.), they should be funded by a per capita head tax.

  • Neu Mejican||

    Lamar | October 20, 2008, 12:49pm | #
    "Why is Weigel criticizing McCain for only being LESS socialist than Obama, rather than criticizing Obama for being more socialist than McCain?"


    Is it because Obama wants to pay for the revenue hit that his pandering to the middle class will have by raising taxes on the people that McCain wants to give a bigger tax cut to?

    http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST2008060900950.html

    The plans seem equally socialist, but McCain is pretending he is not redistributing wealth. Ignoring payroll taxes in a discussion about tax burden is idiotic. Payroll taxes are regressive, so a progressive income tax helps to shift the burden back up the income ladder a bit.

  • Neu Mejican||

    Individuals should pay the cost of those functions in proportion to their share of the benefits. Some functions benefit everyone equally, and others benefit some individuals more than others. To the extent some are benefited more, it fair to charge them more.

    So is income a good proxy to show that you have benefited more?

  • Gilbert Martin||

    "Payroll taxes are regressive, so a progressive income tax helps to shift the burden back up the income ladder a bit."

    Payroll taxes (i.e FICA) is supposedly payment into a system that entitles one to get something back in return at retirement. This is not the case with federal income tax payments.


    And the social security benefit formulas are already "progressive" in that those on the low end of the income scale get a proportionally larger benefit relative to their contributions than do those on the upper end of the scale.

  • ||

    To the extent some are benefited more, it fair to charge them more.

    Still not an argument for a progressive tax.

    $15,000 at 15% = $2,250

    $250,000 at 15% = $37,500

    It's income tax that should be capped, not incomes. Once I'm paying more than I get back, it becomes outright theft.

  • ||

    "So is income a good proxy to show that you have benefited more?"

    I would argue no, but the point is, that some principles like this would help frame the argument in a sensible way. Fairness gets us no where.

  • ||

    So is income a good proxy to show that you have benefited more?

    I don't see why. For nearly all high earners, their income is reflection of your value in the non-governmental market, not the degree to which they reap government benefits.

    In fact, in a society with a safety net, high earners don't see many of the benefits that are the most expensive - the entitlements and transfer payments.

    Payroll taxes are regressive, so a progressive income tax helps to shift the burden back up the income ladder a bit.

    An all-in analysis of both "income" and "payroll" taxes, shows that the burden is already skewed to the top end. This is the best table I could come up with on short notice.

  • Sarah Johnson||

    its very interesting

  • ||

    And let's have a koan about the nonsense earlier...

    If you pay me $300 for a TV, and I give you the TV, your $300, and an additional $500, have you actually paid for the TV? Or just been a pea in a shell game?

    Getting back all of your payroll tax and an additional amount is not paying taxes. It's involuntary participation in a Christmas Club savings account that has a wildly profitable interest rate.

  • Molly||

    "Gonna Kill Kill Kill Kill the Poor Tonight"

    Kill, Kill, Kill, Kill? Fuck You, Weigel.

  • Neu Mejican||

    Payroll taxes (i.e FICA) is supposedly payment into a system that entitles one to get something back in return at retirement. This is not the case with federal income tax payments.


    Sure it is.
    Minus the retirement part.
    You get government services for your payment.

    An all-in analysis of both "income" and "payroll" taxes, shows that the burden is already skewed to the top end. This is the best table I could come up with on short notice.

    I guess that depends upon what you mean by burden. If you are talking about percentage of taxes payed, you are certainly correct. It is unclear to me whether this means that high income earners are more burdened by their taxes than lower income earners. I would speculate that anyone over $100,000 income after taxes is unlikely to be substantially less happy because of their taxes.

    In fact, in a society with a safety net, high earners don't see many of the benefits that are the most expensive - the entitlements and transfer payments.

    This seems to imply that they only benefits that count are direct benefits.

  • Neu Mejican||

    For Molly,

    http://www.youtube.com/watch?v=IWO4JxM3nDc

  • Molly||

    "Why is Weigel criticizing McCain for only being LESS socialist than Obama, rather than criticizing Obama for being more socialist than McCain?"

    Because he's in love.

  • Neu Mejican||

    Relationship between income and happiness...

    http://blog.penelopetrunk.com/2007/07/11/new-research-reveals-some-new-ways-to-buy-happiness-sort-of/

    It turns out that money actually can buy happiness, but not a lot of it. At some point, well under $100,000, the happiness value of a dollar starts to plummet, according to Richard Easterlin, economics professor at University of Southern California. This is because social interactions impact happiness more than money does.

    But here's a new way to look at the money and happiness equation, from a new study by Nattavudh Powdthavee of the University of London: If you make sure to see a friend or relative in person almost every day, that is like increasing your salary by $180,000 a year.

  • fyodor||

    I wonder what the dollar equivalent of freedom is.

  • Neu Mejican||

    So...

    Carbon tax?

    Get rid of tax on labor (income tax/payroll tax) and replace it with a tax on material throughput, starting with carbon and other greenhouse gases.

  • Neu Mejican||

    fyodor | October 20, 2008, 4:45pm | #
    I wonder what the dollar equivalent of freedom is.


    I believe the happiness value of money has to do with the amount of freedom it buys you. More money buys you more options...but there is a ceiling effect of sorts.

    I think it will work on the other end as well.
    You need a basic amount of freedom to be happy. The closer you are to that threshold, the more valuable that last little bit of freedom is. If you are near the ceiling, the change of levels won't matter that much.

    This is how the US lets something like the Patriot act pass. Unwise to say the least.

  • Gilbert Martin||

    "You get government services for your payment."

    There is no correlation between government services received and payment. Some people pay no income taxes at all and others pay large amounts of income taxes. The one's who pay no taxes are not receiving zero services.

    No one's income level is a "service" provided to them by the government.

  • Neu Mejican||

    RC Dean,

    An all-in analysis of both "income" and "payroll" taxes, shows that the burden is already skewed to the top end. This is the best table I could come up with on short notice.

    Isn't this a better table?
    http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=455&Topic2id=20&Topic3id=22

  • Neu Mejican||

    No one's income level is a "service" provided to them by the government.

    Unless you are a politician/former politician turned lobbyist? Right?

    But seriously, who said it was.
    I asked whether it was a proxy measure of benefits received as a citizen of the society.

  • Neu Mejican||

    No one's income level is a "service" provided to them by the government.

    Unless you work for AIG?

  • ||

    It sounds like Thacker is arguing that if Obama gives out a brand new tax credit to people who make $45000 or less, that means that the guy who makes $45001 is getting a tax "increase", because of the marginal greater amount he'll pay than the guy making $44999. And I don't agree with that. If your taxes stay the same, it doesn't matter what the guy making less than you is paying - it's inappropriate to call your experience a "tax increase", as the McCain camp apparently insists on doing.



    I am not arguing that it's a tax increase. I never said that, and I'm not sure how you conclude that. In fact, I noted above that average income tax rates would decrease even as the marginal rates increased at various points. I said that high marginal rates are bad wherever they occur, and that phase outs of credits have the same effect on behavior and are economically indistinguishable from taxes. If you make $44k and a pay raise of $2000 costs you $1000 in lost benefits in addition to the smaller increase in taxes, you face an effective high marginal tax rate. That's not economically efficient.

    You're right that it's not a tax increase on people making more (except for complicated arguments involving that everything has to be paid for eventually, so if you're not getting some of the money, you're probably going to be someone paying for it, but that kind of logic leads you in all sorts of places and I'm not making it.)

    The main point of the EITC, in my opinion, is to try to reduce the high effective marginal tax rates otherwise faced by welfare recipients. If welfare pays you $30k, and you get absolutely nothing if you get a drop, you face an enormous effective tax for working. The EITC is designed to lower the effective marginal tax rate by not having benefits drop as fast when one works, somewhat similar to Milton Friedman's negative income tax proposals.

    I don't see Sen. McCain above claiming that it's a tax increase. I do see him claiming that it's like welfare, which has a decent point, especially to the degree that the tax has a phase-out. His tax credit for health care does share some of the same features, but does avoid the serious problem of marginal tax rates.

  • Neu Mejican||

    700billion in federal resources are being put into the financial sector. Is this service provided to these high income earners proportional to their tax burden?

    ;^)

  • Gilbert Martin||

    "But seriously, who said it was.
    I asked whether it was a proxy measure of benefits received as a citizen of the society."

    No - it's not.

    As I said, those who pay no income taxes are not receiving zero services.

  • ||

    Get rid of tax on labor (income tax/payroll tax) and replace it with a tax on material throughput, starting with carbon and other greenhouse gases.



    If you consider tax incidence, Neu Mejican, there are pretty significant reasons to decrease corporate taxes as well, since their burden falls mostly on labor as well. That's one reason why Sen. Obama's plan to tax people whose companies don't provide them with healthcare seems like adding insult to injury to me.

  • Gilbert Martin||

    "700billion in federal resources are being put into the financial sector. Is this service provided to these high income earners proportional to their tax burden?"

    What high earners specifically are you talking about?

    If you mean some executives at investment banks or commercial banks who would otherwise be out of job, then you have a point.

    If you're including "high earners" who work at Exxon Mobile or Google, then you don't.

  • ||

    Isn't this a better table?
    http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=455&Topic2id=20&Topic3id=22



    A better table? It's one interesting piece of data about the distribution of income, but it doesn't tell much about how much in taxes people actually pay. It only lists statutory top marginal rate, but doesn't list, e.g., the value of exemptions and credits. NB: As a percentage of income, many in the "top 5% but not top 1%" of income have the greats exemptions because certain exemptions top out in value. That's why the AMT hits households in the $150-$500k range even more than households above $500k, see Table 3 of this PDF, also from the Tax Policy Center.

  • ||

    If the complaint is that poor workers already pay payroll tax, and that it's a burden, good, cut payroll tax. I would applaud it as an effort to decrease their effective marginal tax rate. However, while I have no problem with Social Security becoming a welfare program that provides people with a basic sustainable income (but not necessarily providing the upper middle class with an upper middle class income), many Democrats seem to disagree. If you refuse to cut payroll tax for them for any one of a number of reasons, including that it's supposed to pay for Social Security, then please don't use payroll tax as an excuse, especially not to provide a phased-out tax credit that increases marginal tax rates.

  • ||

    An all-in analysis of both "income" and "payroll" taxes, shows that the burden is already skewed to the top end. This is the best table I could come up with on short notice.

    I guess that depends upon what you mean by burden. If you are talking about percentage of taxes payed, you are certainly correct.


    Click through to the table. It shows that the percentage of income paid in income/payroll taxes combined is "progressive" right now - that the more you earn, the greater percentage will be claimed by the feds.

  • ||

    Isn't this a better table?

    It goes higher into the income spectrum, sure, but at those levels the data gets really dirty, because so much of the income at really high levels is not wage income but comes from other sources (cap gains, partnerships, dividends, etc.).

    That kind of income is exactly the income that will evade taxes at higher marginal rates. Its very, very difficult to capture in a tax system.

  • Neu Mejican||

    If you mean some executives at investment banks or commercial banks who would otherwise be out of job, then you have a point.

    That was the point of the sarcastic statement.

    that the more you earn, the greater percentage will be claimed by the feds.

    My point is that this does not map directly onto the burden felt. 10% of 10,000 dollars may hurt worse than 10% of 1,000,000 dollars.

    As I said, those who pay no income taxes are not receiving zero services.

    Huh?
    I asked whether income could be seen as a proxy measure of the benefits you are getting from being a citizen of a particular society.

    That would be a possible justification for a progressive tax. Those at the top benefit more, so they should pay more...or something along that line.

  • ||

    I think you were looking for This chart. Contrary to what I expected, the three lower income quintiles have seen their tax burden as a share of federal revenue go down, not up.

  • MJ||

    "My point is that this does not map directly onto the burden felt."

    Unfortunately, deciding how the burden "feels" is an entirely subjective exercise, and a poor basis on deciding policy. The only objective criteria to apply is how much someone actually pays as percentage of income, and the tax code is already more than sufficiently progressive.

  • Gilbert Martin||

    "Huh?
    I asked whether income could be seen as a proxy measure of the benefits you are getting from being a citizen of a particular society."

    And I answered no. As I said, those who are paying no taxes are NOT receiving zero benefits. That is one example of how income is an invalid proxu.

  • Gilbert Martin||

    "That would be a possible justification for a progressive tax. Those at the top benefit more, so they should pay more...or something along that line."

    There is no proof that "society" is the reason why they are at the top to begin with.

  • Neu Mejican||

    Gilbert Martin,

    Thanks for clearing up your point.

    As for "proof" of the causes of success...well, there is certainly good evidence that without a stable society, most successful individuals would not be as successful as they are.

    No man is an island and all...

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