Raise income tax EXCEPT for the richest of the rich?

Discussion in 'Budget & Taxes' started by wgabrie, Aug 11, 2017.

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  1. wgabrie

    wgabrie Well-Known Member Donor

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    What would happen if we raised income taxes from 38% to 68% for the lower income brackets, anything above the poverty line, and, to take care of the laffer curve we drop income taxes for those who earn 5 million or more to 7%???
     
  2. OldManOnFire

    OldManOnFire Well-Known Member

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    Will depend on what your goal might be? The lower income brackets currently pay little to no actual income taxes so don't see your scheme raising much taxation. And, your laffer curve also applies to lower wage earners as well...the more you try to squeeze the less they will pay. When we consider 60% (?) of Amerians live pay check to pay check there is no possible way to extract more taxation out of them...
     
  3. Iriemon

    Iriemon Well-Known Member Past Donor

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    The richest would get richer at the expense of middle class people.

    Hasn't that happened enough for you already over the past 30 years?

    [​IMG]

    What does this have to do with the Laffer curve?
     
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  4. wgabrie

    wgabrie Well-Known Member Donor

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    I was under the impression that the rich have their income tucked away in a foreign bank account, and they aren't showing their higher income anyway because they don't want to pay tax.

    Lowering the ultra high income tax bracket should, according to the Laffer curve stop penalizing people for reporting their income, thus leading to higher tax revenue, and reward success for people who want to go to a higher income bracket.


    I suppose we could even raise the poverty line to cover more of people's incomes at the bottom, because people's wages are stagnant and they probably can't pay 50-60% income taxes.

    But we need to get more working class people to pay higher taxes for the goods and services we need funding for. Lowering the taxes of the rich is just what is called running out of other people's money. According to theory we'll get more income out of that anyway.
     
  5. wgabrie

    wgabrie Well-Known Member Donor

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    I'm under the impression that according to the Laffer curve we can't tax the rich.
     
  6. Iriemon

    Iriemon Well-Known Member Past Donor

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    The "Laffer curve" has nothing to do with the rich. It is a theoretical postulate that contends that there is an optimal rate of effective taxation that maximizes the amount of revenue a government takes. The basic theory is that a tax rate of 0% brings in 0 revenue, while a tax rate of 100% will also bring in 0 revenue because people will have no incentive to work. As the rate rises above 0, more revenues are brought into the government. However, as some rate of taxation, the disincentive to work will outweigh the additional revenues from the higher rate of taxation. The rate at which the disincentive outweigh the greater taxation from the higher rate is the peak point of taxation. After that, the total revenues received will decline.

    It's a theory, and while the optimal rate is often portrayed at 50%, it could be anywhere between 0 and 100%. But it doesn't say we can't tax rich, they are theoretically as effective by the Laffer curve as anyone else.
     
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  7. Iriemon

    Iriemon Well-Known Member Past Donor

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    Tax avoidance is certainly one reason. Other reasons would include keeping their money away from creditors, diversification, and privacy.

    See above. You have to weigh any increased revenue from the lower "penalty" against the decrease in revenues from a lower tax rate.

    I imagine people trying to get by on minimum wage incomes would be terribly burdened by a 50-60% tax increase.

    See above. That is not necessary true at all.
     
    Last edited: Aug 14, 2017
  8. wgabrie

    wgabrie Well-Known Member Donor

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    I was all for raising taxes to pay for our current government expenditures, but then I learned about the Laffer curve from PragerU and I learned that not only does higher taxes NOT provide revenue, but the peak, the optimal tax rate, is at significantly less than 50%. And there are indicators that the peak is at less than the current tax rate.
     
    Last edited: Aug 14, 2017
  9. CourtJester

    CourtJester Well-Known Member

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    There is no evidence to support the Laffer curve. It is a theory with absolutly no real world support. None.
     
  10. Old Man Fred

    Old Man Fred Well-Known Member

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    I've always found it comical. You make money overseas, and don't want to pay taxes so badly that you leave it there where you can't use it.
     
  11. Ndividual

    Ndividual Well-Known Member

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    Ideally ALL voting age individuals who have an income or not, and younger citizens who have an annual income greater than $20 should be required to file a tax return pay a tax with the minimum payment of $1. A more rational method of progressive taxation, in my opinion would be to tie the tax tables to the minimum wage and eliminate ALL deductions. The lowest tax rate could be 5% applied to those who earn the minimum wage or less, and an increase of 0.5% for each increment relative to the minimum wage. Essentially someone earning the current minimum wage of $7.25/hr or $15,116.25/year would pay a tax of $756, while someone earning double the minimum wage ($30,233) would pay $1,587 the second increment of the minimum wage being taxed at 5.5% and so on. A maximum tax rate of 50% should be guaranteed by amending our Constitution, and the only future means of increasing taxes would be as a result of raising the initial rate of 5% as that would achieve a 50% rate at a much lower income level. At the 5% starting base rate a 50% tax would initially apply to those earning more than $1,360,463. Raising the initial rate to 6% would achieve a 50% rate on all income above $1,330,230. If as a result more revenue would be produced than needed, the increment (0.5%) should be adjusted to a lower value, which would raise income being applied a 50% tax rate. As government provides much aid to those who earn low incomes, they should be taxed accordingly, and recognize a benefit as a result of becoming less dependent upon government. When more people become dependent upon government the base rate should be increased and the incremental change reduced to produce the revenue required by government. Ideally it should be adjusted so that the revenue needed by government is acquired with the numbers set to what would produce the revenue without taxing income greater than 25% allowing the introduction of higher rates in times of need only. Also budgets should not be created with ANY deficit spending at all, and perhaps a little more revenue than needed in order to reduce the debt and eliminate need of a debt ceiling.
     

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  12. Ndividual

    Ndividual Well-Known Member

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    If you have money you don't need to spend, all that matters is that it is earning a return greater than inflation and any taxes applied to it.

    Also you have to take into account the laws of the countries where business is earning money. Where I live there is a 10% tax applied on profits moved by a foreign business to their home country, and that can be reduced by allowing it to remain invested in a bank for a prescribed amount of time. Currently, with the value of the dollar diminishing leaving you money sit is more profitable than converting it to dollars even if you would not be charged the 10% tax.
     
    Last edited: Sep 29, 2017
  13. Iriemon

    Iriemon Well-Known Member Past Donor

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    I recommend you consider learning from more accurate and reliable sources. The Laffer curve does not say any of that at all.

    You've been deceived by RW propaganda falsehoods to support ever more tax cuts to the richest.

    Because lord knows, they've been suffering so since the Reagan revolution.

    [​IMG]
     
    Last edited: Sep 29, 2017
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  14. Iriemon

    Iriemon Well-Known Member Past Donor

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    What makes you think they can't use it or want to bring in back in any case?
     
  15. Ndividual

    Ndividual Well-Known Member

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    Could you show that graph up to date 2016?
     
  16. Iriemon

    Iriemon Well-Known Member Past Donor

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    Not that particular one. But from these we can see that inequality has not improved since 2007 (unless you're a 1% apologist).

    [​IMG]

    [​IMG]

    [​IMG]
     
  17. Ndividual

    Ndividual Well-Known Member

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    About what I expected, but I feel no need for the 1% to apologize for anything, our government would quickly collapse were it not for the amount of dollars in taxes they pay.
     
  18. Iriemon

    Iriemon Well-Known Member Past Donor

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    LOL, now there's a new 1% apologist argument.

    So if instead of the m/billionaires getting more and more of the nation's income and wealth since the Reagan revolution, it continued going to the middle classes, your claim is that the "government would quickly collapse"?

    Gee, how did we ever make it through the 1940s, 1950s, 1960, and 1970s?

    I'm sure you don't fee any need to the 1% to apologize for anything. 1% apologists never do.

    Because for some, or many, more is never enough.
     
  19. Old Man Fred

    Old Man Fred Well-Known Member

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    Then they aren't really hiding money overseas. Having equity in your home is not hiding your money.

    If you don't save money, if you don't take your time and labor and put it into something of value, inequality grows. It doesn't matter if that's a garden, a cottage industry, tools, a home, real estate, stocks, bonds, or managed funds.

    Income and wealth inequality is solely the result of the American people choosing to be poor
     
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  20. Ndividual

    Ndividual Well-Known Member

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    I simply stated a fact.
    In 2014, 139.6 million taxpayers reported earning $9.71 trillion in
    adjusted gross income and paid $1.37 trillion in individual income taxes.

    The share of income earned by the top 1 percent of taxpayers rose to
    20.6 percent in 2014. Their share of federal individual income taxes also
    rose, to 39.5 percent.

    In 2014, the top 50 percent of all taxpayers paid 97.3 percent of all
    individual income taxes while the bottom 50 percent paid the remaining
    2.7 percent.

    The top 1 percent paid a greater share of individual income taxes (39.5
    percent) than the bottom 90 percent combined (29.1 percent).

    The top 1 percent of taxpayers paid a 27.1 percent individual income tax
    rate, which is more than seven times higher than taxpayers in the bottom
    50 percent (3.5 percent).

    My post #11 pretty much spells out what I think would be fair, and might even result in more working people demanding government cut spending, and find/eliminate where waste and corruption is occurring.

    With the possible exception of a major war, no one should have to pay more than a 25% tax on their income.
     
    Last edited: Sep 30, 2017
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  21. Iriemon

    Iriemon Well-Known Member Past Donor

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    Speaking of "fair," is there some reason you're excluding SS, Medicare, excise state and local taxes from your analysis of who bears the tax burden?
     
  22. Iriemon

    Iriemon Well-Known Member Past Donor

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    Yes, I expect you to post your "the poor deserve their lot" claims every time there is a thread like this. It makes the rich feel better about themselves when they can feel that the poor are at fault for their position, and makes them feel like they deserve their riches.

    But the bottom 90% of hard working Americans didn't suddenly decide to "choose to be poor" in 1981.

    [​IMG]

    Something else happened that year.
     
    Last edited: Oct 4, 2017
  23. Old Man Fred

    Old Man Fred Well-Known Member

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    FICA is not a tax, but an insurance premium, and the wealthy pay significantly more in excise, state and local taxes than the poor.

    I can't think of a single state which levies a sales tax on rent, labor, food, or the basic necessities like utilities and insurance, cities typically depend upon business taxes for the lion's share of their revenue, and excise taxes generally require some level of discretionary income.

    About half of all Federal revenue(excluding FICA) is from the personal income tax, and most states derive their income from sales, property, and income taxes. Local government is dependent upon property, sales, and business taxes, plus fees for service.

    Claiming you pay $1,000 in state/local taxes doesn't offset the fact that your local government would probably be bankrupt without Federal funding, and not paying the Federal income tax means you aren't contributing to that.
     
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  24. Iriemon

    Iriemon Well-Known Member Past Donor

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    FICA is social insurance that is paid so we don't have hordes of the aged living in the streets, supported by a regressive tax system that cuts out SS taxes after about $120k of income, and exempts these taxes completely form investment income.

    .

    Down here in Florida its levied on pretty much everything. State and local taxes vary by state but tend to be less progressive or regressive than federal taxes. Which should be no surprise since Republicans control the vast majority of state governments.

    Down here in Florida over the years the Republicans have eliminated the intangible tax on investment wealth and expanded sales and use fees (i.e. road tolls) that have a regressive, disproportationate affect on the middle/poorer folks.

    So what's your point? Whether they are necessary or contributing or not, they still are taxes that people pay.
     
    Last edited: Oct 4, 2017
  25. Old Man Fred

    Old Man Fred Well-Known Member

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    I know a great way to eliminate that regressive tax while eliminating wealth and income inequality within 50 years. PRIVATIZE SOCIAL SECURITY.

    And be careful to accuse Republicans of levying regressive taxes. Checked what the gas tax is in California lately?
     

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