Calaban shares
2011-08-12T14:26:00.000Z
a conservative leaning post for your morning reading.
latest #103
Daningo says
2011-08-12T16:15:25.000Z
How do you respond to these?
Calaban
2011-08-12T17:27:45.000Z
Depends on the point, I suppose. With respect to myth #1, I agree and disagree. I agree that the deficit results from the recession.
Calaban
2011-08-12T17:28:26.000Z
That has never, in my opinion, been in doubt. The question, therefore, is what impact have political decisions made on the deficit within
立即下載
Calaban
2011-08-12T17:29:02.000Z
and during the recession period. The author assumes that Bush is only responsible for 2009, but makes Obama responsible for not only
Calaban
2011-08-12T17:29:50.000Z
current but also future deficits, which have not yet occurred. It makes Obama responsible for the impact of the tax cut, which continues
Calaban
2011-08-12T17:30:20.000Z
into the period of recession for which Obama takes the blame. Obama can be blamed for not ending the tax cut, but Bush still sustains the
Calaban
2011-08-12T17:30:51.000Z
blame for creating it in the first place, in my opinion. Bush doesn't 'get a pass' because now Obama is solely responsible for everything
Calaban
2011-08-12T17:31:22.000Z
that happens from 2010 on. Political decisions don't work that way, as we well know. Those decisions have a "long-term life."
Calaban
2011-08-12T17:33:46.000Z
The claim about corporate taxes is compelling, I think. I agree that it isn't as easy as no taxes and all taxes. The questions about
Calaban
2011-08-12T17:34:11.000Z
corporate taxes relative to GDP and the shift toward individual rather than corporate burden is persuasive.
Calaban
2011-08-12T17:35:08.000Z
The argument about progressive taxes is, in my opinion, a logical fallacy. While the author correctly points out that no one defines "fair"
Calaban
2011-08-12T17:35:56.000Z
what is ignored is the fact that those who don't pay taxes, in most instances, don't pay because either a) they don't make enough money to
Calaban
2011-08-12T17:36:33.000Z
pay taxes or B-) they work the exception, tax deduction system to their benefit so they pay little or nothing. In the case of the first issue
Calaban
2011-08-12T17:37:02.000Z
liberal are difficult to blame for this problem, because they have called for increases in minimum wage for many years and have been
Calaban
2011-08-12T17:37:31.000Z
resisted by both conservatives and businesses who argue it would hurt the economy. If you want more people to pay taxes, they have to have
Calaban
2011-08-12T17:38:00.000Z
jobs that put their annual salaries above the exception levels. In the second case, the exceptions that work to the benefit of those who
Calaban
2011-08-12T17:38:47.000Z
don't pay any taxes are exactly the same for the wealthy (rich) as they are for everyone else. In fact, those who are wealthy have
Calaban
2011-08-12T17:39:46.000Z
(or may have; I would need to do the research) to more exceptions, because their wealth extends to more property, stocks, etc. Areas where
Calaban
2011-08-12T17:40:07.000Z
the tax code gives considerable leverage for deduction and exception.
Calaban
2011-08-12T17:40:52.000Z
The final argument, in my humble opinion, is just simply wrong. I have heard few liberal argue for no spending cuts of any kind.
Calaban
2011-08-12T17:41:20.000Z
Obama was willing to go into the Trillions of dollars in spending cuts, provided that he received, back, an equal amount of revenue
Calaban
2011-08-12T17:41:52.000Z
increases. In my opinion, then, the final myth is a straw person argument. We aren't arguing about 100 billion any more. If this could be
Calaban
2011-08-12T17:42:30.000Z
solved by 100 billion or even 500 billion, liberals would be all over that. They are freaking out about 2 trillion and 4 trillion. That is
Calaban
2011-08-12T17:43:35.000Z
what they are arguing, over the next 10 years, will devastate the economy and those who are most vulnerable.
Calaban
2011-08-12T17:46:28.000Z
So what do you think?
Calaban
2011-08-12T17:48:23.000Z
(One final point, though, about myth #1, Bush v. Obama). I think it is fair to point out that Obama did ask and call for a repeal of the
Calaban
2011-08-12T17:48:55.000Z
tax breaks for those who make over $250K. If congress had agreed to that request, back in 2010, the deficit outlook would be different.
Calaban
2011-08-12T17:49:28.000Z
It certainly wouldn't be perfect and it still might be alarmingly high, but it would also be lower than it is now and is projected to be in
Calaban
2011-08-12T17:50:01.000Z
the future. Should Obama be "praised" for wanting to reduce the deficit by ending the tax break for those over $250 or should he be blamed
Calaban
2011-08-12T17:50:29.000Z
for the fact that he couldn't get it passed through congress? That is a question that complicates myth #1, in my opinion.
Calaban
2011-08-12T17:51:03.000Z
It doesn't, however, fit into the mythology narrative that drives the essay.
Calaban
2011-08-12T18:02:44.000Z
Oh, and I have one final comment about the progressive tax code myth. (Sorry, I'm not trying to pile on, I'm just thinking it through in
Calaban
2011-08-12T18:03:52.000Z
my head). The author cites the fact that 70% of the tax revenue of the United States comes from the top 10% of wage earners. This, according
Calaban
2011-08-12T18:05:01.000Z
to the author, "would appear fairly progressive." Actually, it might not. The number seems like a lot, until you consider the percentage of
Calaban
2011-08-12T18:05:12.000Z
wealth that that 10% actually owns.
Calaban
2011-08-12T18:08:50.000Z
Conservative estimates put the top 10% of wealth holders in the US at around 70% of the nation's wealth.
Calaban
2011-08-12T18:11:59.000Z
Other estimates suggest that in 2007 the top 10% possessed over 83% of the financial wealth, which would make the 70% less progressive
Calaban
2011-08-12T18:12:29.000Z
if you assumed that progressive should equal the amount of wealth that a group of people possess relative to the rest of the nation.
Calaban
2011-08-12T18:16:49.000Z
While the policy conclusions of William Dumhoff are the subject of criticism, I believe that his data is supposed to be fairly accurate.
Daningo says
2011-08-12T18:17:10.000Z
Wealth and Income can be very different - Income is likely fungible, Wealth is more likely to be illiquid
Calaban
2011-08-12T18:17:17.000Z
Regardless, he cites his sources and provides links to much of what he writes: sociology.ucsc.edu/whoru....
Calaban
2011-08-12T18:17:24.000Z
No, not really.
Calaban
2011-08-12T18:18:12.000Z
Wealth can be calculated in different terms. Sometimes it is calculated as property, stocks, etc., but sometimes as simply salary.
Calaban
2011-08-12T18:18:42.000Z
Or maybe I don't understand what you mean, Daningo.
Calaban
2011-08-12T18:18:49.000Z
Does illiquid mean liquid?
Calaban
2011-08-12T18:19:14.000Z
If it does then I don't understand, because wealth, as I see it cited, unusually includes a house which is less liquid than salary.
Calaban
2011-08-12T18:19:23.000Z
Am I confused?
Daningo says
2011-08-12T18:20:39.000Z
I define Wealth to be the accumulated property, businesses, investments, cash on hand - whereas income is revenue
Daningo says
2011-08-12T18:20:57.000Z
cash is liquid/fungible, property is less so
Calaban
2011-08-12T18:21:04.000Z
OK, so you don't include stocks in wealth?
Calaban
2011-08-12T18:21:21.000Z
Or by investments do you mean stocks.
Calaban
2011-08-12T18:21:51.000Z
If so, then I think we agree, and we are talking about the same category, "financial wealth," which is more than income.
Daningo says
2011-08-12T18:22:29.000Z
investments would mean stocks, bonds contracts etc
Calaban
2011-08-12T18:22:41.000Z
It is in the area of financial wealth, the inclusion of investments, businesses that the greatest difference exists.
Calaban
2011-08-12T18:23:36.000Z
You might be arguing, though, that a definition of "fair" in income tax notions of proportional should not include wealth but only income.
Calaban is
2011-08-12T18:23:40.000Z
that right?
Daningo says
2011-08-12T18:24:30.000Z
But the increase of taxes on income, may not address the disparity in wealth - in fact may deepen it as it reduces wealth building
Calaban
2011-08-12T18:24:44.000Z
why?
Daningo says
2011-08-12T18:26:13.000Z
If those who are already wealthy see an increase on their income, it will not reduce their wealth
Daningo says
2011-08-12T18:26:49.000Z
If those who are selling a business or gettign big paychecks, but are not yet wealthy, they will have less to build wealth
Calaban
2011-08-12T18:28:10.000Z
But less is not none.
Daningo says
2011-08-12T18:28:42.000Z
the wealthy will continue to grow, perhaps at a slower rate, but the 'up and coming' will not accumulate enough to even out the trend
Calaban
2011-08-12T18:29:23.000Z
Yes, I agree, but that is the liberal position.
Calaban
2011-08-12T18:29:33.000Z
The liberal position is not that the wealthy shouldn't be wealthy.
Calaban
2011-08-12T18:30:09.000Z
The liberal position is that increased taxes will not prevent them from being wealthy, BUT the increase in revenue CAN be used to change
Calaban
2011-08-12T18:30:18.000Z
the lives of those who are not wealthy.
Calaban
2011-08-12T18:30:51.000Z
Do you see my point? Your position, that taxes will not stop the trend, is perfectly consistent with liberalism.
Calaban
2011-08-12T18:31:13.000Z
Liberalism doesn't want to stop the trend of the wealthy, because additional wealth can and will lead to additional revenue.
Calaban
2011-08-12T18:31:45.000Z
What the liberal position doesn't want is an untaxed wealthy or a wealthy class that is taxed so lowly that programs to help those without
Calaban
2011-08-12T18:31:49.000Z
wealth are impossible.
Daningo says
2011-08-12T18:31:59.000Z
Yes, I see your point - I am trying to point out that the very information used to declare a need for more income tax (wealth disparity)
Daningo says
2011-08-12T18:32:22.000Z
will not be remedied by that method
Calaban
2011-08-12T18:33:00.000Z
I agree, but the alternative is untenable to everyone, liberals and conservatives.
Calaban
2011-08-12T18:33:32.000Z
The alternative is more fully socialist perspective that continues an aggressive system of taxes, but then makes many currently private
Calaban
2011-08-12T18:33:57.000Z
enterprises public enterprises.
Daningo says
2011-08-12T18:36:10.000Z
I'd agree that is untenable - by removing independent Business from the mix, you have only government to mind government - less accountable
Calaban
2011-08-12T18:36:51.000Z
perhaps.
Daningo says
2011-08-12T18:37:17.000Z
much the same calculation raised against multinationals - they can play govt against govt and are less accountable to any one govt
Calaban
2011-08-12T18:37:25.000Z
Although I trust government more than I trust business, but that might be one of the true "differences" between a conservative and a liberal
Calaban
2011-08-12T18:39:22.000Z
With respect to the original post and the myth that the wealthy don't pay their fair share, I'll just repeat that the essay's conclusion is
Calaban
2011-08-12T18:39:54.000Z
weak on several points. The last of those points is the fact that 70% of the tax burden may, in fact, not reflect the true wealth that is
Calaban
2011-08-12T18:40:13.000Z
enjoyed by the top 10% of the wealthy in the US.
Calaban
2011-08-12T18:40:52.000Z
If a "fair" progressive tax means that you pay back in rough approximation to what you possess, then an additional 10%, to 80% would reflect
Calaban
2011-08-12T18:41:38.000Z
wealth disparities more fully. There may be many good reasons NOT to shift taxes in this way, but the notion of progressive tax and fairness
Calaban
2011-08-12T18:41:46.000Z
may not be one of those good reasons.
Daningo says
2011-08-12T18:46:41.000Z
I'd like to see a comparison of annual total revenue to taxation by income strata and see if the same ratio exists as wealth to tax burden
Calaban
2011-08-12T18:48:04.000Z
But it won't. The reason it won't is because income for the top 10% is defined differently. A CEO will make $250,000 a year, but his real
Calaban
2011-08-12T18:48:18.000Z
salary for that year is 1.2 million, because of the stock options.
Calaban
2011-08-12T18:49:21.000Z
Declared income, in this instance and many like it, shifts drastically, because what is included in income can shift drastically, right?
Calaban
2011-08-12T18:49:46.000Z
That's one of the reasons that the tax code is so complicated. It is trying to figure out income not just through salary but through all
Calaban
2011-08-12T18:50:40.000Z
other means. I suspect that it fails at this task, at least in part, because there are so many different ways to
Calaban
2011-08-12T18:51:16.000Z
defer or even "hide" income once you've moved beyond the salary phase. (I don't mean hide in an illegal way, just in a tax beneficial way).
Daningo says
2011-08-12T19:01:22.000Z
So, flat tax, anyone? (I've enjoyed these posts BTW)
Calaban
2011-08-12T19:01:27.000Z
Hey, now this is interesting and it might be sort of what you're looking for, daningo.
Calaban
2011-08-12T19:01:30.000Z
Calaban
2011-08-12T19:02:12.000Z
This essay, published in the Journal of Economic Perspectives, asks exactly the question that are asking, "how progressive are taxes in US?
Calaban
2011-08-12T19:02:36.000Z
I've read some of it quickly, but what I've read is very interesting.
Calaban
2011-08-12T19:04:11.000Z
First, it looks at more than just income tax, it looks at corporate taxes, payroll taxes, etc.
Calaban
2011-08-12T19:04:39.000Z
The essay does conclude that the US tax structure "remains" progressive and that higher income strata pay equal or even more than their
Calaban
2011-08-12T19:05:06.000Z
share based on the income declared to the IRS. What the study seems to acknowledge is exactly what we've been saying here. That the income
Calaban
2011-08-12T19:05:39.000Z
declared to the IRS each year may not be the best indicator of wealth or of income over a lifetime.
Daningo says
2011-08-12T19:05:54.000Z
I printed it out, we'll see if I have time to go through it tonight
Calaban
2011-08-12T19:08:20.000Z
Interesting reading, to be sure. To bad it is only to 2004, but that's the way research often goes. It takes time.
back to top