Only in a nation that is truly ill-informed could Republicans block unemployment aid for millions unless the most fortunate among us get tax cuts, while simultaneously talking out the other side of their mouths about deficits burdening our children. All this while we live in a new Gilded Age of mind-blowing income inequality. It's almost too absurd to contemplate. But you knew that already. As for my thoughts on the Great Compromise: I think Obama could have used his rhetorical abilities to put the GOP on the defensive. But caution is his middle name (it has officially replaced "Hussein," in fact), and it's going to come back and bite him on the butt.
One almost gets the impression from the GOP that something is wrong with you if you're still doing actual, useful work (or would like to, except for the fact that there are five available workers for every job opening), as opposed to occupying the loftier realms of high finance. So I decided to play around with the idea of everyone becoming a banker. Related cartoon from 2004 (a personal fave): "The Labor Chain"
It’s all about incentives….
Extend unemployment again = incentive to not work
Raise taxes = incentive to not work
Bailouts = incentive to take ill-advised risks
BTW, hedge fund managers only survive if they are successful and provide value to their customers. Government employees can accomplish nothing for decades and keep getting raises every year. Who pays for it ? Well the richest 2% pay half of all taxes.
Great! I’m looking forward to your explanation of this …
That’s a stupid thing to say. We’re only extending it in states where unemployment is up over 8%. Here in California, the unemployment rate is 12%, and since that just counts those seeking unemployment, and does not include people for whom unemployment has run out, the number of job seekers is almost certainly higher.
When unemployment is 12% in California, that means that there are four and a half million people looking for work. They’re not just lazy, not that many. They want to work, but there are four and a half million of them.
Too many job seekers + not enough jobs = higher unemployment.
Sure, but the question is whether that incentive would have any effect. I mean, raising taxes on people making over $250,000 a year is actually just raising taxes on the portion of their income above $250,000 a year. There was a lot of talk when Obama took office about people ‘Going Galt” and dropping out of the economy (because those ignorant motherfuckers thought he raised taxes, rather than what he actually did, cut them), but of course it come to nothing.
If you have any statistics showing that raising taxes on people making more than $250,00 a year significantly impacts the labor market in some way, please let me know. Otherwise, please stop repeating unsupported right-wing drivel.
I agree, but since the alternative was watching the economy collapse, I’m pretty happy Presidents Bush and Obama did what they did. Now, granted, I would have liked to see some terms more favorable to the taxpayer in there, as well as some humiliating “All CEOs of bailout-receiving companies banned from working in the financial industry in any capacity for life” clauses, but yeah, avoiding the second great depression seems to be worth it.
And control more than half of all the wealth, so they’re getting a pretty fucking awesome deal.
—Myca
Thank you. Thank you, thank you, thank you. This isn’t pointed out nearly enough. And, not only to they control more than half the wealth, they earn more than half the income.
The sad fact is that the top 2% pay a smaller percentage of taxes than the percentage of income that they earn.
But I guess that’s what fiscal conservatives (hah!) see as fair and just.
The sad fact is that the top 2% pay a smaller percentage of taxes than the percentage of income that they earn.
Commonly believed, but wrong.
Curse you, unclosed italic tag.
Another source:
http://www.taxfoundation.org/news/show/250.html
Top 1%, 20% of AGI, 38% of income taxes.
Top 5%, 35% of AGI, 59% of income taxes.
The previous link includes payroll taxes as well, which make it a bit less progressive – though note that even with all the taxes thrown in, the system is still progressive. Rich people carry a bigger portion of the burden than middle-class people, in absolute terms AND in relative terms.
In most of these discussions I’ve had, this is where the progressive starts to sputter about how the rich people can afford it more, so each marginal tax dollar hurts them less. That’s true. But that’s also not what was originally alleged.
Would you mind cutting and pasting specifically the part of the linked article you think refutes (or refudiates, if you prefer) what Jake said?
I ask because from looking at it for a while, it doesn’t seem to contradict his statement.
—Myca
For lack of my own charts, I’ll concede to Robert’s data. I’ve done the legwork for state income tax in Oregon and the results are starkly different from what Robert has provided here (63% of all income 37% of all income tax revenue, iirc). I may well be wrong to extrapolate Oregon State income tax to the Federal level.
It doesn’t specifically contradict him, Myca, it just broadly contradicts him. The second link is more specific. Thanks for fixing the italics, by the way.
Jake, I would not be at all surprised to see that contradicted in some states. Though I AM surprised that Oregon is one such state. You guys seem like such crunchies.
It’s a flat tax, not progressive.
Crunchy we may be, but we’re also virulently anti-tax. Oregon has a strong right, a strong left and no substantial center. That leads to both left & right wing favorites passing. So, strong funding for environmental issues and constant reductions of allowable tax types. It’s weird.
Raw numbers from the IRS through 2007 can be found here.
Click on the link that says:
1986 – 2007 (under the “Number of Returns, Shares of AGI and Total Income Tax, AGI Floor on Percentiles in Current and Constant Dollars, and Average Tax Rates” heading)
I do notice and acknowledge how the progressivity for the very top was dented substantially by the Bush tax cuts. (One reason I’m not totally verklempt at the idea that the richest people don’t need new tax breaks.)
Robert,
The analyses you point to refer to percentage of federal income tax paid, neglecting non-Federal taxes. Expanding the concept of taxes to actually include all taxes gives a somewhat different result. Not hugely different, only the top quintile do worse than the top 1% in tax rate, so even the upper middle class pay a lower effective total rate of taxes than the top 1% (I’m not sure about the top 0.1%), but the top 1% do pay a lower share than people poorer than them.
And that doesn’t actually answer Brad’s claim either, but it is worth adding to the picture.
The second one is income tax only. The first one is all Federal taxes, including payroll.
If we drag in state and local taxes, then we should also discuss cost of living differentials among states and a few dozen other confusing factors. The context of the original post was the national level.
I think, when it comes to Federal Income Tax, that it’s clear that I was wrong. Sure, nothing we’ve found specifies the top 2% specifically, but the data we have found indicates that my claim was incorrect, Charles.
Well since Jake is being all cowboyed-up and such, I should say that the link Charles provides does indicate that the very very richest are paying less than they “ought” to be, big picture.
Off with their heads! Or at least maybe up with their payroll tax contributions.
Charles pointed out that if you look at total taxes, instead of cherry-picked taxes, the rich’s share of taxes matches their share of income. For instance, the wealthiest 1% of the country gets 20% of the income and pays 22% of the taxes.
In most of these discussions I’ve had, this is where the conservative starts to sputter about how the actual total taxes people pay aren’t relevant, because cost of living differentials and whatever other confusing factors they can think of to throw into the mix.
That’s ridiculous hand-waving. The question people care about is “who pays the taxes?” — not “who pays the cherry-picked sliver of taxes that gives a wildly deceptive view of who pays taxes.” The bottom line is, measured by the yardstick conservatives suggest — percentage of income matching percent of tax burden — the rich are not unfairly burdened.
That said, I agree with Robert’s hypothetical progressive in comment #6: Framing things this way is a mistake. We should be asking “who can afford to pay the taxes with the least suffering” and “what will be the effect of a proposed tax policy on the economy?” Other than the appeal of making things mathematically tidy, there’s no reason to assume that optimum fairness is when everyone’s percentage of national income matches their percentage of the total tax bill.
UPDATE: I cross-posted with Robert, so hadn’t yet read his conciliatory comment when I wrote this comment.
Jake — The person you were responding to, Mary, wrote:
Robert, please note that Mary said ALL taxes — she didn’t specify only federal taxes, or only federal income taxes, or anything else.
Mary was mistaken. The richest 5% pay about 48% of all taxes (source — pdf file). I’m not sure how much the richest 2% pay, but it’s clearly a lot less than 50%.
You then responded:
So yeah, you were mistaken, too. However, you were correct to think that the wealthiest Americans pay about the same percent of the total tax bill as they receive of the total income.
See, we had achieved bipartisan unity. And then you had to come along.