Bipartisan Commission's budget proposal

Originally posted by no1marauder
Equating income taxes to all taxes is fallacious. The overall tax burden is very mildly progressive which is a disgrace given the massive and growing inequality in income distribution.

Typical aspergers retort from no1. I deal in facts not hyperbole. Federal income taxes have become much more concentrated than has income. That's pretty relevant when congress is about to debate what to do about federal income tax rates.

But hey, that's just reality. You wouldn't let a small thing like substance get in your way.

Originally posted by telerion
Typical aspergers retort from no1. I deal in facts not hyperbole. Federal income taxes have become much more concentrated than has income. That's pretty relevant when congress is about to debate what to do about federal income tax rates.

But hey, that's just reality. You wouldn't let a small thing like substance get in your way.

I think what No1 is saying is that you need to look at the entire taxation picture including taxes levied at state and local levels - which includes payroll taxes, sales taxes, excise taxes, and real estate taxes - most of which are not very progressive and impose a significant burden on those who are not wealthy.

Originally posted by Melanerpes
I think what No1 is saying is that you need to look at the entire taxation picture including taxes levied at state and local levels - which includes payroll taxes, sales taxes, excise taxes, and real estate taxes - most of which are not very progressive and impose a significant burden on those who are not wealthy.

I understand what he is saying. That has been done by several reputable institutions. The overall tax code is progressive. Of course, comparing non-income tax rates directly to income inequality is ridiculous (with tje exception of state and local income taxes) since the bases of the other tax instruments is not perfectly correlated with income.

Outside of law, I come to strongly discount anything no1 has to say. Once you parse through the insults and fallacies you realize that he basically wants America to look like Venezuela.

Originally posted by telerion
I understand what he is saying. That has been done by several reputable institutions. The overall tax code is progressive. Of course, comparing non-income tax rates directly to income inequality is ridiculous (with tje exception of state and local income taxes) since the bases of the other tax instruments is not perfectly correlated with income.

Outs ...[text shortened]... gh the insults and fallacies you realize that he basically wants America to look like Venezuela.

That's pretty pathetic crap from you, Tel; channelling Glenn Beck isn't very impressive from pseudo-intellectuals.

There's nothing "ridiculous" about discussing overall tax progressivity when evaluating proposals regarding taxation except perhaps in Ivory Tower Land.

Originally posted by telerion
Typical aspergers retort from no1. I deal in facts not hyperbole. Federal income taxes have become much more concentrated than has income. That's pretty relevant when congress is about to debate what to do about federal income tax rates.

But hey, that's just reality. You wouldn't let a small thing like substance get in your way.

Here's reality:

But it doesn’t make much sense to look only at federal taxes. State and local taxes account for about a third of total tax revenues, and they tend to be less progressive than federal taxes.

If we take into account all taxes — federal, state, and local — the effective tax rate for the well-to-do is only a bit higher than for the poor. Here is one way to see this, based on data from the CBO and the Tax Foundation.

http://lanekenworthy.net/2009/01/05/how-progressive-are-our-taxes/


It's also reality that income distribution has become even more sharply skewed in the last 25 years so that the present levels of inequality are the highest since 1928. So now seems hardly the time to gave the wealthy a big marginal tax rate cut; in fact, it would seem to be a good time to put back in some more brackets at the higher end with rates which were more typical of our 20th Century experience (in the good ole USA, not Venezuela).

A good article on Slate discusses what Tel doesn't want to talk about:

As I pointed out in my Slate series, "The Great Divergence," incomes have grown dramatically less equal since 1979. There are various reasons for this, most of which I won't get into because they're explained in the series. But one very significant reason, especially since the early 1990s, has been a stunning increase in incomes at the top of the income scale. This was first documented by economists Thomas Piketty and Emmanuel Saez in 2003 (see chart below); Saez updated the figures this past July. Since 1979, the share of national income going to the top 0.1 percent (people making more than about $1 million in current dollars) has essentially quadrupled, from about 2 percent to about 8 percent. Let me say that again: About 8 percent of all the income earned in the United States goes to people making $1 million or more. These people don't need tax simplification. They need tax complication: more brackets at higher rates.

The current system of tax brackets is faulty, just like the reformers say it is. But the problem isn't too many tax brackets. It's too few. The income-tax structure we have today is built on the quaint assumption that people earning in excess of $363,650 constitute a single wealthy class. But what Piketty and Saez demonstrated was that this group in fact encompasses a hierarchy of wealthy people whose incomes, like those of the general population, have grown less equal than they were 30 years ago, or even 24 years ago. Here's how James Surowiecki, using the same Piketty-Saez data (and drawing the same conclusion I am here) put it in an August column for the New Yorker: "[A]t the same time that the rich have been pulling away from the middle class, the very rich have been pulling away from the pretty rich, and the very, very rich have been pulling away from the very rich."

We need at least a couple of new higher-percentage brackets above the current highest bracket to acknowledge this reality. It simply isn't fair to treat a family earning $363,650 the same as a family making $1 million. Such families barely live on the same planet. Which isn't to say that the family earning $363,650 deserves a tax cut. It is merely to say that the family earning $1 million should pay more than 35 or even 39.6 percent, and that a family earning $10 million should pay at an even higher tax rate. Stepping it up gradually to a maximum rate of 70 percent would probably cause mass hysteria, at least in the Fox newsroom, but under Nixon and Ford, you paid that much if you earned about $200,000 (the equivalent of somewhere between $800,000 and about $1 million in current dollars). Today that group pays a top marginal tax that's half what it was back then.

By all means, let's eliminate wasteful tax expenditures from the U.S. income-tax system. I'd even favor eliminating the mortgage-interest deduction (though perhaps not at this precise moment, given the perilous state of the housing market). But please, let's hear no more talk about reducing the number of tax brackets. We need more tax brackets, and higher ones, for the rich, richer, and richest. They can afford it.

http://www.slate.com/id/2275442/

No1 vs Telerion arguing about finance, politics and legal issues...clash of the titans!

Where's da popcornz

Originally posted by AThousandYoung
No1 vs Telerion arguing about finance, politics and legal issues...clash of the titans!

Where's da popcornz

It saddens me that you would mistake him for being at my level on these issues.

Originally posted by no1marauder
That's pretty pathetic crap from you, Tel; channelling Glenn Beck isn't very impressive from pseudo-intellectuals.

There's nothing "ridiculous" about discussing overall tax progressivity when evaluating proposals regarding taxation except perhaps in Ivory Tower Land.

Except when the tax bases are different, but please don't let that slow you down.

Originally posted by no1marauder
Here's reality:

But it doesn’t make much sense to look only at federal taxes. State and local taxes account for about a third of total tax revenues, and they tend to be less progressive than federal taxes.

If we take into account all taxes — federal, state, and local — the effective tax rate for the well-to-do is only a bit higher than ...[text shortened]... s which were more typical of our 20th Century experience (in the good ole USA, not Venezuela).

Again, I've never denied that income inequality has been rising. Keep beating that dead horse.

And it makes perfect sense to talk about federal taxes when discussing a commission to review federal taxes. States are all over the place with income taxes. Some are quite progressive, others are not, and some have no income tax at all. From the point of view of Congress, the overall progressivity of one states taxes over another is a complete red herring.

Giving a marginal income tax cut to the rich can still be progressive if the combination of cuts to other brackets as well as hikes in capital gains and dividend income taxes and the reduction of SS benefits at the top end are all quite progressive. One would think that you are all about looking at the whole picture, but clearly you are either incapable of it or simply choose not to when it does not serve your agenda.

Yet other tax expert (that makes 3 including myself) who claim that the Simpson-Bowles Plans are progressive reforms.

http://taxvox.taxpolicycenter.org/blog/_archives/2010/11/16/4680042.html

But of course, this comes from right wing hacks at the Tax Policy Center (yeah, that place that's run by the "conservative" Urban Institute and the Brookings Institute). Go ahead dodge that one with another superfluous smear.

Originally posted by telerion
Again, I've never denied that income inequality has been rising. Keep beating that dead horse.

And it makes perfect sense to talk about federal taxes when discussing a commission to review federal taxes. States are all over the place with income taxes. Some are quite progressive, others are not, and some have no income tax at all. From the point of v ...[text shortened]... itute and the Brookings Institute). Go ahead dodge that one with another superfluous smear.

It's amusing that you now consider yourself a "tax expert".

Originally posted by telerion
It saddens me that you would mistake him for being at my level on these issues.

Was the cost of expanding your doorways so you could fit your new head through it tax deductible?

Originally posted by telerion
Again, I've never denied that income inequality has been rising. Keep beating that dead horse.

And it makes perfect sense to talk about federal taxes when discussing a commission to review federal taxes. States are all over the place with income taxes. Some are quite progressive, others are not, and some have no income tax at all. From the point of v ...[text shortened]... itute and the Brookings Institute). Go ahead dodge that one with another superfluous smear.

From your link:

Because modeling a concept is not so easy, TPC picked the version of their plan that would eliminate all deductions, credits, and exclusions except for the earned income credit and the child credit (two big safety net programs for working families).

It' easy to cherry pick the proposals to get to the result you want. Quite simply, just letting the Bush tax cuts expire would be far more progressive and reduce the deficit more than the Simpson-Bowles package.

Originally posted by no1marauder
A good article on Slate discusses what Tel doesn't want to talk about:

As I pointed out in my Slate series, "The Great Divergence," incomes have grown dramatically less equal since 1979. There are various reasons for this, most of which I won't get into because they're explained in the series. But one very significant reason, especial h, richer, and richest. They can afford it.

http://www.slate.com/id/2275442/

You can C&P from slate all you like. They're basically rehashing Picketty and Saez (papers which, unlike you, I've actually read). Again, income inequality has risen. Then the author takes the easy route and opines about marginal statutory tax rates. That's about the lowest level of scholarship possible. Why? Well, even though a marginal tax rate of 36% appears in the code, because of deductions, credits, income composition, and tax loopholes, the actual amount paid is generally different. What you want to look at is the share of total taxes paid (just as Picketty and Saez look at the share of total income). When you look at the picture that way things look quite a bit more progressive.

My point? If you think that distribution is too concentrated you should see the federal income tax data! I've done the study myself using the same data as Picketty and Saez. The data is called the Statistics of Income and is publicly available from the IRS. But I'm sure that would require more analytical work than your google-happy fingers can handle, no1. Well, get back to misdirection and character assassination. That's the tools of your trade after all.

And to follow up on your bit about federal taxes not being very progressive here's another nice link from those people at the Tax Policy Institute that you favor so much.


"The Distribution of Federal Taxes by Jeff Rohaly"

"Overall, the federal tax system is highly progressive: On average, households with higher incomes pay taxes that are a larger share of their income. The 2007 average effective federal tax rate — tax paid as a percentage of cash income — rises from 3.4 percent for the bottom quintile — or fifth — of the income distribution to 25.9 percent for the top fifth.1 Within the top quintile, average rates climb from 30.4 percent for the top 1 percent to 32.8 percent for the top one-tenth of 1 percent.

Of the major revenue sources, the individual income tax is the most progressive. Refundable credits lead to negative effective rates for the bottom two quintiles.

http://www.taxpolicycenter.org/publications/url.cfm?ID=1001091

They go on to say that payroll taxes are regressive (duh, given the cap at the upper end). What they don't say (because they are only focusing on taxes) is that the SS payments are very progressive. Overall, the SS system (payroll taxes - future benefits) is heavily skewed toward lower incomes.

Originally posted by no1marauder
It's amusing that you now consider yourself a "tax expert".

How many academic papers have you published in the tax literature?