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fair share? Options
niblick
Posted: Monday, September 26, 2011 9:42:46 AM
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Location: United States
Geeman wrote:
Maggie wrote:
I think a lot more people would be receptive to tax increases for high income earners IF they had more trust in what the government was going to do with the money. If we thought they were going to use the increased revenue by applying it directly to the deficit, then we could accept that. But the government has a long history, regardless of the political affiliation of the administration, to view any new revenues as a green light to SPEND. What will probably happen if revenues increase would be a major push to create yet another entitlement program.

In my opinion, It’s not a matter of what’s best for the nation. It’s a matter of ‘how can we spend this money to encourage more voters to support us?”

Once upon a time, the Republicans were the party of fiscal responsibility. Nowadays, I don't think anybody could even remotely lay claim to that title with any legitimacy at all. Despite their arguments to the contrary the only real difference between the R-D sides nowadays is tax and spend versus debt and spend, and that difference is really very tiny. Really, both parties are spenders and debters in a way that would be considered insane in any other context.

The question then becomes: how do we get some sort of fiscal responsibility back into government?


'I predict future happiness for Americans if they can prevent the government from wasting the labors of the
people under the pretense of taking care of them'--Thomas Jefferson
Geeman
Posted: Monday, September 26, 2011 5:36:41 PM

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Maggie wrote:
A balanced budget amendment with some teeth?

I think you might be right. However, requiring the government to balance the budget seems to defy Keynsian economic principles about the role of government during an economic crisis. One wouldn't want to require a balanced budget during WWII, for example, or while facing a massive banking crisis like we recently did. How does a balanced budget amendment deal with the exigencies of the real world and still have teeth?

It seems like it should come with some basic things like banking regulations and a minimal relationship between tax and spending. There would have to be an exception for war and economic crisis, but could such exceptions exist without becoming the kind of loophole that would blunt the teeth of the amendment?

Could an amendment actually address the vagaries of the business cycle? I mention it becaues what seems to me to happen is that every 10-20 years or so the folks in the upper echelons of the private sector walk around suggesting that they've actually managed to find ways around the business cycle itself. Really all they are doing is using new words to describe standard economic factors. Downsizing, junk bonds, low-equity, etc. are all just terms used to describe what we already know of as layoffs, debt, high-risk loans. These things have existed forever. However, they get presented as if they are new concepts. Could something as standardized and stolid as a constitutional amendment stand up to the constantly shifting vocabulary of the business world?
Wanderer
Posted: Monday, September 26, 2011 5:38:40 PM

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I am dreading this coming election season. It just sickens and disgusts me that these people will spend millions of dollars to see who will be prez while the congress is whiling away the time on vacation. Our economy gets sicker everyday and we are losing our freedoms in the the name of safety. I say kick everyone of those bums to the curb. If we do that again maybe they will get the message. Other than that, nothing but open rebellion is going to change things.
niblick
Posted: Thursday, September 29, 2011 8:41:53 AM
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Another view of 'fair share':http://townhall.com/columnists/victordavishanson/2011/09/29/postmodern_class_warfare
RuthP
Posted: Wednesday, October 12, 2011 8:20:32 PM
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Location: United States, Pacific Northwest
niblick wrote:
Another view of 'fair share':http://townhall.com/columnists/victordavishanson/2011/09/29/postmodern_class_warfare

Mr. Hanson has clearly never lived in poverty. To equate "flash mobs" looting electronics stores with single parents or the long-term unemployed or the destitute-following-a-health-care-catastrophy, who cannot pay the electric bill and buy groceries at the same time . . ., the kindest thing I can say is it shows breathtaking ignorance.

Much of the class warfare today has to do with the new new-age portrayal of Ronald Reagan's purported "Cadillac welfare queens". Now, apparently, everyone on welfare, rather than driving Cadillacs, is supposedly buying flat-screen TVs and eating out five nights a week. This has no more basis in reality than did President Reagan's claims.

Mr. Hanson's argument sets up a straw man, then knocks him down.

ON TOPIC
Maggie,

Sorry it's taken me so long to comment. I've been gone off and on, and there was something bothering my about this, but I couldn't figure-out what it was for the longest time.

1) I am not sure we need to define "rich", but you are definitely correct, we should stop talking about "taxing the rich equitably" and simply talk about what tax rates should be at each marginal level.

2) We operate on a marginal tax system. It is hard to remember this, because most of us look our taxes up in a table (which has done all the marginal calculations for us) or we plug the numbers into a formula, the purpose of which is not really clear to most, or (for most in the latter brackets) we give the problem over to an accountant.

Marginal tax system means "the rich" (however they are defined) pay the same percentage on their first earned $20,000 as does the wage-earner with a $20,000 income. "The rich" (however they are defined) pay the same percentage on earned income up through median income as any median-income earner pays. (Deductions complicate this, but leave those aside, for now.)

Look at the 2011 tax brackets as an example. They start at (single tax payer)
10% on earned income of >$0 - $8,500
15% on earned income of >$8,500 - $34,500
25% on earned income of >$34,500 - $83,600
28% on earned income of >$83,600 - $174,400
33% on earned income of >$174,400 - $379,150
35% on earned income of >$379,150

Only those in the bottom bracket can say "This is my tax rate."

Someone earning $400,000 pays 10% on the first $8,500; 15% on the next $28,700 (the difference between $34,500 and $8,500); 25% on the next $49,100; 28% on the next $63,800; 33% on the next $204,750. This taxpayer will pay her 35% marginal tax rate on only her last $20,850 and her total tax rate is far below 35% of her income. (OK, this is why we use tax tables and accountants.)

The more the hypothetical high-earner earns over the $379,150 which defines that top marginal rate, the closer she comes to an actual rate of 35%, but she must learn a lot more to push that rate up close to 35%.

Take, for comparison, 1952.
I am not listing all the tax brackets, because there were 24 of them (26 for "Head of Household"). They ran from
22.2% on earned income of >$0 - $2,000 ($2,000 = $17,098 in 2011 dollars)
34% on earned income of >$6,000 - $8,000 ($6,000 = $51,293 in 2011 dollars)
38% on earned income of >8,000 - $10,000 ($8,000 = $68,391; $10,000 = $85,489)

The top marginal bracket was 92%.
92% on earned income of >$200,000 ($200,000 = $1,709,774 in 2011 dollars)

The top earners are still paying only a 92% marginal rate. Their average tax rate is less, just as with our 2011 $400,000 earner and her 35% marginal rate. (It takes about an order of magnitude more income for enough income to be taxed at the marginal rate to push the average rate up close to the marginal.)

But, the top marginal rate, as important as it is, is not the only story here.
I earn approximately the median income. I fall in the 25% marginal tax bracket, today.

If I were earning an equivalent amount in 1952 (not be the 1952 median income, but my salary in 1952 dollars), I would be in the 34% marginal tax bracket: nearly what the top marginal rate is, now. (Mind, I approve of the bottom two tax brackets, today, more than those of '52.)

Yes, "the rich" have, as a class, increased not only their annual income, but also the percentage of all available annual income that goes to them. They should be paying a higher marginal percentage on that top income.

Pick whatever top income percentage you wish: use the $1,700,00-equivalent of 1952 or pick a percentage: top 5%, top 10% of earners. They have benefited inordinately from the increasing inequality of income.

Layoffs and unemployment have hit middle income and lower earners at higher percentages than upper earners. Median-level and lower income earners have seen real income drop, relative to inflation (even while their wages may have remained the same); Upper income earners have seen an increase in real wages. (Corporations have seen a larger increase in profits.)

However, all of us who are fortunate enough to be gainfully employed at or above median wage need to be pungling-up!
I fully believe in closing the loopholes and creating a more progressive marginal income tax schedule, but we will not solve the problem of the deficit (let alone the debt) nor pull ourselves out of this "recession" (on its way to a depression) solely with tax increases on the wealthy.

Why is it that the generations of WW I, the Great Depression, and WW II (all of whom were working in the 1950s and 1960s) were able to both pay their taxes and grow the economy, but we cannot seem to suck it up and do the same?

Why, when we have increased the number of millionaires, multimillionaires, and billionaires in this country, do our tax brackets top out at 35% on less than $400,000?

Why do we allow low, low, low capital gains tax rates to drastically reduce the average income tax, again, primarily benefiting high-income, high-wealth individuals?

Why do we confound business profit tax with personal income tax on some small business owners and farmers? (A problem with the code).

And, do not even get me started on the amount of tax burden which has been shifted from business/corporate tax to individual tax. (A problem with lobbying strength.)

So, Maggie, I guess to summarize, "rich" comes all the way down to me, the median, with half the earners above me and half the earners below me.
niblick
Posted: Thursday, October 13, 2011 8:00:01 AM
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Joined: 9/30/2010
Posts: 158
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Location: United States
niblick wrote:
Another view of 'fair share':http://townhall.com/columnists/victordavishanson/2011/09/29/postmodern_class_warfare


It goes without saying that no society ever has been able to supply all of the
needs, real or perceived, of its citizenry. Implicit in the term 'fair share'
is the recognition that there will never be enough resources to fill every maw
which fact, of course, does not mean that we should not construct and maintain a
reasonable safety net. When the safety net becomes a cocoon or hammock, the
product of one man's labor becomes the unworked for gains of the idle.

The United States borrows forty cents of each dollar that it spends and government
spending now approaches 25% of our economy. The concept of fair share must relate
to the ability (and desirability) of government to address all of the needs of its
citizens. Since we are mortgaging the future of generations to come, it should
be apparent to the densest amongst us that we need to prune expenditures. For the
young to develop a good work ethic would be salutary as well; the menial jobs are
still out there.
sensai
Posted: Friday, October 14, 2011 5:38:03 PM
Rank: Newbie

Joined: 10/14/2011
Posts: 1
Points: 3
Location: United Kingdom
I apologise now i am 3 quarters drunk and am in a very cynical set of mind,
Equality when involving money has never existed. The people in any country who have an excessive amount of mopney will not follow the 'civilised' rules and will do what they want as they can buy whatever they want to get the result they want. This has gone on since there has been people to buy. Lets face it politicians do seem to have their hands out all the time regardless of what country they originate in. A persons loyalty is not to the their country but to person who puts food on their plate and who lets them pay their rent. The system has for at least 600 years maintained this and with time comes practice, and the top organisations have had lots of practice.
Geeman
Posted: Friday, October 14, 2011 9:59:53 PM

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niblick wrote:
[quote=niblick]It goes without saying that no society ever has been able to supply all of the needs, real or perceived, of its citizenry. Implicit in the term 'fair share' is the recognition that there will never be enough resources to fill every maw which fact, of course, does not mean that we should not construct and maintain a reasonable safety net. When the safety net becomes a cocoon or hammock, the product of one man's labor becomes the unworked for gains of the idle.

Honestly, I think you've got this backwards. It seems to me that the assumption that we should construct and maintain a reasonable safety net does indicate recognition that there are enough resources to fill every maw. That would seem to me to be the definition of the common understanding of what "fair share" means. The assumption that it is the role of government to supply the real or perceived needs of the citizenry would be going beyond the implications of "fair share" and into a sort of redistribution of wealth that implies neither fairness or sharing.

So, I think we might be getting to the heart of the matter. The perception of what "fair share" means. I think the people who have been arguing against the term/concept itself are assuming that paying a "fair share" REALLY means paying an unfair share to the socially and economically idle (that fabled and oh-so-difficult to define "welfare queen" oft touted, but much less often exemplified) while using "fair" as a code for "levelled income distribution" and "share" for "equal parts regardless of contribution."

I don't think that's what most people understand "fair share" to mean. Most would, I think, assume that "fair share" means the amount that should be contributed by people who use the protections and resources of society. That's it. No social engineering agenda. Just that person contributing justly back to the society under which they have advantages that allowed them to create greater income.

How much would that same person make if they had been born in, say, the Congo or Yemen in middling economic circumstances? Would they have still have managed to make as much of an income as they have in the U.S. (or some other Western nation?) One must recognize that the difference between the amount of income a person would have made in a country where there are few protections and advantages, and that in the U.S. (or other Western nation) is the advantage that person gained by living where they did.

A "fair share" of that additional income is one that recognizes that their income is not merely the product of some personal, magical conjuring trick. The society in which they live is expensive to maintain, largely for reasons having to do with the creation of social and economic circumstances that allow such folks to create wealth. Not everyone avails themselves of every social and economic advantage, but that doesn't absolve one of the responsibility of paying for them. Joan Baez was not absolved of her need to pay taxes that supported the military even though she was herself against America's participation in Vietnam. Likewise, those who will probably never need a social safety net are not absolved of paying part of the greater income they earned in the society that has such a safety net simply because they personally don't care to.
niblick
Posted: Friday, October 14, 2011 11:20:35 PM
Rank: Advanced Member

Joined: 9/30/2010
Posts: 158
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Location: United States
Geeman wrote:
niblick wrote:
[quote=niblick]It goes without saying that no society ever has been able to supply all of the needs, real or perceived, of its citizenry. Implicit in the term 'fair share' is the recognition that there will never be enough resources to fill every maw which fact, of course, does not mean that we should not construct and maintain a reasonable safety net. When the safety net becomes a cocoon or hammock, the product of one man's labor becomes the unworked for gains of the idle.

Honestly, I think you've got this backwards. It seems to me that the assumption that we should construct and maintain a reasonable safety net does indicate recognition that there are enough resources to fill every maw. That would seem to me to be the definition of the common understanding of what "fair share" means. The assumption that it is the role of government to supply the real or perceived needs of the citizenry would be going beyond the implications of "fair share" and into a sort of redistribution of wealth that implies neither fairness or sharing.

So, I think we might be getting to the heart of the matter. The perception of what "fair share" means. I think the people who have been arguing against the term/concept itself are assuming that paying a "fair share" REALLY means paying an unfair share to the socially and economically idle (that fabled and oh-so-difficult to define "welfare queen" oft touted, but much less often exemplified) while using "fair" as a code for "levelled income distribution" and "share" for "equal parts regardless of contribution."

I don't think that's what most people understand "fair share" to mean. Most would, I think, assume that "fair share" means the amount that should be contributed by people who use the protections and resources of society. That's it. No social engineering agenda. Just that person contributing justly back to the society under which they have advantages that allowed them to create greater income.

How much would that same person make if they had been born in, say, the Congo or Yemen in middling economic circumstances? Would they have still have managed to make as much of an income as they have in the U.S. (or some other Western nation?) One must recognize that the difference between the amount of income a person would have made in a country where there are few protections and advantages, and that in the U.S. (or other Western nation) is the advantage that person gained by living where they did.

A "fair share" of that additional income is one that recognizes that their income is not merely the product of some personal, magical conjuring trick. The society in which they live is expensive to maintain, largely for reasons having to do with the creation of social and economic circumstances that allow such folks to create wealth. Not everyone avails themselves of every social and economic advantage, but that doesn't absolve one of the responsibility of paying for them. Joan Baez was not absolved of her need to pay taxes that supported the military even though she was herself against America's participation in Vietnam. Likewise, those who will probably never need a social safety net are not absolved of paying part of the greater income they earned in the society that has such a safety net simply because they personally don't care to.


While it would be useful to establsih a dialogue, it is impossible to reply cogently to gibberish.
Geeman
Posted: Saturday, October 15, 2011 2:14:59 AM

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Joined: 10/2/2009
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niblick wrote:
While it would be useful to establsih a dialogue, it is impossible to reply cogently to gibberish.

Hokay then. Since I don't think I'll be able to muster any more cogency than that last post, do you think you could avoid responding to my posts in the future? I'll extend you the same curtesy. Please don't contact me privately. Thanks in advance.
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