Slashdot Mirror

"The federal government takes in plenty of money from taxes. The problem is that they spend too much. I suggest even, across the board, cuts to balance the budget."

Amazing how two people can look at the same data and come to radically different views. Yes, the federal government has typically taken in around 18% of GDP in taxes (of one form or another). However the federal government has taken in only 14.9% of GDP in 2009 and 2010 (lowest since 1950) according to your chart; here's the actual numbers. So no, the government is not taking in plenty of money from taxes. I don't know about you but I really notice a ~20% drop in income and that's a major reason behind the current and projected budget deficits. So if we want to get serious about the budget we must start by repealing the disastrous Bush tax cuts, not by enacting recession-prolonging austerity measures borne entirely by the lower and middle classes.

The $10M in assets is a valuation based upon the profit margin at $1M/year.

Um, no it's not. It's based on the actual assets a company has - Property/Plant/Equipment, Accounts Receivable, Cash, etc.

This idea that reducing the profitability 50% will not effect that $10M valuation is interesting.. in a fantasy world where things dont effect each other.

I think you are confusing the value of a company (i.e. what you could sell it for) with it's assets. You'd pay more than $10M for a company that has $10M in assets and Net Income of $1M. Look at Skype - I'm sure they don't anywhere near $8B in assets.

This idea that changing taxes will not effect sales in interesting

I guess I could have been a little more clear in my original post. First of all, as I stated, I am talking about the short term. Second of all, I neglected to specify that I'm talking about relatively small changes in tax rates. Obviously increasing tax rates to 100% leads to zero output.

Any increase in cost, whether or not it comes from taxes or from an increase in labor or material costs will not affect how many units the firm can sell at a given price. If a widget costs $1 to make, and the firm prices it at $2, they will sell X units. If the widget costs $1.50 to make, and they still sell it at $2, they will still sell X units. The primary (as in first) effect of rising costs (whether it be from taxes or elsewhere) is a decrease in profit.

If the firm then decides that it can't sustain it's business at this new profit level (i.e. $0.50 vs. $1.00 per unit) then it can either close it's doors, raise prices, or find other costs to cut. It may turn out that they will decide to cut labor costs, but to do so while maintaining the X unit sales volume, they will have to increase productivity (which is output/labor). This is what a lot of firms have done over the past 3 years; the amount of labor used has gone down, but output is back up to pre-recession levels.

Now here is the really interesting part. The ability to increase productivity is there regardless of what the government's income tax policy is (leaving aside tax incentives for investing in technology - we're not talking about those taxes, just income tax). So if a company can increase productivity (and hence, save labor costs while maintaining the same level of output) they will do that whether or not the government raises or lowers taxes.

Now, it is possible that an increase in income tax could lead to a company raising it's sales price, and the probability of this happening is of course proportional to the size of the increase. But there are a couple of things to keep in mind. Any such increase will apply equally (we'd hope) to all firms, meaning that no firm will be disadvantaged versus their competitors. There may be some upward pressure on prices across the board, but there doesn't appear to be any correlation between corporate income tax rates and inflation. In fact, from 1952 to 1963 the top corporate tax rate (in the US) was 52%, the highest rate ever. Inflation in the 50s and 60s was among the lowest is was in the last 100 years. Subsequently, corporate taxes slowly declined to the current 35% rate, but inflation has gone up and down.

"The federal budget is funded by federal income taxes."

"Individual income taxes (45%) and payroll taxes (36%) now account for four out of every five federal revenue dollars. Corporate income taxes contribute another 12 percent. Excise taxes, estate and gift taxes, customs duties, and miscellaneous receipts (earnings of the Federal Reserve System and various fees and charges) make up the balance."

http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm

Try again.

... written by some guy named John who doesn't cite the sources for his assertions. They are merely his personal opinions. Here is a better rundown of the subsidies. And John, they aren't "subsidies", they are *subsidies*. http://www.taxpolicycenter.org/taxtopics/2011-Budget-Fossil-Fuels.cfm

100% of statistics lie. You provide a statistic.

Not I didn't say that those statistics are inaccurate. They are often highly accurate. But it is that "highly" that you need to watch carefully, because it often mean "narrow" as well.

It also doesn't say anything about trust funds.

As for pulled out of one's ass? The source of the chart in the document is Urban-Brookings Tax Policy Center Microsimulation Model.

Which is to say, they pulled the numbers out of a mathematician's ass.

I am sorry, but half the US are not trust fund bastards leaching off the backs of the laboring masses.

Are you sure? According to the urban institute, 47% don't owe federal taxes in the US. At first I thought that was didn't need to pay more than they withheld (a common issue), but then I read the report and it does indeed say they don't owe federal taxes.

Of course depending on your point of view, the US government may or may not just look like a big trust fund to those that do not pay into it. And those that do not pay into it, but receive their income from it, may or may not be bastards, but you might just sorrily agree that this 1/2 number is not something pulled out of ones ass (like many a /. statistic)...

Since WWII, Federal revenue has been 18-19% of GDP, no matter what the tax rates were. This suggests that increasing taxes will not significantly increase the amount of money that the federal government collects. If increasing taxes will not increase the percentage of GDP that the federal government collects in revenue (which historical figures suggest is indeed the case), I do not see how increasing taxes will help reduce the deficit.

You are not being factual here. This shows federal revenue varying from 14.4% to 20.4% over that period. That's quite a bit different than 18-19%, which sounds flat. It was not flat.

The highest personal marginal tax rates did vary significantly, from 94% in 1945 to 35% today, but this does not shed light on the subject as it's only one of a large number of contributing variables.

Of particular note, the revenue as a % of gdp dropped from 20.6 in 2000 to 14.9 in 2009. That's quite a significant drop. Combine that with increased apparent spending, which went from 18% of gdp in 2000 to 24% of gdp in 2010 (primarily because of large drop in gdp in 2008-9 due to the recession), and you have a problem.

Back to your point. You were implying that there is a causal relationship between federal receipts and GDP, but your data was faulty. If no such link exists, then increasing taxes will indeed reduce the deficit. In fact, this is strongly suggested by the opposite case in the last decade: we have been cutting taxes, and federal revenue has fallen. Therefore, increasing taxes (within reason) will increase federal revenues, and won't affect GDP.

Since WWII, there are have been precisely two periods where the ratio of U.S debt to GDP rose in a sustained way. The first was under Reagan/Bush, when under Reagan especially, the (democratic) congress consistently approved a budget that was lower than what the president recommended. The second was under Bush Jr./Obama.

That's a bit of a deceptive way to view it since it makes it appear that debt was shrinking most of the time, when in fact it was growth in GDP (inflation) which is causing existing debt to become a smaller share, not fiscal responsibility.

If you look at the historical revenue vs. outlays, you'll see that Washington has an almost completely pathetic record of spending within their means. Except for a brief period in the 1950s and during the 1990s when Clinton and a Republican Congress coupled with the tech bubble managed to achieve budget surpluses, every administration and session of Congress since WWII has had a budget deficit. It's not a matter of some years being good and some being bad. Nearly all were bad, just some were worse than others. (Raw numbers here if you want.)

I forgot to post the link with info about caps:
http://www.taxpolicycenter.org/taxfacts/Content/PDF/state_unemp_rate.pdf

Your point toward not silly may be correct, but ...

if you are a startup, you are probably not making a profit, therefore in washington state, the b&o is significant. Figure it is a percent and half of gross revenue.

and you tended towards a general confusion between taxes and income taxes, and now you make it a little worse. figure corporate income tax revenue is 12% of the federal revenue

http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm

saying "taxes are too much", which tends to be I think your point, *is* silly. But popular with some people. So, yeah, we are all going down the tube, except for the vultures, at least immediately,, and taxes are in fact part of what suck us dry, but talking about secondary issues like taxes, and not even doing that very precisely, does seem to be silly in a different way than I started out claiming.

doing really really well on the topic, doing the right question/claim, requires some decent concepts about economics, and the talking heads do not much even try. And of course, by their predictive ability, if they tried, they would not be able to succeed.

oh well. Looks like we will soon go from 25 trillion to 30 trillion of fiat bailout money. Once that generates the consequences, it will be easy to pay your present tax bill.

Source

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

What you say is true, however there is a Caveat

The vast majority of people who escape federal income taxes still pay other taxes, including federal payroll taxes that fund Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property.

For example, Social Security and Medicare are 15.3% of your income (until you hit the cap for social security).

Hate to break it to you champ, but when Eisenhower was President, Corporations and the top tax bracket were 87%. In those days, fiscal conservation actually happened. The wealthy who reaped the benefits off of labors backs paid back and the nation built highways, dams [Eisenhower screwed up by not making rails first and highways second, but that's a separate issue], power grid expansions, etc.

Breaks my heart that I can do this, but here is a supporting link. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

Because some people have too much income, much more than they need.

About 90% of the people on the planet would place you in that category, Mr. "Trust-Fund Communist With His Own 3000-MHz Computer."

Let's tax them like we used to in good old days (45-60s) when the tax rate for the extreme rich was around 90% and the US economy grew fantastically:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

Yeah, because correlation implies causation.

Or maybe, just maybe, when you bomb the living bejesus out of the rest of the world's production capacity, the one major power left untouched will "grow fantastically." We could try that again, like we did in the good old days (41-45).

Oh NO! We're outside the top 10! Clear we "don't have a manufacturing sector" as you've said.

Who's "full of shit", now?

Manufacturing per GDP #75
Exports per GDP #179

That's not even remote what I said. I said Clinton gave them a bigger tax cut. Bush's tax cuts, on TOP of Clintons tax cuts, of course puts Bush's rate lower, because he came after.

Effective Federal Tax Rates

Top 1%
1988: 29.7
1992: 30.6
1996: 36.0
2000: 33.0
2004: 31.4
2006: 31.2

Top 10%
1988: 26.7
1992: 26.9
1996: 30.1
2000: 29.6
2004: 27.1
2006: 27.5

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456

And I quote: DAVID CAY JOHNSTON

Oooh! Look what else he said!

Well, this is one-- this is a great irony. George Bush owes almost his entire fortune to a tax increase that was funneled into his pocket and into the use of eminent domain laws to essentially legally cheat other people out of their land for less than it was worth to enrich him and his fellow investors...

One of the key sources I quote is a prominent Republican lawyer married to a United States senator who is the expert in Texas on municipal finance. The subsidy, he says, is $202.5 million. And Bush and his partners captured about 168 million of it.

Anecdotes are awesome... but I prefer the CBO's statistical analysis. Johnston may be right about the top 400 households, but I was unable to find any real data on that.

Your facts are all wrong.

Historic Tax Revenues

1. Decreased tax revenues due to massive unemployment caused by the Great Recession

The biggest reason that tax revenues fell off is because the US Tax Code is actually way too progressive. Wage earners essentially pay little taxes, leaving the bulk to taxes on investments and taxes on corporate profits. When the bottom fell out of the stock market, those revenues evaporated and you can see a drop off of about 300 billion from that.

Bush tax cuts, which were entirely financed by the deficits

Quite clearly, Bush's income tax revenues were HIGHER in 2007 than they were pre-tax cut. At the end of Bush's economic runup, federal tax revenues where 25pc higher than they were at the beginning.
Indeed, the increase from 2T to 2.5T was easily enough to actually finance both wars with change. The question is, what else actually went up?

Well, have a look at Medicare alone. Medicare went from 150B to nearly 450B during that time frame. And, we have enormous SSI payouts kicking in. Entitlements are like 5 wars, every year.
And, having the DoD go from 300B to 750B is a kick in the rear as well.

I know this post will be modded for flamebait, but I think the original article reeks of flamebait.

Although I disagree with several points in your topic, it's worth the debate. There's no reason for you to play that cliche.

If taxes are so high that tax dodging becomes a way of life for big business to thrive, raising taxes will not fix the problem.

Quick Google on corporate tax rates over time

If what you are predicting is true, how you you account for the increase in business growth (not counting depressions) over the last 50 years? Effective tax rates have dropped by a rate of 50%

You are blaming a new president and an administration who have been in power for LESS THAN A YEAR for the current state of the budget, while ignoring the past 8 years of what happened?

Yes I am. Because it's Obama's budget. Actually, Congress controls the purse strings, so it's really Congress's fault. They just give Obama everything he asks for and he signs it.

The simplest explanation I can provide to someone like you is that something mysterious and strange happens when you start spending more than ever before and yet decide to lower taxes across the board at the same time. Guess what happens when you do that?

That's right, you run DEFICITS.

You're half right. While I agree that government spending is out of control, and this is not an Obama thing, Bush was just as guilty, cutting taxes actually increased revenue. Look up the Laffer Curve for an explanation.

See, in 2000, under President Clinton, Federal Tax receipts were $2025.5 billion or 20% of the GDP. In 2008, under President Bush, they were $2524.3 billion, but only 17.7% of the GDP. See, when you cut taxes, the GDP (economy) grows, meaning you are taking a smaller percentage of a larger pie, meaning more $$$ for the government.

But again, I agree about the drunken sailor spending. Bush spent WAY too much money. Obama is spending much much more money. So if you are upset about Bush's spending, you should be really pissed about Obama's. If not, you are blinded by your own partisanship.

I think you're missing my point. You aren't just taxing Google. You are taxing the people that are trying to advertise through Google. Which means they'll either choose to run fewer ads or they'll choose to the run the same number and make up for it by charging more for their products. People buying these products are the ones actually getting taxed.

In America income tax makes up the vast majority of government income. I would venture to guess that it's the same in the U.K. Like I said, the government is getting less money because gobs of people are unemployed / making less money. That's the way it should work. Not, "oh, so sad you're unable to pay us like you usually do, let's find a new way to tax you instead."

Before I recently looked it up, I remember there being a 90% tax bracket in the US. But that was a long time ago.

Then I looked it up. In the early 1960's, that was when the top tax bracket was slightly more than 90%. Now, the top tax bracket is 35%. So if you are on the top end of the US
income distribution, your taxes have been going down for the last 50 years.

So if you are quite wealthy, your taxes have been going down down down for 50 years. When
politicians say "were going to have tax cuts," guess who gets the biggest share?
God forbid a politician say he is only going to raise taxes on people who make more than $200,000!

Somehow, the right has gotten most of us to identify with the wealthy and act as if their taxes are our taxes. Maybe its because as Americans we can all imagine starting a business and
becoming a millionaire. But most people don't. Even most business owners don't make a million.

It seems to me that cutting taxes for the wealthy to create jobs for the rest of us has been
tried over and over again and where are we now?

Many economists think that creating jobs though public sector jobs is less efficient than through the private sector. But this approach has been tried over and over since the 1980 Reagan revolution and where are we now? I say lets give public sector job creation a chance.

The private company I work for gets nearly all its money from the public sector.

Let's face it. Obama's tax increases also affect US. I'll be paying about $600 more under Obama's plan versus what I paid under Bush II, and I'm just a middle class employee (less than 100K). If Obama really, truly wants to tax the rich, then why am I paying more taxes? I'm not rich.

Really? Where did you come up with that number? According to this chart, the average taxpayer in the $66k-$112k income bracket will pay $1,290 less taxes for 2009 under Obama's tax plan than they will pay for 2008 under G. W. Bush. The lowest bracket that would see a tax increase is the $227k-$603k bracket, which would see an average increase of a whopping $12. That wasn't a typo -- their annual taxes would go up by twelve dollars.

So, I ask again, where did you get your numbers? The chart on the Wikipedia page I linked has these citations, among others:

• What they'll do to your tax bill
• Your Money: McCain vs. Obama
• An Updated Analysis of the 2008 Presidential Candidates' Tax Plans: Updated September 12, 2008

Feel free to double-check the calculations, if you want. Just let me check yours too.

Because everyone knows that the NYTimes has no political leanings whatsoever.....GEEZ....

If you want fair and balanced then try these:

http://www.taxpolicycenter.org/publications/url.cfm?ID=411693

http://www.grantthornton.com/portal/site/gtcom/menuitem.8f5399f6096d695263012d28633841ca/?vgnextoid=6292254a8313b110VgnVCM1000003a8314acRCRD&vgnextchannel=d1f17220bfca3110VgnVCM1000003a8314acRCRD

Slightly Skewed:

http://www.heritage.org/Research/taxes/cda08-09.cfm

I'm not a tax preparer, but something seems wrong with your numbers. I'm not sure if "my taxes have gone up" means "my absolute amount paid in taxes has gone up" or "my tax rate has gone up", but if it's the former then the obvious reason for that is that your income has increased (as it normally does over a person's career).

If you make less than $50K a year primarily on earned income from work, that probably puts you in what is currently a 25% bracket. That bracket (adjusting for inflation) was at 28% in 1986, and has only dropped since then.
Read for yourself: http://www.taxfoundation.org/publications/show/151.html

The other place you may have seen a tax increase is in FICA, but that rate (7.65%) has been in place since 1990.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=227

The only other explanation I can think of is that your income is primarily on investments rather than working.

I'm not afraid to jump into this fray. Whether or not crying "class warfare" at every criticism of a capital gains tax cut is "pretentious and boring", you didn't respond to the meat of the AC's argument. To paraphrase, while a tax cut on capital gains "ought" to not be a class issue, in reality the benefits of such a tax cut fall almost exclusively to the wealthiest 20%.

In fact, for dividends about 68% go to the 20% with the highest incomes and for capital gains 98% go to the 20% with the highest incomes. When it comes to wealth, the numbers are probably skewed even farther, since many retirees and "trust fund babies" may have great wealth compared to their actual yearly income.

Anyway, I'll avoid the class warfare rhetoric and let the raw numbers speak for themselves:

http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=818&DocTypeID=1

In summary, though, if you want to be taken seriously with the cut capital gains plans, you should be ready to defend the idea that most of those gains go to a small percentage of the population. Perhaps you're a believer in trickle down economics?

If you can't tell the difference between Obama and McCain, you must not be looking very hard. Here's a hint: you will learn very little useful information from cable news. For one clear difference, this chart compares their tax plans (source).

I see many posts here that simply claim without evidence that both major candidates are "evil". I think that discussion would be greatly improved if more posters supported their claims with evidence.

Um, the Laffer curve is not an economic model. It is a tax-rate vs tax-revenue model. Even so, it is not the simplest. The simplest is the model you and other Democrats use, which is a straight line. It's the impression that the more you tax, the more you make, which is false.

Fine, the Laffer curve is about the most simplistic rate vs revenue model you can imagine. Reality is not that simple, that's why economists are able to have a discipline. Using the Laffer curve as the basis for your argument would make an economist cringe. As for the snide comment about a straight line model, you are just being snotty. I never suggested a relationship, and there are very few people who buy into such a model. I, and many others, do believe that our tax rate is lower that optimal (particularly at higher income levels, captial gains, and generally on income based on investment rather than labor).

If you are currently on the left side of the curve, then raising taxes will raise revenue. If you are on the right side of the curve, lowering taxes will actually raise revenue. Seeing that Bush lowered taxes and revenue went up, is a strong indicator that we were on the right side of the curve.

With that kind of ironclad reasoning, I can't see how anyone can argue against it. We changed one part of an extremely complex system, and on the other end something happened, so it must be that one part that mattered. I once made a birthday wish that came true...so by your logic, that's a strong indicator that my act of wishing caused the outcome. You are clearly not an economist, a scientist, or even some very familiar with logic.

Easy, there are more people in the USA then ever before.
You're kidding, right? And you claim that the Laffer curve is too simple?

Nope, I'm not kidding. Population growth is a great way to increase your tax base. This country has to *create* 150,000 or so jobs every quarter just to keep the unemployment rate the same. That is 150,000 more taxpayers every quarter. On top of this, the economy of the country grows, GDP goes up, pretty much constantly somewhere between 2-8% annually, in manner not correlated with tax increases or cuts (again, complex system). This strongly effects tax revenue. And in fact, if you use a more relevant measure, tax revenue as a function of GDP, Bush's tax cuts have had a slightly negative, if any at all.

To claim your revenue will actually go up is something so brazen that even the very conservative proponents did not (and honest ones still don't) make.
Um... tax revenue DID go up.

...

No real data? Bush cut taxes and now tax revenues are at record highs. That IS data and real world evidence. It would appear that REAL WORLD evidence supports me.

1. Only in total terms (not scaled per capita or as a function of GDP, nor in real dollars). If you are going to base your argument on absolute numbers, you are either ignorant of accepted practices, or you are intentionally trying to deceive.
2. There isn't a single non-hack economist who argues this anymore. Lowering taxes *DOES NOT* raise tax revenue. As I mentioned and linked to before, the only claim economists make is that tax cuts might increase the economy enough that the loss in revenue from a lower rate is partially offset by increased economic output.

Granted, tax cuts are not the only reason why revenue is up, but taking less out of the GDP causes the GDP to grow.

So even right here you acknowledge that revenue is up for reasons beyond tax cuts. As for tax cuts causing GDP expansion, the data is slim. The GDP has grown through tax cuts, tax increases, and static tax rates. The point, again, is that this is an extremely complex system that has tons of inputs, only one of which is the

But they are nearly as low as they ever have been(especially long term rates):

http://www.taxpolicycenter.org/TaxFacts/TFDB/TFTem plate.cfm?Docid=161

FYI: Firefox usage nears 25% in Europe is the original article :S, not being a smartass, just sayin' :) ...

Anyway...
I say that the taxation curves were in a major way a contributing factor to the post-war boom

Well I got tired of clicking links in google about the post war boom and not finding a single reference to the taxes levied at the time. Showing that when I say post war boom, most people do not think about your argument where you didn't specifically mention it, you mentioned an economically prosperous time which I say has more to do with the end of WWII (surplus of workers, increased globalization, increased consumer demand, all DIRECT results of the era) as a factor in itself, not just a time period reference.

That of course depends on the kind of government one has. If it is a truly enlightened representative democracy...

Well our system is far from utopian, but it's the best we got, and it's better to work with the current system then work on something that couldn't be used unless there were significant changes in hows things worked. In a utopian system, most forms of government (including communism, anarchy, etc...) DO work, that's why it's called ideal and not real.

As for your premise though:
Real Compensation per hour
GDP
Historical Tax Brackets
Still doesn't correlate for me when it comes to the numbers, they still go up despite tax cuts in the largest bracket. You'll probably say it was more even distribution to the middle class, I didn't find that particular evidence, and if found I would still attribute it to the strong unions of the period fighting for worker's rights and the GI bill educating the workforce over anything else.

Blatant lies!?! You cite a blog for your "proof"? How about a reputable site like http://www.taxpolicycenter.org/TaxFacts/Tfdb/TFTem plate.cfm?DocID=457&Topic2id=20&Topic3id=22 ?

I'll save you the time of reading all those complicated tables of numbers you'll find at that site. In 1979 (the earliest date in the table) the top 20% paid 56.4% of total federal tax liabilities. In 2004 (the most recent data in the table) the top 20% paid 67.1% of same. More interestingly, as for the share of individual income tax liabilities, the top 20% paid 64.9% in 1979, and paid a whopping 85.3% (more than the 80% cited by the OP) in 2004. And guess what? In both cases these percentages have gone *up* during the Bush years, contrary to popular belief that the Bush tax cuts were "for the rich".

One last statistic that is also interesting. The bottom 40% now "pay" a negative precentage of individual income taxes. And the bottom 60% combined pay less than 1%. That means the top 40% pay over 99% of individual income taxes.

I think these inconvenient facts show that your statements are the real propaganda, ignorance and prattling truisms.

Once government started consuming more than 50% of the GDP. . .

What? It's not even close to that. It's about 17%. It's like the people who say we give too much foreign aide, then you ask them how much they think we should be giving and they say a number over ten times higher. I don't know how democracy can work with such ignorance.

... AND drove massive tax cuts for the rich

Incidentally, Bush routinely plays games with his deficit projections

Clinton was just lucky

The idea (as I understand it) is total taxes (including VAT corporate etc.). I.e. tax burden as a percentage of GDP

It isn't 70% though, but Sweden is the highest at 50.06%

http://www.taxpolicycenter.org/publications/templa te.cfm?PubID=9732

This is quite a misleading table, since it doesn't take into account tax deductions etc. Your tax burden in the US, for state & local taxes, is likely to be closer to 16% (10% state & local + 6% Federal):
http://www.taxpolicycenter.org/TaxFacts/overview/f amily_rates.cfm
http://www.retirementliving.com/RLtaxburdens.html
I just looked at my tax returns from a couple of years ago - my effective tax rates were 5% & 4% rather than 10% & 6%, because I deduct mortgage interest, have kids, etc. If you add property taxes my total tax burden would be around 11%. Sales tax here is 5%, compared to 15%+ in most of Europe I believe. I have lived in the UK & I can tell you that the taxes are a lot lighter in the US, despite what the top marginal rates are. From my experience, from a financial perspective, I would want to be earning almost the same in pounds as I do in dollars to have about the same purchasing power, despite the pound being worth $1.87 today. Now, from a quality of life perspective, there are plenty of arguments in favor of living in Europe, but taxes aren't one of them ;)

Page 64 shows the average cost of premium unleaded in various countries. "Normal sales price" (including cost of oil, processing, industry margin, and distribution) comes to just 44 cents per liter. The rest is taxes. Just eyballing the distribution, you can see the U.S. falls towards the lower end of the middle third. On the other hand, countries like Austria, Belgium, Sweden, the UK, and Netherlands are clearly at the extreme high end.

Page 78 lists fuel taxes as % of state revenue. The U.S. gets 12% of its revenue from fuel taxes. This is on par with the revenue of European states with high taxes (probably because their overall taxation rate is higher). U.S. tax revenue in 2005 was $2.15 trillion. 12% of that is $258 billion. This is on the order of the few federal figures I was able to find ($140 billion) plus state taxes. Greenpeace estimates the oil industry receives only $15-$35 billion in subsidies per year. In other words, the taxes are much more than the subsidies. Note that even the motor vehicle fuel taxes imposed by the states , not the federal government, exceeds the high end of Greenpeace's estimate.

$6/gal is not the normal or even market price for gasoline. You could argue the U.S. is slightly subsidizing gasoline prices (since it falls at the lower end of the middle third). But to argue that $6/gal is the "actual cost" is to argue that every country in the world is subsidizing gasoline except those in the EU with high fuel taxes.

Our dependence on oil is bad enough as it is. There's plenty to argue against it without makign stuff up. If you bring bogus figures to the table, it just makes it easier for the nay-sayers to discredit everyone advocating conservation and minimizing environmental impact.

If the government didn't force companies to pay social security taxes, do you really think they'd pass it on to the employees? That 7.5% isn't money taken away from you, it is money taken away from them.

Besides, the effective tax rate quoted by the poster, actually taken from this report (pdf warning), not this one, takes social security into account (see table, page 3).

I call bullshit if you are living in the United States and make less than $200k a year. According to a report released at the end of last year by the Congressional Budget Office (congresses book-keepers), the effective federal tax rate for the United States (averaged across all households) was 20%. For the middle 20% of Americans making about $52k/household (pretax, 44.5k aftertax), the federal tax rate was less than 15%.

For the fourth quintile, average income $77k, the tax rate was 18.7%. It is not until you get up to the top quintile, whose average income is $180k/household, that the effective tax rate gets to wham-o 25%. Let's say, to be generous to your argument, that the state also takes 15%, that's only 30% of your total income. In fact, the state tax rates are substantially less than that - New Hampshire, Nevada, and Alaska don't even have state income taxes.

Of the rest, your take-home pay, which is still 70% of your gross income, you start paying out things like property taxes, sales taxes, and gas taxes. In order for those additional taxes to take away an additional 20% of your gross income (so that your total taxes = 15% + 15% + 20% = 50%), the tax rate on your after-tax dollars would need to be 20%/70% = 28.5%. In other words, if all of the taxes applied to your take-home income had a rate of 28.5% (or a weighted average of them all), then that would make up an additional 20% of your gross income that had been taxed away.

I don't know about you, but the sales tax around here isn't anywhere near 28.5%. Neither is the gas tax, alcohol tax, property tax, or any other kind of tax that I can think of. And if each of those smaller taxes are less than 28.5%, the effective tax rate on your take-home income doesn't exceed 28.5%

Are they ever going to repeal income tax which was only supposed to be 2% max? Many of us pay over 50% in taxes if you include gas tax, sales tax, income tax, property tax, etc etc.

You're counting things in two different and incomparible ways to make your argument. Way back when they first introduced the income tax, there were still a whole lot of other taxes in effect, just as there are today. You are comparing the 2% to 50%, but income tax (as you noted) is only one component of all the taxes you pay. What did people pay out in total taxes back then? I don't know. I'll grant you it is certainly less than today.

Bear in mind, however, that back when the income tax was still very low, the government didn't do nearly as much as it does today. I'm not just talking about pork-barrel politics - there was plenty of government corruption back then, too - I'm talking about things like having the world's foremost military, an impressive tax-backed national infrastructure, and social welfare programs.

If you would rather be susceptible to invasion, have no roads or bridges, your parents and in-laws stay with you when they grow old, and out-of-work beggars at your door, then by all means advocate the libertarian viewpoint. Just be sure your math is correct, though.

According to US Code 26 2001, the tax is imposed on every transfer of taxable estate from US Citizen decedents.
According to the Tax Policy Center, it is not.
Notice how no taxes were paid on inheritances under $1 million.

http://www.taxpolicycenter.org/TaxFacts/Tfdb/TFTem plate.cfm?DocID=221&Topic2id=20&Topic3id=22

http://answers.google.com/answers/threadview?id=20 50

While the Top 20% may pay 60% of the tax, they hold 80% of the wealth.
The bottom 50% hold less than 5%.

So maybe the tax burden on the top 20% should be a little higher, as they are currently being taxed at a low rate in proportion to their benefit.

Most of our tax revenue comes from those corporations anyway, you know

You are so wrong.

In 2003, personal income tax accounted for almost an order of magnitude more US federal revenue than corporate income tax. (8.7x times more to be precise)
http://www.taxpolicycenter.org/TaxFacts/TFDB/TFTem plate.cfm?Docid=407&Topic2id=90

More to the point, those "huuuuuuge" companies provide jobs and livelihood to a lot of people.

You can just as easily say that the people provide manpower and the livelihood to all corporations. The big difference is that without corps, the people would continue to exist but without people the corps would be nothing.

More relevant is this. Corps pay about 1/5th less taxes as a percentage of income. If they want to be treated like people, shouldn't they be taxed like people?

Looks like you're correct. Can't vouch for the accuracy. My point that tax breaks are equivalent to taking less money rather than giving corporations still stands though.

Thanks for your input.

You seem to hate the idea of a big corrupt government taking a lot in tax money. Ok fine, that is understandable, and I'm never going to change your point of view.

But I don't believe that making communities fend for themselves is going to give you the utopia you think it will. I just want to make one point.

Look at:
http://www.taxpolicycenter.org/TaxFacts/TFDB/TFTem plate.cfm?Docid=308&Topic2id=95

And notice how most of the countries with low income taxes are shitholes (in general). The higher the income tax, the better off the citizens are. The better off the citizens are, the less waste and corruption. This list doesn't even go down into the depths, countries like mongolia survive primarily on very low sales taxes.

You seem to miss the point that the higher income workers are also paying FICA. You state that working-class people are paying a higher amount of federal tax than is their fair share, without really defining what that is. The facts state that FICA does not unduly skew the federal tax burden to lower income workers.

I don't see how FICA is more of a drag on middle and lower income workers rather than upper income workers. It's the same percentage of income at $35K vs $85K, and the same overhead effort per worker for employers.

A quick look says that about 69% of FICA and 96% of federal income tax is paid by the 4th + 5th quintiles of income (>$53K for 2001). Again, for 2001, this works out to more than 83% of the total federal revenue burden placed on people making at least $53K. Based upon these numbers, the original statements about the top 20% paying 80% of total tax burden, is a little off. The top 20% pay 65% of the total tax burden, not 80%. However, the statement about the top 50% paying 99% of the total tax revenue is roughly true.

Link to tax liability based upon quintile: http://taxpolicycenter.org/TaxFacts/TFDB/TFTemplat e.cfm?Docid=294
Quintile definitions: http://taxpolicycenter.org/TaxFacts/TFDB/TFTemplat e.cfm?Docid=288
FICA rates are 7.65% for the first $87,900 of income, 1.45% above $87,900.
Social Security - 6.20%/capped at $87,900. Medicare - 1.45%/no limit
These rates are for employees, with employers matching these taxes dollar for dollar.
Self-employed people pay 12.40% FICA.

You seem to miss the point that the higher income workers are also paying FICA. You state that working-class people are paying a higher amount of federal tax than is their fair share, without really defining what that is. The facts state that FICA does not unduly skew the federal tax burden to lower income workers.

I don't see how FICA is more of a drag on middle and lower income workers rather than upper income workers. It's the same percentage of income at $35K vs $85K, and the same overhead effort per worker for employers.

A quick look says that about 69% of FICA and 96% of federal income tax is paid by the 4th + 5th quintiles of income (>$53K for 2001). Again, for 2001, this works out to more than 83% of the total federal revenue burden placed on people making at least $53K. Based upon these numbers, the original statements about the top 20% paying 80% of total tax burden, is a little off. The top 20% pay 65% of the total tax burden, not 80%. However, the statement about the top 50% paying 99% of the total tax revenue is roughly true.

Link to tax liability based upon quintile: http://taxpolicycenter.org/TaxFacts/TFDB/TFTemplat e.cfm?Docid=294
Quintile definitions: http://taxpolicycenter.org/TaxFacts/TFDB/TFTemplat e.cfm?Docid=288
FICA rates are 7.65% for the first $87,900 of income, 1.45% above $87,900.
Social Security - 6.20%/capped at $87,900. Medicare - 1.45%/no limit
These rates are for employees, with employers matching these taxes dollar for dollar.
Self-employed people pay 12.40% FICA.

Umm, I think that the number of people who would be getting back something like $1200 in your example would be far greater than the number of people getting back something like $18,750.
Of course. But 15 times more? That's a good question for staticians to answer, and one that's not too useful consider I just used example numbers.

I would also claim that having $1200 reduction in taxes for a person making $20,000 per year improves that person's standard of living more than a $18,750 reduction in taxes for a
That is in fact true. However, it is a hypothetical point since in real life people making 20,000 a year pay $0 in income tax, and end up getting a heft Earned Income Tax Credit in most cases.

When they feel that a certain increase in taxes on the rich decreases efficiency in a way that outweighs the gain in equity, then they won't support such increases
Thats provably false, and you know. Until Kennedy cut marginal tax rates, and then Reagan cut them again, income tax rates were confiscatory and there was no talk of equity. For example, in 1950 any income over $40,000 (a princely sum for those days, but equal to CEO pay today) you paid 50%. If you made $100,000 you paid 68%, if you made $400,000 you paid 84%.

The point of it all is that right, now taxes for the poor, lower income, and middle income are the lowest they've ever been. Check it out. If you made $4,000 in 1970 you paid 22.50% federal income tax. Inflation injusted, that is $16,500 dollars. What rate do people pay on that now? 15%, with a $4,850 standard deduction, (meaing that you only pay taxes on $12,000 of it).

Claiming that the poor, low, and middle class earners pay too much income tax is a joke.

The top 1% alone in 2000 paid 27% of the taxes.
Nice try, buddy. They paid 20 % in 2003.

2000 is NOT A GOOD benchmark year. That was the big windfall for the rich in the stock market boom so the did pay a lot of taxes that year.

Starve the other beast: the fat cat.

I know the Hubble telescope has done some great science, but shouldn't we just let it go so we have more money to put up the next generation telescope?

No, we should not just let it go, especially not when we've already spent $200 million on the instruments that are supposed to be installed in the next mission. HST is quite possibly the greatest scientific instrument anyone's ever built. You don't just throw it away unless you really have to.

Or is this really about hating Bush's attempt to bring a man to Mars, and undermining it anyway possible just because he's Bush?

Look, no one believes that Bush is serious about a manned mission to Mars, least of all the man himself. His proposed reshuffling of the NASA budget to pay for it is sub-laughable.

I can't see why people are suddenly spendthrift when a Republican president wants to do something, but we can spend billions on welfare and hike taxes up to strangulating levels without anyone complaining under a Democrat.

Please, get serious. What are these "strangulating" tax levels you are talking about, and under whose administration did they occur? If you look at this page, you'll see that tax rates have not appreciably changed since 1980. In fact, that same chart will show you that most people's taxes were actually lower in 2000, when the Man You Love To Hate left office, compared to 1992, when he took office.

Maybe people seem spendthrift because the Bush administration is mangling our budget with explosive spending programs coupled with irresponsible tax breaks for the rich. This results in (suprise, suprise) huge deficits which our children's children will be paying for. This isn't "just party politics"; fiscal conservatives are crying foul about Bush Economics as well.

Thanks for playing!

And the winner is...

Of course, if you took the time to actually look at the facts instead of spouting off unclever quips, Massachusettes' state tax burden is significantly lower than the U.S. average and is in about the middle of the pack when viewed as percentage of personal income.

- a defensive Bostonian

Of course, if you took the time to actually look at the facts instead of spouting off unclever quips, Massachusettes' state tax burden is significantly lower than the U.S. average and is in about the middle of the pack when viewed as percentage of personal income.

- a defensive Bostonian

Bush singlehandedly took us from the best economic conditions in half a century, to the worst, in a mere 3 years.

By late summer, the first rebate checks were putting money in consumers' pockets. Many rebate checks arrived in the weeks after the Sept. 11 terrorist attacks.

The economy started growing in late fall --- and has grown since.

"At the very least, the Bush tax cuts [in 2001] helped lift the economy out of recession modestly and countered the effect of the terror attacks," said economist William Beach, director of the center for data analysis at the Heritage Foundation.