Should Election Day be Held on April 16th?

[Char. Limit]

I have an idea. It's 23:00, so it's probably a bad idea, but I'm posting it anyway. So sue me.

Election day should be held on April 16 this year. What's the significance of this year, you ask? Well, what happens the day before?

 

[Alfi]

April 15
did I win anything?

 

[WhoWee]

The date is meaningless to a large number of our citizens.

 

[Char. Limit]

Tax Day is meaningless?

 

[zomgwtf]

I'd say it's meaningless and definitely not worthy of postponing any elections.

Word on the street is that the Tea Party is planning a big protest at Washington on Tax Day too. Yayyyy.

 

[russ_watters]

Tax Day is meaningless?

I suspect WhoWee means that it is meaningless to the 40something percent of the country that pays no (net) federal income tax.

I would say that trying to base voting on tax burden is exactly the wrong thing to do. It encourages a dictatorship of the majority and buying the vote via uneven taxation. The situation we are in now is approaching that already: the bottom part of the country can band together to tax the top part. This is a key part of democratic campaign strategy, creating a 'rich vs everyone else' dichotomy to motivate their votors. The result is a country where a huge fraction contributes nothing to the federal tax burden and a small fraction contributes the vast majority of it (iirc, the top 10% contributes 90%).

 

[calculusrocks]

For conservatives and libertarians, election day can't come soon enough. If the youth had any idea how much of a burden is going to be placed on them, they'd be protesting. Social Security, the politicians spent it. Health Care, if passed it'll be bankrupt before I'm 70. Conjecture? Maybe. All I know is that the numbers don't add up.

Both Social Security and Health Care are two of the biggest Ponzi schemes ever devised in history. Count me in on the protest. The media will do some close-ups and claim only 60,000 came, but who cares.

 

[Char. Limit]

I'm not sure about that, russ. I saw a chart somewhere describing lower-class, middle-class, and upper-class people. Under taxes, lower-class read $0, middle-class read $25,000, and upper-class read $0.

I think it's possible that a taxes paid vs. income graph could look like a Gaussian distribution...

 

[WhoWee]

I'm not sure about that, russ. I saw a chart somewhere describing lower-class, middle-class, and upper-class people. Under taxes, lower-class read $0, middle-class read $25,000, and upper-class read $0.

I think it's possible that a taxes paid vs. income graph could look like a Gaussian distribution...

Did the chart attribute ANY of the corporate taxes paid - which the wealthy individuals own?

 

[Char. Limit]

Of course not. It was an income tax table.

 

[BobG]

I suspect WhoWee means that it is meaningless to the 40something percent of the country that pays no (net) federal income tax.

I would say that trying to base voting on tax burden is exactly the wrong thing to do. It encourages a dictatorship of the majority and buying the vote via uneven taxation. The situation we are in now is approaching that already: the bottom part of the country can band together to tax the top part. This is a key part of democratic campaign strategy, creating a 'rich vs everyone else' dichotomy to motivate their votors. The result is a country where a huge fraction contributes nothing to the federal tax burden and a small fraction contributes the vast majority of it (iirc, the top 10% contributes 90%).

I'm not sure about that, russ. I saw a chart somewhere describing lower-class, middle-class, and upper-class people. Under taxes, lower-class read $0, middle-class read $25,000, and upper-class read $0.

I think it's possible that a taxes paid vs. income graph could look like a Gaussian distribution...

russ exaggerates just a little by not checking the actual numbers, but what he says is essentially true - the top 20% pays over 80% of the federal income taxes in this country. Of course, you'd expect them to pay over half, since the top 20% earns 52% of the income. The bottom 40% pay less than nothing and earn around 13% of the nation's income.

Numbers from the http://www.cbo.gov/ftpdocs/53xx/doc5324/04-02-TaxRates.htm .

In 2001 the top 1% earned 14.8% of all income and paid 34.4% of federal income taxes. The next 4% earned 12.7% and paid 20.8%. The next 5% earned 10.1% and paid 12.5%. The next 10% earned 14.8% and paid 14.8%, completing the highest quintile, which in total earned 52.4% of all income and paid 82.5% of federal income taxes. The fourth quintile earned 20.7% and paid 14.3%. The third quintile earned 14.2% and paid 5.2%. The second quintile earned 9.2% and paid 0.3%. The lowest quintile earned 4.2% and received a net 2.3% from the federal government in income "credits".

However, tax rates flatten out if you include things like Social Security Tax, state taxes, etc. (Whether you believe things like Social Security Tax should be included in the comparison depends on how much you believe that people will receive the SS benefits they've invested in, so it's tough to do a comparison for all taxes with any kind of reliability.)

 

[calculusrocks]

http://www.heritage.org/static/reportimages/562B77E355AF972AC1755735C9252C74.gif

This graph was taken from an http://www.heritage.org/Research/Reports/2004/11/A-Comparison-of-Tax-Distribution-Tables-How-Missing-or-Incomplete-Information-Distorts-Perspectives" from the Heritage Foundation. russ is closer to the mark than people like to admit.

 

[Char. Limit]

Any way we could put that in a graph of some sort?

EDIT: I started this post before Calculus posted. Now I feel like a dope.

 

[calculusrocks]

Any way we could put that in a graph of some sort?

EDIT: I started this post before Calculus posted. Now I feel like a dope.

No problem, and I'll happily admit that I'm far in the last column. I made less than $25000 last year. I just don't think it's right to tax the 'wealthy' simply because they are 'wealthy'. In the same way we shouldn't punish people for their religions, or their race, or their ancestors. People have a right to their own property. I'm not one of these 'victims' that the politicians pretend to be working on behalf.

"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Ben Franklin

 

[BobG]

Here's data presented in another format by The Tax Foundation. Tables 5 through 8 are the most relevant, although...

Listing how much each income bracket pays in taxes is kind of misleading, especially if a person is going to omit how much income each bracket earns. Effective tax rates are more important.

The top 1% of wage earners (those earning over $400k) are paying 22.45% of their income in federal income tax.

The top 5% of wage earners (those earning over $160k) are paying 20.5% of their income in federal income tax.

The folks in the 6% to 10% range (earning between $113k and $160k) are paying about 12.7%.

The 11% to 25% range ($66k to $113k); about 9.5%

The 26% to 50% range ($32k to $66k); about 7%

Below 50%; about 3%

So, is it fair that person A, earning over 4 times more than person B, has a tax rate more than twice as high? Since person A is four times as smart and enterprising as person B, shouldn't he enjoy 4 times as much money as person B instead of only 3.5 times as much money?

Actually, if you look a little closer at the tables, is it fair that those in the top 5% have had decreasing tax rates the last few years while everyone else has had tax increases? In fact, wage earners in the top 0.1% (those earning more than $2 million a year) had their taxes cut nearly 24% from 2001 to 2007. Why are they getting so much better tax breaks than the rest of us? (In fact, the tax rates for the top 0.1% is lower than the tax rates for the top 1%).

 

[Char. Limit]

The tax rates for the top 0.1% are lower than the tax rates for the top 1%? Well... here I wish that the super-rich (the multimillion-income people) would stop influencing our tax code and politicians...

 

[calculusrocks]

Small businesses are taxed more than corporations because they file differently. I don't know the statistic, but a flat tax around 12% would spur the economy. It worked in Hong Kong. The danger we are facing now is that those who rely on the government for their means may eventually outnumber those who don't, and they will keep voting for entitlements until the US is bankrupt. Socialism only works until you run out of other people's money.

 

[russ_watters]

russ exaggerates just a little by not checking the actual numbers, but what he says is essentially true - the top 20% pays over 80% of the federal income taxes in this country.

Thanks - I was sure about the 40%+ since I had recently checked, but hadn't looked at the other end in a while and was being lazy last night (yeah, i know - that was bad).

 

[russ_watters]

Here's data presented in another format by The Tax Foundation. Tables 5 through 8 are the most relevant, although...

Listing how much each income bracket pays in taxes is kind of misleading, especially if a person is going to omit how much income each bracket earns. Effective tax rates are more important.

The top 1% of wage earners (those earning over $400k) are paying 22.45% of their income in federal income tax.

The top 5% of wage earners (those earning over $160k) are paying 20.5% of their income in federal income tax.

The folks in the 6% to 10% range (earning between $113k and $160k) are paying about 12.7%.

The 11% to 25% range ($66k to $113k); about 9.5%

The 26% to 50% range ($32k to $66k); about 7%

Below 50%; about 3%

So, is it fair that person A, earning over 4 times more than person B, has a tax rate more than twice as high? Since person A is four times as smart and enterprising as person B, shouldn't he enjoy 4 times as much money as person B instead of only 3.5 times as much money?

Now that's interesting and it is counter to what we are typically told. There is that famous interview by Buffett where he says he pays a lower tax rate than his secretary, people often cite. Perhaps that is true only of the highest few hundred people (tiny fraction of a percent) and not generally true of rich people vs middle class? It is definitely a loophole needing to be closed, but not a serious problem in terms of its effect on our economic/tax situation.

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.

http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

That doesn't tell the whole story since if you add in the fact that 40% don't pay any income taxes, what it means is that the middle and upper class are getting slammed with most of the personal burden (fraction of their income), while some small fraction at the top pays less and a huge fraction at the bottom pays nothing.

Actually, if you look a little closer at the tables, is it fair that those in the top 5% have had decreasing tax rates the last few years while everyone else has had tax increases? In fact, wage earners in the top 0.1% (those earning more than $2 million a year) had their taxes cut nearly 24% from 2001 to 2007. Why are they getting so much better tax breaks than the rest of us? (In fact, the tax rates for the top 0.1% is lower than the tax rates for the top 1%).

If they are being taxed at a rediculous rate, it certainly is fair to lower it. In recent history, the top tax bracket has at times been absurdly high. In 1986 the top bracket was 50% and just after WWII, it was over 90%! That removes most of the incentive to earn money over a certain level and stifles small business aspirations. http://www.ntu.org/tax-basics/history-of-federal-individual-1.html

 

[russ_watters]

The tax rates for the top 0.1% are lower than the tax rates for the top 1%? Well... here I wish that the super-rich (the multimillion-income people) would stop influencing our tax code and politicians...

Sort of. That's what I was discussing above. The reason isn't that the tax table becomes regressive at the top (it doesn't), the reason is that the super rich derive their income differently than everyone else. Their income comes from investments and there is a difficult to close loophole that treats investments differently than other forms of income. For the typical investor, that's a good thing, but for someone who derives their income from investments, they get an undue break. The tax code includes a provision that the profit on a stock held for less than one year is taxed as income instead of as a capital gain and that helps, but it doesn't eliminate the problem.

Perhaps extending that to 2 years or adding an age limit or progressive capital gains system would help close the loophole.

 

[Char. Limit]

Definitely not an age limit, I'll tell you that much.

I kind of support a flat tax, since it seems to me to be the fairest method, but it seems to be unpopular, so why support it?

So, instead of the tax rate vs. income graph being a Gaussian distribution, can we call it the integral of a gaussian distribution?

 

[Ivan Seeking]

For conservatives and libertarians, election day can't come soon enough. If the youth had any idea how much of a burden is going to be placed on them, they'd be protesting.

Obama came into office already facing a huge debt, a collapsed economy, a failed banking system, two wars, and health care costs that are spiralling out of control. One cannot simply ignore history and blame the new guys.

http://en.wikipedia.org/wiki/United_States_public_debt

Social Security, the politicians spent it. Health Care, if passed it'll be bankrupt before I'm 70. Conjecture? Maybe. All I know is that the numbers don't add up.

Maybe indeed.

...MR. AXELROD: Well, Tom, you know, as you know, the Congressional Budget Office, which both parties have a great deal of respect for, have said that the, the proposals will save $100 billion on the deficits this year, perhaps a trillion or more--not this year, this decade, and next decade perhaps a trillion or more. And most healthcare experts believe those are, those are conservative estimates because there are a lot of cost-saving measures built into this plan, and no one quite knows how they'll work. So they've made a conservative estimate of, of what the savings will be...

http://www.msnbc.msn.com/id/35837624/ns/meet_the_press/
The CBO report
http://www.cbo.gov/ftpdocs/113xx/doc11307/Reid_Letter_HR3590.pdf

Both Social Security and Health Care are two of the biggest Ponzi schemes ever devised in history. Count me in on the protest. The media will do some close-ups and claim only 60,000 came, but who cares.

Three problem are that, first, people are living too long. Next, the baby boomers are starting to retire with relatively fewer people to take their place. And finally, the cost of health care is too high. Consider that over the last two decades, the cost of my father's health care easily exceeds his lifetime income.

 

[russ_watters]

Obama came into office already facing a huge debt, a collapsed economy, a failed banking system, two wars, and health care costs that are spiralling out of control. One cannot simply ignore history and blame the new guys.

Certainly Obama carries little blame for causing the current situation (but congressional democrats do, so that isn't really relevant since Obama isn't running). The main reason the democrats are going to get hammered in November is the perception that they aren't helping fix the situtation. You can bet that every campaign is going to feature Obama's 8% unemployment promise/prediction prominently. The second (related) thing they will get hammered for is spending a year (so far) monkeying-around with a healthcare bill that isn't necessary now and the public doesn't want. The economic crisis was a banking and housing market issue: it wasn't caused by healthcare, so why are they focusing so much of their effort on healthcare and not the more immediate problems with the economy?

And besides - those graphs show an uptick after Obama entered office, showing the situation got worse after he entered office. What they don't show is that by his own predictions (which so far have mostly proven too optomistic), his plans will make those situations much worse over the next several years. So enjoy that graph while you can. By now you must know they won't look so nice (by not showing much since he hadn't done much to show yet) for Obama it in a year or two. By that graph, Bush took the public debt from like $4 trillion to $5 trillion and under Obama's current plans, by his own projection it'll go up another $2.8 T over the next two years and be triple the current debt in a decade. http://www.washingtonpost.com/wp-dyn/content/article/2010/03/05/AR2010030502974.html

What happened with the debt under Bush was bad. What Obama plans is to make it many times worse.

Three problem are that, first, people are living too long. Next, the baby boomers are starting to retire with relatively fewer people to take their place.

Yes, clearly the social security system has some features that evolved into fundamental flaws over that last several years. So do you agree this means we need to radically change the structure or functioning of social security to deal with these flaws? Ie, increasing the age of retirement, vastly decreasing the benefits (or taxing them) or changing the system itself into something else that doesn't rely on a pyramid scheme (but rather relies on a person's own contributions to support them when the retire). Or should we continue on the current plan of crossing my (our) fingers and hoping that I (we) die before the system implodes so we can squeeze the maximum out of it for our own personal benefit?

 

[calculusrocks]

Obama came into office already facing a huge debt, a collapsed economy, a failed banking system, two wars, and health care costs that are spiralling out of control. One cannot simply ignore history and blame the new guys.

And one cannot credibly run on hope-and-change and spend just like the drunken sailors before him. Either spending is a problem, or it isn't. In order to be consistent in your beliefs, you first have to take a stand, and decide whether or not spending is an issue.

The CBO numbers on Health Care are deceptive, because the plan taxes for four years before even going into effect to make it look deficit neutral on the books. Take a look at CBO numbers over 10 years. But even so, let's say that they are accurate for the sake of discussion. Do you honestly believe that there is going to be health care for all, and it's going to save everyone money? Of course not. What this bill is going to do is to create unlimited demand for health care (because it is free, and who declines free stuff). Any time some wimp stubs his toe, he's going to want some coverage. You have limited supply, and unlimited demand... and that means that there is going to be rationing of health care, just like in England, Canada, Cuba, and everywhere else where this has been tried. There is no free lunch here.

But, if spending is an issue, then $10T in deficits over 10 years in a stalled economy poses new challenges. http://www.bloomberg.com/apps/news?pid=20601087&sid=aVDEHvI9WH_Q"

 

[calculusrocks]

Three problem are that, first, people are living too long. Next, the baby boomers are starting to retire with relatively fewer people to take their place. And finally, the cost of health care is too high. Consider that over the last two decades, the cost of my father's health care easily exceeds his lifetime income.

Why isn't allowing health insurers to compete against state lines not even considered? That would reduce most of the cost, and there are plenty more ideas that are locked out of the discussion by the current administration.

 

[calculusrocks]

Definitely not an age limit, I'll tell you that much.

I kind of support a flat tax, since it seems to me to be the fairest method, but it seems to be unpopular, so why support it?

So, instead of the tax rate vs. income graph being a Gaussian distribution, can we call it the integral of a gaussian distribution?

I agree that it's unpopular, and has almost no chance. Another plan that has a slightly better chance is a "negative income tax". What this does is eliminate the middle-man and the bureaucracy, and all the duplicate spending by cutting the welfare checks directly based on earned income. Sometimes there is disincentive for people to take a job because after taxes it would pay less than welfare. A negative income tax would all but eliminate this problem. It has little chance also, because there is a lot of intrinsic interest in keeping welfare bureaucrats healthy and voting. However, this may happen eventually because we are reaching a tipping point in the tax code where there are more relying on gov't than paying into it. Perhaps people may seek to revolutionize the tax code.

 

[BobG]

Now that's interesting and it is counter to what we are typically told. There is that famous interview by Buffett where he says he pays a lower tax rate than his secretary, people often cite. Perhaps that is true only of the highest few hundred people (tiny fraction of a percent) and not generally true of rich people vs middle class? It is definitely a loophole needing to be closed, but not a serious problem in terms of its effect on our economic/tax situation.

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent.

http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

Except Warren Buffett saying it doesn't make it true. He probably knew how much he, personally, paid in federal income tax, but his estimate for his secretary wouldn't be true even if he she were single and he were talking just about the last dollar she earned. Tax rate for a single person at $60k is 25%, but there will at least be a pesonal exemption, etc, before her income starts being taxed. Worst case, with nothing being saved in 401k, health plan, etc would be about 21% (she'll at least have her personal deduction).

 

[russ_watters]

Granted, Bob. It is a very twisted/ironic situation there: Buffet is one of the super-rich he is speaking against, yet he is trusted for that and it turns out maybe he wasn't giving good information. Honestly, I fell into the trap too - I have never really even looked into his claim (I didn't even really read the quote I posted above!).

 

[BobG]

The problem is that his quote really doesn't give enough information. If he's talking about federal income taxes, then his quote is definitely wrong. If he's including state tax, SS tax, FICA, etc, then the tax on the secretary becomes more realistic and Buffet's taxes are very low.

 

[Al68]

If the youth had any idea how much of a burden is going to be placed on them, they'd be protesting.

Protesting? More like locking and loading.

King George could only have imagined this kind of power in his wildest fantasies.