History US tax rate history - A return to the glory days

[ParticleGrl]

Are you sure you want to go down that path? Because a natural consequence is that those who have "invested" more should get more votes than those who have invested less.

In the analogy (which I clearly find ridiculous, I was simply pointing out that his tax = theft stance is a bit shaky), shareholders were people that live in the country. The taxes aren't an investment, but rather a bill for services. You don't get more say in what Mars does just because you eat more Snickers bars.

 

[Dale]

The taxes aren't an investment, but rather a bill for services.

That is a better way to look at it.

Unfortunately, the people paying the bill are not the ones receiving the services for most of the spending. So theft is also a reasonable characterization. After all the only time this would happen in the private sector is as a result of identity theft.

 

[Al68]

I would never pretend to not comprehend your points. I actually find it very painful to argue with you. Your points are, simply pointless to me. You're above statement merely states that they are unwilling to pay $1005, but are willing to pay $1000. Which is exactly what I stated.

Nope. You said "When people are so anti-tax, that they will not pay annually, for what they will pay daily for a latte, something is dreadfully wrong." I've never paid $1005 for a latte.

But when I voluntarily allow the government to steal my money, they give it to my neighbor, who does something for me. So I would say your definition of theft is still funnier.

Nope, just your gross misunderstanding of it. I'm using the normal definition, which means that "voluntarily allowing government to steal your money" is self-contradictory, since if it's voluntary, it can't be theft.

 

[Al68]

Then think of your tax bill this way- 100% of it is the fee for national defense, a service provided to you by the government at a profit. ...

Reality doesn't depend on how I think about it. Reality is that 100% of taxes are not used for national defense. And using the word "profit" to refer to the difference is just silly in this context, and doesn't change anything. "Profit" made from the use of force is theft.

 

[Ivan Seeking]

Interesting how you neglect the simultaneous incessant drive towards higher spending and don't even mention that. It does show your bias.

Okay, you need to make this personal. I understand your bias.

I said "helped".

Btw, the claim that we have driven towards lower taxation is patently false. We have driven towards lower tax rates which is vastly different from lower taxation. Taxation has increased steadily in inflation-adjusted dollars as the GDP has grown.

I did mean tax rates.

In fact, the top marginal tax rate has almost no impact on revenue as a fraction of GDP and seems to have little impact on the GDP. The best thing that could be done IMO is to simply to leave the tax system alone except perhaps once every 10 years or so. That would make it easier for people and businesses to plan, and removing that short-term uncertainty would encourage longer-term investment strategies.

If the top marginal tax rate makes no difference in revenues, then no one should complain about raising rates. Either you collect more money or you don't.

 

[turbo]

It's quite predictable how these threads degrade, and it would be funny, if the arguments were not so inane and illogical.

Example: My nearest neighbors are tea-party supporters. He is now retired, but has never made more than $40K in a year, since he worked low-skill jobs in a tannery. His wife works a seasonal job, and they have her elderly mother dependent on them, so essentially, they pay no income taxes. Their son works only seasonal part-time jobs and his wife is an aide at the local hospital, plus they have two very young children to claim as dependents, so they pay no income taxes, either.

In contrast, my wife and I own more property than either of them, so we pay more property taxes, ~50% of which goes to pay for the public school system that educates the two little kids. How can these Tea-Partiers be so fearful of rolling back Bush tax cuts for the wealthiest 2% if they can never be effected by the roll-back? Lies and distortions from the right, because these people can repeat a couple of slogans, but can't logically explain how they could possibly be effected by rolling back Bush tax cuts on the top 2%. To keep the peace, I don't talk politics with these neighbors. We talk about building maintenance, growing flowers, fixing lawn tractors, etc, and everything is fine.

Still, it's pretty sad to see people at the bottom of the economic ladder carrying water for the wealthy on the far right, based not on rational self-interest, but ideology. The US cannot hope to grow its way out of these huge deficits by handing more tax cuts to corporations and wealthy individuals. Trickle-down is a farce. Sadly, the same crowd that you see at rallies with "No Socialized Medicine" signs is also well-dotted with "Hands off My Medicare" signs, so although retirees seem to love Medicare, they think that government can't be trusted to provide an affordable insurance option for the masses. Disconnect, anyone?

And yes, my neighbors have the "taxes=theft" slogan down pat, even though the income tax credits that they get more than erase any tax burden and in fact result in checks for money that they never paid in the first place. It's pretty sad. As long as US citizens are ill-educated and gullible, they will be susceptible to jingoism and posturing of politicians.

It is high time to simplify the tax code, and move to a more progressive system, in which high-income earners pay more in income taxes, and low-income people are not nailed with higher and higher sales taxes (a national sales tax is Herman Cain's favorite solution). Low-income people have to spend most of what they earn, so they would have to pay the bulk of any national sales tax, reducing their buying power, and that would damage any positive effect that their consumption might otherwise have on our economy.

BTW, during most of the last decade in which I could still work, I was comfortably in the top 2% of earners every year. I doubt that many (if any) of the right-wingers that mob the P&WA threads are in that bracket, so why parrot GOP talking points that are aimed to protect the wealthiest? It seems quite illogical, like British taxpayers fawning over the royal family.

 

[Ivan Seeking]

Nope. You sais "When people are so anti-tax, that they will not pay annually, for what they will pay daily for a latte, something is dreadfully wrong." Nope, just your gross misunderstanding of it. I'm using the normal definition, which means that "voluntarily allowing government to steal your money" is self-contradictory, since if it's voluntary, it can't be theft.

If I don't support [condone] a traffic law, is it theft if I'm fined for violating the law?

 

[Ivan Seeking]

In contrast, my wife and I own more property than either of them, so we pay more property taxes, ~50% of which goes to pay for the public school system that educates the two little kids.

When I was a kid, my parents paid for my education twice - first through taxes, and then by paying tuition for our private school.

My wife and I never had kids. Clearly we should be credited for our lack of usage of the school system.

In fact, we should just make it a fee for services. That way only rich kids would get an education. Right?

 

[russ_watters]

If the top marginal tax rate makes no difference in revenues, then no one should complain about raising rates. Either you collect more money or you don't.

You missed the other half of the issue: higher taxes mean less money in the pockets of taxpayers. So that's something most people care a great deal about.

 

[turbo]

If I don't support a traffic law, is it theft if I'm fined for violating the law?

Maine passed a law recently making it legal for caregivers to grow and distribute marijuana to patients that need it, as certified by their doctors. Unfortunately, the state's registry of licensed growers is a wonderful way for the federal authorities to swoop in and shut down their operations and ruin them financially, since marijuana remains illegal under federal law. The only way for patients to get marijuana without interference is to buy it on the old black market, meaning that they have to buy from people who are unlicensed, and whose pot may be of spotty quality. The state loses licensing revenue and sales taxes, but the US Attorney in Maine is keeping us safe from the scourge of Reefer Madness.

 

[ParticleGrl]

Reality doesn't depend on how I think about it. Reality is that 100% of taxes are not used for national defense.

Right, the government provides national defense AT A PROFIT. It then does with its profits what it wants.

 

[russ_watters]

If I don't support [condone] a traffic law, is it theft if I'm fined for violating the law?

Theft is tough to apply here, but the name the founders gave is "tyranny of the majority." We've reached the typping point beyond which the majority, who pay no federal income taxes, can freely raise the taxes on the minority who pay them. That can only drive us to ruin.

 

[Ivan Seeking]

Unfortunately, the people paying the bill are not the ones receiving the services for most of the spending.

The biggest driver of long-term debt are entitlements. Are you saying that you are exempt from entitlements?

 

[Ivan Seeking]

Theft is tough to apply here, but the name the founders gave is "tyranny of the majority." We've reached the typping point beyond which the majority, who pay no federal income taxes, can freely raise the taxes on the minority who pay them. That can only drive us to ruin.

So fluff and hyperbole aside, I take it the answer is no.

 

[turbo]

When I was a kid, my parent paid for my education twice - first through taxes, and then by paying tuition for our private school.

My wife and I never had kids. Clearly we should be credited for our lack of usage of the school system.

In fact, we should just make it a fee for services. That way only rich kids would get an education. Right?

My wife and I never had kids, either. Should we have gotten yearly rebates on our municipal property taxes? Unfortunately, when the big-box stores moved into our town, killing lots of small retailers, they brought in lots of low-wage, part-time jobs with no benefits. That meant an explosion of cheap little apartments and trailer parks, AND an explosion of school costs. We had to leave that town after our property taxes went up over 30% in one year, while the taxes on commercial properties remained flat.

 

[Ivan Seeking]

You missed the other half of the issue: higher taxes mean less money in the pockets of taxpayers. So that's something most people care a great deal about.

It could only mean less money in people's pockets if more revenues were collected. The assertion was that tax rates have little influence on revenues [presumably he meant on a per-capita basis].

 

[Al68]

In the analogy (which I clearly find ridiculous, I was simply pointing out that his tax = theft stance is a bit shaky), shareholders were people that live in the country. The taxes aren't an investment, but rather a bill for services. You don't get more say in what Mars does just because you eat more Snickers bars.

I agree with your main point here, but my stance isn't "tax = theft". Taxation is a method of collection, used for both theft and legitimate debts owed. Taxation is a tool used for theft, not theft itself.

 

[Ivan Seeking]

I agree with your main point here, but my stance isn't "tax = theft". Taxation is a method of collection, used for both theft and legitimate debts owed. Taxation is a tool used for theft, not theft itself.

And the defintion of "theft" is whether or not you agree with a particular program or see it as fair?

 

[Al68]

If I don't support [condone] a traffic law, is it theft if I'm fined for violating the law?

No. Traffic enforcement has a cost, and traffic law violators owe that cost.

It could only mean less money in people's pockets if more revenues were collected.

That's false. It means less money in peoples' pockets because the higher tax rates result in less wealth created.

 

[Al68]

Right, the government provides national defense AT A PROFIT. It then does with its profits what it wants.

Taking profits by force is still theft. Theft can be called profit without changing the fact that it's theft. For example, the money a bank robber has left after paying for his expenses is his profit from the robbery, and he does what he wants with his profits. Still theft.

 

[Ivan Seeking]

No. Traffic enforcement has a cost, and traffic law violators owe that cost.That's false.

But I don't support the law. It is just more tyranny of the masses. Same goes for schools.

It means less money in peoples' pockets because the higher tax rates result in less wealth created.

Since Clinton, we have had the lowest tax rates since just before the great depression. I see no evidence to support your assertion.

What I do see that is that we gave huge breaks to corporations under Reagan and funded the outsourcing of our own jobs.

 

[Al68]

And the defintion of "theft" is whether or not you agree with a particular program or see it as fair?

Nope, I have clarified that many times in this thread.

 

[Al68]

Since Clinton, we have had the lowest tax rates since just before the great depression. I see no evidence to support your assertion.

My assertion was basic economics: taxation results in less of that being taxed. Here's a couple of links, the first one is probably the best explanation:

http://online.wsj.com/article/SB10001424052748703514904575602943209741952.html?KEYWORDS=hauser
http://en.wikipedia.org/wiki/Hauser's_Law

 

[Ryumast3r]

My assertion was basic economics: taxation results in less of that being taxed. Here's a couple of links, the first one is probably the best explanation:

http://online.wsj.com/article/SB10001424052748703514904575602943209741952.html?KEYWORDS=hauser
http://en.wikipedia.org/wiki/Hauser's_Law

Since you love the other graph, let's pull out one that shows that lower taxation does not result in more growth:

Here we see that there are many ups and downs (drastic even), even if the tax rate remains constant. Even with the top marginal tax rate at 91% the growth sometimes jumped to over 7% (which is pretty much the highest the graph ever reaches). Sure, there was a spike after the 1984 tax cuts, but then it goes back down, and another cut doesn't stop it from going down again.

In fact, when Bush Sr. cut taxes more, GDP growth actually went negative. Two of the three years with the most economic growth were in the 50's with the top tax rate of 91%.

In short: There is no visible correlation between tax rate and GDP growth.

The link's whole "get a piece of a bigger pie" thing is a farce.

 

[drankin]

I don't understand how the economy can improve if more money is taken from the private sector by the government. How does less money become more because the government has it? I don't care who you take it from.

 

[Ryumast3r]

To continue the last post (hit reply early... haha whoops).

Let's look at Income Growth now:

This gives much of the same story as the GDP growth.

We see some small growth in Median income, a measure of how the avg. american is doing, when the top-bracket taxes were cut in the mid-1960's and the 80's, however we see income decreases after the the late-80's tax cuts, and see some increase after the tax increases of 1993 (clinton-era). 1974 had the worst median income decrease, with a tax rate of 70%, but it also saw the highest median income growth. No correlation again.

Now let's look at wage increases:

Surprise surprise, we have mixed results again!

Growth in hourly wages did increase in the 80's following the reagan tax cuts, though it took two years for that to happen... but, just like GDP and Median income growth, they decreased following the late 80's cuts, spiked upwards after the 1993 tax increase.

Wages grew at a good rate (1% or more, usually more) all throughout the time when the top tax rate was 91%. In fact, it wasn't until 72 (tax decrease) that the growth was less than 1%. If we look at the time that the tax rate was 50% or less (19 years), we see that 8 of those years saw an increase of less than 1%.

Now let's look at job creation:

Negative means decrease in unemployment (in essence, job creation). So, even though the top tax rate goes down, we see unemployment remains essentially the same. Three of the four largest increases were when the top tax rate was 91%, the fourth being the largest, happened when it was 70% in 1975. The mixed results speak poorly for those who see cutting taxes for the rich as a way to incite job creation (significantly).

So, can you tell what our conclusion is yet?

Overall data strongly refutes any arguments that cutting taxes for the richest americans improves economic standing of the lower or middle classes or the nation as a whole. To be sure, everything in these graphs are dependent on MANY MANY factors, not just tax policy. However, what these do show is that any attempt to stimulate growth by cutting taxes for the rich (only talking rich here), HAS NOT worked over the past 50 years, so why should it work now? Why would it work in the next 10?

Put simply: Bush's top-bracket tax is ineffective, and will not cause any growth. Unless, of course, you're talking about the growth of the deficit.

 

[ParticleGrl]

Taking profits by force is still theft. Theft can be called profit without changing the fact that it's theft.

The profits are collected via the bill for national defense. Where is the force? You are provided a service, the government provides that service at a profit, and then uses its profit as it sees fit.

If taxation is force, we are back to tax=theft, which we all agree is shaky.

don't understand how the economy can improve if more money is taken from the private sector by the government. How does less money become more because the government has it? I don't care who you take it from

We all agree (I hope) that money can be spent on capital investment that can grow the economy.

Certain government functions that do create innovation and growth (R&D and infrastructure development, health care (debatably)) probably can't be handled private enterprise effectively- its the problem of public goods. But taking too much money from the private sector can obviously be constrictive.

 

[Ryumast3r]

I don't understand how the economy can improve if more money is taken from the private sector by the government. How does less money become more because the government has it? I don't care who you take it from.

Because the government provides a comparatively stable employer when compared to the private sector. Reliable jobs leads to reliable amounts of spending. In a recession, a big problem is that spending decreases.

Just because "the government has it" doesn't mean it doesn't end up back in the hands of the people who work for the government, who then purchase food from non-government stores, and, if they're feeling lucky/wealthy, maybe a good commodity or two.

This is not to say that if all money is taken by the government we'd have an ideal society, to be sure that's not going to happen. It'd be really stable (see: Communism, where the money is extremely predictable), but there's no growth, and, in the case of tried-communisms, there was no incentive to work, so there was negative growth.

Economies that are not entirely controlled fluctuate. They go up and they go down (maybe not at a set rate, or with a set period, but you cannot grow to infinity). Regulating the economy, taking money out of the private sector and controlling it via government, helps reign in the amount of growth that occurs, but it also limits the effect of recessions/depressions. Without control (theoretically, and I'm not an expert in this field, so someone please feel free to tell me if I got some of this wrong), depressions would be worse than anything we've seen, though the periods of growth would also be much bigger than what we have seen.

 

[russ_watters]

It could only mean less money in people's pockets if more revenues were collected. The assertion was that tax rates have little influence on revenues [presumably he meant on a per-capita basis].

Fast moving thread: I think you missed the graph in post 2...

 

[russ_watters]

So fluff and hyperbole aside, I take it the answer is no.

Getting hung up on the label is a thoughtless way to dismiss real facts that many consider to be a problem:

-It is a fact that the number paying no federal income tax is about 50% and growing.
-It is a fact that Congressional Democrats recently tried to raise taxes on high wage earners, further widening that disparity.
-It is a fact that Democrats campaign on the above.

While you may not be bothered by these facts, some people are. But dismissive as you want to be, they are still facts.