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Post by Deleted on Aug 31, 2012 14:12:58 GMT -5
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tskeeter
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Post by tskeeter on Aug 31, 2012 14:55:40 GMT -5
No, all deductions or credits related to children should go away, too. Why should I subsidize your decision to raise a family? The size of your family is a personal decision. You should be accountable for the decisions you make. If you want me to share the responsibility of paying for decision you made, I'd like you to help pay for some of my decisions. I'd like to buy a new car every five years. Your share will be $18.70 per year. Send the check to Tskeeter at .... But, but, but ... my kids are the doctors, teachers, etc. of the future .... they will provide a benefit to all taxpayers. And my car purchase will stimulate the economy and provide employment for autoworkers, people who make tires, people who mine the iron to make the steel, etc. My stimulation of the economy provides a benefit to all taxpayers. Your share is still $18.70. Please send a check to ... Let's face it, politicians have used other people's money to buy the votes of parents and grandparents as more and more tax deductions and tax credits have been awarded to taxpayers who make the decision to have children. If we're going to eliminate credits and deductions, the only justification for protecting the child tax credit is to buy the votes of a portion of the population. There is no more financial justification for a child tax credit than there is for a mortgage interest deduction, or any other type of credit or deduction. Your post confuses me a little. You don't want your taxes raised because you spend your money & therefore it will negatively impact the economy. But, you want my taxes raised (which is what will happen if you eliminate a credit). Does my money not stilimulate the economy?? My eating out isn't as good as your eating out?? I get your point, but at the same time you essentially want to do a large tax increase on middle class families while trying to explain how tax increases negatively impact the economy. Odd. Angel, although I don't think I said it directly, you're right, I don't want my taxes to go up. Who of us does. But, you're combining two separate concepts as if they were a single issue. While the concepts are both tax related, I believe each one needs to be considered in it's own context. My first comments were to point out that many people don't seem to understand that when tax policy is directed at the top of the income scale, it almost always creates consequences for the people at the bottom of the income scale. I think this is a critical relationship to understand if you're at the lower end of the income scale and think you should encourage your elected representatives to impose additional taxes on the rich. You might get injured by the friendly fire. My second comments were to point out that, if you are eliminating tax credits and deductions to eliminate "loopholes", and in the process force people to accept total accountability for their decisions, the only reason to keep the child tax deduction would be to continue to allow politicians to use tax policy as a means to buy votes. To clarify my position on taxes here's a summary. I don't think it's all that different from how many other people feel. I don't want my taxes to go up. But I believe that tax revenue increases will be necessary to significantly reduce the federal deficit and ultimately improve the US economy. I believe that all who benefit from the services that our federal government provides should participate in funding those services through the payment of income taxes. Even if only to a minor extent. (OK, I'll grant you that there are some limited situations where I'm OK with people not paying any federal income taxes. But that should be something like 5% of US households, not nearly 50%.) One of the ways to increase tax revenue would be to eliminate tax deductions and credits. Probably all of them. But I think the elimination process should be done over 5 - 10 years, not over night. While a progressive system of taxation is probably the most appropriate approach, we need to be sensitive to the possibility that heavy taxation of the capital we need to grow the economy encourages the holders of that capital to invest their capital outside the US. And that it is possible that at some point, a much higher tax burden than other nations may cause some holders of capital to remove their capital from the US economy entirely. The balancing act is going to be tricky, but a simple tax the living daylights out of the rich policy would be economic disaster in a global economy, such as we have today. Andrew Carnegie probably couldn't have shut down his steel mills and moved the production and the jobs to Asia. But it is relatively simple to do something like that today. Tax policy must be administered in the context of today's realities, not the realities of 100 years ago. I prefer workfare to welfare. I think we incent what we use tax revenues to subsidize. When people can live better on unemployment or welfare than they can on gainful employment, we incent them to spend as much time as possible not working. When we provide unwed mothers with housing subsidies, child nutrition subsidies, and the like, and when we increase the subsidies for each additional child, we encourage young women to view being an unwed mother as a career. I worry that continuing to use taxes to incent people not to work will cause the economic collapse of the country. I believe that using tax revenue to fund activities that don't have a positive impact on the taxpayers is a waste of your money and mine. Investigating and prosecuting athletes who used performance enhancers has absolutely no impact on my daily life. Does it affect yours? If not, why are we allowing our elected representatives spending millions of our tax dollars to do nothing more than create publicity opportunities for themselves? To me a "fair" tax policy probably has all of us a little unhappy. The rich will pay more, the poor will pay something, being a social service recipient will not be a long term option available to more than a few.
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Deleted
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Post by Deleted on Aug 31, 2012 14:57:52 GMT -5
Angel, although I don't think I said it directly, you're right, I don't want my taxes to go up. Who of us does. (raises hand)
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tskeeter
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Post by tskeeter on Aug 31, 2012 15:47:09 GMT -5
Angel, although I don't think I said it directly, you're right, I don't want my taxes to go up. Who of us does. (raises hand) How about explaining your perspective for the rest of us? You might affect how some of us view things.
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nllsq
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Post by nllsq on Aug 31, 2012 15:50:17 GMT -5
If you have $3,000.00 per year of discretionary income, a "mere" increase of your tax liability with about 1,500 per year will destroy 50% of it. Your free consumption money outflow will decrease twice. Multiply that by the number of similar households around and you will get it. This is why a seemingly "small" changes cause large negative effects.
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Angel!
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Post by Angel! on Aug 31, 2012 16:16:02 GMT -5
Your post confuses me a little. You don't want your taxes raised because you spend your money & therefore it will negatively impact the economy. But, you want my taxes raised (which is what will happen if you eliminate a credit). Does my money not stilimulate the economy?? My eating out isn't as good as your eating out?? I get your point, but at the same time you essentially want to do a large tax increase on middle class families while trying to explain how tax increases negatively impact the economy. Odd. Angel, although I don't think I said it directly, you're right, I don't want my taxes to go up. Who of us does. But, you're combining two separate concepts as if they were a single issue. While the concepts are both tax related, I believe each one needs to be considered in it's own context. My first comments were to point out that many people don't seem to understand that when tax policy is directed at the top of the income scale, it almost always creates consequences for the people at the bottom of the income scale. I think this is a critical relationship to understand if you're at the lower end of the income scale and think you should encourage your elected representatives to impose additional taxes on the rich. You might get injured by the friendly fire. But, you are completely ignoring the other end of the relationship. Rich people get rich because lots of middle class folks buy their products or services. Increasing taxes of the middle class will have just as much of an impact on the economy. This idea that only the spending of the top 2% drives the economy & employs everyone is silly. You increase taxes by 40 billion on the rich or middle that is 40 billion that is not going to be spent. That is going to hurt jobs. The only way you can get rid of the child tax credits & not have a negative impact is to make it revenue neutral. As far as the rest of your post. You like many others are ignoring all the other federal taxes lower income people pay. Only ~50% of federal revenue comes from income taxes, so why ignore almost 1/2 of the govt revenue when talking about whether or not people pay? Only ~10% of people pay no federal taxes. I had conversation with PBP the other day regarding this because he wants to go to fairtax where only 10% won't pay taxes. Considering fairtax replaces all federal taxes, there is no difference between 10% not paying today & 10% not paying under fairtax.
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phil5185
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Post by phil5185 on Aug 31, 2012 16:33:36 GMT -5
Considering fairtax replaces all federal taxes, there is no difference between 10% not paying today & 10% not paying under fairtax. The name is kinda funny - if they had called it Giant Federal Sales Tax I guess not so many people would want it, lol. You are right only about the "10% not paying" part. But everything else is completely different - your income level doesn't matter, you simply pay about a 23% sales tax on all purchases whether you make $25,000 or $250,000. It would be great for rich people, not so great for low earners. The rich would spend about $50k or $100k for necessities - and bank the rest, tax free.
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Post by Savoir Faire-Demogague in NJ on Aug 31, 2012 16:47:42 GMT -5
Considering fairtax replaces all federal taxes, there is no difference between 10% not paying today & 10% not paying under fairtax. The name is kinda funny - if they had called it Giant Federal Sales Tax I guess not so many people would want it, lol. You are right only about the "10% not paying" part. But everything else is completely different - your income level doesn't matter, you simply pay about a 23% sales tax on all purchases whether you make $25,000 or $250,000. It would be great for rich people, not so great for low earners. The rich would spend about $50k or $100k for necessities - and bank the rest, tax free. Low earners would likely have most of their necessities such as food(to name one) which would likely be non-taxable. The poor would pay minimal taxes under such a scheme if they paid any at all.
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Deleted
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Post by Deleted on Aug 31, 2012 17:31:08 GMT -5
How about explaining your perspective for the rest of us? You might affect how some of us view things. I think I should pay more taxes. I believe that the government does important and worthwhile things (not exclusively, but that's in there). And I believe they need revenue to do those things. We have a huge deficit, we're fighting a war we can't pay for, and Social Security is going to run out of money. I'm not wealthy by a long shot, but I recognize that I have it better than most. I support a one person-one dog household on more income than the average American family earns. According to the good people at Turbotax, my effective federal tax rate is less than 11%. I should pay more taxes.
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Angel!
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Post by Angel! on Aug 31, 2012 18:04:53 GMT -5
How about explaining your perspective for the rest of us? You might affect how some of us view things. I think I should pay more taxes. I believe that the government does important and worthwhile things (not exclusively, but that's in there). And I believe they need revenue to do those things. We have a huge deficit, we're fighting a war we can't pay for, and Social Security is going to run out of money. I'm not wealthy by a long shot, but I recognize that I have it better than most. I support a one person-one dog household on more income than the average American family earns. According to the good people at Turbotax, my effective federal tax rate is less than 11%. I should pay more taxes. Well said. I paid an effective federal tax rate of ~2% & I am above the median family income. It just seems silly. I think they need to raise taxes at least 1-2% on everyone other than the bottom 20% & cut the child tax credit in 1/2. We can't cut our spending enough to fix the deficit, so we must cut spending & raise taxes. Sure the economy will suffer, but when we are overspending our revenue by 50%+, is there any other solution or choice? Minor changes now beat major changes that will come if we let the shit hit the fan.
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MN-Investor
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Post by MN-Investor on Aug 31, 2012 18:29:20 GMT -5
Tax me!
I say that in all seriousness.
If our taxes were raised by $5,000 this year, it would not change our spending by a single dime. We are like the truly rich in that regard.
Are we rich? I guess that depends on your definition of rich. DH makes <$100K a year, and I quit working in 1999, but I made a decent salary up until then. We are in our 50s and live modestly and save assiduously. We have a very healthy nest egg because we have invested well in the stock market.
Because of our modest lifestyle, we can easily afford all our wants and needs plus continue to save for retirement. If our taxes went up by $5,000, for example, we would buy a few less shares of Apple, or whatever stock caught our eye, but our spending would not go down AT ALL.
I firmly believe that the majority of wealthy individuals will adjust their spending minimally if their taxes are raised. They are much more likely to buy fewer shares of stock. Buying additional shares of Apple does nothing to improve the economy. Raising taxes on single parent waitresses, however, will take that money right out of the economy.
Taxes have to go up. Just don't buy into the idea that $100,000 tax on a rich person will cause them to reduce their spending by $100,000.
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justme
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Post by justme on Aug 31, 2012 18:33:52 GMT -5
I think they should phase out the deductions/credits before they up the tax rate. Last year I made less than the average household but I had an 11% effective tax because I could not take any of the deductions/credits available.
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Post by BeenThere...DoneThat... on Aug 31, 2012 18:56:29 GMT -5
<<< We can't cut our spending enough to fix the deficit, so we must cut spending & raise taxes. >>> ...I disagree...
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susanb
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Post by susanb on Aug 31, 2012 18:59:53 GMT -5
To those of you who want to pay more taxes:
You can! Go for it. Everyone has the option to pay more.
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phil5185
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Post by phil5185 on Aug 31, 2012 19:18:03 GMT -5
We can't cut our spending enough to fix the deficit, so we must cut spending & raise taxes. As I said in an earlier rant - you are confusing tax rates and tax revenue. If businesses grew by X%, ie, the GDP went up X%, then the tax revenue would increase by more than X% due to bracket creep. No tax rate increase is needed to do this, we can do it with a GDP increase. Plus that fixes unemployment by providing jobs for an extra X% of workers. And by keeping tax rates low, people get to keep (or spend?) more of their earnings - and that creates even more demand for goods &* services, ie, workers - so the GDP increases even more. As for taxing the rich - you are right, it has no effect ion their lives and they can easily afford it - but that's not the point. They will invest less in in future production because they understand that the demand will not grow if consumer spending is killed. So the workers that would have prospered with the added jobs from future production will not get jobs.
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Deleted
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Post by Deleted on Aug 31, 2012 20:47:04 GMT -5
How about explaining your perspective for the rest of us? You might affect how some of us view things. Because we, as a society cannot afford not to raise taxes. The Bush tax credits were one of the worst ideas ever. We have a deficit, we should not be decreasing our income (taxes), until that is gone. And frankly, if you increase taxes on the poor, they use more social programs (EITC keeps poor parents working, at least to some extent), which will either cost the government a net loss or no benefit. You tax the middle class, we cut out luxuries and that hurts the economy the most. You make capital gains progressive, add a couple more tax brackets (like the Buffet tax recommended), and there is the least issue of all of the adding to taxes for any group. I may not like paying taxes, but we need to, to pay for our society.
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Deleted
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Post by Deleted on Aug 31, 2012 20:49:50 GMT -5
Considering fairtax replaces all federal taxes, there is no difference between 10% not paying today & 10% not paying under fairtax. The name is kinda funny - if they had called it Giant Federal Sales Tax I guess not so many people would want it, lol. You are right only about the "10% not paying" part. But everything else is completely different - your income level doesn't matter, you simply pay about a 23% sales tax on all purchases whether you make $25,000 or $250,000. It would be great for rich people, not so great for low earners. The rich would spend about $50k or $100k for necessities - and bank the rest, tax free. Low earners would likely have most of their necessities such as food(to name one) which would likely be non-taxable. The poor would pay minimal taxes under such a scheme if they paid any at all. Bullshit. I am in the 10% tax bracket, the majority of our purchases are taxed. Gas anyone? How about clothes, or toiletries?
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Angel!
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Post by Angel! on Aug 31, 2012 22:42:08 GMT -5
We can't cut our spending enough to fix the deficit, so we must cut spending & raise taxes. As I said in an earlier rant - you are confusing tax rates and tax revenue. If businesses grew by X%, ie, the GDP went up X%, then the tax revenue would increase by more than X% due to bracket creep. No tax rate increase is needed to do this, we can do it with a GDP increase. Plus that fixes unemployment by providing jobs for an extra X% of workers. . I understand the concept. But there a point at which cutting taxes will fail to create enough growth so that revenue will actually increase - laffer curve. But even if you believe taxes are still on the high side of the curve, it also can take years before the gdp growth catches up to create additional revenue. Can we wait out a few years of higher deficits waiting for the growth to kick in? If congress got their heads out of their asses, then maybe. But all this political posturing & fighting is driving us towards the cliff faster. If we need to reduce the deficit now, then the quickest way is to raise rates. Ryan's proposal to cut tax rates 20% is going to take years to recover the lost revenue through gdp growth.
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Post by Deleted on Sept 1, 2012 8:19:04 GMT -5
We've been on the other side of the Laffer curve for quite a while now... the chances of us ever recovering the lost revenue due to a gdp growth spurred by Ryan's proposed further tax cut is negligible to nonexistant.
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phil5185
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Post by phil5185 on Sept 1, 2012 8:19:27 GMT -5
Can we wait out a few years of higher deficits waiting for the growth to kick in? If congress got their heads out of their asses, then maybe. But all this political posturing & fighting is driving us towards the cliff faster.
If we need to reduce the deficit now, then the quickest way is to raise rates. Well, growth doesn't kick in AT ALL when tax rates are raised, the opposite happens. Higher tax rates cut consumer spending (predictably, by the new tax rate) - so with less new customers, businesses can't expand (doesn't make sense to hire more workers, build more stuff, and then just stack it in the parking lot). So - simply raising tax rates doesn't work, it causes tax revenue to go down rather than up. lol - can you imagine trying to explain that math to Pelosi & Reid?
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Deleted
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Post by Deleted on Sept 1, 2012 8:31:38 GMT -5
Actually, we have had several periods where growth happened under higher tax rates phil. Growth is due to a variety of issues, and innovation and ingenuity are significant.
Honestly, if you tax the higher group a bit more and 'redistribute' it, in that you allow the lower and middle tax brackets to pay less in tax... it actually gives the lower and middle tax brackets... the ones who are more apt to SPEND all they have... MORE consumptive power... thus demand goes up and businesses can expand...
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2kids10horses
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Post by 2kids10horses on Sept 1, 2012 9:14:54 GMT -5
Back in the day when the top tax rates were really high, the available deductions were really high, too. No one ever really paid the top rate.
Look, folks, the problem is not that the rich aren't paying their fair share. The top 2% already pays something like 70% of all taxes. The bottom 50% pays nothing. In fact, they may be receiving, not paying!
No, the problem is we need more rich people! We need a system that encourages people to get out and work, invest, and save.
I think everyone understand that if you tax yachts so heavily that the rich stop buying yachts, you're not just punishing the rich, you just put all the boat builders out of business costing hundreds of jobs. So, no, that's not the answer. What we need is a system that encourages growth, makes it easier for small businesses to succeed, hire people.
This means: LESS REGULATION, LESS GOVERNMENT MANDATES, LOWER TAXES.
The tax code has always been used by "government" to reward certain behavior. Want folks to buy houses? Institute a Mortgage deduction. Want kids to be sent to college? Put in a college tuition tax credit. Want businesses to buy machine tools? Create accellerated depreciation schedules for expensing them.
Congress has always used the tax code to stimulate/regulate our behavior. And "buy votes".
Unfortunately, they also created "unintended consequences".
I really don't think Lyndon Johnson knew that when he instituted "The Great Society", he would be setting into place the process that created the whole "welfare mother" underclass. He thought he was doing the compassionate right thing. It has, sadly, only enabled that lifestyle, and makes it more difficult to escape from it.
Consider: If you were currently making $245,000, and you could potentially invest in a business venture that would take you to $300,000 or more. But, you would be taxed higher for making over $300,000. Would you do it? Is it worth the risk?
Or take a small business owner: Say you own a heating/air business. You have 30 employees. Should you expand? Maybe double the size of your business? Hmm... at 50 employees, you have to do a LOT more government regulation with ObamaCare and all. So... maybe you just go out an start a NEW HVAC company, hire in 30 new employees. Now you own two companies, each at 30 employees. All good! So, what "good" is ObamaCare legislation if employers are going to figure out ways around it?
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mwcpa
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Post by mwcpa on Sept 1, 2012 10:48:36 GMT -5
rukh... it's not the best source... en.wikipedia.org/wiki/List_of_countries_by_tax_ratesnow, it's the stated rate that is the issue, it's the "effective" rate..... and for corporate entities, the tax is on the "net" profit (revenues less expenses, so the left overs).... the actual tax for certain select taxpayers are offset by various credits and exclusions from Congressional will... some are to "stimulate" or give benefits to one industry over another while possibly penalizing another (example... oil and gas are given special breaks just for them, but if a doctor operate his business in a corporate form (C), his profits are subject to the highest marginal rate... one group gets a break, the other gets penalized) or attempts social engineering (having kids when your income is low is rewarded with EIC.... live in an area with high state and local income tax you may get hit with AMT)
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justme
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Post by justme on Sept 1, 2012 11:03:11 GMT -5
Ok, which "other side of the Laffer curve" are we on, supposedly? I'm guessing you're talking about the curve where tax rates is on the x axis (not the traditional curve, it has tax rates on the y axis so the curve is turned on its side - there's a top and a bottom, not a left or a right), and that since you're pro increase taxes I assume you guys are thinking we're at the point where increasing taxes will increase revenue? I think the graph below is more poignant than arguing the Laffer curve (which some don't accept anyways). Even when the top tax bracket was 90%, the tax revenues was the same percentage of GDP. Increasing the tax rate is NOT going to raise the tax revenues if history is any proof. The ONLY way to do that is to raise GDP (as the graph shows tax revenue as a % of GDP, so raising GDP increases the total amount of taxes collected). Changing tax rates just changes behavior, not tax revenue.
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Deleted
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Post by Deleted on Sept 1, 2012 11:17:00 GMT -5
I think your graph is not using a very effective formatting. Yes, the line looks flat, because the variation in % of GDP is never large, but is significant. Raising from 14% to 18% is quite significant... yet would still apear flat on that graph...
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Post by Deleted on Sept 1, 2012 11:20:54 GMT -5
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Post by Deleted on Sept 1, 2012 11:35:40 GMT -5
Message deleted by oped.
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Deleted
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Post by Deleted on Sept 1, 2012 11:40:05 GMT -5
Sorry, wanted to check my math... current GDP is 15 trillion... a 1%-4% change in tax as % of GDP is quite significant... that is why that graph posted previously appears flat...
And if you look at the ACTUAL corporate tax burden in the above graph, it has fallen considerably... we have high rates, but no one pays them...
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justme
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Post by justme on Sept 1, 2012 12:35:03 GMT -5
But your graph only shows from 1981 on - by then the top tax rate had dropped to 50%, maybe lower. My point was that even when taxes were high, the overall revenue was about the same. In fact, if you look at the graph close enough when the tax rate was at its highest the % of GDP line is obviously below 20%, which is where it is now. (You'd have to run statistics to find out whether 1-4% is actually significant in this instance, just because it's a large number does not make it significant. I have an inkling it might not be that significant as it doesn't deviate far from the mean. Especially if you take into account recessions.).
My point was tax revenue overall specific to income as the thread was on personal income, and the top graph was personal income tax. Corporate tax is double taxation, any taxed profit that is passed on to its owners is then taxed again at their income rate therefore it behooves the owners for the corporation to get tax rates as low as possible. Corporate tax is also a pass through tax in that corporations just raise the prices of the goods and services when you increase taxes, so increase taxes on them decreases an individual's purchasing power. You'd have to add in the personal income tax on the profits to find out the true tax rate on corporate profit.
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justme
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Post by justme on Sept 1, 2012 12:38:52 GMT -5
But your graph only shows from 1981 on - by then the top tax rate had dropped to 50%, maybe lower. My point was that even when taxes were high, the overall revenue was about the same. In fact, if you look at the graph close enough when the tax rate was at its highest the % of GDP line is obviously below 20%, which is where it is now. (You'd have to run statistics to find out whether 1-4% is actually significant in this instance, just because it's a large number does not make it significant. I have an inkling it might not be that significant as it doesn't deviate far from the mean. Especially if you take into account recessions.). My point was tax revenue overall specific to income as the thread was on personal income, and the top graph was personal income tax. Corporate tax is double taxation, any taxed profit that is passed on to its owners is then taxed again at their income rate therefore it behooves the owners for the corporation to get tax rates as low as possible. Corporate tax is also a pass through tax in that corporations just raise the prices of the goods and services when you increase taxes, so increase taxes on them decreases an individual's purchasing power. You'd have to add in the personal income tax on the profits to find out the true tax rate on corporate profit. ETA: 1% of GDP is 150 billion, even if we raised it enough for the 4% higher that's 600 billion. Our deficit is in the trillions, 600 billion won't solve the problem, especially since the tax revenue has never stayed at that high of a %. Bugger, that was supposed to be on the post above, not quote myself.
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