Who Pays What

[adios]

Refutes the notion that taxes are in reality flat and not progressive. I expect that those who support that position will say that state taxes, city taxes, sales taxes, property taxes, death taxes, and whatever else hidden tax there is make the system "flat" but I think that's an easy argument to shoot down. From todays WSJ editorial page:

Who Pays What
April 26, 2005; Page A14

Even the most ardent class warriors have no choice but to concede that the U.S. income tax code is steeply progressive -- that is, that it soaks the rich. You know the numbers: The richest 1% of all Americans pay 33.7% of all federal income taxes, even after the Bush tax cuts, while the bottom 50% of earners pay a mere 3.6% share.

But wait, our friends on the left quickly add, what about the payroll tax? Low-income folks pay the full 12.4% FICA tax on all of their income, while that levy is not applied this year on income above $90,000 (a level that rises each year with inflation). Thus, we are told, the U.S. tax system really isn't very progressive and the government would be well advised to raise taxes further.


Well, not so fast, Robin Hoods. An IRS study by a trio of tax wonks shows that, even after including Social Security taxes, the overall tax burden grew more progressive from 1979 to 1999. And while that burden became a tad less progressive after the Bush tax cuts of 2001 and 2003, the rich and upper middle class continued to pay far and away the bulk of U.S. taxes.

The nearby bar chart tells the tale. It is based on an analysis of IRS data by Michael Strudler and Tom Petska of the IRS and Ryan Petska of Ernst and Young. The authors found that over the course of 20 years the richest 0.1% of all taxpayers saw their overall tax share double -- to 11.05%, from 5.06%. The top 20% of all earners also saw their tax share increase sharply to more than two-thirds of all taxes paid. Meanwhile, the bottom 20% of earners paid only a tiny share in 1979 but saw even that share cut in half 20 years later -- including payroll taxes.

As for the windfall for the wealthy alleged to have been provided by the Bush tax cuts, the authors show that the tax share paid by the superrich fell only marginally even after the 1999 data were adjusted for the lower 2003 tax rates. The richest 0.1% would have still paid nearly double the share they paid in 1979 -- that is, double what they paid before the Reagan tax cuts of 1981, which were also supposed to have favored the wealthy. As the authors note, "The progressive nature of the individual income tax system is clearly demonstrated."

All of this is worth keeping in mind as we enter the rough sledding of Social Security (and later tax) reform. AARP and many politicians would love to "solve" Social Security's long-term financing shortfall by raising payroll taxes, especially the $90,000 income limit. But that would be socking it to taxpayers who already bear an outsized share of the American tax burden. The U.S. tax system is already "progressive" enough.

You'll have to get an online subscription or buy the paper to see the chart.

[James Boston]

The author makes reference the the richest .1% saw their tax share double in the past 2 decades. While this is probably true based on "income taxes," it completely ignores the vast amount of wealth concentrated to only a fraction of a percentage of the population that goes untaxed.

[Dead]

I'll paste in the chart. I have an online/print subscription to the Journal.

I hope they don't get pissed about it

But this chart contains no new information. You conservatives really need some new info, because you mention this stuff like every other day. Jack Kemp creams himself every Monday just thinking about it on TownHall.

http://img131.echo.cx/img131/146/chart7mo.gif

[adios]

[ QUOTE ]
The author makes reference the the richest .1% saw their tax share double in the past 2 decades. While this is probably true based on "income taxes," it completely ignores the vast amount of wealth concentrated to only a fraction of a percentage of the population that goes untaxed.

[/ QUOTE ]

Nothing like a non sequiter to hijack the thread /images/graemlins/smile.gif. The issue is whether or not the tax system is progressive or not and to the degree a tax system is progressive. We're talking income being taxed i.e. the money earned from someone's labor and/or is returned from "risky" investment more or less. If you want to debate whether or not we should redistributing wealth in some other manner start your own thread please.

[lehighguy]

What he's referring to is the total tax share of the federal IRS revenue. If the IRS collects $2 trillion in taxes, and 50% come from the top bracket, then $1 trillion came from the top bracket (I'm making up those numbers).

So when you talk about defense, schools, welfare, roads, cops, anything provided by the government it is provided by the taxes of rich people. Though the bottom 50% pays taxes, they are contributing very little to society from a tax perspective. As in they far and away have more spent on them then they pay. So if someone with a median income asks for a government program they are asking for someone else to pay for it.

Even if we were all taxed at a flat-tax rate, say 20%, it would still be a progressive system because 20% of a lot is more then 20% of a little.

One of the reasons Social Security taxes are regressive is because when the program was passed democrats claimed that the poor-middle class would pay for thier own retirement. Thus they were providing for themselves rather then asking the rich to pay for retirement. When the earning ceiling of 90% gets lifted, which it will, then the rich will pay for a majority of the program. As such they will be saving for others retirement.

[ACPlayer]

The progressive/non-progressive argument for taxation borders on idiocy, IMO. The arguments are usually used to justify tax cuts that we cannot affort. This entire piece is designed to continue to support tax cuts.

The fact is:

1. The tax system is too complex and the complexity aids those who can hire people to take advantage of it.
2. The social security "taxes" is the wrong way to provide a safety net for seniors. It should be funded out of general tax revenues.
3. The Medicare system is not the way the govt should be involved in health care -- the govt should implement a universal health care policy.
4. All tax cuts recently passed return money dispropotionately to high income payers. THe last one at a time where the cuts were not fiscally justified.
5. Inheritance taxes should be 100 percent, with an exception for providing adequate funds for minors to reach 21 years of age. This is sound public policy.
6. The feds should get out of all welfare programs (except social security and universal health care) and these should be entirely funded by states by local standards. A case could be made for Soc Sec and Health Care to be state based too). Local politics should govern education.
7. THe feds should get out education and turn that over to the states. Local politics should govern education.

I dont think any of this should be controversial -- specially to conservatives. Unfortunately we dont have any real leadership to implement it.

[adios]

[ QUOTE ]
But this chart contains no new information. You conservatives really need some new info, because you mention this stuff like every other day.

[/ QUOTE ]

The results of the study were just released so I guess they should have just asked you instead of doing the study /images/graemlins/smile.gif. I guess you haven't read the threads where people maintain the taxes are flat and not progressive. I'm glad you acknowledge the progressive nature of the tax system and the implications it has in income redistribution.

[adios]

[ QUOTE ]
The fact is:

1. The tax system is too complex and the complexity aids those who can hire people to take advantage of it.

[/ QUOTE ]

Since the wealthiest pay the lion's share of taxes I guess they're hiring the wrong professionals.

[Dead]

[ QUOTE ]


The results of the study were just released so I guess they should have just asked you instead of doing the study /images/graemlins/smile.gif

[/ QUOTE ]

google search (http://www.google.com/search?hl=en&q=who+pays+the+taxes&btnG=Google+Sear ch)

Bruce Bartlett: Who pays the taxes?

Who Pays? Main Menu

US Income Tax Burden

The SOHO Daily News | Who Really Pays Income Taxes?

Who Pays The Taxes, You do!!!

Amazon.com: Books: AMERICA: WHO REALLY PAYS THE TAXES?



Yeah, it's never really been done before. /images/graemlins/smirk.gif

[ACPlayer]

The point is that these complexities are not necessary and should be abolished forth with.

Your response appears to reflect some bitterness about something.

[Bodhi]

How would you feel about eliminating all taxes except for a rent on property rights in proportion to land value?

[MMMMMM]

[ QUOTE ]
5. Inheritance taxes should be 100 percent, with an exception for providing adequate funds for minors to reach 21 years of age. This is sound public policy.

[/ QUOTE ]

This seems really bizarre to me. Doesn't this seem anathema to the system wherein we live which values and protects individual ownership of property?

Under your proposal, it seems like there would no longer be individual ownership of ANYTHING: just a lease on things until death at which time all ownership reverts to the state. By the way, how is this reconciled with those who would choose to give their property away to their heirs while living rather than after death via a will or trust?

Orwellian implications exist in your proposal (not the least of which is, since the state stands to gain so much upon your death, it has small interest in seeing you live out your natural old age and more interest in seeing you die sooner. As people live longer this would be an added state pressure towards euthanasia and involuntary euthanasia. Heck their personal property could be used to help out the new members of society via the state).

[lehighguy]

1) True, we should have a flat tax
2) SS shouldn't be provided by the government at all. Or if it is it should be funded IN ADVANCE, not by using current revenues to provide current benefits. That is what SS privitization is all about.
3) If this could be done without a loss to the quality of health care then yes. But if it results in lower pay for doctors and less medical research then the long-run negatives outway the posistives. And there have to be ways to control costs, government is bad at that. Given past performance of the US government when it comes to doing anything, I'm rather hesitent.
4) No, in fact large tax cuts should be given to anyone making more then $50,000/year. We can balance the budget by cutting defense spending and cleaning out government waste. There is no reason we need to have hundreds of thousands of troops in Germany, South Korea, Japan, and a myriad of other places. Those wars are over. We also don't need hundred million dollar fighter jets. Last time I checked the terrorist had AK-47s and rocks. The jets we have now work just fine. We don't need all that hardware.
5) Though lower middle class, my parents worked hard to get me through college. When I get stinking rich I want my kids to be well off. Providing for ones kids is just another option people should be allowed to spend thier money on.
6) Yes
7) Yes

[andyfox]

It says "including social security tax." Does it include the portion "paid" by the employer? Does it include all federal taxes, or just the income tax plus the social security tax? Does it include other taxes, such as the ones Adios mentioned in his original post?

[adios]

I'd have to think about that one for awhile. I'm against all tax increases until the pols can tell me the distribution of income they seek.

[ACPlayer]

1. I did not say we need a flat tax. In fact, I dont think we need a flat tax. We need a simple tax formula. Making the tax rate flat does not make it simple. Getting rid of deductions makes the tax simple.
2. It is irrelevant how SS is funded. We need to decide what the basic safety net is for seniors (perhaps at the State leve) and then fund it out of general revenues. The important first step is deciding what the safety net is and then, and only then, figuring out the funding. I also think that there should be no limit as to how much one can save tax free for retirement. THose who dont need the safety net dont get anything.
3. The goal of the health care system should be to provide baseline care for the each member of the population - it is entirely unacceptabe what is happening at the moment. If I want to pay more for something, I can always do that and should be able to. Remember that we end up paying for the uninsured with higher premiums -- this is a massive shift in dollars from the insured to the uninsured. The cost of health care fo the uninsured is uusally in the emergency rooms and those costs are higher than preventive care and are passed on to us via our premiums.
4. Tax cuts can and should be given, once spending has been cut and the deficit (or at least its growth) brought under control. I do think we should target a very large percentage cut in the defense budget.
5. I want my kids to be strong and able to stand on their own and make their own way in the world. Thre is a good reason why the first and second generation Americans are higher achievers in colleges -- it is called motivation.

[MMMMMM]

[ QUOTE ]
5. I want my kids to be strong and able to stand on their own and make their own way in the world. Thre is a good reason why the first and second generation Americans are higher achievers in colleges -- it is called motivation.

[/ QUOTE ]

So don't leave your kids anything, if that's what you think best. But don't tell others that they can't leave their kids anything. What an arrogant approach that would be, hmmm?

[ACPlayer]

I am learning from you. /images/graemlins/grin.gif

[lehighguy]

2) How its funded is the most important part. Nearly all of our big problems: low business investment rates, weak currency, trade deficiet, can be traced back to OUR LACK OF SAVINGS. One huge factor in our savings deficiet is SS. Instead of saving money for retirement, people think the government will take care of it. So they don't save. Actually, its worse. They think they are saving because most people think the money they pay into SS is put away somewhere until they retire. But it isn't. It gets spent on either current retirees or raided by Congress.

If a private company offered a retirement program like that the government WOULD SHUT IT DOWN BECAUSE ITS A PYRAMID SCHEME.

Saving is just as important as getting pooty trained. If you can't do either your gonna [censored] all over yourself. People need to realize this.

5) I want my kids to go to a good school so they learn. I want them to travel to foriegn countries to get culture and perspective. I want them not to have to give up piano because thier parents couldn't afford lessons anymore and sold the piano. I want them to go to whatever college they want and not which one gives the most FINAID. I want to buy them a care so they can get around and be social and have fun cause thier kids. When I die, I want to leave behind enough money so they can start a business doing what they have a PASSION for, not what they need to do to make money.

[ACPlayer]

2. You are wrong. THe problem with Soc Sec as it stands is that the safety net is not designed. We need to design the safety net and then put the most appropriate funding plan in place to meet those needs. You design the program first and then how to fund it.

5. I am not denying your kids anything as long as they are kids.

[lehighguy]

2) The safety net is there. The government gurantees a set schedule of benefits. It just has absolutely no was of paying them, hence a funding problem.

5) My kid is in college, he wants to go to Europe for spring break, can I buy him a plane ticket?

Now my kid has graduated an worked a few years. He's 25. He hates corporate life. He really likes doing X and he has idea Y but he needs 100,000k to startup. Can I give him the money?

Now my kid is 40 and has kids. He wants to send them to a nice private school. But he works for a nonprofit. Am I not allowed to help my grandkids out.

Hell I don't care what age my kid is or if he's gonna spend it all on malt liqour. How is giving money to my kid any different from giving it to charity. I earned my money and if I want to flush it down the toilet its my right. Cmmon, your a poker player. Day after day people through money at you. Are they using thier money wisely, NO. But I don't see you complaining when some maniac sits down at the table and goes all-in every hand. And you know why you don't feel bad. Cause its his money and he decided how to spend it.

[ACPlayer]

2. I say we need to design a proper safety net. For example, let us say that the federal govt will only provide monthly support to those who's assets are nil. That is social security is basically changed to a welfare program -- which is what I think it should be. Then we can plan to provide those benefits. The basic safety net needs to be redesigned. We can and should encourage private savings but making that part of SS is not constructive -- IMO.

5. When your kid is 40 he should be able to stand on his own feet, assuming you have done your job of raising he well. Buy him a ticket and have him travel the world -- he will be the better for it. You can also give him any money that you want -- as long as you are alive to decide how the money is spent. I suspect that if he comes to you for 40,000 to buy cocaine you are likely to say no.

[lehighguy]

2) How are we to define need? The need for SS comes from not having money saved up for retirement. So if you tell people that they get nothing from the government if they save and a stipend from the governemnt if they don't save what exactly do you expect them to do.

Are you going to try and determine who is "capable" of saving? What metric will you use? Average earning over a lifetime, projected amount they "should have saved", present value equations. What about expenses. They vary by region of the country, children, medical needs. And how are we to determine what is neccessary versus what is frivulous. If I buy an ice cream sundee instead of saving the $5 for retirement will that be counted. How about movie tickets, how about getting a car that costs an extra $2,000 because it has extra features you want.

You can't determine who is capable of saving. And you can't base it on how much money they have when they retire because savings is based on an entire lifes worth of decisions. Decisions that have been made worse by the moral hazard of social security which made people think they were saving when they weren't.

5) The basic question of why it is ok for me to leave money to charity(strangers) versus my own family is not addressed. Nor are property rights issues raised.

[ACPlayer]

What are you rambling about? You know that we presently have welfare for those who cant take care of themselves. Social Security should be part of the welfare program and not a govt paid pension plan. That is what I mean by redesign. It should be a safety net for citizens so they can take care of basic necessities.

[lehighguy]

"You know that we presently have welfare for those who cant take care of themselves"

My question was how are we to determine who those people are when dealing with the issue of retirement and savings. I'm waiting for an answer.

[ACPlayer]

How hard is this to understand?

My question was how are we to determine who those people are when dealing with the issue of retirement and savings.

Exactly as we do for welfare recipients. Via a asset and income test and disclosure for those who want it.

The smart guys like you will use the very large tax free savings accounts that I would make available to fund your retirement -- unless of course a catatrophic uncovered health care expense eats through that money, then it is back on the dole.

[lehighguy]

"Exactly as we do for welfare recipients. Via a asset and income test and disclosure for those who want it."

The amount of assets one has at the time of retirement is based on a "Lifetime of Decisions" made by the individual. You can't apply a means test to it. I could make $1,000,000/year and have $0 at 65 if I make bad decisions. And with the moral hazard of knowing the government only pays benefits to those without assets upon retirement it begins to make financial sense for people not to save so they can gain access to those government payments.

There are a million reason a means test will:
A) Not work for something like retirement (see my earlier posts)
B) Lead to a moral hazard that makes people less inclined to save
C) Will be immensely complicated, far more complicated in fact then the tax code you think is too complicated.

[ACPlayer]

If what you say is true, then you should be advocating the abolition of any safety net and leave the burden of retirement planning where it belongs --- on the individual. And if the individual blows it, then society has no further role in supporting that person.

THe sooner we realize that a govt funded retirement program is a bad idea, the better. That is the essence of what I believe. I do think that there is a place for a safety net.

[lehighguy]

"If what you say is true, then you should be advocating the abolition of any safety net and leave the burden of retirement planning where it belongs --- on the individual. And if the individual blows it, then society has no further role in supporting that person."

Yes, I agree with that statement. I'm especially inclined to agree with it in relation to retirement as it is even harder to design a program for that then say the homeless, which is a much simpler problem to deal with.

I'm against wealth redistribution programs in general as they nearly always fail to achieve thier objective without costing society more then they are worth in the long run. In the end they usually hurt the people they are intended to help, or thier children. But then again your the one in your other post that said: "I continued reminder to beware of those who want to do good for you."

[ACPlayer]

I believe that being on welfare eats into the soul of the recipient. I believe that denying a helping hand to those who are in genuine need eats into my soul.

"I continued reminder to beware of those who want to do good for you."
This is a paraphrased quote that I cannt recall at this time.

[Bodhi]

check out: www.henrygeorge.org (http://www.henrygeorge.org) to see if you like the idea. I haven't fully decided yet, but I am intrigued.

[MMMMMM]

[ QUOTE ]
5. When your kid is 40 he should be able to stand on his own feet, assuming you have done your job of raising he well. Buy him a ticket and have him travel the world -- he will be the better for it. You can also give him any money that you want -- as long as you are alive to decide how the money is spent. I suspect that if he comes to you for 40,000 to buy cocaine you are likely to say no.

[/ QUOTE ]

ACPlayer, it isn't any of your--or anyone else's--damn business whether he decides to give his kids money at their ages of 10, 40, or 60 after he dies. Nor is it your business how he accomplishes that. Absolutle ZERO percent your business, period.

This is probably the most wrongheaded and stupid suggestion you've ever come up with--a 100% death tax. Either you believe in private property rights or you don't, and either you or the government at base owns your possessions.

This is so bizarre and farfetched, I can hardly believe you are arguing it.

[ QUOTE ]
You can also give him any money that you want -- as long as you are alive to decide how the money is spent.

[/ QUOTE ]

He can also structure his will in such a way as to have his heir use the money only for certain purposes--if he wishes, if he deems it best that way. Not if YOU deem it best that way for him. Alternatively, he can have confidence in his descendant's judgment of how to use that money. If he has such confidence who the hell are you to say he must vet every possible purpose his child or heir might use that money for. Obviously too if he could give without enumerating allowable uses during life he should be able to do so after death via his will.

[lehighguy]

The quote was from your Iraq post about how a poll shows your right about everything.

It doesn't eat away at my soul, because I base my decisions on logic, reason, and economics rather then my current emotional impulses.

[ACPlayer]

Actually I never said I was right about every thing in that thread. I never even said I was right. All I said is that the majority now agreed with me.

For the record I ambelieve I am right about Bush's lieing to us. I am of course willing to be proved I am wrong. Wonder if Bush would let an independent counsel look into the records leading up to that decision.

Incidentally your posts seem to reflect a level of anger and hostility, hardly the basis for logic and reason. I have no idea about your economics.

[lehighguy]

Your response claimed that you want a safety net because you care more about other people.

I countered that the way I care is smarter thent eh way you care because it is based on sound economics rather then wanting to provide some short term solution that ends up hurting people in the long run.

[ACPlayer]

OK, lets start again. Perhaps there is still hope for Lehigh. Your sentiment ahout short term/long term is spot on and we can agree on that. Sound economics -- OK, apple pie and mother hood. We are agreed on both these.

I proposed based on the same principle to do away with a universal retirement program for individuals, provide incentives to save for retirement, and then provide a safety net for those who find themselves indigent-- modelled in some fashion after the welfare programs.

You dont like it. Fine.

How about you outline for us how exactly you propose to "care"? Is it simply the Private Accounts that Bush suggested or do you have something unique and interesting.

[jcx]

[ QUOTE ]
5. Inheritance taxes should be 100 percent, with an exception for providing adequate funds for minors to reach 21 years of age. This is sound public policy.


[/ QUOTE ]

This is possibly the most idiotic thing ever said in this forum (and that's saying a lot). Have you even thought about what would occur if this came to pass? US capital markets would collapse overnight, as anyone with a few bucks and a brain would be shipping their money out of the country post haste. You'd win fans with bankers in Grand Cayman and the Isle of Man, but few others.

With no available capital in US banks, where will the money come from to make loans for housing? For vehicles? Indeed, what will be the incentive to own housing or a car if the govt takes it when you die? The resourceful will figure out they can create a coporation (theoretically with eternal life) to own their property and thus circumvent your cute little scheme. Or will you close that loophole too?

Are you going to help yourself to family heirlooms? Moms wedding ring? It might be worth a lot of money you know. What about the fine china? Furniture? You said 100% inheritance tax my friend. Every auctioneer and liquidator in America will have you on their Christmas card list.

I love my country, but if your plan ever came to pass, I'd be scouting out land in Burkina Faso for a new homestead. I imagine I'd have company.

[lehighguy]

Natedogg made a post about how we can transistion from the current SS plan to private savings (not private accounts but rather private savings).

I would just leave things up the the individual. Let them decide how they want to plan for retirement (save, spend, buy insurance, stocks of bonds, etc.). The presidents plan is actually much more liberal then mine. He proposes forcing people to save since they have to contribute to private accounts instead of spending thier money however they want. Then he further demands they make smart diversified investment choices by limiting the investment vehicles they are allowed to choose from. It's a complete violation of property rights and a totally liberal idea. If you guys didn't hate Bush so much you'd realize its right up your alley.

[ACPlayer]

If you guys didn't hate Bush so much you'd realize its right up your alley.

Your emotions are showing again.

However, it does appear that we agree on everything except providing a safety net for the indigent senior. So perhaps we are not that far apart after all.

[sam h]

There is some serious straw-manning going on here. Nobody is going to argue that the tax system is not progressive if your definition of progressive is simply who pays more. The issue is supposed to be about who pays what as a proportion of their income, but nowhere does the article index tax payments to income or assets.

It's kind of dumb to make a big deal out of the rich having their tax share double in the last twenty years without mentioning how much their income share has increased.

[MMMMMM]

Good points, jcx...and the most amusing thing about ACPlayer's assertion that inheritance tax should be 100% was that he stated, "this is sound public policy".

I suspect some folks wouldn't know what sound public policy was if it slapped them in the face like a wet fish.

Come to think of it maybe that is just what ACPlayer needs...eh, ACPlayer? Do you think perhaps a nice fresh flounder or bass across the cheek might wake you up a bit? /images/graemlins/grin.gif

[MtSmalls]

This is typical of the WSJ, which I read every day, and also typical of the use of statistics.

While the percentage of income tax paid by the top 0.1% and the top 5% did increase over the last 20 years, it did NOT increase as fast as their share of the total income earned.

i.e. in 1979 the top 0.1 pecent of taxpayers earned 2.01% of total US income. By 1999 that more than tripled to 6.63%, but the share of total taxes paid less than doubled. SO they earn triple what they earned 20 years ago, and pay slightly less than double.

In the online supplement (PowerPoint exhibit for chapter 12, slide 35) to the third edition of his introductory economics textbook, Principles of Economics (Thomson South-Western, 2004), N. Gregory Mankiw, who served as the chairman of President Bush's Council of Economic Advisers until late February 2005, defined the term "progressive tax" as "one for which high-income taxpayers pay a larger fraction of their income than do low-income taxpayers." The Journal presented no evidence that the U.S. tax system has become "more progressive" in this sense.

[lehighguy]

If you believe in property rights then you don't believe that people should pay more just because they earn more, period. If I make $50,000 dollars one year and $100,000 the next year there is absolutely no reason I should pay more in taxes. That is the fundamental difference of opinion in this debate. You believe the rich should pay more because they CAN. I think there is a difference between CAN and SHOULD.

[jaxmike]

This is bull. We all know that the US tax system is regressive and we need to tax the rich more. Afterall, they can afford it, they are rich.

[MtSmalls]

I'm not sure what 'property rights' have to do with it. But yes, I believe that if you make more, you should pay more. Not based on some 'equality' issue, though that's valid as well, but because the upper 5% of the wealthy in this country BENEFIT more from the things that taxes pay for. ie. Police and fire protection, SEC oversight, the civil half of the legal system etc.

[lehighguy]

I don't see how the rich benefit more from government services. They pay for almost the entire budget of the government while nearly all government programs are dedicated to the poor.

Almost all of government expenditures are on wealth redistribution programs (SS, Medicare) or defense. The former rich people get no benefit from, the latter we all benefit from. Roads and cops are a tiny tiny portion of the budget. That's why the government was able to provide them without imposing an income tax for the first 160 years of our country.

[MtSmalls]

[ QUOTE ]
Almost all of government expenditures are on wealth redistribution programs (SS, Medicare) or defense. The former rich people get no benefit from, the latter we all benefit from.

[/ QUOTE ]

How do you figure that the wealthy don't benefit from Social Security? And how do the wealthy NOT benefit more from defense spending? Considering they are the ones that are investing in the defense companies? Not to mention they have the most to lose?

Who benefits the most from every pork barrel project that passes in Congress? Why the wealthy business owners, that used their influence to get the specific project in the first place.

The federal road money that is distrbuted to the states makes up a huge portion of the annual state budget out west. Who benefits the most from the roads being in the best shape? Business owners who need reliable transportation of their goods, and an easy way for their consumers to get to their places of business.

The examples are endless. The question really boils down to, should taxation systems be Progressive, Flat, or Regressive?

[adios]

Exactly look at the big ticket government entitlements where a lion's share of tax revenue gets spent, Social Security and Medicare/Medicaid. Who benefits the most from these programs? It's certainly not the wealthiest taxpayers. One might say that DOD spending helps the wealthy more than poor but I wouldn't say that and I don't see that argument holding water. When you lump all these programs together we're talking over a $1 trillion in spending annually. Ditto for just about every government program I can think of.

[wmspringer]

[ QUOTE ]
Even the most ardent class warriors have no choice but to concede that the U.S. income tax code is steeply progressive -- that is, that it soaks the rich. You know the numbers: The richest 1% of all Americans pay 33.7% of all federal income taxes, even after the Bush tax cuts, while the bottom 50% of earners pay a mere 3.6% share.

[/ QUOTE ]

Hmm...why is it that nobody who quotes that statistic ever mentions how much of the money the top 1% have?

[renodoc]

[ QUOTE ]
1. The tax system is too complex and the complexity aids those who can hire people to take advantage of it.


[/ QUOTE ]

How true. We really should dump the whole code and start over.

[renodoc]

[ QUOTE ]
2. The social security "taxes" is the wrong way to provide a safety net for seniors. It should be funded out of general tax revenues.


[/ QUOTE ]

I think the Social security system should be scrapped also. But if y ou are going to get rid of the 12.5% tax we now pay, I assume you would want a progressive tax to make up for it?? So the OP's point would be even more validated?

[renodoc]

[ QUOTE ]
3. The Medicare system is not the way the govt should be involved in health care -- the govt should implement a universal health care policy.

[/ QUOTE ]

Now you show your Massachusetts Liberal colors. The first part of your quote is absolutely correct. The second is insanity.

I invite you, and anyone else who thinks this way, to spend a day or week shadowing me in my office. Perhaps we can spend an afternoon at the VA to see socialized medicine in action. We can discuss rationing, denial of care, and the failed social experiments in other developed countries.

[adios]

[ QUOTE ]
[ QUOTE ]
Even the most ardent class warriors have no choice but to concede that the U.S. income tax code is steeply progressive -- that is, that it soaks the rich. You know the numbers: The richest 1% of all Americans pay 33.7% of all federal income taxes, even after the Bush tax cuts, while the bottom 50% of earners pay a mere 3.6% share.

[/ QUOTE ]

Hmm...why is it that nobody who quotes that statistic ever mentions how much of the money the top 1% have?

[/ QUOTE ]


Another attempt to hijack this thread in this manner. The issue is whether or not the taxes on money that people earn from the fruits of their labor is progressive or not. So friggen what if they're wealthy? The money they earn is their money and when the government taxes it their taking the money people earn away from them. If you want to redistribute income in some other manner start your own thread.

[renodoc]

[ QUOTE ]
5. Inheritance taxes should be 100 percent, with an exception for providing adequate funds for minors to reach 21 years of age. This is sound public policy.


[/ QUOTE ]

Oh yeah, great idea.

My kids are the most important thing in life. If I work my ass off, or win the WSOP, or whatever, that money is taxed and mine. If I want my kids to have it that is my business. Its very obvious.

[adios]

[ QUOTE ]
[ QUOTE ]
1. The tax system is too complex and the complexity aids those who can hire people to take advantage of it.


[/ QUOTE ]

How true. We really should dump the whole code and start over.

[/ QUOTE ]

Yes it's not a law of nature that government has to raise revenue through taxing income. The reason that income taxes invariably lead to a complicated tax code is that income earners in the U.S. economy are a diverse group and defining income for all income earners is a complicated endeavor. What constitutes a business expense for an entrepeneur is often a discretionary expenditure for some other income earner.

[hetron]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Even the most ardent class warriors have no choice but to concede that the U.S. income tax code is steeply progressive -- that is, that it soaks the rich. You know the numbers: The richest 1% of all Americans pay 33.7% of all federal income taxes, even after the Bush tax cuts, while the bottom 50% of earners pay a mere 3.6% share.

[/ QUOTE ]

Hmm...why is it that nobody who quotes that statistic ever mentions how much of the money the top 1% have?

[/ QUOTE ]


Another attempt to hijack this thread in this manner. The issue is whether or not the taxes on money that people earn from the fruits of their labor is progressive or not. So friggen what if they're wealthy? The money they earn is their money and when the government taxes it their taking the money people earn away from them. If you want to redistribute income in some other manner start your own thread.

[/ QUOTE ]

If you don't think how much the top 1% earns is relevant to the conversation, forget economics, it's time for mathematics.

[hetron]

[ QUOTE ]
Your response claimed that you want a safety net because you care more about other people.

I countered that the way I care is smarter thent eh way you care because it is based on sound economics rather then wanting to provide some short term solution that ends up hurting people in the long run.

[/ QUOTE ]

What exactly is your way of "helping people".

[hetron]

[ QUOTE ]
Natedogg made a post about how we can transistion from the current SS plan to private savings (not private accounts but rather private savings).

I would just leave things up the the individual. Let them decide how they want to plan for retirement (save, spend, buy insurance, stocks of bonds, etc.). The presidents plan is actually much more liberal then mine. He proposes forcing people to save since they have to contribute to private accounts instead of spending thier money however they want. Then he further demands they make smart diversified investment choices by limiting the investment vehicles they are allowed to choose from. It's a complete violation of property rights and a totally liberal idea. If you guys didn't hate Bush so much you'd realize its right up your alley.

[/ QUOTE ]

What about people who are too old to work and are broke?

[wmspringer]

[ QUOTE ]
Another attempt to hijack this thread in this manner. The issue is whether or not the taxes on money that people earn from the fruits of their labor is progressive or not. So friggen what if they're wealthy?

[/ QUOTE ]

hmm...can you say "missing the point"?

Saying that the top 1% pays x% of the taxes is meaningless without knowing where the money is.

Let's break the population down to 100 people. We'll say that I make $98/year (the rich), you make $1.02/year (the middle class) and everybody else makes $0.01/year (the poor) (Yeah, it's a big oversimplification, but maybe it'll get the point across)

Now, let's say I pay $9.50/year in taxes, you pay 50 cents a year in taxes, and nobody else pays anything.

I am paying 95% of the total tax burden, but my effective tax rate is less than 10%, while yours is over 49%. The numbers you use to make it look like the rich are overpaying conceal the reality that it's the middle class that's getting screwed.

[wmspringer]

Simply put: if you want to argue about whether or not the tax system is progressive, then the amount of taxes someone pays compared to the amount someone else pays is irrelevant; you need to look at the effective *percentage* of income each person pays.

[MMMMMM]

[ QUOTE ]
Simply put: if you want to argue about whether or not the tax system is progressive, then the amount of taxes someone pays compared to the amount someone else pays is irrelevant; you need to look at the effective *percentage* of income each person pays.

[/ QUOTE ]

Why is that the only way to define "progressive"? Why doesn't total amount paid *also* help define it?

Example:

least progressive = poll tax (everyone pays an identical amount)

more progressive = flat rate income tax

most progressive = graduated rate income tax

[andyfox]

In 2000, the 13,400 top households had slightly more income than the 96,000,000 poorest Americans.

[Dead]

[ QUOTE ]
In 2000, the 13,400 top households had slightly more income than the 96,000,000 poorest Americans.

[/ QUOTE ]

Our tax system is obviously too progressive. We must move towards a flat tax.

[andyfox]

In the year 2000, the richest 1 percent earned almost 21 percent of all reported income and paid more than 37 percent of individual federal income taxes.

When all federal taxes--not just the income tax--is considered, the top 1 percent's share drops to about 25 percent. If you tally up the economic benefits to the top 1 percent that do not show up in income statistics (in essence, tax sleight of hand), then the richest 1 percent are taxed more lightly than the middle class. People like Milbank, Tweed, Hadley & McCloy partner Jonathan Blattmachr (who has called our tax code a "political" code) make sure the super-rich no how to take advantage of the tax system. There is an underground economy among the super rich that lets them understate their true income and overstate their tax deductions.

The top 400 taxpayers in 2000 had an average income of $174,000,000; they paid 22 cents on the dollar in federal income taxes. That is what a single person making in the low six figures paid. Had the 2003 tax cuts been in effect the top 400 would have paid about 17-1/2 cents on the dollar, not much more than the overall national average of 15.3 cents Americans actually paid that year.

At the state level, an example: Bob Riley of Alabama, hardly a paragon of liberalism while he was a congressman, upon taking office, found out that Alabamans who earned less than $13,000 a year paid almost 11 percent of their incomes in state and local taxes (in 2003) but that those making more than $229,000 paid just 4 percent. He was attacked for trying to change the system and replied that, as a Christian, he believed that government has an obligation to help the poor, not expoit them. "If the New Testament reaches me anything, it teaches me not only to love thy neighbor but also to help those who are the least among us. Having a regressive tax structrue is one thing. But when it starts at $4,600 for a family of four, that's immoral."

[renodoc]

So when you say "top 1%" what is the income floor you refer to?

Much of the income for this group is capital gains. This is usually a tax on money that has already been taxed.

[andyfox]

I don't know what the dollar income floor of the top 1% is. Should be easy enough to find on the net, but my system is running at dinosaur speed tonight.

Let's look at a capital gains example: In 1998, George W. Bush reported income of $18,400,000, of which $15,000,000 was a gain from his interest in the Texas Rangers. He was taxed on that $15,000,000 at the capital gains rate of 20 percent, instead of the then in-effect 39.6 percent rate for salaries. His initial investment in the Rangers was $606,000 in borrowed funds. How was that money already taxed?

[ACPlayer]

I personally think there should be no govt funded retirement payments made to citizens. THere should be incentives (laarge) for the individuals to save for tetirement. Greatly expanded IRAs would be one way. There may be others.

[ACPlayer]

The discussion of progressive and flat taxes hides the fact that the real problem is that the code is too complicated and not that it is flat or not flat.

[ACPlayer]

Universal health care policy does not necessarily mean that the health care system is run by the govt. Far from it. The purpose of the policy should be to ensure that all Americans have access to basic health care.

The fundamental problem with health care is that there is no connection between with consumer of health care and the payer for the services. This leads to a) distortions in the cost and use of the service and b) excessive paper work and back office work. Most health care users dont even know what their employer pays for the premiums. Similarly walk into an emergency room and ask how much it will cost to see a doctor and they have no idea. No where else is there such a disconnect between consumption and paument.

Once we have a insurance program then the health care providers contine to pass along costs of the uninsured to the insurance payers. This has to be done other wise the hospitals will go bankrupt. In addition, the uninsured use acute care facilities at a higher rate and a higher cost then the insured. Clearly this is inefficient.

The insurance industry fights all change (they did it when hilary tried her ideas) as it would mean the end of their industry.

This problem needs leadership that is willing to take on the goal of ensuring universal accesss to healthcare.

[renodoc]

OK, your arguements here makes some sense.

An excellent first step would be to pass malpractice tort reform on the national level. This would help to reduce the cost of defensive medicine, something that is practiced most of the time that the uninsured goes to the acute care facility.

I agree completely that the disconnect between consumption and payment needs to be fixed. But what about the price-fixing that goes on now? Why should I do exactly the same amount of work on someone and get paid 75% less for a medicare patient as a younger insured one? And, take the HIPPA/CMS audit risks for the poorer payer? And, when the well-off 72 year old offers to pay for my services out of pocket, I have to tell him that I could go to jail or get thrown out of medicare for 2 years if I accept payment.

I digress (its late).

I think the biggest problem with your position is the definition of "basic health care." Americans will not be happy unless basic=best possible. We will find out soon enough when the drug benifit debacle goes into high gear and some folks won't get the drug that the doc prescribed because it didn't make it onto the govt formulary. Oh yeah, the [censored] will hit the fan then. Its not difficult to extrapolate this rationing to other things: The smoker's third MI and bypass, anyone's second cataract surgery, treating pneumonia in a 97 year old....how bout the investment in the neonatal intensive care unit of hundreds of thousands of dollars that might produce a dead or severely incapacited child (who may then be the ward of the state for life.) We are used to "the best" healthcare, we don't care who pays for it as long as we get it, and we will get very grumpy when we're told we can't have it anymore.

[jaxmike]

[ QUOTE ]
[ QUOTE ]
Even the most ardent class warriors have no choice but to concede that the U.S. income tax code is steeply progressive -- that is, that it soaks the rich. You know the numbers: The richest 1% of all Americans pay 33.7% of all federal income taxes, even after the Bush tax cuts, while the bottom 50% of earners pay a mere 3.6% share.

[/ QUOTE ]

Hmm...why is it that nobody who quotes that statistic ever mentions how much of the money the top 1% have?

[/ QUOTE ]


Does it matter?

[witeknite]

Actually you example should read

regressive = poll tax (everyone pays an identical amount)

neutral = flat tax

progressive = graduated rate income tax

If, as your income increases, the percentage you pay in taxes decreases, it is a regressive system.

WiteKnite

[renodoc]

[ QUOTE ]
Hmm...why is it that nobody who quotes that statistic ever mentions how much of the money the top 1% have?




Does it matter?

[/ QUOTE ]


I think it matters a lot, and I'd like to know the numbers they are refering to. I think the difference between top 1% and top 0.05% is staggering.

[andyfox]

The top 1%, in 2002, according to the IRS, made a minimum of $285,424. That is, to earn more than 99% of all income earners, you had to make a minimum of $285,424.

[andyfox]

Couldn't find the floor, but the average income of the top 400 taxpayers in the year 2,000, according to the IRS, was $174,000,000.

[andyfox]

People making $60,000 paid a larger share of their 2001 income in federal income, Social Security and Medicare taxes than a family making $25 million, according to the IRS data. And in income taxes alone, people making $400,000 paid a larger share of their incomes than the 7,000 households who made $10 million or more.

Since 1993, the income tax burden on the 400 highest-income Americans has been cut 40 percent when measured the way that President Bush prefers, which is by counting how many pennies out of each dollar go to income taxes. In 1993 the top 400 paid 30 cents out of each dollar in federal income taxes. By the end of the Clinton administration in 2000 they were down to 22 cents. Under Bush, their burden is less than 18 cents. Everyone else felt their tax bite rise to 15 cents on the dollar from an average of 13 cents.

[tolbiny]

"If a private company offered a retirement program like that the government WOULD SHUT IT DOWN BECAUSE ITS A PYRAMID SCHEME"

If a private company also took a portion of your paycheck with the promise of benfits at age X- and then said- opps we idn't exactly manage that well- we can't provide you with the retirement fund we promised- how would that go over?

This is essentially what is being threatened by a lot of the legislation right now.

[lehighguy]

We already have a million funds like that. They are called pension funds and mutual funds. They take the money you give them and invest it in a diversified set of assets that they believe will appreciate over time. That believe is based on mounds of financial data and theory.

Everytime you contribute to your 401k plan you are endorsing privitizing SS since you are doing the same thing voluntarily with your own money.

If you run a pention plan you must have assets (the securities you bought with the money you were given) and liabilities (payments you promised people at retirement). In order to be solvent your assets must cover your liabilities. Otherwise your declared bankrupt, possibly fraudulent or negligent.

While private mutal funds have assets and liabilities, the SS trust fund has ONLY LIABILITIES. No assets. We spent all the assets already. There's nothing there. That is why it would be declared insolvent if it were a private company.

[adios]

All this data doesn't refute the WSJ article data. Also this kind of statistic can be misleading. Take Mrs. John Kerry for instance. Many Bush supporters painted her as some sort of hypocrite because she paid a reletively small amount of income tax. One of the main reasons was that she was invested in tax free municipal bonds. Not a thing wrong with that and I actually defended her. I pointed out that she probably would make more money in taxable investments even after paying the taxes. I opined that the reason that she probably chose tax free munis had a lot to do with her utility function because at her level of wealth she becomes very risk averse. I've pointed out many times that different income streams receive different tax treatment in this country. The wealthiest people don't get W-2's so what? The upper echelon earners pay a disproportionate amount of taxes paid. I believe that the top 20% of income earners earn 52% of the income but pay 67% of the taxes paid. If the system was flat they should pay 52% of the taxes and if the system was regressive they should pay less than 52%. And if we start including other taxes they probably pay at least their fair share.

Speaking of the wage earners such as those making $400,000 who are prime candidates for the AMT and get hurt the most by the AMT, I saw that a few Democratic Senators were complaining about this state of affairs but yet Kerry wanted to sock it to em even harder.

For me the bottom line is that the tax system is progressive and that as long as we tax income the tax laws are destined to be complicated. I'll repeat for the upteenth time that IMO the wage earners in the U.S. are a diverse lot and how a business owner, entrepenuer, investor is taxed will be much different than how wage earners getting W-2's are taxed due to the nature of our economic system.

[andyfox]

The tax system is not progressive. If you look only at the federal income tax, it is progressive in terms of reported income. Those at the bottom pay little if any taxes. Those at the very top pay less than those in the middle.

I agree with you that as long as income is taxed, the system is destined to be complicated, whether the system if progressive or flat.

[renodoc]

I'm not sure what the obsession is with the "top 400" people.

But even if you do concentrate on those, how much benefit to society do they do by all the jobs they produce etc. It does indeed trickle down to the non-400.

[tolbiny]

but investment in those other plans is voluntary. What is your proposal for those who have already had thoasands taken from them?

[adios]

[ QUOTE ]
The tax system is not progressive. If you look only at the federal income tax, it is progressive in terms of reported income.

[/ QUOTE ]

Not sure what your point is here. If you're saying that sales taxes aren't progressive ok. I think you may be referring to payroll taxes but let's be clear that what one pays in payroll taxes ultimately determines what one receives in Social Security at retirement and that amount is capped. Therefore the payroll tax is returned to those who pay at retirement but they can only receive a maximum payment. Since that's the case someone who makes greater than the threshold where payroll taxes terminate should not expected to pay anymore in payroll taxes since they won't receive any payback for what they've contributed above a certain amount.

[ QUOTE ]
I agree with you that as long as income is taxed, the system is destined to be complicated, whether the system if progressive or flat.

[/ QUOTE ]

Right because businesses have costs and those costs should offset revenue (I know you understand this as well as anyone). For an individual getting a W-2, they have costs too and those costs are determined by IRS rules to be encapsulated by the standard deduction and the personal exemption more or less. I realize that home mortgage interset deductions play a role for most people. My point about this is that there is no friggen way that the standard deduction and the personal exemption cover the costs of a middle class W-2 wage earner incurring living expenses and maintaining employment. So I guess I just made your point that the middle class should be taxed less relative to other groups /images/graemlins/smile.gif.

[Phat Mack]

Refutes the notion that taxes are in reality flat and not progressive.

When you use the term "flat," are you talking about something like a fishing license where everyone who gets one pays the same amount, or something like the sales tax on a pair of shoes where everyone pays the same percentage?

Where are you coming across people with "...the notion that taxes are in reality flat..."?

[lehighguy]

That is exactly the problem with SS. We've taken thier money and spent it. Not all that different from stealing.

We have to phase out SS. We will do this in gradual steps. For those already retired or about to retire we will keep current benefits. For people in thier 50's will have to take reduced benefits. People in thier 40's will have further reduced benefits. And people under 40 will have to fend for themselves. This method gives help to those with less time to prepare for eventual benefit reductions the most help. Natedogg made a good post about this, find it.

[adios]

[ QUOTE ]
When you use the term "flat," are you talking about something like a fishing license where everyone who gets one pays the same amount, or something like the sales tax on a pair of shoes where everyone pays the same percentage?

[/ QUOTE ]

I would consider both to be "flat."

[ QUOTE ]
Where are you coming across people with "...the notion that taxes are in reality flat..."?

[/ QUOTE ]

From previous threads on this forum.

[wmspringer]

[ QUOTE ]
I believe that the top 20% of income earners earn 52% of the income but pay 67% of the taxes paid.

[/ QUOTE ]

And the middle class also pays a higher percentage of the taxes than they earn of the money. When you consider that the poor don't really pay taxes, you'll find that that is inevitable as long as we allow deductions for a fixed amount.

[tolbiny]

This is still a very large chunk of money to pay for these benefits- if SS is cut in this manner the government losing a huge source of income without decreasing its current expenditures.

[tolbiny]

"The authors found that over the course of 20 years the richest 0.1% of all taxpayers saw their overall tax share double -- to 11.05%, from 5.06%. The top 20% of all earners also saw their tax share increase sharply to more than two-thirds of all taxes paid"

I just want to be clear on this- Do they mention how the income of the top 0.1% has changed over this time span? I am assuming that by top .1% they are talking about the richest 300,000 (annual income wise) people in the country (1/10 of 1% of 300,000,000). That this group now pays twice as much in taxes than they did x years ago- but i didn't see where they compared thier percentage of the total income over that period of time.

[lehighguy]

FICA taxes will be fased out at roughly the same rate as benefits are fased out to insure solvency.

[andyfox]

My points:

-If one looks only at the federal income taxes paid, the system appears to be progressive. But the super-rich, and, to a lesser extent, hide and shield and disguise and defer income. So the amount they pay as a percentage of all actual income is much less than the percentage the IRS figures show.

-When the impact of all other taxes, including payroll taxes, excise taxes, state and local, etc. are included, the middle class gets shafted. The super-rich and rich pay virtually the same percentage.

-The payroll tax has been used to subsidize the rich. I've posted about this before: between 1984 and 2002 the government collected $1,700,000,000,000 more in Social Security taxes than the agency paid out in benefits. Whereas the rich get to defer taxes, those getting hit the hardest by the payroll tax, the 90% of Americans who don't make more than the maximum amount subject to it, have to pay it a half a lifetime before they get the benefit.

From 1983 to 2002 the government spent $5,400,000,000,000 more than it took in. But the debt grew by "only" $3,600,000,000,000. The government used the excess Social Security taxes for the difference. Senator Mohnihan, whose name the President often invokes in discussing Social Security, called this, accurately in my view "thievery."

As for your view that those making more than the maximum threshhold shouldn't be expected to contribute any more because they're not going to get it back, had the excess payroll taxes not been collected, the government would certainly have not cut their incomes taxes as many times as they did, since the deficit and debts would have increased by that much more. So in a sense they are getting the benefit, and right now, instead of many years later.

In any event, did you notice the president said he would not agree to an incrase in the payroll tax rate? One would think this means he will incrase to raising the maximum amount subject to the tax (at the same rate). In 1970, the maximum tax was $327. By 2003, a married coulpe both earning the $87,0000 maximum subject to the total tax paid $21,576 (including the amount paid by the employer, which economist of all political stripes agree comes out of the employees' pockets).

The Democrats in Congress were largely responsible for this unconscionable tax on their core constituents.

[andyfox]

"From previous threads on this forum."

Mostly from me. /images/graemlins/grin.gif

[tolbiny]

This is the flaw with the plan- its still a pyramid scheme- we just found the bottom- and its me! My age group (25-35) will end up footing the bill and recieving no benefits- which if its the best way to do it, so be it. I can live with it. There are still going to be problems- what happens the next time a company pulls an enron? There are a lot of people who were forced into using enron stock as a major portion of their ret plans, and they were just [censored]. I am not saying that SS will save them- but its going to cushion the fall a little.
NOt that i think SS is a good idea, but it does have some merits... and i think there are going to be some unforseen consequences down the road. Can you imagine retireing a few months before the tech bubble burst, or before 911? This administrations' (and a whole lot of other people to) unwaivering faith in the strength of the stock market scares me. The natural cycles will be tough enough, major events that shake it will ruin people.

[lehighguy]

I trust in 30 year long run returns of a well diversified portfolio. I base this on mounds of data and theory. In fact, that data is so overwhelming I sometimes wonder how anyone can believe otherwise when it comes to the case of the long run (30+ years). For those retiring sooner there are much less volatile bond fund investments. Read the plan. I think opposistion to the plan based on the fact that it is "risky" is based on scare mongering rather then reason. I think Dems are trying to score cheap votes and they are cutting off workers from the greatest opportunity for wealth creation available in this country. In fact, that plan is much less risky then the current one because people will actually have assets to draw off of when they retire. The current plan has no assets, only current tax reciepts, which won't be enough to fund the program.

SS is a scam, and Dems are scare mongers protecting a program they know doesn't work so they can buy votes at the expense of our children. Its the only logical conclusion I can come to given the data.

[tolbiny]

Long term 30 year rates are good for most people- but still volitile in short term sections, the group as a whole will show good numbers, but there will be sections of people who would have lost big chunks of their retirement during recent crashes (crashes is to strong a word)- like the tech bubble and 9/11. Events like this will be magnified as it is likely that "if" SS becomes privitized the market will be overinflated for a period- as it tends to take a while to even out from large influxes like what is likely to happen. I am also concerned about the 35-40 year olds who will be recieveing few or no benefits in the lower class. There will be a group of them who won't be able to save enough even taking all of the money they get back from SS taxes they are not paying. However you feel about their own personal responsibility in the matter of retirement- having a large group of elderly unable to provide care for themselves will be detrimental to our society and economy.

I am not "against" the plan, i think that privitizing is the way to go, i am just leary of some who are promoting it as being almost flawless.

[lehighguy]

If you read the plan they have a variety of investment instruments to meet the needs of people of different ages.

People in thier 50's and 60's can invest in a bond fund, perhaps even the treasuries they are currently invested in. So thier return will not change AT ALL from the current plan.

People in their 40s can invest in a stock bond mix.
People in thier 30s and lower can choose mostly stocks.

There are also international stocks and a variety of other investments. All of them are large diversified index funds with low fees, not single stocks or sectors. That's to protect people from thier own stupidity.

You aren't forced into anything. If you want to keep your money in treasury bills you can. The plan doesn't force anyone to invest in the stock market if you think it is "risky". In fact, if we started private accounts and everyone invested in treasuries things would be exactly the same except the money would be safe and congress wouldn't be able to steal it because it was a private account instead of some wishy washy fund they can raid.

You have to read the plan. No some leftists column about it. Read it, analyze the facts, take a basic finance course, and then do an analysis.

[renodoc]

[ QUOTE ]
I think Dems are trying to score cheap votes and they are cutting off workers from the greatest opportunity for wealth creation available in this country

[/ QUOTE ]

The Dems are afraid that if the investor class in this country grows to encompass 70-80% of the population then these people will all become republicans.

The proposed changes are not a panacea, but they are a huge step in supporting the producers and denying the looters.

[CHiPS]

Wow wow wow ! Cmon all you poker guys there's a right way to analyze this - this is just like calculating house rakes, pot sizes pot equities all that good stuff !!! Lotsa good posts - many sides to this debate - I'm just jazzing you all - Here's the numbers. I am only talking about income tax - how other taxes trade off is another debate:

The top 1% of all income earners in the year 2,000 earned about 20% of all the income that was earned in the country. They payed about 37% of all the income tax in the country. Sorry I have not thought about this much since 2000 so thats the data I have. But you gotta look at both these numbers at the same time ! Only looking at one of these numbers is like one child saying My brother had two pieces of pie !!!! Well ? how many kids are in the family and how big is the pie ???

Yea I'm a one in 8 shot to hit trips on the flop but how big is my opponent's stack !!!!!!

The top 50% of income earners made 87% of all the income and payed 96% of all the income taxes in 2000. Fair? - ahhh beyond me...seems like it to me, but you decide /images/graemlins/smile.gif

Knowing one of these numbers but not the other could make you either a raving liberal or staunch conservative. Since theres so much damn distortion of tax numbers in politics on both sides, no one looks at the numbers in the simple way that makes sense to answer that age old question: Do the Rich pay their "Fair Share" in taxes ?

Ah now the fun begins as to what "Fair Share" means and now we will hear - this tax is a higher % and thats a lower and that ones not counted in this column and this ones payed in Hillary dollars and this ones a double tax and this one's this and that...and life is not fair.....

How about in 1990 - top 1% of income earners made only 14% of all the income - compared to 20% in 2000 - but lets stop right there.....

Liberals used to always harp that the Rich get richer under Republican presidents (mainly Reagan) - hmmmm but under Clinton the rich grabbed a larger portion of the incomes. So its not the Party of the President it just how things tend to go during very strong economies in the US. Funny how this argument against Republican administrations so popular in the 80's has kinda fadded away - I guess that figure of merit is not so critical now as it was back then...the rich getting richer....ahh I remember all the demogogues talking about Reagan being at fault for this......

Good discussion - realize I'm having fun and not trying to insult anyone. What about all that untaxed poker income from the Internet ?????? Shhhhhhhhh.........