We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Our Recent Essays Behind the Front Page
Thursday, April 21. 2011
Is there a pill for people who pay too much attention?
A little fun history: Harding and Coolidge
Exciting vid: Troops Under Intense Enemy Fire Attempt To Direct A-10 Pilot (h/t Neptunus)
If rich aren't paying their "fair share," then what's fair?
All of their money?
Dems ran on a platform of saying they wanted higher gas prices
Why it seems that severe weather is “getting worse” when the data shows otherwise – a historical perspective
China Urges US to Protect Creditors After S&P Warning
Let's face it: they own us
Malanga: California Dreamin' About Texas Jobs
Democrats and Republicans increasingly divided over global warming
We hope for global warming, but fear the next ice age
Top GOP Contenders Have PotentialWeak Spots
Everybody has weak spots
Gov. Otter Signs Order Banning Health Care Reform
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I'll say this about the "rich" not paying their "fair share". I'm of 2 minds.
1. IF so many wealthy like Gates, Buffett, and Zuckerberg want to say it's OK for them to be taxed - then why don't they donate what they think is fair? Seems to me that this is a better solution than being a standard citizen (as I see it) and taking advantage of every single available tax break. Which they all do! Then they have the gall to say they aren't taxed enough? Give me a break.
2. The rich really don't pay enough because the tax code is a mess. Why is it a mess? Because the politicians (Rep and Dem alike) have opened up so many loopholes and hiding places that it's easy for the wealthy to avoid paying much of anything. My feeling is simplify the code and make it transparent. A flat tax with only limited write offs (up to $500,000 in home mortgage, for example) would be optimal. But having 2 rate levels wouldn't be bad, either, with a boost at the $250,000 level (which for a family of 4 is more than enough to live in an expensive region like NYC).
I don't agree that they aren't "paying their fair share" because WE ALL try to reduce our taxes. So few of us truly are "paying our fair share". But that means you have to define fair.
"California Dreamin' About Texas Jobs"
I found some of the quotes in the above article quite revealing:
The lecturing from Texas leaders about how California wouldn't be in such a budget mess if its politicians did business the way it is done in Austin has been relentless for years.
Texas Gov. Rick Perry delights in telling tales of his California "hunting trips" — hunting for businesses ready to flee the Golden State.
But the latest budget projections out of Texas have sharply changed the discussion: The Lone Star State is facing a budget gap of about $27 billion, putting it in the same league as California among states facing financial meltdowns. The gap amounts to roughly one-third of the state's budget.
In a place where government is already lean, there aren't many areas to make up that kind of cash. The budget blueprint Texas' Legislature is mulling would mean layoffs for tens of thousands of teachers, closure of community colleges, and a severe reduction in state services for the poor and those with mental health problems.
Texas has a two-year budget cycle, which allowed it to camouflage its red ink last year, thanks in large part to billions of dollars in federal stimulus money. Now, however, "someone just turned the lights on in the bar, and the sexiest state doesn't look so pretty anymore," said California Treasurer Bill Lockyer, with evident satisfaction.
Whoops, sorry, wrong article. That was from this.
BTW, there was an amusing footnote to the Dems/Repubs AGW article. As I was reading it, I was wondering about the writer's credentials. Was he a Professor of Climatology? An Associate Professor of Advanced Metorlogical Studies? Perhaps part of special think tank composed of the college's best and brightest minds on the subject of AGW and how to curb it?
Then I went to the actual article:
Aaron M. McCright, associate professor of sociology
Well, that answered that.
Well, Rick, if you had read the article at the link and looked at the graphs, maybe you wouldn't still be of two minds after you learned that the top 1% of tax filers pay nearly 40% of all the personal Federal income taxes in this country. So here is another number for you to digest, one that never gets mentioned: that top 1% of wealthy people represents fewer than 3 million people out of the entire 300 million of us who live here. There are, in fact, around 138 million personal federal income tax returns filed each year, so the top 1% of those is just 1.4 million returns. Read that again: 1.4 million out of 138 million returns account for 40% of ALL the income taxes collected. We have reached the point where the vast majority of Americans are disengaged from the cost of running their nation; they have been beggared by the politicians and their own greed. That so many now rely on so few to pay for the government---and yet are so UNGRATEFUL for what they receive---is shameful.
Rick, take a look at the chart in this WSJ article which shows the problem a little more clearly. There isn't enough taxable income above $500K to even cover today's deficit, much less the higher deficits going forward due to increased entitlement payouts as the Boomers retire. Even with bad feelings toward the rich, the math doesn't work. Sorry.
Um, I did read the article. And my point wasn't that they don't pay a considerable amount - but in reality they don't pay anywhere near their fair share.
You have fallen for an interesting statistical trick that has no bearing on reality. 1% of the filers also happen to pay roughly the same percentage in taxes that they earn as a proportion of the population. This would indicate a level of "fairness". But in fact it does not.
Because for me to pay an amount that is "fair" on my income (let's call it $100,000 a year with a family of 4) has a far greater impact on my ability to live than it does for a fellow earning $500,000 and a family of 4.
The inherent "fairness" isn't based on pure percentages of taxes paid versus incomes earned. This is certainly a factor, but not the ONLY factor. One also has to factor in the understanding that, below a certain level (Obama says $250,000 - which I disagree with as too low), your income ceases to be a tangible indicator of your ability to actually earn and live.
As an example, I do a job in the NYC area which pays an amount (again, let's call it $100,000). Someone else doing the same job at another firm earns $300,000. This is an absolute truth - I can show you in my industry where it occurs. In fact, it happens alot at higer levels of management (take a look at CEO pay variations someday...it's all about negotiation).
Now, you may say that this is an indication that I took the wrong job at the wrong company. Or didn't negotiate well. or something of that nature - it is somehow my fault. I can tell you that you are 100% wrong. It is just a fact of life that some companies pay more while others pay less and trying to move into those better paying jobs is often a matter of luck, pluck, or having pictures of somebody doing things with small animals.
Either way, the income isn't always perfectly "fair", so the taxes cannot always (nor should they be) perfectly "fair". But they should be "fair enough". For doing the same job as I do but earning so much more, he should get dinged significantly. He is no better, he does nothing different. He's just lucky.
To that end, I agree with men like Buffett and Gates. But that's as far as I go with my agreement. I don't believe that you push the limits the way they do. If they were truly patriotic, they'd pay what they feel is right, instead of hiding and shifting their income like the rest of us do.
But the taxes on the high earners DO have to be raised. Their tax rates have fallen faster over the last 10 years (thanks to loopholes) than lower earners. Mainly because we don't have as many loopholes to utilize.
But I commend the author for his statistical trick of using the number of people filing (1%) versus the tax money they paid out (40%). The apples and oranges comparison is always something people who are uninformed fall for.
I've read, and agree, with that article. But your response assumes something about what I said. That assumption is that I believe somehow taxes will solve the deficit.
I never said that. Nor do I believe it. And it's funny how, when people like myself make a valid point, there is always someone else out there willing to make an invalid assumption such as yours, or use invalid statistics, to somehow prove someone wrong.
I firmly believe that the deficit can ONLY be solved with substantial cuts in Medicare and other entitlements. Removing agricultural and other subsidies (ethanol, oil, railroads, etc.) are going to be the ONLY way to make substantial cuts.
But there is no question - none whatsoever - that the very wealthy have a very good situation here in the US. Far too good. I don't think it's a heinous thing to ask them to close a few loopholes and raise the rate they pay by a few percentage points.
Will it eliminate the entire deficit? No. But it will do more than our glorious and courageous congressmen did last week in cutting $38bb (whoops...I mean $980million) from the budget.
See, accounting tricks are all these nitwits know. Accounting tricks and statical ploys to keep people off their tails.
They tell you they cut the deficit by $30bb by reducing the rate of increase of a program. In reality they cut nothing. The program is still growing....and adding to the deficit. They didn't cut the deficit at all. They cut the rate of increase in the deficit, sure.......but they get to claim something they didn't do.
I don't understand why people are sticking up for the very wealthy in the US. It's not that I hate them or want to "stick it to them" or engage in class warfare. I believe they are welcome to earn as much as they do and I hope I get to some day, too.
But once you hit a certain level of income, you have to say "thank you" to the country that allows you to do it. How you say "thank you" is up to you, but part of that is paying taxes. Sadly, right now, many of the very wealthy simply don't.
Not that I blame them. If I could take advantage of the loopholes they do - I would too! That's the American way. I applaud them for doing what they do.
But I also think they are terribly hypocritical in doing that and then calling for a tax increase on themselves. Do they need one? Yes. But my point of view is this - simply don't take advantage of the loopholes if that's what you believe. Instead, sit down, shut up, and enjoy the cash you saved yourself.
I don't complain about my tax rate at all. I wish it was lower, but I'm not going to rail against paying taxes. They are the price of liberty.
And, remember - one man's definition of what is "fair" is always going to vary to the next man's. In my opinion, were I to earn $1,000,000 in a year, I'd have no problem paying a 39% rate. I think I can survive quite nicely on $500,000 a year take home (after state and property taxes are laid in over Federal) anywhere in the US.
As a matter of clarity, 1% of the earners (to be fair) should only pay 1% of the tax revenue, if we're using the number of payers as the basis of judgement.
On the other hand, if they pay 40% of the taxes, they should earn about 40% of the wealth - which they come very close to doing by most measures (not just income - wealth. It's a different gauge because wealth is generated via many methods above and beyond income, and while income is what is taxed, wealth is what they measure their progress by).
Consider that the top 1% of all US wealthy own 47% of the capital stock in the US.
There was a time when Cornelius Vanderbilt didn't pay a penny in income tax. Why? Because dividends did not get taxed. So he diverted his pay, had no income, and lived off his dividends in order to avoid taxes (the man was a genius).
It was fair - he did what all Americans do in the sense that he avoided paying his taxes, which I try to do too - but it was unfair because he was by far the wealthiest man in the US and his taxes would have provided for alot of things.
NOW ON THE OTHER HAND (and this is my full POV), Vanderbilt also did many things for this nation free of charge. He handed over his ships to the government for the Civil War effort. He saved the US government money by acting as a broker for ships free of charge. He provided advice to the government to enhance competition. He carried the mail at cost. So he did alot to offset what he hid.
What that says to me is the man was a very deep patriot who knew that he could avoid taxes, but not avoid his duty, and made his payments elsewhere.
It is my view that taxes are ALWAYS AND EVERYWHERE ill spent. However, to that end, it just means that most of our debt was spent on useless garbage (which is true). That doesn't mean we can avoid paying it....
So how do we pay for it?
1. Cut our spending dramatically. Draconian measures are needed.
2. Taxes on the very wealthy ($500k plus) must be raised and loopholes closed.
3. Spending freezes put in place to keep the nation from moving to deficit too quickly after we "fix" things.
4. tie all future tax increases to spending - and have the spending voted on and approved by taxpayers, NOT representatives who are lobbied, and paid for by corporations which seek to divert funds.
In the meantime, we all have a duty. Our duty is to stop asking the government to coddle us, pay for us, bail us out and cover our risks. And the duty of some others, particularly those who gained wealth from bailouts, subsidies and various other government schema, to PAY MORE TAXES.
I'm sorry - but Buffett earned quite a bit from Goldman Sachs, and Goldman Sachs benefits greatly from government largesse.
Time to pay, boys.