Unequal Distribution
A post about taxation makes the observation:
First, it’s simply undeniable that the federal income tax is incredibly skewed. It’s not what it was before the Kennedy and Reagan tax cuts, by any stretch, but it’s hard to argue that those who earn 21.2% of the nation’s income should pay 39.4% of all federal income taxes when taken in isolation.
Turns out that if you don’t include social security which one really shouldn’t federal income tax distribution looks like this:
Paul Caron cites a Tax Foundation study that finds “the top 1% of tax returns paid about the same amount of federal individual income taxes as the bottom 95% of tax returns.” Glenn Reynolds, reasonably enough, thinks “that degree of progressivity is actually bad.”
That inequitable distribution in tax is just obscene.
October 10th, 2007 at 12:16 pm
I am not clear as to what part of this should be persuasive to someone who does not already agree with your position.
October 10th, 2007 at 1:57 pm
I could see making the extreme disparity so apparent that some that are kind of the middle about redistribution through taxiation being pushed towars a more conservative side.
Its why the press covers reports and studies about the rich getting richer and not more reports on the affect of such large tax dsicrepancies on the econcomy.
October 10th, 2007 at 5:29 pm
Why shouldn’t social security taxes, medicare taxes, state and local taxes, sales taxes, and all other taxes be included in this calculation? I mean, some reason other than that they hurt your argument.
October 10th, 2007 at 6:30 pm
The article seems to suggest that these “dsicrepancies” are quite low by historical U.S. standards. They are also low by comparison to many other developed nations. So what baseline of comparison are you using here to make your determination that they are excessive?
October 11th, 2007 at 1:50 am
Darwin
As the article explain social security can’t count because social security is to force people to set aside money for retirement. In this sense its not a tax.
Who knows why the poster chose not to calcuate state tax although I would be surprised to see sales tax not be skewed towards the rich.
Dan
Point to the passage you speak of.
October 11th, 2007 at 2:07 am
“It’s not what it was before the Kennedy and Reagan tax cuts, by any stretch…”
October 11th, 2007 at 8:31 am
Given the posters disposition I suspect he would say currently the tax rates are to high but that during those administrations they were even higher. You read way to much out of a throw away statement. That being said how can you have higher taxes on the rich? They were already paying 95% of the governments revenue.
My baseline is the basic sense of fairness. When 1% of a group is carrying 95% of a burden that simply not fair. Regardless if at some earlier point that same group had to carry 99% of the burden. Both instance are absurdly unfair to the individual that fall into the 1% group.
October 13th, 2007 at 12:00 am
“They were already paying 95% of the governments revenue. ”
THis is exactly my point - no, they weren’t. They were paying 95% of some very narrow aspect of a specially defined prtion of the governments revenue. If I knew what percentage of the government’s actual revenue they paid for, I might be able to make some kind of judgement.
October 15th, 2007 at 10:14 am
How is this hard?
October 15th, 2007 at 8:58 pm
federal income tax ~= the government’s entire revenue
I’m sure you understand what I’m saying, why aren’t you addressing my point?
October 19th, 2007 at 9:46 am
To be honest, I have no idea what you are talking about.
October 19th, 2007 at 1:28 pm
The federal government also obtains income from tariffs, CGT, death taxes, ect. It also borrows lots of money, although I wouldn’t quite call that ‘income’, and the public will have to pay more and more interest on it. I’m not quite sure why that should change the discussion. I admit to not having looked up the statistics, but I have a hunch that the wealthy pay more of those as well (for example, the estate tax has an exemption for small estates).
Anyway, the federal government needs lots of money for blowing up foreign countries and helping those parasitic sick children who really aren’t valuable enough to society to warrant treatment. As long as this remains the case, it’s going to have to tax people, and I suspect the government isn’t that aggressive about taxing the poor because it isn’t very cost-effective. How much tax could you squeeze out of a hobo, compared to the administrative and enforcement costs of hunting him down and making sure he is coughing up a share of the $147/year he makes from begging? The only alternative I see would be funding such programs exclusively through debt, which doesn’t strike me as sound fiscal policy.
March 10th, 2008 at 9:34 pm
The riches man in the world paid 15% rate on his earnings. His secretary paid only 30% on her earnings? Warren expressed that he thought that this was wrong…A lady friend of mine called him stupid and a jerk.