How to Tax Our Way Back to Justice

[ZiprHead]

Because it is paid by the landlord, not the renter. Thus it artificially inflates the tax burden to get the number the author wants to get.


When I buy a car, should I be listed as having paid some commercial property taxes rather than the owner of the dealership? What if I buy groceries at Publix? How is that different than buying a service like housing?

Nor is it wrong to say that the employer remittances of FICA are paid by the employee. Because it is more than fair to say that employee wages could and would be increased the same amount had the tax not been removed from the firms profits in the first place.

Could and would is not the same as is.
But IF you think employer portion of payroll tax should count toward the employee tax burden, then the income should also be adjusted by that amount, right? I somehow doubt the author did that, because, again, he has an agenda.

Many states offer a homestead property tax credit for renters.

https://www.google.com/search?sxsrf=ACYBGNT7WkC7seimrtjq1LtSzGh8DvVyAA%3A1571531349164&ei=VaqrXeqoCbyw0PEP__SHwAw&q=renters+property+tax+refund+calculator&oq=renters+property+tax+refund+calculator&gs_l=psy-ab.3..35i39l2j0i22i30.21530.23291..24548...0.2..0.137.1063.0j9......0....1..gws-wiz.......0i71.W7umCaW8HBc&ved=0ahUKEwiqp8e-yqnlAhU8GDQIHX_6AcgQ4dUDCAs&uact=5

 

[Bomb#20]

Let's not forget progressive vs. regressive taxes.

The Federal Income tax is progressive--the more you earn, the higher the rate you pay. Meanwhile, payroll taxes are regressive. The more you earn, the lower the rate you pay. Sales taxes are also regressive, since lower-income citizens spend a higher percentage of their incomes on purchases that are taxed at the register than higher-income citizens.

In a perfect world, progressive and regressive taxes should be balanced, with everyone paying their share. But in this world, the wealthy use their money to influence lawmakers to lower the progressive taxes while leaving regressive taxes largely alone.

So in 2018, rich Americans pay a combined effective tax rate of 23 percent, while poor Americans pay about 25 percent. Republicans keep telling me that this is perfectly fair and reasonable.

The Rich Really Do Pay Lower Taxes Than You

Calculations like that are typically based on two almost ubiquitous misrepresentations.

First, the tax rate on the super-rich is calculated based on the nominal capital gains rate because so much of the average super-rich person's income is capital gains; but the IRS determines the actual tax by multiplying the nominal capital gains rate by the nominal capital gain -- and the IRS systematically misrepresents how much capital gain people have, by measuring the purchase price and the sales price of a sold asset in different units. The federal government prints dollars faster than the economy grows, devaluing the dollar, and then pretends that an item bought in 1990 for $1000 and sold in 2019 for $2000 has yielded $1000 of income even though the owner has gained precisely nothing. Governments tax capital holders on fictitious income. The actual capital gains rate -- the ratio of the tax paid to the actual capital gain -- varies all over the place for different assets and different years, but on average it's closer to the top marginal rate for ordinary income than it is to the nominal capital gains rate.

And second, the regressivity of the payroll tax is massively overstated. The average wage-earner gets the bulk of his payroll taxes back with interest after he retires. I've seen Social Security estimated to be 85% an annuity program and only 15% a taxpayer-supported welfare program. That means Social Security tax's actual regressivity is only 15% of its nominal level. And the Medicare tax is explicitly progressive.

Of course I haven't read Saez and Zucman's book -- I doubt anyone else here has either since it only just came out -- but based on those 25% vs. 23% numbers you cite, they're almost certainly making those misrepresentations.

 

[Bomb#20]

Notice life cost quality and minimum margin go up within come, However when one gets to about 50M income where great life is about 15-20M and margin goes to about 15M as well taxes goto about 20M or 40% of income. beyond this level tax rates increase rapidly as much wealth is gained each year to bring some of that , let's call it excess income gets returned to pay for what they explointed to from society to get that income.

We can argue that exploit isn't the right word. OK let me call it social penalty for excess income due to problems with tax and regulation failures. social system that permit gains from a society that are tens or hundreds of times what the average citizen realizes need to be corrected.

Why do you call the income "excess"?

The way a guy gets a 50M income is by doing something for other people that causes the other people to choose to give him 50M, instead of choosing to walk away, keep their 50M, and do without whatever it is he does for them. So the "whatever he does for them" is evidently worth more than 50M to other people. Society is getting, say, 60M worth of something from him, and paying him only 50M for it. So yeah, "exploit" is the right word -- society is exploiting him for a 10M benefit to itself. Why should there be a "social penalty" for making society 10M better off? Is making society 10M better off an outrageous wrongdoing? Why is permitting people to charge 50M for doing a 60M service to society something that "needs to be corrected"?

 

[DBT]

It's not good for society or the world at large if wealth tends to accumulate in the hands of a small percentage of the population.

Half of world's wealth now in hands of 1% of population

''Inequality growing globally and in the UK, which has third most ‘ultra-high net worth individuals’, household wealth study finds.''

''Global inequality is growing, with half the world’s wealth now in the hands of just 1% of the population''

''The middle classes have been squeezed at the expense of the very rich, according to research by Credit Suisse, which also finds that for the first time, there are more individuals in the middle classes in China – 109m – than the 92m in the US.

Tidjane Thiam, the chief executive of Credit Suisse, said: “Middle class wealth has grown at a slower pace than wealth at the top end. This has reversed the pre-crisis trend which saw the share of middle-class wealth remaining fairly stable over time.”

 

[Loren Pechtel]

It's not good for society or the world at large if wealth tends to accumulate in the hands of a small percentage of the population.

Half of world's wealth now in hands of 1% of population

''Inequality growing globally and in the UK, which has third most ‘ultra-high net worth individuals’, household wealth study finds.''

''Global inequality is growing, with half the world’s wealth now in the hands of just 1% of the population''

''The middle classes have been squeezed at the expense of the very rich, according to research by Credit Suisse, which also finds that for the first time, there are more individuals in the middle classes in China – 109m – than the 92m in the US.

Tidjane Thiam, the chief executive of Credit Suisse, said: “Middle class wealth has grown at a slower pace than wealth at the top end. This has reversed the pre-crisis trend which saw the share of middle-class wealth remaining fairly stable over time.”

Wealth collects with those who come up with major innovations. Over time it dissipates.

 

[DBT]

It's not good for society or the world at large if wealth tends to accumulate in the hands of a small percentage of the population.

Half of world's wealth now in hands of 1% of population

''Inequality growing globally and in the UK, which has third most ‘ultra-high net worth individuals’, household wealth study finds.''

''Global inequality is growing, with half the world’s wealth now in the hands of just 1% of the population''

''The middle classes have been squeezed at the expense of the very rich, according to research by Credit Suisse, which also finds that for the first time, there are more individuals in the middle classes in China – 109m – than the 92m in the US.

Tidjane Thiam, the chief executive of Credit Suisse, said: “Middle class wealth has grown at a slower pace than wealth at the top end. This has reversed the pre-crisis trend which saw the share of middle-class wealth remaining fairly stable over time.”

Wealth collects with those who come up with major innovations. Over time it dissipates.

There's more to it than that. Given our current situation, wealth continues to be accumulating into the hands of the few. If someones wealth dissipates here or there in isolated instances for whatever reason, it hardly effects or alters the overall situation of wealth accumulation.

 

[T.G.G. Moogly]

Wealth accumulation really isn't the issue. The issue is funding government and who pays for that. Even if taxes are lowered simply by issuing IOUs, that has not reduced the need to fund government and infrastructure. In the U.S. we've simply issued IOUs and said we've reduced taxes. We have not reduced taxes despite the fact that many people believe we have. These birds will come home to roost.

Wealth carries responsibility, the responsibility to fund government and infrastructure, to literally maintain the economic web which supports and is the source of that wealth. That is not happening.

 

[PyramidHead]

Wealth accumulation really isn't the issue. The issue is funding government and who pays for that. Even if taxes are lowered simply by issuing IOUs, that has not reduced the need to fund government and infrastructure. In the U.S. we've simply issued IOUs and said we've reduced taxes. We have not reduced taxes despite the fact that many people believe we have. These birds will come home to roost.

Wealth carries responsibility, the responsibility to fund government and infrastructure, to literally maintain the economic web which supports and is the source of that wealth. That is not happening.

Wealth accumulation absolutely is the major issue, as the reason we don't have policies that benefit the majority of people is because political power is governed by wealth in capitalist societies.

 

[T.G.G. Moogly]

Wealth accumulation really isn't the issue. The issue is funding government and who pays for that. Even if taxes are lowered simply by issuing IOUs, that has not reduced the need to fund government and infrastructure. In the U.S. we've simply issued IOUs and said we've reduced taxes. We have not reduced taxes despite the fact that many people believe we have. These birds will come home to roost.

Wealth carries responsibility, the responsibility to fund government and infrastructure, to literally maintain the economic web which supports and is the source of that wealth. That is not happening.

Wealth accumulation absolutely is the major issue, as the reason we don't have policies that benefit the majority of people is because political power is governed by wealth in capitalist societies.

No it is not, it is only related. If I possess, own, and control 90% of the wealth within an economic community I am obligated to pay 90% of the costs of that community's government and infrastructure. It's not rocket science.

 

[Worldtraveller]

Wealth collects with those who come up with major innovations. Over time it dissipates.

You keep making the bold, and demonstrably false, statements. Do you use a random word generator?

Wealth isn't dissipating, it's accumulating at the top. Haven't you been paying attention. It happened before, and it continues to happen in lots of places. There are only a few places where it doesn't seem to be as bad, and those tend to be areas where the tax system is designed to be progressive and the taxes are usde to fund a healthy social safety net.

 

[PyramidHead]

Wealth accumulation really isn't the issue. The issue is funding government and who pays for that. Even if taxes are lowered simply by issuing IOUs, that has not reduced the need to fund government and infrastructure. In the U.S. we've simply issued IOUs and said we've reduced taxes. We have not reduced taxes despite the fact that many people believe we have. These birds will come home to roost.

Wealth carries responsibility, the responsibility to fund government and infrastructure, to literally maintain the economic web which supports and is the source of that wealth. That is not happening.

Wealth accumulation absolutely is the major issue, as the reason we don't have policies that benefit the majority of people is because political power is governed by wealth in capitalist societies.

No it is not, it is only related. If I possess, own, and control 90% of the wealth within an economic community I am obligated to pay 90% of the costs of that community's government and infrastructure. It's not rocket science.

That's all very well and good, but if you own and control 90% of the wealth, you can easily rig the system so you never have to pay that much of the taxes, which is exactly what has happened. Then it wouldn't have to be this Sisyphean effort just to get the smallest concession from these people. Better to just not let it get to that ridiculous level in the first place.

 

[T.G.G. Moogly]

Wealth collects with those who come up with major innovations. Over time it dissipates.

You keep making the bold, and demonstrably false, statements. Do you use a random word generator?

Wealth isn't dissipating, it's accumulating at the top. Haven't you been paying attention. It happened before, and it continues to happen in lots of places. There are only a few places where it doesn't seem to be as bad, and those tend to be areas where the tax system is designed to be progressive and the taxes are usde to fund a healthy social safety net.

Loren's position is quite common. It has been enabled by liberal/democratic successes. Let's not forget that lots of historically liberal legislation has been enacted by republicans, though primarily democrats. This has enabled people to purse other issues, not worrying about dying in gutters or not having health care or food. Once basic needs are met or even improved, people are free to vote against liberal policy literally because they now have it in their pocket. The reasons they act this way aren't important.

 

[Bomb#20]

''The middle classes have been squeezed ... Middle class wealth has grown...”

Those sentences really don't go together.

 

[T.G.G. Moogly]

No it is not, it is only related. If I possess, own, and control 90% of the wealth within an economic community I am obligated to pay 90% of the costs of that community's government and infrastructure. It's not rocket science.

That's all very well and good, but if you own and control 90% of the wealth, you can easily rig the system so you never have to pay that much of the taxes, which is exactly what has happened. Then it wouldn't have to be this Sisyphean effort just to get the smallest concession from these people. Better to just not let it get to that ridiculous level in the first place.

Yes, that is the case.

It's a really interesting dynamic because even Joe Blow sees his possessions and wealth as something he wants to protect. He naturally wants to keep as much of his money he can from his income and possessions like most anyone else. When forced to relinquish some of that wealth more often than not he chooses to pass it up the wealth chain and not across or down. This is because he sees "the poor" negatively and doesn't want to spend his wealth on something he has negative feelings about. He also doesn't want to be the next "poor" person. His vision is very shortsighted.

The solution obviously is to redistribute wealth as equitably and fairly as possible, then Joe Blow will sign on because he isn't afraid of being poor anymore, and neither are the wealthy or anyone wishing to protect their economic standing. Taxation should not be about lowering a person's social or economic standing, and if done properly it does not. But right now Joe Blow is happy enough reaping decades of liberal legislation so he's not threatened economically or socially, certainly not enough to give a shit.

The present right-wing sentiment in the U.S. is the result of decades of successful and worthwhile liberal legislation. It has created lots of Joe Blows.

 

[Loren Pechtel]

It's not good for society or the world at large if wealth tends to accumulate in the hands of a small percentage of the population.

Half of world's wealth now in hands of 1% of population

''Inequality growing globally and in the UK, which has third most ‘ultra-high net worth individuals’, household wealth study finds.''

''Global inequality is growing, with half the world’s wealth now in the hands of just 1% of the population''

''The middle classes have been squeezed at the expense of the very rich, according to research by Credit Suisse, which also finds that for the first time, there are more individuals in the middle classes in China – 109m – than the 92m in the US.

Tidjane Thiam, the chief executive of Credit Suisse, said: “Middle class wealth has grown at a slower pace than wealth at the top end. This has reversed the pre-crisis trend which saw the share of middle-class wealth remaining fairly stable over time.”

Wealth collects with those who come up with major innovations. Over time it dissipates.

There's more to it than that. Given our current situation, wealth continues to be accumulating into the hands of the few. If someones wealth dissipates here or there in isolated instances for whatever reason, it hardly effects or alters the overall situation of wealth accumulation.

It's not that it occasionally dissipates, it always dissipates. A few generations and it's gone.

 

[ZiprHead]

There's more to it than that. Given our current situation, wealth continues to be accumulating into the hands of the few. If someones wealth dissipates here or there in isolated instances for whatever reason, it hardly effects or alters the overall situation of wealth accumulation.

It's not that it occasionally dissipates, it always dissipates. A few generations and it's gone.

Are you saying trickle down works cuz that's what it sounds like.

 

[Loren Pechtel]

There's more to it than that. Given our current situation, wealth continues to be accumulating into the hands of the few. If someones wealth dissipates here or there in isolated instances for whatever reason, it hardly effects or alters the overall situation of wealth accumulation.

It's not that it occasionally dissipates, it always dissipates. A few generations and it's gone.

Are you saying trickle down works cuz that's what it sounds like.

This has nothing to do with trickle-down. Most people have more than one offspring, those offspring marry, the couples spend the money. Even at the standard 2.1 kids per family each generation is 4x the size of the previous one, even with nothing else going on the money is diluted 4x by this. There's also the issue that most of these people are better at living on the money than growing it.

 

[DBT]

''The middle classes have been squeezed ... Middle class wealth has grown...”

Those sentences really don't go together.

You cut the rest of the sentence; “Middle class wealth has grown at a slower pace than wealth at the top end.'' - which of course means that the ratio is widening.

Not only that, in some cases middle class incomes have not kept up with costs;


''Let’s just discuss the issues of wages: they are not keeping up with inflation. Consider the data below. While the GDP has risen (after inflation), real incomes have barely budged.''

Wage growth of the top 1%

The ability of those at the very top to claim an ever-larger share of overall wages is evident in this figure. Two things stand out. First is the extraordinarily rapid growth of annual wages for the top 1 percent compared with everybody else: Top 1 percent wages grew 138 percent, while wages of the bottom 90 percent grew just 15 percent. If the wages of the bottom 90 percent had grown at the average pace over this period—meaning that wages grew equally across-the-board—then the bottom 90 percent’s wages would have grown by 32 percent, more than double the actual growth.

 

[Bomb#20]

''The middle classes have been squeezed ... Middle class wealth has grown...”

Those sentences really don't go together.

You cut the rest of the sentence;

When two claims contradict each other, adding more claims doesn't make the contradiction go away.

“Middle class wealth has grown at a slower pace than wealth at the top end.'' - which of course means that the ratio is widening.

Yeah, I got that. You and the Guardian are judging the middle class to have been "squeezed" based on the ratio, not based on the wealth. Which is to say, the financial pressure experienced by your ingroup is in point of fact decreasing, but you judge it to be increasing, merely on account of somebody else's prosperity improving faster than your ingroup's prosperity is improving. God forbid that the people in the world whose lives are getting better fastest be anyone but your ingroup.

Not only that, in some cases middle class incomes have not kept up with costs;

''Let’s just discuss the issues of wages: they are not keeping up with inflation. Consider the data below. While the GDP has risen (after inflation), real incomes have barely budged.''

Wage growth of the top 1%

The ability of those at the very top to claim an ever-larger share of overall wages is evident in this figure. Two things stand out. First is the extraordinarily rapid growth of annual wages for the top 1 percent compared with everybody else: Top 1 percent wages grew 138 percent, while wages of the bottom 90 percent grew just 15 percent. If the wages of the bottom 90 percent had grown at the average pace over this period—meaning that wages grew equally across-the-board—then the bottom 90 percent’s wages would have grown by 32 percent, more than double the actual growth.

"The data below" doesn't support your claim that middle class incomes have not kept up with costs and that wages are not keeping up with inflation. It says it right there on the chart: "Hourly compensation: Up 9.2%". I get that you want it to be up more than 9.2%, but what you want it to be has no bearing on whether 9.2 is a positive number or a negative number. (I had to follow the links-within-links to verify what it is the chart shows: "wages and benefits, adjusted for inflation".) Wages are rising faster than inflation. Just not as much faster as you wish they would.

 

[DBT]

You cut the rest of the sentence;

When two claims contradict each other, adding more claims doesn't make the contradiction go away.

There is no contradiction. Middle class incomes have risen but not kept up with inflation;


''In fact, if we look at U.S. wages over the longer term, wages after inflation have barely budged over the last 44 years.

It’s frightening to consider, but my parents, who were a young couple in the 1960s, could buy a house for less than 25% of their take-home pay. They owned two cars and put my brother and me through college on a middle-income salary. (My father was a scientist with a mid-level job.) That dream is elusive today.

As Heather Boushey, an economist with The Washington Center for Equitable Growth puts it,

The economy is growing. Why aren’t people feeling it?” Boushey says. “The answer is: Because they literally aren’t feeling it.

And it seems to be getting worse. Despite an increase in wages most recently (2.9% as of August of 2018), income inequality has increased, leading even more to feel they aren't keeping up.''


Point 2: Workers Are Struggling

The second piece of evidence I want to point out is the level of financial stress we see among workers. Look at some of these statistics:

40% of Americans had trouble paying for food, medical care, housing, or utilities in the last year.

Nearly half of Americans have no retirement savings, creating increases in stress-related illnesses and heart disease

63% of Americans do not have $500 of cash on hand to handle emergencies or other significant expenses

70% of college grads have $15,000 or more of loans outstanding in their first year of work

4 in 10 Americans now have a “sides hustle” to make more money to help make ends meet[9]

Employers like Wal-Mart, McDonald’s, Ubers, and Outback Steakhouse are now building programs to pay people every day, so they can better manage their cash.''