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A chart that compares, among other things, gross incomes, taxes paid, and effective tax rates. If taxes on the top 1% were raised 5% (from 38% to 43%), the additional tax revenue would amount to 2% of taxes collected ($20 billion of $1 trillion).
Yeah, that's why we've gotta raise taxes on way more people than just the top 1%. That's one reason Obama's proposals have focused on those making $250K and up. Also, we don't have to impose a flat 5% increase on the top 1%; we could shave off the top .05 or .03 or even .01% and increase rates much higher than 5%. They wouldn't hurt a bit.
Doesn't matter. Diminishing returns are more than no returns. They're getting off far too easily, especially given the exponential increase in earnings they've enjoyed over the past four decades. Tax 'em high!
That's only one piece of the economic puzzle, it's true, but with their earnings soaring beyond all historical precedent, they can afford get back to the pre-1970s marginal top rates, if not more, as opposed to today's top marginal rate of 35%ish. It's not enough to balance the budget on its own - we need to make changes in capital gains and corporate taxation (or lack thereof) too - but as a matter of principle, they jolly well ought to be paying their fair share, having benefited out of all proportion to anyone else.
It seemed as if, for Wayne's philosophy to work, he needed to believe that those who don't make it deserve their ill fortune.
By George, the boy's got it!
Happiness is having 20 percent more than you imagine needing.
Wisest thing in the piece. Wish it were so easy to do.
Hell, I would barely blink if the taxes on the rich were raised to 75%, but the hard numbers from the IRS don't lie. The gross increase in revenue would be nowhere near what many believe. Also, if we did, what would we do thereafter?
I find it ironic that the second largest group (behind execs) getting hit with the .9% healthcare tax is doctors. Lawyers barely make the list at fourth rather than grouped with "Others".
The multimillionaire (50+ million in a good year, 10 million in a bad -- the admittedly charming one with the private plane) pays 11% federal income tax. 11%!?! Even he laughs and says that's a problem. Like he says, if the middle class does better, business does better. People can't buy your goods and services if they don't have money.
And as the article says, for the wealthiest Americans, much of their income is from capital gains (stocks, etc.), which was lowered to a flat 15% tax rate under Bush and remains there. That's a lower rate than most middle class folks, including me, a lowly teacher, pays, and that's not fair, in my, or Warren Buffet's, book. Raising the Capital Gains tax would raise a lot of needed revenue for schools, health care, social security and Medicare solvency, and infrastructure.
Dare I say an imbedded national sales tax (worked into the production/importation costs so people don't squawk) would raise a lot of revenue, too, and spread the "burden" over a wider area. Consume more pay more. A lot of countries have such a thing.
if the middle class does better, business does better
One of the problems with the free-market ideology is that this doesn't hold true once you ignore national borders. You can impoverish your own nation's middle class as long as your product or service is something that can be widely consumed overseas, especially in booming developing economies. That's an essential aspect of the philosophy and it, of course, means that many people who run global multinationals really have zero investment in sustaining conditions in their ostensible US home. The guy with the storage units is kind of an exception in that his business has to be located somewhere. He doesn't make the connection, though. In fact, if anything, it's probably good for his business when people have to foreclose and downsize and put their stuff in storage.
The problem with increasing sales taxes is that it's a regressive plan. Poorer people necessarily have to spend all of their income to survive, so they pay tax on almost everything they buy, which means they pay tax on almost all of their income. But the wealthier you are, the smaller the percentage of your income that goes to pay for necessities or even luxuries. You put most of your income into forms of saving or investment, where it can earn you more, rather than be taxed. This creates a serious divide where poorer people are charged much more a percentage of their take-home income in tax than wealthy people, so it doesn't solve the inequality problem, but exacerbates it instead.
You can impoverish your own nation's middle class as long as your product or service is something that can be widely consumed overseas, especially in booming developing economies.
Actually, while it's true companies are manufacturing overseas, their largest customer base continues to be here in the U.S., so the economic well-being of said customer base is very much in their interest, whether they always act like it is or not.
Our economy remains sluggish largely because demand is still weak (for better or worse, 70% of our economy is consumer-based, with the middle class providing the lion share of that purchasing power). Some economists say we're still in a deleveraging phase, where individuals and businesses are paying down debt, and it has little to do with national politics. However, in such circumstances, I agree with Obama that it's critical to keep up government spending and safety nets to stimulate the economy; there will be time for the government to pay down debt as the economy picks up. Sluggish growth is better than no growth or a retraction. (Whenever I shop, I like to think I'm doing my part for the economy. ; )
You raise an interesting point about the national sales tax. I wouldn't argue to implement it now, while things are sluggish, but I do still think it could be an excellent revenue source in the future. For the poorest in our country, perhaps the inequity could be compensated for by larger tax credits, like the Earned Income Tax Credit, for instance.