A potential problem with "Just tax the rich!"

[JohnStOnge]

There is a potential problem with the "Just tax the rich" mentality that is so much in vogue and there are indications that it may be on the cusp of realization. The problem is that the "make the rich pay for it" approach results in over-reliance on a small percentage of the population. If something happens to that group revenues will plunge regardless of how high a rate one imposes on its members.

Take a look at the table at http://www.taxpolicycenter.org/taxfacts ... ?Docid=558" onclick="window.open(this.href);return false; . The source is CBO data. Note that the top 20% of the population accounted for almost 70% of total Federal taxes paid in 2007 and the top 10% accounted for 55%. So you can see that less than 10% of the population paid half the taxes.

So what happens if there is an economic disturbance so that incomes dramatically decline for people in that group? I think you can figure it out. You'd either have to spread the load more evenly over the population or revenues are going to decline dramatically.

And there are indications that may be happening. Disagreement about it, actually; but the discussion is out there. In any case, I think there is a tendency among many to like the idea of dragging the "rich" down. Maybe reducing their income. Narrowing the income gap largely by reducing the incomes of the "rich" and/or "super rich."

But if they get their wish they're going to stifle the "tax the rich" gravy train.

[houndawg]

There is a potential problem with the "Just tax the rich" mentality that is so much in vogue and there are indications that it may be on the cusp of realization. The problem is that the "make the rich pay for it" approach results in over-reliance on a small percentage of the population. If something happens to that group revenues will plunge regardless of how high a rate one imposes on its members.

Take a look at the table at http://www.taxpolicycenter.org/taxfacts ... ?Docid=558" onclick="window.open(this.href);return false; . The source is CBO data. Note that the top 20% of the population accounted for almost 70% of total Federal taxes paid in 2007 and the top 10% accounted for 55%. So you can see that less than 10% of the population paid half the taxes.

So what happens if there is an economic disturbance so that incomes dramatically decline for people in that group? I think you can figure it out. You'd either have to spread the load more evenly over the population or revenues are going to decline dramatically.

And there are indications that may be happening. Disagreement about it, actually; but the discussion is out there. In any case, I think there is a tendency among many to like the idea of dragging the "rich" down. Maybe reducing their income. Narrowing the income gap largely by reducing the incomes of the "rich" and/or "super rich."

But if they get their wish they're going to stifle the "tax the rich" gravy train.

Gotta tax where the money is, John. It wouldn't be very productive to tax people who don't have any money.







Tax the rich, feed the poor, til there are no rich no more.
Alvin Lee

[AZGrizFan]

There is a potential problem with the "Just tax the rich" mentality that is so much in vogue and there are indications that it may be on the cusp of realization. The problem is that the "make the rich pay for it" approach results in over-reliance on a small percentage of the population. If something happens to that group revenues will plunge regardless of how high a rate one imposes on its members.

Take a look at the table at http://www.taxpolicycenter.org/taxfacts ... ?Docid=558" onclick="window.open(this.href);return false; . The source is CBO data. Note that the top 20% of the population accounted for almost 70% of total Federal taxes paid in 2007 and the top 10% accounted for 55%. So you can see that less than 10% of the population paid half the taxes.

So what happens if there is an economic disturbance so that incomes dramatically decline for people in that group? I think you can figure it out. You'd either have to spread the load more evenly over the population or revenues are going to decline dramatically.

And there are indications that may be happening. Disagreement about it, actually; but the discussion is out there. In any case, I think there is a tendency among many to like the idea of dragging the "rich" down. Maybe reducing their income. Narrowing the income gap largely by reducing the incomes of the "rich" and/or "super rich."

But if they get their wish they're going to stifle the "tax the rich" gravy train.

Gotta tax where the money is, John. It wouldn't be very productive to tax people who don't have any money.







Tax the rich, feed the poor, til there are no rich no more.Alvin Lee

I think that's kind of JSO's point. WHAT THEN? What happens when there are no rich no more?

[bulldog10jw]

Tax the rich, feed the poor, til there are no rich no more.
Alvin Lee

I don't think Alvin was making a suggestion

[JohnStOnge]

Gotta tax where the money is, John. It wouldn't be very productive to tax people who don't have any money.

In 2005, which is the last year for which I can find data broken down enough, the bottom 80% of households generated about $4.4 trillion dollars of income. They had money. Not as much as the top 20; which generated about $5.3 trillion. But they had money. The bottom 80% generated about 46% of the income and paid about 31% of the total Federal taxes while the top 20% generated about 54% of the income and paid about 69% of the total Federal taxes.

[houndawg]

Gotta tax where the money is, John. It wouldn't be very productive to tax people who don't have any money.

In 2005, which is the last year for which I can find data broken down enough, the bottom 80% of households generated about $4.4 trillion dollars of income. They had money. Not as much as the top 20; which generated about $5.3 trillion. But they had money. The bottom 80% generated about 46% of the income and paid about 31% of the total Federal taxes while the top 20% generated about 54% of the income and paid about 69% of the total Federal taxes.

Good grief, John, does the whining and sniveling ever stop?

That top 20% gets to live in a whole different country than the bottom 80%, they're getting more than their money's worth.

Feed their greed-freak asses to the poor.

[kalm]

Gotta tax where the money is, John. It wouldn't be very productive to tax people who don't have any money.

In 2005, which is the last year for which I can find data broken down enough, the bottom 80% of households generated about $4.4 trillion dollars of income. They had money. Not as much as the top 20; which generated about $5.3 trillion. But they had money. The bottom 80% generated about 46% of the income and paid about 31% of the total Federal taxes while the top 20% generated about 54% of the income and paid about 69% of the total Federal taxes.

How much of that $4.4 trillion was spent? And before you come back with the amazingly high standard of living our working poor/middle class enjoy, consider that in a retail and service based economy, the rich also benefit from that spending.

Everyone needs to pay enough taxes to support the system we all benefit from. Considering the expansion of wealth in the top 5% over the past 30 years, I really don't think they need you going to bat for them. I think they're doing just fine.

[bluehenbillk]

I think a flat tax might work for everybody - and I mean everybody. Close the loopholes & everyone pays their share. Is welfare taxed? If not it should be.

[LeadBolt]

These are not original, but seem to both make sense and present problems with the topic:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. You cannot multiply wealth by dividing it!
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

[JohnStOnge]

Everyone needs to pay enough taxes to support the system we all benefit from

"Everyone" is not doing that. A relatively small percentage of the population is doing that.

And the system is headed towards inevitable collapse. What we should do is adjust the system so that it could be supported without having to make less than 10% of the population bear over half of the cost.

[JohnStOnge]

And this "we all benefit from" thing. Please. We have a substantial percentage of the population that essentially consists of freeloaders. And when we talk about doing something there's this "we all benefit" stuff. Of COURSE they benefit.

But there's a limit to how much someone who actually produces wealth "benefits" from having their wealth confiscated in order to distribute it to the freeloaders. Sure, they benefit from the fact that there's some structure in place. But it's laughable to say they "benefit" from having the fruits of their labors forcibly taken from them so they can be given to somebody else.

[Ivytalk]

These are not original, but seem to both make sense and present problems with the topic:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. You cannot multiply wealth by dividing it!
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Number 5 does it for me.

[GannonFan]

These are not original, but seem to both make sense and present problems with the topic:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. You cannot multiply wealth by dividing it!
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Number 5 does it for me.

Having lived outside of Philadelphia for as long a I have and witnessing the dysfunction that purports itself to be government (and I imagine a lot of large cities are the same), unfortunately I think #5 is a very real problem.

[89Hen]

Tax the rich, feed the poor, til there are no rich no more.
Alvin Lee

Scary thing is that's the kind of place you actually get your political beliefs.

[D1B]

Tax the rich, feed the poor, til there are no rich no more.
Alvin Lee

Scary thing is that's the kind of place you actually get your political beliefs.

You don't get it.

[Ibanez]

I think a flat tax might work for everybody - and I mean everybody. Close the loopholes & everyone pays their share. Is welfare taxed? If not it should be.

I think the Government should pay taxes on everything it purchases and sell off many of it's buildings that are just rotting (like the one here in Charleston).

[clenz]

Tax the rich, feed the poor, til there are no rich no more.
Alvin Lee

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

[BDKJMU]

Tax the rich, feed the poor, til there are no rich no more.
Alvin Lee

Ok Karl Marx.

[kalm]

And this "we all benefit from" thing. Please. We have a substantial percentage of the population that essentially consists of freeloaders. And when we talk about doing something there's this "we all benefit" stuff. Of COURSE they benefit.

But there's a limit to how much someone who actually produces wealth "benefits" from having their wealth confiscated in order to distribute it to the freeloaders. Sure, they benefit from the fact that there's some structure in place. But it's laughable to say they "benefit" from having the fruits of their labors forcibly taken from them so they can be given to somebody else.

What percentage of "wealth" do they produce. What percentage of the commons do they take?

[houndawg]

Tax the rich, feed the poor, til there are no rich no more.
Alvin Lee

Ok Karl Marx.

Better yet -

Ax the rich, feed the poor....


One pigfcvker Wall St. investment banker's bloated carcass could feed a family of four for a month.

[houndawg]

Tax the rich, feed the poor, til there are no rich no more.
Alvin Lee

Scary thing is that's the kind of place you actually get your political beliefs.

yeah, you're on to me..

You shouldn't be so constrained by the conventional wisdom, 89 - what's wrong with giving communism another look, being as they are kicking the sh!t out of us in business and we have to go hat in hand to them to borrow ever more money for our several unnecessary wars?

[CID1990]

Scary thing is that's the kind of place you actually get your political beliefs.

yeah, you're on to me..

You shouldn't be so constrained by the conventional wisdom, 89 - what's wrong with giving communism another look, being as they are kicking the sh!t out of us in business and we have to go hat in hand to them to borrow ever more money for our several unnecessary wars?

The Chinese do not have a communist economic model. Neither do the Vietnamese, even though they still are trying to figure out how to reconcile the Leninist system with capitalist economic models.

The equation CHINA=COMMUNIST=ECONOMIC GROWTH=BETTER THAN CAPITALISM is disingenuous because the Chinese are not actually communist when it comes to their domestic and foreign economic policies. They have been liberalizing for 20 years in that area. Their political system, however, is Maoist through and through and it exists only through repression. If not for the dictatorship of the Proletariat, China would be a multi-party system.

[GannonFan]

yeah, you're on to me..

You shouldn't be so constrained by the conventional wisdom, 89 - what's wrong with giving communism another look, being as they are kicking the sh!t out of us in business and we have to go hat in hand to them to borrow ever more money for our several unnecessary wars?

The Chinese do not have a communist economic model. Neither do the Vietnamese, even though they still are trying to figure out how to reconcile the Leninist system with capitalist economic models.

The equation CHINA=COMMUNIST=ECONOMIC GROWTH=BETTER THAN CAPITALISM is disingenuous because the Chinese are not actually communist when it comes to their domestic and foreign economic policies. They have been liberalizing for 20 years in that area. Their political system, however, is Maoist through and through and it exists only through repression. If not for the dictatorship of the Proletariat, China would be a multi-party system.

Agreed - it's laughable that anyone would actually call China's economic system "communist". Heck, their's is probably one of the most free-wheeling, no holds barred forms of capitalism in the world today. Of course, considering the lack of regulation and the environmental impact of such a system, very few people would honestly advocate trying to mimic that system. Heck, even the Chinese want to correct it. And really, China needs to buy US debt almost as much as we need to sell it to them - they're just as dependent on us as we are them. It's the economic version of the mutually assurred destruction philosophy of the Cold War - we go down, they go down, and vice versa.

[89Hen]

Scary thing is that's the kind of place you actually get your political beliefs.

yeah, you're on to me..

You shouldn't be so constrained by the conventional wisdom, 89 - what's wrong with giving communism another look, being as they are kicking the sh!t out of us in business and we have to go hat in hand to them to borrow ever more money for our several unnecessary wars?

I wish I believed you were kidding.

[AZGrizFan]

The Chinese do not have a communist economic model. Neither do the Vietnamese, even though they still are trying to figure out how to reconcile the Leninist system with capitalist economic models.

The equation CHINA=COMMUNIST=ECONOMIC GROWTH=BETTER THAN CAPITALISM is disingenuous because the Chinese are not actually communist when it comes to their domestic and foreign economic policies. They have been liberalizing for 20 years in that area. Their political system, however, is Maoist through and through and it exists only through repression. If not for the dictatorship of the Proletariat, China would be a multi-party system.

Agreed - it's laughable that anyone would actually call China's economic system "communist". Heck, their's is probably one of the most free-wheeling, no holds barred forms of capitalism in the world today. Of course, considering the lack of regulation and the environmental impact of such a system, very few people would honestly advocate trying to mimic that system. Heck, even the Chinese want to correct it. And really, China needs to buy US debt almost as much as we need to sell it to them - they're just as dependent on us as we are them. It's the economic version of the mutually assurred destruction philosophy of the Cold War - we go down, they go down, and vice versa.

I think it's laughable that anyone would compare China's capitalist system to America's capitalist system. We've hamstrung ourselves with so many rules, so much regulation that we're fighting a global economic battle with BOTH hands tied behind our back. We will soon have legislated ourselves out of relevance. And China will be standing there to fill that economic vaccuum and lead the world over the edge of the cliff.