First, The Defense Department is just that – for defense. For those who might understand the difference between what forces are needed for offense versus defense, the forces needed for offense are normally 3 to 4 times the forces needed for defense. The U.S. has forces needed for defense, not offense. Look at the the forces of the Soviet Union and China and you'll see forces designed for offense, not defense. You won't hear this from the party whose leaders haven't served. And it takes adequate weaponry to defend yourself. Let your police department using pistols confront criminals with machine guns and you'll understand that good weaponry is needed to confront crime and terrorism/aggression.

Second, those in the top 50 % of taxpayers, since 1990, have paid over 96% of the income tax collected. In recent years the percentage paid by the high earners has increased, not decreased. The portion paid by the top 1% of taxpayers is some 30% of tax paid. That group happens to have companies and investments that create many of the jobs in our country – a group that Obama wants to tax even more. Have you ever heard the phrase "don't eat your seed corn"? That's what he proposes.

Bill in Knoxville

Due to a change in corporate tax, a lot of entities which used to be taxed as corporations chose to be taxed as partnerships or sole proprietors. Since partnerships, LLC's and sole proprietorships are considered to be "disregarded entities", the taxable net income of the firm ends up on individual returns. Thus, some of what now constitutes individual income today was counted as corporate income in 1980. Obviously, all that shift in income classification had the biggest impact on the top 1%.

Of course it's just pure coincidence that tax rate cuts are always correlated with the top 1% paying a larger share of total income taxes collected and higher tax revenue. The fact that they paid a much smaller share with a top marginal tax rate of 90% and less tax revenue was collected is also mere coincidence. After all, people don't respond to incentives and would work just as hard and take as much risk (of starting a business, say) if the incremental dollar was taxed at 80% as they would if the incremental dollar were taxed at 20%. Makes total sense – as long as we're not talking about humans.

I've heard these dire Marxist warnings about societal instability since I was knee-high to a grasshopper as part of the constant propaganda piped to us by the Soviet government from the time I was a tiny child in the USSR. The truth is, nowhere is income inequality and instability more more pronounced than in countries that seek "income equality". Let's forget the Soviet Union for a minute because "obviously" they just screwed everything up and Americans would do it so much better because we're not Russians and that makes all the difference. I dare you to go to the suburbs of Paris, where unemployment runs about 47% for minorities, and experience the deep societal stability of riots and 100 cars torched on an average Saturday night (according to Paris police). And that's just for a start.

If you want to prevent this country from becoming a banana republic, then don't copy the egalitarian failures of banana republics. If you remove the incentives for success, you won't have any.

Perhaps Jeff, it would be more productive to your goals, if you are sincere, to not just focus on what you claim is "growing income inequality" and focus on why there is such a thing if indeed there is.

BTW Jeff, by what standards is there a "growing income inequality". What is the benchmark? Our old village idiot, muirduck, could claim it but never identify it. Perhaps you can do better.

Why do we have more and more people sitting on their asses, not getting an education of even the most basic level, using the "excuse" as their first line of defense to any criticism of their nonproductivity, whining about how their job went away (as if they had guaranteed lifetime employment), etc. etc. It is so easy to excuse, whine and complain when actually improving your own lot is actual work.

Work! Oh God another one of those 4 letter words.

I work and my income has been on the growing side of that inequality.

"I'd rather focus on policies that prevent us from becoming a banana republic.
Posted by: Jeff | Jul 23, 2008 4:18:31 PM"

Really? Well just keep insisting on socialist policies that forcefully even income out and we too can become a new Chile and plunge downhill. In other words, Jeff, nothing will guarantee our becoming a banana republic quicker then following your heart.

Regardless of the factors that are driving this, growing income inequality creates quite perverse political dynamics and makes for unstable societies as a whole.

Instead of being a tax-cuts-cure-all-ills ideologue and whining about being overtaxed, I'd rather focus on policies that prevent us from becoming a banana republic.

Uh…right, Jeff. So, what can we glean from that information? A cut in the tax rate of the top 1% results in a.) more absolute tax revenue collected and b.) the top 1% pays more as a share of total income taxes collected. Incidentally, when the tax rates were much higher for the top 1%, that group paid a much smaller portion of all income taxes. I don't have that number hand but I believe in the early 80's or late 70's it was something like 14% instead of 40%. Thanks for bringing that up, Jeff.

Anecdotally, look at what gets spent on big weapons programs like the the crusader (mobile artillery vehicle) and the osprey (which even Cheney tried to kill) which are roundly criticized for their worthlessness. Do we really need both the F-22 and the JSA fighters to go after Al Qaeda? Did you know that annual expenditures on military bands (i.e., musical bands) is in the hundreds of millions?

Commentators here like to rail about bridges to nowhere, but the Pentagon is far from immune from useless pork spending.

Lastly, I wanted to note that Russ posting was an example of cherry picking of the key conclusions. What doesn't appear to have been mentioned about the same report is the the average tax rate for the top 1% actually declined and is at an 18-year low.

By "bridges to nowhere", I meant assorted government waste. Let me explain my position on this a little better.

Defense spending has been declining as a percentage of GDP for decades. At the same time spending on Medicare, Medicaid, and social security has been rising and is projected to increase dramatically in the near future. The alphabet soup of welfare programs has fluctuated but stayed at an average of 2.8% of GDP since falling from roughly 4% of GDP in the 70's (according to the CBO).

Given that I agree with Brotio and Hammer – that defense is one of the very few activities rightfully engaged in by government – anything less than close to 100% of the total budget means it's too small a percentage. Given projections for growth in social security, medicare and medicaid spending and the new role of the taxpayer as underwriter for giant private institutions such as Freddie, Fannie and large investment banks, defense will be a rounding error in short order.

RPL,
In that list, I only see two items that are Constitutionally acceptable: Defense and federal retirement.

The federal budget is somewhere around 3 trillion dollars – defense is at a half-trillion dollars.

Also, the amount we spend on defense is a tiny fraction of what we spend on entitlement programs and bridges to nowhere.

Let's not go off the deep end, now. In FY'07 defense spending totaled 22.9% of the federal budget, compared to 24.3% for health care and 25.2% for "pensions", which includes both social security and government retirement plans. Welfare programs consumed 9.2%, so if you consider "entitlements" to be social security (but not retirement plans), health care, and welfare, you wind up with defense spending at a little less than half of entitlement spending. I wouldn't exactly call that a "tiny fraction". You could probably argue for including a few more things here and there to bring the fraction as low as 1/3, still not "tiny" by any reasonable definition.

Bridges to nowhere, incidentally, are presumably part of the transportation budget, which barely registers at a little less than 3% of the budget. They're offensive, to be sure, but they're not what is bankrupting us.

Source: http://www.usgovernmentspending.com/index.php

The only other key component would be to push for reform of the laws of incorporation. The trade off of incorporating is that it shelters shareholders from liabilities while coming under the hand of governmental bodies who can regulate simply because, while being treated as a living entity, it is largely intangible and not necessarily subject to the same argument of negative rights.

Gentlemen and ladies (of which I assume there are more than one), don't let the deliberately created complexity of the tangled run amok laws, rules, regulations, and operations of our government distract you from the real simplicity with which it can be contained and fixed by people of courage and determination.

To fix the government, now that it has been permitted to run amok for so long as individuals and groups crowded and lined up for privileges and handouts encouraging the natural tendency of a person in a presumed position of power (congressperson) to become corrupt, will mean real emotionaly and financial pain for everyone. Much as a person with his body covered with 3rd degree burns can not be helped in anyway without causing him more pain.

Earlier I lauded the Constitution as the plan for the small central government our founding fathers intended. It is but it does have one serious fatal flaw (I have pointed this out before and will continue to do so until everyone actually begins to think about it).

You can talk about fixing this or that clause, statement, or passing a new amendment; but, unless this flaw is fixed, you've wasted your time.

This really is all simple.

The serious fatal flaw is found at Art. 1, Sec. 5, second paragraph to wit I quote, "Each house may determine the Rules of its Proceedings, punish its Members fpr disorderly Behaviour, and, with the Concurrence of two thirds, expel a Member."

"Each house may determine the Rules of its Proceedings," this flaw has allowed total negation of the rest of the Constitution.

Some will say that the committee system is necessary so that proposals may be investigated as to costs, problems, workability, rational, etc.; and, I can admit to some rational there. However, that recognition does not mean that I believe that it is wise to not have a time table in place that makes it mandatory for every piece of legislation or bill submitted be sent to the floor for a full vote and let the entire congress decide, not just one man. A committee may pass a bill to the floor with a recommendation of "Yea" or "Nay", that's okay, but the full membership should have the final and legal say.

It destroys equal representation in concept and in fact. It permitted corrupted and corruptible congress critters to slam the committee system through congress. The committee system is seen by both dominant parties as the "Holy Grail" of congressional politics, to be sought after and cherished but never to be destroyed. It means ultimate power to the party that controls congress.

The power to appoint the committee chair and have the majority on each committee is why there is such a bitter fight in all elections to win the majority.

The committee system destroys equal representation in concept and in reality. It permits one individual to block any bills from even being considered in committee and to block it from ever being passed to the floor for a full vote.

If your congresscritter is not a committee chair then your congressman must, I repeat must, sell his vote in the congressional market to ever hope to get a bill through committee. That is reality.

This fatal flaw is the source of lobbying, it makes lobbying necessary and effective. Fix this fatal flaw and we immediately save ourselves untold trillions of dollars. Eliminating the committee system as it is operated today would make it impossible for any wealth to buy one man and control legislation. THINK ABOUT IT, PEOPLE! Yes, that was a scream, no apologies.

The committee system and the power of the chair to control the committee means that right now congresspersons not Democrat may not even be allowed in the committee room to participate in the discussion or debate, much less submit new legislation. Don't shrug this off, please, it has happened in the past when congress was dominated by Democrats (prior to 1994) and it will happen again if it isn't already being done.

It is simple, the democrats have the committee majority, even if all the minority members vote together and against the democrats, the democrats still win and control the committee, so what does it matter if the opposition is present in debates and discussion they are going to lose anyway. It is just a bother for the democrats to have them in the room. In essence we do not have a two party system of government unless Republicans are in dominance. The press never talked about how the democrats operated their committees; but they began to notice and broadcast minute details once Repulicans dominated….good 'ole left leaning media.

Now, my radical proposal for restoring liberty to Americans and fixing government.

1. Make the Declaration of Independence positive law and the one single guiding light by which all else must be judged. There is a lot of wording in the Declaration that is not appropriate to being law, such as the list of abuses committed by the King, but they could serve as a visible and easily understood measure by which congress could be judged.

2. Keep the Constitution, just amend it to fix the fatal flaw, and bring government back under the control of the people via their individual representative.
a. I would keep the committee system, but make it seniority sytem in appointing committee chairs, with each chair serving only until new congress men are seated from the next election….meaning a total of 2 years. b. No chair could repeat as chair until all others in the committee had served as chair. c. All proposed bills or legislation would be kept in committee no longer than 30 days, after which time it would be passed to the floor for a full vote (with recommendation). In the time of Google and Nexus/Lexus any proposal can be thoroughly investigated in 30 days. d. No debate would be conducted on any proposal unless 3/4 majority of the committe is present, with presence compelled by force of law.

3. Amend the constitution to limit the staff each individual congress critter could pay out of funds collected by means of tax. Revamping the fatal flaw would make it obvious that many congresscritters are carrying a lot of staff purely out of ego reasons and it is costing you and I dearly.

4. Amend the constitution to force the Supreme Court to consider any case brought before it in light of Amendments 9 and 10 before any other question or debate can be made. The basic question being, "Does this case belong here in front of the Supreme Court"? In other words narrow the jurisdiction of the Supreme Court back to its constitutional role.

5. The constitution should be amended to make the issue of taxes more clear. We, each and all, pay an enormous amount of excise taxes which is the basic system our founding fathers meant to finance government. With computerization it is a matter of relative simplicity to put government on a pay as you go footing vis-a-vis funding. Income taxes are not needed, and a pay as you go funding would instantly reveal those government activities for which no one wants to pay especially at the level now being funded.

6. Amend the constitution to make English the official language, to be used in public and on private signs intended for the public, to be used in any government or quasi-government offices. Include wording to make it crystal clear that no attempt would be tolerated to suppress any other language being used in settings other than "official".

7. Amend the constitution to allow Vidyohs to shoot each day as permissable game at least three idiots who have subwoofers in their autos that can be heard more than 3 inches off the car's chassis. This amendment could be expanded to allow other irritated people to be legal game takers as they request. The idiot herd needs thinning and I welcome help in culling the gene pool.

That's my considered opinion and ideas. I see fixing government like butchering a hog. You don't first kill him by getting lost in his flailing legs or tail and try bleeding him by cutting those distractions. You go straight for the juglar vein and do it quick and thorough.

The fatal flaw is the juglar.

Also, the amount we spend on defense is a tiny fraction of what we spend on entitlement programs and bridges to nowhere.

My take on the CC is that the FedGov should be involved in regulating *how* trade amongst the States, not *what* is traded. I think that the CC was intended to prevent trade wars between the States – that is, a tariff on items from one state by another state.

If one thinks long – really long – and hard about what Congress is involved in at the local level because of this interpretation of the Commerce Clause, it becomes apparent that a lot of their programs would become unconstitutional. With this little wording change, the FedGov would be barred from being involved in many, many areas that they have assumed dominion over now. The impact would be a tremendous downsizing of the FedGov.

We would gain some freedom back.

Give it some thought.

I generally agree with CRC and Vidyohs on this, though limiting defense spending doesn't make much sense as it is just about the only thing the federal government can rightfully do. Being a super power is better than not being one, after all.

Let the states have all of the power struggles for silly taxation and redistribution plans. They are much easier to move away from after all.

Paris,

Well yeah, duh. (To quote my neighbor's teenage girl)

What you live in now is not the system the founding fathers set up in the Constitution.

The answer to your question is….read the Constitution. There it is, the smaller more efficient government, exactly what you, I, Don, CRC, and Ron Paul can all respect and live with.

The problem is that the Constitution began being ignored approximately 1 nono-second after it was signed.

On a related subject, does anyone really appreciate how volatile the income for this group is from year-to-year?