Taxing Facts

by Don Boudreaux on April 23, 2011

in Myths and Fallacies, Taxes

Here’s a letter to the New York Times:

Many letters in today’s edition reveal deep confusion over the burden of income taxes shouldered by “the rich.”  Fortunately, Mark Perry (my former GMU research assistant and now Professor of Economics and Finance at the University of Michigan-Flint) constructed this useful graph showing the relationship, from 1979 through 2007, between changes in the top marginal U.S. income-tax rate and the share of Uncle Sam’s tax receipts paid by the top one-percent of income earners.

Two facts leap out.  First, over the course of these 29 years, the share of Uncle Sam’s income-tax receipts paid by the top one-percent of income earners rose significantly, from 18 percent to 40 percent.  (And because inflation-adjusted receipts in 2007 were 94 percent higher than they were in 1979, the absolute amount of income taxes paid by the top one-percent earners therefore increased dramatically.) [I used the Minnesota Fed's inflation adjuster to adjust the 1979 tax-receipt figure into 2007 dollars.]

Second, because the top marginal tax rate declined significantly from 1979 to 2007 – today it is half of its 1979 level – it’s a myth to suppose that lower marginal tax rates for the highest-income earners result in these income earners paying fewer taxes, either absolutely or relative to the amount of taxes paid by the bottom 99 percent of income earners.

Sincerely,
Donald J. Boudreaux

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{ 141 comments }

Plac Ebo April 23, 2011 at 10:51 am

Could it be that you are leaving out some important information- that the income of the top 1% has exploded over this time period while it has stagnated for the other 99%?

jjoxman April 23, 2011 at 11:09 am

This is not the case, however. See the excellent work by Terry Fitzgerald at the Minneapolis Fed on the issue of middle class stagnation. http://www.minneapolisfed.org/research/economists/staff_display.cfm?id=365

jjoxman April 23, 2011 at 11:11 am

The other important issue is that progressive taxation results in greater dispersion in pre-tax income because the net income must conform to people’s productivity.

vikingvista April 24, 2011 at 3:33 am

Good point. The market dynamics don’t go away with a tax, and a tax probably doesn’t affect either productivity, or the amount a person is willing to pay for labor, or receive in payment for his labor. That is, it doesn’t really shift the supply or demand curves. The tax merely reduces the quantity of labor traded, removing from the labor trade those people at the margin–where the margin is less than the tax. Those remaining earn less and pay more, to cover the tax. Pretax income goes up, while after tax income goes down.

rjs April 23, 2011 at 11:31 am

your link gives his profile page, not a specific work…

jjoxman April 23, 2011 at 1:06 pm

Because a lot of what Terry works on is related to this point. Read the “in briefs” for a variety of papers and you’ll get this gist of his work.

yet another Dave April 25, 2011 at 4:05 pm

I found this (Where Has All the Income Gone?) by searching for middle class stagnation at the linked site.
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=4049

Well written and researched. These 3 sentences from the conclusion wrap it up nicely:

Claims of long-term middle America stagnation—such as those quoted at the beginning of this article—are often part of a broader argument about the adverse impact of globalization, outsourcing and free trade. And middle class stagnation is used as motivation for a specific set of policies. But if middle America has not stagnated—as this analysis has shown—then this motivation for those policies is without merit.

Martin Brock April 25, 2011 at 1:11 pm

You write, “This is not the case, however.” Then you link a page that does not address Plac Ebo’s first point (exploding income of the top 1%) at all and does not refute his second point (stagnating income of the other 99%) very well.

Fitzgerald’s page links two articles with some bearing on the second point.

In chart 7, “Say hello to the modest good life for me” shows median hourly wages for males between 1979 and 2006 falling by two percent. Labeling this change “stagnation” seems reasonable. Median hourly wages for females rose 33% over the same period.

“Are Income Gains Due to More Wives Working Longer Hours?” finds that over half of the increase in median household earnings over roughly the same period (’76 – ’05) is attributable to wives working more for wages outside the home.

Of course, this gain must be corrected for the fact that women working for wages now often pay other women for work (like childcare) that women once performed in the home. For this reason, the actual gain in material living standard cannot be 33%. It can be greater than zero, but it cannot be 33%.

Even a 33% gain over 30 years is not huge. Considering the ambiguity in this figure, describing this change with “stagnation” might me reasonable, given a much greater gain at higher income percentiles.

None of the articles discuss the income gains of the top one percent or compare these gains with any of the middle income statistics.

Emil April 23, 2011 at 11:45 am

The fact that the income of the top 1% earners has exploded is exactly the point. They are making more money. (In the US) which translates into more consumption and investment in the US

John V April 23, 2011 at 12:48 pm

Several things Plac:

-The top 1% is not the same now as it was then. Different people.
-The patterns of opportunity and entrepreneurship that create that top 1% are different now and then.
-Qualifications for employment and value of most kinds of labor are different now and then.
-Saying “the other 99%” lumps together the poorest and those in the top 2% and everyone in between. Hardly an enlightening stat…even it were true. You need to break that 99% down into useful subsets.

-*Most importantly, even the most left liberal of liberal economists acknowledge something called the “skills gap” when explaining stagnant incomes in bottom groups. It has nothing to do with anything other than increasingly higher growth in the value of labor for new skills and knowledge bases that command higher compensation. You want to call this a failure of education or social development programs or whatever? There may be a point there or there may not. That’s a different discussion. But it’s the fault of wealthy people or people who were in a bottom percentile in 1979 and now in a much higher percentile (or even top 1%) in 2011. I’m in a far higher percentile now than just 20 years ago when I started college. Did I do something wrong?? Did the government fail to do something it should have to prevent that from happening?

BTW, keep in mind that in time, through nobody’s doing or any conspiracy, the highest value skills will change and the adjustment will show lots of new stats that people with an axe to grind can twist, contort and mangle to “show” something that isn’t the cogent or relevant point.

John April 23, 2011 at 6:41 pm

Not sure if you have or have seen something with the data, but what can we say about A) the prior rich and
B) the poor.

It would be really nice if we could make the same statement about the poor as you make in your first item. Unfortunately I don’t think the stats bear that hope out.

Economiser April 24, 2011 at 9:41 am

Russ covered this a week or two ago. See the chart from the Pew Economic Mobility Project. When following the same families over two generations, the bottom quintile see very large gains.

http://cafehayek.com/2011/04/theres-no-their-there.html

crossofcrimson April 25, 2011 at 10:52 am

“Could it be that you are leaving out some important information- that the income of the top 1% has exploded over this time period while it has stagnated for the other 99%?”

I think it’s true that people overlook this – but to what end is its realization applied? It’s points like this that make me believe that “taxing the rich” is moreso about punishing the wealthy than it is helping the poor, or bringing in more government revenue in general.

Daan April 23, 2011 at 10:51 am

Both graphs illustrate the growing inequality in the US which, i think, will turn out to be unsustainable.

Ike April 23, 2011 at 3:05 pm

There are many things like “Poverty” that we don’t WANT to be sustainable.

The fact is that the people in the lowest quintile of income today live MUCH better lives, with a much greater quality of life, than the people who occupied that quintile 20 or 40 years earlier.

But hey, if Equality is what you want, we can just tax the holy hell out of everyone and make us all poor together.

Krishnan April 24, 2011 at 10:34 am

THAT is exactly what they want … It is insufficient that the poor are much, much better off … What they cannot stand is that the “rich” are better also – worse, many who were “poor” have moved to being “not poor” – they will not be satisfied unless there are exactly ZERO ‘poor” people

It is pure class, wealth and ability envy – they cannot stand the fact that there are many/few who are able to create and earn while the demanders keep demanding …

Daan April 24, 2011 at 10:58 am

Wow it is amazing how angry you guys sound. I think it explains your view on the world. You guys desocialized long time ago and totally lost touch of your social human nature.

It is not all about money. Try to value the happiness of others.

Anyway, There is no way convincing you.

Good luck.

Economiser April 24, 2011 at 11:29 am

I value the happiness of others by not attempting to dictate their preferences. How, pray tell, do you value the happiness of others?

tdp April 24, 2011 at 8:45 pm

The gap in happiness between the rich and poor has dropped significantly over the last few decades, assuming people answer surveys with some degree of honesty.

Daan April 25, 2011 at 7:09 am

That is great if overall happiness has increased as well.

Fed-up April 28, 2011 at 11:41 am

There’s a saying that goes “Only one group of people think more about money then the rich and that’s the poor”
By your logic happiness can be gained at someone esle’s expense.
How’s this for an idea – let’s concentrate on how to bring as many people into a state of improvement – whatever their current circumstances?

dan April 23, 2011 at 3:18 pm

Communism ‘light’ is unsustainable……. redistribution of wealth.

Daan April 24, 2011 at 6:39 am

Strong reply. Communism is the only other option.

Polly April 24, 2011 at 11:42 am

Are you saying that America has only two options, Communism-lite or Communism??

Are you one of Barack’s czars? That’s the only thing I can think of that would explain your position.

Daan April 24, 2011 at 12:28 pm

Sarcasm of. I’m joking.

Stephen A. Boyko April 24, 2011 at 3:13 pm

Does not comport with historical realities where consumer demands increase geometrically vs. linear command response.

The Destruction of the Soviet Economic System: An Insiders’ History. Michael Ellman and Vladamir Kontorovich, Armonk, NY: Sharpe, 1998, p.34.

Gorbachev realized that “Soviet Inc.” lacked the information system to restructure and therefore was unable to address effectively the hierarchical complexity required for a global society. In the early years of the Soviet Union, the total number of goods controlled by Gosplan’s centralized planning was on the order of 500,000 to 750,000 items. By 1972, the total number of goods produced in the economy was 12 million and a decade later the number had doubled to 24 million. This meant that planning only used a 2-to-3 percent sample size of total products to forecast aggregate demand. It was simply impossible to calculate real demand for all items in the economy. This flaw became more dramatic as the economy became more dynamic. Command controls were a linear function, while market demands were an exponential function

vikingvista April 24, 2011 at 5:25 pm

No it doesn’t. It illustrates the growing opportunity for individuals to enjoy relatively short but highly productive careers that serve to fund long periods of training as well as long leisurely retirements. This is not only sustainable, but very much desirable.

Rayray April 23, 2011 at 10:58 am

Income statistics go by household, and the average number of people per household has decreased. Real wages have risen.

Emerson April 23, 2011 at 11:22 am

Don,

You write “it’s a myth to suppose that lower marginal tax rates for the highest-income earners result in these income earners paying fewer taxes.”

Does this mean you are not in favor of lowering marginal tax rates for the top 1% because they will not actually pay less in taxes?

Antonio Mendes April 23, 2011 at 11:25 am

How convenient that you left out of the chart the rise in the share of the top 1% earners. It must have increased substantially, otherwise your chart would be different.

Anyway, whether the share of taxes they pay is fair or not can not be decided by comparing income with taxes. For that, you must assume that they, like everybody else, are buying a service from the state – very much like you buy insurance. So the more capital (wealth) they have at stake the more they should pay in taxes, distribution issues aside. For more details on this issue see my post at: http://marques-mendes.blogspot.com/2010/05/why-constitutional-liberalism-is.html

Methinks1776 April 23, 2011 at 11:38 am

In 2008, The top 1% earned 20% of all income and paid 38% of all taxes.

So the more capital (wealth) they have at stake the more they should pay in taxes, distribution issues aside.

Total B.S. – particularly since the vast majority of taxes are used to fund entitlements. If you don’t think that anyone besides the wealthy cares about state provided goods like fire, police and national defense, then we can make the funding of it private and voluntary.

Justin P April 23, 2011 at 11:45 am

Lots of Trolls out these past few week.

WhiskeyJim April 23, 2011 at 1:56 pm

How much is the expanding percentage of top earners’ tax payments is due to a shrinking tax base as government exempts more people?

First, we know that the 1% changes more than any other class for the simple reason that it is mostly chunky one-time capital gains.

Could it not be the case that their percentage of payments is growing because everyone else’s taxes are shrinking, especially the lower 50%?

IOW, measuring taxes paid is kind of useless. It is revenues by person that provides meaningful analysis. Anything else does not tell you much.

Mitch Green April 23, 2011 at 11:57 am

How about laying bare the underlying data to Perry’s chart, or at least citing the methodology? I might be convinced by your argument if I can verify that all is well with the data.

HaywoodU April 23, 2011 at 12:34 pm

Go to the “Taxing” post two down from this one and click on the link. You might have to lift a hand.

Sam Grove April 23, 2011 at 12:35 pm

All this talk about the tax burden on the rich misses the fundamental reality that the very wealthy are not physically able to produce the goods and services represented by government spending.

All that is consumed must first be produced by directed labor.

It is those who engage in such productive labor that physically bear the burden of producing the goods and services that we consume, including that consumption represented by government spending.

The very wealthy do very little of this labor, thus it is impossible to have the wealthy support the consumption of others.

It is then critical to grasp the difference between consumable wealth, capital wealth, and entitlement wealth. The wealth held by the rich is largely of the second and third categories and should be thought of as investments in current and future productive capacity. These investments are crucial to economic growth and future production of consumable wealth.

There are those who believe that these investments should be direct via collective agency, but experience informs us that such means of organizing resources is fraught with peril.

Examination reveals that the incentives inherent in political management of resources are systemically corrupting and socially divisive.

Logic informs us that distributed control of resources in the context of market forces (consumer choice and competitive production) tends toward greater efficiency in the allocation of resources toward the production of consumable wealth, because the incentives are more conducive to cooperation as opposed to the contention fostered by resource allocation by collective agency.

The incentives in distributed markets are these:

1 Profit – induces people to take risks, experiment, and produce consumable wealth.
2 Loss – tempers risk taking and encourages prudence
3 Competition – Promotes efficiency of resource usage and allows consumers to give feedback to producers through their choices.

Command markets, on the other hand incorporate other incentives which mostly serve to corrupt the government and markets.

Some hope to temper the inducement to corruption with greater political oversight, but this too contains the incentives for corruption and induces unseen costs in government and productive activity, all of which reduces the standard of living of most everyone.

Any attempt to make “the rich” support the burden of government sponsored consumption will have a negative effect on the economic well being of “the people” by diverting investment wealth into greater current consumption at the expense of future productivity and by directing more resources into bureaucratic consumption (including the costs to business of documenting regulatory compliance, etc.).

John V April 23, 2011 at 12:59 pm

Well said, Sam.

But the inane reply that you may get is that the wealthier people took more advantage of the infrastructure provided by government. Or the civil society provided by government. Or the stability in law and property provided by government.

To each quip, there are responses.

Infrastructure: So what? It’s there for everyone. Are we supposed to ration it? Is there a flat rate of “privilege” to use infrastructure? It’s there and paid by taxes that we all have to pay. So, the “free-loading” or “over-gorging” argument on infrastructure is stupid.

Civil society. Here’s one of those BS chicken-egg arguments. Society creates it’s own society. Government plays a role but it’s not the main driver. In societies that are less stable, the result is more draconian law enforcement or outright corruption. So, government..limited or otherwise…is not the driver. People are and the informal institutions that they have and honor.

Stable law and property: Well yeah. It makes everything possible. But that’s a good and needed role for government. The use of this argument to libertarians and minarchists is actually pretty silly since it’s what they want. And again, if some are more able to utilize that freedom than others, I fail to see that as something to address by demonizing those who do utilize it more.

Sam Grove April 24, 2011 at 1:42 am

But that’s all irrelevant to the economic reality that all consumption is paid for by the productive efforts of those who labor to produce that which is to be consumed.

The wealthy may control more resources than the many, but the many must pay the cost of all consumption with their productive efforts.

It is as inevitable as the tides.

vikingvista April 24, 2011 at 4:04 am

“But the inane reply that you may get is that the wealthier people took more advantage of the infrastructure provided by government.”

Then those repliers should be all for privatizing those services, so that the wealthy have to pay for what they use.

Methinks1776 April 24, 2011 at 9:54 am

Amen.

muirgeo April 23, 2011 at 6:02 pm

“Two facts leap out. ” DB

That’s it? Just those two facts? These two facts pretty much point to an undeniable third fact. That being that the first two facts could only be true if those rich people have garnered a far greater share of the income pie.

And finally , a forth fact should jump out at one. That the other 90-95% of people in this country would LOVE to be paying more taxes if it meant they had a job or were making a better wage.

Oh a fifth fact…. My God how terrible if this trend continues the poor wealthy elites will be paying ALL the taxes… how horrific… how inhumane… what’s persecuted billionaire to do?

Oooops… a sixth fact… federal income taxes are only a portion of ALL taxes paid.

No now is NOT the time to pity the wealthy in America… that will be when they’ve finally pushed things a bit too far and their gates come crashing down… then pity for them might be in order.

Methinks1776 April 23, 2011 at 7:09 pm

Well, as it happens, in 2007, the top 1% (which earned only 24% of the income) paid more in federal taxes than the bottom 95%. The top 1% took a massive hit in 2008 and the tax burden shifted – over 41% of the taxes collected by your dear Uncle Sam came from the bottom 95%.

Still, in 2008, the top 5% paid much more than the bottom 95% (just under 59%). So, as you can see, obese, unproductive little flees like yourself are already pretty irrelevant to Obamassiah. You might as well remove yourself from the planet and save Gaia your vast carbon footprint. Offing yourself will provide the added benefit of reducing the number of people seeking employment. The unemployed will be employed and wages will rise – it’ll be like the cleansing the plague provided. Besides, didn’t your idol, John Muir, view humanity as a boil on the ass of the planet? Follow your moral beliefs, muirdiot – become fertilizer.

Sam Grove April 23, 2011 at 8:01 pm

Nor is it worthwhile to envy the wealthy.

I’d suggest you dive a little deeper into economics, but you might come up gasping.

brotio April 23, 2011 at 11:18 pm

Yasafi has a brain of helium, surrounded by a skull of iridium. No matter how deep he dives; if anything penetrates the iridium, there is only helium left to absorb the knowledge.

Brian Bedient April 23, 2011 at 8:01 pm

Hmm…thinking about your fifth ‘fact’ there…is anyone really decrying the trend toward the top 1% shouldering an ever-larger share of the tax burden? Marginal tax rates are historically (well, by mid-20th-century-to-today standards) low, to the point where I don’t see how anyone can seriously argue that even our top rates are on the wrong side of the Laffer curve (not that maximizing tax revenue really ought to be our only objective in tax policy anyway, but that’s another argument)…no one is saying ‘oh no our poor billionaires are being exploited’ (though to be honest, your utter lack of sympathy for these people who are your fellow human beings is rather unseemly) and the graph dispels the notion that the wealthy aren’t paying their ‘fair share’ (whatever that means).

I feel like I’d consider it okay, or even very fortunate, for a very large share of the costs of government (assuming the government produces public goods, which is a pretty big stretch) to be paid by the very wealthy (I’d rather do away with coercive taxation altogether, but if we can’t, better to tax people with low marginal utility of money who disproportionately benefit from the government’s services, I suppose). Indeed, many of them seem to naturally take up philanthropy as a hobby and voluntarily divert resources to the production of public goods (art, culture, research, education, charity). The increased relative share of taxes paid by them in the last couple of decades seems neutral at worst. Can anyone else from the pro-market side of the aisle comment on this? That graph looks like evidence of a successful policy of lowering tax rates while increasing revenue. Does anyone think this is terrible because we’re exploiting billionaires?

Methinks1776 April 23, 2011 at 8:22 pm

to the point where I don’t see how anyone can seriously argue that even our top rates are on the wrong side of the Laffer curve.

That’s an empirical question. Let’s drop the top marginal tax rate and see if we get an increase in tax revenue.

(not that maximizing tax revenue really ought to be our only objective in tax policy anyway, but that’s another argument)

Like what? Impoverishing the population? Social Engineering?

who disproportionately benefit from the government’s services,

How do you figure?

Indeed, many of them seem to naturally take up philanthropy as a hobby and voluntarily divert resources to the production of public goods (art, culture, research, education, charity).

Does that bother you? Do you suppose since the wealthy tend to financially support those thing you might as well take that money and do what government does bests – create rents for special interests?

I actually do have a problem with depending on the top 1% for the vast majority of the taxes. It’s unstable. By definition, the top 1% is a very small number of people and relying on a very small number of people to support everyone else is just a recipe for disaster.

Sam Grove April 23, 2011 at 8:35 pm

By definition, the top 1% is a very small number of people and relying on a very small number of people to support everyone else is just a recipe for disaster.

Not to mention the physical impossibility of such a small group being able to support everyone else. Won’t happen.

Brian Bedient April 23, 2011 at 9:29 pm

Fair enough, it’s an empirical question, but my intuition says that we are very close to that point on the Laffer curve that maximizes tax revenue, if only because politicians have known about the Laffer curve for decades now and that’s where their self-interest would lead them to steer tax policy. I’d love to do an experiment on this or make a bet with you but I don’t see how those would work, neither of us being able to set tax rates.

Haha, other things we could do with taxes besides maximizing revenue might include lowering taxes below the revenue-maximizing point to increase long-term economic efficiency, for moral reasons, etc. I don’t think simply maximizing tax revenue without thinking about the effect taxes will have on those who pay them, or the long-run health of the economy, is smart.

The wealthy benefit disproportionately from government because the protection of private property disproportionately benefits those with large amounts of property (I am not complaining about this, just saying). They also tend to have influence on governments beyond what their numbers would suggest, and they use that influence to benefit themselves. Politicians more often intervene to support wealthy campaign contributors against the poor than otherwise, despite their rhetoric (speaking of rent-seeking).

Philanthropy bothers me not at all. If I were rich I’d happily engage in it myself. I would much rather wealthy people keep their money and engage in philanthropy or profitable enterprise than have it squandered by government.

Your instability argument is clever, but what you and especially Mr. Grove should keep in mind is that these folks would not be ‘supporting everyone else.’ They’d just be bankrolling the functions of government. For example, we could still have a pretty effective government even if its revenues were entirely limited to the ~40% of its revenue coming from the top 1% – that’s still something on the order of several percent of our GDP, is it not? Our own government has historically made do with far less, even as a share of GDP.

What if we had a single tax, that was 0% up until the level of income that put your household in the top 1%, and then had a flat marginal rate of our current top rate? You could raise enough revenue to support a government (maybe not a globe-spanning military empire, but who wants one of those anyway?) and the incidence of the tax would fall entirely on the hundredth of our citizens with the greatest incomes. Victims of government theft would decrease by 99%. I don’t see how that’d be unstable – there will always be a top 1% simply because of math, it doesn’t matter if they’re the same people every year or not.

I’m not saying this is ideal. I think it’s workable, though, and better than our current system (which can be said of almost anything) and it certainly answers muirgeo’s charge of excessive pity for the wealthy but lack of compassion for the poor: here the wealthy pay everything and the poor pay nothing and I as a libertarian would consider it an improvement on our present state.

Sam Grove April 23, 2011 at 10:05 pm

but what you and especially Mr. Grove should keep in mind is that these folks would not be ‘supporting everyone else.’ They’d just be bankrolling the functions of government. For example, we could still have a pretty effective government even if its revenues were entirely limited to the ~40% of its revenue coming from the top 1%

they may be “bankrolling” the functions of government, but the costs must be borne by those that labor to produce consumption wealth by way of a relative lower standard of living. There is no way to make “the wealthy” bear those costs.

The costs must be paid by producers regardless of income level.

John Dewey April 24, 2011 at 5:48 am

“but my intuition says that we are very close to that point on the Laffer curve that maximizes tax revenue, if only because politicians have known about the Laffer curve for decades now and that’s where their self-interest would lead them to steer tax policy”

I disagree. In the first place, I doubt that most of the Democrats in Washington have a clue about the logic behind the Laffer curve. Second, I doubt that those Democrats who do understand the logic will even accept it. Just consider that even supposedly conservative economists have denied that lower tax rates led to increased government revenues. Third, politicians of all stripes are more interested in increasing their personal power than in increasing government revenue. While it is true that more government revenue an lead to more power, it is also true that higher than necessary tax rates can result in powerful taxpayers begging – with bribes – for assistance.

“They’d just be bankrolling the functions of government”

It is the “functions of government” funded by taxes which are the real prolem to beginb with. Almost all of those functions would be far better performed by private organizations.

“we could still have a pretty effective government”

I think most at Cafe Hayek will agree that “pretty effective government” is not a concept supported by any real evidence.

Economiser April 24, 2011 at 9:53 am

The Laffer curve concept applies equally to tax burden as well as nominal tax rate. Washington could retain the same tax rates but dramatically reduce the tax burden by simplifying the behemoth of a tax code we have today. The fact that they haven’t done so is evidence that their self-interest is not where you think it is.

dan April 25, 2011 at 2:09 am

Wouldn’t a rate closer to 18%-20% be on target for the Laffer Curve, if we were to accept Hauser’s law and apply the tax rate, accordingly?

Ken April 24, 2011 at 2:29 am

muirgeo,

“These two facts pretty much point to an undeniable third fact. That being that the first two facts could only be true if those rich people have garnered a far greater share of the income pie.”

This is what Plac asked as the very first question in the comments and it was shown that this is NOT correct. Why do you insist on being an unbelievable moron? Are you illiterate, lazy, or just plain stupid?

“And finally , a forth fact should jump out at one. That the other 90-95% of people in this country would LOVE to be paying more taxes if it meant they had a job or were making a better wage.”

If you’re a doctor, then you make much more than the average person. Do you LOVE paying taxes? Of course not dumbass!

“Oh a fifth fact…. My God how terrible if this trend continues the poor wealthy elites will be paying ALL the taxes… how horrific… how inhumane… what’s persecuted billionaire to do?”

It is horrific because it means that fewer and fewer people in the country have a financial stake in how well the government functions.

“Oooops… a sixth fact… federal income taxes are only a portion of ALL taxes paid.”

So?

“No now is NOT the time to pity the wealthy in America… that will be when they’ve finally pushed things a bit too far and their gates come crashing down… then pity for them might be in order.”

It is never time to divide Americans against each other. Your hatred of some Americans and indifference to everyone else is quite shocking. You are one of the most inhuman people with whom I’ve ever talked (digitally of course).

Regards,
Ken

muirgeo April 24, 2011 at 3:03 am

“Do you LOVE paying taxes?”

Taxes are the price we pay to live in a civilized society. My biggest problem is that the government is representing the interest of the wealthy and the interest of corporations over those of the majority of people. I would have no problem paying 40% on anything above 500K .

Paying taxes for the poor and the elderly is not a problem. Paying taxes to a government that sets up conditions for massive accumulation of wealth among a few IS a problem for me.

Emil April 24, 2011 at 4:53 am

” I would have no problem paying 40% on anything above 500K .”

I thought you were campaigning for the rich paying 100% in taxes? Or I guess your definition of rich is anyone earning more than you?

“Paying taxes to a government that sets up conditions for massive accumulation of wealth among a few IS a problem for me.”

And the solution to this is… more government?

muirgeo April 24, 2011 at 9:35 am

“I thought you were campaigning for the rich paying 100% in taxes?”

NO… that’s just the stupid interpretation you guys have to attach to any meaningful real life pragmatic suggestions that maybe we are a little below the optimal tax rates.

But again for you OCD libertarian jack asses everything is black or white … all or none…yes or no…on or off. Where nuance might be considered you guys just bring up communism or Lenin or clubbing people over the head.

tkwelge April 24, 2011 at 10:38 am

Uh, muirgeo, have you ever read any of our posts or even your own?

Sam Grove April 24, 2011 at 11:55 am

meaningful real life pragmatic

Progressives like to string words like these together because they believe doing so automatically bolsters their argument regardless of whether true or not.

Ken April 24, 2011 at 12:50 pm

muirgeo,

“Taxes are the price we pay to live in a civilized society.”

To an extent, I agree, but as has been shown historically in the US taxes don’t need to exceed 5% of the GDP and local taxes don’t need to exceed 10% to provide institutions for phenomenal increasees in living standards.

“My biggest problem is that the government is representing the interest of the wealthy and the interest of corporations over those of the majority of people.”

Your lying. You lobby all the time for the government to take from the middle class and give to the rich, except you call it “taxing”.

“I would have no problem paying 40% on anything above 500K .”

You’re lying.

“Paying taxes for the poor and the elderly is not a problem.”

You seem to think that forcing others to pay taxes for poor people doesn’t cause a large number of people to remain poor rather than work their way out of poverty. And why should tax money be given to old people, the most affluent segment of our society?

“Paying taxes to a government that sets up conditions for massive accumulation of wealth among a few IS a problem for me.”

Accumulation of wealth is typically due to production of wealth. I am grateful that there are government institutions that encourage the massive production of wealth which results in massive accumulation of wealth. There is no doubt that people like Oprah and Bill Gates have made our lives better and deserve their wealth.

Lastly, do you think the world should only have moderate accumulation rather than massive? Isn’t it better for their to be massive accumulation of wealth rather than just a little? Due to that massive accumulation of wealth, even the “poor” citizens of the US today have more material comfort than the wealthiest American just a century ago.

Regards,
Ken

vikingvista April 24, 2011 at 5:31 pm

That’s a non sequitur. Taxes aren’t for what people are willing to pay. Taxes are for what people are unwilling to pay.

gregworrel April 24, 2011 at 10:29 pm

Taxes are evidence that we do not live in a civilized society. In a truly civilized society all funding would be voluntary or not at all.

yet another Dave April 25, 2011 at 4:31 pm

True ‘dat!

MWG April 25, 2011 at 2:14 am

“I would have no problem paying 40% on anything above 500K .”

Of course you wouldn’t as you don’t make above $500K.

Methinks1776 April 24, 2011 at 10:49 am

Ken:”Are you illiterate, lazy, or just plain stupid?”

Obviously, all three.

Malikail April 23, 2011 at 7:55 pm

Any income tax is morally wrong.

What should be taxed are assets, those things bought and held, I believe hereditary wealth would fall under that solving the entire problem……

but then i’d reduce military spending by over 80% and end all entitlements so in my mind we’d need only a small fraction of the taxes currently collected anyway.

Brian Bedient April 23, 2011 at 8:08 pm

Asset taxes are more moral than income taxes? How so? I fail to see how one is morally superior to the other.

Efficiency-wise, I’d think income taxes would be preferred because they wouldn’t result in the forced sale of assets (possibly at a bad price) to pay tax bills by those with large holdings but low current incomes. Income taxes, at least, one can always pay out of current income.

I’m with you on reducing the size and scope of government but let’s not pretend that one kind of theft is more moral than any other.

Methinks1776 April 23, 2011 at 8:26 pm

And a consumption tax is better still – voluntary and taxes what you take out of the economy instead of what you put into it.

Brian Bedient April 23, 2011 at 9:43 pm

A consumption tax is no more voluntary than an income tax, or an asset tax for that matter.

They’re also regressive by nature, falling the hardest on those we’d expect to have the highest marginal utility of money – raising the same amount of revenue would cause more suffering with a consumption tax than with an income tax.

There really is no such thing as a good tax. A progressive income tax is the least bad tax I can think of, but it’s still, at its core, simply theft.

Methinks1776 April 23, 2011 at 10:11 pm

How is it that you know what everyone’s marginal utility of money is? You don’t. You’re guessing based on some arbitrary metric – the total amount of money one chooses to work for.

Consumption taxes are absolutely much more voluntary than income taxes. You can choose your level of consumption while suffering no disincentive to be productive – which will lead to more wealth creation. Do you find being more wealthy painful?

It is utter nonsense to claim that raising the same amount of revenue from a consumption tax would be more painful.

I have no idea how you reconcile raising the same amount of revenue as Uncle Sam does now with “taxation is theft” in your own head.

vikingvista April 24, 2011 at 4:15 am

“There really is no such thing as a good tax.”

This is true. But a progressive income tax is far from the least bad. The least bad tax is the one you can most easily avoid. The reason is twofold: (1) taxes are always wrong, and people should never have to pay them; (2) easy tax avoidance puts pressure on governments to keep taxes low. Most state sales taxes are like that, since you can buy online and avoid them.

“Tax fairness” is contradiction in terms. I advise anyone and everyone who can successfully avoid taxes to do so to whatever extent possible (and really, who doesn’t take that advice?), without regard to whether or not others have that opportunity. There is no solidarity in victimhood. If you can escape the boot, then I am happy for you. I surely wish that I could.

Of course, if you avoid being victimized, but advocate for the victimization of others, then I wish you into the deepest ring of Hell.

Randy April 23, 2011 at 8:03 pm

Whether or not to tax the rich is simply the wrong question. The right question is what to do with the poor. Because the rich are doing great, the middle class is doing just fine, and it isn’t that hard to be middle class.

Methinks1776 April 23, 2011 at 8:37 pm

What poor? The middle class in most of the rest of the word is desperately trying to claw its way up to the living standards of America’s “poor”. section 8 housing was better and bigger and cheaper than my first two apartments in NYC.

On her first visit from Cairo, an Egyptian asked me where the poor in NYC were. I pointed out the housing projects. She said “no, I mean the poor. Then I went to Cairo and saw the squalor in which the Egyptian doctors and lawyers lived. “The poor” live in cemeteries.

There will always be someone poorer than others and there’s nothing you can do about that.

Randy April 24, 2011 at 5:02 am

I agree that “nothing” is a valid answer to the question of what to do with the “poor”, for a variety of very practical reasons.

vikingvista April 24, 2011 at 4:17 am

“The right question is what to do with the poor.”

The first thing is to lift the government ban on their labor, aka “minimum wage laws”.

Randy April 24, 2011 at 5:05 am

I would not be opposed to “government” solutions to the question of what to do with the poor, if such a thing as “government” actually existed. Perhaps unfortunately, it does not exist, and the political organizations we have can not be trusted to do anything for the poor without first lining their own pockets.

persiflage April 23, 2011 at 8:50 pm

Some people just aren’t producing their fair share.

tkwelge April 23, 2011 at 9:11 pm

+1

As I am probably the poorest person on this board without kids, I will point out that the poor do seem to bitch an awful lot while spending most of their time partying and avoiding work. I could be working more and supporting a higher quality of life for myself and my girlfriend, but I made the choice that weed and leisure were worth more to me than a newer car or a bigger tv (I already have a 42 inch!).

It actually makes me sick to see poor people complain as if they are entitled to something when I see this same poor person avoid doing actual work for the lionshare of their lives. For some reason, the image being peddled today is that of “the working poor.” When people mention “the working poor” they want you to think about a single mother with 5 kids who’s also taking college classes who needs government assistance just to prevent her and her kids from starving to death. Yes, people like that do exist, but they are more like 5% of the poor or less.

Actually, most of the bitching that I hear comes from the middle class. They literally think that they are entitled to a house and a new car. Whenever I tell my friends parents that they should trade in their cars and move into an apartment in order to effectively double their real incomes, they always respond, “Live in an apartment? I’m 48 years old!!!” Of course, they used to rationalize their overspending and lack of thrift by arguing that their house was their long term savings, but we all know where that thinking got them…

All of the American dumbasses who blame “Wall Street” for all of their problems need to think really hard about their own decisions for once.

Randy April 24, 2011 at 5:27 am

Great line. Technically, it could stop after “producing”, but the addition of “their fair share” does have counter-propaganda value.

gregworrel April 24, 2011 at 9:51 am

Yes. I miss the like button.

I am surprised that so many of my friends who make decent incomes insist that the rich are not paying enough. I am not in the top 2% but I have absolutely no desire to see anyone pay more in taxes. The rich could spend their money to hire belly dancers to feed them grapes and the money would be better spent than if paid in taxes.

The other part of it I find morally repugnant is the idea that someone else should be forced to pay for benefits that go to me. Or even to causes I believe in. How is it that people even think this way?

B April 23, 2011 at 11:20 pm

That graph fails to show the % of income going to the top 1%. The Left loves to mention how much income the top 1% gets. The Right loves to mention how much taxes the top 1% pays.

As long as anyone mentions one and not the other, we’ll continue talking past each other.

Emil April 24, 2011 at 2:56 am

You don’t get income, you earn it

Economiser April 24, 2011 at 10:02 am

*Like*

brotio April 24, 2011 at 7:13 pm

Hehe,

I watched, “McLintock” the other day. Your post reminded me of this exchange from the movie:

DEVLIN: … l suppose l should have been grateful you gave me the job.

MCLINTOCK: Gave? Boy, you got it all wrong. l don’t give jobs. l hire men. You intend to give this man a full day’s work, don’t you, boy?

DEVLlN: You mean you’re still hiring me, Mr. McLintock? Well, yes, sir. l mean, l’ll certainly deliver a fair day’s work.

G. W: For that, l’ll pay you a fair day’s wage. You won’t give me anything, and l won’t give you anything. We both hold up our heads.

Great bit of philosophy, there! :)

Chucklehead April 24, 2011 at 2:42 am

The dirty secret is that the average Joe, whether the mean or the median does not cover his own weight. by paying for as much government as they consume. The top 10 % can easily carry the bottom 25 percent, but not the middle 50 percent too.
Also a consumption tax, which is usually a flat tax is neither progressive or regressive, and don’t tell me about % of income, for no market works that way.
My accountant once told me I was fortunate to be in such a high bracket, which I replied to her: “Do you tell rape victims that they are fortunate to be so pretty?

vikingvista April 24, 2011 at 4:19 am

““Do you tell rape victims that they are fortunate to be so pretty?”

I love it.

Methinks1776 April 24, 2011 at 9:57 am

Me too!

brotio April 24, 2011 at 7:14 pm

Me three!

Randy April 24, 2011 at 5:21 am

Great comment, but I’ll take this opportunity to mention yet again that I disagree with the premise that the dollar amount on the check which one hands over to the IRS is a true measure of the amount of taxes that one pays. That is, I don’t believe that the rich are actually paying most of the taxes, or that much of the middle and lower classes actually pay none. It is a violation of common sense to believe that the powerful serve the less powerful. I believe that there are two primary reasons why this strange belief is so widespread. One, the massive propaganda regime deployed by the political class to promote the belief, and two, the lazyness of academics who do not follow the concept of tax incidence to its full extent.

John Dewey April 24, 2011 at 6:07 am

” It is a violation of common sense to believe that the powerful serve the less powerful”

If, by powerful, you are referring to wealthy Americans, then I disagree. It is exactly the act of providing goods and services to the common man which has enabled such men as Steven Jobs, Sam Walton, Phil Knight, and Steven Spielberg to become billionaires. It is primarily through government spending and interference in the economy that a few wealthy Americans have obtained billions without directly or indirectly serving the consumer.

Randy April 24, 2011 at 9:12 am

I understand your perspective, but my use of the word “serve” is akin to servant, or slave, and not as used in the term “goods and services”. What Jobs, Walton, Knight, Spielberg and their colleagues do is trade, not serve. I’m all for trade. I wouldn’t tax traders at all, regardless of their accumulated wealth, because trade is inherently beneficial to all parties involved. I would tax politicians at the rate of 100%… no, make that 200%… punitive damages do seem to be in order.

Mao_Dung April 24, 2011 at 6:21 am

Krugman says that you are repeating a “zombie tax lie.” What is PK missing?

http://krugman.blogs.nytimes.com/2011/04/22/zombie-tax-lies/

Methinks1776 April 24, 2011 at 10:02 am

Scruples.

tkwelge April 24, 2011 at 10:51 am

The top twenty percent pays 64% of taxes while earning a smaller percentage of income. That still seems pretty progressive. Also, we are talking about federal taxes only for a reason, your local taxes are not necessarily my problem. Good luck with your local issues, but leave me out of it!

If you look at this older study, which is also fraught with issues, especially since the US data is from the middle of a recession in which the taxes paid by the rich are skewed downwards due to lower capital gains and whatnot, the tax system of France is only slightly more progressive than the the US tax system overall. The Uk has the most progressive taxes in the world according to this study, but of course, UK data is from the year 2000, so I don’t know if that is still true.

Focusing on the progressivity of the taxation system is meaningless, as it is the distribution of benefits that really matters. The European countries tend to focus their spending on welfare rather than simply government largess. We easily take in enough money to provide the services of a gargantuan welfare state, but the US tends to focus the bulk of its spending on middle class entitlements, public works, and corporate welfare.

tkwelge April 24, 2011 at 10:56 am
Harold Cockerill April 24, 2011 at 7:31 am

The looter class doesn’t really care how much money you get from the producer class. They are more interested in punishing somebody because they’re mad that life dictates production before consumption. They hate the way the world works. They hate producers and anyone that’s not a looter and probably they hate themselves.

It takes a miserable person to spend a lot of time worrying about how much money someone else makes.

muirgeo April 24, 2011 at 9:25 am

Who here thinks are economy isn’t doing so well and who here can point to the last time our economy was “on track”?

Randy April 24, 2011 at 6:38 pm

Muirgeo. I assume that you are saying here that you want more “economy”. But at many other times you have said that you want more taxes on the economy. We tax things that we want less of. So… choose.

Ken April 24, 2011 at 9:11 pm

muirgeo,

For the most part, individual earnings and total earnings do just fine. What we mainly rail against here on this site is the destructive nature of the government (like creation of the tech stock and housing bubbles through a combination of irresponsible laws and monetary manipulations). What you call for is an increase in this destructive government force. And you want to claim that rich people can pay for it, saying they’re not paying their fair share.

The jpg you point to clearly shows you are a liar. The rich pay far more than their fair share. The Census Bureau statistics show that people are getting richer (with those earning over $100K doubled as a percentage of the population from 1980 to 2008 after adjusting for inflation), then you lie and say this is untrue, that government needs more money because rich people are getting too rich (whatever that means) and everyone else is falling behind.

You can try to claim that libertarians believe there is a “track” for an economy to take. The reality, though, is that there is NO track for an economy. It cannot be centrally controlled or guided, which the last 500 years, if not the last 5000, shows us.

Letting people create what they want and sell what they want without government interference and theft. Government is the greatest impediment to human happiness and material well being the world has ever known.

Regards,
Ken

muirgeo April 24, 2011 at 9:49 pm

“It cannot be centrally controlled or guided, which the last 500 years, if not the last 5000, shows us.”

Oh so feudalism, communism, dictatorships, libertopias and social democracies basically have nothing to do with economic outcomes?

That’s a stupid statement. You should retract it immediately… give it some more thought and then get back with us later.

Ken April 25, 2011 at 11:01 am

“Oh so feudalism, communism, dictatorships, libertopias and social democracies basically have nothing to do with economic outcomes?”

That’s right. These small examples you give show clearly how a coercive government cannot direct an economy, but merely ossify it. Feudalism, communism, dictatorships, liberal utopias like communism and dictatorships (which you call libertopias) have never been responsible for moving an economy forward, much less directing it.

Modern social democracies depend on the one federal democracy (the US) for nearly every innovation, since it’s illegal to work too hard and innovate too much (i.e., profit too much) in those social democracies.

Regards,
Ken

muirgeo April 24, 2011 at 9:31 am

http://4.bp.blogspot.com/-n70Q9jL-zks/TbB5isZWnBI/AAAAAAAAPOY/mu2vq43lstI/s1600/taxrates.jpg

So how’s this working out… do you all like the current economy? Think this is working out ok do you? Maybe we should cut more government services and taxes further? Think we should take milk away from the babies and heating oil away from he cold people? Think that will make things even better?

Again you guys position requires a complete denial of the current state of the economy. You simply don’t give a crap about how your theories aren’t working out in the real world.

You are the economic equivalents of Monty Pythons Black Night… completely limbless and claiming its only a flesh wound.

tkwelge April 24, 2011 at 10:58 am

“You simply don’t give a crap about how your theories aren’t working out in the real world.”

Examples pls?

muirgeo April 24, 2011 at 3:28 pm

Examples pls?

The current economy…. you guys seem content with it. I think we can do much better

You guys claiming poor people have it good…. I think they do not. I think they could be doing much better and far fewer in numbers. I think we let a lot of human potential go to waste unfulfilled because we set up and allow for such massive unnecessary inefficient concentrations of wealth.

JohnK April 24, 2011 at 5:08 pm

I was driving past a construction site today and saw something you would likely call an unnecessary inefficient concentration of wealth in the form of several pieces of construction equipment that I doubt is owned by the people who use them.

Of the people at the site I imagine perhaps one percent of them owned the vast majority of the wealth. That would be the employer.

Holy shit you’re stupid.

muirgeo April 24, 2011 at 9:51 pm

The same situation existed during the feudal system. The means of production and most property was held by a few people.

JohnK April 25, 2011 at 6:16 am

The feudal system was imposed by top down authority.

The same top down authority that you feel can “save” us from capitalism.

Holy shit you’re stupid.

Ken April 24, 2011 at 9:24 pm

muirgeo,

“You guys claiming poor people have it good…. I think they do not.”

How many people die of malaria these days? How about measles, mumps, rubella, plague, polio, etc.? How many mothers die during child birth? What are the rates of survival for the various cancers? What is the average number of calories people consume on a daily basis?

Now compare these to 50 years ago and 100 years ago. The worst diseases were irradicate first. Due to people living longer other diseases now cause death, but to people decades older than in the past.

How many people in this country own a car, a refrigerator, a house, central air and heat, TVs, a washer and dryer, have electricity, running water hot water, etc? It is undeniable that people in the US have a wonderful standard of living. Our recessions now cause people to go on less expensive vacations, buy cheaper cars, etc. Our recessions do not cause people to starve to death, or disease to run rampant. All of which used to happen in the west and still happens around the world in the countries unfortunate enough to have integrated Western culture and values.

“I think we let a lot of human potential go to waste unfulfilled because we set up and allow for such massive unnecessary inefficient concentrations of wealth.”

Then you are a dumbass. People achieving high levels of wealth accumulated in free markets, like Bill Gates’s wealth, are the RESULT of efficiencies. Accumulation of wealth in free markets are NEVER inefficient.

The policies you want to implement create waste of human potential by incentivizing working less if at all and placing responsibility for their own lives on others. Your world view and the politics associated with it create true misery by not allowing the full potential of human achievement. Free individuals engaging in free association and trade, unencumbered by the shackles of distorting and coercive governments are responsible for the amazing achievements of mankind.

Regards,
Ken

muirgeo April 25, 2011 at 9:35 am

How many people die of malaria these days?

Thanks The U.S. Public Health Services

How about measles, mumps, rubella, plague, polio, etc.?

Thanks public childhood vaccination program and publicly funded research supporting said programs.

How many mothers die during child birth?

Thanks Medicaid!!!

What are the rates of survival for the various cancers?

Thanks research from the NIH!!!!

What is the average number of calories people consume on a daily basis?

Thanks food stamp and student lunch programs.

Methinks1776 April 25, 2011 at 10:04 am

Thanks Medicaid!!!

Jesus, you are stupid. The very graphs you linked to in order to “prove” that showed that the drops in maternal and infant mortality dropped most precipitously well before Medicaid – and that’s without controlling for other factors like tech improvements in medical care.

What is the average number of calories people consume on a daily basis?

Thanks food stamp and student lunch programs.

I realize you are yourself obese, so the morbidly obese probably just look a little pudgy to you, but are you aware of the obesity problem in the United States? More calories ain’t what we need. Have you seen the slop that passes for “food” in a school lunch program? It’s a virtually inedible goo concocted almost entirely of fat, salt and sugar. This you support feeding children?

You are, without a doubt, the dumbest thing I have ever come across in my entire life.

Ken April 25, 2011 at 11:07 am

muirgeo,

First and foremost, your statement that my comment was directed at was how bad people’s lives are. You said “You guys claiming poor people have it good…. I think they do not.” Yet you post the above comment admitting that poor people do have it pretty good.

But, alas, you have to go and say really dumb shit. Which, I guess, you have to do being muirgeo and all:

“Thanks The U.S. Public Health Services….Thanks Medicaid!!!….Thanks research from the NIH!!!!….Thanks food stamp and student lunch programs.”

How many drugs have the US Public Health Services, Medicaid, or the NIH brought to market? Zero. All medicines are developed and brought to market by private organizations such as Merck and Pfizer.

Food stamps have nothing to do with AVERAGE calories consumed, only which person consumes it.

Nice try, though.

Regards,
Ken

brotio April 26, 2011 at 2:32 am

Thanks Medicaid!!!

Methinks,

He tried that one on you a couple of months ago. Dr Yasafi Goebbels must believe that if he tells the lie often enough, we’ll believe it.

tkwelge April 24, 2011 at 11:46 pm

Sigh,,,

Once again, Muirgeo believes that we are already living in libertopia and everything that goes wrong is the fault of the libertarians, period. Can somebody please point out the date that libertarians took over the government?

I was expecting specific examples. Go screw yourself, Muirgeo. You don’t deserve any respect from any other person. You remember that.

JohnK April 25, 2011 at 6:18 am

“You don’t deserve any respect from any other person.”

I’ve decided that all my posts directed to the med school flunky will end with “Holy shit you’re stupid”.

muirgeo April 25, 2011 at 9:38 am

Oh no we are not living in a true libertopia… the owners of production and wealth would NEVER let that happen. They like things just how they are … with you guys promoting the idea of it while they soak up all the power and wealth with policies that attempt to create it and have not unintended consequences… but very intended consequences of further concentrating their wealth and power. Guys like you are just their worker bees… mealy mouthed unthinking drones…. common day vassals and other sorts of dupes.

Methinks1776 April 25, 2011 at 10:06 am

Muirdiot believes in the tooth fairy and a free lunch. He doesn’t know where he is most of the time. He doesn’t know the meaning of words, so he obviously “believes” random things.

Have you ever talked to a drug addict? He sounds exactly like one.

robert_o April 25, 2011 at 12:43 pm

Doctors hoard all the good stuff.

tkwelge April 25, 2011 at 5:19 pm

In other words, muirgeo, you’re just talking out of your ass. Unless you can point to a libertarian proposal actually getting through the government, you have no argument.

Methinks1776 April 26, 2011 at 9:32 am

Twelge ,

In Muirdiot’s case, his ass is indistinguishable from his head.

tkwelge April 24, 2011 at 10:56 am

“Maybe we should cut more government services and taxes further?”

The current state of the economy has nothing to do with “cutting government services.” In fact, spending in every area has ballooned per capita, so I don’t know what the hell you are talking about.

http://www.usgovernmentspending.com/downchart_gs.php?year=2000_2015&view=1&expand=&units=p&fy=fy12&chart=00-fed_10-total_20-total_40-total_60-total&bar=0&stack=1&size=m&title=&state=US&color=c&local=s

Which area have government services been “cut?”

muirgeo April 24, 2011 at 3:31 pm

I think we can provide all we need to maintain society with current or even somewhat less than spending levels. The biggest cuts would come from the military and the biggest revenues increases would not have to come from raising tax rates but mostly from cutting out loopholes and growing the economy.

Ken April 24, 2011 at 9:31 pm

muirgeo,

Again, you are lying. Military spending today is what it has historically been – about 5% of GDP. While I think there needs to be an across the board cut of 15% for ALL government agencies (including for the DOD), cutting military spending is minor compared to any of the three largest programs in the government: SS, medicare, and medicaid. Without talking about how to control the costs of these programs you show just how uninterested you are in controlling out of control government spending and encouraging economic growth. These three programs account for $114,000,000,000,000 in unfunded liabilities. This number is twice the total wealth of the US, 10 times the size of national GDP, and 31 times the size of the federal budget.

In other words they represent a financial catastrophe. If any private sector company used the same accounting tricks as the ones government bureaucrats and politicians use for these programs, all the executives of those companies would be jailed. But people like you just stick your head in the sand and claim that it’s all military spending without saying how that could possibly be true.

Regards,
Ken

dan April 25, 2011 at 2:16 am

I would do 10%, followed by another 10% two to three yrs later. Military could be the exception with only a 5% decrease in the latter years.

Ken April 25, 2011 at 11:10 am

dan,

Excepting the military will only encourage politicians to engage in more militaristic actions in order to divert funding to their political friends and pet projects. The initial course of action should be an across the board budget cut. If you want to initially do 10%, fine, I’m on board with that.

Regards,
Ken

yet another Dave April 25, 2011 at 4:55 pm

This is the discussion that should be happening! The only fiscally sensible thing to do in the present fed-gov’t situation is an immediate across-the-board budget decrease (including everything, not just “discretionary” spending). I’d argue for at least -20% this year followed by -10% each of the next 3 years. That would at least be a decent start.

The only downside is the improved fiscal situation would reduce pressue for the substantial government reductions that should happen, but that problem won’t happen because the politicians aren’t going to significantly cut spending any time soon.

optimus primed April 24, 2011 at 4:39 pm

Please report to me back on the % breakdown of annual spending on defense vs entitlements. The only person who is serious about cutting spending for a “future economy” and only mentions defense cuts is nothing more than a partisan left-wing hack.

Everyday Anarchist April 24, 2011 at 9:17 pm
muirgeo April 25, 2011 at 2:41 am

There are plenty of decent billionaires that disagree with you.

http://www.thedailybeast.com/galleries/2834/1/

As founder of Farallon Capital Management, (Tom) Steyer’s wealth was estimated to be $1.2 billion in 2008. “I think anyone who doesn’t give credit to the system that they are born into is taking an awful lot onto themselves,” Steyer told Amanpour. “I mean, I really think that people have sacrificed a lot more than a little tax money to make that system available for all of us.”

Nicely put!!!

Methinks1776 April 25, 2011 at 10:09 am

Nobody is stopping him from paying tribute to the system he worships, idiot. Interestingly, despite being a billionaire who worships at the alter of “the system”, he doesn’t pay one penny more to that system than it takes to keep his ass out of jail.

Empty words aimed at empty heads. I see he’s hit his target audience.

Mesa Econoguy April 25, 2011 at 11:54 am
muirgeo April 25, 2011 at 9:40 am

And anarchy is stupidity of a great degree. I bet you are thieving via public resources almost every hour of your silly miserable deluded life.

Sam Grove April 25, 2011 at 2:15 pm

The solution to that would be to stop providing public resources.

Ross April 25, 2011 at 8:27 am

@Muirgeo

You would have the government force people, with guns and cages, to do what Tom Steyer is doing voluntarily of his own free will?

muirgeo April 25, 2011 at 9:43 am

No. I would suggest we do it democratically. Most people overwhelmingly support increasing taxes on higher incomes.

Ken April 25, 2011 at 11:12 am

Most people used to overwhelmingly support segregation and slavery too. Majorities, even vast ones, don’t make it the correct decision or even morally right.

muirgeo April 25, 2011 at 12:03 pm

Assuming massive accumulations of wealth are an OK way to arrange society doesn’t make it right either. Assuming wealth is proportionate to value has no basis either.

JohnK April 25, 2011 at 12:07 pm

You’ve got a point.
Society would be so much better without massive accumulations of wealth in the form of hospitals, universities, factories, department stores and such.
It would be so much better if we didn’t have those things.
Yes, massive accumulations of wealth are horrible for society.

Holy shit you’re stupid.

Slappy McFee April 25, 2011 at 12:10 pm

Why is society something that must be arranged?

Ken April 25, 2011 at 2:09 pm

muirgeo,

The difference is that to accumulate massive amounts of wealth in a free market, you have to produce a product and service that provides at least that much wealth. For example, Bill Gates is directly responsible for an operating system and productivity software suite that provides trillions of dollars worth of wealth.

In a free market providing a product or service that people want is the ONLY way to to accumulate any wealth. To accumulate massive amounts of wealth you have to provide massive amounts of value.

You seem to not understand that second part. Go read it again if you need to, which you clearly do since you said this:

“Assuming wealth is proportionate to value has no basis either.”

I’m not ASSUMING anything. The value that Bill Gates has provided is proportional to the wealth he has accumulated is a verifiable fact. That you deny this shows that you are either dishonest or you don’t understand economics or, most likely, both.

Regards,
Ken

JohnK April 25, 2011 at 2:25 pm

“That you deny this shows that you are either dishonest or you don’t understand economics or, most likely, both.”

He’s just stupid. That’s all.

Thick as a brick.

Methinks1776 April 25, 2011 at 3:57 pm

Idiot, you couldn’t arrange food on a plate, never mind “society”.

Thomas A. Coss April 25, 2011 at 2:15 pm

Interesting indeed, but perhaps not helpful in that the administration (Obama specifically) has stated that he is for higher taxes on the wealthiest even if it doesn’t mean more revenue. I’m not certain how one gets around that.

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