McCain's Big Backfire: Majority of Americans Like the Idea of Spreading the Wealth

[dalegg 143]

I would have to say that the middle class pays most of the taxes for this country. We middle class people work our AZZes off and get taxed the most. The rich usually get to write most of their taxes off. The poor doesnt have to pay as much tax, so there leaves the middle class holding the vasoline.

That is completely contrary to the data though.

[HAL 9000 96]

I think she is referring to relative load of taxation to income.

[diadromous mermaid 36]

Frankly, I think that the current taxation system is flawed anyway, if one is looking to improve the average person's standards of life. If one is intent on making sure that each American pays only a fair share of the tax burden, then the whole system should be revamped, and a "consumption" tax be instituted. Now that would be a prudent and fair resolution that would not incur a "redistribution of wealth" per se, but would place the onus on those that consume more, and relieve those that consume less.

[one...two...tree 2,762]

Dale, would you agree that we as a nation would be better off with a large Middle Class where there is less disparity between the highest income earners and the lowest? And if so, how do you envision that happening?

I happen to think we do have a large Middle class. Go on, start throwing your tomatoes, but I've been to other countries where there actually is a large disparity and we don't look nothing like that.

Compared to many Third World countries, you're right. Compared to most industrialized nations, we've fallen behind.

Yes, but they are all socialists.

No they're not....not in the truest sense of the word...and certainly nothing like the socialism of the former Soviet Union or even modern China.

Frankly, I think that the current taxation system is flawed anyway, if one is looking to improve the average person's standards of life. If one is intent on making sure that each American pays only a fair share of the tax burden, then the whole system should be revamped, and a "consumption" tax be instituted. Now that would be a prudent and fair resolution that would not incur a "redistribution of wealth" per se, but would place the onus on those that consume more, and relieve those that consume less.

Mike Huckabee was proposing a similar tax system. It certainly sounded reasonable.

[Heracles 417]

Frankly, I think that the current taxation system is flawed anyway, if one is looking to improve the average person's standards of life. If one is intent on making sure that each American pays only a fair share of the tax burden, then the whole system should be revamped, and a "consumption" tax be instituted. Now that would be a prudent and fair resolution that would not incur a "redistribution of wealth" per se, but would place the onus on those that consume more, and relieve those that consume less.

A suitable alternative is the federal GST system.. Works well overseas

Edited November 3, 2008 by Aficionado

[dalegg 143]

Dale, would you agree that we as a nation would be better off with a large Middle Class where there is less disparity between the highest income earners and the lowest? And if so, how do you envision that happening?

I happen to think we do have a large Middle class. Go on, start throwing your tomatoes, but I've been to other countries where there actually is a large disparity and we don't look nothing like that.

Compared to many Third World countries, you're right. Compared to most industrialized nations, we've fallen behind.

Yes, but they are all socialists.

No they're not....not in the truest sense of the word...and certainly nothing like the socialism of the former Soviet Union or even modern China.

Socialist-light.

[HAL 9000 96]

In theory, a consumption tax would be optimal if you lived in a society where upwards mobility really was something every single member of the society could equally achieved. Given we live in a country where the consumer market drives the economy above other services and industries, a VAT system would be required to be far lower than it could likely support the economy under current economic conditions.

Who's to argue that it wouldn't work in the future? Certainly not me. Perhaps another angle that people aren't near considering is that the whole BS behind wealth redistribution could actually work to stabilize the economy and correct the unfair system that exists today so that we could one day eliminate income tax altogether and keep a VAT in place with simple deductions/exemptions to adjust for real-time conditions.

[IAMX 3,055]

Why do you say that the extra money given back to the wealthy had no trickle down affect? Did they just take all of their tax savings and put them into savings accounts and contributed nothing to the economy? How do you know that? Up until very, very recently the economy was actually doing pretty darn good, despite two wars going on. You can argue about the debt...but hold off on that for just a minute since I'm not arguing that. I'm trying to imagine what the economic picture would be like if they didn't have their tax cuts. How much worse off would the automobile industry be for example.

Firstly, once again, lowering taxes as a trickle down effect is a short term solution. In the long term, it f*cks the economy, screws up the debt, and places a burden upon the lower and middle class, which is what we see now.

I can understand how you would want middle class persons such as you and I to have more of a tax break than the upper class who don't need it. Nobody is arguing that they need it, but why do you think we have actually suffered because they have had more money to spend? This is the part I'm confused about. When they got their tax breaks, it didn't come at our expense. We also got tax breaks. I get that our dollar is a bit weaker because of our debt, but I would argue that in a further depressed economy caused by this particular group not spending any money there would be even less tax dollars going into the system.

We're mainly talking about our local economy, not the value of the dollar on global markets.

As in, when the tax burden shifts to the lower and middle class, wages go down, and/or local purchasing power is weakened by this group. They don't spend money, because they don't have it, and it also helps fan the fires of problems like the housing crisis.

The tax burden is already on the middle and lower class? What in blazes are you talking about?

Secondly, just as the last paragraph iterated, the tax burden is on the middle class. When wages go down, it's because a tax is being passed down to those in the middle and lower class, meaning the burden comes upon them to compensate the lower wages by spending less, because the taxes being taken out hurt them, further harming the economy. This is the "trickle down effect" (pun intended) of a stagnant economy or one in recession. The way this is mitigated is lowering taxes on the middle and lower class, raising taxes on the upper class (who have the least amount of movement from a tax increase), to give the middle and lower class the ability to make their dollar extend further, thus helping the economy, and also creating more jobs by spreading money around the local markets.

Sorry man. I'm just not in agreement with you on this one.

Explain.

[dalegg 143]

Why do you say that the extra money given back to the wealthy had no trickle down affect? Did they just take all of their tax savings and put them into savings accounts and contributed nothing to the economy? How do you know that? Up until very, very recently the economy was actually doing pretty darn good, despite two wars going on. You can argue about the debt...but hold off on that for just a minute since I'm not arguing that. I'm trying to imagine what the economic picture would be like if they didn't have their tax cuts. How much worse off would the automobile industry be for example.

Firstly, once again, lowering taxes as a trickle down effect is a short term solution. In the long term, it f*cks the economy, screws up the debt, and places a burden upon the lower and middle class, which is what we see now.

I can understand how you would want middle class persons such as you and I to have more of a tax break than the upper class who don't need it. Nobody is arguing that they need it, but why do you think we have actually suffered because they have had more money to spend? This is the part I'm confused about. When they got their tax breaks, it didn't come at our expense. We also got tax breaks. I get that our dollar is a bit weaker because of our debt, but I would argue that in a further depressed economy caused by this particular group not spending any money there would be even less tax dollars going into the system.

We're mainly talking about our local economy, not the value of the dollar on global markets.

As in, when the tax burden shifts to the lower and middle class, wages go down, and/or local purchasing power is weakened by this group. They don't spend money, because they don't have it, and it also helps fan the fires of problems like the housing crisis.

The tax burden is already on the middle and lower class? What in blazes are you talking about?

Secondly, just as the last paragraph iterated, the tax burden is on the middle class. When wages go down, it's because a tax is being passed down to those in the middle and lower class, meaning the burden comes upon them to compensate the lower wages by spending less, because the taxes being taken out hurt them, further harming the economy. This is the "trickle down effect" (pun intended) of a stagnant economy or one in recession. The way this is mitigated is lowering taxes on the middle and lower class, raising taxes on the upper class (who have the least amount of movement from a tax increase), to give the middle and lower class the ability to make their dollar extend further, thus helping the economy, and also creating more jobs by spreading money around the local markets.

Sorry man. I'm just not in agreement with you on this one.

Explain.

The tax rate is very low on the lower classes, unless every document I've read and that anyone has ever posted is a lie.

[IAMX 3,055]

The tax rate is very low on the lower classes, unless every document I've read and that anyone has ever posted is a lie.

What is the timeframe of your tax data based on?

[Ling Ling 22]

Frankly, I think that the current taxation system is flawed anyway, if one is looking to improve the average person's standards of life. If one is intent on making sure that each American pays only a fair share of the tax burden, then the whole system should be revamped, and a "consumption" tax be instituted. Now that would be a prudent and fair resolution that would not incur a "redistribution of wealth" per se, but would place the onus on those that consume more, and relieve those that consume less.

A suitable alternative is the federal GST system.. Works well overseas

Greets Aficionado. I've heard of the GST system...but not really familiar with it. "Goods & Services Tax" right?

So can you give us a quick run-down on the pros and cons, and how it works.

[mawilson 2,133]

But if there is such a lopsidedness, how does it happen?

The answer is very simple - you get a better return on your investment if you have more money to invest.

I.e. it's easier to turn $100,000,000 into $200,000,000 in N months/years than it is to turn $10,000 into $20,000 over the same period of time.

[dalegg 143]

The tax rate is very low on the lower classes, unless every document I've read and that anyone has ever posted is a lie.

What is the timeframe of your tax data based on?

1980-2006

[HAL 9000 96]

But if there is such a lopsidedness, how does it happen?

The answer is very simple - you get a better return on your investment if you have more money to invest.

I.e. it's easier to turn $100,000,000 into $200,000,000 in N months/years than it is to turn $10,000 into $20,000 over the same period of time.

That's all great. Really. However, horded money is hardly invested. We are talking about the countless millions locked away while others are locked away in a cycle of not being able to invest in much for everyday subsistence.

[rebeccajo 14]

Ah, my charts and graphs from the other thread.

Here's what I said at the end of it:

"Well - it seems to me that looking at Adjusted Gross Income of all taxpayers is the only way to get a 'level playing field' picture of our progressive tax system.

There are a myriad of credits and deductions available to taxpayers, but the availability of these depend on the particular tax situation. If you are poor, you have the Earned Income Credit. If you are wealthy, you deduct your legitimate business expenses. We hear a lot about the wealth of our nation being concentrated with a very small percentage of taxpayers, but the extant question is how much of that wealth actually gets taxed.

According to this article (http://multinationalmonitor.org/mm2003/03may/may03interviewswolff.html), in 1998 (the last time reliable figures were collected) the upper 5% of US Taxpayers held 59% of the wealth in this country. If you look at table 5 in the article I cited, in 1998 these individuals (after their income was adjusted) made up 32.85 percent of the base upon which tax dollars were collected. Joe the Plumber is in this group.

The converse of this is telling - the remaining 41% of wealth in the US made up the adjusted base from which taxes were collected. 41% of the wealth made up for 71.44% of the base on which taxes were collected."

Okey dokey. What was I trying to say with that?

I'm trying to say that upper-echelon taxpayers get to hide more of what they earn from the taxman. The upper 5% have an upper hand when it comes to deductions. It's true they are paying the lions share (dollar wise) of taxes collected. But look at the AGI (adjusted gross income) to see a different kind of inequality. When you look at the amount of money they were taxed on compared to the amount the rest of us were taxed on, then it's abundantly clear that the other 95% of the population spread their wealth upward to make up for collected taxes. In the case of 1998, the lower 95% of wage earners were taxed on 71 cents out of each dollar they earned. The upper 5% were taxed on 33 cents of every dollar they earned.