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

[rebeccajo 14]

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.

This is the part your losing me on. Where are you getting this info from? I'm not seeing that column from what you posted.

From Table 5. Top 5% of wage earners - adjusted share of AGI - 32.85%. Year 1998.

All adjusted dollars are the same. They are worth - a buck. Whether they are on Bill Gates tax return or mine.

You are going to have to get a little more detailed to help me put this together! This just says that their adjusted share of AGI is 32.85%. That doesn't say they are only being taxed on 33 cents of every dollar they make! If it does then I guess the bottom 50% is only being taxed on 13.67 cents for every dollar in the same column.

All adjusted tax dollars are worth the same amount.

It's the number of those adjusted dollars that you declare on your return that determines the rate upon which you will be taxed.

And yes you are correct that the bottom 50% of taxpayers were taxed 13.67 cents of every adjusted dollar on their return.

[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?

1980-2006

Let me rephrase: How often is tax data, as well as taxable income, calculated?

Once per...

year. Obviously.

Ok, so what people misinterpret about tax burden is it's based upon end-of-the-year returns. It's not. Why? Because bills and other things aren't based upon the end of the year returns. It's based up a daily, weekly, bi-weekly, monthly, quarterly income because that is taxed and directly relative to ability to afford things. If the burden lies upon the lower and middle class, they have more of a difficulty paying for goods and services. This also coincides with lower wages, because these costs are being transferred to them. This is what raising taxes on the highest incomes, and giving a tax break to the lower and middle class will relieve. Additionally, due to costs being transferred, it means the upper class can stomach the taxes with little to no economic movement, or, relatively, the least amount.

Look. We either accept the figures produced by Tax Foundation or you don't. You can manipulate this data and twist it around apparantly in some very complicated ways, but at the end of the day it states simply that in 2006

From Table 8, the average tax rate on the bottom 50% was a whopping 3%. 3 freakin percent. How much lower are you going to go?

From the same table, the average tax rate on the top 5% is 20.68%.

From Table 6, it says that the top 5%- those getting taxed at 20.68%, contributed 39.89% of the total tax revenue while the bottom 50%- those getting taxed at the average rate of 3 freakin percent, contributed only 2.99% of the total tax revenue.

Now, how it is that you are saying that the group paying 3% of the total taxes is carrying the burdon for the group that is contributing 39.89% is completely beyond me.

You're not reading.

Do people pay bills or go shopping once a year? Do they get taxes taken out of their check once a year? Maybe if they are 1099, but that's paying as they get all of their check, and most people aren't, so they get taxes taken from their income every check. If wages are less (the byproduct of lowering taxes on the rich in the long term), and if goods are more expensive (because their value of service has gone down), do the people who have the hardest time affording them have a burden? They sure as #### do. Who is that? The middle and lower class.

Is this sinking in yet?

Edited November 4, 2008 by SRVT

[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

Let me rephrase: How often is tax data, as well as taxable income, calculated?

Once per...

year. Obviously.

Ok, so what people misinterpret about tax burden is it's based upon end-of-the-year returns. It's not. Why? Because bills and other things aren't based upon the end of the year returns. It's based up a daily, weekly, bi-weekly, monthly, quarterly income because that is taxed and directly relative to ability to afford things. If the burden lies upon the lower and middle class, they have more of a difficulty paying for goods and services. This also coincides with lower wages, because these costs are being transferred to them. This is what raising taxes on the highest incomes, and giving a tax break to the lower and middle class will relieve. Additionally, due to costs being transferred, it means the upper class can stomach the taxes with little to no economic movement, or, relatively, the least amount.

Look. We either accept the figures produced by Tax Foundation or you don't. You can manipulate this data and twist it around apparantly in some very complicated ways, but at the end of the day it states simply that in 2006

From Table 8, the average tax rate on the bottom 50% was a whopping 3%. 3 freakin percent. How much lower are you going to go?

From the same table, the average tax rate on the top 5% is 20.68%.

From Table 6, it says that the top 5%- those getting taxed at 20.68%, contributed 39.89% of the total tax revenue while the bottom 50%- those getting taxed at the average rate of 3 freakin percent, contributed only 2.99% of the total tax revenue.

Now, how it is that you are saying that the group paying 3% of the total taxes is carrying the burdon for the group that is contributing 39.89% is completely beyond me.

You're not reading.

Do people pay bills or go shopping once a year? Do they get taxes taken out of their check once a year? Maybe if they are 1099, but that's paying as they get all of their check, and most people aren't, so they get taxes taken from their income every check. If wages are less (the byproduct of lowering taxes on the rich in the long term), and if goods are more expensive (because their value of service has gone down), do the people who have the hardest time affording them have a burden? They sure as #### do. Who is that? The middle and lower class.

Is this sinking in yet?

*sigh* You are getting off topic. Do poor and middle class people have a harder time getting by than rich people. Well, duh. That doesn't mean that its because of the high taxes that they are paying to make up for the filthy rich who apparantly still aren't paying their share.

If I make $10,000,000 and you tax me 45%, I still have 4.5 Million and I'm not having a hard time paying the bills. #######, tax me 90% and I still have a million.

A guy making $20,000 getting taxed at 5% loses only $1000, and OF COURSE that $1000 is harder on him than the guy who went from $10,000,000 to $1,000,000 because you are struggling to get buy on $19,000 while you are still living high on $1,000,000. I GET IT!!

But that does not mean the guy on the bottom is paying the guy on top's share! What it means is that you think they guy on the bottom should probably not be getting taxed at all, and we should tax the guy on top to make up for it. Its that simple.

[HAL 9000 96]

We're still avoiding the transitory nature of a progressive tax system.

We're still avoiding the transitory nature of a progressive tax system.

We're still avoiding the transitory nature of a progressive tax system.

[diadromous mermaid 36]

And we're also forgetting Capital Gains taxes and how that directly impacts economic growth. The top eschelon under Obama's plan will pay more tax and CGT, remember.

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

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.

Thank you, RJ. That's what I understood to be the case.

[rebeccajo 14]

But that does not mean the guy on the bottom is paying the guy on top's share! What it means is that you think they guy on the bottom should probably not be getting taxed at all, and we should tax the guy on top to make up for it. Its that simple.

No. It means the guy on the top got a bunch of opportunities to lower his taxable amount.

He gets some of that opportunity by declaring hard business costs. He gets other opportunites by depreciation and other soft expenses.

Joe the Plumber can buy a van for his business and he can write off the loan expense or depreciate the van, thereby lowering his taxable income. Joe the Wage Earner cannot buy a car for his personal use and do the same. Would you like to wager that Joe the Plumber only uses his van for business, and never drives it to get groceries or pick up his kid from school?

This is why it makes little to no sense that Joe the Plumber wouldn't buy a van for his business because he's paying a few bucks more in taxes. He can write the cost of it off his gross income. The same with any wages he pays out. That's a hard expense.

Joe the Plumber will grow his business if the business is there to be had. Taxes ARE a concern when a smart businessperson makes a decision about whether to invest in capital or employees. But they aren't the only concern. If Joe is going to be so narrow-minded that he will dig in his heels and not grow his business solely becausee of taxes, then his competitor will. That's the REAL beauty of capitalism.

[dalegg 143]

But that does not mean the guy on the bottom is paying the guy on top's share! What it means is that you think they guy on the bottom should probably not be getting taxed at all, and we should tax the guy on top to make up for it. Its that simple.

No. It means the guy on the top got a bunch of opportunities to lower his taxable amount.

He gets some of that opportunity by declaring hard business costs. He gets other opportunites by depreciation and other soft expenses.

Joe the Plumber can buy a van for his business and he can write off the loan expense or depreciate the van, thereby lowering his taxable income. Joe the Wage Earner cannot buy a car for his personal use and do the same. Would you like to wager that Joe the Plumber only uses his van for business, and never drives it to get groceries or pick up his kid from school?

This is why it makes little to no sense that Joe the Plumber wouldn't buy a van for his business because he's paying a few bucks more in taxes. He can write the cost of it off his gross income. The same with any wages he pays out. That's a hard expense.

Joe the Plumber will grow his business if the business is there to be had. Taxes ARE a concern when a smart businessperson makes a decision about whether to invest in capital or employees. But they aren't the only concern. If Joe is going to be so narrow-minded that he will dig in his heels and not grow his business solely becausee of taxes, then his competitor will. That's the REAL beauty of capitalism.

Well yeah, Joe the Plumber was being disingenuous.

[rebeccajo 14]

And we're also forgetting Capital Gains taxes and how that directly impacts economic growth. The top eschelon under Obama's plan will pay more tax and CGT, remember.

Exactly.

A prudent business person can help lower capital gains by re-investing in their business. If you sit on your profit, you will pay for that gain.

Am I the only person who has wondered if that's not one reason there is talk of raising the CGT?

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

But that does not mean the guy on the bottom is paying the guy on top's share! What it means is that you think they guy on the bottom should probably not be getting taxed at all, and we should tax the guy on top to make up for it. Its that simple.

No. It means the guy on the top got a bunch of opportunities to lower his taxable amount.

He gets some of that opportunity by declaring hard business costs. He gets other opportunites by depreciation and other soft expenses.

Joe the Plumber can buy a van for his business and he can write off the loan expense or depreciate the van, thereby lowering his taxable income. Joe the Wage Earner cannot buy a car for his personal use and do the same. Would you like to wager that Joe the Plumber only uses his van for business, and never drives it to get groceries or pick up his kid from school?

This is why it makes little to no sense that Joe the Plumber wouldn't buy a van for his business because he's paying a few bucks more in taxes. He can write the cost of it off his gross income. The same with any wages he pays out. That's a hard expense.

Joe the Plumber will grow his business if the business is there to be had. Taxes ARE a concern when a smart businessperson makes a decision about whether to invest in capital or employees. But they aren't the only concern. If Joe is going to be so narrow-minded that he will dig in his heels and not grow his business solely becausee of taxes, then his competitor will. That's the REAL beauty of capitalism.

Well yeah, Joe the Plumber was being disingenuous.

[HAL 9000 96]

Its always going to be the same BS argument when an election rolls around. A very small chunk of change contributed by those that have horded wealth in order to improve the society that supports their horde vs a system that keeps it indefinitely that way. Nice. I guess it depends on what side of that fence you think you sit on.

[dalegg 143]

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.

This is the part your losing me on. Where are you getting this info from? I'm not seeing that column from what you posted.

From Table 5. Top 5% of wage earners - adjusted share of AGI - 32.85%. Year 1998.

All adjusted dollars are the same. They are worth - a buck. Whether they are on Bill Gates tax return or mine.

You are going to have to get a little more detailed to help me put this together! This just says that their adjusted share of AGI is 32.85%. That doesn't say they are only being taxed on 33 cents of every dollar they make! If it does then I guess the bottom 50% is only being taxed on 13.67 cents for every dollar in the same column.

All adjusted tax dollars are worth the same amount.

It's the number of those adjusted dollars that you declare on your return that determines the rate upon which you will be taxed.

And yes you are correct that the bottom 50% of taxpayers were taxed 13.67 cents of every adjusted dollar on their return.

Ohhhhh. Now I'm beginning to understand why Mawilson and I were not getting your logic. You are reading these charts incorrectly.

Table 5 is not telling you what share of each individuals total income makes up his AGI, its telling you what share of the total AGI earned in this country was earned by each group.

In 1996 for example, it tells you that the % of AGI earned in this country by the top 50% was 85.92%, while the bottom 50% brought in 14.08%.

85.92+14.08=100%.

It is not that the top 50% were taxed on 85.92% of their incomes and the bottom 50% were taxed on only 14.08%. Honestly, does that even sound right to you? Somehow the bottom 50% is able to deduct 85.92% of their Gross Income? For one thing it goes contrary to your final argument.

Look-Table 3 correlates this data-

In 1996, a total of $4,591,000,000,000 AGI was reported by American tax payers. The top 5% accounted for $1,394,000,000,000 of that.

$1,394,000,000,000 is 30.36% of $4,591,000,000,000, which is what you see in the corresponding cell of table 5.

Likewise $3,944,000,000,000 (total AGI reported by the top half) is 85.91% of $4,591,000,000,000,

and $646,000,000,000 (total AGI reported by the top half) is 14.07% of $4,591,000,000,000.

This is where those numbers come from. It's got nothing to do with what percentage of one's income a group is able to somehow hide from taxes.

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

I think my brain just blew a fuse.

[rebeccajo 14]

Dalegg:

Adjusted Gross Income is not dollars earned. It is dollars taxed.

Chart 5 shows the PERCENTAGE of the taxable base for each group. The percentage of 100%.

[dalegg 143]

Dalegg:

Adjusted Gross Income is not dollars earned. It is dollars taxed.

Chart 5 shows the PERCENTAGE of the taxable base for each group. The percentage of 100%.

You need to take a closer look. You are misinterpreting these charts. Chart 5 shows the percentage of AGI reported by each income group that makes up the total 100%- hence the title-

Table 5

Adjusted Gross Income Shares - meaning this groups share of the total.

It has zilch to do with the taxable base of those groups

You and Steven have posted data that directly contradicts your arguments.