Is this sustainable?
- Thread starter PhilFish
- Start date
FICA does indeed get refunded in part...now...or was that reduction and now extension a mirage..?
The germans have an interesting progressive taxation system..some singles pay upwards of 50% post solidarity taxes etc
Germany individual income tax rates ,2011
Tax % Tax Base (EUR)
0 Up to 8,004
14% 8,005-52,881
42% 52,882-250,730
45% 250,731 and over
The germans have an interesting progressive taxation system..some singles pay upwards of 50% post solidarity taxes etc
Germany individual income tax rates ,2011
Tax % Tax Base (EUR)
0 Up to 8,004
14% 8,005-52,881
42% 52,882-250,730
45% 250,731 and over
connieb
Senator
No I don't think it is sustainable.
I am an accountant - I generally do not do personal taxes unless they are mine and a few close friends. But, let me tell you that does not stop people from finding out I am a CPA then launching in on all manner of discussions on their personal finances and personal tax situations. Seriously, people at my son's school, friends of friends at parties, distant relatives,freaking other customers at Jiffy Lube......
I am all for helping people that need help. But, when people tell you how they are working the system to get the most back on their tax returns or get the most out of government programs, time and time again, it is hard to believe that the majority of people are doing the most they can for themselves and just taking what they need to get by. Our system encourages dependence. Non productivity is rewarded. That trend has got to stop.
I think right now we are in the depths of a recession unknown since the great depression. I don't think that where we stand with aid programs right now is where we should be. But, I do think we are starting to very very very slowly climb back out of the hole we have been in. So, it will be interesting to see the statistics in another 2 - 3 years. Because by then, I think we will have recovered all that we will recover, and I think that will be the new reality for our country.
I am an accountant - I generally do not do personal taxes unless they are mine and a few close friends. But, let me tell you that does not stop people from finding out I am a CPA then launching in on all manner of discussions on their personal finances and personal tax situations. Seriously, people at my son's school, friends of friends at parties, distant relatives,freaking other customers at Jiffy Lube......
I am all for helping people that need help. But, when people tell you how they are working the system to get the most back on their tax returns or get the most out of government programs, time and time again, it is hard to believe that the majority of people are doing the most they can for themselves and just taking what they need to get by. Our system encourages dependence. Non productivity is rewarded. That trend has got to stop.
I think right now we are in the depths of a recession unknown since the great depression. I don't think that where we stand with aid programs right now is where we should be. But, I do think we are starting to very very very slowly climb back out of the hole we have been in. So, it will be interesting to see the statistics in another 2 - 3 years. Because by then, I think we will have recovered all that we will recover, and I think that will be the new reality for our country.
Fine -- so long as I don't have to pay in for all of my life. If I am forced to pay into the system all my life, you can't test my means to see if I can make use of it. The reason means aren't in the Social Security/Medicare system is that the politicians who created those systems wanted to avoid class warfare -- do you want to institute it?
Yuri Zhivago
Mayor
that is a valid point that politicians at the time of creation of those programs thought that means testing =class warfare.
I do not.
fairsheet
Senator
(Sticking with the top-qualifier that we're talking specifically about federal income taxes)....
The 53% to 47% distinction is non-dispositive in and of itself. The dividing line between those who pay and those who don't, is arbitrary and a function of our democratic sociopolitic. In order to narrow consider of this issue, it might be useful for us to start with the Reagan Era, during which the largest percentage of Americans were shifted from "payer" to "non-payer" status. And coincident with this 31+ year era, we see a rather marked diminuition of the "non-payer" cohort's ability to extort "freebies" from the payers. This fact, runs counter to the conventional barstool wisdom that if the poor were more "invested", they might not demand quite so much spending.
So...if we look at the actual facts, we see that increasing the 47% figure, won't have any sort of positive impact on the spending side. But, what about the revenue side? And there again..our "47%" is arbitrary. There are two rather obvious ways of our incrasing that number, virtually overnight.
We COULD simply revise our tax regimes as they apply to these people - make them pay what they're not now paying. The problem with THAT - as Ronald Reagan so well understood, is that it's not in our economy's interest to try wringing blood out of turnips. The 10% we take from the poor guy, doesn't just come from his bottomline. It comes from our economy's bottomline AND it comes from taxpayer's bottomline in the form of the increased social services the poor guy will necessarily require.
-OR-...we could raise that "47%" figure, by increasing the incomes of those people, thereby exposing more of them to federal taxation. But there again, we would have to ask whether the economic costs of such wage inflation, would be a worthwile price to pay, simply in order to raise that "47%" figure.
I'm rambling...simply to make the point that 47% and 53%, don't tell us much by themselves.
degsme
Council Member
Well if a reduction in tax rates counts as a refund then Reagan+GWB refunded more than 50% of taxes to the wealthy...
That's not a valid line of reasoning.
I'm just asking.. and what makes it invalid?
in the case of the Germany example/..how did they get there?
I think it was called Agenda 2012 or some such.... they diminished social payouts (namely by capping UC and tying it to work requirements...and wrung concessions out of unions capping costs..)...anathema to the US political sphere...
in the case of the Germany example/..how did they get there?
I think it was called Agenda 2012 or some such.... they diminished social payouts (namely by capping UC and tying it to work requirements...and wrung concessions out of unions capping costs..)...anathema to the US political sphere...
D
Doc
Guest
Irrelevant.
2+ (-3) = -1
3 + (-10,000,000,000) = -9,999,999,997
See...no matter what you do, when you TAKE more out of the equation, than you put IN, you end up with a net NEGATIVE.
The only question for the United States and, Western Europe, is "how far into the red can we go, before the resources are all gone, and we simply have no more Golden Gooses to eat, as oppoed to just taking a few of their eggs, from time to time....????"
degsme
Council Member
Germany's top marginal tax rate is about 70%.... And while they do have national debt, they largely tax for their benefits. It is precisely because they tax top earners aggressively that their economy is more efficient. You can compare them to Switzerland with a higher Wealth disparity and lower marginal tax rates (basically the same as USAs) - which had the same GDP growth rate over the last decade (I'm leaving out the crash) as the USA.
Basically the data is clear, the economic Law of Diminishing Marginal Utility applies to income as well as anything else. So while the conservative mantra is that "the wealthy are job creators" they actually are not. Consider that CALPERS which is one pension plan in one industry in one state, has MORE ASSETS invested in "job creation" than the top 10 wealthiest individuals in the USA combined.
It wouldn't be "anathema" if those benefits were at Germany's levels. That for example is the myth that conservatives engage in when they point to how Canada "stabilized" its economy some 2 decades ago... they talk about Cutting taxes and benefits.... well yes that did occur. But AFTER THE CUTS the tax rates were at about 70% marginal rates and the BENEFITS were much higher than anything the USA has had AT ITS MOST GENEROUS (much less what we have now).
We have solid track record data on income inequality's impact on economic growth. One of the measures (not necesarily the best but one of them) is called the GINI coeff. http://en.wikipedia.org/wiki/Gini_coefficient its the one the CIA uses in its analysis https://www.cia.gov/library/publications/the-world-factbook/
We know that GINI coeff much below 0.20 result in stagant growth. And ones much above 0.35 result in reduced GDP growth AS WELL. Below .2 you suppress risk/reward too much essentially overweighting risk and underweighting reward. Above .35 you are essentially suppressing risk and overweighting reward thereby encouraging inefficient investing and spending.
ALL societies engage in wealth transfer: Consider the case of two hunter/trappers in the wilderness. Obviously working together they can catch bigger game, build a more robust shelter, be less susceptible to predation etc. But clearly because humans are inherently different, in any particular endeavor, one will be more adept than the other, yet both will be sharing in the increase in benefits of cooperation. That's clearly a "wealth transfer" from the more adept to the less adept in that moment.
And that basically scales up throughout all of society.
So the question then is not whether to engage in wealth transfer or whether not to. The question rather is WHAT SORT OF POLICIES are
1) sustainable - as you asked
2) desirable - based on the values of the nation
3) optimal - based on the values of the nation.
And I would contend that the problem with conservative approaches to this are twofold
1) there is a mythologized claim about "the values of the nation" that runs contrary to history and how the general populace chooses to live their life
2) there is a mythology about what actions/policies are optimal (most efficient) for achieving any particular goal.
and until we address BOTH of these issues, we invariably end up in the kinds of false dilemmas you presented at the top
degsme
Council Member
Cuz for roughly 31 years, we have been engaged in supply side economics... and it simply does not work. There is no historical example of supply side economics working.
None, not one. And we are paying the price of that 31 years of failed ideology just as much as the USSR paid for the failed ideology of an economic model that valued production targets ahead of optimized resource allocation
degsme
Council Member
Nope
2+(-3)=FF
3+(-10,000,000,000) = 17,7777,7777,6653,7501,6003
See no matter what you do, you first have to agree on the context.
That's for simple addition and subtraction. But the economy works a bit more complexly than that.
You keep forgetting that the defintion of what "1" means is not fixed. $1 has no fixed value.
What false dilemma? at issue is how to pay for the needs of the nation...and contrary to what your thoughts may be..I dont think we're far apart at all..
the values of the nations..conservative or no..are prety straighforward in my estimation..
good/universal healthcare / education / needs based social services... at issue is how to pay.
No question that the top earners should pay more, and the lowest earners should pay leaset...the poorest..none..
In the example of germany..theire reobust social services and quality HC and ed systems are funded by an aggressinve progressive taxation system. great system..something we should parallel.
but to cite it as example absent the means they took to get there..or canada for that matter..serves no purpose. they cut social services / capped/ negotiated and reduced..in concert with their revamping of the prog taxation system.
would be great to have it go down that way here too... but it wont. It's not a false dilemma..because no one is going to get 'just' the richest to pay. it's patently unfair. Sure, they shoudl pay a higher margin of earnings..but if the goal of equal utility to all..as far as HC/ED, etc goes..then the progressive structure will have to reach down to all but the poorest.
the values of the nations..conservative or no..are prety straighforward in my estimation..
good/universal healthcare / education / needs based social services... at issue is how to pay.
No question that the top earners should pay more, and the lowest earners should pay leaset...the poorest..none..
In the example of germany..theire reobust social services and quality HC and ed systems are funded by an aggressinve progressive taxation system. great system..something we should parallel.
but to cite it as example absent the means they took to get there..or canada for that matter..serves no purpose. they cut social services / capped/ negotiated and reduced..in concert with their revamping of the prog taxation system.
would be great to have it go down that way here too... but it wont. It's not a false dilemma..because no one is going to get 'just' the richest to pay. it's patently unfair. Sure, they shoudl pay a higher margin of earnings..but if the goal of equal utility to all..as far as HC/ED, etc goes..then the progressive structure will have to reach down to all but the poorest.
D
Doc
Guest
I understand you perfectly, now......
degsme
Council Member
The false dilemma is that you posit these primarily as costs, when the data suggests that they may be the very thing that actually ACCELLERATES GROWTH.
Ah here I think we have our major disagreement. just witness the rhetoric of posters like NC, Jen and AoD.
I can tell you from my interations with an old acquaintance who made his money at Microsoft, that "good universal education" is absolutely not something he supports.
Again, I don't think any of those are in any way "straightforward values of the nation"... just listen to the rhetoric about "job creators" or go read Lukey's posts on how taxation is the equivlient of slavery and you quickly get disabused of the universality of this view.
I think you and I may agree on this, but I don't think that it fits with the view many have of our nation. Actually I think the Canadian system is one that would work better in the USA, in as much as it is a bit less proscriptive. I was recently talking with a Fulbright Scholar on the difference between EU and North American legal systems (in a discussion with a French trained lawyer). In the EU a law about something tends to enumerate all possibilities, where as the USA and Canada (and UK) tend to instead legislate principles and policies and leave it to the courts to explore the nooks and crannies.
Net result is less legislation in the NorthAm, but more litigation vs. more legislation and less litigation in the EU.
As I responded to your "how do we deal with the National Debt " thread - we don't really need to. What we need to do is deal with THE DEFICIT and GROWTH.
BEcause if our GDP begins to outgrow the deficit, then the national debt eventually shrinks to nothingness. And the USA is not limited by a fixed lifespan in the time it has for making the debt infintessimal.
So if we cut DoD DIRECT spending by 20% and raised top marginal rates back to 70%, - say over 5 years. We would have the deficit to 1/3 of GDP growth within 4 years.
