If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(Washington Post)   A recent paper suggests a 50-70% high-income tax is the maximum revenue point on the laugher curve. Laffer. Sorry   (washingtonpost.com) divider line 269
    More: Interesting, income taxes, George H. W. Bush, Randy Levine, maximum, tax rates  
•       •       •

2717 clicks; posted to Politics » on 17 Apr 2012 at 3:39 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



269 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest

Archived thread

First | « | 1 | 2 | 3 | 4 | 5 | 6 | » | Last | Show all
 
2012-04-17 04:36:08 PM
Dusk-You-n-Me:
He posted yesterday about effective rates.

His source added in FICA taxes paid by employers (for the low end earners) and "corporate profits net of taxable dividends" (for the high end earners).

The fun part is when you look at the other charts from that source:
Link (new window)

...and see that Federal income taxes are EXTREMELY progressive - the bottom 20% only ends up paying 5% or so of their income to various Federal taxing authorities (income tax and others), while the top 1% pays about 21.1%.

A lot of the "extra" taxes for the bottom earners are from state and local tax - sales and real estate taxes, mostly.
 
2012-04-17 04:36:51 PM

Dusk-You-n-Me: tenpoundsofcheese: Doesn't mean that is why the economy grew.

The other side of that coin is that it also means those high tax rates didn't inhibit the economy from experiencing that growth. Which is the exact opposite of what we're told would happen by those in Grover's corner.


or did it? bumbumbahhhhhh
 
2012-04-17 04:39:10 PM

No Such Agency: EWreckedSean:
Taxes don't really work that way. When we were at 92%, the tax rate was in today's dollars on people making more than $4,000,000 a year, not $250,000 like today's top rate. Also the nature of loopholes and shelters then is such that almost nobody paid it.

Well, it's true that the wealthy would be idiots to actually structure their income as "income". Better to pay themselves in stocks for consulting with their own company, then write off their own compensation as a business expense, or some devious thing like that. Or, you know, just stop doing anything except live off of capital gains, and pay a lower % than a dishwasher in East Armpit, Idaho does on his $20,000/year.

/don't actually understand how the rich avoid taxation, but the gov't is awfully eager to ding that dishwasher the minute he deducts an invalid medical expense, while the rich generally avoid scrutiny indefinitely.


They don't. From this author's other story:

www.washingtonpost.com
 
2012-04-17 04:41:07 PM

cirby: Dusk-You-n-Me:
He posted yesterday about effective rates.

His source added in FICA taxes paid by employers (for the low end earners) and "corporate profits net of taxable dividends" (for the high end earners).

The fun part is when you look at the other charts from that source:
Link (new window)

...and see that Federal income taxes are EXTREMELY progressive - the bottom 20% only ends up paying 5% or so of their income to various Federal taxing authorities (income tax and others), while the top 1% pays about 21.1%.

A lot of the "extra" taxes for the bottom earners are from state and local tax - sales and real estate taxes, mostly.


Yeah looks like the 80 to 90 percentile are the ones who really get screwed, and that's just because that's the switch to where it really turns from salary to cap gains.
 
2012-04-17 04:42:50 PM
But the flip side of that is also true. To hear many Republicans talk, you would think that the slightest tweak to the tax rates of the very richest Americans would grind the economy to a halt.

The argument is more that the proposed tax increases will amount to one half of one percent of our projected 10 year deficit. In other words, it is a cheap moral victory that the democrats are pushing in order to make everyone feel warm and fuzzy about feeling fair.

The government spends more in a day than what the buffett rule would yield in 10 years. I might be inclined to take democrat tax proposals seriously if they actually did something about the deficit. This is just designed to rile up the occupy crowd.
 
2012-04-17 04:44:27 PM

o5iiawah: But the flip side of that is also true. To hear many Republicans talk, you would think that the slightest tweak to the tax rates of the very richest Americans would grind the economy to a halt.

The argument is more that the proposed tax increases will amount to one half of one percent of our projected 10 year deficit. In other words, it is a cheap moral victory that the democrats are pushing in order to make everyone feel warm and fuzzy about feeling fair.

The government spends more in a day than what the buffett rule would yield in 10 years. I might be inclined to take democrat tax proposals seriously if they actually did something about the deficit. This is just designed to rile up the occupy crowd.


You're right. All we need to do is eliminate Planned Parenthood and PBS funding and all our problems go away!

/we need massive tax increases and massive spending reductions
 
2012-04-17 04:47:34 PM

EWreckedSean: Yeah looks like the 80 to 90 percentile are the ones who really get screwed


Poor babies, living hand-to-mouth on miniscule pittance of their net income. They should quit their jobs and become freeloaders like the lowest 20%. I hear those people even have refrigerators and running water.
 
2012-04-17 04:47:39 PM

cirby: Another guy trying to forget that "marginal" and "effective" tax rates are very different things.

If your marginal tax rate is 90%, but you can write off pretty much EVERYTHING, plus get huge benefits from your high-paying job for free (including homes and meals), then you get a tax situation like the 1950s. In 1955, the US collected about 16.5% of GDP as tax revenue.

If your marginal tax rate is 30%, but your tax writeoffs are tiny in comparison, plus have to pay taxes on a lot of the freebies your company gives you, then you get a tax situation like the one we have now. In 2008 (the last year before the recession kicked in), the US collected about 17.6% of GDP as tax revenue. Yes, the "Bush tax cuts" were in full effect that year.

Link (new window)


Wait a minute here.
With the 80% marginal rate of the 50s, the country was still running a deficit? I thought everything was solved by raising taxes?
 
2012-04-17 04:48:01 PM
On reading the TFA if have decided to write off in my mind and and all people whoe discuss the laffer curve in marginal rates as morans. That really is pants on head stoopid but to have 4 economists do that is criminal.

I still want the study on the other rates. I think that a 25% bottom rate was more what spurred the growth of the 50's. More reason to save and more reason to work harder for the poor and middleclass who I continually hear are the main drivers of the economy.
 
2012-04-17 04:48:11 PM
Rich people:

STFU and pay your taxes. You can afford them, and you're still RICH after you supposedly get "soaked."
 
2012-04-17 04:50:20 PM

whidbey: Rich people:

STFU and pay your taxes. You can afford them, and you're still RICH after you supposedly get "soaked."


The rich people do pay their taxes.
Yours too.

Those that don't, usually go to jail.or have their assets seized or get in other trouble
(hello Charley Rangel, Tim Geitner, Wesley Snipes, Willie Nelson, )
 
2012-04-17 04:51:56 PM
What we really need is to do a scientific experiment to settle the question once and for all. Set up a periodically oscillating tax rate with an amplitude of a few percent, then after a few years, take the federal government tax revenue data and run a fourier analysis. If revenue is in-phase with the tax rate, we're on on the left side of the Laffer curve. If revenue is ~180 degrees out-of-phase, then we're on the right side.

/ 95% kidding, for a variety of technical reasons
 
2012-04-17 04:53:46 PM

Saiga410: . More reason to save and more reason to work harder for the poor and middleclass who I continually hear are the main drivers of the economy.


They are the main drivers of the economy. It isn't just hearsay.
Not sure how you'd be "working" for them.
 
2012-04-17 04:55:37 PM

tenpoundsofcheese: The rich people do pay their taxes.
Yours too.


No you disingenuous dumbfark troll, they pay a portion of the material wealth they have accrued back to the country that allowed them to accrue it in a proportion that takes into account the decreasing marginal utility of every extra dollar earned.

They pay their share, and other pay theirs. Go fark yourself with a chainsaw for being so annoying I actually responded to your trollishness.
 
2012-04-17 04:56:47 PM

Saiga410: More reason to save and more reason to work harder for the poor and middleclass


That's what them poors need, people to force them to work harder.
 
2012-04-17 04:58:18 PM

theorellior: Saiga410: More reason to save and more reason to work harder for the poor and middleclass

That's what them poors need, people to force them to work harder.


Makes sense. Put them through enough tests of fire and they will be ready to take their places in the Hall of Exploitation as rewarded subjects.
 
2012-04-17 04:58:36 PM
The problem with these discussions is that it's not like somebody in the 35% tax rate actually pays 35% in taxes. It doesn't work anything like that.

Things that reduce taxes:

1. The first $379,150 is taxed at a lower rate.
2. Deductions, deductions, deductions!

Things that increase taxes:

1. State and local income taxes.
2. Sales and other taxes.

If you are a zillionaire who lives in an area with high state and local income, sales, and other taxes (say, New York City), make most of your income via salaries, and have few deductions, you might already be paying 70% or more of your income in taxes.

But if you are a zillionaire who lives in an area with low state and local income, sales, and other taxes, make most your money via capital gains, and have a lot of deductions, you might pay 15% or less of your income in taxes.
 
2012-04-17 04:58:42 PM

A Dark Evil Omen: astro716: *sigh*

another Laffer curve post, another excuse to post this gem:

[economistsview.typepad.com image 295x359]

I... I... What?

That's amazing. I can practically feel the stupid emanating from that.


What you're feeling is the intellectual weight that drips off of everything coming out of the American Enterprise Institute.
 
2012-04-17 04:59:35 PM
Here's my question.

Why do we want to be at the revenue maximizing point?

Because isn't the revenue maximizing point the point at which the damage the tax increase does to the economy overwhelms the revenue increase?

Shouldn't we want to be somewhere much further down the left side? Because even though the government could be making more money, the private sector is able to grow and flourish (and lead to long-term revenue increases anyways)?
 
2012-04-17 05:00:41 PM

theorellior: Saiga410: More reason to save and more reason to work harder for the poor and middleclass

That's what them poors need, people to force them to work harder.


Why not, it worked in the 50's.
 
2012-04-17 05:01:46 PM

Saiga410: theorellior: Saiga410: More reason to save and more reason to work harder for the poor and middleclass

That's what them poors need, people to force them to work harder.

Why not, it worked in the 50's.


Actually in the 50s, we still had a 40 hour work week, ordinary people made less and could buy more. You know: cars, houses, stuff.

Not so much now.
 
2012-04-17 05:05:35 PM

whidbey: Actually in the 50s, we still had a 40 hour work week, ordinary people made less and could buy more. You know: cars, houses, stuff.

Not so much now.


Single-income, 2 kids and you had 2 cars, a house, and family vacations. But it's better now because our TVs are bigger. That's what FoxNews tells me.
 
2012-04-17 05:06:21 PM

12349876: /we need massive tax increases and massive spending reductions


The budget is appx:

40% social programs & interest on the debt
25% departments of such and such
20% military industrial complex
15% Highway projects, pork spending, park rangers, research grants, etc.

The democrats will only even think of cutting defense which a libertarian like myself can get behind but you can only fire so many park rangers before you start having to push grandma off a cliff and cast the proverbial autistic kids out into the streets. Massive tax rates have historically been used to pay for various war debts and I would support a tax increase that would help pay for the war efforts. Maybe people would then wake up and realize that we dont prosper as a nation with 850+ military bases around the world.

The elephant in the room is the ever expanding 40% of our budget. The fact is there wont be any medicare, medicaid or SS for anyone if the programs arent reformed to be made solvent.
 
2012-04-17 05:07:02 PM

whidbey: ordinary people made less and could buy more


Inflation how does it work? (new window)
 
2012-04-17 05:07:49 PM

Saiga410: whidbey: ordinary people made less and could buy more

Inflation how does it work? (new window)


Which totally explains why cost of living has risen much faster than inflation.

Totally.
 
2012-04-17 05:07:57 PM

theorellior: tenpoundsofcheese: The rich people do pay their taxes.
Yours too.

No you disingenuous dumbfark troll, they pay a portion of the material wealth they have accrued back to the country that allowed them to accrue it in a proportion that takes into account the decreasing marginal utility of every extra dollar earned.

so does everyone else. wtf is your point? do the middle class earn their money from some other country? Or from a different system that operates within this country?

They pay their share, and other pay theirs.

Great. Thanks for agreeing. They pay their share.

 
2012-04-17 05:08:43 PM

Saiga410: Inflation how does it work?


This is why figures on household income are usually indexed for inflation, but you're just being disingenuous, so forget I said anything.
 
MFL
2012-04-17 05:09:10 PM
Until the government learns how to responsibly spend money...why are we asking anyone to give them more?
 
2012-04-17 05:11:10 PM
What rate maximizes GDP? Perhaps we should shoot for that.
 
2012-04-17 05:11:57 PM

tenpoundsofcheese: Great. Thanks for agreeing. They pay their share.


And because they have been rewarded with material comforts far beyond the mean, median or mode of the rest of the population, they can pay a larger percentage of their income without hardship or duress.
 
2012-04-17 05:11:58 PM

Saiga410: whidbey: ordinary people made less and could buy more

Inflation how does it work? (new window)


So you're fine for adjusting everyone's wages accordingly? Awesome.
 
2012-04-17 05:12:06 PM

A Dark Evil Omen: Saiga410: whidbey: ordinary people made less and could buy more

Inflation how does it work? (new window)

Which totally explains why cost of living has risen much faster than inflation.

Totally.


Subsidization of of the delta in COL vs inflation via the tax code. If there was no change in the tax code would there have been more pressure on the lower rates to earn more? Which lead to which? Lowering bottom rates and stagnation of the median income.
 
2012-04-17 05:12:08 PM

tenpoundsofcheese: cirby: Another guy trying to forget that "marginal" and "effective" tax rates are very different things.

If your marginal tax rate is 90%, but you can write off pretty much EVERYTHING, plus get huge benefits from your high-paying job for free (including homes and meals), then you get a tax situation like the 1950s. In 1955, the US collected about 16.5% of GDP as tax revenue.

If your marginal tax rate is 30%, but your tax writeoffs are tiny in comparison, plus have to pay taxes on a lot of the freebies your company gives you, then you get a tax situation like the one we have now. In 2008 (the last year before the recession kicked in), the US collected about 17.6% of GDP as tax revenue. Yes, the "Bush tax cuts" were in full effect that year.

Link (new window)

Wait a minute here.
With the 80% marginal rate of the 50s, the country was still running a deficit? I thought everything was solved by raising taxes?


We ran a surplus in 3 years, and let's not forget that the economy was growing at about an annualized 4%, much faster than the deficit, so it was sustainable even though there was a deficit.

Next, please.
 
2012-04-17 05:12:31 PM

theorellior: No you disingenuous dumbfark troll, they pay a portion of the material wealth they have accrued back to the country that allowed them to accrue it in a proportion that takes into account the decreasing marginal utility of every extra dollar earned.


If existing in this country is the only criteria for success then why cant liberals accept the idea that anyone can become successful? They will argue up and down that the deck is stacked against person A yet Person B, who grows up in the same environment is only a success because of the same environment that apparently contributed nothing to the lack of success of A.

The only reason we tax the rich is because there arent enough of them to object to it and because "we can"
 
2012-04-17 05:12:38 PM

tenpoundsofcheese: Dusk-You-n-Me: tenpoundsofcheese: Doesn't mean that is why the economy grew.

The other side of that coin is that it also means those high tax rates didn't inhibit the economy from experiencing that growth.

It doesn't say anything about causality.
You could say it didn't inhibit growth, or equally, you could say that it suppressed even more growth.


Or you could take a graduate-level course in economics and learn that top marginal tax rates are nearly irrelevant to economic growth, and that it's more a function of the largest segments of the population having sufficient disposable income to fuel demand for products and services.

If median wages rose noticeably but not much, and if participation in employment rose, our economy would straighten up almost overnight. Note: this is the opposite of our current situation.

But in that scenario, the top marginal rate could be raised to 75% (income over $339,000 IIRC) and, while it would do wonders for the deficit and would allow major infrastructure improvement spending, it would not have much of a negative effect on economic growth.
 
2012-04-17 05:13:43 PM
i40.tinypic.com
 
2012-04-17 05:14:12 PM

tenpoundsofcheese: Great. Thanks for agreeing. They pay their share.


And before you start whining about "fair share" or "equality", remember that "fair" is not a mathematical construct. It involves moral, fiscal, ethical, societal and cultural calculations that are more involved than a simple flat percentage. So fark you and your water-carrying for rich people who are more than compensated for their lives in this country.
 
2012-04-17 05:16:39 PM

theorellior: tenpoundsofcheese: Great. Thanks for agreeing. They pay their share.

And because they have been rewarded with material comforts far beyond the mean, median or mode of the rest of the population, they can pay a larger percentage of their income without hardship or duress.


why? 0bama took every opportunity to pay less taxes. He didn't have to give his kids that money tax free. Or is 0bama a hardship case?

since when is economic policy based on people's personal hardship or duress?
 
2012-04-17 05:16:48 PM

NowhereMon: We have data on tax rates as high as 90% down to about 25%. It should be fairly trivial to see where the maximum revenue was generated as well as where compliance was maximized.


Revenue has remained relatively flat despite the rates. Just Google tax revenue as percent of gdp.
 
2012-04-17 05:17:15 PM

o5iiawah: The only reason we tax the rich is because there arent enough of them to object to it and because "we can" they own over 40% of the wealth in the nation


accuratized
 
2012-04-17 05:17:37 PM

Snarfangel: What rate maximizes GDP? Perhaps we should shoot for that.


As far as capital gains tax goes, economists and the CBO have figured that a 10-15% rate encourages the most investment and returns the most money to the treasury.

The president's stance on where capital gains taxes should be has nothing to do with what returns the most money to the treasury and everything to do with what he thinks is fair.

Link (new window)
 
2012-04-17 05:18:38 PM

tricycleracer: whidbey: Actually in the 50s, we still had a 40 hour work week, ordinary people made less and could buy more. You know: cars, houses, stuff.

Not so much now.

Single-income, 2 kids and you had 2 cars, a house, and family vacations. But it's better now because our TVs are bigger. That's what FoxNews tells me.


Few middle income families in the 1950's had two cars (and said cars were worse in every way than modern ones (safety, features, fuel economy, top speed, acceleration, handling, reliability, pollution emitted) except possibly styling). In fact, a lot of people had zero cars. That's not to say that nobody owned two cars, but that the average middle income family did not.

Their houses were (again, on average) much smaller as well, and were less likely to have things like air condintioning, or even electricity or indoor plumbing (most had both, but a fair number lacked one or the other).

Life is much better for every income group since the 1950's, it's just more better for rich people.
 
2012-04-17 05:19:29 PM

Headso: o5iiawah: The only reason we tax the rich is because there arent enough of them to object to it and because "we can" they own over 40% of the wealth in the nation

accuratized


I'm offering him a visual representation of this in case he has a hard time understanding the concept.

media.theunderstatement.com
 
2012-04-17 05:20:29 PM

o5iiawah: 12349876: /we need massive tax increases and massive spending reductions

The budget is appx:

40% social programs & interest on the debt
25% departments of such and such
20% military industrial complex
15% Highway projects, pork spending, park rangers, research grants, etc.

The democrats will only even think of cutting defense which a libertarian like myself can get behind but you can only fire so many park rangers before you start having to push grandma off a cliff and cast the proverbial autistic kids out into the streets. Massive tax rates have historically been used to pay for various war debts and I would support a tax increase that would help pay for the war efforts. Maybe people would then wake up and realize that we dont prosper as a nation with 850+ military bases around the world.

The elephant in the room is the ever expanding 40% of our budget. The fact is there wont be any medicare, medicaid or SS for anyone if the programs arent reformed to be made solvent.


Only SS is very nearly solvent, and SS excess is safely invested in US treasuries, which appears as "debt." Health care costs are the elephant in the room, and would be addressed with single-payer.
 
2012-04-17 05:20:42 PM

dahmers love zombie: If this analysis stands up to mathematical scrutiny, the immediate conservative response will be, of course, to jettison the Laffer curve as "totally unworkable". And socialist.

/and probably Muslim
//and Kenyan


It is more assumptions than math. The assumptions on human motivation are the main impetus to the laffer curve. There is a reason economics is not an exact science.
 
2012-04-17 05:21:32 PM

Headso: o5iiawah: The only reason we tax the rich is because there arent enough of them to object to it and because "we can" they own over 40% of the wealth in the nation

accuratized


is it your wealth or theirs?
 
2012-04-17 05:22:09 PM
farm5.static.flickr.com

/Laugher curve
 
2012-04-17 05:23:25 PM

o5iiawah: If existing in this country is the only criteria for success then why cant liberals accept the idea that anyone can become successful? They will argue up and down that the deck is stacked against person A yet Person B, who grows up in the same environment is only a success because of the same environment that apparently contributed nothing to the lack of success of A.


Fark me, here I am engaging another dumbass retard troll. Existing in this country is not the only criterion for success. Anyone can be successful, but those people with trust funds and deep pockets sure as shiat have a much easier time of it. Much more so than people farther down the income scale, who require mountains of grit, determination and dumb blind luck to make any headway.

Fark me. Why do I even bother?
 
2012-04-17 05:23:43 PM

tenpoundsofcheese: ftfa: "Some of the fastest economic growth of the post-war period came in the 1950s, when the top tax rate was above 80 percent."

seriously? there were more pirates back then too and less CO2 in the air. Doesn't mean that is why the economy grew.

(hint: europe in shambles so US could fill a huge void, US selling off assets and factories to businesses at bargain basement prices to spur growth, government spending, etc).


Shhhhh. The only two independent variables according to liberals is tax rate and president.
 
2012-04-17 05:24:11 PM

Mrtraveler01: Headso: o5iiawah: The only reason we tax the rich is because there arent enough of them to object to it and because "we can" they own over 40% of the wealth in the nation

accuratized

I'm offering him a visual representation of this in case he has a hard time understanding the concept.

[media.theunderstatement.com image 461x693]


Wealth isn't finite. For one person to have more, another doesn't have to have less.
 
Displayed 50 of 269 comments

First | « | 1 | 2 | 3 | 4 | 5 | 6 | » | Last | Show all

View Voting Results: Smartest and Funniest


This thread is archived, and closed to new comments.

Continue Farking
Submit a Link »






Report