http://taxpolicycenter.org/numbers/d...21&DocTypeID=1

This is so blatantly obvious it's astounding. The first time I ever saw the 9/9/9 gimmick I stated laughing. It's an obvious boon to the rich and a regressive tax on the poor.

It really is unreal the complete and utter stupidity of Americans that they could even entertain the idea of something like this. Guess that's what happens when you have a country full of uneducated, ignorant people who will believe anything you tell them.

GOP primary voters don't give a flying **** about this.

Crosspost:

This sort of stuff annoys me because it makes no claims as to what justice is, other than basing it on changes to the status quo. Granted, that's the case for a lot of political debate, so I shouldn't be too wound up about this particular instance.

But for example, suppose a group of radical socialists briefly attained power and raised the top tax rate to 100%. The next day, they leave office and Congress was left debating how much to cut taxes to. Whatever it is (even if it's much higher than the previous top tax rate or any tax rates around the world) it would likely result in the rich being given tax cuts of a magnitude dwarfing that of this chart. If your only basis for whether a tax cut is desirable is whether it makes the tax system less progressive, then you'd oppose these cuts, even though that implies you implicitly support a top tax rate of 100%. The fact you probably don't suggests that this tells you nothing at all about your political philosophy and simply play on people's status quo bias. Which is likely to be successful, sure, but it's still distasteful.

It should go without saying when people attack this tax for being too regressive, they consider the current tax code as too regressive. And thus this is worsening a problem and not improving it.

Certainly, there are those that feel the tax code is too progressive. Bachmann suggested last night:

Of course last month, she thought tax was theft:

Quite the complicated mix of government has no right to your money, but if you're such an ingrate GTFO. America, **** yeah!

In no way is it "regressive". It's "less progressive". There's a big difference between "stealing" from the poor to give to the rich and "stealing" less from the rich to give to the poor. But this sort of rhetoric deceptively makes it look like the former.

Hard to side with that view in light of income disparity in this country and the direction it's been going for the last 20 years.

In fact, it's indefensible in my opinion. Maybe someone would like to try. I'd say they have a lot of problems facing their argument.

What are you talking about? Sales taxes are regressive. Cain's plan is not progressive at all, it's a flat tax on income.

Also, regressive and "less progressive" mean the same thing.

Also, there's nothing deceptive or dishonest about comparing proposed changes to the status quo.

Basically, no.

It is 2011 and we are debating the merits of trickle down economics

waaf

Well, if you think the rich got richer largely by stealing from the poor, perhaps. But that's getting into tinfoil territory.

A far more defensible position is that while most rich people become so legitimately, progressive taxation is justifiable on fairness and/or utilitarian grounds. But whatever level of taxation you decide is optimal based on those principles largely should not depend on what the current levels of taxation are.

So a widening income disparity does not in and of itself imply that upper income taxes should be increased, because even if we grant the general principle that an optimal tax should increase with higher inequality, we have no reason to believe (from that principle alone) that current taxation levels were not too high to begin with. You could attempt to come up with such an argument, but it's ultimately going to be a pretty arbitrary call. (Is 63% on income over $1,000,000 fair? 64%? Where do you draw the line, and why is any amount above or below not optimal?)

Maybe the rich have earned their money instead of "stealing" from the poor. Nichelmn is right, theres already a ridicolous amount of income ridistrubution, there should be less not more.

Consumption taxes are not regressive over lifetimes (or generations). Sure, if Scrooge makes money that he never plans to spend, then he doesn't pay tax on it. But if Scrooge never spends money, he's as good as burned it, effectively donating it back to the population in the form of higher purchasing power,.

Flat taxes are still arguably progressive in the sense that the rich pay a greater absolute value in taxation, so it still redistributes. If you count tax credits or benefits against lower income taxation, then it is clearly progressive. But yes, I'll give you this in a strict definition.

Wrong, especially if you're consistent in adhering to strict definitions that would cause you to be correct about the first two. If you want to define a progressive tax as one where the tax rate increases as the taxable amount increases and a regressive tax where the tax rate decreases as the taxable amount increases, then a progressive tax that becomes less progressive than before (but still progressive) is not a regressive tax. It'd be like saying that someone hating you less means they love you.

It is not dishonest by outright lying, it is dishonest because it frames it a way maximally advantageous to a particular ideological position - showing the tax changes without regards to how taxes are paid in the first place. (Similarly, charts showing only the proportion of total taxes paid by each decile are dishonest for not showing income earned by decile).

Note that my argument doesn't support this. I'm arguing against anyone who thinks you can prove where to draw a line in the sand based on where someone else drew a line in the sand.

this line of argument has gotten beyond ridiculous, and entered full blown idiotic. This redistribution you speak of doesn't exist for the wealthy. each and every year their share of the pie increases. These are documented facts.

Sure more of their money is put back in play, but the way the game is played (some contend stacked) is for that cash to make its way back to their pockets.

The people on the mid to lower end of the spectrum aren't able to actually play the game, they have no cash for a ticket. So their cash is in a continual state of redistribution. But you don't make that claim, nor be able to see it.

It's pretty simple: the current tax system, in many people's opinion, already favors the rich and especially the super-rich.

So when you compare the current tax system and the 9-9-9 plan and it shows that 9-9-9 means that the rich and the super-rich would pay a lot less than under the current tax system and poor people would pay a lot more, then this comparison is really helpful to said people who think that the current tax system already favors the rich and especially the super-rich.

But they might well care when they realize that the 9/9/9 plan is only meant as a transition to a 30% sales tax.

I've never thought this. I think the rich got richer by the system. It's set up so that the people who started with the most get to astronomical amounts of money. I've stated this many times with many examples. You lower the tax rate on someone making 10k a year from investments, they do well. You do that to someone who has 10 million, he makes out like a bandit. It's simple math. After a certain amount of time the guys who started with the most have such ridiculous amounts of money it skews EVERYTHING. Proof? The top 400 people in this country have the equal amount of wealth than the bottom 100 million. Think about that for a second, in all seriousness. You could fit 400 people in a city block. What kind of space do you need to fit 100 MILLION ****ing people?


Current levels of taxation are ******ed in my opinion. I'm not blaming people from benefitting from it. I'm saying the game is screwed up. Like Bodie said "this game is rigged".


A widening income disparity implies that the tax rate should be, in your terms, "more progressive". This is where things get a bit hairy. Do I believe that people should be punished for their success? Absolutely not. Do I think that the richest people in America, over time, will get to such a gargantuan amount of wealth that it would be detrimental to the good of the country?

Yeah.

Inequality increasing does not prove taxes should increase. For instance, if the top tax rate were 95%, inequality could still increase from one period of time to a later period. Would that prove that the optimal top tax rate should be higher than 95%? No? Then how does it for lower levels?

What you're argued is in favour of a progressive tax system. But nothing about what you've said provides any evidence of where to draw the line. You believe that higher taxes have benefits such as reducing the chances of large fortunes emerging, but you presumably also believe they have costs (otherwise you would support a 100% top tax rate). Where do marginal costs = marginal benefits? You could make arguments for 0.1% or 99.9%.

For more on why this and other arguments miss the point, see my thread.

I've having a lot of trouble here because with most positions I can come up with an answer very quickly. With what you posted, I'm actually struggling. But I'll try.


Actually, I think it does. By the very nature of your statement you are saying if the gap is getting larger, it doesn't prove that taxes should increase. I would say the opposite is true. If the gap is getting larger, the top end should increase to slow down the growth rate. Yes, I'm saying the more you make the more you should be taxed. The alternative, because of the concept of compounding returns, would be self-destructive. Warren Buffett's wealth increase faster than others. Eventually, something has to give. Agree? Or am I nuts?

This would depend on what the tax rate is on the lower amount of income. I might not be conveying my thoughts well here. What I mean is that the lesser amount of money you have, the easier it should be to benefit by having a lower tax burden. The higher amount, the harder it should be. The alternative, over time, is a collapse somewhere. Not sure how many years, but it'll happen.

I'm having a lot of trouble with this post, I hope someone can expand on my theory more eloquently than I can.

Fair enough. And this is where I admittedly have a problem. I'm unsure where to draw the line on BOTH ends.

I might need some help here. Fly?

Regarding 9-9-9

Approx 47% of Americans currently pay taxes.
If I'm not mistaken 100% of Americans will pay at least something in taxes.
If the other 53% of Americans now contribute at least some $$, which they haven't in the past, then the only way this can be net neutral is if some people contribute less than they did before.

So who gets to contribute less?

I'll take that as a compliment.


Firstly, you're assuming that an increase in inequality means that inequality will continue to increase unbounded forever, and that this is a very bad thing. I find both assumptions questionable. But let's grant them for now.

Even if inequality would keep growing to an extreme level bar a change in tax policy, it does not imply that taxes should be increased now. It could instead imply that taxes should be increased later. The reason is that the current growth in inequality could be an extremely low level to a very low level, such that it is currently not seen as a problem. For instance, suppose we measure inequality via a Gini coefficient, where 0 is total equality and 1 is total inequality. Suppose you decide that the optimal point, balancing out inequality versus distortions, is 0.2. (Sweden is 0.23, the US is 0.47). The Gini coefficient of Country X recently increased from 0.15 to 0.18. Despite the increase in inequality, it is still below the level which you think is optimal, and hence there would be nothing irrational about calling for upper income tax cuts. Maybe the Gini coefficient will increase to 0.21 in the future - but then you could support tax increases then.

The purpose of the 95% example is to show an example in which you probably would not support a tax increase despite the case following your logic. Presuming you think the top tax rate should be lower than 95% (and if not, substitute 95% for some sub-100% level), you would support tax cuts if a gang of socialists briefly seized power and raised taxes to that level. This would not change if inequality rose from Day 15 of the regime to Day 20.

I find this a strange argument from a normally smart guy.

Yes... if a national sales tax is instituted as a replacement tax it COULD be raised to 30% in the future, most certainly. It could be raised in the future to eleventy billion percent in the future, for that matter.

What's the point. You make it sound like 278 people in unison can't do that already. As a matter of fact, the Obamiacs recently tried to raise taxes and only the Tea Party folks stopped it.

People of good will can argue whether taxes on income or consumption or inheritance or corporate profits or capital gains are the fairest, but the fact of the matter is until spending is addressed the rest really doesn't matter.

I think all would agree we can't continue borrowing 43 cents on every dollar we spend from China in perpetuity unless your objective is to collapse the system.

Cain's plan is to reduce the tax load (costs) to small and large businesses as well as individuals (while it is true people making between 23k and 45 k will do slightly worse temporarily). The reasoning is if Joe small business owner pays substantially less taxes, he can lower the prices of his goods to the general public (increase market share for himself while aiding consumers with lower prices), hire more people ( he no longer has to match their FICA wages) or buy more stuff himself all of which stimulate the economy and increase employment. The notion is designed to greatly expand the tax base with more workers and less cheese eaters rather than crush the few that are big earners at the top.

Putting more people to work has the triple synergy of not only giving them money (they earned) to spend, but it takes the suction cups off the tax payer and makes them assets on the national balance sheet rather than liabilities by becoming tax payers. Those that actually pay taxes are a little more conscious of how tax revenues are spent and that is generally a good thing.

It also doesn't show that lower taxes to those that wouldn't notice (other than as a glint in their eye) is +ve for the overall economy. Taxes are a complaint whether they're 1% or 95%. But that brings the game back into play, the wealthy will expend considerable resources to save pennies. Why you may ask, because it is a game to them. There is no real cost to live.

Before you go off on how it does matter to some, the sector who I speak of are in the millionaire range. They are accelerating the acquisition phase of their wealth. The hardest money anyone ever earned was their first million, after that it becomes geometrically easier to get to 10's and then 100's of millions.
And the irony is, it's the wealthy that practice the most redistribution of wealth, towards them.