The greatest Fox News interview

[Matador]

Top 1% of earners paid 39% of all taxes. The top 1% paid a larger share than the bottom 90% combined (29%), that sounds pretty progressive to me.

By your data, increasing the tax rate on the top 1% would have the largest impact, no?

Your argument looks only at the total revenue, and  neglects two important considerations:  first, the marginal utility of a dollar, and second, the fact that the effective tax rate above %1 falls as we get to the top 0.001%.  In fact, the top 50% of tax earners pay an effect rate of about 14%, and the top 0.001% pay an effective rate of about 18%.

That doesn't seem particularly progressive.  Funneling your income via capital gains has it's advantages.  I think this is cyrano's point, and why there are those that claim it's unfair.

In fact, doubling the effective rate on the top 0.1% would add nearly 0.5T to the total tax revenue collected, which is a 30% increase for the entire government.

 

[JohnRoberts]

By your data, increasing the tax rate on the top 1% would have the largest impact, no?

Perhaps if you are trying to discourage wealth creation, but that is just speculation on my part, not objective fact. Everything has consequences so raising taxes further will have an impact on the private economy (negative IMO).

Your argument looks only at the total revenue, and  neglects two important considerations:  first, the marginal utility of a dollar, and second, the fact that the effective tax rate above %1 falls as we get to the top 0.001%.  In fact, the top 50% of tax earners pay an effect rate of about 14%, and the top 0.001% pay an effective rate of about 18%.

Not an argument... simple math and/or statement of facts. 

That doesn't seem particularly progressive.  Funneling your income via capital gains has it's advantages.  I think this is cyrano's point, and why there are those that claim it's unfair.

"Fairness"... can you give me an objective definition for fairness in this context? These are pretty old political screed.

Doing some simple math if the bottom 90% pay only 29% of total taxes, that means the top 10% pay 70%... that seems progressive to me.

In fact, doubling the effective rate on the top 0.1% would add nearly 0.5T to the total tax revenue collected, which is a 30% increase for the entire government.

I do not favor giving the government even more money until they can prove they are effective and productive with their spending of the peoples wealth. I remain unconvinced.

For the record people rarely volunteer their own wealth to government. All this wrestling is over OPM (using government force to take "other people's money"). The wealthy start their own charities before giving government one more penny, because the waste and inefficiency is visible from such distance.

JR

 

[Gold]

The notion that someone would try hard not to earn more than 10M a year just because the $10,000,001 dollar gets taxed at 70% seems utterly ridiculous to me. Everyone I know who likes to make a lot of money does it like we do audio. Because they get something out of it besides money.

The “job creator” talking point is also specious. Who creates more jobs, the 1% or the other 99%? I’m going with the 99%.

 

[JohnRoberts]

The notion that someone would try hard not to earn more than 10M a year just because the $10,000,001 dollar gets taxed at 70% seems utterly ridiculous to me. Everyone I know who likes to make a lot of money does it like we do audio. Because they get something out of it besides money.

[edit] since you mentioned people working in audio, how about musicians? Back in the 70s UK taxes were high enough that a number of high profile musician's left the country..  http://ultimateclassicrock.com/rock-bands-taxes/  [/edit]

I don't think I personally know one single person making that kind of money. I did work for one multi-millionaire and he absolutely detested taxes. 

The “job creator” talking point is also specious. Who creates more jobs, the 1% or the other 99%? I’m going with the 99%.

Sorry I do not have time or inclination to defend arguments I did not make (at least not today).

Statistically it sounds like you have a good wager there (or a good straw man). The majority of jobs I created were backed by a millionaire's working capital not mine. The few I created by myself are statistically insignificant.

JR

 

[Gold]

I don't think I personally know one single person making that kind of money. I did work for one multi-millionaire and he absolutely detested taxes.  Sorry I do not have time or inclination to defend arguments I did not make (at least not today).

I didn’t mean that money specifically but “a lot” whatever that means. I know a couple Wall Street guys who make big money but I don’t know how much. They have a secretary but otherwise work in a small shop. I guess venture capital creates and destroys jobs. They don’t directly hire anyone though.

Statistically it sounds like you have a good wager there (or a good straw man). The majority of jobs I created were backed by a millionaire's working capital not mine. The few I created by myself are statistically insignificant.

Jobs are usually created because someone in charge thinks more money will be made with the hire than without the hire.  I don’t see the tax rate influencing that much.

 

[cyrano]

I can tell you a bit about the state of mind of real rich people.

They're in it for the money. Mind you, they don't want to spend that money. They just want more.

One example is a family member, since deceased. He once bought a castle. Of course, he didn't want to live there. After a few years, he figured the maintenance to be too expensive. So he wanted to sell. Of course, you can't sell a castle easily. Took him a few years. And he only made a 10% profit on the sale. Made him sick for weeks.

A detail: over here, the law states that you pay more tax for a building if it has over 104 windows. Needless to say, the previous owner had a few windows closed when that law came into action, as it had 110 windows originally...

Another case is a family that owned at one time 85% of a big corporation. Billionaires. They live in a relatively simple house. They also spend over a million a year on security. They do own a Rolls and a Bentley, but these only come out of the garage for serious events. Their every day drive is a golf. The guy who manages their wealth, used to be a banker. He's a millionaire too, now. The reason, as stated by one of the family: the only way to keep him honest, is by making him rich...

This family pays their taxes, as they are strictly religious. But, still, most of their wealth is parked overseas. They pay more taxes than an average family, but they still don't pay any taxes on the largest part of their wealth, as it's income from shares and it's in a tax heaven...

It is the mentality that govt is bad, that is driving all this tax evasion. Govt is necessary and if things are good, WE ARE THE GOVT. But things aren't "good", because of lobbyism and a lack of interest in politics. So people fall back on dogma's like 'socialism is bad'.

And that's why that propaganda machine is the #1 problem, and having voting machines that are very unreliable by design, the #2 problem.

The only nation I know of, that's a little different, is France. In France, they say "La France, c'est nous".

One case where chauvinism is good, very good. That's why the French revolution is still the historical event that started modern times. It did away with royalty and nobility, as they were the pests that plagued humankind in that period. It also was the event that enabled the explosion of mankind, just a few centuries later.

Now we stand for the opposite problem. We badly need to trim down human numbers, or we'll simply fall off the Earth...

We can only fix that if we succeed in finding the good in all of the systems we tried and uniting that in a new social system.

 

[scott2000]

and having voting machines that are very unreliable by design, the #2 problem.

Maybe human error, be it the voters or the people operating the system have some part in this "unreliability" as well? I wonder what the recounts usually uncover....

It could have been even more of a popular vote  count last presidential election perhaps.....??

 

[Matador]

"Fairness"... can you give me an objective definition for fairness in this context? These are pretty old political screed.

Doing some simple math if the bottom 90% pay only 29% of total taxes, that means the top 10% pay 70%... that seems progressive to me.

I can't parse this answer.  Are you saying that paying an effective 18% on 64 million in personal income is fair compared to paying 14% on $85k?  We can argue on the exact point:  AOC's 70% over 10 million seems like a good start.

The idea that higher marginal rates on the wealthy leads to reduced GDP/economic growth has been pretty well dispelled.  There are many studies that showed that GDP growth rates prior to Reagan's tax cuts were actually higher pre-1980's versus after the tax cut, and the GDP in the USA grew at rates commensurate with other nations that have higher marginal rates.

This actually makes sense:  because the marginal rate applies to personal wage income, not capital investments (aka. how employees are paid).  You would have to believe we live in a world where there are businessmen who think, "My personal income isn't going up as high, therefore I'm going to not allow my business entities to invest their capital in other employees" which doesn't make any sense.

There was this interesting paper from MIT (https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.25.4.165) which tried to calculate this based on a logarithmic marginal value of a dollar, and their analysis arrived at an optimal top personal income rate of 73% which agrees with some of the claims made by AOC in recent years.

 

[JohnRoberts]

I can't parse this answer.  Are you saying that paying an effective 18% on 64 million in personal income is fair compared to paying 14% on $85k?  We can argue on the exact point:  AOC's 70% over 10 million seems like a good start.

She and Bernie agree, and in full 2020 primary mode most democrat candidates are marching in lockstep, as everybody crowds that same side of the boat (for now).

The idea that higher marginal rates on the wealthy leads to reduced GDP/economic growth has been pretty well dispelled.  There are many studies that showed that GDP growth rates prior to Reagan's tax cuts were actually higher pre-1980's versus after the tax cut, and the GDP in the USA grew at rates commensurate with other nations that have higher marginal rates.

This is almost economic malpractice, but happens so frequently it's just economic practice. In macroeconomic analysis it is just about impossible to control for all variables so conclusions are often confounded and laced with subjectivity.  You can just pick a data set that supports your hypothesis.

I don't think the Laffer Curve has been objectively disproved, but as I've said before economics is not a hard science. 

This actually makes sense:  because the marginal rate applies to personal wage income, not capital investments (aka. how employees are paid).  You would have to believe we live in a world where there are businessmen who think, "My personal income isn't going up as high, therefore I'm going to not allow my business entities to invest their capital in other employees" which doesn't make any sense.

nah

There was this interesting paper from MIT (https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.25.4.165) which tried to calculate this based on a logarithmic marginal value of a dollar, and their analysis arrived at an optimal top personal income rate of 73% which agrees with some of the claims made by AOC in recent years.

Probably one of many such attempts.

I do not claim to know what marginal rate is ideal and I am concerned about unfettered growth of entitlements, that are not even in the discretionary part of the federal budget. I am uncomfortable with the size of our sovereign debt.

I prefer growing the economy (making the pie bigger). Not using government force to redistribute wealth, a lossy less than zero sum game (IMO).

Of course maybe I'm wrong.

JR

PS: AOC's suggestion that we can just "expand credit" (code for printing money) to pay for her green new deal is a dangerous concept to anyone with a sense of world history.  I almost feel bad about using AOC examples  : but she appears to be an opinion leader for her side, so not a lonely voice in the wilderness..  Why does the new green deal ignore nuclear power as a fossil fuel free energy source? (rhetorical... years ago I posted here that nuclear energy is a bridge energy technology we should use until we develop better non-nuclear technology, but nuclear energy could still be useful for say another century)?

 

[john12ax7]

Term limits would just make sure that expertise is whiped out on the legislative side. Look at the havoc the amateurs from the Trump administration have wreaked.

It takes time and effort to get good in your field, and crafting legislation is no different. Probably more so in a system that relies so much on precedent.

What term limits would do is to strenghten the very moneyed interests you want to tame. And they are undemocratic.

So we should never elect someone without experience? Should we disqualify AOC?

74% of people support term limits, but somehow they are undemocratic? Really?

Should this then apply to presidents a well? After all the longer they do it, they better they would be at it right? Would we be happy if this was George W's  19th year in office? What about if it was Clinton's 27th? Reagan probably would have been president for life.

Two terms for a senator (12 years) is plenty of time to learn the ropes, accomplish some things, and then move on.

 

[john12ax7]

In fact, doubling the effective rate on the top 0.1% would add nearly 0.5T to the total tax revenue collected, which is a 30% increase for the entire government.

This may apply for the 1%, but the 0.1%?  Source?

 

[john12ax7]

Doing some simple math if the bottom 90% pay only 29% of total taxes, that means the top 10% pay 70%... that seems progressive to me. 

This is a beloved point of certain pundits, but really proves nothing about whether something is progressive or not. It is an obfuscation of the issue aimed at people who aren't good at math. So why perpetuate this?

If person A pays 10% of 1 million and person B pays 25% of 50k, then person A pays a much bigger share of the total collected. But no reasonable person would call that progressive.

I do not favor giving the government even more money until they can prove they are effective and productive with their spending of the peoples wealth. I remain unconvinced.

In terms of total revenue I completely agree. If anything government should get smaller in most areas.

 

[john12ax7]

The notion that someone would try hard not to earn more than 10M a year just because the $10,000,001 dollar gets taxed at 70% seems utterly ridiculous to me. Everyone I know who likes to make a lot of money does it like we do audio. Because they get something out of it besides money.

The “job creator” talking point is also specious. Who creates more jobs, the 1% or the other 99%? I’m going with the 99%.

Focusing on marginal tax rates is also another obfuscation of the issue. 70% rates would have practically no effect, as wealth at that level is not earned income. The real solution is to treat all income exactly the same as a starting point.

It's hard for the 99% to create jobs since they don't have the capital to do it. The problem is not the 1% in general, but portions of the 0.1%, .01% and .001%. Lots of money is siphoned off with no practical benefit to job creation or society.

 

[Matador]

This may apply for the 1%, but the 0.1%?  Source?

Bloomberg quoted the top 0.1% as paying roughly 20% of tax revenue via personal returns.  This is roughly $250B of approximately $1.5T.  Doubling this is roughly $500B.

 

[john12ax7]

Bloomberg quoted the top 0.1% as paying roughly 20% of tax revenue via personal returns.  This is roughly $250B of approximately $1.5T.  Doubling this is roughly $500B.

ok, but if you double $250B to get to $500B you have only actually added $250B of new money, not $500B as originally stated.

 

[iturnknobs]

The facts do not support that claim. Somebody paid the $1.45T (2015) that government collected (they actually spent more than that).  :

per https://taxfoundation.org/summary-federal-income-tax-data-2017/  summary

Top 1% of earners paid 39% of all taxes. The top 1% paid a larger share than the bottom 90% combined (29%), that sounds pretty progressive to me.

This is a false narrative to gain political influence with low information voters who believe the tired old "class warfare" rhetoric.

JR

PS: The wealthy are generally pretty charitable after they get more money than they can spend. The recent concert in Columbia to raise money for the humanitarian crisis in Venezuela was sponsored by Richard Branson. I expect the federal government largess discourages some private charity. The uber-wealthy prefer to fund their own charities than give their excess wealth to governments, who will use it ineffectively.

I understand that Wikipedia is not the most reliable source of information, but I believe this to be correct. I would take that information with a grain of salt, given the founders of said organization:

"The Tax Foundation was organized on December 5, 1937 in New York City by Alfred P. Sloan Jr., Chairman of the General Motors Corporation; Donaldson Brown, GM Financial Vice President; William S. Farish, President of Standard Oil Company of New Jersey (Exxon); and Lewis H. Brown, President of Johns-Manville Corporation, who later became the first Chairman of the Board of The Tax Foundation.[2] The stated goal of the organization was "to monitor the tax and spending policies of government agencies".[3] Its offices were located at 50 Rockefeller Plaza and later 30 Rockefeller Plaza."

I do not trust that organizations like this have the masses "best interests" in mind. As a "live" audio engineer I provide services for "big oil", pharma and financial organizations. Please do not site ALEC as a "for the masses" information provider next. I have worked for all these companies. Because of non-disclosure agreements, I must weigh my words carefully, but disgust is the word that almost always comes to mind when wealth inequality discussions are concerned. One cannot believe the disregard that exists for the masses behind closed doors... as the rich take... and take... and take... and worse...

The only people I respect in these discussions are the ones who have the guts to say: "I care about nothing but my financial bottom line. Nothing else and no one else matter." Mad respect with mad disagreement. Any other stance appears to be blind or dishonest.