CDZ An interesting analysis of our economic problems, but....

[320 Years of History]

That data includes all the deductions the rich receive.

And they still pay more taxes at a higher rate than everyone else.

It would be clearer if it said taxable income versus cash income. If it means the same thing, then the 1% is paying $397,590 per taxpayer in that bracket.

That wouldn't be clearer. It'd just be something different from what the chart currently depicts. LOL Cash income on it's own is quite clear. It's income that is cash and that isn't non-cash.

If one is interested in the difference between gross cash income and AGI, there's probably a chart that someone produces and that shows that piece of information. It just isn't the chart that Toro provided. LOL

 

[Picaro]

[QUOTE="Toro, post: 14538302, member: 2926"

That data includes all the deductions the rich receive.[/quote[

No, it doesn't; it shows adjusted income, most of their incomes are capital gains and/or dividends, not salaries, and like Mitt Romney, it's most likely to be in off-shore accounts and not required to be reported in the same years it's made.

And they still pay more taxes at a higher rate than everyone else.

No, they don't pay higher taxes; the rates are meaningless. They pay higher rates on reported personal income, after adjustments, special tax breaks, and all the rest. the majority goes into tax shelters and many have their own 'hedge fund', those have a top bracket of 15%, on reported income. they only bother to show income so as to justify purchases and living expenses and have to report that as 'income'. In Mitt Romney's case, he merely has to 'loan' himself his own money to buy say, a house, and even gets to deduct the interest he pays himself through his paper front in the Bahamas or where ever he has it off-shored. this is also legal for hedge fund owners and PE shareholders to do.

 

[Toro]

[QUOTE="Toro, post: 14538302, member: 2926"

That data includes all the deductions the rich receive.[/quote[

No, it doesn't; it shows adjusted income, most of their incomes are capital gains and/or dividends, not salaries, and like Mitt Romney, it's most likely to be in off-shore accounts and not required to be reported in the same years it's made.

And they still pay more taxes at a higher rate than everyone else.

No, they don't pay higher taxes; the rates are meaningless. They pay higher rates on reported personal income, after adjustments, special tax breaks, and all the rest. the majority goes into tax shelters and many have their own 'hedge fund', those have a top bracket of 15%, on reported income. they only bother to show income so as to justify purchases and living expenses and have to report that as 'income'. In Mitt Romney's case, he merely has to 'loan' himself his own money to buy say, a house, and even gets to deduct the interest he pays himself through his paper front in the Bahamas or where ever he has it off-shored. this is also legal for hedge fund owners and PE shareholders to do.

Those aren't the rates in the graphs. Those are the total taxes paid relative to total income.

And the rich pay more in taxes than anyone.

 

[Toro]

Considering the top 10% receive over 80% of income, and also are able to take advantage of numerous deductions that nobody in the bottom 50% is even remotely going to benefit from, this isn't a real point.

That data includes all the deductions the rich receive.

And they still pay more taxes at a higher rate than everyone else.

It would be clearer if it said taxable income versus cash income. If it means the same thing, then the 1% is paying $397,590 per taxpayer in that bracket.

Taxable income includes deductions. Cash income is before deductions.

 

[Fishlore]

The people who believed in speeding up history were followers of Lenin, not Marx. The Marxist parties of Europe all denounced Lenin's idea of dictatorship of the proletariat as contradictory to everything Marx theorized. This is an important fact, one hidden by a century of anti-Communist propaganda. "Democracy is the path to socialism," declared Marx. Dictatorship and totalitarianism were anathema to him and to his followers.

 

[Picaro]

Is this not in the Communist Manifesto, then, written in 1848?


“In short, the Communists everywhere support every revolutionary movement against the existing social and political order of things.

In all these movements they bring to the front, as the leading question in each, the property question, no matter what its degree of development at the time.

Finally, they labour everywhere for the union and agreement of the democratic parties of all countries.

The Communists disdain to conceal their views and aims.

They openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions.

Let the ruling classes tremble at a Communistic revolution. The proletarians have nothing to lose but their chains. They have a world to win.

WORKING MEN OF ALL COUNTRIES, UNITE!” ― Friedrich Engels, The Communist Manifesto

 

[320 Years of History]

Considering the top 10% receive over 80% of income, and also are able to take advantage of numerous deductions that nobody in the bottom 50% is even remotely going to benefit from, this isn't a real point.

That data includes all the deductions the rich receive.

And they still pay more taxes at a higher rate than everyone else.

It would be clearer if it said taxable income versus cash income. If it means the same thing, then the 1% is paying $397,590 per taxpayer in that bracket.

Taxable income includes deductions. Cash income is before deductions.

Just to be clear and complete, there are deductions both before and after AGI, and for almost all personal income taxpayers, all income reported on individual/joint (non-business) tax returns is cash basis income. One need not be self-employed to have pre-AGI deductions. Whether one's income is cash basis, thereby making one's taxable income cash basis income, or accrual basis, thus making one's taxable income accrual basis income, depends on the accounting method one adopts, not on which "income" line on a tax return the sum is found.

There are some personal filers -- small (very small) construction contractors, farmers, and a few others -- who might choose to file using the accrual method even though they are eligible to use the cash method. Either way, the cash basis method is by far easier to deal with as all that matters is that money was received or not received during the tax year. Money received is included in gross income; money not received is not. It's that simple. For accrual basis, one must address the question of whether the money was earned, regardless of whether it was received, in the tax year under consideration.

High Level Tax Calculation

Gross income
Less: Pre-AGI deductions
Adjusted Gross Income (AGI) -- This is one's gross taxable income
Less: Itemized or standard deductions
Less: Personal exemptions
Less: Tax credits
Net Taxable Income​

If one is an accrual basis filer, for nearly everyone filing that way, all the amounts noted above will be accrual basis. If one is a cash basis filer, for nearly everyone filing that way, all the figures above will be cash basis amounts. Yes, folks can use hybrid and a few special methods, but as a practical matter, very few individual/joint filers do. Most importantly, however, any method one uses that at least in part includes a cash basis of measurement is automatically deemed a cash basis method.

Taxable income does not include deducted amounts. Taxable income (net) is the amount of income one has after reducing AGI by the sum of all the deductions, credits and exemptions for which one qualifies.


Note:
You'll notice above that I couched my remarks with things like "for nearly everyone," "most" and so on. That's because one of the biggest pains in the ass about the U.S. tax code isn't the basic rule for what to do, but the friggin' exceptions to the rules. Heck, to be a good tax professional, one needs to know more about how and when to apply exceptions than the darn basic rules that give rise to the exceptions.

And, yes, exceptions are where one finds quite a lot of lucrative "loopholes." In the early-ish years of my career, I collaborated with the tax professionals in my firm to sell and deliver several technology projects that had only one purpose: to allow the client to avail themselves of exceptions in federal and state tax codes. The most beneficial of those projects produced Year 1 just shy of $100M in tax savings (cash not paid to taxing jurisdictions) with $38M+ per year tax savings for the following decade. Tax savings, because they are cash kept "in one's pocket" rather than merely less in accrued expenses, are especially attractive to large companies in specialized business areas for which Congressional or State legislatures have made "carve outs."

As goes the matter of tax reform, it'd be a huge step toward simplifying the tax code and everyone's efforts to file their taxes were the exceptions removed.

 

[Holos]

I do not understand why this is necessarily a Marxist perspective.

It doesnt require a Marxist to realize that our Wall Street banks are too big, a threat to our economy and thus national security as well. It doesnt take a Marxist to realize that a world in which the rich prosper at record rates of growth while the Middle Class is sacked and pillaged by the government for an ever growing tax base and the poor are locked into frustration and futility is an inherently dangerous and unstable economic system.

What is the basis upon you separate the rich and the middle class? Knowledge? A country that has any rich people is a country in which richness is available everywhere for the rich to enjoy as they may without becoming lawfully restrained to enjoy it by transgressing on the ability for richness to be always prevalent for any citizen in any civil infra-structure. It's very simple. The middle class are the rich, in between one richness and another, rather they call it a transition, a commute, traveling, work, vacations, education or politics. A country with rich people is a country with plenty of richness for any lawfully abiding citizen to enjoy, no matter they are in a specialized, contained class or in an altogether different activity in which citizenship is being exercised (leisurely, playfully, or curiously).

 

[Picaro]

Those aren't the rates in the graphs. Those are the total taxes paid relative to total income.

Yes, they have nothing to do with real incomes, and reflect how little they pay relative to their income.

And the rich pay more in taxes than anyone.

they receive some 80% of income in this country, and they don't pay 80% of taxes, so this isn't a point. Your graphs are based on fake numbers.

Income taxes aren't the majority of tax revenues; they are less than half of government revenues.

 

[saveliberty]

Considering the top 10% receive over 80% of income, and also are able to take advantage of numerous deductions that nobody in the bottom 50% is even remotely going to benefit from, this isn't a real point.

That data includes all the deductions the rich receive.

And they still pay more taxes at a higher rate than everyone else.

It would be clearer if it said taxable income versus cash income. If it means the same thing, then the 1% is paying $397,590 per taxpayer in that bracket.

Taxable income includes deductions. Cash income is before deductions.

Which is why I brought it up. Folks are not being taxed on cash income, although lower income people probably are as they lack the deductions.

 

[Picaro]

One of the few points I agree with some of the right wing theorists is that wages aren't income, and shouldn't be taxed as income. A link or two for a couple of arguments.

Income Tax Page

The above is of course a ridiculous argument for taxing wages as income, and ,,,

What Is Constitutional Taxable Income

.... this one covers a little more ground.

Taxing wages as if they have zero costs of capital re deductions and are pure 'profit' and 'gain' is pure farce, in any economic case. If the employer can deduct wages as an expense, then those wages are clearly not income, while the poor sap doing the work gets banged as if it were 100% profit for themselves is ridiculous 'logic'. It makes zero economic sense to tax wages.

 

[320 Years of History]

Considering the top 10% receive over 80% of income, and also are able to take advantage of numerous deductions that nobody in the bottom 50% is even remotely going to benefit from, this isn't a real point.

That data includes all the deductions the rich receive.

And they still pay more taxes at a higher rate than everyone else.

It would be clearer if it said taxable income versus cash income. If it means the same thing, then the 1% is paying $397,590 per taxpayer in that bracket.

Taxable income includes deductions. Cash income is before deductions.

Which is why I brought it up. Folks are not being taxed on cash income, although lower income people probably are as they lack the deductions.

Red:
Everyone who is a cash basis filer is taxed on cash income.

 

[Wilbur Right]

...a world in which the rich prosper at record rates of growth while the Middle Class is sacked and pillaged by the government for an ever growing tax base...

Whoa....The middle class are not "sacked and pillaged" to grow the tax base.

• Wealthy people pay the majority of the taxes collected.
  
  
  
  
  
  
  
  
  
  
  (Click on the images to access their source narratives.)

I'm not taking exception with your being irked over the resource disparity we observe in the U.S. today. Rather, I don't cotton to your misrepresenting the reality. The middle class simply do not pay the lion's share of income taxes; thus it does not comprise the majority of the tax base. Moreover, as the charts above show, the share of income tax revenue collected and that derives from the middle class is decreasing while the share coming from the wealthy is increasing. Make whatever argument you want, but at least base it on something that's actually so.

Other:
As for your remark about Marx and Marxism, what I think you may overlooking is that Marx was was a social economist first and a "technical" (some might say "classical") economist second. Accordingly, one must look at Marx's ideas, particularly his later ones such as those in Grundrisse, in terms of what they mean for people as a whole rather than for what they mean to the agents of production.

Marx was less concerned about pure economic efficiency that capitalism provides and how to obtain it, but rather than he was concerned about the impact of structuring and basing society, nations and public policy so as to achieve the efficiency that capitalism can yield. Marx doesn't deny capitalism's efficiency; it was quite clear to him that capitalism is far and away the most economically efficient of the economic systems. He thought, however, that society, and more importantly to him, the people in it, is better off living in a less efficient economic system if that is what it takes to minimize or eliminate the enmity in society between capitalists and labor.

Put another way, Marx saw capitalism, when implemented on a societal level (whatever be the size of the society in question) essentially as that society's cutting off it's nose to spite its face. Yes, it's great to make all that money and have it available to spend on society's "bars, temples, and massage parlors," but if doing so leaves huge swaths of the society in despair and comparative destitution, what's the point for there's no denying that a billionaire doesn't actually need billions of dollars to actually be happy. So if a less efficient economic system -- be that constrained capitalism, or be it capitalism constrained to the point we call it socialism, or no capitalism at all, which we call a command economy -- can provide satisfaction for more people in society, Marx thought that preferable to one in which a small share of the society are greatly over satisfied, a large share are somewhat satisfied and have no "in their lifetime" prospect of becoming over sated, and a large share who are just barely sated or not sated at all.

Contrasting Marx with Keynes, Marshall and the other "technical" economists, one finds that pretty much all of them assume that individuals living in a capitalist economy will do what makes sense to do under capitalism: become capitalists. Why do they make that assumption? Because it doesn't take great genius to see that being a capitalist is the way to get one's "piece of the pie." One may not become a billionaire capitalist, but one can nonetheless get enough "pie" to enjoy a pleasant lifestyle.

Now coming to where we find ourselves today, not just the U.S., but the world, we find ourselves in precisely the situation that Marx predicted and that your OP's video illustrates. Some may take that we do as an indication that Marx was right and that the classical economists were wrong. Attempting to head down that path would be a mistake because they are both right.

One might ask how can it be that they are both right. Well, the answer is that Marx is right because the societal impacts he predicted are manifest. Yours and others' lamentations about our economy are clear proof of that much. The classical economists are right because they didn't attempt to address the societal impact of capitalism. (That's why I referred to them as "technical" economists.)

Above I've tried to provide an explanation of why the ideas in the video are considered Marxist. In short they are because their focus is on the society not the on maximizing and obtaining economic efficiency. If you'd like to get a better understanding of the details of Marx's ideas, I'd suggest starting with Grundrisse.

• There's an annotated copy of it here. I haven't read it, so I don't know what the annotator's thoughts are, but it doesn't matter what they are for no matter what be their themes, they'll nonetheless provide fodder for one to consider. I suggest reading Grundrisse and then reading the annotations.
• An analysis of Grundrisse -- Marx and Beyond Marx -- Lessons on the Grundrisse

What is the significance of Grundrisse? It's the first draft of Kapital, however, in it, Marx offers numerous reflections on matters that Marx did not develop elsewhere in his oeuvre and is therefore extremely important for an overall interpretation of his thought.

Damned if I don't get smarter reading your posts. And it's FREE. Tyvm.

 

[sealybobo]

I do not understand why this is necessarily a Marxist perspective.

It doesnt require a Marxist to realize that our Wall Street banks are too big, a threat to our economy and thus national security as well. It doesnt take a Marxist to realize that a world in which the rich prosper at record rates of growth while the Middle Class is sacked and pillaged by the government for an ever growing tax base and the poor are locked into frustration and futility is an inherently dangerous and unstable economic system.

So the economy we have right now is exactly the way they want it to be. The people who haven't recovered are the uneducated blue collar workers. But if you listen to Republicans here those people have only themselves to blame.

But it's also "the liberals fault". They want to force companies to pay better. That's socialism.

The libertarians may not win elections but their policies sure are getting implimented

 

[Wilbur Right]

As goes the matter of tax reform, it'd be a huge step toward simplifying the tax code and everyone's efforts to file their taxes were the exceptions removed.

Maybe our current tax code situation is actually our Congresses
jobs program for accountants, tax lawyers, off shore bank executives, financial planners and lobbyists.

They gotta eat too.

 

[Indeependent]

I do not understand why this is necessarily a Marxist perspective.

It doesnt require a Marxist to realize that our Wall Street banks are too big, a threat to our economy and thus national security as well. It doesnt take a Marxist to realize that a world in which the rich prosper at record rates of growth while the Middle Class is sacked and pillaged by the government for an ever growing tax base and the poor are locked into frustration and futility is an inherently dangerous and unstable economic system.

The people who haven't recovered are the uneducated blue collar workers.

Ageism has hurt many White Collar professionals.

 

[sealybobo]

I do not understand why this is necessarily a Marxist perspective.

It doesnt require a Marxist to realize that our Wall Street banks are too big, a threat to our economy and thus national security as well. It doesnt take a Marxist to realize that a world in which the rich prosper at record rates of growth while the Middle Class is sacked and pillaged by the government for an ever growing tax base and the poor are locked into frustration and futility is an inherently dangerous and unstable economic system.

The people who haven't recovered are the uneducated blue collar workers.

Ageism has hurt many White Collar professionals.

Damn right. Think about that before raising the retirement age. At least give people Medicare at age 60

 

[320 Years of History]

Damned if I don't get smarter reading your posts. And it's FREE. Tyvm.

You're welcome.

What? You'd never Murray Head's song from Chess before that post? LOL

 

[Picaro]

I do not understand why this is necessarily a Marxist perspective.

It doesnt require a Marxist to realize that our Wall Street banks are too big, a threat to our economy and thus national security as well. It doesnt take a Marxist to realize that a world in which the rich prosper at record rates of growth while the Middle Class is sacked and pillaged by the government for an ever growing tax base and the poor are locked into frustration and futility is an inherently dangerous and unstable economic system.

The people who haven't recovered are the uneducated blue collar workers.

Ageism has hurt many White Collar professionals.

Damn right. Think about that before raising the retirement age. At least give people Medicare at age 60

People with real jobs, like construction, warehousing, trucking, mechanics, etc. should be able to get on it earlier at 50 or 55. White collar types can wait longer, 62-65 or so.

 

[320 Years of History]

As goes the matter of tax reform, it'd be a huge step toward simplifying the tax code and everyone's efforts to file their taxes were the exceptions removed.

Maybe our current tax code situation is actually our Congresses jobs program for accountants, tax lawyers, off shore bank executives, financial planners and lobbyists.

They gotta eat too.

I have come by no specific evidence indicating that is or was a deliberately intended outcome of structuring the tax code as it has been for at least half a century, but there's no denying that the structure and stipulations we see in the tax code have had that effect.

Fair disclosure:
In advocating for a far simpler tax code as I have on several occasions on USMB, and more often among my professional colleagues and social peers, I, in a manner of speaking, "bite the hand that in part feeds me." The tax minimization projects I mentioned helped make possible many of the niceties I and my family have enjoyed, not the least of which is the home in which I live and the fancy schools my kids attended.

So while I think a simpler tax code would be a good thing for most everyone, I'm keenly aware that keeping it as it is is likely best for me and my colleagues, but I know too that absent that cash cow, I and they will find/create others. At the end of the day, however, I'm willing and able to be quite content whichever way the tax code goes, simpler or more complex.