Tax the Rich: Fix Jobs and Deficits

[FiscalSanity]

Toro.

I can't speak for the national number, but I know exactly how much the company I work for pays our CPA firm to audit our books and put them into the form they need to be for tax purposes.

I also know that I spend about half my time each month doing sales taxes or arguing with different states sales tax departments over taxes on internet sales. My counterpart on the receivables side spends just as much time arguing with customers over sales tax charges and rates. Then there are all the city, county and state tax audits, which also eat up a ton of time that we could be spending on things that benefited the company. All told, out of 35 people that work for the company 3 of us spend at least 50% of our time on tax compliance of one sort or another. Add that portion of our salaries and the CPA firms fee's and it's well over $100K a year, and we're not exactly a fortune 500 company.

 

[skookerasbil]

Tax revenues to the government are at an all time high in 2011. And anyway.........progressive tax policy has never worked in the history of the world!!

 

[Toro]

Toro.

I can't speak for the national number, but I know exactly how much the company I work for pays our CPA firm to audit our books and put them into the form they need to be for tax purposes.

I also know that I spend about half my time each month doing sales taxes or arguing with different states sales tax departments over taxes on internet sales. My counterpart on the receivables side spends just as much time arguing with customers over sales tax charges and rates. Then there are all the city, county and state tax audits, which also eat up a ton of time that we could be spending on things that benefited the company. All told, out of 35 people that work for the company 3 of us spend at least 50% of our time on tax compliance of one sort or another. Add that portion of our salaries and the CPA firms fee's and it's well over $100K a year, and we're not exactly a fortune 500 company.

I don't doubt that.

However, even at 2%, it implies that with zero compliance, long-term productivity growth would be double what it is today, assuming the estimate is entirely a deadweight loss. That implies that half of gains from technology are eaten by paperwork. That is difficult to wrap one's mind around.

 

[Toro]

Tax revenues to the government are at an all time high in 2011. And anyway.........progressive tax policy has never worked in the history of the world!!

1. Every single wealthy in the country has a progressive tax system. This has been the case for most of the last century.
2. The world has never seen growth as high as it has been during this time. Global economic output has never been as high as it has been.

So I'm not sure by what you mean when you say "never has worked," apart from empty sloganeering.

 

[FiscalSanity]

Toro,

It depends on whether you're actually gaining through the use of technology or not. One of the reasons I spend so much time on sales taxes currently is that the state decide to upgrade it's system last October, and now you can only do spreedsheet filing if you have one of the programs that uses their special format and that they have approved for use. I researched those programs and did the cost analysis, and it's cheaper to pay me to fill the taxes out by hand while we write our own program and get it approved . Would have been easier if they had used a common programming language, but they had to choose one that none of us (including our IT guys or programmer) has any hands on experience with.

 

[BOBO]

Taxation just enables government to have ever increasing control over the constituency. Tax the rich & prices of the goods they have manufactured in their company's production lines just go up & you pay for the tax increase levied upon the rich, through HIGHER prices. Would it not be better for all the populace to go to a less taxing system? This could be handled by starting with electing Constitutionally based REPRESENTATIVES of & for the people instead of run of the mill professional politicians. Remember that "elected officials are but a mirrored image of the voting constituency."
Congressman Ron Paul's idea of introducing competing currencies against the now worthless federal reserve notes would break the 'money monopoly' the fed now enjoys. An actual value based currency would eliminate printing fiat currency by exposing it for what it really is... a tool for the power players to elevate their social position through favortism. That is WHY the rich get richer & the poor get poorer!
Money does not create political power, social positioning creates political power. Don't believe me... Adolf Hitler died a penniless man, never received so much as one government paycheck as chancellor of nazi Germany. Adolf died as the poorest man in nazi Germany but is regarded still today as the most politically powerful individual that ever graced the face of our planet earth.
"Avoid empowering government against others when ever possible, for government will then empower itself OVER YOU!" Vote responsibly & demand Constitutional representation from those YOU elect into office. ONLY then will you find contentment in your life. Taxing the so called rich is just taxing yourself & eventually your own children. Don't fall into the class warfare facade for that is a well groomed 'mirage' to keep you from seeing what the real problem is.
Once government is checked the corrupt corporate 'elite' will no longer have their bought & paid for professional politicians to cover their tail. The economy then balances out & the rich get a lot less rich as they then have to compete against competition. YOU might even be one of their competitors, once their politicians & endless fiat currency YOU PAY FOR through INFLATION TAX is eliminated!
Join up with us & help us take back OUR country from these people!!!

 

[waltky]

Granny says, "Dat's right...

... don't tax you an' don't tax me...

... tax dat moneybags behind dat tree."

 

[FiscalSanity]

Bobo,

Um, Unless I'm completely mistaken you're advocating going back to the days when banks issued their own bills.... You do realize that under the old system bank panics and runs weren't all that unusual, and that there was no guarantee that banknotes you had from your bank were going to be accepted as money anywhere else?

Dealing with fluctuations in the foreign currency market is already tough for companies, and now you want to create the same sort of fluctuations for domestic sales? Are you out of your ever loving mind?
Whether the Fed as it is currently organized is a good thing or not is open to debate. However, the history of finance makes it quite clear that you must have some sort of central bank to control the currency or you are going to have a depressingly regular cycle of panics and bank/currency failures.

 

[Wiseacre]

I've read estimates that tax compliance costs to the U.S, economy are approximately $1.5T...on top of the actual taxes paid. Considering how much time is spent on preparing, reporting, accounting, and planning for taxes, this sounds about right.

Yet another reason for Simplification.

I highly doubt compliance is over 10% of the economy. I'm sure there is a dead weight loss, but that sounds like a gross exaggeration.

This site claims it's $338 billion.

Tax Compliance Costs US $338 Billion a Year

That's still a lot of money that could be better spent in other ways. One wonders if that 338 billion includes the tax accountants and lawyers that the rich guys use to avoid paying taxes as much as possible.

 

[Dot Com]

 

[bripat9643]

1. Every single wealthy in the country has a progressive tax system. This has been the case for most of the last century.
2. The world has never seen growth as high as it has been during this time. Global economic output has never been as high as it has been.

So I'm not sure by what you mean when you say "never has worked," apart from empty sloganeering.

Every single third world hell hole also has a progressive tax system, so your logic is suspect on that score alone. Furthermore, your claim that growth has never been higher is also not true. Growth was higher during the 19th century when we had no income tax at all. The countries with the least progressive tax system have the highest growth.

 

[editec]

1. Every single wealthy in the country has a progressive tax system. This has been the case for most of the last century.
2. The world has never seen growth as high as it has been during this time. Global economic output has never been as high as it has been.

So I'm not sure by what you mean when you say "never has worked," apart from empty sloganeering.

Every single third world hell hole also has a progressive tax system,...

You just make shit up as you go along, don't you?

 

[Toro]

1. Every single wealthy in the country has a progressive tax system. This has been the case for most of the last century.
2. The world has never seen growth as high as it has been during this time. Global economic output has never been as high as it has been.

So I'm not sure by what you mean when you say "never has worked," apart from empty sloganeering.

Every single third world hell hole also has a progressive tax system, so your logic is suspect on that score alone.

You fail to understand the argument.

progressive tax policy has never worked in the history of the world!!

I am not making a comparative analysis of different tax systems. I am disproving his assertion that progressive tax systems have never worked. All it takes is one example to disprove an assertion that something never works. Clearly, skoosy is just parroting conservative talking points.

Furthermore, your claim that growth has never been higher is also not true. Growth was higher during the 19th century when we had no income tax at all. The countries with the least progressive tax system have the highest growth.

The 20th century was the most prosperous in the history of the world.

Economic Growth in the 1990s

In the US, the 20th century was also more prosperous than the 19th century.

US per capita real GDP in
1800: $1,396.70
1900: $5,556.85
2000: $39,749.59

Real per capita annual GDP growth
19th century: 1.4%
20th century: 2.0%

Measuring Worth - Measures of worth, inflation rates, saving calculator, relative value, worth of a dollar, worth of a pound, purchasing power, gold prices, GDP, history of wages, average wage

I believe the data is provided by the St Louis Fed.

So, no the 19th century was not the most prosperous century, at least not from what I've read. Perhaps you can back up your assertion though and prove me wrong.

 

[Steelplate]

So it's fair that a person who makes say $60,000 a year has to pay more percentage wise in taxes then millionaires and billionaires?

I'd rather see a system where everybody paid the same percentage then a "regressive" tax system. Hell, we're supposed to be using a progressive tax system I thought...

I say let's go back to Ronald Reagan's tax rates. Everyone loves Reagan, right?

Oh... yeah.... Reagan's top rate was 50%. Now it is 35% and people SCREAMED Socialism when asked for a 4% bump back to the Clinton rates of 39%.

The top rate when Reagan took office was 70%.
The top rate when Reagan left office was 28%.

You're right, we should go back to Reagan's 28% top rate!

That was only his last year in office buckwheat. The rest of the time it was 50% other than in 1987 when it was 38.5%. 6/8 years? It was 50%. Funny how he lowered them towards the end. Probably to help his VP get elected.

 

[Gadawg73]

Geithner the tax cheat was on The Hill the other day advocated taxing small business more.
Of course he said "but only the top 3%".
This is how stupid these folks are and anyone that believes in raising taxes in bad times.
The menatlity is "well, they are doing well and can afford it".
Well guess what small businesses that are doing well ALWAYS DO?
They RETAIN THEIR EMPLOYEES AT THE LEAST and most grow to make more profits if that have been doing well.
And a tax TAKES $$ FROM THEM and limits their ability to do either.
The problem is most Americans do not understand the free market and small business. I own 3 and one has done well the last few years.
The LAST THING my employees want is for my taxes to be raised. How do I pay them in the businesses that are not doing well IF MY $$$ GOES TO WASHINGTON?
WELL DUH!!

 

[Toddsterpatriot]

I say let's go back to Ronald Reagan's tax rates. Everyone loves Reagan, right?

Oh... yeah.... Reagan's top rate was 50%. Now it is 35% and people SCREAMED Socialism when asked for a 4% bump back to the Clinton rates of 39%.

The top rate when Reagan took office was 70%.
The top rate when Reagan left office was 28%.

You're right, we should go back to Reagan's 28% top rate!

That was only his last year in office buckwheat. The rest of the time it was 50% other than in 1987 when it was 38.5%. 6/8 years? It was 50%. Funny how he lowered them towards the end. Probably to help his VP get elected.

Sorry I showed your claim was wrong, Buckwheat.
Funny how he lowered them when he first took office.

 

[FiscalSanity]

Todd & Steel,

Setting the correct tax rate isn't a science, it's an art. Set it too low and your bond holders get nervous about the countries ability to raise enough revenue to meet all it's obligations, even if everyone else loves it. Set it too high and you stifle economic growth, which in turn leads to falling tax revenues and bond holders getting nervous. Problem is, we're dealing with human perception here on all sides of the issue, and those change constantly.

Right now cutting taxes very far is going to make our deficit situation even worse, and our bond holders are already getting jittery. However, raising the income tax rates themselves is just as bad an idea. About the only thing you can do with the tax code to boost revenues right now is to eliminate loopholes and start treating capital gains as ordinary income. Anything else is too likely to result in the bond market hitting us with higher interest rates, which would in turn make our ability to repay our debts even more in doubt. Like it or not, we're only a financial mistep or two from being in Greece's position, so we can't afford to make many more mistakes.

 

[georgephillip]

Geithner the tax cheat was on The Hill the other day advocated taxing small business more.
Of course he said "but only the top 3%".
This is how stupid these folks are and anyone that believes in raising taxes in bad times.
The menatlity is "well, they are doing well and can afford it".
Well guess what small businesses that are doing well ALWAYS DO?
They RETAIN THEIR EMPLOYEES AT THE LEAST and most grow to make more profits if that have been doing well.
And a tax TAKES $$ FROM THEM and limits their ability to do either.
The problem is most Americans do not understand the free market and small business. I own 3 and one has done well the last few years.
The LAST THING my employees want is for my taxes to be raised. How do I pay them in the businesses that are not doing well IF MY $$$ GOES TO WASHINGTON?
WELL DUH!!

DUH!(cont.)

Who profits from placing small business owners in the same tax bracket as PARASITES earning thousands of times more than you do every year?

 

[georgephillip]

Todd & Steel,

Setting the correct tax rate isn't a science, it's an art. Set it too low and your bond holders get nervous about the countries ability to raise enough revenue to meet all it's obligations, even if everyone else loves it. Set it too high and you stifle economic growth, which in turn leads to falling tax revenues and bond holders getting nervous. Problem is, we're dealing with human perception here on all sides of the issue, and those change constantly.

Right now cutting taxes very far is going to make our deficit situation even worse, and our bond holders are already getting jittery. However, raising the income tax rates themselves is just as bad an idea. About the only thing you can do with the tax code to boost revenues right now is to eliminate loopholes and start treating capital gains as ordinary income. Anything else is too likely to result in the bond market hitting us with higher interest rates, which would in turn make our ability to repay our debts even more in doubt. Like it or not, we're only a financial mistep or two from being in Greece's position, so we can't afford to make many more mistakes.

I'm assuming when you use the term bond market you're referring to a private bond market.
Am I wrong?

Is there a way of constructing an economy without private bond markets?

What is your impression of the state of North Dakota doing business as the State Bank of North Dakota?

“The Bank of North Dakota: A Model for Massachusetts and Other States?” — Response to the May 2011 Report by the Federal Reserve Bank of Boston « WEB OF DEBT BLOG

 

[georgephillip]

Since DC Democrats and Republicans are tone deaf to anything that doesn't ring of corporate cash, it falls on workers to demand a massive public works program which can be funded by taxing corporations and the richest Americans at pre-Reagan levels.

"And it makes complete sense because the growing inequalities in wealth over the past three decades has meant a spectacular concentration of wealth at the top.

"The rich have plenty of money to spare."

Spare me the brain-dead conservative vomit about how hard the rich have "worked" for all their money.

The rich have the money because Republicans AND Democrats threw money at Wall Street banks and hedge funds instead of prosecuting the executives responsible for the biggest economic downturn since the Great Depression.

The rich have the money because their chief enabler, The Federal Reserve, has fueled a major commodity bubble "that may be in the midst of bursting, possibly triggering a double dip recession."

Throw in high unemployment which allows the rich to work remaining employees harder and thus increase profits and combine it with commodity speculation and you have the entire basis for a corporate recovery which both major parties tout as "proof" of economic "recovery."

It's another lie the rich tell.

When the Fed stops purchasing 60% of US Treasury bonds, a new creditor will have to step up. One that will probably demand significantly higher interest rates before loaning anymore money to the US Government.

Surprise, surprise - the rich win again!

They got all that free bail-out money which increased the deficit.
None of them went to prison for their crimes.
Their bottom lines are being enhanced by commodity speculation and high unemployment.
And now the rich want higher interest rates for investing in US Treasury Bonds.

"In (all) instances working people pay the bills."

The Rich Are Destroying the Economy | Common Dreams

Errors;

- There is no monolithic "rich." I know rich liberals who vehemently disagree with rich conservatives. Most "rich" do not get rich through financial speculation.

- TARP is a rounding error in the deficit. They did bail out the GSEs, but that was to bail out the mortgage market, not the rich. Plus, it will cost $200 billion to fund the GSEs, which pales in comparison to the $4 trillion or so of debt we will accumulate over the next decade. The deficit was not created by "the rich."

- And even if the government had allowed the banks to crash and burn, dragging us into Depression 2.0, income inequality would still be very wide.

- Commodity speculation is a minor corner of the financial market. Very few become rich through commodities.

- Most of the buyers of Treasury bills once the Fed is done with QE2 will not be "the rich." They will be large institutions representing others besides "the rich." And interest rates have been falling as QE2 winds down.

The "rich" are monolithic in the sense much of their wealth comes from stock market gains.
Stock markets gain because of rising short-term profit.
Profit is enhanced by busting unions, outsourcing jobs and dodging taxes.

For three decades after WWII wages rose with productivity, and American workers earned enough money to buy what they produced. That ended in the 1970s. Since '79 US productivity has surged 55% yet workers' wages have essentially flatlined.

While the "richest" 1% of Americans have seen their share of national income grow from less than 10% in 1979 to over 20% today.

How much more money are the "rich" entitled to, in your opinion?