I'm no economist, but it feels like just adjusting the taxation the further up the marginal brackets (even creating more marginal brackets at different increments to make the resolution finer) is what would benefit the majority more.
Whether that has negative effects elsewhere, I have no idea and thank goodness I'm not in charge of that.
That is a discussion that inflation resembles a tax. And in any case, how does that refute the idea that taxation in general is not a solution? That’s like saying soda taxes are bad so we shouldn’t have income taxes either.
> That is a discussion that inflation resembles a tax.
That's splitting hairs. Inflation is a choice, just like taxes, and, importantly, it's a regressive tax, which helps us understand why the elites love it so much. Inflation shouldn't be mentioned without pointing out that it's a regressive tax.
> And in any case, how does that refute the idea that taxation in general is not a solution?
It doesn't. Nobody claimed that either.
Taxation by itself isn't a solution, but I doubt there is a solution that doesn't involve taxation.
> You’re arguing that because inflation (which is not a tax) is kinda sorta like a tax, therefore taxation in general isn’t a solution?
I can't find anybody claiming anything of the sort.
> That’s like saying soda taxes are bad so we shouldn’t have income taxes either.
Inflation looks a lot like taxation, yes. But assets, the markets for equities, etc rise with inflation. The upper class has most of their net worth in assets/equities, whereas the poorer people are living paycheck to paycheck just buying the essentials each month, and each month those essentials become more expensive. Only one of these groups feels any real impact.
So yes it's a tax but it's a tax on a very specific segment of the population.
It's less about raising taxes on people making less than 250,000 a year and more on getting people who make over 1,000,000 pay taxes at all. Sure there's plenty of people who aren't rich that commit tax fraud but the IRS is pretty good at getting them. Getting the millionaires who can throw lawyers at them to waste time makes it not worth it. The rich get richer and the poor get poorer
When the top 5% makes 3x more than the bottom 50%? The top 5% makes 38% of the total, while the top 1% alone makes 22%, per the same sources you just quoted. Yes, the ones who make the most can afford to pay the most in taxes.
You didn't even cover GP's main point about getting the top to even pay taxes; the top 1%, per your own source, only pays 26%, while the top 50% pays 16%.
> When the top 5% makes 3x more than the bottom 50%? The top 5% makes 38% of the total, while the top 1% alone makes 22%, per the same sources you just quoted. Yes, the ones who make the most can afford to pay the most in taxes.
And this isn't even considering the wealth distribution disparity, which is even greater than the income distribution disparity. A lot of that is held in the form physical assets (property) and government debt.
Financially, the wealthy own the government. In a way, a lot of the taxes they pay go back to them in the form of interest paid on government debt.
Argue for higher tax rates and more enforcement all you want, but the fact is that the current setup results in a situation where the bulk of actual taxes collected come from the rich.
This situation has persisted for as many decades as I've been able to find data for.
Here's a quote from my source: "The top 1 percent earned 22.4 percent of total AGI and paid 40.4 percent of all federal income taxes.
In all, the top 1 percent of taxpayers accounted for more income taxes paid than the bottom 90 percent combined."
And we haven't even talked about the avalanche of payroll and sales taxes generated by the businesses they run.
> Argue for higher tax rates and more enforcement all you want, but the fact is that the current setup results in a situation where the bulk of actual taxes collected come from the rich.
As they should, because the rich are paid multiples or orders of magnitude more than the middle/working class and poor. That's possible because they make money by:
- Owning capital and taking a share of the resulting productivity passively (the wealthiest of the wealthy)
- Working at a level of abstraction in the hierarchy where their skills allow them to scale their income via technology or by directing the labor of lower skilled workers.
- Working in elite supply-limited professions (i.e highly specialized doctors and lawyers, r&d in high speculation industries like AI).
It takes significant financial, social, or education capital to be able to participate in the economy in either of those modes.
As the income and wealth inequality trends have become more extreme, it makes sense that the wealthy should be paying an ever increasing portion of the tax burden, not a lower portion. Otherwise you end up with feudalism.
> The top 5% of taxpayers in the USA pay 61% of the taxes.
Only if you ignore the payroll tax.
For the median US worker, they pay ~15% in payroll tax, and significantly less in income tax. The median US worker makes $40k year, paying like $6k in payroll tax and like $2.8k in federal income tax.
So yes, if you ignore the majority of tax that the average worker pays, then the top 5% pay the majority of tax.
The useful statistic is not "what percentage of the taxes do each quintile/decile/etc pay?"
It's "What percentage of their disposable income (ie, net of housing, food, health care, and other necessary expenses) do each quintile/decile/etc pay in taxes?"
And the answer is going to be that the middle and working classes pay a huge percentage—close to 100% for many—while for the wealthy it's effectively nothing.
....Right. Which is why what I described would ensure that the people who feel the least pain from funding the state are asked to pay the greatest share.
If you make having neighbors painful don't be surprised when "the rich" stop collaborating and instead work to eliminate them like you're seeing everywhere in the post millennial US now.
I'm not sure what this subthread has to do with having neighbors?
But regardless, "if you try to make the rich actually participate in and contribute to society, don't be surprised if they try to destroy society instead" is exactly the kind of threat that supports the idea that we should, instead, make it impossible to be rich enough to carry that threat out.
Having a functioning and mutually beneficial society is much, much more important than letting outlandishly rich selfish people stay rich.
Their tax rates have been reduced every time a Republican President has been in office in the last 25 years, and not, to the best of my knowledge, increased enough to counteract that when a Democrat has been in office.
The top marginal tax rates during the right's supposed "golden age" after WWII were much, much higher than they are now.
We're running a deficit because huge promises were made to entire generations of people when we had a pyramid-shaped demographics, but now we have a population candle.
If you tax rich people even more than now, you risk simply slowing down the economy long-term and making the whole situation much worse.
If you raise taxes on people with a lower marginal propensity to spend and transfer it to people with a higher marginal propensity to spend you'll have a stronger economy.
We were running surpluses at numerous times across the past 100 years. Each of those surpluses ends with a reduction in the top tax rate.
I’ve heard this statistic before and it always strikes me as basically a non-sequitor. You’re writing down two percentages as if they are meaningful with respect to one another, but they arent.
If we as a society agree that some sort of progressive tax system is good (based on the fact that the mere act of survival comes with fixed costs, that naturally impact low-wealth holders over high-wealth holders) then we presumably expect higher wealth people to shoulder a larger burden of the cost of maintaining society, relative to that wealth.
The top 1% hold >30% of all wealth in the US, which, by the logic I described above, makes your 40% figure sound not just not exorbitant, but possibly too low.
People making one million dollars a year are people like doctors and lawyers and are most certainly paying taxes. One million dollars today was ~$680k in 2008.
