Because what do the poor need money for?
August 21, 2011 9:20 PM Subscribe
Congressional Republicans favor letting the payroll tax increase at year's end. Jeb Hensarling claims this is because "not all tax relief is created equal for the purposes of helping to get the economy moving again." However, his logic may be backward[s].
No, his logic isn't backwards - he's just lying to you. His real logic: this tax cut should end because he doesn't want to waste money on poorer people and he sure as hell doesn't want the economy to improve before the 2012 elections.
posted by nightwood at 9:29 PM on August 21, 2011 [35 favorites]
posted by nightwood at 9:29 PM on August 21, 2011 [35 favorites]
Yeah, the reality is Americans are okay with paying more payroll taxes because those taxes support popular programs. The Republicans are doing the right thing here.
Now, it's still true that it is an utterly hypocritical position that makes a farce of their policy for taxes on the rich, but it's still the right policy.
posted by furiousxgeorge at 9:34 PM on August 21, 2011 [2 favorites]
Now, it's still true that it is an utterly hypocritical position that makes a farce of their policy for taxes on the rich, but it's still the right policy.
posted by furiousxgeorge at 9:34 PM on August 21, 2011 [2 favorites]
GOP leaders pledge to block deficit package that increases taxes
Boehner and Cantor: no new taxes
95% of congressional Republicans have taken the No-Tax Pledge
"Republicans know that the way out of a recession is to provide tax relief, not raise taxes even higher."
Daily Show's on vacation for the next two weeks, so we have to do our Hypocrisy Montages manually
posted by saturday_morning at 9:37 PM on August 21, 2011 [29 favorites]
Boehner and Cantor: no new taxes
95% of congressional Republicans have taken the No-Tax Pledge
"Republicans know that the way out of a recession is to provide tax relief, not raise taxes even higher."
Daily Show's on vacation for the next two weeks, so we have to do our Hypocrisy Montages manually
posted by saturday_morning at 9:37 PM on August 21, 2011 [29 favorites]
What y'all need to do is eliminate the payroll tax and double the highest income tax rate.
posted by fleetmouse at 9:41 PM on August 21, 2011 [14 favorites]
posted by fleetmouse at 9:41 PM on August 21, 2011 [14 favorites]
double the highest income tax rate
That would help, but only a fraction of what's needed.
posted by stbalbach at 9:52 PM on August 21, 2011 [1 favorite]
That would help, but only a fraction of what's needed.
posted by stbalbach at 9:52 PM on August 21, 2011 [1 favorite]
nightwood: "No, his logic isn't backwards - he's just lying to you."
Exactly. Payroll tax cuts are progressive, putting money directly into the pockets of lower- and middle-class workers while providing virtually no benefits to the extremely wealthy, which is why Obama has argued for them in addition to thinks like extending unemployment benefits.
The fact that Republicans are targeting this tax cut to abolish, after all their ridiculously hyperbolic, almost theological anti-tax rhetoric, speaks volumes.
posted by Rhaomi at 9:52 PM on August 21, 2011 [59 favorites]
Exactly. Payroll tax cuts are progressive, putting money directly into the pockets of lower- and middle-class workers while providing virtually no benefits to the extremely wealthy, which is why Obama has argued for them in addition to thinks like extending unemployment benefits.
The fact that Republicans are targeting this tax cut to abolish, after all their ridiculously hyperbolic, almost theological anti-tax rhetoric, speaks volumes.
posted by Rhaomi at 9:52 PM on August 21, 2011 [59 favorites]
If you let regular folks have more money they'll just piss it away on food, rent, clothes, etc. A lot of it will just circulate uselessly through their neighborhoods for days and even weeks. Better to give the tax breaks to the wealthy who will make sure the money gets socked away properly.
posted by squalor at 9:56 PM on August 21, 2011 [28 favorites]
posted by squalor at 9:56 PM on August 21, 2011 [28 favorites]
See, but your mistaken about one thing.
The wealthy get those benefits also.
Just like they also get tax breaks for the middle class on their first 5% of their income.
posted by dglynn at 9:59 PM on August 21, 2011 [5 favorites]
The wealthy get those benefits also.
Just like they also get tax breaks for the middle class on their first 5% of their income.
posted by dglynn at 9:59 PM on August 21, 2011 [5 favorites]
The wealthy get those benefits also.
Two reasons you're a bit wrong:
1.) The wealthy - the wealthy wealthy - derive most of their income from capital gains and investment income. The moderately wealthy derive part of their income from this. Poor people, well, don't. Therefore a payroll tax cut is better for poor people, since it affects them more significantly.
2.) Payroll taxes cap at the high end, so again, high earners aren't as significantly affected as low earners.
posted by mightygodking at 10:22 PM on August 21, 2011 [1 favorite]
Two reasons you're a bit wrong:
1.) The wealthy - the wealthy wealthy - derive most of their income from capital gains and investment income. The moderately wealthy derive part of their income from this. Poor people, well, don't. Therefore a payroll tax cut is better for poor people, since it affects them more significantly.
2.) Payroll taxes cap at the high end, so again, high earners aren't as significantly affected as low earners.
posted by mightygodking at 10:22 PM on August 21, 2011 [1 favorite]
The fact that Republicans are targeting this tax cut to abolish, after all their ridiculously hyperbolic, almost theological anti-tax rhetoric, speaks volumes.
Exactly-smackly right.
Unlike the cravenly political the Bush stimulus of 2008, where Herr Bush incurred the expense of mailing "rebate" checks to millions of taxpayers:
"The package will pay $600 to most individual taxpayers and $1,200 to married taxpayers filing joint returns, so long as they are below income caps of $75,000 for individuals and $150,000 for couples. There is also a $300 per child tax credit.Watch Bush sign stimulus bill into law."
and which was a Keynesian failure because people used their one-time bpnus to pay off debt rather than increase consumption, the Obama payroll cut spread the tax relief over time so that the money would more likely find its way to consumption.
The key to all of this is understanding that the problem in America today, as it was in the 1930s, is consumption, not production. Businesses aren't hiring because people aren't buying stuff. Find a way to get money into the hands of consumers and the whole problem sorts itself out.
A reduction of the payroll tax was less likely to have any immediate or remarkable effect on the economy over the short term, but it addresses the real problem in a real way.
Republicans on the other hand only ever see supply side problems: replacing income from customers with tax cuts and investment credits is not the way to create prosperity.
I do not understand how the Democrats continue to loose this argument, but they do. Obama seems to understand the problem, he speaks well, but he has been so far unable to connect these two dots.
posted by three blind mice at 10:24 PM on August 21, 2011 [27 favorites]
Exactly-smackly right.
Unlike the cravenly political the Bush stimulus of 2008, where Herr Bush incurred the expense of mailing "rebate" checks to millions of taxpayers:
"The package will pay $600 to most individual taxpayers and $1,200 to married taxpayers filing joint returns, so long as they are below income caps of $75,000 for individuals and $150,000 for couples. There is also a $300 per child tax credit.Watch Bush sign stimulus bill into law."
and which was a Keynesian failure because people used their one-time bpnus to pay off debt rather than increase consumption, the Obama payroll cut spread the tax relief over time so that the money would more likely find its way to consumption.
The key to all of this is understanding that the problem in America today, as it was in the 1930s, is consumption, not production. Businesses aren't hiring because people aren't buying stuff. Find a way to get money into the hands of consumers and the whole problem sorts itself out.
A reduction of the payroll tax was less likely to have any immediate or remarkable effect on the economy over the short term, but it addresses the real problem in a real way.
Republicans on the other hand only ever see supply side problems: replacing income from customers with tax cuts and investment credits is not the way to create prosperity.
I do not understand how the Democrats continue to loose this argument, but they do. Obama seems to understand the problem, he speaks well, but he has been so far unable to connect these two dots.
posted by three blind mice at 10:24 PM on August 21, 2011 [27 favorites]
Obama doing unforced harm to Soc Sec is one of many reasons I won't vote for him again.
If "supporting Social Security" is your value for selecting a President, who will you vote for instead? I'm pretty sure you'll be disappointed with your other options.
posted by incessant at 10:27 PM on August 21, 2011 [8 favorites]
If "supporting Social Security" is your value for selecting a President, who will you vote for instead? I'm pretty sure you'll be disappointed with your other options.
posted by incessant at 10:27 PM on August 21, 2011 [8 favorites]
remember when obama gave a nice little talk to students encouraging them to stay in school and study hard and some republicans were all outraged about it?
who needs consistency when you've got blind, irrational hatred?
posted by pyramid termite at 10:30 PM on August 21, 2011 [10 favorites]
who needs consistency when you've got blind, irrational hatred?
posted by pyramid termite at 10:30 PM on August 21, 2011 [10 favorites]
I do not understand how the Democrats continue to loose this argument, but they do. Obama seems to understand the problem, he speaks well, but he has been so far unable to connect these two dots.
Again, they lose this argument because these are not the tax cuts Americans want. Americans can see cutting this revenue is taking money from social security which is going to lead to cuts down the line. The preferred policy among the people is actually to take in more revenue to save the benefits. There is a reason the Republicans let this cut pass in the first place, always look a Republican gift horse in the mouth, it probably has equine dental ebola.
The best stimulus is a sense of long term economic security, not tax cuts or hikes or spending games.
posted by furiousxgeorge at 10:33 PM on August 21, 2011 [1 favorite]
Again, they lose this argument because these are not the tax cuts Americans want. Americans can see cutting this revenue is taking money from social security which is going to lead to cuts down the line. The preferred policy among the people is actually to take in more revenue to save the benefits. There is a reason the Republicans let this cut pass in the first place, always look a Republican gift horse in the mouth, it probably has equine dental ebola.
The best stimulus is a sense of long term economic security, not tax cuts or hikes or spending games.
posted by furiousxgeorge at 10:33 PM on August 21, 2011 [1 favorite]
If "supporting Social Security" is your value for selecting a President, who will you vote for instead? I'm pretty sure you'll be disappointed with your other options.
Having the right to choose other options is one of the hallmarks of a strong, vibrant democracy.
A Constitutional scholar like Obama should theoretically be happy that people can evaluate his record, to live in a country where people are able to make a decision on the basis of his record, whatever the outcome for him.
posted by Blazecock Pileon at 10:38 PM on August 21, 2011 [2 favorites]
Having the right to choose other options is one of the hallmarks of a strong, vibrant democracy.
A Constitutional scholar like Obama should theoretically be happy that people can evaluate his record, to live in a country where people are able to make a decision on the basis of his record, whatever the outcome for him.
posted by Blazecock Pileon at 10:38 PM on August 21, 2011 [2 favorites]
What y'all need to do is eliminate the payroll tax and double the highest income tax rate.
What I found amazing is that with every tax debate people are always want to increase OTHER people's tax rate. People in highest income bracket overwhelming don't need the programs funded by the payroll taxes. While I understand the tax rate at highest income bracket is at historical low level and need to be raised. I never ever seen anyone advocating raising their OWN tax rate. It's always about raising OTHER's people income tax. Sad thing is after all the deductions for mortgage interest, children allowance and etc over half of American already pay no income tax.
With the current federal deficit and debt level, no amount of spending cut will be enough to close the gap. The income taxes will eventually needed to be raised. How about instead of just increase the income taxes on highest income bracket, let income taxes increase for everybody no matter how token that will be at lower income brackets? After all, we as the voters, elected members of Congress to authorize the spending.
Justice Holme once said "Taxes are what we pay for civilized society"
We can either live without the government programs or pony up the money to pay for it.
posted by Carius at 10:43 PM on August 21, 2011 [1 favorite]
What I found amazing is that with every tax debate people are always want to increase OTHER people's tax rate. People in highest income bracket overwhelming don't need the programs funded by the payroll taxes. While I understand the tax rate at highest income bracket is at historical low level and need to be raised. I never ever seen anyone advocating raising their OWN tax rate. It's always about raising OTHER's people income tax. Sad thing is after all the deductions for mortgage interest, children allowance and etc over half of American already pay no income tax.
With the current federal deficit and debt level, no amount of spending cut will be enough to close the gap. The income taxes will eventually needed to be raised. How about instead of just increase the income taxes on highest income bracket, let income taxes increase for everybody no matter how token that will be at lower income brackets? After all, we as the voters, elected members of Congress to authorize the spending.
Justice Holme once said "Taxes are what we pay for civilized society"
We can either live without the government programs or pony up the money to pay for it.
posted by Carius at 10:43 PM on August 21, 2011 [1 favorite]
I never ever seen anyone advocating raising their OWN tax rate
except for Warren Buffet of course.
posted by Carius at 10:48 PM on August 21, 2011 [12 favorites]
except for Warren Buffet of course.
posted by Carius at 10:48 PM on August 21, 2011 [12 favorites]
I am 100% for raising the payroll tax on myself. The cut had real noticeable economic impact for me, but I'd rather keep that money going towards keeping the social programs running.
posted by furiousxgeorge at 10:50 PM on August 21, 2011 [8 favorites]
posted by furiousxgeorge at 10:50 PM on August 21, 2011 [8 favorites]
Blazecock Pileon: "Having the right to choose other options is one of the hallmarks of a strong, vibrant democracy.
A Constitutional scholar like Obama should theoretically be happy that people can evaluate his record..."
Who said you didn't have other options? Incessant's comment was essentially "What other options will be better for social security than voting for Obama in the 2012 presidential election?"
On what planet is "Why does Obama hate our freedoms?" a sensical response to that question?
posted by Riki tiki at 10:52 PM on August 21, 2011 [5 favorites]
A Constitutional scholar like Obama should theoretically be happy that people can evaluate his record..."
Who said you didn't have other options? Incessant's comment was essentially "What other options will be better for social security than voting for Obama in the 2012 presidential election?"
On what planet is "Why does Obama hate our freedoms?" a sensical response to that question?
posted by Riki tiki at 10:52 PM on August 21, 2011 [5 favorites]
Daily Show's on vacation for the next two weeks, so we have to do our Hypocrisy Montages manually
I almost wonder if the GOP didn't get this idea from his last show: World of Class Warfare - The Poor's Free Ride Is Over
posted by homunculus at 10:54 PM on August 21, 2011 [1 favorite]
I almost wonder if the GOP didn't get this idea from his last show: World of Class Warfare - The Poor's Free Ride Is Over
posted by homunculus at 10:54 PM on August 21, 2011 [1 favorite]
which is why Obama has argued for them in addition to thinks like extending unemployment benefits.
While Pushing Corporate Tax Cuts, Bachmann Rejects Extending Jobless Benefits: ‘We Don’t Have The Money’
posted by homunculus at 11:18 PM on August 21, 2011 [3 favorites]
While Pushing Corporate Tax Cuts, Bachmann Rejects Extending Jobless Benefits: ‘We Don’t Have The Money’
posted by homunculus at 11:18 PM on August 21, 2011 [3 favorites]
That would help, but only a fraction of what's needed.
Total wealth of the US is about 188 trillion. The top 1% owns as much wealth as the bottom 90%. That's enough to pay off the entire debt several times over. Just take everything that top 1% owns.
Then, eat the fuckers.
posted by fleetmouse at 11:18 PM on August 21, 2011 [20 favorites]
Total wealth of the US is about 188 trillion. The top 1% owns as much wealth as the bottom 90%. That's enough to pay off the entire debt several times over. Just take everything that top 1% owns.
Then, eat the fuckers.
posted by fleetmouse at 11:18 PM on August 21, 2011 [20 favorites]
Carius, I'm a computer programmer and I'm in favor of having my taxes raised, *and* I vote that way every chance I get.
posted by chrchr at 11:25 PM on August 21, 2011 [9 favorites]
posted by chrchr at 11:25 PM on August 21, 2011 [9 favorites]
I am 100% for raising the payroll tax on myself.
Same here. The pitiful extra I see in my weekly paycheck isn't exactly funding my 401(k).
I've been tossing around in my head a modest wealth tax placed on individuals of the US with a significantly high threshold. 1-2% of assets over $20 million or so as an annual tax. I am realistic in that this will never happen.
posted by Mister Fabulous at 11:25 PM on August 21, 2011
Same here. The pitiful extra I see in my weekly paycheck isn't exactly funding my 401(k).
I've been tossing around in my head a modest wealth tax placed on individuals of the US with a significantly high threshold. 1-2% of assets over $20 million or so as an annual tax. I am realistic in that this will never happen.
posted by Mister Fabulous at 11:25 PM on August 21, 2011
I never ever seen anyone advocating raising their OWN tax rate
I have never made more than $30k a year, I have more than that in student loan debts.
Please raise my taxes.
posted by munchingzombie at 11:34 PM on August 21, 2011 [8 favorites]
I have never made more than $30k a year, I have more than that in student loan debts.
Please raise my taxes.
posted by munchingzombie at 11:34 PM on August 21, 2011 [8 favorites]
All this talk about raising taxes on yourself and social security is missing the point. In the worst economic climate in 2 generations and terrible unemployment, republicans just favored increased taxes on businesses having employees.
Keep that in mind as you read why such a tax increase would make sense. Spin away, my friends.
posted by cotterpin at 11:36 PM on August 21, 2011 [6 favorites]
Keep that in mind as you read why such a tax increase would make sense. Spin away, my friends.
posted by cotterpin at 11:36 PM on August 21, 2011 [6 favorites]
Carius: "Sad thing is after all the deductions for mortgage interest, children allowance and etc over half of American already pay no income tax. "
What's sad is that they don't pay income tax because they have so little income.
Also, even the poorest are not exempt from sales taxes, property taxes, SS taxes, state and local taxes, etc.
cotterpin: " In the worst economic climate in 2 generations and terrible unemployment, republicans just favored increased taxes on businesses having employees. Keep that in mind as you read why such a tax increase would make sense."
To be precise, they favor *raising* the tax on employees (by letting the cuts lapse) while *lowering* the rate on employers. Because that generally helps the rich at the expense of the poor, while simultaneously hampering economic recovery prior to the 2012 elections.
posted by Rhaomi at 11:41 PM on August 21, 2011 [13 favorites]
What's sad is that they don't pay income tax because they have so little income.
Also, even the poorest are not exempt from sales taxes, property taxes, SS taxes, state and local taxes, etc.
cotterpin: " In the worst economic climate in 2 generations and terrible unemployment, republicans just favored increased taxes on businesses having employees. Keep that in mind as you read why such a tax increase would make sense."
To be precise, they favor *raising* the tax on employees (by letting the cuts lapse) while *lowering* the rate on employers. Because that generally helps the rich at the expense of the poor, while simultaneously hampering economic recovery prior to the 2012 elections.
posted by Rhaomi at 11:41 PM on August 21, 2011 [13 favorites]
In the worst economic climate in 2 generations and terrible unemployment, republicans just favored increased taxes on businesses having employees.
...because cutting them has accomplished so much? We need economic demand to get jobs, to get that demand we need people who feel economically secure.
Uncertainty comes up a lot in regards to businesses, but it's more important for families. It's wise to put some value in a guaranteed social benefit program over a job you can be fired or laid off from on a whim.
posted by furiousxgeorge at 11:43 PM on August 21, 2011
...because cutting them has accomplished so much? We need economic demand to get jobs, to get that demand we need people who feel economically secure.
Uncertainty comes up a lot in regards to businesses, but it's more important for families. It's wise to put some value in a guaranteed social benefit program over a job you can be fired or laid off from on a whim.
posted by furiousxgeorge at 11:43 PM on August 21, 2011
Sad thing is after all the deductions for mortgage interest, children allowance and etc over half of American already pay no income tax.
I think one's interpretation of this sentence about sums up the debate.
posted by intendedeffect at 11:48 PM on August 21, 2011 [10 favorites]
I think one's interpretation of this sentence about sums up the debate.
posted by intendedeffect at 11:48 PM on August 21, 2011 [10 favorites]
carius, who benefits more from federal tax dollars being spent on public roads, legal infrastructure, federal subsidies, someone making $20k or someone with millions to billions of dollars in stock? Why shouldn't the wealthy pay much more, when they get so much more out of it?
posted by stavrogin at 11:48 PM on August 21, 2011 [2 favorites]
posted by stavrogin at 11:48 PM on August 21, 2011 [2 favorites]
Yet the think that breaks my heart, furiousxgeorge, is when that value isn't converted into support. That disconnect provides a disincentive for the correct, compassionate action and favors a knee-jerk tax cut.
posted by Wyatt at 11:54 PM on August 21, 2011 [1 favorite]
posted by Wyatt at 11:54 PM on August 21, 2011 [1 favorite]
Incessant's comment was essentially "What other options will be better for social security than voting for Obama in the 2012 presidential election?"
Thank yew, yes, exactomundo.
Please, Blazecock, explain to me why this question equals a disavowal of democracy?
posted by incessant at 12:00 AM on August 22, 2011
Thank yew, yes, exactomundo.
Please, Blazecock, explain to me why this question equals a disavowal of democracy?
posted by incessant at 12:00 AM on August 22, 2011
let them be exposed for the hateful petty blowhard illogical cum-swallowing pigs that they are...
And when UI runs out and people are really hurting give them all a rifle and point them the local GOP re-election office.
Um. I don't like the GOP either, but really?
posted by naoko at 12:00 AM on August 22, 2011
And when UI runs out and people are really hurting give them all a rifle and point them the local GOP re-election office.
Um. I don't like the GOP either, but really?
posted by naoko at 12:00 AM on August 22, 2011
I don't think anyone knows exactly what's going to work to fix the economy, and even recognizing a fix is difficult because we don't know how long recovery will take. I'm also not an economist.
Despite this uncertainty, It seems obvious that taxing jobs will drive down employment. The arguments that it won't, that it will help instead, sound a lot like people are being disingenuous, especially if they are appealing to general ideas like "taking jobs will make people feel economically secure which will create more jobs". How about tax incentives for creating jobs, not tax increases?
posted by cotterpin at 12:03 AM on August 22, 2011
Despite this uncertainty, It seems obvious that taxing jobs will drive down employment. The arguments that it won't, that it will help instead, sound a lot like people are being disingenuous, especially if they are appealing to general ideas like "taking jobs will make people feel economically secure which will create more jobs". How about tax incentives for creating jobs, not tax increases?
posted by cotterpin at 12:03 AM on August 22, 2011
Cotter, the argument is that building that stimulus on top of sacrificing social security makes people feel less secure. You would do the same thing if you built it on top of cutting public healthcare funding.
If you want to add incentives for hiring, you can do it without raiding the future a million different ways.
posted by furiousxgeorge at 12:09 AM on August 22, 2011 [1 favorite]
If you want to add incentives for hiring, you can do it without raiding the future a million different ways.
posted by furiousxgeorge at 12:09 AM on August 22, 2011 [1 favorite]
People in highest income bracket overwhelming don't need the programs funded by the payroll taxes
It used to be understood that the social safeteynet let rich people keep their heads and not have to deal with torch wielding mobs.
posted by humanfont at 12:35 AM on August 22, 2011 [16 favorites]
It used to be understood that the social safeteynet let rich people keep their heads and not have to deal with torch wielding mobs.
posted by humanfont at 12:35 AM on August 22, 2011 [16 favorites]
I understand that in theory this could be a logical and fair way to pay for social security. In practice though, there are other possible sources of revenue. We have the lowest rate of taxation on the highest incomes in decades. Capital gains are also at historic lows. The economy is lousy and unemployment is especially high.
Given all this, in practice it seems stupid to increase payroll taxes. This tax makes it costlier to have employees.
If you want to add incentives for hiring, you can do it without raiding the future a million different ways
When money goes from employer to employee, when the gov't takes a larger cut, the overall result is that the employer can afford fewer employees. Tax credits and incentives do not change this. That's just trying to have it both ways. If actually raise revenue from employment, then it's going to drive employment down.
posted by cotterpin at 12:40 AM on August 22, 2011
Given all this, in practice it seems stupid to increase payroll taxes. This tax makes it costlier to have employees.
If you want to add incentives for hiring, you can do it without raiding the future a million different ways
When money goes from employer to employee, when the gov't takes a larger cut, the overall result is that the employer can afford fewer employees. Tax credits and incentives do not change this. That's just trying to have it both ways. If actually raise revenue from employment, then it's going to drive employment down.
posted by cotterpin at 12:40 AM on August 22, 2011
Sad thing is after all the deductions for mortgage interest, children allowance and etc over half of American already pay no income tax.
What's sad is that they don't pay income tax because they have so little income.
Also, even the poorest are not exempt from sales taxes, property taxes, SS taxes, state and local taxes, etc.
carius, who benefits more from federal tax dollars being spent on public roads, legal infrastructure, federal subsidies, someone making $20k or someone with millions to billions of dollars in stock? Why shouldn't the wealthy pay much more, when they get so much more out of it?
This is no-brainer. Everybody lose if the United States government was to cease to exist tomorrow but wealthy would definitely lose more. I'm totally in favor of progressive income tax. The wealthy should pay more and the top marginal income tax rate should return to 1950s level.
Just to be clear, I'm not rich and no where near the top income rate. But I'm still in favor of raising my own income tax rate to help close the deficit because sooner or later the debt would eventually need to be repay. I would much prefer paying back sooner.
What I don't like is the general attitude of fuck the rich and hike other people's tax but don't raise my tax because I don't earn enough income. That is a dangerous thinking because majority of people think they don't earn enough income so it always rest the responsibility of paying tax to other people. It is civic duty of every citizen to pay tax. What I advocating is if voters want to increase tax it should be across the board increase taxes for everyone, even if it's $1 increase in income tax for people in lower bracket.
posted by Carius at 12:44 AM on August 22, 2011 [1 favorite]
What's sad is that they don't pay income tax because they have so little income.
Also, even the poorest are not exempt from sales taxes, property taxes, SS taxes, state and local taxes, etc.
carius, who benefits more from federal tax dollars being spent on public roads, legal infrastructure, federal subsidies, someone making $20k or someone with millions to billions of dollars in stock? Why shouldn't the wealthy pay much more, when they get so much more out of it?
This is no-brainer. Everybody lose if the United States government was to cease to exist tomorrow but wealthy would definitely lose more. I'm totally in favor of progressive income tax. The wealthy should pay more and the top marginal income tax rate should return to 1950s level.
Just to be clear, I'm not rich and no where near the top income rate. But I'm still in favor of raising my own income tax rate to help close the deficit because sooner or later the debt would eventually need to be repay. I would much prefer paying back sooner.
What I don't like is the general attitude of fuck the rich and hike other people's tax but don't raise my tax because I don't earn enough income. That is a dangerous thinking because majority of people think they don't earn enough income so it always rest the responsibility of paying tax to other people. It is civic duty of every citizen to pay tax. What I advocating is if voters want to increase tax it should be across the board increase taxes for everyone, even if it's $1 increase in income tax for people in lower bracket.
posted by Carius at 12:44 AM on August 22, 2011 [1 favorite]
Let it be known from this day forward that Republicans are not anti-tax: they are merely against taxing the wealthy.
Taxing the poor and middle-class is just fine with them.
posted by Avenger at 12:52 AM on August 22, 2011 [15 favorites]
Taxing the poor and middle-class is just fine with them.
posted by Avenger at 12:52 AM on August 22, 2011 [15 favorites]
I understand that in theory this could be a logical and fair way to pay for social security.
No, you don't understand. The payroll taxes support the trust fund. When you cut them, you are directly hastening the insolvency.
There most certainly are alternate ways to fund it, like taxing the rich, but you can't kick the leg out of the actual real funding for it we have right now before you get those taxes.
posted by furiousxgeorge at 1:05 AM on August 22, 2011
No, you don't understand. The payroll taxes support the trust fund. When you cut them, you are directly hastening the insolvency.
There most certainly are alternate ways to fund it, like taxing the rich, but you can't kick the leg out of the actual real funding for it we have right now before you get those taxes.
posted by furiousxgeorge at 1:05 AM on August 22, 2011
What I don't like is the general attitude of fuck the rich and hike other people's tax but don't raise my tax because I don't earn enough income.
I think you'll find that the majority of people here would be okay with letting all of Bush's tax cuts expire. You are arguing against a straw man.
posted by Justinian at 1:09 AM on August 22, 2011 [7 favorites]
I think you'll find that the majority of people here would be okay with letting all of Bush's tax cuts expire. You are arguing against a straw man.
posted by Justinian at 1:09 AM on August 22, 2011 [7 favorites]
What I don't like is the general attitude of fuck the rich and hike other people's tax but don't raise my tax because I don't earn enough income.
Oh, boo hoo, I'm poor! I need money for shelter! I have to clothe children! I don't want to starve to death!
The people who pay the most tax should be those with the most to spare, who also receive a greater share of the benefits of our society. A given percentage of your income hurts a lot more when you have a little money than a lot.
posted by JHarris at 1:24 AM on August 22, 2011 [11 favorites]
Oh, boo hoo, I'm poor! I need money for shelter! I have to clothe children! I don't want to starve to death!
The people who pay the most tax should be those with the most to spare, who also receive a greater share of the benefits of our society. A given percentage of your income hurts a lot more when you have a little money than a lot.
posted by JHarris at 1:24 AM on August 22, 2011 [11 favorites]
But I'm still in favor of raising my own income tax rate to help close the deficit
And thus you fall into the Republican rhetorical trap. Any discussion about Keynesian stimulus gets hijacked by a discussion of the U.S. debt and the mythical social security lock box.
There is no social security lock box. Social security is pay as you go. A reduction in the payroll tax has no more impact on the solvency of social security than a cut in income tax.
As far as deficits go, Reagan proved that "deficits don't matter" as long as you have economic growth: "The lesson we should have learned [from those years] is that deficits have little or no short-term economic impacts," said William A. Niskanen, a member of Reagan's Council of Economic Advisers.
...
"The Reagan "experience changed the debate dramatically," said Kevin A. Hassett, an economist at the American Enterprise Institute. "Back then, it seems that everybody believed Reagan must be some kind of kook and the people who agreed with these views were flimflam artists. Not so anymore.
Indeed, since the Reagan years, the argument over the deficit has been turned on its head. In the 1980s, prominent liberal economists dismissed the significance of government red ink to head off the slashing of social welfare spending. Now, many liberal economists have become the fiercest deficit hawks to head off still more tax cuts."
The payroll tax cut was the right thing to do and if Obama doesn't double down on consumer spending, he's gonna have all the vacation he needs in about two years.
posted by three blind mice at 2:05 AM on August 22, 2011 [7 favorites]
And thus you fall into the Republican rhetorical trap. Any discussion about Keynesian stimulus gets hijacked by a discussion of the U.S. debt and the mythical social security lock box.
There is no social security lock box. Social security is pay as you go. A reduction in the payroll tax has no more impact on the solvency of social security than a cut in income tax.
As far as deficits go, Reagan proved that "deficits don't matter" as long as you have economic growth: "The lesson we should have learned [from those years] is that deficits have little or no short-term economic impacts," said William A. Niskanen, a member of Reagan's Council of Economic Advisers.
...
"The Reagan "experience changed the debate dramatically," said Kevin A. Hassett, an economist at the American Enterprise Institute. "Back then, it seems that everybody believed Reagan must be some kind of kook and the people who agreed with these views were flimflam artists. Not so anymore.
Indeed, since the Reagan years, the argument over the deficit has been turned on its head. In the 1980s, prominent liberal economists dismissed the significance of government red ink to head off the slashing of social welfare spending. Now, many liberal economists have become the fiercest deficit hawks to head off still more tax cuts."
The payroll tax cut was the right thing to do and if Obama doesn't double down on consumer spending, he's gonna have all the vacation he needs in about two years.
posted by three blind mice at 2:05 AM on August 22, 2011 [7 favorites]
. Social security is pay as you go. A reduction in the payroll tax has no more impact on the solvency of social security than a cut in income tax.
I mean, again, Social Security is directly funded by payroll taxes. I'm not sure why it is so important for everyone to disregard this fact in favor of the false Republican framing, but I can't help but notice Democrats weren't using this talking point before Obama signed on with cutting the SS revenue.
posted by furiousxgeorge at 2:31 AM on August 22, 2011
I mean, again, Social Security is directly funded by payroll taxes. I'm not sure why it is so important for everyone to disregard this fact in favor of the false Republican framing, but I can't help but notice Democrats weren't using this talking point before Obama signed on with cutting the SS revenue.
posted by furiousxgeorge at 2:31 AM on August 22, 2011
Social Security is directly funded by payroll taxes.
And on this basis it is more than solvent. The problem is the "out years" for which surplus payroll taxes are being collected to fund the system in the future - i.e., the "trust fund", "lock-box", or whatever other mythical creature you wish to call it.
In reality, surplus payroll taxes are used for things other than Social Security - in other words a too high payroll tax is being used to keep income taxes down. The Republican false framing is that cuts to payroll taxes threaten Social Security and this is just patently untrue.
I mean, again, cutting payroll taxes is a progressive form of Keynesian stimulus which makes very good economic sense - even though it is in a low-key, hardly visible manner which makes it less likely Obama can be photographed in front of a "mission accomplished" banner.
posted by three blind mice at 2:47 AM on August 22, 2011 [2 favorites]
And on this basis it is more than solvent. The problem is the "out years" for which surplus payroll taxes are being collected to fund the system in the future - i.e., the "trust fund", "lock-box", or whatever other mythical creature you wish to call it.
In reality, surplus payroll taxes are used for things other than Social Security - in other words a too high payroll tax is being used to keep income taxes down. The Republican false framing is that cuts to payroll taxes threaten Social Security and this is just patently untrue.
I mean, again, cutting payroll taxes is a progressive form of Keynesian stimulus which makes very good economic sense - even though it is in a low-key, hardly visible manner which makes it less likely Obama can be photographed in front of a "mission accomplished" banner.
posted by three blind mice at 2:47 AM on August 22, 2011 [2 favorites]
Again, no, what we do is take those payroll taxes and loan them out via treasury bonds owed back to the trust fund. These are not mythical creatures like Ron Paul tells you.
posted by furiousxgeorge at 2:54 AM on August 22, 2011
posted by furiousxgeorge at 2:54 AM on August 22, 2011
You know what? I only barely care anymore. Maybe you guys and the Republicans are right, taxing job creators is what is killing our economy, let's just drop those taxes more and businesses will start hiring!
And in a year when we have already dropped taxes like a rock and unemployment is still over 9%, fuck it, let's cut them some more...because some very serious Republicans said that those taxes aren't actually spent on anything but Minotaur farms and fuck if I'll ever doubt them....
posted by furiousxgeorge at 3:06 AM on August 22, 2011 [1 favorite]
And in a year when we have already dropped taxes like a rock and unemployment is still over 9%, fuck it, let's cut them some more...because some very serious Republicans said that those taxes aren't actually spent on anything but Minotaur farms and fuck if I'll ever doubt them....
posted by furiousxgeorge at 3:06 AM on August 22, 2011 [1 favorite]
These are not mythical creatures like Ron Paul tells you.
Right, I only believe it because Ron Paul tells me. C'mon man.
Again, no, what we do is take those payroll taxes and loan them out via treasury bonds owed back to the trust fund.
And who pays for the treasury bonds when they come due? That's right, the same taxpayer, but now it's called "income tax" and not "payroll tax," but it is a tax - i.e. a deduction from the paycheck - all the same.
fuck it, let's cut them some more...
There is a significant difference between supply side cuts and consumer side cuts. When you lump them together under the banner "Republican" you are doing a disservice to liberal economists.
posted by three blind mice at 3:17 AM on August 22, 2011
Right, I only believe it because Ron Paul tells me. C'mon man.
Again, no, what we do is take those payroll taxes and loan them out via treasury bonds owed back to the trust fund.
And who pays for the treasury bonds when they come due? That's right, the same taxpayer, but now it's called "income tax" and not "payroll tax," but it is a tax - i.e. a deduction from the paycheck - all the same.
fuck it, let's cut them some more...
There is a significant difference between supply side cuts and consumer side cuts. When you lump them together under the banner "Republican" you are doing a disservice to liberal economists.
posted by three blind mice at 3:17 AM on August 22, 2011
If the President were to suddenly morph into the Obama I thought I was voting for in 2008, he would say, "OK, I support letting the payroll tax cuts expire, but only if the income cap on them is eliminated."
If I could find anyone to take the bet, I'd bet against that happening.
posted by Kirth Gerson at 3:27 AM on August 22, 2011 [4 favorites]
If I could find anyone to take the bet, I'd bet against that happening.
posted by Kirth Gerson at 3:27 AM on August 22, 2011 [4 favorites]
furiousxgeorge: "The Republicans are doing the right thing here."
furiousxgeorge: "You know what? I only barely care anymore. Maybe you guys and the Republicans are right, taxing job creators is what is killing our economy, let's just drop those taxes more and businesses will start hiring!"
The payroll tax is paid by both workers and employers. The cuts under Obama have applied to the worker portion, putting more money directly in the pockets of regular people to encourage consumer spending.
Republicans aren't responsibly arguing that these cuts should lapse, period -- they want the tax increase on workers to be accompanied by a tax cut on the employer portion. So if they get their way, it'll be more or less a wash, revenue-wise... only the burden will have shifted from employers to workers.
Those arguing for continuing the tax cut on employees aren't buying into the "taxing job creators" bullshit -- quite the opposite. They're arguing for tax cuts that largely benefit regular working-class people and stimulate the economy, rather than simply funneling more money to the top tier.
posted by Rhaomi at 3:28 AM on August 22, 2011 [9 favorites]
furiousxgeorge: "You know what? I only barely care anymore. Maybe you guys and the Republicans are right, taxing job creators is what is killing our economy, let's just drop those taxes more and businesses will start hiring!"
The payroll tax is paid by both workers and employers. The cuts under Obama have applied to the worker portion, putting more money directly in the pockets of regular people to encourage consumer spending.
Republicans aren't responsibly arguing that these cuts should lapse, period -- they want the tax increase on workers to be accompanied by a tax cut on the employer portion. So if they get their way, it'll be more or less a wash, revenue-wise... only the burden will have shifted from employers to workers.
Those arguing for continuing the tax cut on employees aren't buying into the "taxing job creators" bullshit -- quite the opposite. They're arguing for tax cuts that largely benefit regular working-class people and stimulate the economy, rather than simply funneling more money to the top tier.
posted by Rhaomi at 3:28 AM on August 22, 2011 [9 favorites]
money doesn't exist, that is what makes it so complicated
vote for love
posted by flyinghamster at 4:13 AM on August 22, 2011
vote for love
posted by flyinghamster at 4:13 AM on August 22, 2011
they want the tax increase on workers to be accompanied by a tax cut on the employer portion
Do you have a cite for that? I didn't see it in any of the referenced links.
posted by Slothrup at 4:50 AM on August 22, 2011
Do you have a cite for that? I didn't see it in any of the referenced links.
posted by Slothrup at 4:50 AM on August 22, 2011
So this year I have 1. a big increase in property taxes; 2. a HUGE increase in insurance premiums because my work is screwing us over; 3. a significant increase in phone/internet; an increase in my taxes (because after all the other increases I need the cash I get) and 5. year four of a wage freeze at work. (Oh, at work? The managers and administration have NEVER had a wage freeze; just the rest of us.)
posted by Frowner at 5:02 AM on August 22, 2011 [2 favorites]
posted by Frowner at 5:02 AM on August 22, 2011 [2 favorites]
To be precise, they favor *raising* the tax on employees (by letting the cuts lapse) while *lowering* the rate on employers. Because that generally helps the rich at the expense of the poor, while simultaneously hampering economic recovery prior to the 2012 elections.
I don't know which is more sad, the fact that they're doing it in the open, or that those who are doing it will most likely be re-elected.
And yet you still hear that people think sitting on their hands and not voting will accomplish anything.
posted by SteveInMaine at 5:21 AM on August 22, 2011
I don't know which is more sad, the fact that they're doing it in the open, or that those who are doing it will most likely be re-elected.
And yet you still hear that people think sitting on their hands and not voting will accomplish anything.
posted by SteveInMaine at 5:21 AM on August 22, 2011
The whole social security being funded by payroll taxes thing is a nonstarter for me. Money is fungible and there are plans in place for when social security debits exceed credits for using money from other tax revenues to cover the difference. Lowering payroll taxes is one of the most effective forms of short term stimulus available. Republicans are against it because of this. They want the economy to be as bad as possible in October of 2012.
Some republicans like Romney are splitting the difference saying cutting the employer portion of the payroll tax is preferable to cutting the employee portion. This is actually pretty sane as it increases the incentives for hiring people at the margin. There are tradeoffs involved and it likely wouldn't provide the same amount of relief to workers but it is still arguably sane policy.
The half of Americans paying no income tax is a great line for the GOP but it depends on time series distortions. Many of the people who do not pay income tax are retirees. Of course they did pay income tax when they had more income. They might not even be poor retirees. The might be solidly middle class retirees who own their own home, draw against their savings, and collect modest interest payments and social security and are able to live a decent lifestyle based on this.
Other Americans paying no income tax are young people who are just starting out and are at the bottom of their expected yearly income. They will over their lifetime usually be net income tax contributors.
posted by I Foody at 5:35 AM on August 22, 2011 [3 favorites]
Some republicans like Romney are splitting the difference saying cutting the employer portion of the payroll tax is preferable to cutting the employee portion. This is actually pretty sane as it increases the incentives for hiring people at the margin. There are tradeoffs involved and it likely wouldn't provide the same amount of relief to workers but it is still arguably sane policy.
The half of Americans paying no income tax is a great line for the GOP but it depends on time series distortions. Many of the people who do not pay income tax are retirees. Of course they did pay income tax when they had more income. They might not even be poor retirees. The might be solidly middle class retirees who own their own home, draw against their savings, and collect modest interest payments and social security and are able to live a decent lifestyle based on this.
Other Americans paying no income tax are young people who are just starting out and are at the bottom of their expected yearly income. They will over their lifetime usually be net income tax contributors.
posted by I Foody at 5:35 AM on August 22, 2011 [3 favorites]
Holy fuck! Some Republicans have gone on record in the last week saying that the people at the bottom of the economic ladder that pay no income taxes are hurting the country because " they have no skin in the game." They are clueless, heartless haters.
Want to help Social Security through the payroll tax? Then fucking remove the cap and institute some reasonable means testing.
posted by Benny Andajetz at 5:40 AM on August 22, 2011 [1 favorite]
Want to help Social Security through the payroll tax? Then fucking remove the cap and institute some reasonable means testing.
posted by Benny Andajetz at 5:40 AM on August 22, 2011 [1 favorite]
I'm a liberal guy, but I agree that the T-bill only trust fund is an accounting gimmick. The only way a trust fund helps prevent future reductions is in providing psychological / political cover. Because it's already listed as debt, TF cashing in T-bills which are immediately reissued could be sold as not "deficit spending" even though an econ person / the bond marketplace will absolutely regard it as such. Similarly, the D person can honestly state that working-class people have pre-paid for this benefit, so it being cut is wholesale class expropriation.
Medicare's going to run out of money first, so we get to see this theory tested. I'm betting it provides no cover whatsoever.
posted by a robot made out of meat at 5:41 AM on August 22, 2011
Medicare's going to run out of money first, so we get to see this theory tested. I'm betting it provides no cover whatsoever.
posted by a robot made out of meat at 5:41 AM on August 22, 2011
I just want to go on record saying that I would be ok with a tax increase on myself if there was also a "fair shair" progressive tax increase on the rich.
posted by drezdn at 6:05 AM on August 22, 2011 [2 favorites]
posted by drezdn at 6:05 AM on August 22, 2011 [2 favorites]
Maybe you guys and the Republicans are right, taxing job creators is what is killing our economy, let's just drop those taxes more and businesses will start hiring!
Haven't you heard? It's Federal regulations that are killing job creation, silly. What we need to do is allow those poor, fettered companies to poison the water, pollute the air, and mangle their employees and there will be a job avalanche.
posted by Secret Life of Gravy at 6:13 AM on August 22, 2011 [2 favorites]
Haven't you heard? It's Federal regulations that are killing job creation, silly. What we need to do is allow those poor, fettered companies to poison the water, pollute the air, and mangle their employees and there will be a job avalanche.
posted by Secret Life of Gravy at 6:13 AM on August 22, 2011 [2 favorites]
I'm against cutting the payroll tax again -- except for one thing. As a stimulus, it wasn't -- a person making $50K saw a staggering $19.23 per week more pay. $80 a month isn't the kind of money that's going to change your spending habits.
Worse, however, was that the deal screwed over the poor. Remember the Making Work Pay credit? You got a flat $400 ($800 if married.) It was replaced by the payroll tax holiday. So, the best off (like me) got a 2% cut, or $2136 -- which isn't going to change our spending habits one bit. The moderate got $20 a week -- also, not a big deal, and you know, people trying to get out from under debt just put that on the credit cards, they didn't spend it.
And, the poor? Well, if you made $25K, you only saved $500 a year. If you were married, you saved $500 in payroll taxes, but you lost a $800 credit, costing you $300 a year.
That's $5.76 a week. That's a couple of gallons of milk and some cheap cereal. To me, that means pretty much nothing. To someone making $25K a year supporting two people, that little "payroll tax holiday" deal is taking food out of their mouths.
And yet we want to continue this charade? Of course, right now, you can bet that credit isn't coming back, so if we do get rid of the holiday, we'll be taking another $500 out from the poor, which will screw them over even harder.
Which, of course, is why the GOP wants this dead. Screwing over the poor is what they do best.
posted by eriko at 6:27 AM on August 22, 2011 [4 favorites]
Worse, however, was that the deal screwed over the poor. Remember the Making Work Pay credit? You got a flat $400 ($800 if married.) It was replaced by the payroll tax holiday. So, the best off (like me) got a 2% cut, or $2136 -- which isn't going to change our spending habits one bit. The moderate got $20 a week -- also, not a big deal, and you know, people trying to get out from under debt just put that on the credit cards, they didn't spend it.
And, the poor? Well, if you made $25K, you only saved $500 a year. If you were married, you saved $500 in payroll taxes, but you lost a $800 credit, costing you $300 a year.
That's $5.76 a week. That's a couple of gallons of milk and some cheap cereal. To me, that means pretty much nothing. To someone making $25K a year supporting two people, that little "payroll tax holiday" deal is taking food out of their mouths.
And yet we want to continue this charade? Of course, right now, you can bet that credit isn't coming back, so if we do get rid of the holiday, we'll be taking another $500 out from the poor, which will screw them over even harder.
Which, of course, is why the GOP wants this dead. Screwing over the poor is what they do best.
posted by eriko at 6:27 AM on August 22, 2011 [4 favorites]
Carius wrote: What I found amazing is that with every tax debate people are always want to increase OTHER people's tax rate. People in highest income bracket overwhelming don't need the programs funded by the payroll taxes.
No. Any tax increase that didn't involve only the highest bracket would impact me, yet here I am advocating for it, just as I have all along. I'd prefer any increase be phased in as economic targets are hit, just like what I want to have happen with deficit reduction.
Thanks for playing, though!
posted by wierdo at 6:33 AM on August 22, 2011 [3 favorites]
No. Any tax increase that didn't involve only the highest bracket would impact me, yet here I am advocating for it, just as I have all along. I'd prefer any increase be phased in as economic targets are hit, just like what I want to have happen with deficit reduction.
Thanks for playing, though!
posted by wierdo at 6:33 AM on August 22, 2011 [3 favorites]
Americans are okay with paying more payroll taxes because those taxes support popular programs.
If that were true, why can't anybody who doesn't promise to lower taxes get elected? How did taxation become a centerpiece of a political system? Promises to lower taxes have resulted in the most fucked up people we've ever seen win congressional seats and presidential nominations in the past thirty years.
And even if it were true, Americans sure as hell don't want a payroll tax increase that follows ten years of giant tax cuts and out-and-out giveaways to the wealthiest people in the country.
I say let the Republicans do their thing by raising the payroll tax, and let them endure the shitstorm that (I hope) finally clues their non-wealthy supporters in to their real agenda. The country will be better off for it.
posted by Rykey at 6:41 AM on August 22, 2011
If that were true, why can't anybody who doesn't promise to lower taxes get elected? How did taxation become a centerpiece of a political system? Promises to lower taxes have resulted in the most fucked up people we've ever seen win congressional seats and presidential nominations in the past thirty years.
And even if it were true, Americans sure as hell don't want a payroll tax increase that follows ten years of giant tax cuts and out-and-out giveaways to the wealthiest people in the country.
I say let the Republicans do their thing by raising the payroll tax, and let them endure the shitstorm that (I hope) finally clues their non-wealthy supporters in to their real agenda. The country will be better off for it.
posted by Rykey at 6:41 AM on August 22, 2011
We can all argue over which of us wants our taxes raised the most... it's completely irrelevant unless the majority wants their taxes raises. Does anyone really think they do?
posted by smackfu at 6:48 AM on August 22, 2011
posted by smackfu at 6:48 AM on August 22, 2011
(And I suggest in general it's not worthwhile to make arguments based around the idea of "no one wants X" because there's always someone who will say "I want X!")
posted by smackfu at 6:50 AM on August 22, 2011 [1 favorite]
posted by smackfu at 6:50 AM on August 22, 2011 [1 favorite]
i want my taxes raises infinity percent from 0 to 0 again
posted by flyinghamster at 6:51 AM on August 22, 2011
posted by flyinghamster at 6:51 AM on August 22, 2011
I'm against cutting the payroll tax again -- except for one thing. As a stimulus, it wasn't -- a person making $50K saw a staggering $19.23 per week more pay. $80 a month isn't the kind of money that's going to change your spending habits.
Which is precisely why cutting the payroll tax makes sense. It doesn't change people's behavior - it's not supposed to - it's money that it supposed to be spent unnoticed by individuals.
These small amounts add up to a lot of money. Even Glenn Beck's math estimates the payroll tax cut to be worth USD275bn - money that precisely because it is being paid out in such small amounts per person - is likely to re-enter the economy in the form of consumption.
Ignore the arguments about funding social security and increasing the deficit and see it in the light of promoting economic growth: Cutting the payroll tax is textbook Keynesian stimulus. Unglamorous, a bit technically complicated so its hard for the average voter to understand (and reward), but it works - which is why Republicans oppose it.
posted by three blind mice at 6:54 AM on August 22, 2011
Which is precisely why cutting the payroll tax makes sense. It doesn't change people's behavior - it's not supposed to - it's money that it supposed to be spent unnoticed by individuals.
These small amounts add up to a lot of money. Even Glenn Beck's math estimates the payroll tax cut to be worth USD275bn - money that precisely because it is being paid out in such small amounts per person - is likely to re-enter the economy in the form of consumption.
Ignore the arguments about funding social security and increasing the deficit and see it in the light of promoting economic growth: Cutting the payroll tax is textbook Keynesian stimulus. Unglamorous, a bit technically complicated so its hard for the average voter to understand (and reward), but it works - which is why Republicans oppose it.
posted by three blind mice at 6:54 AM on August 22, 2011
Carius wrote: I'm totally in favor of progressive income tax. The wealthy should pay more and the top marginal income tax rate should return to 1950s level
Not that high. For all the pointing and laughing I do regarding the Laffer Curve, the basic concept itself is probably sound. We've long been below the tax rates where lowering taxes will raise revenue, but I doubt going back to the highest rates in history will be helpful. I'd be perfectly fine going back to the rates of the late 60s, though.
Benny Andajetz wrote: Holy fuck! Some Republicans have gone on record in the last week saying that the people at the bottom of the economic ladder that pay no income taxes are hurting the country because " they have no skin in the game." They are clueless, heartless haters.
This has been percolating up for the better part of a year now. It's pretty widely used schtick. I like to point out that (almost) everyone still pays sales tax, payroll tax, or some other tax. Not that it matters, since it's not a position reached by reason.
posted by wierdo at 7:07 AM on August 22, 2011
Not that high. For all the pointing and laughing I do regarding the Laffer Curve, the basic concept itself is probably sound. We've long been below the tax rates where lowering taxes will raise revenue, but I doubt going back to the highest rates in history will be helpful. I'd be perfectly fine going back to the rates of the late 60s, though.
Benny Andajetz wrote: Holy fuck! Some Republicans have gone on record in the last week saying that the people at the bottom of the economic ladder that pay no income taxes are hurting the country because " they have no skin in the game." They are clueless, heartless haters.
This has been percolating up for the better part of a year now. It's pretty widely used schtick. I like to point out that (almost) everyone still pays sales tax, payroll tax, or some other tax. Not that it matters, since it's not a position reached by reason.
posted by wierdo at 7:07 AM on August 22, 2011
Payroll taxes are the most egregiously regressive taxes ever devised. Of course Republicans favor increasing them because they don't hurt the wealthy.
Capital gains tax rates, currently at 15%, should be made progressive based on total income.
"Qualifying dividends" tax rates, currently at 15%, should be made progressive.
Payroll taxes should be made less regressive, or better, progressive with the first $20k in net profits tax free (wonder why so many self employed people under report their income? SE tax is the main reason.)
The income tax structure in the U.S. favors the wealthy so much it's sickening, and all they do is bitch about how they want even lower taxes.
posted by mrhappy at 7:49 AM on August 22, 2011 [3 favorites]
Capital gains tax rates, currently at 15%, should be made progressive based on total income.
"Qualifying dividends" tax rates, currently at 15%, should be made progressive.
Payroll taxes should be made less regressive, or better, progressive with the first $20k in net profits tax free (wonder why so many self employed people under report their income? SE tax is the main reason.)
The income tax structure in the U.S. favors the wealthy so much it's sickening, and all they do is bitch about how they want even lower taxes.
posted by mrhappy at 7:49 AM on August 22, 2011 [3 favorites]
mrhappy wrote: Capital gains tax rates, currently at 15%, should be made progressive based on total income.
It already is, to some degree. If, absent the (long term) capital gains your marginal rate is 15% or less, the capital gains rate is zero for you.
posted by wierdo at 8:08 AM on August 22, 2011
It already is, to some degree. If, absent the (long term) capital gains your marginal rate is 15% or less, the capital gains rate is zero for you.
posted by wierdo at 8:08 AM on August 22, 2011
The awesome thing is the Tea Party stooges will blame Obama anyway.
posted by Legomancer at 8:09 AM on August 22, 2011
posted by Legomancer at 8:09 AM on August 22, 2011
eriko: "$80 a month isn't the kind of money that's going to change your spending habits."
It's not, but its also enough that you might not change your spending habits when you otherwise would. With inflation and people raising fees in everything from state and local taxes to checking accounts to video streaming, and not a raise or COLA adjustment in sight, it's a buffer against a wakeup call that would likely adjust spending downwards.
posted by pwnguin at 8:13 AM on August 22, 2011 [1 favorite]
It's not, but its also enough that you might not change your spending habits when you otherwise would. With inflation and people raising fees in everything from state and local taxes to checking accounts to video streaming, and not a raise or COLA adjustment in sight, it's a buffer against a wakeup call that would likely adjust spending downwards.
posted by pwnguin at 8:13 AM on August 22, 2011 [1 favorite]
It already is, to some degree.
True, but this is yet another cruel joke. For single taxpayers the 15% tax bracket ends at $34,500. How many people have capital gains at that income level? Not many.
posted by mrhappy at 8:17 AM on August 22, 2011 [1 favorite]
True, but this is yet another cruel joke. For single taxpayers the 15% tax bracket ends at $34,500. How many people have capital gains at that income level? Not many.
posted by mrhappy at 8:17 AM on August 22, 2011 [1 favorite]
Capping the long-term capital gains tax rate at 15% is a huge boon to the rich, and the poor don't even understand how they got screwed.
posted by smackfu at 8:36 AM on August 22, 2011 [2 favorites]
posted by smackfu at 8:36 AM on August 22, 2011 [2 favorites]
carius, who benefits more from federal tax dollars being spent on public roads, legal infrastructure, federal subsidies, someone making $20k or someone with millions to billions of dollars in stock? Why shouldn't the wealthy pay much more, when they get so much more out of it?
Honestly, I'd say the poor are benefiting more from government spending when it comes to daily life. The super wealthy can take their own helicopter between their own helipads at their mansion and the office, while the poor rely on subsidized public transit. If the board of directors turns on them, the CEO has a sweetheart golden parachute deal, savings, and investments to use while waiting for the next opportunity to come along. The rest of us need unemployment and maybe even food stamps. Public schools, Pell Grants, and federally-backed student loans aren't of any interest when you're paying full freight at Choate, Princeton, and Yale, but are vital to everyone else. The wealthy can send their kids to play in their expansive fenced yards and swimming pools, while others have to rely on local, state, and national parks for recreation. The wealthy have gated homes and alarm systems that include rapid response by armed guards, while the rest of us put our faith in the local police.
The major exception is fat-cat defense contractors, which is why the Republican Party always wants a huge military. If the wealthy benefited so much from government, why are the Republicans always trying to over-fund the military while systematically dismantling the rest of the federal government one piece at a time?
posted by zachlipton at 8:50 AM on August 22, 2011
Honestly, I'd say the poor are benefiting more from government spending when it comes to daily life. The super wealthy can take their own helicopter between their own helipads at their mansion and the office, while the poor rely on subsidized public transit. If the board of directors turns on them, the CEO has a sweetheart golden parachute deal, savings, and investments to use while waiting for the next opportunity to come along. The rest of us need unemployment and maybe even food stamps. Public schools, Pell Grants, and federally-backed student loans aren't of any interest when you're paying full freight at Choate, Princeton, and Yale, but are vital to everyone else. The wealthy can send their kids to play in their expansive fenced yards and swimming pools, while others have to rely on local, state, and national parks for recreation. The wealthy have gated homes and alarm systems that include rapid response by armed guards, while the rest of us put our faith in the local police.
The major exception is fat-cat defense contractors, which is why the Republican Party always wants a huge military. If the wealthy benefited so much from government, why are the Republicans always trying to over-fund the military while systematically dismantling the rest of the federal government one piece at a time?
posted by zachlipton at 8:50 AM on August 22, 2011
The super wealthy can take their own helicopter between their own helipads at their mansion and the office, while the poor rely on subsidized public transit.
The helicopter flight actually involves the use of the highly subsidized air traffic control.
posted by drezdn at 9:10 AM on August 22, 2011 [2 favorites]
The helicopter flight actually involves the use of the highly subsidized air traffic control.
posted by drezdn at 9:10 AM on August 22, 2011 [2 favorites]
Trying to figure out exactly how much of the public services each person uses in order to determine whether they are fairly paying their share seems like a pointless game. And I'm not sure it would end up with the result you want.
posted by smackfu at 9:16 AM on August 22, 2011
posted by smackfu at 9:16 AM on August 22, 2011
Quite. It seems likeliest that the biggest consumers of the public utility who aren't putting enough back in are already the ones least qualified to pay that back.
posted by Archelaus at 9:38 AM on August 22, 2011
posted by Archelaus at 9:38 AM on August 22, 2011
Honestly, I'd say the poor are benefiting more from government spending when it comes to daily life.
While your point is sound, remember that if the employees of a company of 500 had to pay private road tolls and needed to dedicate even more money to their children's educations, this money would have to come from their employer. This is why wages are higher in areas with higher cost of living.
Furthermore, the general construct of society favors the wealthy just because they have more. This is most evident at the level of law and order: the social contract that people will be punished if they take other people's stuff favors the people with the most stuff.
posted by Wyatt at 9:39 AM on August 22, 2011 [2 favorites]
While your point is sound, remember that if the employees of a company of 500 had to pay private road tolls and needed to dedicate even more money to their children's educations, this money would have to come from their employer. This is why wages are higher in areas with higher cost of living.
Furthermore, the general construct of society favors the wealthy just because they have more. This is most evident at the level of law and order: the social contract that people will be punished if they take other people's stuff favors the people with the most stuff.
posted by Wyatt at 9:39 AM on August 22, 2011 [2 favorites]
mrhappy: "Payroll taxes should be made less regressive, or better, progressive with the first $20k in net profits tax free (wonder why so many self employed people under report their income? SE tax is the main reason.)"
Payroll taxes are already progressive. I realize this is a complicated subject, but what you put in is related to what you get out. The first leg pays out like 90 percent, the next 32 percent, and the last one 15 percent. Viewed on a get what you pay for basis, SS looks progressive.
The main objection I recognize from opponents is that SS is low return (low risk), so they'd prefer to opt out and funnel the money into their own retirement plan. Viewed on that basis, you might argue the cap makes SS regressive by freeing high earners to invest in stocks and get a higher return over time than the poor. This argument though doesn't bode well for SS at all.
I recognize there are disability and other social goals tied in here, but I'm not sure it's a good idea long term to wed old-age insurance with less popular social welfare systems.
posted by pwnguin at 9:46 AM on August 22, 2011
Payroll taxes are already progressive. I realize this is a complicated subject, but what you put in is related to what you get out. The first leg pays out like 90 percent, the next 32 percent, and the last one 15 percent. Viewed on a get what you pay for basis, SS looks progressive.
The main objection I recognize from opponents is that SS is low return (low risk), so they'd prefer to opt out and funnel the money into their own retirement plan. Viewed on that basis, you might argue the cap makes SS regressive by freeing high earners to invest in stocks and get a higher return over time than the poor. This argument though doesn't bode well for SS at all.
I recognize there are disability and other social goals tied in here, but I'm not sure it's a good idea long term to wed old-age insurance with less popular social welfare systems.
posted by pwnguin at 9:46 AM on August 22, 2011
People in highest income bracket overwhelming don't need the programs funded by the payroll taxes.
And people who need them overwhelmingly can't afford them, that's why the programs exist. You can't expect the people who by definition can't afford to pay for goods or services to fund the programs that are supposed to make it possible for them to afford those goods and services. That's crazy pretzel logic, and misses the entire point of public programs in a stunning way.
For example, you can't reasonably expect those who control only 10% or so of the total potentially taxable income to be responsible for 90% of the overall tax burden, just because there are more of them. You can't bleed a stone. If you need more tax revenue during a time of economic crisis, you have to take it from those who have more of it to give, not those that have less than ever.
posted by saulgoodman at 10:39 AM on August 22, 2011 [6 favorites]
And people who need them overwhelmingly can't afford them, that's why the programs exist. You can't expect the people who by definition can't afford to pay for goods or services to fund the programs that are supposed to make it possible for them to afford those goods and services. That's crazy pretzel logic, and misses the entire point of public programs in a stunning way.
For example, you can't reasonably expect those who control only 10% or so of the total potentially taxable income to be responsible for 90% of the overall tax burden, just because there are more of them. You can't bleed a stone. If you need more tax revenue during a time of economic crisis, you have to take it from those who have more of it to give, not those that have less than ever.
posted by saulgoodman at 10:39 AM on August 22, 2011 [6 favorites]
"Just remember that the government program with the greatest bipartisan support is WAR."
It's probably the best way of evaluating baseball players that we have, but I'm not sure the government needs to be involved.
posted by klangklangston at 10:48 AM on August 22, 2011 [3 favorites]
It's probably the best way of evaluating baseball players that we have, but I'm not sure the government needs to be involved.
posted by klangklangston at 10:48 AM on August 22, 2011 [3 favorites]
Who made that helicopter? Who is teaching at Yale? More importantly, who is doing the work of the legal and financial infrastructure required to preserve wealth? A whole bunch of people. It's called a society. The rich benefit the most from society. Duh, that's what it means to be rich. I am so fuckin sick of the myth of the self made man.
posted by yesster at 10:49 AM on August 22, 2011 [10 favorites]
posted by yesster at 10:49 AM on August 22, 2011 [10 favorites]
Payroll taxes are already progressive.
An unemployed Walmart heir making $100,000 in dividends pays $15,000 in income taxes.
A self employed widget maker netting $100,000 in profits pays approximately $35,000 in taxes.
You can call that progressive if you like. (I understand what you are saying about how Social Security benefits are accrued, but the segregating of payroll taxes from general income taxes is just another way to screw the non-wealthy.)
posted by mrhappy at 11:10 AM on August 22, 2011 [2 favorites]
An unemployed Walmart heir making $100,000 in dividends pays $15,000 in income taxes.
A self employed widget maker netting $100,000 in profits pays approximately $35,000 in taxes.
You can call that progressive if you like. (I understand what you are saying about how Social Security benefits are accrued, but the segregating of payroll taxes from general income taxes is just another way to screw the non-wealthy.)
posted by mrhappy at 11:10 AM on August 22, 2011 [2 favorites]
It is true that capital gains and other forms of income should all probably be categorized and taxed at the same rates as other kinds of income. The current ways of slicing and dicing income are not at all progressive--but that's not due to any problem with the way core income is taxed (in other words, it's not an argument for the so-called "FAIR tax" or flat tax proposals, which are anything but fair). It's just, as others have said: income is income, and it should all be taxed according to a consistent, progressive tax scheme.
posted by saulgoodman at 11:26 AM on August 22, 2011 [1 favorite]
posted by saulgoodman at 11:26 AM on August 22, 2011 [1 favorite]
For example, you can't reasonably expect those who control only 10% or so of the total potentially taxable income to be responsible for 90% of the overall tax burden, just because there are more of them.
Doesn't this just boil down to "those who can afford it should pay more taxes"? Which isn't really much of a nuanced argument.
posted by smackfu at 11:44 AM on August 22, 2011
Doesn't this just boil down to "those who can afford it should pay more taxes"? Which isn't really much of a nuanced argument.
posted by smackfu at 11:44 AM on August 22, 2011
No the argument is that those who benefit more should pay more. Be definition of "rich," it is the rich who should pay more.
posted by yesster at 11:57 AM on August 22, 2011
posted by yesster at 11:57 AM on August 22, 2011
Doesn't this just boil down to "those who can afford it should pay more taxes"? Which isn't really much of a nuanced argument.
All the irritating exigencies of modern rhetorical persuasion/sales pitch/political messaging aside, though, it's just a practical mathematical truth. You really can--like it or not--only get more revenue from people who have it to spare.
Economic gains have been shared very unequally over the last 30 years. During that period individual income for the vast majority of us at the lower end (the bottom 60%) has actually shrunk if you dig a little deeper--sure, per household income has increased when adjusted to today's dollars by about 15--16%, but that's only with most households now having two full-time incomes, so individual incomes have shrunk significantly at the lower income levels by apples-to-apples comparison. Meanwhile, the upper 1% have seen their take of the overall income pie increase by 281%! Those two income households on the upper-end of the income spectrum could eliminate one of their incomes completely, assuming roughly equal incomes among both income earners, and still come out with something like a 140% increase over their relative household incomes from the late 60s).
Most of the income that the really major earners take home is extra money they literally have no immediate need or use for--except to rent out to others for productive uses or to waste on luxury goods and services, where the actual, real-world economic value added increases only marginally relative to the sticker price. The need for places to park excess capital creates investment bubbles like the housing market bubble whose crash we just experienced. That's well established, mainstream economics at work there--too much idle capital leads to investment bubbles as the market fills the excess demand for investment vehicles with crap.
All of which is not even to mention, the practical realities of income disparity. When high income earners are forced to give up $50 a month, chances are they aren't going to go into a negative financial cycle, losing their homes, going hungry, becoming drains on public resources, etc., but at the lower end of the income spectrum, that can easily happen. People at the bottom don't have any slack, because the slack has been meticulously squeezed out of the system in the interest of supply-side efficiency. Where do you think those productivity gains and cheap labor come from? If you look at labor as a single pool, both of these kinds of "economic gains" can only come from replacing more workers with fewer workers and/or from replacing higher paid workers with lower paid ones.
Unless you guys at the top have got room for the rest of us up there, you'd do well to consider a better strategy. This one leads to the death of the middle class and the gradual starvation of the consumer base. Pretty damn quickly, as it turns out.
posted by saulgoodman at 12:50 PM on August 22, 2011 [10 favorites]
All the irritating exigencies of modern rhetorical persuasion/sales pitch/political messaging aside, though, it's just a practical mathematical truth. You really can--like it or not--only get more revenue from people who have it to spare.
Economic gains have been shared very unequally over the last 30 years. During that period individual income for the vast majority of us at the lower end (the bottom 60%) has actually shrunk if you dig a little deeper--sure, per household income has increased when adjusted to today's dollars by about 15--16%, but that's only with most households now having two full-time incomes, so individual incomes have shrunk significantly at the lower income levels by apples-to-apples comparison. Meanwhile, the upper 1% have seen their take of the overall income pie increase by 281%! Those two income households on the upper-end of the income spectrum could eliminate one of their incomes completely, assuming roughly equal incomes among both income earners, and still come out with something like a 140% increase over their relative household incomes from the late 60s).
Most of the income that the really major earners take home is extra money they literally have no immediate need or use for--except to rent out to others for productive uses or to waste on luxury goods and services, where the actual, real-world economic value added increases only marginally relative to the sticker price. The need for places to park excess capital creates investment bubbles like the housing market bubble whose crash we just experienced. That's well established, mainstream economics at work there--too much idle capital leads to investment bubbles as the market fills the excess demand for investment vehicles with crap.
All of which is not even to mention, the practical realities of income disparity. When high income earners are forced to give up $50 a month, chances are they aren't going to go into a negative financial cycle, losing their homes, going hungry, becoming drains on public resources, etc., but at the lower end of the income spectrum, that can easily happen. People at the bottom don't have any slack, because the slack has been meticulously squeezed out of the system in the interest of supply-side efficiency. Where do you think those productivity gains and cheap labor come from? If you look at labor as a single pool, both of these kinds of "economic gains" can only come from replacing more workers with fewer workers and/or from replacing higher paid workers with lower paid ones.
Unless you guys at the top have got room for the rest of us up there, you'd do well to consider a better strategy. This one leads to the death of the middle class and the gradual starvation of the consumer base. Pretty damn quickly, as it turns out.
posted by saulgoodman at 12:50 PM on August 22, 2011 [10 favorites]
Doesn't this just boil down to "those who can afford it should pay more taxes"? Which isn't really much of a nuanced argument.
I think there is another aspect to this that often gets missed. The way I see it, your success or failure (as measured by income) is the combination of three things, your work ethic, your intelligence (combining knowledge, skill, and experience), and fortune.
Fortune could be anything external, being a white male born to a middle-upper-class family, knowing the right people, being in the right place at the right time, starting your career and looking for an entry-level job in your field when the economy was booming, and a whole bunch of other things. The way see it, your fortune was made possible in some way by society at large. Maybe it was a well managed economy, an excellent post-secondary education, or whatever.
Those who are extremely wealthy have benefited from all three but, in my view, taxes are what you pay to society from the benefits of fortune. Those with the highest incomes have benefited the most. The CEO of the company I work for makes 565 time the annual income of the average employee at that company. There is simply no way that he is 565 smarter than average, works 565 times harder, or any combination of the two. I'm sure he is smarter than the average, probably a lot smarter and I'm sure he works really hard and worked really hard to get where he is and he should be rewarded for that but he has clearly benefited more than most. Society invests in all of us, in the case of this CEO, the investment has paid off in much greater proportion to the rest and society should be able to capitalize on the returns of that investment.
On the other side of the coin, some people work really hard and are really smart/skillful/experienced, but fortune takes a dump on them and they should be compensated for that.
Some of those getting compensated are going to be less deserving but some people are successful despite a lack of work ethic and intelligence and they still get taxed at the same rate as the guy who makes the same money but wasn't as lucky.
posted by VTX at 1:24 PM on August 22, 2011 [4 favorites]
I think there is another aspect to this that often gets missed. The way I see it, your success or failure (as measured by income) is the combination of three things, your work ethic, your intelligence (combining knowledge, skill, and experience), and fortune.
Fortune could be anything external, being a white male born to a middle-upper-class family, knowing the right people, being in the right place at the right time, starting your career and looking for an entry-level job in your field when the economy was booming, and a whole bunch of other things. The way see it, your fortune was made possible in some way by society at large. Maybe it was a well managed economy, an excellent post-secondary education, or whatever.
Those who are extremely wealthy have benefited from all three but, in my view, taxes are what you pay to society from the benefits of fortune. Those with the highest incomes have benefited the most. The CEO of the company I work for makes 565 time the annual income of the average employee at that company. There is simply no way that he is 565 smarter than average, works 565 times harder, or any combination of the two. I'm sure he is smarter than the average, probably a lot smarter and I'm sure he works really hard and worked really hard to get where he is and he should be rewarded for that but he has clearly benefited more than most. Society invests in all of us, in the case of this CEO, the investment has paid off in much greater proportion to the rest and society should be able to capitalize on the returns of that investment.
On the other side of the coin, some people work really hard and are really smart/skillful/experienced, but fortune takes a dump on them and they should be compensated for that.
Some of those getting compensated are going to be less deserving but some people are successful despite a lack of work ethic and intelligence and they still get taxed at the same rate as the guy who makes the same money but wasn't as lucky.
posted by VTX at 1:24 PM on August 22, 2011 [4 favorites]
mrhappy: "An unemployed Walmart heir making $100,000 in dividends pays $15,000 in income taxes.
A self employed widget maker netting $100,000 in profits pays approximately $35,000 in taxes.
You can call that progressive if you like."
I'm pretty sure dividends were only recently classified as capital gains as part of the Bush tax cuts. Like the wierd rule that allows clever people to classify 60 percent of their earned income as capital gains, it makes sense to roll them back.
posted by pwnguin at 1:30 PM on August 22, 2011
A self employed widget maker netting $100,000 in profits pays approximately $35,000 in taxes.
You can call that progressive if you like."
I'm pretty sure dividends were only recently classified as capital gains as part of the Bush tax cuts. Like the wierd rule that allows clever people to classify 60 percent of their earned income as capital gains, it makes sense to roll them back.
posted by pwnguin at 1:30 PM on August 22, 2011
Damn saulgoodman I hadn't thought of that. Bubbles get created when there's excess capital. So there should be some correlation between malfeasance and prosperity. Or between wealth inequality and malfeasance.
posted by yesster at 1:30 PM on August 22, 2011
posted by yesster at 1:30 PM on August 22, 2011
It is telling that the Republicans are very quick to have their candidates and media puppets scream "Class warfare!" at the drop of a hat, but have been emminently successful at actual class warfare since the election of Reagan.
posted by Danf at 2:05 PM on August 22, 2011 [4 favorites]
posted by Danf at 2:05 PM on August 22, 2011 [4 favorites]
Republicanism: it's not a position reached by reason.
American taxes on Mefi always goes down well. Your tax system seems unbelievably complex to me. It seems a lot simpler in the UK.
Also: Keynes ftw.
posted by marienbad at 2:38 PM on August 22, 2011
American taxes on Mefi always goes down well. Your tax system seems unbelievably complex to me. It seems a lot simpler in the UK.
Also: Keynes ftw.
posted by marienbad at 2:38 PM on August 22, 2011
JHarris wrote:
The people who pay the most tax should be those with the most to spare, who also receive a greater share of the benefits of our society. A given percentage of your income hurts a lot more when you have a little money than a lot.
Hence I favor progressive taxation, the wealthy should pay more. We are in agreement here.
three blind mice wrote:
Social security is pay as you go. A reduction in the payroll tax has no more impact on the solvency of social security than a cut in income tax.
And on this basis it is more than solvent. The problem is the "out years" for which surplus payroll taxes are being collected to fund the system in the future - i.e., the "trust fund", "lock-box", or whatever other mythical creature you wish to call it.
In reality, surplus payroll taxes are used for things other than Social Security - in other words a too high payroll tax is being used to keep income taxes down. The Republican false framing is that cuts to payroll taxes threaten Social Security and this is just patently untrue.
If I understand the social security funding correctly, the payroll tax was save in a "trust fund" and since it's a "trust fund" it will use the money to invest in safest investment possible, which at this point is US Treasury bond.
So essentially all the money from surplus social security "trust fund" ended up in US Treasury account to pay for general expenditure. Is that correct?
So cut in payroll tax would end this surplus social security "trust fund" and increase the deficit.
Is there really a legal distinction between payroll tax and income tax? A revenue is a revenue right?
three blind mice wrote:
As far as deficits go, Reagan proved that "deficits don't matter" as long as you have economic growth: "The lesson we should have learned [from those years] is that deficits have little or no short-term economic impacts," said William A. Niskanen, a member of Reagan's Council of Economic Advisers.
The problem is there hadn't been much economics growth for last three years. At what debt to GPD ratio would the debt be sustainable? Is it still manageable at current level if nothing is done?
saulgoodman wrote:
And people who need them overwhelmingly can't afford them, that's why the programs exist.
You can't expect the people who by definition can't afford to pay for goods or services to fund the programs that are supposed to make
it possible for them to afford those goods and services. That's crazy pretzel logic, and misses the entire point of public programs in a stunning way.
This is indeed some crazy pretzel logic, which is not something I've advocated.
When did I ever advocated to cut the social security so seniors can starve or eliminate medicare so people can die from lack of health care.
For example, you can't reasonably expect those who control only 10% or so of the total potentially taxable income to be
responsible for 90% of the overall tax burden, just because there are more of them. You can't bleed a stone.
If you need more tax revenue during a time of economic crisis, you have to take it from those who have more of it to give, not those that have less than ever.
I agree with you here, it would be silly to more from those who have less than ever. That's why I fully support progessive taxation.
posted by Carius at 9:01 PM on August 22, 2011
The people who pay the most tax should be those with the most to spare, who also receive a greater share of the benefits of our society. A given percentage of your income hurts a lot more when you have a little money than a lot.
Hence I favor progressive taxation, the wealthy should pay more. We are in agreement here.
three blind mice wrote:
Social security is pay as you go. A reduction in the payroll tax has no more impact on the solvency of social security than a cut in income tax.
And on this basis it is more than solvent. The problem is the "out years" for which surplus payroll taxes are being collected to fund the system in the future - i.e., the "trust fund", "lock-box", or whatever other mythical creature you wish to call it.
In reality, surplus payroll taxes are used for things other than Social Security - in other words a too high payroll tax is being used to keep income taxes down. The Republican false framing is that cuts to payroll taxes threaten Social Security and this is just patently untrue.
If I understand the social security funding correctly, the payroll tax was save in a "trust fund" and since it's a "trust fund" it will use the money to invest in safest investment possible, which at this point is US Treasury bond.
So essentially all the money from surplus social security "trust fund" ended up in US Treasury account to pay for general expenditure. Is that correct?
So cut in payroll tax would end this surplus social security "trust fund" and increase the deficit.
Is there really a legal distinction between payroll tax and income tax? A revenue is a revenue right?
three blind mice wrote:
As far as deficits go, Reagan proved that "deficits don't matter" as long as you have economic growth: "The lesson we should have learned [from those years] is that deficits have little or no short-term economic impacts," said William A. Niskanen, a member of Reagan's Council of Economic Advisers.
The problem is there hadn't been much economics growth for last three years. At what debt to GPD ratio would the debt be sustainable? Is it still manageable at current level if nothing is done?
saulgoodman wrote:
And people who need them overwhelmingly can't afford them, that's why the programs exist.
You can't expect the people who by definition can't afford to pay for goods or services to fund the programs that are supposed to make
it possible for them to afford those goods and services. That's crazy pretzel logic, and misses the entire point of public programs in a stunning way.
This is indeed some crazy pretzel logic, which is not something I've advocated.
When did I ever advocated to cut the social security so seniors can starve or eliminate medicare so people can die from lack of health care.
For example, you can't reasonably expect those who control only 10% or so of the total potentially taxable income to be
responsible for 90% of the overall tax burden, just because there are more of them. You can't bleed a stone.
If you need more tax revenue during a time of economic crisis, you have to take it from those who have more of it to give, not those that have less than ever.
I agree with you here, it would be silly to more from those who have less than ever. That's why I fully support progessive taxation.
posted by Carius at 9:01 PM on August 22, 2011
« Older See, the king? He stay the king. | I’m a turtle. I didn’t know a Danish was a pastry.... Newer »
This thread has been archived and is closed to new comments
posted by wrapper at 9:28 PM on August 21, 2011 [4 favorites]