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Is the Left and the Right wrong about our tax system?


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Posted

Don't know how many of y'all heard this episode on Freakonomics recently, where the guest was Jessica Riedl. I... thought it was really interesting some of the claims she made, especially that the US is taxing the billionaire class on par with Europe and not taxing the middle class enough. I know there are people here, much more knowledgeable about this than I am, so I would love to hear some thoughts from the community about this. 

The podcast episode: Ten Myths About the U.S. Tax System

Posted (edited)

Remember kids, the top marginal rate under Eisenhower was 91%.

Kennedy cut it to 70% and it was briefly raised to help pay for (what a novel concept) our excursion into Vietnam.  It stayed at 70% until Uncle Ronnie.

 

 

 

 

 

 

Edited by Francisco 2.0
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Posted
47 minutes ago, 'stache said:

I listened and was really disappointed that she ignored or glossed over several aspects of broader economic policy. She points out that the wealthy pay a vast majority of taxes overall, which is true, but doesn't once mention U.S. wealth disparity and its change over the last 50+ years. The fact that the top 1% or so control so much of the country's wealth is a problem not to mention how it affects the calculus. The boomer generation didn't have CEO's making 300%-400% more than the average worker and didn't have an investor class controlling so much of corporate profits. Instead, they shared in enough of that revenue to afford education, healthcare, have kids, buy a home and a couple of cars, take vacations, and still have a nice savings account, all while paying enough in taxes to build the federal interstate system and pay for expansion of roads, utilities, and infrastructure into the sprawling suburbs. A massive majority of today's working class lives paycheck to paycheck, can be bankrupted by a health episode, can't afford a home, can't afford to have kids, have to take on a lifetime's worth of debt to attend college, and not only lack savings but are drowing in credit card debt. There isn't much capacity for them to pay much more in taxes, meanwhile the people who control that much wealth continue to advocate for and get tax cuts while our roads and bridges and schools and rural hospitals crumble. She also mentions that the wealthy make a lot of money through capital gains that are taxed at a lower rate but doesn't discuss at all wheather it makes sense any more, especially for individuals, and considering that to gain wealth in that manner requires wealth to start, so the advantage is accessible to very few who are already wealthy. I just wasn't all that impressed with her presentation, felt like a Heritage Foundation white paper, which it basically was considering her admitted background.

You have my vote

Posted (edited)

As a wholly average person firmly situated in the middle class, I just did my taxes (a few hours ago) and it was painful. Paying 24% is brutal.

Tax the billionaires more, relieve the choking of the middle class, and exempt the poor (poverty or below) entirely. That's a plan 99% of American's can get behind. Unfortunately the 1% will never let it happen.

Edited by Vegas64
Posted
17 minutes ago, wildcat09 said:

In this scenario, Jeff Bezos would owe $10,000,000.00, while the other 99 people combined would owe $4,950,000.00. In this scenario one percent of taxpayers would be responsible for 66.89% of all tax revenue! How unfair that would be to Jeff Bezos! Those other 99 would be riding his coattails without his getting nearly the same benefit!

 

But Jeff Bezos is actually getting much more benefit than the middle class people. Because he has more to lose. 

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Posted
7 minutes ago, High Plains Drifter said:

 

But Jeff Bezos is actually getting much more benefit than the middle class people. Because he has more to lose. 

Yes, that was my sarcasm (which probably made more sense in the context of that thread).

Posted

I listened to that episode and at one point she was discussing the story about Warren Buffet paying more in taxes (by percentage points) than his secretary.  I think the economist misspoke, or misunderstood, something about the comparison.  I think the core of the argument is taxes on salary for the middle class (the secretary) is higher than taxes on dividends or long term capital gains for the rich (Warren).  But this distinction was not addressed and she dismissed the anecdote.  I became less enthused about the episode after that.

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Posted
49 minutes ago, 27-25 said:

I listened to that episode and at one point she was discussing the story about Warren Buffet paying more in taxes (by percentage points) than his secretary.  I think the economist misspoke, or misunderstood, something about the comparison.  I think the core of the argument is taxes on salary for the middle class (the secretary) is higher than taxes on dividends or long term capital gains for the rich (Warren).  But this distinction was not addressed and she dismissed the anecdote.  I became less enthused about the episode after that.

And this is the stupidity of the argument. Our wealthy don't take income and are allowed to live off of super low interest rate loans against their stock shares, which they don't pay taxes on either. So they go years without paying taxes which aren't factored into the discussion on purpose to twist the story in their favor. I tire of this same old shit. I have these discussions irl and you would be surprised how many people don't understand it but just regurgitate what they heard from some right wing talking head.

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Posted
9 minutes ago, Thatguy said:

And this is the stupidity of the argument. Our wealthy don't take income and are allowed to live off of super low interest rate loans against their stock shares, which they don't pay taxes on either. So they go years without paying taxes which aren't factored into the discussion on purpose to twist the story in their favor. I tire of this same old shit. I have these discussions irl and you would be surprised how many people don't understand it but just regurgitate what they heard from some right wing talking head.

What's your point of view on why this and other right of center economist focus on tax rates? 

Posted
2 hours ago, wildcat09 said:

Let's try a simple hypothetical. America has a population of 100 people. One of them, let's call him Jeff Bezos, makes $100,000,000.00 per year in taxable income. The other 99 people each make $50,000.00 per year in taxable income. Let's say Jeff Bezos pays an effective rate of 10%, while the other 99 pay an effective rate of 100%. Stick with me, this is just a hypothetical. In this scenario, Jeff Bezos would owe $10,000,000.00, while the other 99 people combined would owe $4,950,000.00. In this scenario one percent of taxpayers would be responsible for 66.89% of all tax revenue! How unfair that would be to Jeff Bezos! Those other 99 would be riding his coattails without his getting nearly the same benefit!

Bezos has basically 95% of the income.  His 67% of the tax revenue is shit. Fucking freeloader.

Posted
20 minutes ago, Thatguy said:

And this is the stupidity of the argument. Our wealthy don't take income and are allowed to live off of super low interest rate loans against their stock shares, which they don't pay taxes on either. So they go years without paying taxes which aren't factored into the discussion on purpose to twist the story in their favor. I tire of this same old shit. I have these discussions irl and you would be surprised how many people don't understand it but just regurgitate what they heard from some right wing talking head.

Said it before, I'll say it again; if you take a loan against stock that stock should be considered sold.  You pay tax on whatever gains have been made on the stock to that point.  If you legit sell the stock later down the road, you pay tax on any gains from the time of the loan until the stock sale.  Oh, and writing off the interest on that loan?  Fuck you, that's gone.

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Posted
1 hour ago, YChang said:

What's your point of view on why this and other right of center economist focus on tax rates? 

 

1 hour ago, Fudge Nuggets said:

They focus on rates to confuse the rubes.

This right here. They know the uneducated only understand the basics about taxes. So they can simply leave out the whole section about tax loopholes and the unwashed will be none the wiser. It's the same as talking about tariffs. You say, "we are gonna put a tax on goods from China", and the unwashed cheer. You don't need to tell them who picks up the tab. Once you've sold them on "the rich pay all the taxes" then you can convince them that "we need to give them a tax cut and all those savings will trickle down". No need to explain about stock buybacks because rubes.

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Posted
42 minutes ago, Thatguy said:

 

This right here. They know the uneducated only understand the basics about taxes. So they can simply leave out the whole section about tax loopholes and the unwashed will be none the wiser. It's the same as talking about tariffs. You say, "we are gonna put a tax on goods from China", and the unwashed cheer. You don't need to tell them who picks up the tab. Once you've sold them on "the rich pay all the taxes" then you can convince them that "we need to give them a tax cut and all those savings will trickle down". No need to explain about stock buybacks because rubes.

Dave Chappelle did this bit where he talks about how HRC hit him with the "This rich man doesn't pay taxes!" to which Trump replied, "That makes me smart. If you want me to pay the tax then change the code. But you won't do that, because your friends and your donors take advantage of the same tax laws that I do."

When the power brokers and rich, from all walks and politics, are aligned on the green idol, it hurts the middle class from real change. The only thing the rich will understand is disruption and/or blood.

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Posted
1 hour ago, Vegas64 said:

Dave Chappelle did this bit where he talks about how HRC hit him with the "This rich man doesn't pay taxes!" to which Trump replied, "That makes me smart. If you want me to pay the tax then change the code. But you won't do that, because your friends and your donors take advantage of the same tax laws that I do."

When the power brokers and rich, from all walks and politics, are aligned on the green idol, it hurts the middle class from real change. The only thing the rich will understand is disruption and/or blood.

donation caps and if you are a politician you are not allowed to invest in the market. The only way to get real change and politicians who work for the people.

Posted
3 minutes ago, Thatguy said:

and if you are a politician you are not allowed to invest in the market.

Oh my friend....how 10 years ago of you.

All a politician has to do now is create a shitcoin, have those who want to bribe him buy it at inflated prices, and voila, no laws violated and bribe paid.  Or maybe he could just own, say, real property that can be rented at way-above market rates.

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Posted
48 minutes ago, Brisketexan said:

Oh my friend....how 10 years ago of you.

All a politician has to do now is create a shitcoin, have those who want to bribe him buy it at inflated prices, and voila, no laws violated and bribe paid.  Or maybe he could just own, say, real property that can be rented at way-above market rates.

Or lets say you're a high end home builder, and you're trying to make it real hard for home owners to sue you. You could maybe sell the governor a premium piece of land for a seemingly well below market price. Then said governor could hold onto it for a couple years and sell it to a different home builder (who would also like to make it harder to sue him) for a seemingly well ABOVE market price.  That's not fraud, that's just the governor being a shrewd and savvy bidness man. Probably learned all about real estate while he was making Ds in his animal science classes

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