Taxes on the rich already gone...

We could argue numbers all day long. The fact is that the high income earners are paying their fair share, and then some. Are the ones not paying income taxes a problem to you, like the 47%?

 

What we have effectively done is take the share of America away from the former tax payers in the 47% who pay no federal income taxes. I believe that is a huge mistake and conscious or unconscious the feeling of belonging for those who pay no income tax has been usurped. It is not necessary that they pay a lot, but everyone should have a stake in the country.

There are some who will say, "but they pay payroll taxes," to which I say, "taxes to cover the premiums for Social Security and Medicare are not the same thing."

What Obama did with his Pay Roll Tax Holiday was to partially turn SS and MC for future recipients partially a welfare program whereas here to fore it has been a way (mandatory that it may be) for people to support their own old age needs.

We are no longer creeping toward a welfare society, we have increased the pace, and if we continue at this rate we will soon be running toward a welfare state being supported by a smaller and smaller number of people paying taxes to support that state. When the higher earners get tired of supporting the rest of the country there will a revolution of sorts, not with guns and bullets, but a social revolution. I can only hope that the union can survive it intact.

 

What some people don't want to recognize is, sometimes the economy gets better IN SPITE OF EXCESSIVE TAXATION, not because of the high taxes.

 

You have no means to define 'excessive tax'. Even supply-side economics, via the Laffer Curve, would encourage tax increases (given its multiple peaked)

 

Interesting. Show us your math that proves we're below one, or more optimum tax rates.

 

Three things:

One, to Liberals it's not so much about revenue as it is about control. Liberals are only interested in controlling everything and everyone

Two, Just how much is enough to satisfy the left as far as taxation? Should we tax everyone 100%? Make everyone work for free just to fund big daddy government? Which leads to...

...Three, it IS about the spending, stupid!

 

We are moving toward a welfare state like that asteroid that flew past Earth. More and more users, and less and less producers. Like Margaret Thatcher once said, "The problem with socialism, is that eventually you will run out of other people's money".

 

Payroll taxes are a government mandated retirement savings plan which is either hugely under funded, or hugely over paid. The average contribution for Medicare is $100K, the average draw is $300K, and getting worse each year.

In a normal retirement plan, low interest rates on T-Bills (artificially low, to reduce the interest on the debt, much of that debt is T-Bills), would have resulted in lower payouts or higher contributions. Neither were changed.

Because payroll tax trust fund is "invested" in T-Bills, interest earned comes from income tax.

Being payroll tax is limited to the first $113,700, those earning more, aren't taxed on the excess. But, they also, aren't any paid more SSI than someone earning $113,700.


Payroll taxes collected in 2010 were $865B. The payout for SSI was $695B, Medicare was $453B.

$283B more than collected.

 

You've already been given an example of the evidence:

Heijman and van Ophem (2005, Willingness to pay tax: The Laffer curve revisited for 12 OECD countries, Journal of Socio-Economics, Vol 34 Issue 5, pp 714-723):

According to Laffer, economic activities are a decreasing function of the taxation rate. As a consequence, total tax revenue increases with the taxation rate at its lower levels and decreases against it at its higher levels. The result is the Laffer curve. According to him, the reason for this decrease lies in decreasing economic activities. Although this may be true for activities in the official (white) sector, in the unofficial (black) sector they can increase under the influence of an increasing taxation rate. Part of the Laffer effect may be nothing more than an activity switch away from the white towards the (hidden) black sector. This paper takes both effects into account: decreasing activities in the white sector combined with increasing activities in the black sector. It examines the computation of the maximum tax revenue generating taxation rate for a number of OECD countries. It concludes that, with the exception of Sweden, the marginal taxation rate in these countries is below its optimum

 

Given that the Laffer Curve varies according to the business cycle, and also given that in principle it is correct, taxes beyond the peak reduce the over all government revenue. But effectively most left wingers could care less about the revenue, it is about controlling wealth and the redistribution of that wealth.

 

I agree that the funds are under funded, something which can be corrected by removing the cap on wages from which the premiums are collected.

Thus the logic behind investing some of the trust funds in secure commercial paper, yet leaving some for T-Bills to keep our debt interest low.
Being payroll tax is limited to the first $113,700, those earning more, aren't taxed on the excess. But, they also, aren't any paid more SSI than someone earning $113,700.


Payroll taxes collected in 2010 were $865B. The payout for SSI was $695B, Medicare was $453B.

$283B more than collected.[/QUOTE]Under funding should be corrected as the individual SS benefits are not very high and not sufficient for retirement.

We should also include not wage income as a source of SS/MC revenue.

 

Could you refer to an empirical paper that supports that premise?

 

This is your proof?

"Part of the Laffer effect may be nothing more than an activity switch away from the white towards the (hidden) black sector."

Part, what part?
My be..... or it may be not.
How high do taxes have to be to cause the percentage of people willing become criminals increases faster than the tax rate?

Does that result in multiple peaks, or shift the peak percentage?

And, as far as my definition of excessive tax. Excessive has nothing to do with the Laffer Curve - the highest possible tax is not the right tax level. What is better, a 2% unemployment rate because the economy is booming, so we don't need a lot of safety net spending? Or, and 15% unemployment rate, and enough taxes to pay unemployment?

 

Its but one of several examples of how the laffer curve is multipeaked. We usually get two forms of "taxes are too high" doomsters: The silly anarchist that sees any tax as wrong; and the supply-side wannabe that doesn't realise the laffer curve analysis actually often argues for tax increases.

Provide a definition of 'excessive taxation' then. Your vacuous attempt at referring to unemployment rates won't work. For example, given hysteresis effects in unemployment, we'd actually have another source for government expenditure as a means to minimise the negative consequences of economic shocks

 

I have not seen an empirical paper which proves conclusively that the curve varies with the business cycle but it is logical that it would. If the business cycle is in a boom it would be logical to presume that even with a higher marginal tax rate capital would continue to invest and expand and vice versa.

We also must recognize that the laffer curve only suggests 1 tax bracket rather than several with increases only in the marginal rate. It would also be reasonable to assume that where the higher marginal rates kick in would be a controlling variable.

Studies involving tax incidence for business suggest that it also depends on elasticity of supply/demand and mobility of capital as to whether the taxes will be paid by capital, consumers or labor which suggests that under some circumstances the marginal rate is irrelevant to capital.

(I make the assumption we are talking about capital as high tax rates tend to involve people/companies who earn high income.)

 

That can go two ways. Increasing the cap, pays those with higher income more, which does nothing for the short fall. Or, increasing taxes on the rich, changing SSI and Medicare from an insurance policy to an entitlement.

This is a government run retirement plan, raise the payroll tax on the people receiving the benefits to make, and keep it fully funded.

What should be the source of revenue?

 

Can you refer to one empirical paper that suggests the curve varies with the business cycle?

 

There is good reason to believe that morally taxes can be too high such that they allow the government to create safety nets whereas it pays not to work. There is also the consideration as to should anyone pay a higher rate than anyone else once the poverty level has been satisfied? I personally accept progressive taxation as the most fair, but only to a point which is likely to the left of the peak of the curve, and I also recognize that there can be a point beyond which revenues may drop.

In my opinion ambition, motivation, hard work and intelligence should be rewarded. I also believe taxation should be high enough to take care of structural deficits/debt during off cycles of business and flexible enough to go down as adequate revenues are collected to take care of governmental obligations. Maybe a progressive rate schedule with easily added or subtracted surcharges. I also believe that if we maximize revenues at the federal level we take away from the tax base of the states where most of the functions should take place. (10th amendment)

 

How did your example show there were multiple peaks?

Keep trying, there are actually people that don't think the highest possible tax revenue is desireable.

My example shows the silliness of your arguement for using the Laffer Curve.

 

Or, controlling people. Those with money are harder to control. People dependant on you for money are easier to control. Redistribution fixes that.

 

Why, is the concept too difficult to understand?

Taxes were reduced during the Reagan years, and a limping economy recovered.
Taxes were increased during the Clinton years, but the economy was too robust to be slowed.
Taxes were reduced during the Obama years, but the economy continued to limp.

One tax rate is not optimum....

 

Its a basic feature of the empirical analysis. The problem for you is that you haven't got anything to say. You have no means to define "excessive taxation". You whine, nothing more

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Can you help him? Can you refer to one study that shows the laffer curve is related to the business cycle? You fellows make points without evidence. When asked for that evidence you whine "its logical". No, its logical to refer to the evidence!

 

All income should have FICA/MC premiums deducted and benefits should continue to be paid skewed toward the lower wage earners. Every one pays, everyone gets benefits. And yes, there is a welfare element in that benefits should continue to be skewed towards lower wage earners.

 

The biggest reason for "it pays not to work" is high marginal rates of tax that creates unemployment and poverty traps. This reflects the interaction of tax and benefit systems. It also describes how higher tax (via progressivity) can actually increase work incentives.

 

I don't see taxation as a means to increase federal revenue to its maximum effective quotient. There should be a limit even if there is room for more taxes to be extracted. Effectively the Fed Gov does too many things that should be reserved for the states. Also even the rich should be allowed to keep some of what their ambition, motivation and hard work produce. Once the poverty line is secured, infrastructure and defense is financed, there should be a cut off of taxes.

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It appears you are suggesting there is a finite amount of wealth keeping the less wealthy from creating more wealth. I don't subscribe to that theory at all.