The U.S. Already Soaks the Rich In 2021 the richest 1% paid 45.8% of income taxes, up from..

Excellent post!

I keep saying; Since the 90’s, both Democrats and Republicans have consistently and proudly claimed that they were the ones who balanced the budget.

Indisputable fact; The budget was nearly balanced with receipts at 18.7% to GDP, and Outlays at 18.9% to GDP.

Receipts Post Trump’s tax cuts;

2018; 16.3% to GDP
2019; 16.3%
2020; 16.4%

And a few years ago, I predicted that Uncle Sam’s receipts would eventually come down to a mid 16% to GDP, and I was right;

2023: 16.4%

Question; Would Gingrich & Co. have balanced the budget with receipts at 16.4% to GDP?

Answer; Absolutely Not!

In addition, compared to the 90’s, we currently have 4 expenditures growing faster than the economy, such as the Net interest, thus, for said reason, if Congress were to rebalance the budget over X number years, it wouldn’t be achievable with receipts and outlays at 18.9% to GDP.

What about at 20% to GDP over X number of years?

Achievable if Democrats were willing to cut current spending from current 24.6% to 20% of GDP, thus, by 4.6% over X number of years.

Achievable if Republicans were willing to increase revenue from current 16.5% to 20%, thus, by 3.5% over X number of years.

In nominal dollars;

FY 2023 Nominal GDP; $26.982 Trillion

X 4.6% = $1.24 Trillion
X 3.5% = $944 billion

 

Just a couple of points:

In principle, as a conservative, I agree with much of what you said. But I think desperate times require desperate measures. I think our need to stop the bleeding is urgent, and perhaps it doesn't seem as urgent to you.

Next, when Obama was elected, for the first two years Democrats held the House and Senate. Do you know what we heard about increasing taxes on the very wealthy? The answer is nothing. After those first two years, Republicans had the House for the rest of Obama's presidency. It was during that time that Democrats talked about taxing the very wealthy more. It's just the game they play. Do you think Nancy Pelosi, the Speaker of the House, the $250,000,000 woman, really wanted to raise taxes on the very wealthy?

The Republicans play this game too. Remember all those times the House Republicans voted to repeal Obamacare when they knew the measure would never even get a vote in the Democratic Senate? But when they had majorities in both the House and Senate and the Presidency, they couldn't muster the votes.

Next, the tax measure, as I said, would be temporary. It would stay in place, along with spending restraints, until we achieve a balanced budget. We could reduce or eliminate the tax increase I suggested when those funds could be replaced by a budget surplus.

And finally, it is important to make some distinctions here. I am not talking about corporate taxes. It is my belief that corporate income derived from manufacturing goods or providing services in the U.S. should not be subject to taxation at all. The only corporate income taxes I can support are on profits that American owned companies make from goods manufactured overseas. What I was talking about is personal income taxes. But any personal income used to expand a business or start up a new one would not be subject to income tax. So let's say a business owner has a net profit of $2 million, but he uses $1 million of that profit to expand his business. His tax liability would be on the $1 million he converted to personal use. So, you see, I'm not talking about corporate income, and I'm not talking about personal income that expands or creates business. I am only talking about that part that is taken for personal use. I don't want to discourage investment any more than you do.

 

But you don't cut your nose off to spite your face or do things that will actually SLOW the growth of tax revenues. It's been urgent since the late 1970's for me and only a few times have I ever seen serious attempts to do something about and those times were under Rep supply side policies.

It wasn't just rates it was eliminating deductions and shifting numbers around but he got a 3.8% surtax on investment income and a Capgains from 15% to 20%.

They knew that it had been in place so long it would be nearly impossible to repeal it without a full control of the Congress and the White House.

When has such a tax measure EVER been temporary? The first income tax was to be temporary, the second with the Amendment was to be about 2% or 1% of the population. How many times have we seen this and then when the time comes for it to run out we see the politicians crying "BUT WOMEN AND CHILDREN WILL STARVE".

It is the PERSONAL investment in those corporations and private businesses that drives the economy. My PERSONAL money is invested in those corporations.

CUT tax rates to expand the economy and get the government out of the way and revenues will EXPLODE and then with fiscal conservatives in the Congress, I don't care what party, MAYBE we can get some reasonable spending restraint and FINALLY a going through the elimination of all the wasteful spending and wasteful employees and wasteful programs.

How about this too which for several reasons but here to get rid of the 17th Amendment and make the Senate a representative of the States and stop all the Federal mandates to the states on spending and the Federal government taking all the tax revenues for themselves and force the Feds to balance it's budget like the States are required.

 

The bottom 90% only earn 59% of all wages.
So it seems, the 1% are not getting soaked.

...
Income Disparity
Income disparity is the most dramatic when you look at how the distribution of wages has changed since 1979. As the EPI reports: "The top 1% earned 14.6% of all wages in 2021—twice as high as their 7.3% share in 1979. The bottom 90% received just 58.6% of all wages in 2021, the lowest share on record, and far lower than their 69.8% share in 1979."1
https://www.investopedia.com/personal-finance/how-much-income-puts-you-top-1-5-10/

 

I have written on PF my belief that we should repeal the 17th and impose term limits on the House. We should repeal the 17th for the reasons you mentioned and also to eliminate the need for campaign cash (bribe money) for Senators. If the 17th was repealed, Senators would be accountable only to their state legislatures, not their party, not their party leaders, not campaign donors.

We agree on that.

 

Exactly and as the founding fathers designed. The Senate was not to be a political body and to represent State interest.

 

I would add something that convinced me early on to support such a rescinding of the 17th and that was the history of why it was implemented. An ancillary reason for passage were a few rare alleged instances of corruption between state legislators and and the appointed Senators and that must be stopped. To this day in such debates some will present that argument. That fact is, the irony is, that IMO was totally backward thinking and and reality the corruption level grew exponentially after Senators were made political animals.


17th Amendment Weakened Balance of Power Between States, Federal Government

".....As the Heritage Guide to the Constitution explains, the “Framers intended to protect the interests of states as states” and the “mode of election impelled senators to preserve the original federal design and to protect the interests not only of their own states, but, concomitantly, of the states as political and legal entities within the federal system.”

Alexander Hamilton emphasized this at the New York ratifying convention in 1788 when he said that senators “will constantly look up to the state governments with an eye of dependance” and, if they wanted to be reelected by state legislators, they, “would have a uniform attachment to the interests of their several states.” In other words, they would be wary of imposing unfunded mandates on state governments or taking other actions that extended the power of the federal government into areas traditionally within the authority of the states."
https://www.heritage.org/the-consti...lance-power-between-states-federal-government

So give the man a kewpie doll for predicting exactly what would be the consequence of a 17th Amendment. Since the 17th was ratified more and more power especially the power of taxation has been shifted to the federal government. The States need to recoup that power.

I don't see how anyone on either side can see that the 17th failed in its purpose, to bring the people closer to the government, and the good it would do to go back the that balance of power as the founding fathers so BRILLIANTLY designed.

Stepping down off the soapbox........

 

Because the top 1 percent paid 42.3 percent of the total federal income tax in 2020 while receiving 22.2 percent of total adjusted gross income, the logic goes, they’re getting “soaked.”

Focusing on 2020, the year the pandemic crashed the economy, necessitating emergency help for practically every household outside the top 5 percent, is a funny choice. Much of that help took the form of tax rebates, as the Tax Foundation noted. An important reference to this qualification can be found in the Tax Foundation’s report:

“The income dip for the bottom half of taxpayers combined with the tax credit boost unavailable to higher-income households led to lower average tax rates at the bottom and a greater share of taxes borne by households at the top, compared to a typical year.” Thus, it appears 2020 is a cherry-picked, atypical year for this argument.

Using the year 2020, however, pales compared to a focus on the federal income tax, to the exclusion of other federal and state taxes, to make this argument. The contrast used — the percentage of total federal income tax paid versus income flowing to the top 1 percent — is more a measure of economic inequality than a measure of tax progressivity. By design, income up to the poverty level is not subject to federal income tax. This policy choice is implemented through the standard deduction, which in 2020 exempted from taxation the first $12,400 of income for single filers and the first $24,800 of income for married couples.

To see the disproportionate impact that income inequality has on the percentage of tax to the percentage of income, consider what the percentage of the total federal income tax paid by the top 1 percent would be if the adjusted gross income of the entire bottom 99 percent were equal to the standard deduction. In that scenario, even with an effective tax rate barely above zero, the top 1 percent would pay 100 percent of all federal income tax. Would the top 1 percent be getting “soaked” in that scenario?
https://thehill.com/opinion/finance/3894233-how-america-actually-taxes-the-affluent/

 

See post #454, it needs a response.

 

What about it? Since when is the governments responsibilty and the purpose of the tax code to limit what a person can earn.

 

You can't respond cogently to it? You should consider why you can't given this thread you started.

 

Receipts have been in the range of 15-17% since 1946. Implying that the Trump tax cuts are the problem is disingenuous.

Deficits, however, have started to tank accentuated by "events" such as 2008 and 2020 implying that there is a spending problem

 

Well, it would undeniably depend upon what would the GDP have been with a lower tax rate. As such, you cannot just give a blanket statement covering all eventualities. A lower tax rate logically increases GDP to some extent so the answer to that hypothetical is not entirely clear. On top of that, it was the dot com boom growth that drove the bulk of additional revenue, NOT simply the additional 2% of receipts collected due to differing tax policy.

Additionally, we could just as easily turn that around and ask whether the budget would have been balanced post-Trump tax cuts with receipts at 18.7%. Assuming the GDP would not be higher with a higher tax revenue percentage
( it undoubtedly would be lower) , the answer would be a resounding and unqualified NO.

In truth, this is all an apples to oranges comparison while acting as if it is providing some sort of deep insight. There are far too many variables involved to be making these comparisons as if they are meaningful.

 

Quote; Receipts have been in the range of 15 to 17% since 1946

FALSE! Since 1946, Receipts have been in the range of 14 to 20%, thus, there’s something wrong with your RANGE.

Source; OMB Historical Tables, Table 1.2

 

oooooo, you got me. There were some outlier years. Good for you for catching that but it doesn't change the gist of what I said.

 

Here are Trump’s “best economy we ever had” Receipts, Outlays and Deficits as a percentage of GDP;

Receipts/Outlays/Deficits

2016….17.5%/20.7%/-3.1%....Obama

2017….17.1%/20.6%/-3.4%
2018….16.3%/20.1%/-3.8%
2019….16.3%/20.9%/-4.9%

Source; OMB Historical Tables, Table 1.2

And back then, Repubs were chanting “We don’t have a revenue problem, we have a spending problem”

My response; NOPE, according to said Trump’s fiscal percentages, we both have a revenue and a spending problem.

Now, here’s the reason why I’ve REALISTICALLY suggested that Congress should balance today’s budget with receipts and outlays at 20% to GDP, and over X number of years…..BECAUSE Trump and his RED Congress weren’t capable of lowering spending below 20% to GDP.

 

Did you care to respond to anything I actually said?

 

You are really trying to pin the spending problem on Republicans? Wake up. There isn't a politician up there that doesn't want to spend money. The only difference is what they want to spend money on. Covid was a huge excuse to spend big. They continued that thought process through 2022. Neither side has done their job and put in the hard work of creating a budget. They just do spending packages and point at the other side.

 

Such as “it was the dot com boom growth that drove the bulk of additional revenue

In other words, a boom in one sector of our economy boosted Clinton’s receipts.

Thanks for your clarification as I’ve been wondering why Trump’s “best economy we ever had” generated very poor revenue growth rates.

 

Indeed a gigantic boom due to the advent of the internet had an enormous impact on receipts which does in fact render useless the comparisons you are trying to make. Thanks for replying to at least one point that I made.

The whataboutism however could have been left off. It serves no purpose as a response to the topic being discussed.

If seeking to bicker aimlessly is your goal, I'm not your guy. I guess I took your name far too literally. My bad.

 

I stated one great disappointment, and that’s Trump’s RED Congress/self-acclaimed fiscal conservatives who have increased spending from 20.1% to 20.9% to GDP, and nearly doubled FY2016’s deficit during the “best economy we ever had”.

And a disgrace compared to Clinton and Bush’s late cycle economies.

 

Thus, according to your rationale, in order to balance today’s budget over X number of years, we would need a gigantic BOOM in one sector of our economy, and a revenue generating boom, such as Clinton’s dot.com.

I disagree….I could feasibly balance today’s budget over X number of years without a gigantic boom, and Trump’s RED Congress could have done the same.

Question; What nearly balanced Bush’s FY 2007 budget, a homeownership boom?

 

Hmmm.

How are you deriving that the above would be my rationale? One could concoct numerous scenarios that could potentially lead to a balanced budget as every economy is different/always changing. What you propose above is most certainly not what I said or implied in ANY fashion.

At first you responded by just pushing your agenda and literally not responding to ANYTHING I said. Now you falsely put an argument into my mouth and then just proceeded to argue against that false argument you just fabricated. Yeesh. Do you even need others to have a conversation?

I have an idea. If we interact in the future, how about I make MY arguments, and YOU make yours? Deal?

 

Deal!

Now, in 2025, I would only extend Trump’s tax cuts for people making less than $ 250,000, thus, the bottom 90%, and here’s why;

My best buddy died 3 years ago

1. He owned a construction company
2. He was an active Church elder, and a 10% giver
3. His after tax income; $160,000 - $180,000

His last five words; “I had a good life”

Question; Reference to the expiration of Trump’s tax cuts, what do you propose?

 

1. 2001 - 2019 Share of income tax paid by the top 1%

2001…..33.23%
2019…..38.77%, up 5.54% over 19 years

Well, of course…….wages for the top 1% grew faster than the bottom 90%

2. 2020…..Top 1% paid 42.31%, up 3.54%

Well, of course……compared to tax year 2019

2020’s Tax withheld, down 8% …...Covid unemployment income tax exclusion

2020’s OTHER income tax/Net tax liability, down 4%….

Top 50% paid less income tax, bottom 50% paid much less, thus, just a reallocation of percentages due to an abnormal year.

3. 2021…..Top 1% paid 45.8%

Well, of course……2021’s capital gains realization; Over $2 trillion, a 40-year record high according to the IRS.

4. Tax year 2022/2023…..Share of income tax paid by the Top 1%, UNKNOWN, however, mostly likely, significantly lower than 45.8%.