July 15, 201115 yr It doesn't show the opposite, I think it supports it. I'll have more coffee and look at it closer.
July 15, 201115 yr Are you suggesting that's a regular risk for wealthy folks? Yes it is. At least when you put personal capital into a venture - i.e. 'venture capital'. But even when people buy stocks - that were the foundation of the capital used to build or expand companies there is much more risk than just working for a wage. Starting up new business, expanding businesses is risky business. And sometimes there is not only no return on capital, but it is completely lost. There should be reward associated with capital investing since it involves high risk.
July 15, 201115 yr http://www.cnsnews.com/node/68094 As with all statistics, you have to peel the onion a little. My first thought is I want to see inflation adjusted numbers before I start making any judgments on those numbers. $74,000 in 1975 is a lot different than $74,000 in 2010. One thing that comes to mind though is the middle class. What income range is the middle class? What are the demographics there? I think a lot of people in the middle class act don't realize that is where they are, don't want to admit even to themselves that is where they are and think about issues like taxes as if they are in the upper class. The big dynamic there is a huge chunk of today's middle class is sitting behind a desk with a college degree, whereas in the past they were in the manufacturing plant. Most people with a college degree think they are now in the upper class and that just isn't real.
July 15, 201115 yr Not sure who he was talking about but investors bear huge risks, as do business owners. Not sure what he means about the 50/50 chance though. 50/50 would be in regards to venture capital, brand new companies. Having been part of one and involved with a number of them in the dot com days and with B2B exchanges (where goods were supposed to traded like the stock market) it seems new companies in new industries have about a 50% fall out rate. And when they fail the investors are out their whole up front investment. So not only 0% return but actual lost capital.
July 15, 201115 yr Did you read post #19 above you? His presentation shows just the opposite. The 10% (1998-2001) vs. 6% (2009) was the percentage of individual tax revenue from capital gains. Not the rate. For the time in question the 'top rate' dropped from 29.2% to 21.2% in between 1996 and 1997. It then dropped to 16% in 2003 and now at 15%. Historically, this is very low. As I posted above, I believe the data supports 'maximizing' capital gains revenue. That is likely not through lowering the top rates any more. The revenues seemed to do fine at 21% and lower them may have appeared to gotten a bump in 2006 and 2007 but that may have been just the effects of a strong market with lots of trading and lots of capital gains. But to create a deficit there are two parts. And the simple fact is - you can not tax away this deficit. It is an animal of the spending, not the lack of revenue - regardless of the source. Spending is the main problem by far. Top cap gains rates on right here: http://www.ctj.org/pdf/regcg.pdf Edited July 15, 201115 yr by Bluegrasscard add link
July 15, 201115 yr As with all statistics, you have to peel the onion a little. My first thought is I want to see inflation adjusted numbers before I start making any judgments on those numbers. $74,000 in 1975 is a lot different than $74,000 in 2010. One thing that comes to mind though is the middle class. What income range is the middle class? What are the demographics there? I think a lot of people in the middle class act don't realize that is where they are, don't want to admit even to themselves that is where they are and think about issues like taxes as if they are in the upper class. The big dynamic there is a huge chunk of today's middle class is sitting behind a desk with a college degree, whereas in the past they were in the manufacturing plant. Most people with a college degree think they are now in the upper class and that just isn't real. My sphere of friends includes maybe 35-40 people with college degrees and in the workforce more than 30 years and I only know of one who thinks she's upper class, but she would think that no matter what the circumstances. I don't think it's a degree that makes people think that.
July 15, 201115 yr As with all statistics, you have to peel the onion a little. My first thought is I want to see inflation adjusted numbers before I start making any judgments on those numbers. $74,000 in 1975 is a lot different than $74,000 in 2010. I believe the data is all in 2007 dollars and adjusted based on this link that is a source to the source of the article: http://www.cbo.gov/publications/collections/tax/2010/average_before-tax_income.pdf About the only thing that seems to be kept in absolute dollars is the AMT threshold. It never adjusts for inflation and so every year more and more people are called 'rich' under this 1970s index threshold.
July 15, 201115 yr My sphere of friends includes maybe 35-40 people with college degrees and in the workforce more than 30 years and I only know of one who thinks she's upper class, but she would think that no matter what the circumstances. I don't think it's a degree that makes people think that. I am not saying they think of themselves as in the upper class. But all of their philosophy politically and economically is aligned as if they are in the upper class versus where they are. Part of that IMO is the American Dream, we all think we could be there some day and since we aspire to be there we align our thinking with how we would think if we were there. I guess the biggest example of this for me is taxes on high net worth people. If someone is making $1M a year, is there any reason why they shouldn't be paying 40% of that in taxes? The system that allowed them to attain such a high income level should be supported right? Can they live a life of luxury with $600K in take home pay? I would hope so. Yet I hear many, many people who think that would be outlandish. Why? That is part of where I am coming from. These people making $75K or maybe in the low $100K range with dual income would be appalled at that and I just don't get it.
July 15, 201115 yr I am not saying they think of themselves as in the upper class. But all of their philosophy politically and economically is aligned as if they are in the upper class versus where they are. Part of that IMO is the American Dream, we all think we could be there some day and since we aspire to be there we align our thinking with how we would think if we were there. I guess the biggest example of this for me is taxes on high net worth people. If someone is making $1M a year, is there any reason why they shouldn't be paying 40% of that in taxes? The system that allowed them to attain such a high income level should be supported right? Can they live a life of luxury with $600K in take home pay? I would hope so. Yet I hear many, many people who think that would be outlandish. Why? That is part of where I am coming from. These people making $75K or maybe in the low $100K range with dual income would be appalled at that and I just don't get it. The problem VOR is NOBODY wants to pay their fair share. The "poor" feel that they should pay no income tax as they don't make enough, and now between 47 to 51% of Americans are at this level and pay no income tax. The rich feel like they are being hosed by the government so they do everything they can to avoid taxes and look for loopholes with their accountants. Everybody is playing the game. That is why I too support a fair tax. Sorry, but everybody but the poorest of the poor should be paying an income tax. As to the rest of your post, I don't agree, numbers are always relative.....to you it is easy to say another rich person should pay 40% of their income to taxes, after all they can afford it. To me, they earned their money and they should pay no more or no less than anyone else. Your ideas border on socialism and I am saying that to you not to agitate you. That would be the same as saying if you have 4 children that you care for , and I can't have any, that you should give me one of yours, because you would still have three left and I have none. That makes no sense to be whatsoever.
July 15, 201115 yr The problem VOR is NOBODY wants to pay their fair share. The "poor" feel that they should pay no income tax as they don't make enough, and now between 47 to 51% of Americans are at this level and pay no income tax. The rich feel like they are being hosed by the government so they do everything they can to avoid taxes and look for loopholes with their accountants. Everybody is playing the game. That is why I too support a fair tax. Sorry, but everybody but the poorest of the poor should be paying an income tax. As to the rest of your post, I don't agree, numbers are always relative.....to you it is easy to say another rich person should pay 40% of their income to taxes, after all they can afford it. To me, they earned their money and they should pay no more or no less than anyone else. Your ideas border on socialism and I am saying that to you not to agitate you. That would be the same as saying if you have 4 children that you care for , and I can't have any, that you should give me one of yours, because you would still have three left and I have none. That makes no sense to be whatsoever. Spot on!
July 15, 201115 yr The graph above is very misleading....which I would conclude was the intent. The below excerpt is from the Joint Economic Committe in Congress written in 1996: Tax Rates and Tax Revenues High marginal tax rates discourage work effort, saving, and investment, and promote tax avoidance and tax evasion. A reduction in high marginal tax rates would boost long term economic growth, and reduce the attractiveness of tax shelters and other forms of tax avoidance. The economic benefits of ERTA were summarized by President Clinton's Council of Economic Advisers in 1994: "It is undeniable that the sharp reduction in taxes in the early 1980s was a strong impetus to economic growth." Unfortunately, the Council could not bring itself to acknowledge the counterproductive effects high marginal tax rates can have upon taxpayer behavior and tax avoidance activities. Since 1984 the JEC has provided factual information about the impact of the tax cuts of the 1980s. For example, for many years the JEC has published IRS data on federal tax payments of the top 1 percent, top 5 percent, top 10 percent, and other taxpayers. These data show that after the high marginal tax rates of 1981 were cut, tax payments and the share of the tax burden borne by the top 1 percent climbed sharply. For example, in 1981 the top 1 percent paid 17.6 percent of all personal income taxes, but by 1988 their share had jumped to 27.5 percent, a 10 percentage point increase. The graph below illustrates changes in the tax burden during this period. I think the statement above should be considered by our current administration. Also, Accounting is a much more creative science than given credit....for every cut, how many NEW spending programs are enacted to replace. Are these accounted for in the chart? Is this just a mis-direct?
July 15, 201115 yr http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm This is the link to the above excerpt.
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