fish82;923044 wrote:He's claimed several times over the past month flat out that the middle class pays more in taxes than the rich. No "as a rule," no "in certain cases." He's stated it as fact repeatedly. Where the hell have you been?

Warren has clearly claimed several times that his secretary, who he clearly states he pays about 40K (why you people fail to rage on this point is beyond me) pays a 35% tax rate. Those are his exact numbers. They've been proven impossible by several sources, including your little table above...which clearly shows the even including payroll taxes, it's virtually impossible to reach a 35% average tax rate in the 40-50K bracket.

No rage here. I've read a lot of news lately and I can't remember reading any quote from Obama that would lead me to believe that he is saying that the middle class pays a higher effective rate than millionaires FLAT OUT. Based upon your wit I'm sure your reasonable enough to realize that this is not what Obama is saying in his recent partisan speeches.

I just went to politifact here; http://www.politifact.com/truth-o-meter/article/2011/sep/21/does-secretary-pay-higher-taxes-millionaire/

I found this quote from BHO:

"Middle-class families shouldn’t pay higher taxes than millionaires and billionaires. That’s pretty straightforward. It’s hard to argue against that. Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There is no justification for it. It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million. Anybody who says we can’t change the tax code to correct that, anyone who has signed some pledge to protect every single tax loophole so long as they live, they should be called out. They should have to defend that unfairness -- explain why somebody who's making $50 million a year in the financial markets should be paying 15 percent on their taxes, when a teacher making $50,000 a year is paying a higher rate."


Nothing in there he says is false based upon the data gathered by the tax policy center when taking into the average effective rate of federal income taxes and payroll taxes. None of those quotes should lead you to believe that he's saying FLAT OUT that teachers as a class are paying higher rates millionaires.

But, based on the chart I provided, a teacher making 50k could pay a higher effective rate in payroll + income taxes than a guy makiing 50 million.

Additionally, this is what Warren Buffet said:

"only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent."

Unfortunately I could not find any links to your claim wherein he said he pays his secretary 40k. If that were true, based on TPC's data, she would not be paying a 33 percent rate. Politifact also did not cite any quote wherein he listed his secretary's salary.

Rather, I imagine it more likely based upon those rates that he gives that he pays them a much higher salary than the average secretary. Why do you think he's lying or wrong anyway?

I've provided a link;

Show me a link wherein he clearly states his secretary only makes 40k as I could not find his secretary's tax return information.

My table does show you can't reach 35% in federal taxes + payroll in the 40-50k income level but I see no evidence that that is all his secretary makes. According to Atlantic his "executive assistants" aren't answering questions about the matter.

However, it is true that there are millionaires that pay as low as 4.6% payroll+income taxes and 40-50k types who pay 26%. Thus, it is true that there are people making 50k who pay a higher effective rate than millionaires. Obama's simply saying that should never happen in any instance, not even once...hence the proposed millionaire ATM called the "buffet rule"

Boatshoes = Footwedge?

Manhattan Buckeye;923113 wrote:By the way what state has a regressive tax? Boatshoes have you ever held a job in your life?

When I referred to state and local regressive taxes I was referring to sales taxes which are widely agreed to be regressive...Knowing that, you might have figured out that I wasn't referring to the state and local income taxes which as you note are progressive in every state.

http://www.seattlepi.com/news/article/State-tax-system-hurts-poor-data-find-1104803.php

Manhattan Buckeye;923281 wrote:This gem from Boatshoes' post #97 on the thread:

"10% of people who earn only $10,000 a year pay 12.4% of their income in taxes (not even including state and local taxes which are regressive)."

which I debunked.

Probably could have made the sentence more clear but if you know that consumption taxes are regressive which is widely agreed upon by economists both liberal and conservative you should have known I was referring to those.

Manhattan Buckeye;922997 wrote:"Well if you follow traditional conservative economic norms and believe that the tax code ought not distort an actor's decision between earning their income from their labor or from capital,"

There is a big difference which some people (I call them idiots) neglect, the element of risk. If I earn my income through a cash payment, there is zero risk aside from monetary fluctuations. If I earn it through an investment, any tax is on already taxed money and there's no guarantee of a positive return.

There's a stronger argument for not taxing capital gains at all then taxing it at ordinary income levels, unless we want to completely kill our economy, which presently stinks to high heaven.

There are plenty of knowledgeable tax experts and economists who advocate for lower capital gains rates in our hodge podge of a code to move it more towards consumption tax treatment for all income levels. There are just as many who advocate that rates not deviate from ordinary income rates and like the others I don't think "idiot" is a proper descriptor. Agree to disagree.

Manhattan Buckeye;923005 wrote:"10% of people who earn only $10,000 a year pay 12.4% of their income in taxes (not even including state and local taxes which are regressive). "

It shouldn't include it because no one pays it. I take it you are referring to FICA because no one making $10,000/year pays any "taxes", if anything due to the EITC they have a negative tax liability.

Chart says "Effective individual and payroll tax rate"

BoatShoes;923391 wrote:Probably could have made the sentence more clear but if you know that consumption taxes are regressive which is widely agreed upon by economists both liberal and conservative you should have known I was referring to those.

Consumption taxes are flat, not regressive.

Your idea of regressive taxation is a butchering of the English language for a political gain.

Footwedge;923373 wrote:I destroyed my own argument? LMAO and Rolling on the floor I might add.

Yes, that pretty much describes anyone who actually understands economics and taxation every time you attempt to discuss the subject.

The system is not inherently regressive - capital gains are a flat tax. The distribution of income matters. The small business owner with $1M in ordinary income and little capital gains pays a high effective rate. That PROVES the system is not inherently regressive and proves you very wrong, again.

If you want to be technical, regressive taxes are defined by LOWER marginal rates on additional income, and that is never true. A person with no ordinary income and $1k in capital gains pays the same 15% as they would on $1M. It's designed not to favor the rich but to incentivize investment. Taxes on investment increase the cost of capital - you can see this proven with muni rates - and thus are a drag on growth.

Manhattan Buckeye;923396 wrote:Consumption taxes are flat, not regressive.

Your idea of regressive taxation is a butchering of the English language for a political gain.

Consumption taxes are regressive because the lower your income the higher percentage of your income is spent, and therefore taxed. This is also the reason that price inflation disproportionately affects the lower and middle classes as opposed to the wealthy.

Cleveland Buck;923399 wrote:Consumption taxes are regressive because the lower your income the higher percentage of your income is spent, and therefore taxed. This is also the reason that price inflation disproportionately affects the lower and middle classes as opposed to the wealthy.

I understand the argument, I just think it is BS. I liken it to someone from NYC arguing they are taxed more because they choose to live in a city where rents are higher. The percentage being taxed is still the same.

Manhattan Buckeye;923396 wrote:Consumption taxes are flat, not regressive.

Your idea of regressive taxation is a butchering of the English language for a political gain.

I don't mean to be rude but your understanding is elementary. Flat taxes on things like clothing, food, transportation (gas) and the like are regressive in that their income elasticity of demand is low. Any tax on consumption is going to be regressive and this is widely agreed upon. This idea that flat marginal rates some how prevent regression is not correct. If you claim that I am butchering the english language for political gain you might want to take up your beef with people who are way smarter than I am.

"Who Pays? A distributed analysis of the tax systems in all 50 states" The institute on Economic Policy and Taxation: available here: http://www.itepnet.org/whopays3.pdf

Consumption taxes don't have to be regressive. If you include all transactions, such as financial transactions (i.e. investments, CD's, etc), then it is indeed a flat tax (essentially treating savings and investment as a form of consumption). Otherwise I agree with Boatshoes that a consumption tax on say, only food, is regressive.

If you're going to exclude secondary markets (i.e. used goods) then the dynamic changes further.

BoatShoes;923405 wrote:I don't mean to be rude but your understanding is elementary. Flat taxes on things like clothing, food, transportation (gas) and the like are regressive in that their income elasticity of demand is low. Any tax on consumption is going to be regressive and this is widely agreed upon. This idea that flat marginal rates some how prevent regression is not correct. If you claim that I am butchering the english language for political gain you might want to take up your beef with people who are way smarter than I am.

"Who Pays? A distributed analysis of the tax systems in all 50 states" The institute on Economic Policy and Taxation: available here: http://www.itepnet.org/whopays3.pdf

You aren't being rude.

I'll repeat an earlier post:

"I understand the argument, I just think it is BS. I liken it to someone from NYC arguing they are taxed more because they choose to live in a city where rents are higher. The percentage being taxed is still the same."

I'm not sure we need to change the definition of regressive.

By the way, my favorite line in Boatshoes' link:

"The main finding of this report - that virtually every state's tax system is fundamentally unfair."

There are some days I'm amazed the U.S. has lasted this long.

Footwedge;923234 wrote:Yes they do pay 20% less. Either you didn't read the article, did read the article and cannot understand simple math equations, or you don't believe his stated numbers as being accurate. If it's the latter, then let me know. The internet is loaded with tax info that validates Buffet's numbers.

You are the one that doesn't understand "simple math equations". Boatshoes' table completely debunks the "Buffet rule".

Footwedge;923370 wrote:Answer the question...one last time. iT IS A FACT that people who whose income falls in the top .3% pay 20% less percentage wise than those who fall in the category of upper middle class. My question is a really simple one. Try to stay on point...and leave the other off track bullshlt aside....Do you you think that that is a fair tax structure? If so? Why?

Average Tax Rate, 1980-2008 (Percent of AGI paid in income taxes)
Year	Total	Top 0.1%	Top 1%	Top 5%	Between 5% & 10%	Top 10%	Between 10% & 25%	Top 25%	Between 25% & 50%	Top 50%	Bottom 50%

2001	14.23%	28.20%	27.50%	23.68%	14.89%	21.41%	11.58%	18.08%	8.91%	15.85%	4.09%
2002	13.03%	28.49%	27.25%	22.95%	13.87%	20.51%	10.47%	16.99%	7.67%	14.66%	3.21%
2003	11.90%	24.64%	24.31%	20.74%	12.22%	18.49%	9.54%	15.38%	7.12%	13.35%	2.95%
2004	12.10%	23.09%	23.49%	20.67%	12.28%	18.60%	9.26%	15.53%	7.01%	13.51%	2.97%
2005	12.45%	22.52%	23.13%	20.78%	12.37%	18.84%	9.27%	15.86%	6.93%	13.84%	2.98%
2006	12.60%	21.98%	22.79%	20.68%	12.60%	18.86%	9.36%	15.95%	7.01%	13.98%	3.01%
2007	12.68%	21.46%	22.45%	20.53%	12.66%	18.79%	9.43%	15.98%	7.01%	14.03%	2.99%
2008	12.24%	22.70%	23.27%	20.70%	12.44%	18.71%	9.29%	15.68%	6.75%	13.65%	2.59%
Source: IRS

I'm sorry, but the actual facts and statistics completely make your statement false.

jmog;923495 wrote:

Average Tax Rate, 1980-2008 (Percent of AGI paid in income taxes)
Year	Total	Top 0.1%	Top 1%	Top 5%	Between 5% & 10%	Top 10%	Between 10% & 25%	Top 25%	Between 25% & 50%	Top 50%	Bottom 50%

2001	14.23%	28.20%	27.50%	23.68%	14.89%	21.41%	11.58%	18.08%	8.91%	15.85%	4.09%
2002	13.03%	28.49%	27.25%	22.95%	13.87%	20.51%	10.47%	16.99%	7.67%	14.66%	3.21%
2003	11.90%	24.64%	24.31%	20.74%	12.22%	18.49%	9.54%	15.38%	7.12%	13.35%	2.95%
2004	12.10%	23.09%	23.49%	20.67%	12.28%	18.60%	9.26%	15.53%	7.01%	13.51%	2.97%
2005	12.45%	22.52%	23.13%	20.78%	12.37%	18.84%	9.27%	15.86%	6.93%	13.84%	2.98%
2006	12.60%	21.98%	22.79%	20.68%	12.60%	18.86%	9.36%	15.95%	7.01%	13.98%	3.01%
2007	12.68%	21.46%	22.45%	20.53%	12.66%	18.79%	9.43%	15.98%	7.01%	14.03%	2.99%
2008	12.24%	22.70%	23.27%	20.70%	12.44%	18.71%	9.29%	15.68%	6.75%	13.65%	2.59%
Source: IRS

I'm sorry, but the actual facts and statistics completely make your statement false.

Source it with a link. And then we will discuss...if you have the nads to do so. Remember, we are talking about ALL income taxes as a percentage of gross income....that includes capital gains. I can guarantee you...100%, .....the capital gains are NOT included in your little chart here.

Again...source it..and then we will discuss.

Manhattan Buckeye;923417 wrote:You aren't being rude.

I'll repeat an earlier post:

"I understand the argument, I just think it is BS. I liken it to someone from NYC arguing they are taxed more because they choose to live in a city where rents are higher. The percentage being taxed is still the same."

I'm not sure we need to change the definition of regressive.

Well that is fine but you don't seem to understand what the definition of what a regressive tax is...

From the IRS: Regressive Tax: A tax that takes a larger percentage of income from low-income groups than from high-income groups.

As they explain it in their "understanding taxes" series:

"A regressive tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level, pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay. Though true regressive taxes are not used as income taxes, they are used as taxes on tobacco, alcohol, gasoline, jewelry, perfume, and travel.

User fees often are considered regressive because they take a larger percentage of income from low-income groups than from high-income groups. These include fees for licenses, parking, admission to museums and parks, and tolls for roads, bridges, and tunnels."

The name of the game is "share of income." In most instances, flat rate taxes like sales taxes take a greater share of a lower income earner's income than a higher income earner's income...thereby making it a regressive tax. A flat rate of tax is not what makes a "flat tax." A flat tax would be a tax that takes the same share of income from each income earner.

So in another possible world wherein the Ohio sales tax took 10% of each income earners income...then it would be a "Flat tax." The flat rate doesn't make it flat because it, in most cases, will generate greater shares of income from lower income earners than higher income earners who will have more income to spend on investment goods (which we consider non-consumption goods).

As Gut points out, if we characterized everything as consumption so that there was a consumption tax levied on these types of economic activity so that the tax collected the same percentage of income from all income earners...then you could say it's flat. So if whatever you decided to spend your money on there was always levied some kind of tax, then it'd be a flat consumption tax.

Now, with income taxes, a flat rate of tax on income as it is earned could be a true flat tax if all income levels paid the same rate. The payroll taxes could be considered a true flat tax if there was no cap above which no taxes are paid making all income earners pay the same percentage of income. But, because there is a cap above which taxes are paid, lower income earners pay a larger share of their income in payroll taxes...thereby making them regressive taxes. But again, Consumption taxes, in most causes, like the state sales taxes, despite "flat rates" are regressive because lower income earners spend more on consumption therefore allowing the states to collect a greater share of income from lower income earners.

your definition of what makes a tax regressive is wrong. Any tax, regardless of how it is designed that gathers a greater percentage of income from lower income earners is regressive.

gut;923398 wrote:Yes, that pretty much describes anyone who actually understands economics and taxation every time you attempt to discuss the subject.

The system is not inherently regressive - capital gains are a flat tax. The distribution of income matters. The small business owner with $1M in ordinary income and little capital gains pays a high effective rate. That PROVES the system is not inherently regressive and proves you very wrong, again.

If you want to be technical, regressive taxes are defined by LOWER marginal rates on additional income, and that is never true. A person with no ordinary income and $1k in capital gains pays the same 15% as they would on $1M. It's designed not to favor the rich but to incentivize investment. Taxes on investment increase the cost of capital - you can see this proven with muni rates - and thus are a drag on growth.

FW: I don't like the Browns White Jerseys...because of X, Y, and Z.

Gut: You clearly don't understand the logic in wearing orange helmets.

FW: Umm, I am talking about the jerseys.

Gut: The brown stripes on the pants are beautiful. Every time you talk about it you destroy your own arguments.

FW: Facepalm...and SH.

Gut, I'll put my economic knowledge against yours anytime you want.

jmog;923487 wrote:You are the one that doesn't understand "simple math equations". Boatshoes' table completely debunks the "Buffet rule".

Um, no it does not. All the "Buffet Rule" proposal suggests is that people who earn more than $1 million per year would have an alternative minimum tax. the Table clearly indicates that there are at least some people who earn more than $1 million per year who pay a lower effective rate of income + payroll taxes than middle income earners and definitely HENRY's.

Thus, if you earned $1 million per year in all investment income and were to be taxed at 15% you would instead have to pay some higher rate that it is above say, 22% because there are 10% of people earning 50k who pay 22% of their income in income taxes + payroll taxes or something like that.

FWIW The AMT that Reagan signed in 1982 has been largely a disaster and I imagine any millionaire's AMT would be too...

gut;923398 wrote:Yes, that pretty much describes anyone who actually understands economics and taxation every time you attempt to discuss the subject.

The system is not inherently regressive - capital gains are a flat tax. The distribution of income matters. The small business owner with $1M in ordinary income and little capital gains pays a high effective rate. That PROVES the system is not inherently regressive and proves you very wrong, again.

If you want to be technical, regressive taxes are defined by LOWER marginal rates on additional income, and that is never true. A person with no ordinary income and $1k in capital gains pays the same 15% as they would on $1M. It's designed not to favor the rich but to incentivize investment. Taxes on investment increase the cost of capital - you can see this proven with muni rates - and thus are a drag on growth.

Where did I ever say the system is "inherently regressive". If you want to debate economics with me...quit deliberately misquoting me. That's 5 times in one thread.

BoatShoes;923851 wrote:Well that is fine but you don't seem to understand what the definition of what a regressive tax is...

From the IRS: Regressive Tax: A tax that takes a larger percentage of income from low-income groups than from high-income groups.

As they explain it in their "understanding taxes" series:

"A regressive tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level, pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay. Though true regressive taxes are not used as income taxes, they are used as taxes on tobacco, alcohol, gasoline, jewelry, perfume, and travel.

User fees often are considered regressive because they take a larger percentage of income from low-income groups than from high-income groups. These include fees for licenses, parking, admission to museums and parks, and tolls for roads, bridges, and tunnels."

The name of the game is "share of income." In most instances, flat rate taxes like sales taxes take a greater share of a lower income earner's income than a higher income earner's income...thereby making it a regressive tax. A flat rate of tax is not what makes a "flat tax." A flat tax would be a tax that takes the same share of income from each income earner.

So in another possible world wherein the Ohio sales tax took 10% of each income earners income...then it would be a "Flat tax." The flat rate doesn't make it flat because it, in most cases, will generate greater shares of income from lower income earners than higher income earners who will have more income to spend on investment goods (which we consider non-consumption goods).

As Gut points out, if we characterized everything as consumption so that there was a consumption tax levied on these types of economic activity so that the tax collected the same percentage of income from all income earners...then you could say it's flat. So if whatever you decided to spend your money on there was always levied some kind of tax, then it'd be a flat consumption tax.

Now, with income taxes, a flat rate of tax on income as it is earned could be a true flat tax if all income levels paid the same rate. The payroll taxes could be considered a true flat tax if there was no cap above which no taxes are paid making all income earners pay the same percentage of income. But, because there is a cap above which taxes are paid, lower income earners pay a larger share of their income in payroll taxes...thereby making them regressive taxes. But again, Consumption taxes, in most causes, like the state sales taxes, despite "flat rates" are regressive because lower income earners spend more on consumption therefore allowing the states to collect a greater share of income from lower income earners.

your definition of what makes a tax regressive is wrong. Any tax, regardless of how it is designed that gathers a greater percentage of income from lower income earners is regressive.

Boat....I actually agree with MB here in the pure sense of the word or phrase "regressive tax". Sure, one can argue utils for necessities, but that should not be equated with regressive taxation. Taxation around the globe is inherently progressive....because the utils necessary to meet basic needs must be met.

What you are implying....if every citizen paid a flat income tax of 10%, it would be a regressive tax. I disagree.

Footwedge;923848 wrote:Source it with a link. And then we will discuss...if you have the nads to do so. Remember, we are talking about ALL income taxes as a percentage of gross income....that includes capital gains. I can guarantee you...100%, .....the capital gains are NOT included in your little chart here.

Again...source it..and then we will discuss.

The top set are from the IRS. I've posted the link almost a dozen times, including this thread. The bottom set is courtesy of our boy Paul Krugman. The IRS numbers are income taxes only, not payroll taxes. The bottom set include payroll taxes.

Can you think of a reason why IRS numbers wouldn't include capital gains?

Footwedge;923848 wrote:Source it with a link. And then we will discuss...if you have the nads to do so. Remember, we are talking about ALL income taxes as a percentage of gross income....that includes capital gains. I can guarantee you...100%, .....the capital gains are NOT included in your little chart here.

Again...source it..and then we will discuss.

Read a little closer...it had the IRS as a source. I took it directly from the IRS. So yes, it was actual filed taxes vs actual income. I am on my phone right now but will get you a link later.

Footwedge;923887 wrote:Where did I ever say the system is "inherently regressive". If you want to debate economics with me...quit deliberately misquoting me. That's 5 times in one thread.

So in addition to economics, you struggle with the English language as well? Do you deny saying that the income tax is regressive? You are wrong, as stated in Boatshoes post from the IRS: "Though true regressive taxes are not used as income taxes, they are used as taxes on tobacco, alcohol, gasoline, jewelry, perfume, and travel. "

You are welcome to put your economics "knowledge" up against me any time, but first you'll have to demonstrate you have any.