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trymahjong

Income gap between the Rich and Poor

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The problem is not that there exist wealthy people, that their wealth creates relative wealth inequality, or anything of that sort. If anything, there aren't enough wealthy people. There should be more. As many as possible!

The article completely fails to address a cause or a solution. Allow me to preface my next statement by saying that I'm pro-immigration. ...but. The problem is immigrants. More specifically, the problem is that the United States only enforces its immigration laws effectively against those immigrants that are the most highly skilled. All that we are left with are those who forgo any kind of immigration policy, that are unskilled, or that are willing to subsist by working as unskilled labor in the kinds of jobs that are not effectively tracked by law enforcement or taxing entities.

And that's a shame. Many of the immigrants of a century ago became wildly successful entrepreneurs in the realms of manufacturing, retail, information, science, and technology (and they got that way by competing openly with the 'native' firms for the same domestic turf). Immigration here was not a leisurely task, but it was not actively discouraged either. And consequently, the United States effected a brain drain upon the world. Such a thing would be impossible today, and we're missing out on the best human talent that the world has to offer. By embracing cultural isolationism, we have abdicated an economic hegemony and superpower status. Stagnation awaits us.

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The problem is not that there exist wealthy people, that their wealth creates relative wealth inequality, or anything of that sort. If anything, there aren't enough wealthy people. There should be more. As many as possible!

The article completely fails to address a cause or a solution. Allow me to preface my next statement by saying that I'm pro-immigration. ...but. The problem is immigrants. More specifically, the problem is that the United States only enforces its immigration laws effectively against those immigrants that are the most highly skilled. All that we are left with are those who forgo any kind of immigration policy, that are unskilled, or that are willing to subsist by working as unskilled labor in the kinds of jobs that are not effectively tracked by law enforcement or taxing entities.

And that's a shame. Many of the immigrants of a century ago became wildly successful entrepreneurs in the realms of manufacturing, retail, information, science, and technology (and they got that way by competing openly with the 'native' firms for the same domestic turf). Immigration here was not a leisurely task, but it was not actively discouraged either. And consequently, the United States effected a brain drain upon the world. Such a thing would be impossible today, and we're missing out on the best human talent that the world has to offer. By embracing cultural isolationism, we have abdicated an economic hegemony and superpower status. Stagnation awaits us.

I would add that the erosion of regulations and tax laws that favor the wealthy also have contributed heavily (if not more) to the problem.

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The problem is not that there exist wealthy people, that their wealth creates relative wealth inequality, or anything of that sort. If anything, there aren't enough wealthy people. There should be more. As many as possible!

You may be getting your wish.

A study from Capgemini and Bank of America Merrill Lynch showed that the World’s population of High Net Worth Individuals (HNWI) with $1 million or more in investable assets (read, extra cash) jumped 8.3% over the last year to a total of 10.9 million people. That number is up from the 2007 tally of 10.1 million tycoons.

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You may be getting your wish.

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Eh, not really. That is a world total. The US number is apparently down slightly. Further, they specualte that the weak dollar has made those who save foreign currencies appear wealthier in US Dollar terms due to the exchange rate.

Besides, is 10.9 million millionaires out of a world population of 6.9 Billion really all that impressive? That is 0.15% of the population.

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I recently read that about 4.7% of American households qualify as millionaires. In addition, there are about 3 million High Net Worth Individuals, or people with net investable assets (excluding assets like cars and real estate) in excess of $1m. These are just from memory so I may be off. So HNWIs make up perhaps 1% of US population, and of course account for a much higher percentage of income and asset value.

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I recently read that about 4.7% of American households qualify as millionaires. In addition, there are about 3 million High Net Worth Individuals, or people with net investable assets (excluding assets like cars and real estate) in excess of $1m. These are just from memory so I may be off. So HNWIs make up perhaps 1% of US population, and of course account for a much higher percentage of income and asset value.

Here's a link to the source.

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Here's a link to the source.

Thanks for the link.

Here's something I found interesting (which is consistent with other data I've seen...): The Capgemini data shows the number of adults in each of 10 metro areas. I compared this to the total population in these MSA's and I found that, of the cities for which the adult population is given, Houston's adult population is the lowest as a proportion of its total:

Houston: 76.4%

Washington: 79.5%

Los Angeles: 79.9%

San Jose: 79.9%

Chicago: 80.6%

Philadelphia: 81.2%

New York: 82.0%

San Francisco: 82.1%

Detroit: 82.6%

Boston: 83.3%

I've heard that Houston's population's age is one of the lowest of big cities, but I thought this was an interesting perspective on the same. Just thought I'd share.

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Here is an interesting analysis on the topic:

http://www.the-american-interest.com/article-bd.cfm?piece=906

One notion I find interesting is that Americans are more concerned about equality of opportunity than unequal economic outcomes. To me, this sounds noble on the surface, but it ignores the fact that opportunity generally favors the wealthy, and that the tax cuts for the wealthy coincide with the gradual dismantling of the social safety net that affects a far greater number of Americans who's needs are more desperate. The income gap between rich and poor will only grow larger if the political right continues it's success at convincing the lower and middle class to vote in favor of the wealthy and against their own economic interests, and of course the conservative supreme court and the Citizens United ruling that favor the organized wealthy elite only seem to encourage this gap.

Scandalous as it may sound to the ears of Republicans schooled in Reaganomics, one critical measure of the health of a modern democracy is its ability to legitimately extract taxes from its own elites. The most dysfunctional societies in the developing world are those whose elites succeed either in legally exempting themselves from taxation, or in taking advantage of lax enforcement to evade them, thereby shifting the burden of public expenditure onto the rest of society.
Edited by barracuda
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Scandalous as it may sound to the ears of Republicans schooled in Reaganomics, one critical measure of the health of a modern democracy is its ability to legitimately extract taxes from its own elites. The most dysfunctional societies in the developing world are those whose elites succeed either in legally exempting themselves from taxation, or in taking advantage of lax enforcement to evade them, thereby shifting the burden of public expenditure onto the rest of society.

The CBO did a study on the subject a couple years back. Effective income tax rates are still very progressive. We're a long ways off from a day where the elites are able to exempt themselves from taxation. In fact, for the bottom two quintiles of American households, who get more money refunded to them than they pay in, the income tax system has become a social welfare program disguised as taxation. It didn't used to be like this. Bush I started it, Clinton continued it, and Bush II expanded it.

Edited by TheNiche
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Here is an interesting analysis on the topic:

http://www.the-american-interest.com/article-bd.cfm?piece=906

One notion I find interesting is that Americans are more concerned about equality of opportunity than unequal economic outcomes. To me, this sounds noble on the surface, but it ignores the fact that opportunity generally favors the wealthy, and that the tax cuts for the wealthy coincide with the gradual dismantling of the social safety net that affects a far greater number of Americans who's needs are more desperate. The income gap between rich and poor will only grow larger if the political right continues it's success at convincing the lower and middle class to vote in favor of the wealthy and against their own economic interests, and of course the conservative supreme court and the Citizens United ruling that favor the organized wealthy elite only seem to encourage this gap.

From the same article that had the income concentration charts, here is the top marginal tax rate.

tax-rates.png

It should be noted of course that marginal tax rates aren't all that meaningful as an indicator of relative tax burden. It would be preferable to factor in the impact of sales, payroll and real estate taxes.

Economists have tried to get a handle on 'equality of opportunity' by measuring inter-generational social class mobility, ie how likely children are to move to a higher social class or income bracket than their parents. I've read that America doesn't score particularly highly, although I don't have links at hand to back that up.

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Everyone can't be "rich", at least not until humans enslave some other species to do all of our menial work. But then we would just end up like planet of the apes. Social class mobility isn't a good measure either, it will just highlight places where there is a lot of room to move up. Every generation can't move up, and once you're middle to high class, staying there is not only acceptable but sometimes challenging.

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The CBO did a study on the subject a couple years back. Effective income tax rates are still very progressive. We're a long ways off from a day where the elites are able to exempt themselves from taxation. In fact, for the bottom two quintiles of American households, who get more money refunded to them than they pay in, the income tax system has become a social welfare program disguised as taxation. It didn't used to be like this. Bush I started it, Clinton continued it, and Bush II expanded it.

This is absolutely true at both ends of the tax brackets. The tax code has been turned into a social program for the poor/lower middle class AND the upper class, something it was never intended to be. What needs to occur is that ALL exemptions, deductions and other breaks should be eliminated, and the number of brackets reduced. I propose two brackets, one at around 15%, the other at 25%. The first $12,000 or so is untaxed. Everything else is taxed. ALL income is taxed at the same rate, including earnings, dividends, interest, and capital gains. Tax breaks and exemptions force investment into places it might not otherwise occur. Let it go where the market wants it to go. Those lucky enough to have trust funds should not get a bigger break than those who must work.

Most people who oppose raising the top tax bracket are under the erroneous assumption that the wealthy are already paying a high percentage. Must do not, because of the tax breaks. If everyone paid the same rate, all could pay a lower percentage.

Note that I would also eliminate the mortgage deduction. It encourages the purchase of more house than one needs. Obviously, it should be phased out over time, perhaps 10% per year, but it needs to go, along with EIC, capital gains, and childcare, and medical deductions. Only then will a semblance of fairness return to the tax code.

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Note that I would also eliminate the mortgage deduction. It encourages the purchase of more house than one needs. Obviously, it should be phased out over time, perhaps 10% per year, but it needs to go, along with EIC, capital gains, and childcare, and medical deductions. Only then will a semblance of fairness return to the tax code.

So, what's fair about giving a deduction for mortgage interest to someone who owns a house and rents it out as a business, while denying that same deduction to me, simply because I rent from myself? And, you can't really take away the deduction for the business, as taxes ought ot be based on net income. Otherwise, it's just a gross receipts tax.

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The tax code has been turned into a social program for the poor/lower middle class AND the upper class, something it was never intended to be.

I'm not sure of the relevance of the original intent of the tax code. The fact is that taxes aren't just for revenue collection. They have also always been used as means of implementing desired social policies. Every exemption has a constituency, which is why cries for simplification of the tax code are never successful.

From yesterday's Calculated Risk, the composition of USS government receipts over time. Note that income and corporate taxes are both near record lows.

USReceipts.jpg

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So, what's fair about giving a deduction for mortgage interest to someone who owns a house and rents it out as a business, while denying that same deduction to me, simply because I rent from myself? And, you can't really take away the deduction for the business, as taxes ought ot be based on net income. Otherwise, it's just a gross receipts tax.

Well, for one, you are comparing businesses to private individuals. The landlord gets no breaks on his personal home, just like you. Secondly, the landlord pays taxes on the income from that home. The individual does not.

To Subdude, I never said this would pass. In fact, given the naked prostitution engaged in by politicians, I suspect that it never will. Congress has made it clear that they do not do things for the good of the country, only for themselves and their wealthy benefactors.

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This is absolutely true at both ends of the tax brackets. The tax code has been turned into a social program for the poor/lower middle class AND the upper class, something it was never intended to be. What needs to occur is that ALL exemptions, deductions and other breaks should be eliminated, and the number of brackets reduced. I propose two brackets, one at around 15%, the other at 25%. The first $12,000 or so is untaxed. Everything else is taxed. ALL income is taxed at the same rate, including earnings, dividends, interest, and capital gains. Tax breaks and exemptions force investment into places it might not otherwise occur. Let it go where the market wants it to go. Those lucky enough to have trust funds should not get a bigger break than those who must work.

Most people who oppose raising the top tax bracket are under the erroneous assumption that the wealthy are already paying a high percentage. Must do not, because of the tax breaks. If everyone paid the same rate, all could pay a lower percentage.

Note that I would also eliminate the mortgage deduction. It encourages the purchase of more house than one needs. Obviously, it should be phased out over time, perhaps 10% per year, but it needs to go, along with EIC, capital gains, and childcare, and medical deductions. Only then will a semblance of fairness return to the tax code.

I agree with this proposal...Everyone should pay taxes in this country....The liberal mentality of just taxing the "rich" and giving it to the poor does nothing to encourage the poor to get out of the situation that they are currently in. The poor in this country are not invested in improving their situation, because they are not really poor...They just don't have all of the things that everyone else does. However, the vast majority of the poor in this country, have a house or an apartment, a television, air conditioning, cable, cell phones, and at least one car. That is not suffering, even if you do not have free health care. The tax code should not be a way to enforce social policy. Equally as important in making sure everyone pays taxes is putting an end to all the loopholes. The loopholes are part of the problem in Washington...it encourages corruption, and a glance at the tax codes shows a person how corrupt Washington really is.

I also think that there is a very distinct difference between what Democrats considers "rich" and what rich actually is. Much of the extreme hostility in this country coming from the haves and the have nots is that the tax code is the hardest on those who are working extremely hard and doing well for themselves, but see so much of their paycheck going away in taxes to people who are not even trying to work. A family of 4 with both parents working earning $250,000 are not "rich" They are doing well and living comfortably, but they are not rich. They can not vacation wherever they want, they do not have jets, they are not driving ferraris...they are normal folks who are justifiably upset that such a huge chunk of their income goes to pay for benefits of people who many perceive, and many actually are... just to dang lazy to work.

The tax code is a massive problem, but its not isolated to the right or the left side of the political spectrum....the Left are as guilty as the right in corruptly providing tax favors to their constituents.

Furthermore, the left has been very successful at manipulating the simple minded folk that the evil republicans are getting rich on the backs of the working people. The left is the MOST guilty of playing class warfare. Many in the left ensure that they are re-elected by intentionally holding their own constituents down by offering them just enough to keep them from going out to work hard enough to get more. This problem crosses party lines, with in my opinion, the left being far more guilty than the right of intentionally playing class warfare games.

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I agree with this proposal...Everyone should pay taxes in this country....The liberal mentality of just taxing the "rich" and giving it to the poor does nothing to encourage the poor to get out of the situation that they are currently in. The poor in this country are not invested in improving their situation, because they are not really poor...They just don't have all of the things that everyone else does. However, the vast majority of the poor in this country, have a house or an apartment, a television, air conditioning, cable, cell phones, and at least one car. That is not suffering, even if you do not have free health care. The tax code should not be a way to enforce social policy. Equally as important in making sure everyone pays taxes is putting an end to all the loopholes. The loopholes are part of the problem in Washington...it encourages corruption, and a glance at the tax codes shows a person how corrupt Washington really is.

I also think that there is a very distinct difference between what Democrats considers "rich" and what rich actually is. Much of the extreme hostility in this country coming from the haves and the have nots is that the tax code is the hardest on those who are working extremely hard and doing well for themselves, but see so much of their paycheck going away in taxes to people who are not even trying to work. A family of 4 with both parents working earning $250,000 are not "rich" They are doing well and living comfortably, but they are not rich. They can not vacation wherever they want, they do not have jets, they are not driving ferraris...they are normal folks who are justifiably upset that such a huge chunk of their income goes to pay for benefits of people who many perceive, and many actually are... just to dang lazy to work.

The tax code is a massive problem, but its not isolated to the right or the left side of the political spectrum....the Left are as guilty as the right in corruptly providing tax favors to their constituents.

Furthermore, the left has been very successful at manipulating the simple minded folk that the evil republicans are getting rich on the backs of the working people. The left is the MOST guilty of playing class warfare. Many in the left ensure that they are re-elected by intentionally holding their own constituents down by offering them just enough to keep them from going out to work hard enough to get more. This problem crosses party lines, with in my opinion, the left being far more guilty than the right of intentionally playing class warfare games.

Ignorance is bliss.

I was going to type out a long-winded response but have decided instead to use the ignore feature for the first time ever.

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Ignorance is bliss.

I was going to type out a long-winded response but have decided instead to use the ignore feature for the first time ever.

Enjoy your ignorance...you earned it.

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I agree with this proposal...Everyone should pay taxes in this country....The liberal mentality of just taxing the "rich" and giving it to the poor does nothing to encourage the poor to get out of the situation that they are currently in. The poor in this country are not invested in improving their situation, because they are not really poor...They just don't have all of the things that everyone else does. However, the vast majority of the poor in this country, have a house or an apartment, a television, air conditioning, cable, cell phones, and at least one car. That is not suffering, even if you do not have free health care. The tax code should not be a way to enforce social policy. Equally as important in making sure everyone pays taxes is putting an end to all the loopholes. The loopholes are part of the problem in Washington...it encourages corruption, and a glance at the tax codes shows a person how corrupt Washington really is.

I also think that there is a very distinct difference between what Democrats considers "rich" and what rich actually is. Much of the extreme hostility in this country coming from the haves and the have nots is that the tax code is the hardest on those who are working extremely hard and doing well for themselves, but see so much of their paycheck going away in taxes to people who are not even trying to work. A family of 4 with both parents working earning $250,000 are not "rich" They are doing well and living comfortably, but they are not rich. They can not vacation wherever they want, they do not have jets, they are not driving ferraris...they are normal folks who are justifiably upset that such a huge chunk of their income goes to pay for benefits of people who many perceive, and many actually are... just to dang lazy to work.

The tax code is a massive problem, but its not isolated to the right or the left side of the political spectrum....the Left are as guilty as the right in corruptly providing tax favors to their constituents.

Furthermore, the left has been very successful at manipulating the simple minded folk that the evil republicans are getting rich on the backs of the working people. The left is the MOST guilty of playing class warfare. Many in the left ensure that they are re-elected by intentionally holding their own constituents down by offering them just enough to keep them from going out to work hard enough to get more. This problem crosses party lines, with in my opinion, the left being far more guilty than the right of intentionally playing class warfare games.

So, you're saying the poor have it made, and yet you feel sorry for those struggling to get by on $250,000 because they can't afford a private jet? I guess the family of four living on less than $22,350 just doesn't understand how lucky they are. Perhaps it's really just a fun adventure to live on $15/day or less per person.

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So, you're saying the poor have it made, and yet you feel sorry for those struggling to get by on $250,000 because they can't afford a private jet? I guess the family of four living on less than $22,350 just doesn't understand how lucky they are. Perhaps it's really just a fun adventure to live on $15/day or less per person.

Likewise some people have worked very hard to get to an upper level while some choose not to work at all. Is it fair they should have to support someone with little or no ambition?

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Ignorance is bliss.

I was going to type out a long-winded response but have decided instead to use the ignore feature for the first time ever.

I'm curious to read your "long-winded" response... would you post it please?

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So, you're saying the poor have it made, and yet you feel sorry for those struggling to get by on $250,000 because they can't afford a private jet? I guess the family of four living on less than $22,350 just doesn't understand how lucky they are. Perhaps it's really just a fun adventure to live on $15/day or less per person.

I never said they had it made, and I never said I did not feel sorry for those who are actually trying to improve their lives...but they are not suffering...they just do not have many of the luxuries in life. If that is cruel, fine...I am cruel, but that is how I feel. If you want it, then you need to earn it, not have it given to you. People who have everything given to them have zero incentive to achieve for themselves.

I also do not feel sorry for those making $250,000 either, but I do feel they are bearing the brunt of the animosity in this country...$250,000 is not rich....most people in the $250,000 range, have had to work very hard to get there....many carry both undergraduate and graduate school loans totaling more than $150,000....They have worked hard to get where they are, they have incurred substantial debt, and they earned the right to start buying those things that they have wanted for the 16 years they were in school and they could not afford. They may be rich one day if they spend their money wisely, but most are just upper middle class people working hard, and expecting to receive the fruit of their labor.

A tax policy that punishes those who have worked hard enough to earn a good living in favor of giving it to those who are not working at all is not a good policy. A simple flat tax on all income, with no loopholes or exceptions, solves many of the problems and eliminates even the appearance of unfairness...

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I never said they had it made, and I never said I did not feel sorry for those who are actually trying to improve their lives...but they are not suffering...they just do not have many of the luxuries in life. If that is cruel, fine...I am cruel, but that is how I feel. If you want it, then you need to earn it, not have it given to you. People who have everything given to them have zero incentive to achieve for themselves.

I also do not feel sorry for those making $250,000 either, but I do feel they are bearing the brunt of the animosity in this country...$250,000 is not rich....most people in the $250,000 range, have had to work very hard to get there....many carry both undergraduate and graduate school loans totaling more than $150,000....They have worked hard to get where they are, they have incurred substantial debt, and they earned the right to start buying those things that they have wanted for the 16 years they were in school and they could not afford. They may be rich one day if they spend their money wisely, but most are just upper middle class people working hard, and expecting to receive the fruit of their labor.

A tax policy that punishes those who have worked hard enough to earn a good living in favor of giving it to those who are not working at all is not a good policy. A simple flat tax on all income, with no loopholes or exceptions, solves many of the problems and eliminates even the appearance of unfairness...

I do agree that the tax code is a problem, and would love to see it simplified and bereft of loopholes and exemptions. A simpler system like what Red proposed might allow a massive reduction in the IRS and personal and corporate accountants, eliminating a lot of overhead and inefficiency spent managing our inefficient loophole-ridden tax system.

But I don't know about animosity towards those earning $250,000…the angst seems to be aimed at vastly increasing income gap of the top 1%. For example, the average S&P 500 CEO is expected to make $11.4M in 2011, about 279 times more than the national average wage index, which has actually been falling in recent years. I don't suggest that the tax system should be used to punish people for their income or success, but it's common sense that those making $11.4M can afford to pay a higher marginal tax rate than those making $40K. The vast majority of American economists, regardless of their political leanings, support a progressive tax system where the wealthy pay a greater share at the higher income brackets and where essential fixed cost of living expenses are accounted for at the lower income brackets.

At the $250,000 level, a married couple is only paying at the 33% rate for the last $37,700 of their income, so the extra 5% tax on the final 15% of their income should not be a major burden. I don't see how it's unfair if everyone pays the same rate for equivalent income, but the exemptions and loopholes do open the door for unfairness and I think they should be eliminated.

Edited by barracuda
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I do agree that the tax code is a problem, and would love to see it simplified and bereft of loopholes and exemptions. A simpler system like what Red proposed might allow a massive reduction in the IRS and personal and corporate accountants, eliminating a lot of overhead and inefficiency spent managing our inefficient loophole-ridden tax system.

But I don't know about animosity towards those earning $250,000…the angst seems to be aimed at vastly increasing income gap of the top 1%. For example, the average S&P 500 CEO is expected to make $11.4M in 2011, about 279 times more than the national average wage index, which has actually been falling in recent years. I don't suggest that the tax system should be used to punish people for their income or success, but it's common sense that those making $11.4M can afford to pay a higher marginal tax rate than those making $40K. The vast majority of American economists, regardless of their political leanings, support a progressive tax system where the wealthy pay a greater share at the higher income brackets and where essential fixed cost of living expenses are accounted for at the lower income brackets.

At the $250,000 level, a married couple is only paying at the 33% rate for the last $37,700 of their income, so the extra 5% tax on the final 15% of their income should not be a major burden. I don't see how it's unfair if everyone pays the same rate for equivalent income, but the exemptions and loopholes do open the door for unfairness and I think they should be eliminated.

The animosity is coming from the White House. Obama constantly claims that the wealthiest Americans, those earning 250,000 or more are not paying their fair share...He is constantly engaging in class warfare...promising to take from the wealthy and make them pay their fair share....Even though only 51% of the people in this country are still actually paying taxes!

While I agree that CEO salary has gotten way out of hand, I think that is an issue that is entirely controllable by the people and the companies...At some point in time the people who invest in public companies paying those outrageous salaries are going to vote the board of directors out of those spots, and hire a CEO for a reasonable salary. The outrageous salaries are a reflection of the fact that most stocks are traded by 401K's or large trading firms, and that the people who own the stock never vote, or allow someone else to do it for them....

We do not need the government to come in and tell us what we are allowed to achieve...that stifles ambition. CEO pay can be corrected by Shareholders...just like the tax issue can be corrected by politicians who are unwilling to compromise on the issues they ran for election upon.

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The animosity is coming from the White House. Obama constantly claims that the wealthiest Americans, those earning 250,000 or more are not paying their fair share...He is constantly engaging in class warfare...promising to take from the wealthy and make them pay their fair share....Even though only 51% of the people in this country are still actually paying taxes!

While I agree that CEO salary has gotten way out of hand, I think that is an issue that is entirely controllable by the people and the companies...At some point in time the people who invest in public companies paying those outrageous salaries are going to vote the board of directors out of those spots, and hire a CEO for a reasonable salary. The outrageous salaries are a reflection of the fact that most stocks are traded by 401K's or large trading firms, and that the people who own the stock never vote, or allow someone else to do it for them....

We do not need the government to come in and tell us what we are allowed to achieve...that stifles ambition. CEO pay can be corrected by Shareholders...just like the tax issue can be corrected by politicians who are unwilling to compromise on the issues they ran for election upon.

Not sure if you are overly optimistic or naive. When is this fiscal epiphany on the part of board members going to take place? If it is a matter of stockholders not always voting that is not going to change.

Edited by west20th

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Not sure if you are overly optimistic or naive. When is this fiscal epiphany on the part of board members going to take place? If it is a matter of stockholders not always voting that is not going to change.

I am an extreme optimist. I never voted, read any bios, or did anything other than buy/sell stocks until things became so mismanaged...now even though I am among the super-majority of shareholders who do so, I vote in all shareholder elections.

I hope (though I still doubt) the epiphany will come when the people finally say enough is enough and start paying attention to everything in their finances. The tighter money becomes, the more people start to pay attention to where and how it is being spent.

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The animosity is coming from the White House. Obama constantly claims that the wealthiest Americans, those earning 250,000 or more are not paying their fair share...He is constantly engaging in class warfare...promising to take from the wealthy and make them pay their fair share....Even though only 51% of the people in this country are still actually paying taxes!

The President is merely calling for the expiration of the Bush tax cuts, so the 33% bracket would go to 36%, and the 35% bracket would go to 39.6%. These are still low by historical standards, and unlikely to seriously affect high income folks. After all, we're only talking about the marginal income tax rate. A married couple making $250,000 would pay an additional $1,131 in taxes based on the current tax brackets if the Bush tax cuts were eliminated. And that's not even taking into account exemptions that reduce taxable income. Only those couples making over $379,150 would pay the 39.6% marginal rate.

Eliminating these tax cuts would raise about $700B over the next decade and help balance the budget - something Bush didn't take into account when he passed the tax cuts without appropriate spending cuts.

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Well, it appears that perhaps 6 people listened to me.

Gang of 6 propose $4 Trillion Deficit Plan

The tax reform outline would set up three income tax rates — a bottom rate of 8-12 percent; a middle rate of 14-22 percent; and a top rate of 23-29 percent — to replace the current system that has a bottom rate of 10 percent, with five additional rates topping out at 35 percent.

It would reduce but not eliminate tax breaks on mortgage interest, higher-cost health plans, charitable deductions, retirement savings like individual retirement accounts and tax-free savings accounts known as 401(k)s, and tax credits for families with children.

Like the president's deficit commission, the Senate group's plan calls for a fundamental overhaul of the tax code that would slash special tax preferences and deductions as a way to lower tax rates — along the lines of the 1986 tax reform measure signed into law by President Ronald Reagan. It would skim some of the revenue to reduce the deficit and, advocates say, would spur the economy and fill federal coffers further because of growth.

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That's the best plan I've seen. It's a GREAT start and certainly beats the circus taking place in the House today. Seriously, those fools spent the whole day voting on a symbolic bill that will never pass and doesn't have a single itemized cut listed?

Governing isn't about being an uncompromising bully. I am so tired of our two party system.

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The President is merely calling for the expiration of the Bush tax cuts, so the 33% bracket would go to 36%, and the 35% bracket would go to 39.6%. These are still low by historical standards, and unlikely to seriously affect high income folks. After all, we're only talking about the marginal income tax rate. A married couple making $250,000 would pay an additional $1,131 in taxes based on the current tax brackets if the Bush tax cuts were eliminated. And that's not even taking into account exemptions that reduce taxable income. Only those couples making over $379,150 would pay the 39.6% marginal rate.

Eliminating these tax cuts would raise about $700B over the next decade and help balance the budget - something Bush didn't take into account when he passed the tax cuts without appropriate spending cuts.

Raising taxes is not the answer to a government out of control on spending.

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Well, it appears that perhaps 6 people listened to me.

Gang of 6 propose $4 Trillion Deficit Plan

The article is very vague, but I feel that ANY tax code changes need to be met with a balanced budget amendment as well.

We can not raise the debt ceiling, increase taxes, even marginally, and not put an absolute end to deficit spending and expect an outcome any different than what we currently have.

Democrats have proven they will outspend any revenue increases...they see tax increases as more revenue to spend. I can only hope that the house is not foolish enough to compromise without forcing the end to deficit spending.

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The article is very vague, but I feel that ANY tax code changes need to be met with a balanced budget amendment as well.

We can not raise the debt ceiling, increase taxes, even marginally, and not put an absolute end to deficit spending and expect an outcome any different than what we currently have.

Democrats have proven they will outspend any revenue increases...they see tax increases as more revenue to spend. I can only hope that the house is not foolish enough to compromise without forcing the end to deficit spending.

Amen to that although I should point out Republicans have done their share of wasting our hard earned tax money also.

Edited by Fringe

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Seriously, those fools spent the whole day voting on a symbolic bill that will never pass....

Same could possibly be said for the Senate's gang of 6 plan since it's already established the House probably won't go for it.

If the HoR and Senate are controlled by different parties, then this could be said about 90% of the bills out there.

Not that I hope this new plan doesn't pass.. I do.

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Amen to that although I should point out Republicans have done their share of wasting our hard earned tax money also.

I do not limit wasteful spending to either party. Both are outrageous, but the democrats far outspend the republicans.

All these "cuts" mean nothing if they are only to take place in the future....they are just passing the buck to the next set of senators to clean up the mess they made.

As a voting fiscal conservative, I will be upset if they agree to any plan that does not cap spending at non-deficit levels...otherwise I say let the defaults begin. We will not default on bonds....or Social Security, just pet programs that are "unfunded" any way.

I am fine with that. We can just stop funding programs that are not essential until 2012 when we can finally take out the trash and start fixing this mess.

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I do not limit wasteful spending to either party. Both are outrageous, but the democrats far outspend the republicans.

All these "cuts" mean nothing if they are only to take place in the future....they are just passing the buck to the next set of senators to clean up the mess they made.

As a voting fiscal conservative, I will be upset if they agree to any plan that does not cap spending at non-deficit levels...otherwise I say let the defaults begin. We will not default on bonds....or Social Security, just pet programs that are "unfunded" any way.

I am fine with that. We can just stop funding programs that are not essential until 2012 when we can finally take out the trash and start fixing this mess.

Really?

Democrats '81 - '10: years in power ->09: percent increase in Fed debt->25.5

GOP since '81 - '10: years in power->20: percent increase in Fed debt->163.4

http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms

Edited by west20th
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Really?

Democrats '81 - '10: years in power ->09: percent increase in Fed debt->25.5

GOP since '81 - '10: years in power->20: percent increase in Fed debt->163.4

http://en.wikipedia....sidential_terms

As a corollary to this, I'll also point out that the average job growth rate under Democratic presidents has been about 3% per term of office, while that for Republican presidents has been less than 1% per term.

And, average GDP growth rates have been about 2.6% under Democratic presidents starting with Carter and about 2.5% under Republican presidents during this time. Not a significant difference - but the point here is that it's not leaning the other way.

I'm not a supporter of the Democratic party or a partisan supporter of any of its members, but I don't think Democratic presidential administrations should be vilified as they are in our society. Democratic Houses, which have dominated for the past 30+ years, on the other hand...

I will give credit to both Clinton and the 105th/106th Houses (Republican) for curbing spending during the first Clinton term.

Edited by Simbha

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Really?

Democrats '81 - '10: years in power ->09: percent increase in Fed debt->25.5

GOP since '81 - '10: years in power->20: percent increase in Fed debt->163.4

http://en.wikipedia....sidential_terms

I dont see it that way. Look at this chart, which shows spending by year, president, and who controlled Congress.

Best years were under Democrat President Clinton and a Republican Congress.

Worst year - All Democrat under Obama.

Republicans clearly lost their way from 01-05, but if the Republicans were lost at that time, then the Democrats have not even figured out they are lost yet...

Bush was not fiscally conservative by any means, but Democrats controlled Spending under Bush for the last half of his presidency...how they can blame the spending they controlled on him is beyond me.

The train fell off the tracks in 2007 under a Democrat controlled Congress...Obama has done nothing but make it worse.

post-5690-0-45719400-1311257559_thumb.jp

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I didn't have much interest in bumping the thread, but couldn't resist posting this article. It's an unscientific but fascinating little insider piece on just how stacked the odds are against the overhwelming majority. It's long been my belief that the Rep/Dem 'philosphoical' differences (regulation, taxation, for example) ceased to be real differences a long, long time ago. The current debt ceiling negotiations charade is exactly that.

http://ampedstatus.org/who-rules-america-an-investment-manager-breaks-down-the-economic-top-1-says-0-1-controls-political-and-legislative-process/

The takeaway is pretty straighforward-- policy and law is written (and will continue to be) for the benefit of the top 0.1%. Because this extreme concentration of wealth is so dangerous, government has no intention of ever allowing the top to fail. Regardless of economic impact to the bottom 99.9%.

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Raising taxes is not the answer to a government out of control on spending.

Grover Norquist would be proud. After all, it's his tax pledge that's holding the Republican party hostage, and he did say his goal is to shrink government “down to the size where we can drown it in the bathtub.” Because government bad, freedom (or more realistically, plutocracy) good.

Edited by barracuda

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Grover Norquist would be proud. After all, it's his tax pledge that's holding the Republican party hostage, and he did say his goal is to shrink government “down to the size where we can drown it in the bathtub.” Because government bad, freedom (or more realistically, plutocracy) good.

I would gladly sign that pledge.

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I would gladly sign that pledge.

Maybe this will help...

What aspects of the federal government do you believe are unnecessary?

Edited by VicMan

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Maybe this will help...

What aspects of the federal government do you believe are unnecessary?

Department of Education,

Any of the many SWAT teams that aren't in the FBI or US Marshall's

TSA

most of Homeland Security

Most of EPA

USDA Bunny Inspectors

etc.

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Department of Education,

Any of the many SWAT teams that aren't in the FBI or US Marshall's

TSA

most of Homeland Security

Most of EPA

USDA Bunny Inspectors

etc.

Congratulations! You just saved the government $140 Billion, less than 10% of the deficit! You should be on the super committee.

Of course, you just kicked 9 million kids out of college who rely on the $17 Billion in Pell Grants administered by the Dept of Ed. No matter, once the minimum wage job creator, Rick Perry, becomes president, they'll be taken care of.

You also just ditched the Coast Guard, so I hope you have made plans to protect our coasts. Immigration? Customs? We should rename the ports and borders 'Welcome Centers', because since you just eliminated ICE, we have no Border Patrol, and no one to inspect cargo for terrorist bombs. We also have no legal immigrants, since you took away INS.

FEMA? Gone. Stock up on bottled water and ice. You're gonna need it.

Secret Service? Nada. Let the president hire his own bodyguards.

Good job. What else you gonna get rid of?

Edited by RedScare
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Maybe this will help...

What aspects of the federal government do you believe are unnecessary?

It's not just about being necessary or unnecessary, it's about efficiency. It's about wasteful spending. It's about being held accountable. The Federal Government should be able to protect our nation, most everything else should be handled by the States.

The best thing the Tax Reform Act advocates is a flat tax, which I also support.

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It's not just about being necessary or unnecessary, it's about efficiency. It's about wasteful spending. It's about being held accountable. The Federal Government should be able to protect our nation, most everything else should be handled by the States.

The best thing the Tax Reform Act advocates is a flat tax, which I also support.

IMHO I would define "wasteful spending" as unnecessary spending, which is why I used the words "necessary" and "unnecessary".

"The Federal Government should be able to protect our nation, most everything else should be handled by the States." - But protect how and from what?

"The best thing the Tax Reform Act advocates is a flat tax, which I also support." - Are you meaning a flat federal income tax? If there is nothing else to the tax code than a flat federal income tax, I don't think a flat tax would be feasible today, especially with such a large disparity in incomes existing today.

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