There is a very nice posting by CM about wealth and taxes. Striking: the right-wing complain that 47% of Americans pay no Federal tax. But the real problem is that the bottom 50% measured by wealth only hold 2.5% of the wealth, so no matter how hard you tax them you'll get very little.
Of course, when talking about the right wing in the US, that's a long way further to right than the more right thinking right wings in the UK/Australia (Canada/New Zealand/etc) (right)?
It is indeed an interesting post. But I'd be interested to see another one for Australia (although I suppose that could just be me). There's about to be a great big tax review released in parliament in Australia in a few days.
To see one for the UK would also be interesting.
Interesting and ripe for plucking selective quotes out.
My initial thoughts were "representation without taxation", which in the US is presumably true for Federal Govt.
In the UK this is different as everybody ends up paying "federal" tax courtesy of VAT.
Funding for more lcoal government is distributed widely in both countries (sales tax - US and national funding for local government in the UK)
"pay no Federal tax"
federal income tax is what you're after there. Most everybody with a job pays federal payroll tax.
Major, major, fail here.
There are no wealth taxes in the US (unless you want to talk about property tax which is at county level, not Federal). The Federal tax system is about "income" not "wealth".
Wealth is a stock, income is a flow. They are two very different things.
The bottom 50% of households get about 25% of income.
[I appreciate the distinction but hadn't expected the wealth / income divisions to be so different. Are you sure about your figure? But anyway: if the lower 50% has that fraction of income but such a small fraction of wealth, then either wealth is soooo much greater than income, or the wealthy are banking income but the poor aren't. Either way that suggests the original point: that there is little to squeeze out of the poor. Or do yuo disagree with that aspect, too? -W]
Go down to Table 1, under "Number of Returns, Shares of AGI and Total Income Tax, AGI Floor on Percentiles in Current and Constant Dollars, and Average Tax Rates"
Scroll down, and you can see the share of income and income tax paid by various percentiles of earners
The system is progressive by design, but not nearly as much as people think, because income is also distributed rather unevenly, not just wealth.
Add in payroll tax, which is a flat tax up to the cap, and the whole thing is less progressive.
Add in state and local taxes, and these guys claim the overall tax burden is barely progressive.
The whole thing is ridiculous. Income and income tax have always been unevenly distributed; I don't know why this is suddenly news. Anyway, the Earned Income Tax Credit (due to which, many poor households don't owe net tax, and may even receive money on net) was expanded under Reagan, who we all know was a rabid leftist.
> wealth is soooo much greater than income
"In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%.
... drawn from the careful work of economist Edward N. Wolff at New York University (2009)."
PS -- this is in one sense possibly good news. With 1% of the people controlling 34% of the wealth, that means they control a similar proportion of the energy use and CO2 production.
It reminds me of a joke long ago in the era of black and white television, making fun of the first mentions of concern about overpopulation:
"Gentlemen, somewhere in the world, a woman has a baby every 0.3 seconds. Our task is to find her and stop her."
Don't get hung up on looking at individual live meat people.
Remember, in the US, corporations are people too. The only difference is they're immortal, and can't be executed or locked up no matter what they do.
I think it's stated in the Delaware Corporate Code somewhere: "we are as gods, and meatpeople might as well get used to it."
What's amusing is federal taxes in the US are at the lowest level ever, certainly much lower than under the right wing "hero" Ronald Reagan. And 95% of the people in the US, thanks to Obama, got a tax cut. Yet you can still find moronic right-wingers goose-stepping around calling Obama the "new Stalin" or whatever. They're also most prone to scream about "climategate" and post to McI's blog! ;-)
In the beginning the income tax was on only the very rich. Since Nixon/Ford, every US president has tried to lop off more taxpayers form the lower rungs. The lowest 20 - 30% get income rather than pay in via the earned income credit.
"What's amusing is federal taxes in the US are at the lowest level ever, certainly much lower than under the right wing "hero" Ronald Reagan." The current tax rates were enacted under Bush so it may be amusing, but it shouldn't be surprising.
As to fairness, there's no point in discussing it unless all agree on the diminishing utility of a dollar. The next five dollars are worth a lot less to the millionaire that to the hobo. Also, as carrot eater says, there are lots of other taxes led by the most regressive tax of all the payroll tax which fund social security and medicare. Thank you FDR and LBJ.
I enjoy waiting til the last minute. The central Chicago post office is open til midnight on April 15. It's good to see so many others who share my sense of artful procrastination. Traffic is jammed, hurly burly.
President Obama has enacted no changes to tax rates and plans increases as the Bush tax cuts are allowed to expire. He has put in a number of new tax credits especially in the area of energy efficiency and a worker's credit from the stimulus.
US taxes are at the lowest rates in 60 years; even lower than the right-wing nutjob "hero" Ronald Reagan. The "Tea Party protests" are a laughing-stock of basically people who can't stand that a black guy is president. They sure weren't around when Bush was spending trillions on wars etc.
Oops, I've stumbled onto the Huffington Post. Much passion, few facts.
well maybe you should take your fact-devoid ramblings to an appropriate "Tea Party" blog; or head back to "ClimateAudit"....
"What's amusing is federal taxes in the US are at the lowest level ever"
If the yardstick is tax revenue as % of GDP, that's mainly because of the recession. With the current tax structure, the tax rates don't have to change for the tax revenue as a % of GDP to cycle with the business cycle.
But even in terms of rates, it's low - we've got the Bush cuts combined with the tax cut from the stimulus package.
The brain-dead tea partiers don't seem to realise that the biggest piece of the stimulus was a tax cut.
According to Wikipedia the bottom 50% earn about 20% of the income.
Wealth numbers can be somewhat misleading.
Social Security benefits, for example, are usually not included, but an inflation adjusted income for the years from 65 (or whenever you retire) till you die is worth a lot in today's dollars, especially with interest rates as low as they are today.
"[I appreciate the distinction but hadn't expected the wealth / income divisions to be so different. Are you sure about your figure?"
It's roughly right, yes.
Wealth and income figures are always wildly different. In every society.
"then either wealth is soooo much greater than income,"
It is. From the ONS:
"Wealth is considerably less evenly distributed than income, and life cycle effects mean that this will almost always be so. People build up assets during the course of their working lives and then draw them down during the years of retirement, with the residue passing to others at their death."
Total marketable wealth in the UK is around Â£5 trillion. Total GDP is about Â£1.4 trillion and income is some fraction of that (perhaps Â£1 trillion?).
There's little wealth to squeeze out of the poor, this is true. There's more income there though. That was my point though...not the desirability or not of taxing said incomes of the poor.
But there is a larger point here as well. If you want a large State (say, the UK's govt takes about 53% of GDP at present) then you've got to tax the poor. Because while the rich might have lots of income (the top 10% of households have total income of around Â£250 billion from memory) even if you tax all of it that's still not enough to pay for the Â£700 billion the Govt is spending.
finally, there was a big report recently on wealth distribution in the UK. The Hills Report. be careful though, it's pretty much garbage:
[Thanks Tim. Ah, I should have known better than to venture into economics. Just as the economists should know better than to venture into climate :-) -W]
Why on earth are we mixing up the UK and US? The US has a more uneven distribution of income; just look at the Gini coefficients.
In the US, the top 1% make 22% of the income, and the top 5% make 36%.
The low end of the range of incomes for the top 50% of filers is.. $32,000. The bottom 50% pays income tax at an average rate of 3% (those at the upper end at $32k pay a higher rate), and then payroll tax at an additional 6.2%+1.45%. What more do you want from them? Make exemptions and deductions not count for poor people?
for the US, the "47 percent" thing is debunked:
Your assumptions are inanely off-base. For the record, I am a registered Democrat and have never attended a Tea party event or visited their websites. Yes, I visit CA as do many others who also visit here. I have never commented there. I bet you have.
Paul, what comments of mine, of any import, are "off-base?" US taxes are at the lowest in decades. The psychotic racism/xenophobia of the "Tea Party" is well documented, as is their "genesis" right after Obama won the election (hint: they weren't around protesting the Bush/Cheney-era psychotic military spending, wars etc). That's about all I've said; pretty mainstream documented stuff.
Your anecdotes of paying taxes at the last minute are at best tedious. Perhaps you'd feel better actually commenting at CA though? I have enjoyed flaming there a bit I must admit; as well as other blogs (I consider flaming on blogs a sort of catharsis, i.e. people are deluded if they think they're going to actually change minds/opinions with facts or otherwise on a blog...)
US income tax rates are lower than in the past thanks to presidents Kennedy, Reagan and GWB. Most other US taxes - social security/medicare, capital gains, motor vehicle and gasoline, alcohol and tobacco e.g. - are at historic highs. I sympathize with your need of catharthis for your inner rage. Try reading Wallace Stevens.
And how odd that the "fiscal conservatives" are the ones that drive up the debt to ridiculous levels (introducting us to the idea of multiple-trillions of dollars of debt). It was Ronald Reagan, that hero of the right, who introduced us to the idea of national debt over a trillion dollars. Yet he's lauded as a great leader and somehow spending all that money is justified.
But I guess that's because their catharsis is war and new expensive stealth bombers etc. Right-wing dopes will screech about pennies of tax going to some mythical welfare queen (US) or asylum seeker (UK) but still happily spend billions on war toys.
"Just as the economists should know better than to venture into climate"
Which is why I only venture into the economics of what we should do about climate change.......
[Don't worry, it wasn't a dig at you. Had it been aimed at anyone in particular, it would have been the Freaks -W]
"The US has a more uneven distribution of income; just look at the Gini coefficients."
Umm, no, it doesn't actually. The market gini for the UK is around .50, .51. The market gini for the US is around .48, roughly the same as Sweden.
It's only when you take into account the effects of the tax and benefit systems that the US gini falls to (I think this is right) 0.40, the UK to 0.34 and Sweden to 0.28.
So it's entirely fair to say that the UK has a more unequal distribution of income than the US.....before all the things we do to change that distribution.
"Which is why I only venture into the economics of what we should do about climate change....."
Could you continue after the ellipsis? What is the economics of any or all of the various proposals for solving the problem?
Also, if only to improve overall thinking, what if the number one reason to eliminate and replace burning fossil fuels is economic survival? How would the solution then differ from those based on climate and/or CO2 suppression?