Where is the US economy headed?

I have answered the question many times, cyclops. The admission that tax rates affect the economy and that a point of rates can be reached wherein tax revenues actually suffer would be a good and beneficial point of agreement among politicians. Then they could start to make more informed and prudent decisions on tax policy. As it is, the argument is nothing more than a class envy argument.

It would also be beneficial if all politicians would acknowledge that rich people pay most of the taxes. That would be much better than politicians criticizing and blaming rich people. I am frankly sick of that mantra.

okie wrote:

I have answered the question many times, cyclops. The admission that tax rates affect the economy and that a point of rates can be reached wherein tax revenues actually suffer would be a good and beneficial point of agreement among politicians. Then they could start to make more informed and prudent decisions on tax policy. As it is, the argument is nothing more than a class envy argument.

Class envy my ass. Ridiculous.

Okay, so then what do you propose they do? You have never given a specific, ever, as to how it would be helpful to discuss taxation according to your false theory. What you are essentially saying is that it would help if people would agree that sometimes, taxes can be too high. But the truth is we are light years away from that point of taxation currently. Nobody has ever argued any differently; it has nothing to do, however, with the situation in which we currently find ourselves.

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It would also be beneficial if all politicians would acknowledge that rich people pay most of the taxes. That would be much better than politicians criticizing and blaming rich people. I am frankly sick of that mantra.

Further ridiculousness. The rich pay most of the taxes because they have the vast, vast, vast majority of the money - and this amount is ever-increasing. They deserve to pay most of the taxes, and what more, it doesn't affect the quality of their life - their health, housing, and food security - one damn bit.

I have still challenged you to show that the Laffer theory is used for anything other than trying to justify tax cuts.

Cycloptichorn

You have also forgotten the important fact that there are several types of taxes in America, and only Income taxes are even remotely progressive.

Property taxes, sales tax, gasoline taxes, stamps, even Social Security and Medicaid - these are all highly regressive taxes in that they are the same no matter what level of income you make. Therefore they effect the poor to a far greater degree than the rich.

When you factor in the regressive taxes we all have to deal with, the Rich - as a percentage of income - pay no more a share of taxes than any other sector of society and in most cases far less.

Cycloptichorn wrote:

okie wrote:

I have answered the question many times, cyclops. The admission that tax rates affect the economy and that a point of rates can be reached wherein tax revenues actually suffer would be a good and beneficial point of agreement among politicians. Then they could start to make more informed and prudent decisions on tax policy. As it is, the argument is nothing more than a class envy argument.

Class envy my ass. Ridiculous.

It is promoted and proclaimed by politicians and the press all the time, cyclops. Either you are deaf, or dumb, or both. You are doing it in your own style right here. I don't mean to offend you, but that is what I am reading here. People need to take a look at reality and thank their lucky stars that some people have some money, otherwise the country would look more like some third world country.

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Okay, so then what do you propose they do? You have never given a specific, ever, as to how it would be helpful to discuss taxation according to your false theory. What you are essentially saying is that it would help if people would agree that sometimes, taxes can be too high. But the truth is we are light years away from that point of taxation currently. Nobody has ever argued any differently; it has nothing to do, however, with the situation in which we currently find ourselves.

It has everything to do with our situation all the time.

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It would also be beneficial if all politicians would acknowledge that rich people pay most of the taxes. That would be much better than politicians criticizing and blaming rich people. I am frankly sick of that mantra.

Further ridiculousness. The rich pay most of the taxes because they have the vast, vast, vast majority of the money - and this amount is ever-increasing. They deserve to pay most of the taxes, and what more, it doesn't affect the quality of their life - their health, housing, and food security - one damn bit.

I have still challenged you to show that the Laffer theory is used for anything other than trying to justify tax cuts.

Cycloptichorn

but it is used primarily as just a factor that exists, thats all.

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You have also forgotten the important fact that there are several types of taxes in America, and only Income taxes are even remotely progressive.

Property taxes, sales tax, gasoline taxes, stamps, even Social Security and Medicaid - these are all highly regressive taxes in that they are the same no matter what level of income you make. Therefore they effect the poor to a far greater degree than the rich.

When you factor in the regressive taxes we all have to deal with, the Rich - as a percentage of income - pay no more a share of taxes than any other sector of society and in most cases far less.

First of all, none of the above taxes are totally regressive. They have some mild forms of progressivity built into them by virtue of the fact that rich people own more property, buy more merchandise and more expensive merchandise, drive bigger cars and usually drive more, use the postal service more aggressively, and earn higher wages subject to SS and Medicare.

Furthermore, Social Security is supposed to be a retirement program, not a tax. When it was implemented, it was designed to be a supplemental program, but due to the poor planning and preparation of many people that ignore this fact, or simply do not know this fact, their retirement income can be almost solely Social Security.

Get your facts straight, cyclops.

You telling me to get my facts straight? Ludicrous. Your arguments don't rely upon any facts.

Cycloptichorn wrote:

You telling me to get my facts straight? Ludicrous. Your arguments don't rely upon any facts.

So how do you respond to these facts that I presented, cyclops?

"First of all, none of the above taxes are totally regressive. They have some mild forms of progressivity built into them by virtue of the fact that rich people own more property, buy more merchandise and more expensive merchandise, drive bigger cars and usually drive more, use the postal service more aggressively, and earn higher wages subject to SS and Medicare. Furthermore, Social Security is supposed to be a retirement program, not a tax. When it was implemented, it was designed to be a supplemental program, but due to the poor planning and preparation of many people that ignore this fact, or simply do not know this fact, their retirement income can be almost solely Social Security."

Cyclops, do not have a heart attack. Is a tax on yachts progressive? Yes or no.

A luxury tax (yachts? whatever) isn't either progressive or regressive - it taxes rich and poor equally on the item. It may have the features of a progressive tax in that poor people do not buy yachts, but there are likewise plenty of rich people who also do not buy yachts.

Cyc is completely correct when he says that the sales tax is regressive, in that poor people typically spend a larger proportion of their income on consumption than rich people do, and the sales tax is a consumption tax. The social security tax is also very regressive, in that the cap on taxable income means that poor people actually pay a higher rate than rich people.

Property taxes aren't quite as regressive, because you have to actually own some property to pay 'em; however, because they're not a tax on income or expenses, they can be a huge pain in that your property taxes can increase faster than your ability to pay them. Lots of property is sold because the owners can't afford the tax on it!

The income tax is progressive, well and good. It's also an area of great dishonesty when it comes to characterizing the tax's effect on rich and poor people. Rich people pay -most- of the income tax - not just more, but the lion's share. Poor people don't pay income tax; really poor people actually receive money from the government instead of paying. Thus, any cut of the income tax is going to "disproportionately" benefit rich people, precisely because they're the ones paying the tax; a tax cut on a tax you don't pay gives you no benefits at all. It'd be like a cut in the taxes on yachts; I don't buy any yachts, so it does me no good, right? Of course, raising the income tax disproportionately affects rich people while doing nothing to poor people too, but you don't hear about that side of it - or rather, that observation is either met with "so what?" or "screw the rich, they can pay it."

One points out that as income increases, one's ability to structure that income in order to avoid taxation also increases in tandem. If you're poor, you aren't hiding your income in corporations or sending it to offshore banks or buying extra homes or anything; you spend it to get what you need to live plus what luxuries you can afford. But if you're rich, you can afford to reduce your tax burden (legally, through any number of loopholes.) This is mostly caused by our use of the tax code to encourage certain behavior and discourage other behavior, and definitely has a distorting effect on several other sectors of the economy, most notably the housing sector; having mortgage interest as a deductible expense is a huge force affecting housing prices.

I gotta say, though... stamps aren't a tax, they're a use fee. You don't send mail, you don't get taxed.

If only rich people buy yachts, then how can such a tax on yachts be defined as regressive? You need to look up the definitions of progressive and regressive. I submit there are gray areas of interpretation, but since poor people do not buy yachts, then there is no way that a sales tax on yachts can take a higher percentage of their income than for rich people that buy them.

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A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. The term "progressive tax" can be applied to any type of tax. It is frequently applied in reference to income taxes, where people with more disposable income pay a higher percentage of that income in tax than do those with less income.

Pick your definition. Here is another for regressive tax:

"A tax that takes a larger percentage of the income of low-income people than of high-income people."

And for the progressive tax:

"A tax that takes a larger percentage of the income of high-income people than of low-income people."

I repeat, since poor people do not buy yachts, on average a tax on yachts will be progressive because it takes a higher percentage of income from high income people than low income people. One could liken this to a "luxury tax," which I would call progressive.

I disagree. All sales taxes are not absolutely regressive. States that exempt food have injected a degree of progressivity into the tax. Not to the extent of income tax, but I have never claimed that.

You are defining a progressive tax as a tax with a series of thresholds on the income of the individual, and I do not think that strict definition is held by most people.

A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. The term "progressive tax" can be applied to any type of tax. It is frequently applied in reference to income taxes, where people with more disposable income pay a higher percentage of that income in tax than do those with less income.

If you exempt the living necessities, such as food from sales tax, you have made the tax progressive.

I understand your argument, but I think you are defining the term too narrowly. I have heard time and again many people define the progressive aspects of something like a sales tax by exempting certain items.

Also, a luxury tax can be described as a progressive form of tax.

Progressivity can be applied not only to income but by the relative categories of items purchased via a sales tax. You seek to apply the term only to income, and I think that is too narrow of a definition.