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a commentary on taxes

sugarb said:
Is it true that Reagan raised taxes more than any other peacetime President?
What did that poster mean? I thought that Reagan lowered taxes, but did he only lower taxes for the extremely wealthy? And was that offset by an increase in Soc. Security taxes for everyone else? *Is* it a myth that Reagan lowered taxes?
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Reagan lowered income tax rates in 1981, and then raised social security taxes in 1982(83?).

This resulted in a slight tax increase for people at the low end of the income spectrum, and a large tax decrease for people at the high end, with a moderate decrease for the people in the middle. More people experienced an increase than a cut, but the increase was very, very, small, while the cuts were significant for those who got them.

Overall, the government collected less money. Spending was not decreased, so the deficit rose.

There was also a major revision of tax codes in 1986. I don't know how those changes affected the net payments by individuals in different classes.

Clinton raised taxes significantly on wealthy people and, pushed on by a Republican Congress, held the line on spending.
 
Meadmaker said:
Reagan lowered income tax rates in 1981, and then raised social security taxes in 1982(83?).

This resulted in a slight tax increase for people at the low end of the income spectrum, and a large tax decrease for people at the high end, with a moderate decrease for the people in the middle. More people experienced an increase than a cut, but the increase was very, very, small, while the cuts were significant for those who got them.

Overall, the government collected less money. Spending was not decreased, so the deficit rose.

There was also a major revision of tax codes in 1986. I don't know how those changes affected the net payments by individuals in different classes.

Clinton raised taxes significantly on wealthy people and, pushed on by a Republican Congress, held the line on spending.
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What is your source for this?
 
leftysergeant said:
And when that reaches a certain point and we are no longer able to buy the product, it hardly matters how much of it the manufacturer shirks. Further, it taxes the gross output of a factory, rather than the net profit that the factory makes. Exactly the opposite of what you want during an ecconomic down-turn.

I am also opposed to ad valorem sales and real estate taxes. This taxes a larger percentage of a working man's income, since he may already be spending most of what he earns just to obtain neccessities, leaving him little opportunity to amas capital to go into a small business of his own. Thus mega-chains and big box stores crowd out the local entrepreneurs who would actually provide more jobs for employees and local merchants. The wealthier investor, by contrast, will pay out a smaller percentage of his income for neccessities and sales taxes, and have a lot more money on hand to buy job opportunities out from under the small-time operators.
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So let me get this straight...

The wealthy benefit more from this country's infastructure, so they should pay more taxes. The wealthy also make more money, therefore, they have more savings and can afford more luxuries like bigger houses. Bigger houses pay more in real estate taxes. Yet, real estate taxes are unfair to those not as wealthy?

I've gone cross eyed.

You also do realize that taxes are income based, don't you? For example, I could make 10 million dollars this year in income and pay my 30% in taxes. Next year, I could retire and pay no taxes for 5 years. Then, an investment opportunity comes up where I could "buy job opportunities out from under the small-time operators". Am I horrible wealthy person, or just a working class person making ends meet?
 
Francesca R said:
Income tax, capital gains tax, corporation tax and dividend tax are. Other taxes are wealth-based, expenditure-based, or sometimes per-head.
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There really are so many kinds of taxes that if I were to try to figure out an exact dollar amount we pay each year, I think it would be nigh impossible. Income (state and federal), property (home and vehicles), there is some kind of tax on all of our utility bills, cell phone bills, sales taxes on everything (even food in one state we sometimes shop in), tobacco (yeah, I need to quit...getting there though)...I am not really even sure anymore *what* all has a tax added to it.

The vehicle tax annoys me most of all, for some reason. When we buy a vehicle, we pay a tax on it, and then have to keep paying taxes on it every year (though it's taxed on value so it gets lower), and then when we sell it, the person who buys it pays a sales tax and then starts paying taxes yearly on it...it just seems like a scam. Property taxes upset me in the same way...however, I don't mind paying them because they go to things that benefit me directly.

I think that the most unfair tax is what we call a "city tax"...when I worked in the city limits many years ago, one percent of my income went to the city I worked in, on top of the yearly "fee" we had to pay if we parked even on an employers lot three days a week. They call it a fee, I consider it a tax.

I wonder sometimes, if we were able to figure an exact amount that we pay in various taxes each year, how high that figure would be. I tend to think astonishing. But...some of the taxes, such as sales taxes, are things we can limit ourselves to some extent.
 
Well the OECD collates numbers for how much of national income a country's government takes as tax. For the US it is approx 28%. It is not all that useful since it excludes social insurance payments (I think) which are much larger in some countries than others, and anyway bump the percentage up. And of course it is an average for the whole country, and national income is not the same as household income from employment.

It is broadly true that the US is at the low end of the tax-welfare scale compared to other rich nations.

ETA--Also those numbers are a couple of years old. They're likely all going north.
 
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Francesca R said:
Well the OECD collates numbers for how much of national income a country's government takes as tax. For the US it is approx 28%. It is not all that useful since it excludes social insurance payments (I think) which are much larger in some countries than others, and anyway bump the percentage up. And of course it is an average for the whole country, and national income is not the same as household income from employment.

It is broadly true that the US is at the low end of the tax-welfare scale compared to other rich nations.

ETA--Also those numbers are a couple of years old. They're likely all going north.
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(just as an aside, I don't think we're really as "rich" as we like to let on) :)

I think I may be starting to change my mind about taxes. The problem, as I see it, is that when we *do* pay higher taxes, it does't function to give us more services/protection as citizens, and that is probably why many people will always oppose higher taxes.

Perhaps the tax structure isn't the problem so much as how the government manages those monies.

Anyway, I appreciate everyone's input and have found everyone's comments very interesting. I used to admire Reagan very much (and still do in some ways), but it would appear to me that the Clinton administration's, had we stayed the course fiscally that they were on, strategies may have eventually put us in a much better position both as a nation and financially as individuals than we are currently in. I'm not even thinking in terms of partisanship. I'm just trying to get a better grip on taxation overall. I really do appreciate your input, Francesca. You seem to be very informed on this issue, so thank you.
 
Meadmaker said:
Memory

ETA: But here's a link that I got to by typing Reagan+"social security tax increase" into google.

http://www.politifact.com/truth-o-m...mccain/one-major-tax-cut-then-lots-of-raises/
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What I'm really interested in is how any of this is determined, with so many variables in the mix. For example, high unemployment tends to stifle wage increases, resulting in lower tax revenues. Low unemployment has the opposite effect. Then there's things like interest rates on mortgages (higher interest rates means higher tax deductions and lower income tax revenue), home prices (see interest rate deductions), the ratio of retired workers to those still in the workforce, inflation, etc etc.

It seems that any statistician worth his salt could make the stats say anything they want them to say with so many variables involved.
 
sugarb said:
There really are so many kinds of taxes that if I were to try to figure out an exact dollar amount we pay each year, I think it would be nigh impossible.
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That's exactly the way the politicians want it sugarb!
 
sugarb said:
I used to admire Reagan very much (and still do in some ways), but it would appear to me that the Clinton administration's, had we stayed the course fiscally that they were on, strategies may have eventually put us in a much better position both as a nation and financially as individuals than we are currently in.
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I don't see how the tech bubble which benefited Clinton could have lasted any longer than it did.

At any rate, remember when a $150 billion budget deficit was considered huge? Seems quaint these days.
 
WildCat said:
I don't see how the tech bubble which benefited Clinton could have lasted any longer than it did.

At any rate, remember when a $150 billion budget deficit was considered huge? Seems quaint these days.
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LOL, Wildcat, that's funny because it is true. Strange world when $150 billion seems "quaint".

The tech bubble probably did benefit Clinton. Well, yeah, it did. Lot of wealth in that bubble moving around, but I think the same could be said of any bubble. However, question...did the housing bubble benefit anyone? I know the bust hurt Bush, but did anyone benefit from the expansion?
 
sugarb said:
(just as an aside, I don't think we're really as "rich" as we like to let on)
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It's economics jargon closely linked to income per capita, measured by the buying power of that income. If you don't think you're rich it would be easy to show you some poor nations and have you reassess that one.

Perhaps the tax structure isn't the problem so much as how the government manages those monies.
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This is why many people favour small government. Some want it to do next to nothing. Others are happy for it to provide public goods/services and others want it to run a sizeable welfare system too.

it would appear to me that the Clinton administration's, had we stayed the course fiscally that they were on, strategies may have eventually put us in a much better position both as a nation and financially as individuals than we are currently in
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This was more influenced by fast revenue growth than by tax/spend policies
 
Francesca R said:
It's economics jargon closely linked to income per capita, measured by the buying power of that income. If you don't think you're rich it would be easy to show you some poor nations and have you reassess that one.

This is why many people favour small government. Some want it to do next to nothing. Others are happy for it to provide public goods/services and others want it to run a sizeable welfare system too.

This was more influenced by fast revenue growth than by tax/spend policies
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Oh, of course I am aware of the many poor nations that, in comparison to, we are disgustingly wealthy. I think there is some kind of problem, though, when we get ourselves into a position in which the middle class is in many cases just one medical emergency from poverty. I don't know economics jargon, admittedly. How does the ability (not the choice but the ability) to save money factor in? Or does it at all?
 
wastepanel said:
So let me get this straight...

The wealthy benefit more from this country's infastructure, so they should pay more taxes.
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Yes, because they benefit more from a wider variety of government services than does the average working stiff. Further, they would have no source of wealth but for an educated labor pool and natural resources which the government stewards for the common good. I can think of nothing more equitable.

Bigger houses pay more in real estate taxes. Yet, real estate taxes are unfair to those not as wealthy?
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I see no justification for ad valorem property taxes. The only ad valorem taxes should be income taxes and tariffs.

Nuisance taxes (tobacco, alcohol, firearms, other items which are likely to occassion expense to public health and safety agencies) should be per unit The tax on a bottle of cheap whiskey out of Tukwila, WA should be the same as that on the best Kentucky can produce.
I've gone cross eyed.

Then, an investment opportunity comes up where I could "buy job opportunities out from under the small-time operators". Am I horrible wealthy person, or just a working class person making ends meet?
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If you off-shore the jobs that a local business was creating, you are harming the community. Working people have no interest in your gaining any tax advantage for acting like that. Working people, not capitalists are the source of wealth.

Capital cannot create wealth. Labor creates wealth. Capital is merely a means of managing it.

When capital manages the wealth creation onto a barge and off to some third-world country where workers accept less than living wages, it is time to tax the butts of the capitalists who profit from it.
 
leftysergeant said:
Capital cannot create wealth. Labor creates wealth. Capital is merely a means of managing it.
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Garbage. Tell that so somebody in a remote village in Equatorial Guinea who has no capital other than their undernourished body. Then tell them your protectionist nonsense too. What rot that post was.
 
Francesca R said:
Garbage. Tell that so somebody in a remote village in Equatorial Guinea who has no capital other than their undernourished body.
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Capital is just a way of paying for the labor of those starving villagers. THe land and their labor are a source of wealth. It does no good to throw capital at the village unless they are able to do somethiong with it.

Then tell them your protectionist nonsense too. What rot that post was.
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So, I am supposed to be glad that my job gets moved to Guinea when Nike builds a shoe factory on what used to be a peanut field.

Got it.
 
leftysergeant said:
Capital is just a way of paying for the labor of those starving villagers. THe land and their labor are a source of wealth. It does no good to throw capital at the village unless they are able to do somethiong with it.
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You know that capital is not just another word for money, yes?
 
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