Progressive taxation

[Lafayette]

PROGRESSIVE TAXATION - NOT JUST A THEORY

For the moment, and until we change radically income taxation making it more progressive, nothing will change. The rich will continue to get richer, and the rest of us "the 90Percenters" can go to hell. America's tax-law provides the incentive to make as much as possible, and by any means possible.

The answer is in implementing progressive tax-rate. How do we get that? First, by wanting them - a volition that the US government has never ever demonstrated since the 1930s. Then by implementing tax-progressiveness.

What does that look like?

Here is the best explanation: Progressive Tax - Measuring Progressivity - from which we see this infographic demonstrating a typical progressive income tax (actually that of Germany):

Click here to expand the infographic - the black line above is the Marginal Tax Rate and the Red Line the Average Tax Rate.

Excerpt:

Marginal and effective tax rates

Main articles: Marginal tax rate and Effective tax rate
The rate of tax can be expressed in two different ways; the marginal rate expressed as the rate on each additional unit of income or expenditure (or last dollar spent) and the effective (average) rate expressed as the total tax paid divided by total income or expenditure. In most progressive tax systems, both rates will rise as the amount subject to taxation rises, though there may be ranges where the marginal rate will be constant. Usually, the average tax rate of a tax payer will be lower than the marginal tax rate. In a system with refundable tax credits, or income-tested welfare benefits, it is possible for marginal rates to fall as income rises, at lower levels of income.

Furthermore:

Progressive taxation has a direct effect on reducing income inequality. This is especially true if taxation is used to fund progressive government spending such as transfer payments and social safety nets. However, the effect may be muted if the higher rates cause increased tax evasion. When income inequality is low, aggregate demand will be relatively high, because more people who want ordinary consumer goods and services will be able to afford them, while the labor force will not be as relatively monopolized by the wealthy. High levels of income inequality can have negative effects on long-term economic growth, employment, and class conflict. Progressive taxation is often suggested as a way to mitigate the societal ills associated with higher income inequality.

MY POINT?

"Where there's a will there's a way." In America, there is no great desire for more equitable progressive taxation amongst the population. Besides, the Replicants would do all "that money could buy" in order to make sure it never happens ....

 

[Lutherf]

Everyone is equal in poverty.

 

[ttwtt78640]

Yep it is definitely unfair that Walmart pays the same income tax rate as a taco truck business. Once that is addressed then we can start taxing a welder at more than 21%.

 

[Mircea]

High levels of income inequality can have negative effects on long-term economic growth, employment, and class conflict.

Prove it.

 

[Lafayette]

Prove it.

Don't have to.

Take a course in EC101 ...

 

[ludin]

Don't have to.

Take a course in EC101 ...

Income inequality is only an issue when there is a closed money system. If we were still on the gold standard then income inequality would be a major issue.
however we do not have a closed money system.


The federal reserve is able to add money into the economy as needed based on the need of the economy.
So yes please take a EC101 or financing or even banking 101 course.

 

[Lafayette]

Income inequality is only an issue when there is a closed money system. If we were still on the gold standard then income inequality would be a major issue.
however we do not have a closed money system.


The federal reserve is able to add money into the economy as needed based on the need of the economy.
So yes please take a EC101 or financing or even banking 101 course.

Malarkey. The Federal Reserve simply defines the cost-of- money. I.e., interest rates. It does not "hand out" money to banks for distribution to the public or private enterprises.

Income Inequality is about the FAIR DISTRIBUTION OF NET INCOME IN A NATION.

Not all people should obtain the same level of income, which socialism tried to introduce but failed miserably. Nonetheless distribution needs to be progressively fair. One of the criteria economists employ to measure Income Fairness in an economy is called the Gini Index. This is what the Index looks like nowadays for a broad range of countries (note that the higher the index-value the less equitable is the distribution of Income or Wealth):

The above shows that:
*The US has one of the highest levels of Income Inequality amongst developed nations and
*Thos countries with higher taxation have lower gini-coefficients meaning more Income Distribution Fairness.

 

[ludin]

Malarkey. The Federal Reserve simply defines the cost-of- money. I.e., interest rates. It does not "hand out" money to banks for distribution to the public or private enterprises.

Umm yes it does. That is the entire roll of the federal reserve. What finance class did you ever take?
You just lost what little credibility that you just had.

Income Inequality is about the FAIR DISTRIBUTION OF NET INCOME IN A NATION.

Again income inequality only matters in a closed money system like Greece or any other nation that does not
Have control over their currency.

Not all people should obtain the same level of income, which socialism tried to introduce but failed miserably. Nonetheless distribution needs to be progressively fair. One of the criteria economists employ to measure Income Fairness in an economy is called the Gini Index. This is what the Index looks like nowadays for a broad range of countries (note that the higher the index-value the less equitable is the distribution of Income or Wealth):

The only entites that benefits from high progressive taxes is government and rich people.
Rich people can afford to pay or move to better places. It also protects them from new comers as it makes it harder to earn more income.

The other entity it benefits is government that turns around and wastes it.
No one else benefits as they will never see it.

You want to lower income in equality then create the market place to put workers in demand.
Give businesses more money to spend and grow.

 

[Lafayette]

UPDATE ON HOW ECONOMICS WORKS - PART 1

Again income inequality only matters in a closed money system like Greece or any other nation that does not Have control over their currency.

No, it doesn't. Do you understand that this is an Economics Forum?

Did you read the economic research on Income Disparity that I have shown? Which demonstrate that a tiny percentage of the American population (0.1% of families) are enjoying as much (20%) of the Income generated by the economy due as the rest of us? Nope!

Meanwhile, close to 14% of the American population are life-incarcerated below the Poverty Threshold. That's 15 million families - men, women and children!

The only entites that benefits from high progressive taxes is government and rich people. Rich people can afford to pay or move to better places. It also protects them from new comers as it makes it harder to earn more income.

Correct, the first sentence. Nope, in the second and third. The only instance in more than four decades since the end of WW2 - from 2010 to 2014 - the US economy was NOT CREATING JOBS even though overall unemployment was receding.

 

[Lafayette]

HOW ECONOMICS WORKS - Part 2

So, jerks started protesting that "illegal migrants" were taking the jobs of native-born "Yanks". Not so - when the economy nose-dived, figures show that illegal migration nosedived as well.

What the nation faces now is the fact that illegal migration over the past 40-years has led to births of illegal migrants in the US. But, since they were native born and not migrants soil, in most other countries they would have automatic citizenship.

But, of course, NOT IN AMERICA - a land built by migrants. The consequence of which is to perpetrate them in poverty since most do not have the qualifications (a tertiary-education) for a better-paying job.

As I never tire of explaining: In this Brave New World called the Information Age, if you do not have a post-secondary degree you are condemned to comparative poverty. (Even if you earn above the Poverty-Threshold wage of $24K for a family of four.)

SO WHAT?

So this: Because the children of migrants have no "identity" (ie. "birth certificate), they are not allowed easily into postsecondary state-schools from which a diploma would allow them entry to better payscale jobs.

So, they remain a significant part of the unemployed. From here follows employment information from a dated-study (2009) on the children of non-citizen migrants:

The Center for Immigration Studies has prepared a detailed employment breakdown for immigrants and native-born Americans based on December 2008 data, the latest publicly available. (The Department of Labor generally does not separate out unemployment statistics for immigrants and the native-born.) Among US-born blacks and Hispanics without a high school degree, unemployment is 24.7 percent and 16.2 percent respectively — two to three times the national rate.

Those native-born supposedly "illegitimate" Americans most in competition with immigrants (having obtained citizenship). They are particularly teenagers (16-17), or all adults (18+) without a high school diploma, and young workers (18 to 29) with only a high school diploma.

Unemployment rates for less-educated native-born Americans (all races).
Less than high school: 17 percent.
Young with high school diploma only: 15 percent.
Teenagers: 21.9 percent.

The other entity it benefits is government that turns around and wastes it. No one else benefits as they will never see it.

All you can see, it seems, is the glory of unlimited riches for those who have "controlled the Taxation System" since Reckless Ronnie changed the ground-rules. You don't understand the persistent economic affliction of the American economy. And it is called Income Disparity.

Too much for the rich, too little to permit the poor to escape from poverty. They haven't got a chance-in-hell, which is where they live their entire lives - whilst statistically most of us aspire to at least a Middle-class Existence. (And we get it.)

So the truly poor can-go-to-hell, because that is all they deserve in a country where 54% of the Discretionary Budget goes to the DoD. As if defending the world with the most expensive military-establishment on earth were God's 11th Commandment ... !

You want to lower income in equality then create the market place to put workers in demand. Give businesses more money to spend and grow.

Businesses do not "need more money". The economy began to correct itself (on its own without stimulus spending and 6-years after the inception of the Great Recession) in 2014 when it finally started creating jobs again. When Donald Dork was queerly elected, unemployment in America had already reached close to its bottom.

One does not "create" a marketplace. The exchange of goods/services amongst mankind exists since the dawn of time. It comes and goes - always has been since humans invented "money" and always will be. And a market-economy is always there - it perpetuates itself.

MY POINT

What we have done is create a market-economy based upon "capital". And since the end of the Roman Empire - all that humanity has accomplished is to assure that a select group of individuals obtain the profits (that build their Wealth) whilst the very significant remainders perish-in-poverty.

And the worst victims are those manipulated by a select group of individuals - places like the US and Russia run by oligarchs (the Koch Brothers and their ilk in the US, Putin and his "friends" in Russia).

PS: The irony of it all is that the US still thinks it defeated Communism in Russia, when all it did was spectate as Putin generated its present rampant Oligarchism!

B.F.D for the down-and-out in both places ...

 

[Aristaeus]

Prove it.

This is pretty much axiomatic in economic theory. You're doing the equivalent of demanding proof that the sky is blue.

 

[ludin]

UPDATE ON HOW ECONOMICS WORKS - PART 1

Yes you should learn how it works instead of posting your propaganda all over it.

No, it doesn't. Do you understand that this is an Economics Forum?

Yes i do which is why I am constantly proving you wrong.

Did you read the economic research on Income Disparity that I have shown? Which demonstrate that a tiny percentage of the American population (0.1% of families) are enjoying as much (20%) of the Income generated by the economy due as the rest of us? Nope!

Because people study income disparity in a bubble not in a real world situation. It doesn't matter what they own. This is not monopoly. The only time it would matter is if this was monopoly and there was only so much money
in the bank and we couldn't do anymore about it. if we were still on the gold standard then you would be correct. Then income disparity is a negative factor on the economy. We are not on the gold standard and this is not monopoly.
We have a Floating point currency. As the economy demands to have more money through growth we can add more money to the system without a negative impact.
How do you think our economy has grown over the years? The ability to expand the money supply is the only reason.

Meanwhile, close to 14% of the American population are life-incarcerated below the Poverty Threshold. That's 15 million families - men, women and children!

Which has absolutely nothing to do with what someone else makes. They are there for reasons other than Johnny just sold his company for 10m dollars. They are mutually exclusive events.

Correct, the first sentence. Nope, in the second and third. The only instance in more than four decades since the end of WW2 - from 2010 to 2014 - the US economy was NOT CREATING JOBS even though overall unemployment was receding.

They are all true. The fact you don't understand why they are true is not my issue.
Unemployment if you actually look at the numbers was receding because people were leaving the work force.

Once you leave the work force you are not considered part of the unemployment numbers that the government spits out.
which is why i consider the U3 number to be BS.

 

[ludin]

HOW ECONOMICS WORKS - Part 2

So, jerks started protesting that "illegal migrants" were taking the jobs of native-born "Yanks". Not so - when the economy nose-dived, figures show that illegal migration nosedived as well.
What the nation faces now is the fact that illegal migration over the past 40-years has led to births of illegal migrants in the US.

collerations without causation fallacy. pretty much sums that up.

But, of course, NOT IN AMERICA - a land built by migrants. The consequence of which is to perpetrate them in poverty since most do not have the qualifications (a tertiary-education) for a better-paying job.

All countries require that you have permission to be there. if you don't then you can get into big trouble.

As I never tire of explaining: In this Brave New World called the Information Age, if you do not have a post-secondary degree you are condemned to comparative poverty. (Even if you earn above the Poverty-Threshold wage of $24K for a family of four.)

It depends on your job skills. I know people they are very few that have done very well for themselves without a secondary education. They are all in trade's businesses but they have done well for themselves none the less.
They are few and far between but it can happen and it does. That or they own their own business.

So this: Because the children of migrants have no "identity" (ie. "birth certificate), they are not allowed easily into postsecondary state-schools from which a diploma would allow them entry to better payscale jobs.

You once again prove you have no clue what you are talking about. If you are born in america then you are an american citizen. There is a reason that a lot of pregnant women try and cross the border.
Frankly it is a stupid law that needs to be looked at. You should not be rewarded for an illegal act.
One of the biggest complaints in colleges right now is that they give illegal immigrant kids in-state tuition that which takes away money from other kids that are legal.

again what this has to do with your orginal argument is nothing. this is a red herrring attempt to deflect.

All you can see, it seems, is the glory of unlimited riches for those who have "controlled the Taxation System" since Reckless Ronnie changed the ground-rules. You don't understand the persistent economic affliction of the American economy. And it is called Income Disparity.

We know you don't understand the economy which is why we have to correct you in every single thread you post.

Too much for the rich, too little to permit the poor to escape from poverty. They haven't got a chance-in-hell, which is where they live their entire lives - whilst statistically most of us aspire to at least a Middle-class Existence. (And we get it.)

which i have already proven to be complete BS. It doesn't matter if Johnny earns 1m dollars tomorrow that isn't going to stop alice from earning a million dollars the next day.
Johnny doesn't simply take 1 million dollars out of the economy and no one else can have it. It also doesn't mean that the money supply now has a 1 million dollar loss.

Let me explain it to you in terms you can understand.

Lets say out economy is based on leaves. I hold the tree's. I look around and say right now there is enough leaves in the system for everyone.
Now you come along and start a business. You begin making a lot of leaves from your customers and you pay people. Now i see i need more leaves in the system.
There is more demand for leaves now i can leave the amount of leaves where they are at and their value will increase as there is a small amount of them, but i need
to have enough leaves in the system so that people can get paid. So i add more leaves to the system and just enough so that their value stays the same but
that everyone has enough leaves.

I can't break it down any simpler than that.

What we have done is create a market-economy based upon "capital". And since the end of the Roman Empire - all that humanity has accomplished is to assure that a select group of individuals obtain the profits (that build their Wealth) whilst the very significant remainders perish-in-poverty.

Appeal to emotion fallacy and frankly completely wrong.

In order to make money one must have skills. There are tons of opportunities to learn skills at every level.
Some people are not meant for college. They need to have trade skills etc ...

again you need to understand our money system and how it works. without that you have no clue what you are talking about.

 

[ludin]

This is pretty much axiomatic in economic theory. You're doing the equivalent of demanding proof that the sky is blue.

Actually no he isn't.

The problem is that the OP has no clue or understanding of our money system in how it relates to the economy.
His argument is only valid if we are playing monopoly.

Why? because in monopoly there is only so much money in the bank.
Now if we treat monopoly as not a game but real life in which money is constantly traded at some point in time the bank is going to run out of money.

now once that happens all the money is in the system. I have no way to expand it and those with the most will constantly gather it to themselves.
in that type of system unless there is heavy redistribution then yes you will end up with something like the hunger games or that movie In Time.

that is simply not possible in our current banking system. Why? The federal reserve and the fact that we are no longer on the gold standard.
We have the ability to add money to the system on an add needed basis.

which is why it doesn't matter one iota if Buffett makes another 10 billion dollars the guy at 7-11 is going to get paid on friday regardless.

The only reason that people bring up income disparity is for the uneducated masses and a political tool for an US against them mentality.

 

[Lafayette]

Yes i do which is why I am constantly proving you wrong.

See a doctor. You badly need help ...

 

[ludin]

See a doctor. You badly need help ...

your failure to actually respond is all i need.

so lets keep this simple since anything more might be too complicated.

I have a pond with fish

I have 5 people that fish. some are better at it than others and some are more inventive than others.
a couple of people only use single poles to catch their fish.

other go using multiple poles is a better idea and they catch more fish.

soon all the fish are gone. now we have an issue where the people that were innovative have way more fish than everyone else.
I have reach my maximum capacity of how many fish i can have in the pond. I can't add anymore fish.

now we have a problem with disparity of those with fish and without.

now lets look at the real world.

We have the same pond same fishing people same setup. some use single poles others use multiple only a few get the idea to use a boat and a net.
the difference in this scenerio is that as i need to i can add more fish to the pond on an as needed basis.

so once i see i need more fish i just add more fish to it.
i don't have to worry about who has what because i can always add more fish when i need to.

somehow i still don't think you will get it.

 

[danielpalos]

Prove it.

We have alleged wars on crime, drugs, poverty, and terror.

 

[SirGareth]

Malarkey. The Federal Reserve simply defines the cost-of- money. I.e., interest rates. It does not "hand out" money to banks for distribution to the public or private enterprises.

Income Inequality is about the FAIR DISTRIBUTION OF NET INCOME IN A NATION.

Not all people should obtain the same level of income, which socialism tried to introduce but failed miserably. Nonetheless distribution needs to be progressively fair. One of the criteria economists employ to measure Income Fairness in an economy is called the Gini Index. This is what the Index looks like nowadays for a broad range of countries (note that the higher the index-value the less equitable is the distribution of Income or Wealth):

The above shows that:
*The US has one of the highest levels of Income Inequality amongst developed nations and
*Thos countries with higher taxation have lower gini-coefficients meaning more Income Distribution Fairness.

I will volunteer to serve on the "fairness" committee. One of my first duties will be to see to it that fairness committee members will be compensated "fairly"

 

[Aristaeus]

Actually no he isn't.

The problem is that the OP has no clue or understanding of our money system in how it relates to the economy.
His argument is only valid if we are playing monopoly.

Why? because in monopoly there is only so much money in the bank.
Now if we treat monopoly as not a game but real life in which money is constantly traded at some point in time the bank is going to run out of money.

now once that happens all the money is in the system. I have no way to expand it and those with the most will constantly gather it to themselves.
in that type of system unless there is heavy redistribution then yes you will end up with something like the hunger games or that movie In Time.

that is simply not possible in our current banking system. Why? The federal reserve and the fact that we are no longer on the gold standard.
We have the ability to add money to the system on an add needed basis.

which is why it doesn't matter one iota if Buffett makes another 10 billion dollars the guy at 7-11 is going to get paid on friday regardless.

The only reason that people bring up income disparity is for the uneducated masses and a political tool for an US against them mentality.

High income inequality is proven to have a negative effect on the economy and social wellbeing.

 

[ludin]

High income inequality is proven to have a negative effect on the economy and social wellbeing.

repeating something that isn't true doesn't make it any more truer than the last time it was said.
please see my full post.

Income inequality is only a factor in a closed money system.
we do not have a closed money system. We did away with it in 1933.

 

[danielpalos]

repeating something that isn't true doesn't make it any more truer than the last time it was said.
please see my full post.

Income inequality is only a factor in a closed money system.
we do not have a closed money system. We did away with it in 1933.

you have a fallacy of false Cause.

Income inequality happens naturally under Capitalism. A natural rate of unemployment is a natural form of capital inequality.

 

[SirGareth]

This is pretty much axiomatic in economic theory. You're doing the equivalent of demanding proof that the sky is blue.

Is it axiomatic in Karl Marx economic theory or Ludwig Von Mises economic theory?

I believe there are as many economic theories as there are anuses.

 

[ludin]

you have a fallacy of false Cause.

Income inequality happens naturally under Capitalism. A natural rate of unemployment is a natural form of capital inequality.

not at all.

I am not arguing that income inequality doesn't exist. Nor am i arguing that it doesn't happen naturally see my example the very simple example.
If the guy using the single fishing pole is not going to do as well as the guy using a boat and a net.

however that doesn't matter if i can always add more fish to the pond. The guy with the boat and the net can never own 100% of the resources.
even if i have 10 guys or 1m guys with boats and nets i can add as many fish to the pond that i need.

the guy with the single pole will still catch fish.

maybe he learns a lesson and sees the guy with multiple poles catching multiple fish.
it happens.

the fact is though it doesn't matter how many fish other people catch. he will still catch fish as i can always add more too meet demand.

the only time inequality matters is if i have a limited amount of resources.
I only have so many fish and i can only add so many fish till i run out.

in that case i need a heavy redistribution system to ensure everyone has a piece.

 

[danielpalos]

not at all.

I am not arguing that income inequality doesn't exist. Nor am i arguing that it doesn't happen naturally see my example the very simple example.
If the guy using the single fishing pole is not going to do as well as the guy using a boat and a net.

however that doesn't matter if i can always add more fish to the pond. The guy with the boat and the net can never own 100% of the resources.
even if i have 10 guys or 1m guys with boats and nets i can add as many fish to the pond that i need.

the guy with the single pole will still catch fish.

maybe he learns a lesson and sees the guy with multiple poles catching multiple fish.
it happens.

the fact is though it doesn't matter how many fish other people catch. he will still catch fish as i can always add more too meet demand.

the only time inequality matters is if i have a limited amount of resources.
I only have so many fish and i can only add so many fish till i run out.

in that case i need a heavy redistribution system to ensure everyone has a piece.

Providing for the general welfare includes providing social safety nets.

 

[ludin]

Providing for the general welfare includes providing social safety nets.

again has nothing to do with the argument. you can either address the argument or you can't.
i didn't mention anything about safety nets.

so that is a strawman argument.

if you don't understand the topic just say so.