Is Raising Revenue More Important Than Raising Tax Rates?

cpwill said:

you certainly have - the last time we had this discussion you merely zoomed in on the variation within the range to demonstrate that collection does, in fact, fluctuate.

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So this is going to be your attempt to get the upper hand? I have supported my arguments and if you wish to avoid that fact, go ahead.

cpwill said:

when the top rate was lowered, all rates were lowered. and your claim that "of course lowing the top tax rate is going to have some effect on overall revenues" remains unsubstantiated in the negative sense though we do have some substantiation in the positive sense:

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and the problem with that graph is that it also does not show the distribution of income, so no real parallels can be made between your two points.

cpwill said:

so here is the unfortunate fact. as tax rates were dramatically lowered for all taxpayers, revenue actually climbed slightly as a measure of GDP. Not enough to push it out of the historical range, but enough to push us to the upper side of it. This utterly invalidates the claim that revenues are merely a function of rates - had that been he case then revenues would have fallen as dramatically as the rates did - or at least they would have fallen at all.

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Thank you. You have actually made a claim that is supported with demonstrated data. I will have to think on it.

cpwill said:

on the contrary, our current tax code is stupid, and it is immoral. Our tax code punishes people for saving and investing (which is economically beneficial) and rewards them for going into debt in order to consume (which is economically harmful). It punishes people for getting married and forming stable families in which to raise children. It discourages new business formation and investment. It encourages malinvestment and helps to feed bubbles. On top of all that, it costs us a huge amount of money to maintain. We could fight four wars the size of Iraq and Afghanistan, and still have enough left to fund the Department of Education, the Department of Agriculture, the Department of Energy, NASA, and the EPA; just on the cost of compliance alone.

It's been well-bandied about that 45% of households don't pay income taxes. Another figure - slightly less known - is that 6 out of 10 households now receive more money from the Federal Government than they pay in taxes, so the 45% actually understates the matter. Not only should I not pay my fair share of government, it seems, I should have you cover my share, and then I think I should have you pay me a little something extra on the side. The US has the most progressive tax structure in the industrialized world. (I know, it surprised me too.) Now, a progressive tax code is supposed to have the wealthy pay more than the middle class or the poor as a percent of their income. I get that, and I get the basic notion of fairness behind it. But it also strikes me that the basic "fairness" of such a system depends on the middle class and poor actually paying something. Not as much as the rich, but something. Even if it's just one percent, you should pay something on tax day rather than looking forward to it as a day when the government sends you a big ole fat check.

Instead we've allowed our politicians to turn our progressive tax structure into a weapon of class warfare, and rewarded them for encouraging us to use it to try to take from others. Our tax code encourages dependency on government rather than self-reliance. It encourages us to turn on each other and form opposing blocs seeking to suck each other dry rather than fostering a sense of national unity and a belief that we are each helping to pay for the necessary costs of government. Look at you in this thread - you aren't pushing ways that you can earn more, you are pushing for ways that you can seek out hunt down and force more out of someone else because there are more of you than there are of them. Politicians can take advantage of people who are convinced that Someone Is Out To Get Them, and they can take advantage of people who think that They Can Get Something For Nothing; but it's harder for them to take advantage of people who are convinced that What We Need Is To Come Together To Have Responsible Governance. Our tax code doesn't just hurt our poor (who stand the most to lose from the economic losses it encourages), it doesn't just hurt our national pocketbook, it hurts our soul. It encourages greed, grift, lying, and cheating in the average man and woman. People who would never steal from their neighbor's house are tempted and encouraged by the complexity and messaging of the system to steal from him by taking advantage of the tax code to minimize their burden and increase his. It weakens what it means to be American, to be in something together, to take care of your own costs and be responsible for your own self. It weakens our sense of community by setting us against each other and putting us into a zero-sum game of I-win-You-lose. Instead of everyone seeking to combine our forces to produce good governance, the tax code has become a way for us to take from each other.

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I do agree (and always have), that a simplification of the tax code is in order, or at least using the tax code to promote things that are beneficial to society rather than special interests alone. However, that is a function of the various tax exemptions we have allowed into our tax code, rather than, the progressive nature of the income tax itself. In fact thinking about it, that may be another thing wrong with your graph, does it show these exemptions? Perhaps having a simplified code that allows for people to cheat (and there is a difference between a simple mortgage deduction or a deduction for what people do anyway in their normals lives and economic activity primarily aimed at reducing tax burden but does not help them otherwise, the latter is cheating) is the nature of the problem more than anything else.

cpwill said:

well, it's probably to do with the fact that individuals pay taxes, and are effected by the tax code and the cost of business in general. for example, i know several families who will be out of work the day after the EPA passes it's own version of Cap-and-Trade (if it ever does so), and the taxes inherent in Obamacare will have a similar effect (which is why so many businesses are so eager to get exemptions). If you don't make enough to think that you are effected by it, then of course you don't look at it as a personal issue - but those who get screwed of course are.

yeah! hunt them down right? make 'em squeal! how dare they try to minimize their tax burden, as if they were normal people, just like everyone else?

:lol: but no. It's tax avoidance. tax evasion is illegal. we are not yet communist china, and it is not yet illegal for people to move without the permission of the government. though we shall see how the Boeing case works out.

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If people are going to benefit from a society that allows them the opportunity to benefit, then yes, they are obligated to support it. Even if it is largely their own actions that made them a success, the fact that they were born into a country with great infrastructure to support and multiply their efforts is reason alone. Because of this, we have to look at this from a macro level so that we can further enrich ourselves through good policy. So, yes, if people want to cheat from their obligation, they lose their moral right to claim they are being unduly harmed.

cpwill said:

I wouldn't say he's an idiot. I would simply say that he has a very different set of priorities than the people who have thus far voted in this poll.

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No he isn't an idiot, neither is George W. Bush.

They went to very prestigous colleges.

Bigfoot 88 said:

Pretty stupid comment you made.

The goal is to raise revenue-to say otherwise means they want to punish someone with taxes.

Taxes may be one method but it isn't the only method.

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Apparently the point in my comment was missed.

megaprogman said:

So this is going to be your attempt to get the upper hand? I have supported my arguments and if you wish to avoid that fact, go ahead.

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no you haven't, you have merely sought to identify holes in my own. Never have you ever attempted to demonstrate how increasing tax rates will increase revenue as a % of GDP.

and the problem with that graph is that it also does not show the distribution of income, so no real parallels can be made between your two points.

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given that tax rates fell and rose together, the distribution is irrelevant. had we been hiking taxes for the middle class while lowering it for the wealthy, then that would indeed be a powerful argument for you, but that is not what we did. instead we slashed tax rates for all income brackets and yet tax revenues increased (though as a % of GDP, agreeably only slightly, and it is debatable whether or not it was outside the margin of error).

Thank you. You have actually made a claim that is supported with demonstrated data. I will have to think on it.

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I hope you get back to us on it. I think that your liberal lean will - over time - be threatened by your unfortunately high level of intellectual honesty. we may win you yet.

to aid, I looked up the tax brackets and rates over the pre-reagan, post-war decades for Married, Filing Jointly:

Year $10,001 $20,001 $60,001 $100,001 $250,001
1950 38% 56% 78% 89% 91%
1952 42% 62% 80% 90% 92%
1954 38% 56% 78% 89% 91%
1956 26% 38% 62% 75% 89%
1958 26% 38% 62% 75% 89%
1960 26% 38% 62% 75% 89%
1962 26% 38% 62% 75% 89%
1964 23% 34% 56% 66% 76%
1966 - 1976 22% 32% 53% 62% 70%
1980 18% 24% 54% 59% 70%

if you like, here is a year-by-year breakdown for pretty much everybody.

All tax rates for all income brackets used to be significantly higher than they are today. yet, when we cut all of them, revenue did not decline as a % of GDP, and in fact, it rose (slightly).

Now, If revenue is a function of rates, then this would be impossible.

Revenue appears instead to be a function of GDP; certainly it is pretty easy to establish a rough ratio that seems to hold steady through all tax environments. So, if you want to raise the revenue, you gotta raise the GDP. This has a lot of other happy consequences including lower unemployment and higher wages, so I'm not really sure why people fight it so.

I do agree (and always have), that a simplification of the tax code is in order, or at least using the tax code to promote things that are beneficial to society rather than special interests alone.

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interesting. all things being equal, would you support a move to simplify the tax code but keep revenue neutral via rate reduction? currently we spend about $431 Billion just trying to comply with our own tax code - releasing even half of that money into the economy would be a no-cost real economic stimulus that only increases private productivity (as the cost of governance stays the same but the cost of compliance is reduced) and tax revenues (as GDP increases over time). Democrats get more revenue, Republicans get tax rate cuts, and everyone gets more jobs. The Presidents' Bi-Partisan Bowles-Simpson Debt Reduction Commission suggested exactly this approach.

However, that is a function of the various tax exemptions we have allowed into our tax code, rather than, the progressive nature of the income tax itself.

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on that I'm not so sure. Just as the business interference in politics is due to the political interference in business (they wouldn't lobby if there wasn't any money in it), I would suspect that tax code complexity and exemptions are a natural result of a highly progressive tax code. Give someone millions of dollars worth of incentive to spend hundreds of thousands of dollars to effect the tax code, and that is precisely what he will do.

In fact thinking about it, that may be another thing wrong with your graph, does it show these exemptions?

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no. however, that's a good point - it's worth noting that tax code complexity (exemptions and other fun - read, stupid - things) has exploded even as rates have come down - rather giving an even more solid backing to the claim that revenue is more generally a function of GDP than anything in the tax code. If the claim that revenue was a function of the code was correct, then we would expect to see revenues dive as rates did, and then dive even further as complexity and exemptions increase.

However, I will say that due to the decreased compliance costs, the cost of an additional dollar squeezed from reducing complexity will probably be less than the dollar squeezed from increasing tax rates in turns of economic loss of productivity. But that's just an application of what seems to be common sense (that the loss of the dollar is partially offset by the loss of the cost of maintaining it), and I don't really have any actual work that backs it up.

Perhaps having a simplified code that allows for people to cheat (and there is a difference between a simple mortgage deduction or a deduction for what people do anyway in their normals lives and economic activity primarily aimed at reducing tax burden but does not help them otherwise, the latter is cheating) is the nature of the problem more than anything else.

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evasion is cheating - avoidance is not. one is illegal and the other isn't. me taking my mortgage interest deduction is legally or ethically no different from someone setting up a trust for their kids - both of us are seeking to reduce our tax exposure as much as possible.

If people are going to benefit from a society that allows them the opportunity to benefit, then yes, they are obligated to support it. Even if it is largely their own actions that made them a success, the fact that they were born into a country with great infrastructure to support and multiply their efforts is reason alone.

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I agree - and that is why I think that the poor and middle class should pay something, rather than being net benefactors of the tax system. Taxes ought to be the expense you pay for good governance, not an opportunity or temptation for you to screw your neighbor.

Redress said:

Apparently the point in my comment was missed.

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apparently the point in your comment is stupid :lamo :sorry - couldn't resist:

:lol: hey - no fair liking my posts; i'm trying to argue you, dammit

there - got you back. take that

cpwill said:

I hope you get back to us on it. I think that your liberal lean will - over time - be threatened by your unfortunately high level of intellectual honesty. we may win you yet.

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I thanked you for this :lol: Pretty funny.

The fact is there are so many empty arguments on either side of the spectrum that you shouldn't get your hopes up. If anything, I am moving more solidly to the center, however, I have yet to see anything attractive about high levels of fiscal conservativism. However, it does seem to have usefulness in a balance against high levels of socialistic policy.

I will ponder your points and perhaps integrate them into my views, if I find merit in them and I especially like your last point. However, I would also very much like some real data to back up your claims, your current offerings are not convincing. Generally, my problem with many of these arguments lies in the base assumptions about human nature and how they react to various government policies, the idea of people being primarily self maximizing is in fact very counter intuitive to me and runs counter to my experience with people in general and my own reactions to things (and its not like I am some saint or anything). I am beginning to wonder if this is an aspect of human nature that varies with person to person, some people are selfish and some are not, therefore that has to be taken into account when designing any social policy and it could be that a limitation of both the conservative and liberal side is that they assume that this aspect is fixed, which is why they both end up failing when economies go way or the other too far. Certainly something to ponder.

governing systems built on anything other than the notion that people tend to seek their (and their family's) self interest tend to degrade over time and eventually fail rather dramatically. It's not the benevolence of the baker, or the butcher.....

the trick is not to try to change human nature ( attempts to create a "new man" also tend to fail dramatically - though they tend to also include alot more blood ), but rather to design a system where people seeking their own self-interest will increase the interests of others as well. that's why i think - despite the argument i've made here - that you could get an increase in revenues off of the wealthy by popping the cap but allowing them to keep a percentage in a tax-free account, as i suggested in my social security reform proposal. because we have provided them with a powerful and positive incentive to increase their taxes (they actually stand more to gain from said tax increase up to over around - as i recall - $647,000), they will not seek to avoid doing so.

MaggieD said:

How does the government raise revenue without raising taxes? Unless you're saying, "Grow ourselves out of this mess....?"

No matter how much money we give those clowns in Washington, they will continue spending us broke. No new taxes. Cut spending. Oh, okay, maybe increase taxes on "really rich." They've got no voice. Let's git 'em!

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I agree, the question is confusing... It's like asking, what would you rather do... eat breakfast or eat something in the morning?

Mayor Snorkum said:

By lowering tax rates, of course.

This poll is independent of the spending side of the criminals in Washington. It's simply about the goals.

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The options should say, raise taxes or cut spending... It would be less confusing

if you will look above, you may find that it is anything but that simple.

growing GDP is a far better way of ensuring increased Revenue than increased tax rates. certainly it is a proven method of increasing revenue, whereas increasing tax rates.... well, suffice to say that it is far more likely to depress growth off the baseline than it is to raise us more revenue. On top of that, growing GDP means higher wages, more jobs, decreased expenditures as people come off of the aid programs...

Revenues usually increase some after a tax decrease, because it's a form of stimulus... It's a liquid infusion in the market, however, everybody is in the same competitive position and everybody is in the same economic position relative to all other agents in the economy prior to the tax cut. Therefore, it's a small stimulus and it doesn't create more liquidity, so it usually only has a short term affect... Giving people tax credits is also a stimulus, and businesses compete tax season to for those customers to spend their checks. I'd argue that those tax checks create more competition in the market than a federal tax cut. However, it's also a short term stimulus as well, and the competition is also short term.

cpwill said:

governing systems built on anything other than the notion that people tend to seek their self interest tend to fail rather dramatically. It's not the benevolence of the baker, or the butcher.....

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In some aspect, yes, in other aspects no. People may behave that way economically, however, socially, people tend to be very for society in general. Witness the high levels of support for social programs, taxing the rich, etc. This is not because of selfishness (I don't believe) it is because people tend to have compassion and a desire to promote their fellow man with a genuine sincerity. Your philosophy seems to ignore that aspect of ourselves, which is why it is problematic (and the notion of doing such privately does not adequately address that aspect of ourselves in my view, really, its just a cop-out position to grudgingly allow for something in order to avoid a real discussion of the limits of the philosophy by shunting it off to a side discussion)

cpwill said:

the trick is not to try to change human nature ( attempts to create a "new man" also tend to fail dramatically - though they tend to also include alot more blood ), but rather to design a system where people seeking their own self-interest will increase the interests of others as well. that's why i think - despite the argument i've made here - that you could get an increase in revenues off of the wealthy by popping the cap but allowing them to keep a percentage in a tax-free account, as i suggested in my social security reform proposal. because we have provided them with a powerful and positive incentive to increase their taxes (they actually stand more to gain from said tax increase up to over around - as i recall - $647,000), they will not seek to avoid doing so.

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I agree, we should never attempt to change human nature because at our level of biological technology, it is impossible to do so and therefore foolish to do (not that I am advocating, but that is the reason we cannot do it, we do not have sufficient control over our own make-up and our free will does have limits based on our biology). However, I don't agree with your base assumptions about what human nature is either. While you see many of these things as an attempt to change human nature, I see many of them as conforming to human nature (not necessarily the utopian ideals of the past, those were based on ignorance and nothing more and our limits to our mental and social flexibility were very bloodily discovered). However, the primary lesson of that time is simply that, not that one philosophy failed so its opposite philosophy is automatically good (which is a fallacy so many here commit, liberalism/conservativism has had a spectacular failure at some point in the past, so the inverse must be true!) I am beginning to believe that reality is far more complex than the simple philosophies that are popular in the American culture. I guess I need to make my own way (but then I always have).

cpwill said:

if you will look above, you may find that it is anything but that simple.

growing GDP is a far better way of ensuring increased Revenue than increased tax rates. certainly it is a proven method of increasing revenue, whereas increasing tax rates.... well, suffice to say that it is far more likely to depress growth off the baseline than it is to raise us more revenue. On top of that, growing GDP means higher wages, more jobs, decreased expenditures as people come off of the aid programs...

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GDP = private consumption + gross investment + government spending + (exports − imports)

I think measuring GDP is flawed.

megaprogman said:

It would basically depopulate the virginia/maryland area and stuff like the pentegon would have to be moved if I am interpreting this correctly.

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The details can be worked out, such as exempting defense spending within the U.S.

But let's use transportation infrastructure as an example. Let's say we have to rebuild the Federal Highway System. In that case, all the spending done within a state comes from federal tax revenues paid from within the state.

Or if that doesn't work, than do it by percentage. Say 70% of federal revenue from states have to be spent within that state while the other 30% of spending can be determined by the federal government for just such a case.

I just think something should be done because New York and California gets slammed by conservatives for their liberal spending but what they never point out is how much the money they bring in, especially as centers of trade because of airports and seaports, is taken from them to pay for states in middle America.

SheWolf said:

GDP = private consumption + gross investment + government spending + (exports − imports)

I think measuring GDP is flawed.

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I agree. Among it's many other issues, it pretends that exports don't = imports, which treats currency and financial instruments as a non-commodity. Trillions of dollars in currency and bond markets tell us otherwise, but we insist on using a flawed measure that is blind to this reality.

I would prefer we discuss Gross Domestic Income. But that's sort of my own little squint-eyed rant against the system, and most folks don't do much with it, so information on how these things measure up to it isn't readily available

samsmart said:

The details can be worked out, such as exempting defense spending within the U.S.

But let's use transportation infrastructure as an example. Let's say we have to rebuild the Federal Highway System. In that case, all the spending done within a state comes from federal tax revenues paid from within the state.

Or if that doesn't work, than do it by percentage. Say 70% of federal revenue from states have to be spent within that state while the other 30% of spending can be determined by the federal government for just such a case.

I just think something should be done because New York and California gets slammed by conservatives for their liberal spending but what they never point out is how much the money they bring in, especially as centers of trade because of airports and seaports, is taken from them to pay for states in middle America.

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I wonder what it would do the politics. Poor areas tend to correlate with conservativism and richer areas tend to correlate with liberalism. Would it further divide us due to the differences in infrastructure affecting local wealth, creating further disparity?

megaprogman said:

In some aspect, yes, in other aspects no. People may behave that way economically, however, socially, people tend to be very for society in general

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the trick being that paying taxes is an economic act - not a social one. attempting to set tax rates might come from social theory attempts - but the actual tax paying is an economic one, and we all of us tend to make economic decisions based on our and our familys' best interests.

Witness the high levels of support for social programs, taxing the rich, etc. This is not because of selfishness (I don't believe) it is because people tend to have compassion and a desire to promote their fellow man with a genuine sincerity

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but you merely reinforce my point. we are 100% in favor of spending money on our poor.... so long as someone else has to pay for it. We are generous indeed..... with other people's money. that's not charity - charity is when you give your own money.

Your philosophy seems to ignore that aspect of ourselves, which is why it is problematic (and the notion of doing such privately does not adequately address that aspect of ourselves in my view, really, its just a cop-out position to grudgingly allow for something in order to avoid a real discussion of the limits of the philosophy by shunting it off to a side discussion)

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i don't think ignoring private giving is legitimate in this discussion. Study after study seems to demonstrate that private giving goes down under a welfare state, and rises in it's lack. The more people perceive "taking care of the poor" to be the role of government, the more they tend to consider it less a role of their own... but really when you reflect government back into the form of revenue that it draws from, you are really talking about taxes, and in this country that means that you are really talking about taking from the top income earners.

So when we see a privatized charity we are seeing people making a social decision - I wish to be a good social actor and so I wish to help take care of others. but when we see us shift into a more heavily socialized system (government system, however you want to put it, not trying to go down the Oh That's Not Socialism! rabbit hole here), we see that people begin to make economic decisions - I want to make sure it doesn't cost me anything, but rather costs that guy something.

I agree, we should never attempt to change human nature because at our level of biological technology, it is impossible to do so and therefore foolish to do (not that I am advocating, but that is the reason we cannot do it, we do not have sufficient control over our own make-up and our free will does have limits based on our biology).

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nor, i think, should we even wish to do so in the future. we would be reducing the free will of those future generations whose decisions we make for them.

However, I don't agree with your base assumptions about what human nature is either.... However, the primary lesson of that time is simply that, not that one philosophy failed so its opposite philosophy is automatically good (which is a fallacy so many here commit, liberalism/conservativism has had a spectacular failure at some point in the past, so the inverse must be true!) I am beginning to believe that reality is far more complex than the simple philosophies that are popular in the American culture. I guess I need to make my own way (but then I always have).

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well i certainly don't pretend to be putting forth a holistic view of human nature - here what we are discussing is merely how people react to economic decisions, including taxes, entitlements, income, and spending.

While you see many of these things as an attempt to change human nature, I see many of them as conforming to human nature (not necessarily the utopian ideals of the past, those were based on ignorance and nothing more and our limits to our mental and social flexibility were very bloodily discovered).

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on the contrary i see much of modern economic policy and not a little of our public discussion of tax codes built around a desire to ignore human nature. for example, the notion that we can statically score tax increases assumes that people will not seek to minimize their tax exposure - which is in contradiction to nearly everything we know about how people approach taxes.

megaprogman said:

I wonder what it would do the politics. Poor areas tend to correlate with conservativism and richer areas tend to correlate with liberalism. Would it further divide us due to the differences in infrastructure affecting local wealth, creating further disparity?

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It may.

But it may also force those conservative areas to modernize and diversify their economies. Rather than focus on whatever it is they use for an economy, they will be forced to compete in certain profitable markets, such as medicine or computers or what-have-you. Which I don't see as a bad thing at all.

cpwill said:

:
given that tax rates fell and rose together, the distribution is irrelevant. had we been hiking taxes for the middle class while lowering it for the wealthy, then that would indeed be a powerful argument for you, but that is not what we did. instead we slashed tax rates for all income brackets and yet tax revenues increased (though as a % of GDP, agreeably only slightly, and it is debatable whether or not it was outside the margin of error).

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Fallacious response.
If you cut taxes on the rich enough, it doesn't matter what you do to the small fry at the bottom
See below:

cpwill said:

to aid, I looked up the tax brackets and rates over the pre-reagan, post-war decades for Married, Filing Jointly:

Year $10,001 $20,001 $60,001 $100,001 $250,001
1950 38% 56% 78% 89% 91%
1952 42% 62% 80% 90% 92%
1954 38% 56% 78% 89% 91%
1956 26% 38% 62% 75% 89%
1958 26% 38% 62% 75% 89%
1960 26% 38% 62% 75% 89%
1962 26% 38% 62% 75% 89%
1964 23% 34% 56% 66% 76%
1966 - 1976 22% 32% 53% 62% 70%
1980 18% 24% 54% 59% 70%

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Lets' take a longer view, not your attempt at burying the MAJOR problem.

Real Perspective and problem said:

Top US Marginal Income Tax Rates, 1913--2003 (TruthAndPolitics.org)
Historical rates (married couples, filing jointly)

Year/ Top Rate%/ Over

1913 --- 7% 500,000
1914 --- 7% 500,000
1915 --- 7% 500,000
1916 --- 15% 2,000,000
1917 --- 67% 2,000,000
1918 --- 77% 1,000,000
1919 --- 73% 1,000,000
1920 --- 73% 1,000,000
1921 --- 73% 1,000,000
1922 --- 58% 200,000
1923 --- 43.5% 200,000
1924 --- 46% 500,000
1925 --- 25% 100,000
1926 --- 25% 100,000
1927 --- 25% 100,000
1928 --- 25% 100,000
1929 --- 24% 100,000
1930 --- 25% 100,000
1931 --- 25% 100,000
1932 --- 63% 1,000,000
1933 --- 63% 1,000,000
1934 --- 63% 1,000,000
1935 --- 63% 1,000,000
1936 --- 79% 5,000,000
1937 --- 79% 5,000,000
1938 --- 79% 5,000,000
1939 --- 79% 5,000,000
1940 --- 81% 5,000,000
1941 --- 81% 5,000,000
1942 --- 88% 200,000
1943 --- 88% 200,000
1944--- 94 200,000
1945 --- 94% 200,000
1946 --- 86% 200,000
1947 --- 86% 200,000
1948 --- 82.% 400,000
1949 --- 82% 400,000
1950 --- 84.36% 400,000
1951 --- 91% 400,000
1952 --- 92% 400,000
1953 --- 92% 400,000
1954 --- 91% 400,000
1955 --- 91% 400,000
1956 --- 91% 400,000
1957 --- 91% 400,000
1958 --- 91% 400,000
1959 --- 91% 400,000
1960 --- 91% 400,000
1961 --- 91% 400,000
1962 --- 91% 400,000
1963 --- 91% 400,000
1964 --- 77% 400,000
1965 --- 70% 200,000
1966 --- 70% 200,000
1967 --- 70% 200,000
1968 --- 75.25% 200,000
1969 --- 77% 200,000
1970 --- 71.75% 200,000
1971 --- 70% 60% 200,000
1972 --- 70% 50 200,000
1973 --- 70% 50 200,000
1974 --- 70% 50 200,000
1975 ----70% 50 200,000
1976 --- 70% 50 200,000
1977 --- 70% 50 203,200
1978 --- 70% 50 203,200
1979 --- 70% 50 215,400
1980 --- 70% 50 215,400
1981 --- 69% 50 215,400
1982 --- 50% 85,600
1983 --- 50% 109,400
1984 --- 50% 162,400
1985 --- 50 % 169,020
1986 --- 50 % 175,250
1987 --- 38.5% 90,000
1988 --- 28% <8> 29,750 <8>
1989 --- 28% <8> 30,950 <8>
1990 --- 28% <8> 32,450 <8>
1991 --- 31% 82,150
1992 --- 31% 86,500
1993 --- 39.6% 89,150
1994 --- 39.6% 250,000
1995 --- 39.6% 256,500
1996 --- 39.6% 263,750
1997 --- 39.6% 271,050
1998 --- 39.6% 278,450
1999 --- 39.6% 283,150
2000 --- 39.6% 288,350
2001 --- 39.1% 297,350
2002 --- 38.6% 307,050
2003 --- 35% 311,950

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How much "More" "revenue" does the OP suppose we'd "raise" if the Top rate was 5%.. or 1%?
How much "Laugh" is in your Laugher Curve?

cpwill said:

Now, If revenue is a function of rates, then this would be impossible.
Revenue appears instead to be a function of GDP;

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Revenue is of course a function of the overall economy, but note how the burden of who pays-- has changed.
ie, the "Class Warfare" Won by the rich over the last 50, especially 30, years.

And the above chart does not include the near HALVING of the Capital Gains and Dividend Taxes under GW Bush. (28% to 15%). On which the really rich really live.

mbig said:

Fallacious response.
If you cut taxes on the rich enough, it doesn't matter what you do to the small fry at the bottom
See below:

Lets' take a longer view, not your attempt at burying the MAJOR problem.




Revenue is of course a function of the overall economy, but note how the burden of who pays-- has changed.
ie, the "Class Warfare" Won by the rich over the last 50 years.

And the above chart does not include the near HALVING of the Capital Gains and Dividend Taxes under GW Bush. (28% to 15%). On which the really rich really live.

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before the 16th amendment the rich werent required to pay for freeloaders and others

the poor have a pretty good deal

they have the same voting and citizenship rights as the rich yet they don't even pay their share of the government

right now the top 5% pay more of the federal income tax burden than the other 95%

right now the richest 1 percent of tax payers pay the highest proportion of the FIT than at anytime since welfare socialism started in the USA

the rich have always "won" the current system is distributing much of that winning to the losers

This thread is entirely retarded. No one who understands taxes cares about statutory rates. What matters is effective. Government focusing on raising revenue by elimination of tax deductions has effectively raised effective marginal rates.

mbig said:

Fallacious response.
If you cut taxes on the rich enough, it doesn't matter what you do to the small fry at the bottom

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well, the big money isn't in either - it's in the middle and upper middle class.

See below:

Lets' take a longer view, not your attempt at burying the MAJOR problem.

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i'm not attempting to bury any problem - i'm attempting to identify what the actual problem is. as you point out brilliantly - top tax rates have varied wildly even as revenue has remained relatively consistent. the rational conclusion is that these two things must not have a direct relationship.

How much "More" "revenue" does the OP suppose we'd "raise" if the Top rate was 5%.. or 1%?

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probably much less in the short term, and more only over a very long time horizon. there is undoubtedly a point on both ends of the spectrum where we begin to depress revenue below it's historical average of around 18.5%.

How much "Laugh" is in your Laugher Curve?

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look back over this thread and I'll give you a dollar for every time I've referenced the Laffer curve before this response here.

Revenue is of course a function of the overall economy

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precisely. if you want to grow the revenue, you have to grow the economy.

but note how the burden of who pays-- has changed.
ie, the "Class Warfare" Won by the rich over the last 50, especially 30, years.

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um... your first sentence sort of contradicts your second - given that the percent of revenue coming from the highest earners has gone up over the past 30 years...

And the above chart does not include the near HALVING of the Capital Gains and Dividend Taxes under GW Bush. (28% to 15%). On which the really rich really live.

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another excellent point. if revenue were a function of rates - then we would expect to see an even greater loss in revenue as a % of GDP as these taxes were slashed with income rates. yet we didn't.

cpwill said:

the trick being that paying taxes is an economic act - not a social one. attempting to set tax rates might come from social theory attempts - but the actual tax paying is an economic one, and we all of us tend to make economic decisions based on our and our familys' best interests.

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I disagree, it is not merely an economic act. It entirely depends on one's relationship with society and what they consider paying taxes to be. Personally, I don't mind higher tax rates for what I get. In parts of Europe, this is the prevailing attitude, for example.

cpwill said:

but you merely reinforce my point. we are 100% in favor of spending money on our poor.... so long as someone else has to pay for it. We are generous indeed..... with other people's money. that's not charity - charity is when you give your own money.

i don't think ignoring private giving is legitimate in this discussion. Study after study seems to demonstrate that private giving goes down under a welfare state, and rises in it's lack. The more people perceive "taking care of the poor" to be the role of government, the more they tend to consider it less a role of their own... but really when you reflect government back into the form of revenue that it draws from, you are really talking about taxes, and in this country that means that you are really talking about taking from the top income earners.

So when we see a privatized charity we are seeing people making a social decision - I wish to be a good social actor and so I wish to help take care of others. but when we see us shift into a more heavily socialized system (government system, however you want to put it, not trying to go down the Oh That's Not Socialism! rabbit hole here), we see that people begin to make economic decisions - I want to make sure it doesn't cost me anything, but rather costs that guy something.

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I believe it is because there is no mechanism built into such a system to make sure that the right amounts of funds are going where it is needed. Simply saying "give to charity, its good for you" does nothing to address the problem from a numbers level. Therefore it is a side discussion. Its a dodge.

cpwill said:

nor, i think, should we even wish to do so in the future. we would be reducing the free will of those future generations whose decisions we make for them.

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Well we don't exactly have free will now, we are subject to internal and external pressures, instincts, etc, but thats a side discussion I think. We like to pretend we do and I think we do over some aspects of our personalities.

cpwill said:

well i certainly don't pretend to be putting forth a holistic view of human nature - here what we are discussing is merely how people react to economic decisions, including taxes, entitlements, income, and spending.

on the contrary i see much of modern economic policy and not a little of our public discussion of tax codes built around a desire to ignore human nature. for example, the notion that we can statically score tax increases assumes that people will not seek to minimize their tax exposure - which is in contradiction to nearly everything we know about how people approach taxes.

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As am I cpwill. The idea of man being primarily self interested is very much in vogue and popular right now, but that doesn't necessarily mean it stands up to any sort of rigorous analysis. Again, look at the attitudes of people not only in the US to get a more complete picture.