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One reason one might suspect that the good ol’ U.S.A. has devolved into something a little different than what the Founders had in mind is taxation. Since the advent of the current federal income tax in 1913, more and more of our money is being taken away from us by taxes. Our governmental overlords feel they have the right to tax every transaction, every piece of property, every event, every idea, and every little thing in our short little lives. And make no mistake, what our overlords allow us to keep of our earnings and savings and assets is strictly due to the goodness in their hearts, so shut your trap and get back to work.

Our overlords, however, tell us that we’re overtaxed, and that reducing the tax burden will unleash a torrent of new economic activity and all will be blue skies and lollipops if we’ll just cut tax rates. But when they talk about income tax cuts for the middle class, they’re being dishonest. I recently did the math and discovered that the bottom 80 percent of federal personal income tax filers in 2013 had an average effective tax rate of less than 1 percent. Sounds unbelievable, but click and check it out. I used CBO data and merely averaged the effective rates of the four lowest quintiles. The bottom 60 percent of federal income taxpayers in 2013 had an average effective tax rate that was negative: -1.93.

Perhaps the reason they’re insulting us with talk about middle-class tax cuts is because they want to cut taxes for those at the top. But I’m sympathetic to that. Most of the personal income taxes are paid by an itty-bitty minority, the folks at the top. The 98+ percent of us who were not hit by the “fiscal cliff” tax hikes are still covered by the rates introduced more than 15 years ago by President Bush. The middle and working classes once actually paid income taxes, but no more, not to any extent. Of course, there are certain “anomalies” in the bottom 80 percent who do indeed pay significant taxes, but they’re the exception.

On July 26, The Intercept ran “Steve Bannon Pushing for 44 Percent Marginal Tax Rate on the Very Rich” by Ryan Grim. This 44 percent rate would hit those with incomes of more than $5 million, with the revenue going to pay for rate cuts for everyone else.

According to IRS data, just over 43,000 people filed tax returns for the year 2014 claiming income of at least $5 million, accounting for $600 billion in taxes, or 8.8 percent of the total taxes paid.

So the “alt-right” wants to raise tax rates on those already paying most of the personal income tax? (And here I thought I liked Steve Bannon.)

Mr. Grim didn’t provide any links for his IRS data, but some of the stats he cites can’t be right; for instance, the “$600 billion in taxes, or 8.8 percent of the total taxes.” Total Receipts in 2014 were $3.021T (see Table 1.1, page 26), so $600 billion would be closer to 20 percent. But we’re talking personal income taxes, not total federal taxation, and individual income taxes provided revenue of $1.394T in 2014 (Table 2.1, page 34). So, if $600B figure is correct, then the group that Mr. Bannon wants to target would have provided more than 43 percent of personal income tax revenue in 2014.

Frankly, I don’t trust any of the stats in the above quote. In fact, I have a hard time believing Bannon really wants a tax that touches so few Americans. You see, there were 148,606,578 returns filed in 2014, and the 43,000 of them that would have been hit by Bannon’s tax hike would have been less than 0.029 percent of all income taxpayers, and less than 2.9 percent of all the Evil One Percenters.

But here’s what’s really wrong with Bannon’s tax hike: it goes from incomes of $5M to infinity. That means that some pissant making a measly five megabucks a year is lumped in with, and is paying at the same marginal rate as, the Masters of the Universe, like hedge fund managers, who can make a billion bucks a year. A factor of 200 is what separates the $5M guy from the $1B guy. Exceedingly few earners make a billion dollars in a year. So it seems a little much to expect anyone to be happy with having the same tax rate as someone making 200 times what they make. Mr. Bannon’s 44 percent rate proposal may be a shiny object meant to divert attention; he’s much too smart to really want such a rate.

From the Left it’s always the same message: Tax the Rich. And now we’re getting it from the political “right.” But I have sympathy for the rich. You see, I suffer from this atavistic, perhaps Neanderthal, notion that The State should not be able to take more than half of an American’s income. That is, all levels of government, the feds, the states, and local governments, through all types of taxation, including income, payroll, sales, property, etc. should leave an American with at least half of her earnings. Take anything more than half, and we live in a fascist state. And if the feds actually did take 44 percent of an earner’s income in income taxes, they’d be leaving the states and cities with only 6 percent before getting into the taxpayer’s half of the taxpayer’s earnings.

It’s not federal personal income taxes that burden the vast majority of the bottom 80 percent of us; it’s all the other taxes, like payroll, property, real estate, sales, ObamaCare taxes, and tariffs and corporate income taxes passed along as higher prices. And there’s the proposed VAT and BAT (border adjustment tax). If Congress wants to ease the tax burden for the middle and working classes, look at that list. (POINTER: “The Next Revolution” is a terrific new program on Fox News. On July 23 in “Why elites don’t understand the working class” (video), host Steve Hilton interviewed Joan Williams about what’s been bugging American workers.)

Here’s an idea for Steve Bannon and Congress: How about cutting spending? Cutting spending is hard. Eliminating federal jobs, finding fraud in income tax returns and federal programs, making the government more efficient, that’s all difficult. Cutting income tax rates, however, is simple; anyone can do it, and it’s not real reform. We’re not going to usher in a new age of economic dynamism merely by tweaking federal personal income tax rates.

Imagine a tax system where Americans actually wanted to pay their taxes; where they might even be proud to pay their taxes. Seems impossible, right? Such a happy situation could not exist unless Congress was meeting certain conditions. For instance, folks would need to think they’re getting the biggest bang for the buck, so there couldn’t be much waste, fraud, and abuse in the public sector. And Congress couldn’t spend more than what they take in, so they’d need to balance the budget. But since such conditions don’t exist, taxes are going to continue to irritate those who actually do pay them. Thanks for paying, rich Americans!

Jon N. Hall of Ultracon Opinion is a programmer/analyst from Kansas City. 

One reason one might suspect that the good ol’ U.S.A. has devolved into something a little different than what the Founders had in mind is taxation. Since the advent of the current federal income tax in 1913, more and more of our money is being taken away from us by taxes. Our governmental overlords feel they have the right to tax every transaction, every piece of property, every event, every idea, and every little thing in our short little lives. And make no mistake, what our overlords allow us to keep of our earnings and savings and assets is strictly due to the goodness in their hearts, so shut your trap and get back to work.

Our overlords, however, tell us that we’re overtaxed, and that reducing the tax burden will unleash a torrent of new economic activity and all will be blue skies and lollipops if we’ll just cut tax rates. But when they talk about income tax cuts for the middle class, they’re being dishonest. I recently did the math and discovered that the bottom 80 percent of federal personal income tax filers in 2013 had an average effective tax rate of less than 1 percent. Sounds unbelievable, but click and check it out. I used CBO data and merely averaged the effective rates of the four lowest quintiles. The bottom 60 percent of federal income taxpayers in 2013 had an average effective tax rate that was negative: -1.93.

Perhaps the reason they’re insulting us with talk about middle-class tax cuts is because they want to cut taxes for those at the top. But I’m sympathetic to that. Most of the personal income taxes are paid by an itty-bitty minority, the folks at the top. The 98+ percent of us who were not hit by the “fiscal cliff” tax hikes are still covered by the rates introduced more than 15 years ago by President Bush. The middle and working classes once actually paid income taxes, but no more, not to any extent. Of course, there are certain “anomalies” in the bottom 80 percent who do indeed pay significant taxes, but they’re the exception.

On July 26, The Intercept ran “Steve Bannon Pushing for 44 Percent Marginal Tax Rate on the Very Rich” by Ryan Grim. This 44 percent rate would hit those with incomes of more than $5 million, with the revenue going to pay for rate cuts for everyone else.

According to IRS data, just over 43,000 people filed tax returns for the year 2014 claiming income of at least $5 million, accounting for $600 billion in taxes, or 8.8 percent of the total taxes paid.

So the “alt-right” wants to raise tax rates on those already paying most of the personal income tax? (And here I thought I liked Steve Bannon.)

Mr. Grim didn’t provide any links for his IRS data, but some of the stats he cites can’t be right; for instance, the “$600 billion in taxes, or 8.8 percent of the total taxes.” Total Receipts in 2014 were $3.021T (see Table 1.1, page 26), so $600 billion would be closer to 20 percent. But we’re talking personal income taxes, not total federal taxation, and individual income taxes provided revenue of $1.394T in 2014 (Table 2.1, page 34). So, if $600B figure is correct, then the group that Mr. Bannon wants to target would have provided more than 43 percent of personal income tax revenue in 2014.

Frankly, I don’t trust any of the stats in the above quote. In fact, I have a hard time believing Bannon really wants a tax that touches so few Americans. You see, there were 148,606,578 returns filed in 2014, and the 43,000 of them that would have been hit by Bannon’s tax hike would have been less than 0.029 percent of all income taxpayers, and less than 2.9 percent of all the Evil One Percenters.

But here’s what’s really wrong with Bannon’s tax hike: it goes from incomes of $5M to infinity. That means that some pissant making a measly five megabucks a year is lumped in with, and is paying at the same marginal rate as, the Masters of the Universe, like hedge fund managers, who can make a billion bucks a year. A factor of 200 is what separates the $5M guy from the $1B guy. Exceedingly few earners make a billion dollars in a year. So it seems a little much to expect anyone to be happy with having the same tax rate as someone making 200 times what they make. Mr. Bannon’s 44 percent rate proposal may be a shiny object meant to divert attention; he’s much too smart to really want such a rate.

From the Left it’s always the same message: Tax the Rich. And now we’re getting it from the political “right.” But I have sympathy for the rich. You see, I suffer from this atavistic, perhaps Neanderthal, notion that The State should not be able to take more than half of an American’s income. That is, all levels of government, the feds, the states, and local governments, through all types of taxation, including income, payroll, sales, property, etc. should leave an American with at least half of her earnings. Take anything more than half, and we live in a fascist state. And if the feds actually did take 44 percent of an earner’s income in income taxes, they’d be leaving the states and cities with only 6 percent before getting into the taxpayer’s half of the taxpayer’s earnings.

It’s not federal personal income taxes that burden the vast majority of the bottom 80 percent of us; it’s all the other taxes, like payroll, property, real estate, sales, ObamaCare taxes, and tariffs and corporate income taxes passed along as higher prices. And there’s the proposed VAT and BAT (border adjustment tax). If Congress wants to ease the tax burden for the middle and working classes, look at that list. (POINTER: “The Next Revolution” is a terrific new program on Fox News. On July 23 in “Why elites don’t understand the working class” (video), host Steve Hilton interviewed Joan Williams about what’s been bugging American workers.)

Here’s an idea for Steve Bannon and Congress: How about cutting spending? Cutting spending is hard. Eliminating federal jobs, finding fraud in income tax returns and federal programs, making the government more efficient, that’s all difficult. Cutting income tax rates, however, is simple; anyone can do it, and it’s not real reform. We’re not going to usher in a new age of economic dynamism merely by tweaking federal personal income tax rates.

Imagine a tax system where Americans actually wanted to pay their taxes; where they might even be proud to pay their taxes. Seems impossible, right? Such a happy situation could not exist unless Congress was meeting certain conditions. For instance, folks would need to think they’re getting the biggest bang for the buck, so there couldn’t be much waste, fraud, and abuse in the public sector. And Congress couldn’t spend more than what they take in, so they’d need to balance the budget. But since such conditions don’t exist, taxes are going to continue to irritate those who actually do pay them. Thanks for paying, rich Americans!

Jon N. Hall of Ultracon Opinion is a programmer/analyst from Kansas City. 



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