Taxes redux

[Norman Bernstein]

Since we occasionally lapse into endless arguments about taxes, I thought it might be worthwhile to post a link to a recent graphic in the NYT that lays it out, as facts, not prejudice. It's highly interesting reading... and helps to confirm my suspicion that some people do indeed vote against their own economic interests.

http://www.nytimes.com/packages/pdf/nationa l/20050605_HYPER_GRAPHIC.pdf (http://www.nytimes.com/packages/pdf/national/20050605_HYPER_GRAPHIC.pdf)

Take a look... fascinating reading.

[George Roberts]

"lays it out, as facts"

I am not sure if it is indeed facts or not.

I expect the incomes are per tax return not per tax payer. That ommission may be seen by some as a lie.

The 4 graphs come from 4 sources. That selection may be seen by some to be a lie.

The statement "extra tax paid by those affected" is about as biased as can be. The Alt Min Tax is not an "extra tax". It is an alternative way to compute tax. One could say with as much justification that those NOT paying the Alt Min Tax are getting an "extra tax credit."

If we all vote in our self interest, noone would pay taxes.

[Norman Bernstein]

I am not sure if it is indeed facts or not... ...The 4 graphs come from 4 sources. That selection may be seen by some to be a lie.
The bottom of the page links to the sources. From what I can see, the authors of the graphic made a pretty good effort to get the best available data.


I expect the incomes are per tax return not per tax payer. That ommission may be seen by some as a lie.
At the top of the graphic, it says that the data is per tax return and tax filer. I hardly would classify that as a lie.... how ELSE could the data be compiled?


The statement "extra tax paid by those affected" is about as biased as can be. The Alt Min Tax is not an "extra tax". It is an alternative way to compute tax. One could say with as much justification that those NOT paying the Alt Min Tax are getting an "extra tax credit."
I don't know about you, but I pay my taxes in dollars... genuine American greenbacks that I toil to earn. As a big believer of the 'net effect', it doesn't matter one whit to me if the calculation is based on the regular form, the AMT, or if the entrails of an ox are examined, to determine my tax. A tax is a tax is a tax. What the graphic demonstrates is that there is a whopping tax INCREASE on the way, one that George Bush has conveniently neglected to address... and it hits upper middle income people especially hard.


If we all vote in our self interest, noone would pay taxes. With the possible exception of those who want to drive on federal highways, be protected by a military, or take advantage of any of the things that our taxes pay for. If you really don't care about any of those things, then yes,YOUR self-interest would be to not pay taxes at all.

Anyhow... the most interesting aspect of the report: people earning $50K - $75K pay just about the same percentage of thier income (17.4%) in federal taxes as do the top 400 taxpayers (17.5%)... so much for the idea of progressive taxation :(

[George Roberts]

Tax fairness is in the mind of the beholder. Consider who should pay more in taxes:

A business owner or an employee both with the "same" gross income and doing the same work.

A man who makes $20k for each of 50 years or a man who makes $1000k all at once. Both doing the same work. Adjust the numbers so we are using "constant" dollars.

In the past 3 months my wife has taken 3 "business" trips. 1 week to a local resort area, 2 weeks to norther Michigan - visited her mother and stayed on the lake, 1 week at Disney World. 6000 miles of driving gives us $2400 in milage deductions. 4 weeks gives us $1400 in food dedutions. 4 weeks gives us a bunch of hotel deductions. Compare that tax situtation to an employee who takes a 4 week vacation.

There are no fair representations of taxes.

I like your issue about national defense and other federal services...

To make the numbers easy: $6,000 billion economy, $1.500 billion for the services, 300 million people.

Each person can send a check $5,000 to pay their share. That appears to be fair. I don't want the services. I expect my check will not be missed.

On the other hand 25% of the economic benefit we recieve appears to be fair. Again I don't want the services. I expect my check will not be missed.

Perhaps we should just send in 2-3% of our gross assets. That seems fair. Again ....

There are NO FAIR tax plans.

[Keith Wilson]

There are NO FAIR tax plans. That and $1.25 will get you a cup of coffee. It may be true, but it doesn't help us decide how and from whom taxes should be collected. There may not be any completely fair tax plans, but some are less unfair than others.

(There are no perfect women either, but I've been married to one for 25 years who's more than good enough, thank you.)

[ 06-06-2005, 04:12 PM: Message edited by: Keith Wilson ]

[Norman Bernstein]

Tax fairness is in the mind of the beholder I'd tend to agree that 'tax fairness' can certainly be affected by individual perception. However, I'd argue strenuously that differing tax plans can't be compared and assessed for thier relative 'fairness'. If you toss your hands in the air and say 'there's no way to be fair when devising a tax plan', then would you also suggest that the people who have the most power in this country (i.e., the wealthy) should impose a tax plan where the top 0.1% pay NOTHING and everyone else pays whatever it takes?

Of course not. There is a logic behind trying to devise a plan which doesn't undully penalize some segment or portion of the population, or benefits one portion at the extreme expense to others.

Things which sound 'fair', like the so-called 'flat tax' ('everyone pays 17% or some other hogwash like that) are, of course, anything BUT fair. The incremental dollar that is taxed on someone who can barely put food on the table has a different meaning than the incremental dollar of someone whose personal wealth exceeds that of a number of small nations. I propose that 'fair' ought to mean something that respects our differing incomes, and pays some homage to those for whom taxes mean something more than the difference between luxury and extreme luxury.

Similarly, the means of how one derives their income shouldn't be ignored, either. The guy who buts his butt to earn $100K, and the guy who clips bond coupons to earn $100K, ought to deserve different tax treatment... IF you want to pay homage and respect to hard work and determination. Right now, we have it precisely backwards: ordinary income is taxed at a higher rate than passive income. Is that right... or 'fair'?

Finally, there's the issue of the value of services that taxes provide. Extreme Libertarians might argue that they neither want nor need federal expenditures (other than national defense), but in a democracy, you don't get to individually decide that... you CAN try to persuade others of the merits of your argument. Good luck! smile.gif

[Norman Bernstein]

To make the numbers easy: $6,000 billion economy, $1.500 billion for the services, 300 million people.

Each person can send a check $5,000 to pay their share. That appears to be fair. I don't want the services. I expect my check will not be missed.
Ahh, I see... the guy struggling to raise a family on minimum wage, with wife and two kids, pays $20K or so... sounds fair to me...yeah, right!

By the way... you're NOT going to drive on any federal highways, right?

[ 06-06-2005, 04:43 PM: Message edited by: Norman Bernstein ]

[seafox]

will read your link latter tonight but I was compelled to answer your statement about driving on the federal highways. they are not paid for with income tax they are paid with taxes on the vehicle and one the fuil the vehicles use.
a few years back when gas prices took a jump the feds took out ( temporarly) 4.2 percent of the gas tax that was going for " debt reduction" it was noted at the time that each penny of gas tax raises about a bilion dollers a year.

at just about the same time the highway funding bill was done for 10 years at I belive 288 bilion dollors pretty close to the 28 cents a gallon fuil tax the feds take.

bntw the idea that progressive is fair then why not make it so when you buy a car you pay say 6 months of your income and I pay 6 months of my income, no wait we need to make it progressive so I should pay 3 months and you pay 9 months.

the national retail sales tax isn't exactly what I would like but it is a lot better than what we have now
and at least it cuts out a whole lot of wasted time and energy doing taxes and cut out a lot of terror inflicted on the people by the goverment