Countdown to Extinction: The 2016 Presidential Election

[San Antone]

Exactly. I cannot blame Trump for taking advantage of the tax code. But a tax code which allows someone to boast of accumulating a net worth of $10 billion and simultaneously report no income has clearly been "rigged" to favor the wealthy. We can depend on Trump to "fix" this?

The section of the tax code that allows for business deductions is designed to benefit businesses, which used to be seen as also good for everyone.  It is a wacky world view in which businesses are called "the wealthy", and that therm used as a pejorative. 

The tax code has been called progressive for two reasons 1) it is indexed so that lower income citizens pay a lower percentage (often zero) of their income than higher wage earners and 2) it often allows for deductions in order to encourage behavior.  E.g. charitable deductions to encourage giving, home mortgage interest deductions to encourage home ownership, and yes, business deductions to encourage businesses to be profitable which allows them to hire more people and provide services to the public.

The top 1% (income of over $400,000 not really that "rich", imo, since family businesses are counted as well) of the population pays about half of all tax revenues and the bottom 60% pays less than 6% in tax revenues.

The corporate tax rate in the US is 35%; which is one of the highest in the world, e.g. in Ireland it is around 12.5% for active income and 25% for passive income.

Liberals like to cry foul and point their finger at the top 1% - I dunno, seems like the 1% are paying more than their share.

[Brian]

Liberals like to cry foul and point their finger at the top 1% - I dunno, seems like the 1% are paying more than their share.

...when, on a percent basis, they often pay less than their subordinates? When Trump's effective rate is probably zero? When many derive their income off investments and therefore enjoy a smaller rate than me?

Your "more than their share" is based on total share of tax revenue, rather than tax rate per individual.

[(poco) Sforzando]

The corporate tax rate in the US is 35%; which is one of the highest in the world, e.g. in Ireland it is around 12.5% for active income and 25% for passive income.

Liberals like to cry foul and point their finger at the top 1% - I dunno, seems like the 1% are paying more than their share.

That is the top marginal rate, not the effective tax rate. Big difference. Thanks to all kinds of tax loopholes and breaks, many large corporations are in fact paying no federal tax at all. Ever hear about Apple over in Ireland? And don't forget Warren Buffett and his secretary. How about those 1% who derive much of their income from capital gains which are taxed at a lower rate than ordinary income? Damn straight we liberals are calling foul.

http://tinyurl.com/h9t2wpr

[Madiel]

Considering the damning spin the media and the Clinton campaign made of his entirely legal business loss deduction I am not surprised Trump does not wish to volunteer any information to the Clinton campaign.  Information that they will twist and distort and with a willing press use to inflame public opinion against his ordinary tax practices.

Yeah, no mystery there - but of course The Atlantic wishes to spin that as yet another "disqualifying" attibute of Trump's candidacy.  Blah, blah, blah.

I just love these irregular verbs. Spin, twist, distort... These are only things that "other people", over there, are capable of doing. Whereas "I" and "we" only ever tell it like it is.

Oh, and well done for recently raising the dead voting Democrat yet again, and yet again managing to direct it at a non-Democrat. You seem incapable of grasping that the entire world does not fall into two neat boxes.

[(poco) Sforzando]

I just love these irregular verbs. Spin, twist, distort... These are only things that "other people", over there, are capable of doing. Whereas "I" and "we" only ever tell it like it is.

Don't you get it? This is the guy who's ever ready to call foul at biased reporting. Bias, of course, only applies when his guy is being attacked; when the other side is involved, anything goes.

[Madiel]

Also I'd very interested to know what is a fair share for the top 1% of people to pay.

Perhaps we can at least start by establishing what percent of the MONEY they have, which is actually far more relevant than how many names or birth dates they possess.

Similarly, whether 60% of people paying 6% of the tax is okay has nothing to do with them being 60% of the population. And a lot more to do with what percent of the money they have.

[(poco) Sforzando]

Perhaps we can at least start by establishing what percent of the MONEY they have, which is actually far more relevant than how many names or birth dates they possess.

As a commenter noted in the evil New York Times: "The richest 62 billionaires now own as much wealth as the poorer half of the world's population (i.e. 3.7 BILLION people). In 2010, the 388 richest people owned the same wealth as the poorest 50%...now it's down to just 62 Richie Rich's."

Part of the problem is that the debate has been phrased in terms of income inequality, as if Warren Buffett's secretary should earn as much as Warren Buffett. I don't believe even the secretary would agree to that .The real issue is parity of growth, in that the Richie Rich's have seen a massive explosion of their income in terms of percentages, while the rest of us have seen little or no growth at all (especially when adjusted for inflation). Seen in that way, raising the minimum federal wage to $15 an hour is - well, minimal.

[Madiel]

Yes to all that. I've previously seen commentary on the widening gap.

What I can find right this second is this: https://www.theguardian.com/business/2014/nov/13/us-wealth-inequality-top-01-worth-as-much-as-the-bottom-90

But I've definitely seen, a year or two ago, a quite detailed discussion of how the wealth distribution is far MORE skewed now than it was a few decades ago.

I'm actually finding it quite amusing that sanantonio could throw out " the bottom 60% pays less than 6% in tax revenues" as if it's some kind of horrible revelation or injustice that needs to be fixed by bringing the 6 closer to 60. When there's plenty of data to suggest the 6 might be too high.

[Madiel]

I should of course note that the last article referred to wealth inequality. So perhaps we should focus on income inequality.

In which case I offer this: https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States   and note that, like other things I've read, it indicates that the US scores fairly poorly on a variety of measures to do with income.

I particularly like this bit:

There is a direct relationship between actual income inequality and the public's views about the need to address the issue in most developed countries, but not in the U.S., where income inequality is worse but the concern is lower.

And there's several references pointing to how the US tax system actually creates the problem, such as this:

One 2013 study indicated that U.S. income inequality is comparable to other developed countries before taxes and transfers, but rated last (worst) among 22 developed countries after taxes and transfers. This means that public policy choices, rather than market factors, drive U.S. income inequality disparities relative to comparable wealthy nations.

Of course, in Europe/Canada/Australia/New Zealand we're all just a bunch of commies. 

[North Star]

I should of course note that the last article referred to wealth inequality. So perhaps we should focus on income inequality.

In which case I offer this: https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States   and note that, like other things I've read, it indicates that the US scores fairly poorly on a variety of measures to do with income.

I particularly like this bit:

There is a direct relationship between actual income inequality and the public's views about the need to address the issue in most developed countries, but not in the U.S., where income inequality is worse but the concern is lower.

And there's several references pointing to how the US tax system actually creates the problem, such as this:

And compare it with this:
https://www.youtube.com/v/QPKKQnijnsM
http://www.businessinsider.com/inequality-in-the-us-is-much-more-extreme-than-you-think-2015-6

[Madiel]

And there's several references pointing to how the US tax system actually creates the problem, such as this:
And compare it with this:
https://www.youtube.com/v/QPKKQnijnsM
http://www.businessinsider.com/inequality-in-the-us-is-much-more-extreme-than-you-think-2015-6

THANK YOU! That is one of the things I was looking for, but couldn't remember where I'd seen it.

[(poco) Sforzando]

I should of course note that the last article referred to wealth inequality. So perhaps we should focus on income inequality.

They are related. Everyone has both a personal balance sheet (your assets, monetary and otherwise, and your liabilities) and a personal income statement (your income and outgo). Say your balance sheet includes long-term liabilities such as a mortgage and/or student loan debt, and a portion of your income goes to paying off those loans. Your disposable income, quite likely including the amount you have left over for savings and investments or the percentage you contribute to retirement, necessarily suffers as a result.

[North Star]

Overall, real average incomes per family in 2014 grew by a substantial 4.8 percent. For the bottom 99 percent of income earners, this marks the first year of real recovery from the income losses sparked by the Great Recession of 2007-2009. After a large decline of 11.6 percent from 2007 to 2009, those families saw a negligible 1.1 percent in real income gains from 2009 to 2013. But a full recovery in income growth for the bottom 99 percent is still not in sight. In 2014, these families recovered slightly less than 40 percent of their income losses due to the Great Recession.

Those at or near the top of the income ladder did substantially better in 2014. The share of income going to the top 10 percent of income earners—individuals making an average of $300,000 a year—increased to 49.9 percent in 2014 from 48.9 percent in 2013, the highest ever except for 2012. The share of income going to the top 1 percent of families—those earning on average about $1.3 million a year—increased to 21.2 percent in 2014 from 20.1 percent in 2013. Income inequality, then, remains extremely high, particularly at the very top of the income ladder. (See Figure 2.)

More broadly, the top 1 percent of families captured 58 percent of total real income growth per family from 2009 to 2014, with the bottom 99 percent of families reaping only 42 percent.

http://equitablegrowth.org/research-analysis/u-s-income-inequality-persists-amid-overall-growth-2014/

[Madiel]

They are related. Everyone has both a personal balance sheet (your assets, monetary and otherwise, and your liabilities) and a personal income statement (your income and outgo). Say your balance sheet includes long-term liabilities such as a mortgage and/or student loan debt, and a portion of your income goes to paying off those loans. Your disposable income, quite likely including the amount you have left over for savings and investments or the percentage you contribute to retirement, necessarily suffers as a result.

Preaching to the choir. But, you know, income, income tax. Let's not make it too complicated for the students at the back of the class who believe the top 1% are paying more than their fair share.

Except, of course, for those in the top 1% who managed to post massive tax losses. Who should be congratulated for not paying anything at all, apparently at the SAME TIME as their cohort receives sympathy for paying too much.

[(poco) Sforzando]

Who should be congratulated for not paying anything at all, apparently at the SAME TIME as their cohort receives sympathy for paying too much.

And at the same time those famous 47% earning poverty level wages are pilloried for not paying anything at all (which refers only to federal income tax, as if these people are not paying payroll taxes, sales tax, gas tax, etc.).

[Madiel]

While we are on this topic, it's also true that those who are well off rarely see themselves as well off.

This is an Australian report and tool. There may well be an American equivalent out there somewhere***:

2015 edition http://www.smh.com.au/business/the-economy/tool-that-compares-your-income-shows-most-australians-are-out-of-touch-20150512-ggznib.html##incomecalculator
2016 edition http://www.smh.com.au/federal-politics/political-news/income-distribution-australias-highest-earners-think-they-are-battlers-20160212-gmt62w.html

But I've seen similar things before. People regularly underestimate their own position in society. And I did it too - not to the point of delusionally thinking my income is average, but I still underestimated a little. I won't tell you the actual percentiles involved, but while I knew I was quite well off**, it turns out I'm even more well off than I believed. I'm not a one-per center, but I've got enough to keep a classical CD habit going...

**And have no gripe with the taxes that I pay.

EDIT: *** A google for "income percentiles US" appears to offer quite a few percentile calculators.

[Madiel]

(income of over $400,000 not really that "rich", imo, since family businesses are counted as well)

If that's a household income of $400,000.... Yeah. Top 2% according to the CNN calculator. As an individual income it would be top 1%.

Let's forget about "in your opinion" and try some facts. That's pretty much the whole point of the debate I've generated in response. Facts. Actual data about income. Not opinions pulled out of thin air.

[Herman]

Re: Trump's tax morals. Perhaps it's legal to arrange your income in such a fashion so that you don't pay any income taxes and keep boasting you're making billions.

But in that case you demonstrate you're not a bona fide part of civic life. As He's done too by conducting a phoney charity organisation, using other people's money to pay off his law suits.

If that's the way you conduct yourself you shouldn't run for public office.

[Pat B]

If that's a household income of $400,000.... Yeah. Top 2% according to the CNN calculator. As an individual income it would be top 1%.

Let's forget about "in your opinion" and try some facts. That's pretty much the whole point of the debate I've generated in response. Facts. Actual data about income. Not opinions pulled out of thin air.

Depends on whether you're talking gross income or taxable income. Taxable income excludes business expenses (and other deductions). If a household has $400,000 in taxable income then they are really that rich. $400,000 in gross income may or may not be rich.

[Madiel]

Depends on whether you're talking gross income or taxable income. Taxable income excludes business expenses (and other deductions). If a household has $400,000 in taxable income then they are really that rich. $400,000 in gross income may or may not be rich.

I'll leave it to the sites that have calculators to tell you which kind of income they each ask you to enter.

EDIT: I note, however, that I've already referred to the Wikipedia article that mentions it's the system of tax that makes the US more inequitable than comparable countries, by allowing wealthy people lots of deductions.