IRS Numbers Shred Biden’s “Fair Share” Platitudes

[NxNW]

and so much for Biden's claim of not taxing anyone making under 400K lol..

There were no such claims.

 

[probinson]

There were no such claims.

Biden didn't say that he wouldn't tax anyone making under $400k, but he did say that he wouldn't raise taxes on anyone making under $400k.

"Nobody making under 400,000 bucks would have their taxes raised. Period. Bingo."​

- Joe Biden, May 22, 2020 ​

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President Biden’s No Tax Hike Pledge Problem

Nobody making under 400,000 bucks would have their taxes raised. Period. Bingo. – Joe Biden, May 22, 2020 Enacting good tax policy is hard under...

www.taxpolicycenter.org

​

 

[iluvatar5150]

No, he noted that, "It’s also important to note that the U.S. income tax system has become more progressive since the 2017 tax cuts under former President Donald Trump, not less." The author cites the data ("approximately 39% to today’s 45.8%") to support the truth of his claim.

Regarding the code being "steeply progressive" the author notes, "... it’s impossible to intelligently argue that the U.S. tax system itself isn’t steeply progressive." You have yet to make an objective argument countering that statement.

I know I haven't made an objective argument countering it. In fact, in post 33, I said "The definition of 'steeply' is a matter of opinion, but ranging between 16% and 26% doesn't strike me as all that steep."

In which of your posts did you correct the author's numbers?

Post 6. He listed a number of erroneous tax rates that had the effect of making the tax code appear much more progressive than it is.

No need to "sum up"; the author was quite succinct.

One can infer almost anything they can imagine; better to simply take the author literally: "... a reasonable equilibrium between someone’s share of income earned and their share of income taxes paid."

No, that's his definition of "fair."

What I asked for was his definition of "reasonable."

If you disagree then you ought to give us your alternative as to what constitutes a reasonably fair method to evaluate the fairness of the tax code.

I don't have a clear cut method, but that doesn't matter because I never made any arguments about whether the tax code was "fair." In fact, at one point, I said that "I don't really like the 'fair share' language, either."

No. I read your comment correctly and noted that it does not apply as a counter argument to the author's claim.

If you read it correctly, why did you address something entirely different?

What do you now see?

You can calculate his number for the bottom 50 from the information available about the total and the top 50.

TotalIncome - Top50Income = Bottom50Income
TotalTaxReceipts - Top50TaxReceipts = Bottom50TaxReceipts
Bottom50TaxReceipts / Bottom50Income = Bottom50TaxRate

That's a correct mean average across the bottom 50%, but I suspect it glosses over quite a few details. I'd like to see some breakdowns of those income tiers and where exactly the rate goes negative.

 

[NxNW]

Exactly what level of support, if ANY should government provide to it's poorest citizens?

If you ask a Libertarian, and there are plenty of them, they'll tell you Zero.

If these people are unable to get the necessary income to survive, what do you predict would be the next steps they would take?

If you ask a Libertarian, they'll tell you that these people should die. No government services, no taxes, no assistance even for poor children who will otherwise die. Every man, woman, and child for themselves.

 

[NxNW]

To be more precise, it jumped from 38.47% to 45.78%, which is an increase of 19%.

However, their share of income over that same span went from 21.04% (in 2017) to 26.3% (in 2021), which is an increase of 25%.

You're taking percents of percents, which is misleading. Taxes are measured as a percentage of income, not as a percentage of a percentage of income.

If I pay a penny of tax on a million dollars, and next year I pay two pennies, a Republican might complain about a tax increase of 100%, but it wouldn't be accurate.

 

[RocksInMyHead]

How so?

I live in PA where we have flat state income tax of 3.07%. How do you think that disproportionately disadvantages Pennsylvanians with lower income?

Consider the impact of losing 3% of your income when you're living paycheck to paycheck compared to the impact of losing 3% when you have millions in disposable income. Sure, it's a small enough percentage in this case that it's probably not going to make or break the first person, but it is going to impact their life more than it will the second person.

Now ramp that up to federal income tax levels (most flat tax plans call for a rate of 15-20%) and consider again.

 

[iluvatar5150]

You're taking percents of percents, which is misleading.

We've had this argument before. Talking about percents of percents is fine as long as you're clear about what you're describing and don't conflate percentages with percentage points. There is nothing misleading about what I wrote.

Taxes are measured as a percentage of income, not as a percentage of a percentage of income.

Ratios of change, which is what I was talking about, are measured as a percent of whatever unit is under discussion.

If I pay a penny of tax on a million dollars, and next year I pay two pennies, a Republican might complain about a tax increase of 100%, but it wouldn't be accurate.

It would absolutely be accurate to say that the tax rate increased by 100%. It would not be accurate to say that it increased by 100 percentage points.

 

[Laodicean60]

Flat taxes are extraordinarily regressive in that they disproportionately disadvantage lower income taxpayers.

I heard that before and there are pros and cons for both I feel each person living in America should pay taxes now that I've heard how detrimental the debt is to America. I rented the first home I owned and enjoyed the benefits, I wrote off most the income from that property, If I can do it then those millionaires in government and high-paid white collar (CEO) workers probably enjoy the same to the tenth level because they can afford the high priced lawyers to do it for them. Maybe this is why nothing can be done about the tax system.

I'm torn about "taxing the rich" because we are making them pay for being successful. One of the arguments against this is that it will hurt our economy because the rich won't be able to invest more in the economy. Conundrum

 

[iluvatar5150]

I'm torn about "taxing the rich" because we are making them pay for being successful.

We're not making them pay for being successful. We're making them pay for the services that facilitate and, in some cases, directly subsidize their success.

The highway facilitates you making $30k/yr at Taco Bell? Then we tax you like it's a resource required to generate $30k/yr.
That same highway facilitates you making $700k/yr as a surgeon? Then we tax you like it's a resource required to generate $700k/yr.
That highway facilitates you making $30M/yr as a hedge fund manager? Then we tax you like it's a resource required to generate $30M/yr.

Each of these individuals is extracting a different amount of value from that highway. I don't have a problem with extracting a different amount of tax from them in return.

One of the arguments against this is that it will hurt our economy because the rich won't be able to invest more in the economy. Conundrum

Where do you think tax money goes? The back of Bob Menendez' freezer? It goes back into the economy. In many cases, more of it goes back into the economy than does what passes for "investments" amongst rich folks.

 

[Laodicean60]

Consider the impact of losing 3% of your income when you're living paycheck to paycheck compared to the impact of losing 3% when you have millions in disposable income. Sure, it's a small enough percentage in this case that it's probably not going to make or break the first person, but it is going to impact their life more than it will the second person.

Now ramp that up to federal income tax levels (most flat tax plans call for a rate of 15-20%) and consider again.

I was thinking more like 10% lol but you're probably right. When I say flat tax that includes doing away with all the other taxes including sales, property.... Also a flat tax in my state like PA.

 

[RocksInMyHead]

When I say flat tax that includes doing away with all the other taxes including sales, property....

That would require even higher tax rates. Also, those are state taxes, not federal. I can generally support folding sales tax into income tax - that's also a regressive tax, in that the greater percentage of your income that you spend, the more tax you pay. So, people who spend the majority of their income on taxable items end up paying more in sales tax (as a proportion of their income) than someone who invests or saves most of their income.

However, eliminating property taxes would really put the burden on lower-income people - renters especially. Consider that they are already "paying" property tax in the sense that it's folded into their rent. Then, if you increase income taxes to cover the loss in property taxes, they're paying it again - because landlords aren't going to reduce rent just because their property taxes disappeared.

 

[probinson]

Consider the impact of losing 3% of your income when you're living paycheck to paycheck compared to the impact of losing 3% when you have millions in disposable income. Sure, it's a small enough percentage in this case that it's probably not going to make or break the first person, but it is going to impact their life more than it will the second person.

Now ramp that up to federal income tax levels (most flat tax plans call for a rate of 15-20%) and consider again.

Years ago, my company instituted an across the board 5% pay cut. Everyone, whether they made $20k or $500k, lost 5% of their income. So I understand exactly what you're talking about, as I was on the lower end of that spectrum. There's no doubt that the loss of 5% of my paycheck impacted me more than it did for the person making $500k.

However, most flat and/or fair tax plans I've seen also include some kind of pre-bate to address this imbalance.

I don't claim to have the answers, but our tax system is in dire need of overhaul and simplification.

 

[iluvatar5150]

I don't claim to have the answers, but our tax system is in dire need of overhaul and simplification.

The system isn't very complicated for individuals. The forms could be designed (a lot) better, but by and large, you get a W2, you enter your numbers, and you're done. Where it gets complicated is when you start taking deductions. Most people don't even have to worry about that because they don't itemize.

 

[RocksInMyHead]

I heard that before and there are pros and cons for both I feel each person living in America should pay taxes now that I've heard how detrimental the debt is to America.

Everyone in America does pay taxes - sales tax, gas tax, property tax (even by renters - they just pay indirectly). Not everyone pays income tax, but that's generally because it's deemed too much of a burden on people who make less than a certain amount of money.

I'm torn about "taxing the rich" because we are making them pay for being successful. One of the arguments against this is that it will hurt our economy because the rich won't be able to invest more in the economy. Conundrum

"Trickle down" economics has been proven not to work time and time again.

 

[Laodicean60]

We're making them pay for the services that facilitate and, in some cases, directly subsidize their success.

Can you give me an example are you talking about corporations?

Where do you think tax money goes? The back of Bob Menendez' freezer?

Probably or maybe in Trump's and Biden's basement. The government doesn't know where all the tax dollars are going so don't ask me. One Trillion dollars every 100 days are going into the economy? We are reaching a point where the interest payments on our debt is going to cost us as much as social security. This interest payment does nothing for the economy but pays for borrowed money.

 

[RocksInMyHead]

However, most flat and/or fair tax plans I've seen also include some kind of pre-bate to address this imbalance.

Sure, but when you cross that pre-bate threshold, you're still getting hammered with the maximum tax rate. I make about $65,000/year. My effective federal income tax rate is about 10%. In order to maintain that rate under a 20% flat income tax (assuming that FICA taxes aren't bundled with it), I would need a $32,500 deduction. Most plans that I've seen don't come close to this.

I don't claim to have the answers, but our tax system is in dire need of overhaul and simplification.

No arguments that our tax system needs an overhaul - I'm just saying that a flat tax is not the answer. It's attractive because it's "easy", but the problem isn't that taxes are complicated (as @iluvatar5150 pointed out). It's that there are too many ways to avoid paying taxes if you have a lot of money.

 

[iluvatar5150]

Can you give me an example

The whole paragraph about the highway was the example.

are you talking about corporations?

I was talking about individuals, but the same principle applies to corporations, too.

One Trillion dollars every 100 days are going into the economy?

If that's what we're actually spending, yes.

 

[Laodicean60]

don't claim to have the answers, but our tax system is in dire need of overhaul and simplification.

I second that! Maybe we can ask AI because something has to be done and spending curtailed.

 

[Desk trauma]

"Trickle down" economics has been proven not to work time and time again.

Works every single time, for the powerful people it is designed for not the people suckered into supporting it and waiting on the trickle to hit them.

 

[Laodicean60]

If that's what we're actually spending, yes.

Not 100% Because we give money overseas. I just copied 10 countries in 2024 that get the most and Afghanistan surprises me because the Taliban is getting our tax dollars and Yemen is launching bombs at our supply ships.. Ukraine is a no-brainer but we give your tax dollars to countries that don't like us.

Ukraine $16.2B
Ethiopia $2B
Jordan $1.2B
Afghanistan $1.2B
Somalia $1.1B
Yemen $1.1B
DR Congo $982M
Syria $894.7M
South Sudan $891.1M
Nigeria $886.2M

US Foreign Aid by Country 2024

Here is a link about the $1 Trillion every 100 days. When our ratings go down countries will be less inclined to loan us money.

"Moody’s Investors Service lowered its ratings outlook on the U.S. government to negative from stable in November due to the rising risks of the country’s fiscal strength."

https://www.cnbc.com/2024/03/01/the-us-national-debt-is-rising-by-1-trillion-about-every-100-days.html