Ugh... The only thing that is wrong here is that people believe and spread this junk.
This is a conservative blog, obviously, but we believe if you're going to vote, regardless of whichever side you're on, we hope you have the truth behind any and all information you care about. If you have read this blog recently, you certainly have realized that we are growing tired of this constant lie that claims millionaires pay lower tax rates than the middle class. Obama and the leftist media broadcast this like it's the norm. It's not. Yes, there are some select cases (as the Congressional Research Service report on the Buffett Rule shows) of this, but since the fact exists that only 25% of millionaires pay lower tax rates than 10% of middle class taxpayers, it's statistically slim at best. We will not rest until the truth is seen.
In comes the picture above. Let's make this clear: it is 100% false. The average teacher (salary of $40,000 yearly) does NOT pay an effective tax rate of 25%. The following chart shows the average income tax rates for various income group breakdowns:
If you factor in payroll taxes (6.2% for Social Security, the pre-payroll tax holiday rate, and 1.45% for Medicare taxes) of 7.65% total, the average American worker earning approximately $40,000 pays an average tax rate of 14.45% before deductions. When deductions are factored in, the middle-class taxpayer pays a final effective tax rate that is much lower than 14.45%. After deductions, Mitt Romney paid a final effective tax rate of 13.9%. For comparison purposes, using a real-life example, as seen in the chart shown in this blog post (http://bit.ly/yCNO36), MY final effective tax rate is 13.5%.
Well, what about teachers? What about the claim that teachers pay 25% as seen in the propaganda above? Funny you asked... my wife is a teacher. Just as I did in the previous link, I am sharing her tax information (with her permission, of course). See the chart below:
Yes, the house is in my name for now. Regardless, look at the rate. 13.7%!!! It isn't even close to the alleged 25% rate seen in the poster above. Truth? Well, it is one example of it. But, with the IRS chart above and the numerous studies and reports we have highlighted throughout this blog, the truth is that millionaires DO NOT pay lower tax rates than the middle class. I would love to see someone come forth with evidence that millionaires do. Thank you.
When faced with facts, what will the left do? I'm guessing:
ReplyDeleteA. Name calling
B. Trying to change the subject
C. Claim your facts (though from IRS, CBO) are wrong
D. Blame Bush
E. All of the above
I'm pretty certain that both sides are guilty of the above on many occasions, and equal amounts.
DeleteAnd all repeating your statement does is encourage the same pointless monotony to continue.
Why does so much of politics have to revolve around labeling the other side as wrong/stupid/biased/immature, rather than discussing actual facts and having civilized debates for the betterment of America?
Anonymous reply - Thank you
DeleteI do agree, both sides do this. And it doesn't help at all.
We at The Elephant in the Room would rather promote facts and real info than slurs and such. In any argument, left or right, we stand closer with truth and fact-backed statements than anything. We don't like misinformation and feel we can help people see real evidence of counter arguments when they exist.
For the poster above, the 25% rate teachers pay, and the myth that is being passed about it simply isn't true. Rather than smear and go nasty, we feel an educated, fact-based counter is the best way to spread a rebuttal. We don't, however (unless they are threatening, hate-filled, etc), delete comments on our blog because we believe in running an open forum. Sure, the comment in which you replied doesn't make an agreeing or dissenting argument with facts and citations, but we aren't going to delete it.
What did you think of the info we wrote in our post? Thank you for your time and I hope to hear back from you.
And thank you for the reply.
DeleteCertainly is very refreshing to see a level-headed, mature, and factual approach to dissecting propaganda and discussing politics. It is incredibly valued and I only wish that more people would follow suit, but nevertheless your efforts in this are very much appreciated.
You've earned my respect and I will surely monitor this blog in the future, and try to add in another perspective when I can. I like to call myself independent, though to be completely fair I likely lean liberal more than conservative.
I suppose I’ll rebuke the anonymous tag as well.
That said, I do agree in keeping the good with the bad in running an open forum.
As for the information in the post; it’s very well-written, clear, concise in the point and cited properly. My only gripe was the point highlighted in the other comment I made here (which I’ll reply to in that thread).
Again, thanks.
13.7%???? How dare she?! The government needs more of her money
ReplyDeleteYour teacher wife makes more than my teacher wife. We should take from yours and give to mine!!!
ReplyDeleteI kid I kid
I think you're missing a point here.
ReplyDeleteIt's easy to form an argument against a strawman and tear it apart, but how about one of the actual, practical arguments people are making on this subject?
No one of any importance has ever said or argued that "all millionaires pay lower tax rates than all middle class workers." Hell I'll stand with you in laughing at anyone that sincerely believes that to be true; and needless to say it's easily proven false.
But, that's not the real argument most people are making (unless all you do is monitor liberal extremist websites).
The argument is that no millionaire should ever pay tax rates close to any middle class citizen. And believe me, they do exist. You would be hard-pressed to prove that they don’t by any means. Heck, my tax rate is 20% for federal as a middle class worker.
Even in Obama's SOTU address his exact words were more along 'a millionaire should never pay the same or less of a tax percentage than a middle class worker.' That, is the argument. Not that all millionaires shouldn’t pay less than all middle class workers; that’s ridiculous.
Too much of politics lately is taking an extreme piece of propaganda/filler from the far left/right and acting like it’s what everyone believes. There’s no middle ground anymore.
Anonymous - Thank you for your post.
DeleteI can completely understand where you’re coming from, I do respectfully disagree, somewhat. The issue I have with your post is when you said: No one of any importance has ever said or argued that "all millionaires pay lower tax rates than all middle class workers."
You’re probably right (in some sense) but, to me, that’s not the message that is being broadcast. Al Sharpton blasted a congressman from Kansas and kept asking him “is it fair that millionaires pay a lower tax rate than the middle class?”
When Obama spoke about inequality in Osawatomie, Kansas he said “That is the height of unfairness. It is wrong. (Applause.) It's wrong that in the United States of America, a teacher or a nurse or a construction worker, maybe earns $50,000 a year, should pay a higher tax rate than somebody raking in $50 million. (Applause.) It's wrong for Warren Buffett's secretary to pay a higher tax rate than Warren Buffett. (Applause.) And by the way, Warren Buffett agrees with me. (Laughter.) So do most Americans -- Democrats, independents and Republicans. “ (http://articles.latimes.com/2011/dec/06/news/la-pn-text-obama-speech-kansas-20111206)
To me, that kind of speech doesn’t imply “as small few.” (yes, it is a small few… only 25% of millionaires pay a lower tax rate than 10% of the middle class). Also, the poster at the beginning of our post doesn’t make the claim that it’s a small few, either. From the news media, the claim being made seems to be that this is the norm. That’s where my biggest problem comes in.
I do agree that no millionaire should pay a lower tax rate than the middle class. But at 25% of millionaires (94,500 out of 378,000) paying lower rates than only 10% of the middle class (10,400,000 out of 104,000,000), that’s a very small case.
With regards to your tax rate, is that (20%) your final effective tax rate (after deductions and refunds)? I make about $53k (and as you can see my wife makes around $45k). I posted my tax info in a previous blog to show that my effect tax rate is only about 13.5% I saw about 20% going out each paycheck, but, after factoring in my refund (which comes heavily from mortgage interest deduction) I actually paid only about 13.5%. Is this the case for you?
Thank you for your input. I hope to hear back from you hear, and if not, I hope you come back and participate more in our open forum.
And again, thanks for the (mature, well-thought out) reply.
DeleteI definitely will side with you in that promoting the idea as much as some media outlets/political figures have, and even in the way they’ve gone about it has greatly exaggerated the real situation. It is indeed a rare situation that someone with a significantly higher income will pay less (as a percentage) than anyone with lower income; the numbers don’t lie there.
And as much as I don't like the term "class warfare" (especially as it becomes more overused), the way it has been approached in quite a few instances do more to 'villainize/spite' a group of people than provide a basis for practical discussion.
All of that said, I do believe that even though rare, it is a situation that should be eliminated.
Everyone has their own definition of ‘fair’ when it comes to this topic, reasonably so. Some will argue that even though (for example) Mitt Romney only paid ~15% of his income worth of taxes, he has also paid more money into the system than 99% Americans ever will and asking him to pay even more is unfair. A valid point, but I simply don’t agree in that view of fair as much as I believe that people that can afford to pay more into the system, should pay more for the greater good of the country as a whole. I don’t agree with taxing the person that is working hard but still barely able to get food on the table paying the same rate as a multi-million/billionaire.
Others argue that they don’t believe in paying more to a government that doesn’t manage its money well, but I think that’s a different discussion all-together. I’d rather see those efforts diverted towards putting focus in how our government can manage money better, rather than just protesting contributing more to it.
As far as my tax rate, yes, that is my effective overall tax rate. It is also admittedly the highest possible tax one can pay at my salary, because I essentially have no deductions at all other than the standard, and am filing single with no home.
Rken – Thank you very much for the kind words! Some quick info about our blog:
DeleteYes, we are conservative (we don’t hide it :-) ) but, we respect all views. We believe in sharing information. We are only one view point, and perhaps we can learn from the “other side.” It’s difficult to learn, however, with all the politically charged vitriol we hear on both sides clouding out simple truth and fact. If we can respectfully share information, we might disagree (respectfully, always) with the other side, but it really helps to know why the other side feels the way they do if they can express themselves with respectful ears listening.
We believe in truth and fact-backed opinions. We always say we stand closer to opposing views that are backed than agreeing views that are not. If someone claims “Obama is bad” we tend to not like it (yah, that’s a slim example). If someone claims “I think Obama is bad for our country because this policy caused this and that policy caused that” and the comment maker has relevant facts to back it, we think that’s the way to go. Our biggest pet peeves are lies, misinformation or the propagation of myth.
I write “we” here because this isn’t one person’s blog. There is a staff of three (two writers and a graphics… guy?) that continually manage writing, reader’s responses, marketing, etc. Most importantly, this is a “people’s blog.” Sure, that sounds cliché, but we want open lines of communication where anyone of any view can express themselves. Of course, we are going to preach from our conservative pulpit, but we welcome dissenting (hopefully, without the name calling) challenges because we feel we have the right to challenge any opinion, too. In the civil exchange of ideas, hopefully everyone can learn something. If you have read through our blog you will notice Reader’s Posts. (http://loudmouthelephant.blogspot.com/2011/12/readers-posts-our-open-forum-blog.html) These are open invitations for anyone to express themselves in any way on any topic. We also encourage civil (we promise to maintain civility when we engage though we can only promote, not promise, this from our commenters) debate in the comments section of every post.
I (and speaking for the entire blog here, which is safe to say) definitely believe in a flat-rate tax system (since you brought it up :-) ) but that's for a different day. And thank you for answering about your final effective tax rate.
Your responses are definitely respected here. I might disagree with them, but you express your points well. We are slowly growing. There are many here that write and/or comment that have beliefs in stark contrast to those of this blog... but that's totally okay!
I know this is probably a long synopsis… but I hope that gives you an understanding of what we’re about. We would definitely love to hear more from you, whether it’s writing your own views or rebutting ours. Thank you very much, and I/we hope to hear back from you soon!
"It's difficult to learn, however, with all the politically charged vitriol we hear on both sides clouding out simple truth and fact. If we can respectfully share information, we might disagree (respectfully, always) with the other side, but it really helps to know why the other side feels the way they do if they can express themselves with respectful ears listening. "
DeleteCouldn't agree more with that sentiment, and unfortunately that political vitriol makes it hard for many to discern the true facts.
I always am 100% for facts, regardless of how it may conflict with my viewpoint/opinion. And your agreement in that is very admirable (and sadly seems increasingly rare).
Job well done though on the blog to the three of you, and I look forward to some interesting debates/discussions in the future!
Thanks for the synopsis.
RKen - Looking forward to your input as well!
DeleteSo ...you are stopping left wing propaganda with right wing propaganda ?
ReplyDeleteHmmmmm.
Or, just possibly, they are stopping propaganda with truth. Hmmmmmmm
DeleteFor real, Anonymous, he gave you three sources with links, and his wife's tax return. However, if you wanted to be to be cantankerous, you could question the tax return. I guess that is the only part of his argument that you could question(and I'm not saying that I question the truthfulness of the return, just making a point). The chart comes from the IRS, which isn't an opinion magazine.
Anonymous - Thank you for your post.
Delete32Slim32 - You beat me to it! :-) I will still respond with what I was going to say:
How is this post propaganda? First, propaganda is defined as "1.the organized dissemination of information, allegations, etc, to assist or damage the cause of a government, movement, etc". So... with that?
- Yes, the picture floating around on Facebook IS propaganda. It is a lie.
- No, our post is not. I cite CRS reports, IRS reports and my wife's actual tax info ( I can mail you a copy of her W-2 if you like).
I am refuting propaganda with facts. Please explain to me how this is propaganda. Thank you.
I've seen a similar ad on MoveOn.org and the DailyKos... (whilst watching the other hand : )
ReplyDeleteHubby and I pay pretty close to 20% - never a refund for us - as we have little in the way of deductions -(and...some years I must hold my nose and cut an additional check to Uncle Sam!)... would we like to pay less - sure. Do I want Romney or anyone else to pay more - no.
This focus the percentage of taxes paid by individuals and others (corporations) is another smoke and mirrors diversion from the REAL issue - which is rampant, unsustainable Government spending.
See Greece for how this will end, if not checked.
FACT Back when the top tax rate was 91%, (Under Eisenhower) the number of people within that bracket diminished significantly, when it dropped, they magically reappeared.
Along with unreasonable and unsustainable demands by unions - high taxation of corporations by the govt. was high on the list of reason that most manufacturing LEFT the U.S. and... the reason they've not come back!
Setting aside the furor which arose at the mere mention of making adjustments to SS/Medicare in the interest of sustainability.. we have a Pres. and a large lump of Congress, seeking to spend even MORE money - we don't have - on NEW Govt. programs... to be paid for with higher taxes on those 'who can afford to pay a bit more' in the name of 'fairness.'
(Nevermind the fact that those same people will NEVER reap any of the benefits of said programs - new or old.)
This is total and complete hogwash... never, in the course of my lifetime, have the 'I'll gladly pay you Thursday for a hamburger today' crowd (Dems) ever come through with cuts to the budget - after raising taxes - on anyone.
The TP people in Congress get that - and that's the reason they are sticking with the 'no new taxes' theme... so far, anyway.
'Progressive taxation' by its very nature - is categorically 'unfair.'
Our current tax code with its bazillion pages of deduction and loopholes for all sorts of special interest groups - is unfair.
I'm really weary with hearing the word 'fair' in conjunction with taxation - so here's the diffinition of it:
fair (adj)
reasonable or unbiased: not exhibiting any bias, and therefore reasonable or impartial
done properly: done according to the rules
Synonyms: reasonable, just, fair-minded, open-minded, impartial, rational, nondiscriminatory, unbiased, objective, dispassionate, honest, evenhanded.
Instead of demonizing 'the rich' and demanding higher taxes (on only them!) to fund 'new' entitlement programs or those ever popular 'shovel ready jobs', how 'bout we get a handle on our CURRENT, unsustainable level of spending?
Sing it sister:
DeleteAlong with unreasonable and unsustainable demands by unions - high taxation of corporations by the govt. was high on the list of reason that most manufacturing LEFT the U.S. and... the reason they've not come back!
The left will spin this. They will never acknowledge it as long as they can keep their King Obama looking squeaky clean.
I don’t quite agree with it being as simple as you explained.
DeleteThe biggest point being that we have the lowest average income tax rates in the world, of any major first world country (source: http://en.wikipedia.org/wiki/File:Income_Taxes_By_Country.svg). The argument that raising our taxes slightly will force Americans to run for the hills is very much exaggerated, because short of moving to a third world country or a place like Mexico/Korea, no one is going to enjoy any kind of sizeable tax relief in doing so.
With that in mind, I think it is completely reasonable to raise the taxes of the country to levels more common among other first world nations. I’m not talking a 91% tax bracket, but I am talking a small few% increase and the elimination of some of the excessive deductions/loopholes.
And, just for the record, I do agree that corporate tax rates are a completely different story and should be lowered substantially from what they are now. Our corporate tax system is completely ridiculous right now, in that it makes it harder for business to run in America and it favors companies that spend large amounts of money on lobbyists/accountants/etc, which also absolutely devastates small and starting businesses. The rates overall are also just too high as well.
Back on personal taxes, I would also argue that a 'regressive taxation system' by its very nature is unfair; and even more so than a progressive one.
Yes, a progressive system requires those that earn more to pay more than those that earn less. And I agree that this can be viewed is unfair.
But, a regressive system that requires those that earn less to pay more as a percentage of their income, strikes me as far more unfair. Particularly in cases where people are living paycheck to paycheck.
Furthermore, passing policies that force those that are less fortunate to contribute just as much (as a percentage) of their income in taxes not only is less fair in my view, but it also would likely force even more people into welfare/gov assistance programs. Which doesn’t help anyone.
As a side note, I find it particularly odd that when we talk about who donates the most to charity, we always look at it as the percentage of income (and not the actual figures) being what matters. But when it comes to our tax system, that whole idea flips sides. Why is this?
All of that said, I also agree that it is completely fair to not want to pay more in taxes/raise tax rates because you believe that the government is miss-managing/inefficient with the money, and not agreeing with giving them more before they improve on what they’re already bringing in. But I think that is a completely different argument, and if that’s what you truly feel then it should be made clear and not hidden under the guise of not wanting to force the rich to move out of the country or anything else.
I also very much disagree with the TP approach in this, as 'pledging to never raise taxes ever' when polls have shown the majority of the voter base actually believed that raising taxes is part of the solution to our debt problem (and the S&P cited the lack of a revenue component in our budget proposals as a reason for our downgrade) is unreasonable. Congress is about compromise, and while it's fine to fight for a cause, being unwilling to compromise with anyone or even listen to voters is completely irrational.
RKen – good evening! Great to hear from you.
DeleteIt’s interesting… I actually agree with you on some of this, and for some of your comment, I disagree. I think I’ll try to address each individually (it’s not to belittle, or pick apart, it’s to make sure I accurately address everything).
First, you said: “The biggest point being that we have the lowest… tax relief in doing so.” - This is one I most definitely disagree with :-) Income taxes, maybe, but we are heavily taxed with everything else (payroll, gas, property, city, county, sales, etc. etc. etc. Even if this wasn’t true, I don’t like the argument of “well, everyone else is doing it.” Taxes are highly elastic. The economy should be a two player proposition between sellers and buyers. The more the government gets in, whether it’s taxing income (the buying and selling of labor), goods (sales tax), property (capital), the more this third wheel grows and interrupts the growth. The more money removed from the economy via taxes, the worse off everyone is. I think you’d be surprised how much a “little” tax rate affects the economy. Many (Bob Brinker for one) believe that an increase in gasoline acts as a “tax” and the effects in the economy post-gas price increases are felt by all.
You then said: “With that in mind, I think it is completely reasonable… excessive deductions/loopholes.” – Again, I’m not for raising taxes. If we raise and raise and raise, when does it stop? As a firm believer in a flat-rate tax system, I am completely for the elimination of loopholes and deductions for all taxpayers. I am firmly against any form of government discrimination.
As far as corporate taxes… yes! This is one I strongly agree with you on.
(continued) - Yes, as you probably know, I think the progressive tax rate is incredibly unfair. Yes, the government needs money. Yes, the poor can’t afford as much. But income is a product of choices, not static, unchangeable notions. We are not born into our income. Because some made different choices than others, why should the government discriminate and make the tax rate different. I believe it should be a flat rate. The government should simply say “hey, if you go out and work, we are going to tax a flat 10%.” For every hour you work, 54 minutes go to you, 6 to your country. To me, that’s the epitome of fair. And it sounds harsh, but someone has to say it: if the poor can’t handle that minimal tax rate, they can work harder to make more. The bottom line to me is, for a government that is supposed to promote equality, I don’t understand how telling two people they must pay different rates in taxes is fair.
DeleteAs far as donations, I’m not well educated on it and I’ve never looked in to it. My background is finance and economics. I have taken many courses in taxes, but none in donations. I will look into it more, though.
As with Dara, I’m in that group that we should NOT be giving more money to this over-bloated, grossly mismanaged, inefficient government body. Yes, that is a different argument.
As far as never raise taxes again, I’m not affiliated with the tea party, but I can see why this view exists. It kind of goes back to “if we keep raising, when do we stop.” Economics teaches us that the best way to raise tax revenue is to actually reduce rates (in a 2008 debate with H. Clinton, Obama was asked this question, and yes, for some reason, ignored this sound economic fact). I do not believe at all that raising taxes is the way to fix our debt problem. I believe the way to do it is to sharply cut spending. If I want to save more money each month, I can’t just increase my pay… I have to cut what I spend. I feel the government (of the people, by the people, for the people) should run itself just as people do. Here in Maryland, our governor is proposing shifting teachers’ pension funds from the state to the counties, taxing mobile phone app downloads, increasing the gas tax, and putting another sales tax on gasoline. How could this possibly be good for the economy of Maryland? Letting people keep more of their money so they can buy the goods and services of companies ultimately increases the velocity of money (a concept rarely discussed, but vitally important in economics) which would ultimately increase government revenues.
Thank you again. These are quite long posts, but we are having a great discussion. I truly appreciate the civil exchange, and I/we at the blog hope you are getting something out of it, too. Looking forward to hearing more from you.
Good morning!
DeleteI see eye to eye with you on some points, but also have some slight disagreements.
Regarding taxes, I don’t necessarily agree that non-corporate taxes are directly related to economic health. I do agree that taxes can definitely affect the economy, but there’s just no evidence that there is a substantial direct, linear, and absolute causal correlation between them (in that higher taxes always = worse economy, and lower taxes always = better economy). Our economy went through the exact same ups and downs as always despite taxes being lowered consistently since the mid-1900s. We’ve had economic growth and fall during high tax periods, and low tax periods. This isn’t to say they have no possible relation at all, I just think that it has yet to be proven on a direct and substantially quantifiable level, and that simply far more comes into play than non-corporate tax rates for our economy; especially when we’re talking about a meager few % difference.
And, there definitely is a point of value in taxes where we do need infrastructure, national security, a functional government, etc.
As far as income being a product of choices, to an extent I of course agree, but the exceptions to that rule are the exact reason I don’t feel a flat or regressive tax system is more fair here.
In a perfect world where hard work and your income are directly related in a linear scale, I would 100% agree with a system that revolves around the philosophy of income being a product of choices (likely with flat tax rates). But, that’s simply not he case. The reality of our world right now is that hard work does not necessarily mean you will be successful, or even guarantee you won’t be poor. Luck plays too big of a factor, and while people aren’t born into their income they are often born into disadvantaged situations. For every person that works hard from humble beginnings, is successful, and lives a happy upper middle class/wealthy life, there are thousands that are working just as hard (if not harder) and simply fail. Whether they never find that lucky break, or an unexpected medical condition/disability/accident ruins their life/dreams/stability/family, or they’re just never in the right place at the right time.
It happens, and I sure enough know a fair share of people that are some of the most determined, hardest workers I know that sadly don’t even make half my salary. Heck, my best friend earned a PhD from a major university as one of the top microscopists in the nation, with a post doc at Yale, and a job at Brown University and had to fall back on food stamps because she simply can barely get by. There’s no question she didn’t work hard.
Likewise, there are plenty of people that don’t work hard at all and come into massive amounts of wealth/good fortune. Whether being born into it or simply just a lucky role of the dice; that happens too.
That said, I don’t agree with a tax system that makes it harder for the less fortunate, and simply chalking it up as ‘if they didn’t want to struggle day-to-day then they should’ve worked harder.’ It just isn’t always that simple.
That of course is all subjective, as there is no realistic way to study or provide actual numbers to this. But I think that most of the above goes without saying in that it does exist; and it is more a question of how common it is. But there definitely is also evidence of this apparent in the fact that most studies show that Americans are still among the most productive workers in the world, yet the average American household income is still at lower-middle class levels.
Your chart is bogus & does not match IRS tax bracket percentages. Post info from the IRS and not right-biased Cato & try again. Also, you say 25% of millionaires pay lower rates than the average middle-class American, so it's still a problem that needs fixing.
ReplyDeleteCBO: Income grew 275% for top 1% from 1979-2007, but only 18% for bottom 20%: http://www.cbo.gov/doc.cfm?index=12485
Thank you for your comment.
DeleteFirst, the chart is NOT bogus. It is a graphic representation of the chart shown here: http://www.irs.gov/pub/irs-soi/09in11si.xls It does NOT show tax brackets. It shows final effective income tax rates paid (after deductions, exemptions, refunds, etc.) If someone makes $60K, they have some money in the 25% bracket, (and obviously some in the lower brackets), but after write-offs and deductions, they pay about 7.7% in income taxes). Again, this is shown in the IRS spreadsheet linked above.
That is the IRS data that is used to make the chart. It is an exact match. Please show how this is "bogus." We have a position, we backed it with IRS evidence. You have a position; I hope you back it.
No, I do not say 25% of millionaires pay lower rates than the average middle-class American. I highlight the FACT, cited in the CRS report ( a democrat analysis of the Buffett rule), pasted above:
"Yes, there are some select cases (as the Congressional Research Service report on the Buffet Rule shows) of this, but since the fact exists that only 25% of millionaires pay lower tax rates than 10% of middle class taxpayers, it's statistically slim at best."
Please understand this... 25% of millionaires pay lower tax rates than only 10% of the middle class.
As far as those 25%... YES, that is not the way it should be. As far as Obama highlighting this in speeches, his State of the Union address, etc, as if this is the norm is a complete misrepresentation. 25% of all millionaires paying lower tax rates than only 10% of the middle class, while true and needs to be corrected, is NOT the norm, it is a statistical anomaly.
As far as income... I say "so." My income is a product of the choices I made. Perhaps people should make better choices? It sounds harsh, but someone needs to speak the truth. Perhaps the select skills, experience, education required for high-income jobs has gotten slimmer and slimmer as American become less educated, and less skilled? If we started from scratch (hypothetically) at 2000 and the government said "to all citizens, go and earn for yourself" and everyone did... everyone made choices, and by 2100, we had the same situation of "income inequality"... but it was based on everyone's choices over 100 years, would you still complain? Income inequality does not bother me one bit. It's an incentive to work harder to get there. It shows that there is a place to get to, and if I work hard enough, there is no law, regulation or rule stopping me from doing so. I keep my eyes on the finish line, not on the field around me.
Thank you for your input. We hope to hear back from you.
Don't you just love how the anonymous guy clipped and took what you said out of context? He claimed you said "Also, you say 25% of millionaires pay lower rates than the average middle-class American, so it's still a problem that needs fixing" when you did not. Oh... something taken out of context, cherry-picked... oh, that's a surprise...
DeleteAnd yes, glad someone said it. Enough with all this income inequality baloney. We are the land of equal opportunity, not the land of equal results. This means that the law does not stop one of us from having the legal opportunity to pursue success and happiness. With no laws stopping us in a discriminating fashion (there are regulations, but they cover everyone and there is nothing that says if you start poor you can't succeed, if you are of a certain race or background you can't succeed) we all have the OPPORTUNITY to make CHOICES to get where we are. I'm tired of fellow democrats talking about income inequality. Income inequality exists because people choose their own choices and some make poorer choices and get lower incomes than others. A doctor chooses to become one, an janitor chooses to become a janitor. Should they get the same income? NO! Hence income inequality.
I'm glad you stepped up and said what needed to be said.
For reasons I went into in more detail just above, I don't believe that this is so easily simplified to 'your choices determine your success.' If it was that easy, far more people would be better off than they are now (particularly being in the most productive nation in the world).
DeleteBut without repeating myself, I did want to add another point.
You said "A doctor chooses to become one, an janitor chooses to become a janitor. Should they get the same income? NO! Hence income inequality."
I personally have never heard any reasonable person complain about that kind of income equality. I've never seen someone say "why can't I earn just as much working at McDonald's as a cardiac surgeon!?!?" That's ridiculous, and sounds far more like reductio ad absurdum than a practical argument.
Anyone who says that, I'll agree with you, it's foolish.
But I think the more realistic argument people are making with regards to the subject of income equality, are the facts that:
1. The middle class is shrinking.
A smaller and smaller portion of the population is becoming wealthy, and a larger and growing part of the population is falling into poor. The difference between the richest and the poorest in the country is also growing rapidly, while inflation and the cost of living grows much faster than the income rates for 95% of our population. These trends continuing are ultimately unsustainable for the health of our nation and economy, and no matter what side you're on if that trend continues this nation will collapse.
2. Money plays too much influence in politics.
I don’t recall the actual statistic and don’t have the time to search for the source this moment, but a news article a month ago revealed that more than 80% of the total amount of campaign contributions came from 1% of the contributors. That essentially means that 1% of the people that donate to a political campaign carry 80%+ of the power. As long as that continues, our nation is little more than an illusion of Democracy.
Those are two of the major points of income equality, which are not so easily dismissed (or solved). I’d much rather see proposed solutions or opinions on those points than the obviously ridiculous notion of ‘doctors should make as much as janitors.’
RKen - Good evening, and it's good to hear from you. I must say, I gotta agree with Dem 4 Newt on this one. :-)
DeleteAs always, disagreement is totally fine. I’m glad we can come here and share/express our views no matter how much we disagree. So here we go...
You said: “I personally have never heard any reasonable person complain… than a practical argument.” I, however, think his argument about that complaint is true. Allow me to explain why I agree with Dem 4 Newt on this one. As you can see by the lateness of this reply relative to yours, it took me all day to think of it. Bear with me.
Economics has taught me to look at things in models. When looking at economic models, the simpler, the better. The more things you can make equal (ceteris paribus), the better. Let’s just assume (trust me, I’m not getting facetious, just explaining things from my point of view) that in Elephantland, there are only two professions: McDonald’s employees and cardiac surgeons. This is a very small country (say, city sized) like Andorra; there is one McDonald’s and a heart surgery clinic (all other goods, services, etc are in-sourced from neighboring Pachydermland directly to the residents’ homes). That’s it :-) Now in Elephantland, there are 9 McDonald’s employees and one heart surgeon. The McDonald’s employees make $20,000 per year. The heart surgeon makes $820,000 (this is about right for the U.S.). He would own (yes, this is income, let’s assume it translates to wealth) 82% of the wealth and the remaining 10 citizens would own just 18%. Wouldn’t it be reasonable to assume the McDonald’s employees are complaining about that rich jerk whenever he stopped in? My point, too, is that, yes, no one is saying that, exactly ("why can't I earn just as much working at McDonald's as a cardiac surgeon!?!?" )… but, as you can see with this small example/model (you might call it ridiculous, and that’s fine, it’s your opinion) it shows how income inequality might exist. Extrapolate it to the United States and it works out the same.
(continued...)
As far as your next points:
Delete1. I don’t care at all that the middle class is shrinking. Income inequality does not bother me. It actually is a good thing on a few accounts. It creates incentive (people should see other wealthy people around them and want to do well and work hard themselves), and it helps maintain value (if we all had the same income, we would all be rich or all be poor… as humans, a species that always wants more, bigger, better, badder things, we would never settle for this). As far as how it has played out, I go by one major facet that makes America great: there is no law, no rule and no regulation that stops all of us from being wealthy. The fact that some can do it (many, many people come from nothing, Larry Ellison is an example) shows that anyone can do it. Because there is no rule or law that stops this, I believe that, yes, it is up to the individual to make the choices to get where they need to be, and yes, with every choice comes consequence, good or bad. There is no economic evidence that shows that this is unsustainable. In fact, if we remove most government regulations, naturally, it will survive. The wealthy would need services done. They would need goods produced. If free-market economics are allowed to work, they would need to employ people and those people can make a living working. Secondly, yes, again, it is up to choices. There are no accidental doctors or lawyers. No one says, “Well, I went to school to be a mechanic, and somehow ended up a doctor.” No one also says, “You know, I was behind on my rent, and, when the time came, I went and bought a new pair of Nikes instead, and somehow I got evicted.” It’s all about choices. There are too many people getting tattoos on their faces, wasting money endlessly, not investing in education or the development of skills and caring way too much about the recent celebrity break-up while not being able to tell you how to screw in a light bulb or what a mutual fund is or what the capital of the state they’re living in is. To me, the biggest “inequality” right now is education. The unemployment rate for people with at least a 4-year degree is 3.9%. For those without it’s around 17%. I’m not saying that those who go to college are better people, but, yes, it’s about choices. Those that choose to pursue a path where they are marketable and demanded by others deserve the rewards of the path they choose. You might disagree, and that’s fine, but I cannot get around the fact that every person’s lot in life is what they chose it to be. So yes, in a sense, Dem 4 Newt actually beat me to it. I tend to see eye-to-eye with his opinions on this.
(continued...)
2. As far as money in politics, perhaps this is true (Obama pledged a billion-dollar campaign, and I think you’re not obtuse and one-sided so I assume your disdain for money in politics encompasses this, too). Maybe you’re not referring only to campaign finance, though. My only question is: how do we solve this “problem?” I put quotes around “problem” because I don’t know if I believe it really is. I actually agree with the SC ruling that does not limit campaign contributions. If we set the kind of precedent that states that one legal US citizen cannot spend as much of his money where and when he pleases, that, to me is very, very dangerous. But, if that’s the case, that you feel campaign finance is way out of whack, how do we fix it? I’m asking because as someone who doesn’t have your view, I can’t offer a solution. How would candidates buy advertisement, hire staff, travel, etc? If money is needed, how do we protect everyone’s right to free speech and to spend their money as they see fit? Again, I’m not being facetious; I’m really interested in your side. It might help me understand your view better. As far as this contributing to income inequality (again, I have no problem with that), I might have missed how it is connected.
DeletePerhaps you might see that my case isn’t that ridiculous, you might not (hopefully, you don't think it's as ridiculous as Dem 4 Newt's, lol). That’s totally fine. I do appreciate you taking your time to express yourself, and I am glad I’m able to learn something about how you think and feel, too. I hope write back soon; this is a very interesting subject. Thank you!
Rken....Good evening. Glad to see you back on here.
DeleteI think one misconception a lot of people have about the top 10% or the top 1% is that it is the same people every year. I don't believe it is. Sure, there are some that remain there year after year but I would dare to say that there is a pretty good turnover rate in those income brackets. I don't even know if there is such a statistic on that or not.
For instance, I had worked my way up into the top 5% of income earners with my small business. A couple of years ago, I had to close the business. I am no longer in the the top 5%. I recently have saved enough and sold enough of my toys to accumulate enough money to start all over and try it again though.
Anyway, I was in the top 5% one year and the bottom 15% (or so) the next year. This year, if my business continues to grow as it has over the past 4 months (when I started again) I may get pretty close to the top 10% again. Next year I EXPECT to be in the top 10%. I wonder how many more people in America have had the same plight as me.
My father gave me some real sound advice about income inequality. He said, "Son, you will NEVER get rich working for someone else". I didn't believe him then, but he is right.
My father grew up dirt poor. They were share croppers. He grew up working on the farm from a very young age. He dropped out of high school in his sophomore year and moved out of state. There, he got in an apprentice program to be a machinist. He worked his way up to Foreman of the machine shop. He then began a small business on the side and grew it until he was able to quit the machine shop and run his business full time. My point is, a lot of the top income earners are the self employed/business owners. There was no legislation passed that put them there. They put their self there. You can't legislate income equality.
What are you basing your claim of the middle class shrinking upon? I am assuming because of the increase in food stamps may be one of the reasons that you would list. That is a very misleading thing. In my state, Tennessee, you literally could live in a million dollar home (they take no consideration of your home value), drive a Ferrari (because they do not count your primary transportation), own rental property (because they don't count that either), and have a couple of million dollars in your IRA/401K (because they don't count that either). As long as you do not own stocks, bonds, mutual funds (outside of an IRA/401K)and your bank account COMBINED do not have more than $2,500 and your income is low enough based on the scale, you qualify. Those rules are just too lenient for me. In fact, my wife and I technically could qualify for food stamps right now, well after an IRA contribution, and we are doing OK.
As far as the money in politics goes, I don't have a big opinion on that. That appears to me to be more of a double standard issue as most of the media and a lot of folks on the left (and I am not saying you) really just hate money in Republican politics. They never seem to be too upset with who raises it for the Democrats and how much they contribute or how much they raise.
I see a biased and nonobjective media having way more influence in politics than the money. I think the media is nothing more than a bunch of fawning sycophants. They seem to be a lot more critical in nature when there is Republican in the White House as opposed to a Democrat. In fact here is an example of what I am talking about:
http://www.boortz.com/weblogs/nealz-nuze/2011/dec/06/liberal-bias-obamamedia-no-way/
I look forward to your reply.
Wow, the anonymous poster that called my original post "bogus" has created one heck of a thread :-)
DeleteSlim - you know, I do like this statement: "You can't legislate income equality." I really agree with that. Might I add, it will ALWAYS exist, and it is a necessary evil.
The inputs here are great. Such a sharing of ideas. I hope it keeps growing.
Phew, lots of good points to respond to lol. Good discussions though, appreciate your opinions.
DeleteI'll try to not to let my responses get too long!
__________________________________
First, hello and good morning LME!
I'd just like to start by reaffirming the fact that to me, income equality isn't about wage equality. I am firmly against the idea of promoting any sort of wage equality, as well as attempting to villianize or spite anyone that makes more than you. Especially when it comes down to, as themed in my and your example, a low-skill low-education low-demand job like at McDonald's vs a high-skill high-education high-demand job like a cardiac surgeon.
Like you said, that's best left to the market forces, and shouldn't be any surprise as to why there is such a salary difference.
Although, that said it does bring up another topic that perhaps is for a different conversation... In that I do think it starts to become a problem when it is taken to an extreme (I do think that $100mil wages are a bit excessive, particularly in struggling companies). For another time though!
I do still believe though that if wages for the overwhelming majority of US citizens continue to grow at rates much slower than inflation and cost of living, it will eventually lead to an inevitable crash as overall consumer spending decreases and more people have to depend on gov assistance. A lot of other factors also come into play here though such as population growth, demand for insourced jobs, the global economy, etc.
Regarding the next points.
1. I completely agree in what you said regarding choices, in that people making poor choices can't expect to do as well as those that make much more responsible ones. However, it's not that situation which makes me feel that this can be unfair, it's when people are doomed into misfortune/poverty/failure due to events they have absolutely no control over (regardless of choices).
Take your pick of any one of countless different possible circumstances out of your control and possibly not even preventable (cancer, disability, car accident, robbery/theft, murder, etc). None of which of course give you an excuse to throw your hands up and give up, but often just don't leave you with any option or choice in the matter as it can result in insurmountable amounts of debt, or having to miss work (possibly get let go), etc.
Additionally, many people who arguably made perfectly good and responsible choices still end up in poverty. As with the real life example I gave of my friend, who has done extremely well for herself education-wise (PhD, ivy league education & experience & career), has to still fall back onto food stamps.
Because those cases exist and are not uncommon, I don’t think the idea can be simplified so easily to ‘If you make good choices, you will be successful. If you’re not successful, then you made bad choices and only have yourself to blame.’
2. Believe me; I feel exactly the same about this subject for both Repubs and Democrats. Obama's 'billion-dollar pledge' is just as bad (if not worse) on the context of this topic as what we're seeing with the super PACs in the Republican primaries. These are exactly part of the problem, and I think even (oddly enough) Steve Colbert did a fine job exploiting how silly the system is becoming with him easily raising over $1mil through his own super PACs that weren't meant to do anything other than mock the system.
DeleteAs for as a potential solution, yeah, that's the tough part. For a start I do think that all campaign financing of any sort should be 100% disclosed, and the anonymous contribution aspects (aka super PACs) should be done away with.
That would be a good first step.
From there though, it's tough. I think that perhaps doing away with corporate/organizational/business/entity contributions may be another good step, keeping it so only actual people can donate (because, yeah, this is a democracy for the people as individuals and not for the organization).
And, hello and good morning to you 32slim32!
DeleteI'd also like to reaffirm that I don't agree with the whole "I am the 99%!", "the 1% is greedy!", or any of that 'us vs them' mentality. Once again, that kind of effort to villianize or attack/stereotype groups of people do no good for anyone.
That said, I do definitely believe (as you do) that there is a pretty decent turnover through the different earning brackets; certainly as salaries change, situations change, and the population changes.
I also agree that you can't legislate income equality, nor would I ever recommend we tried to do something so blatant. But, I do think that we can give less breaks to the wealthy than to those struggling/still working their way up; because they simply don’t need them as much. Not to say we should make things harder for them, but I do think (for example) it’s silly to give millionaires major tax breaks that they really don’t need.
My claims that the middle class is shrinking are based on the growing poverty rates (as a percentage of population), the exponentially growing difference in wages between top earners and the average earnings over the past 50 years, average earnings growing slower than inflation/cost of living, etc.
Much of that is represented very well and sourced here: http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
Which I’m sure many people have seen at one point or another. Note that I again, don’t agree with the "1% vs 99%"/“us vs them!”/”rich vs poor!” mentality, and that website definitely goes about it in that way more than I’d like, but it is still sourced and presented very well.
As far as what you said about poverty, while I’m aware of that situation you outlined that can skew the numbers, I think it’s more than fair to say it is incredibly rare and certainly not responsible for even a fraction of the percent of the nearly 30 million people added to the food stamps program alone over the past 10 years.
I do agree about the media. The amount of bias, misreporting, and spinning facts in the news lately (particularly over the past 10 years) is sickening. For Obama in particular though, I feel as though there’s far more fact-spinning against him than there is for him. The number of people that think unemployment was at 5% before Obama (7.8% on inauguration date), or that Obama created all the policies that blew-up our current debt (two major spending policies passed are his creation, at $1.5 tril), or that Obama bailed out the banks (TARP was in 2008 under Bush), or has taken more vacation time than any other (79 days thus far is on the very low-side for Presidents), etc, is ridiculous (and all of those are easily researched). Another discussion though!
RKen, good afternoon and thank you for your reply. I hope I didn't post something that made you think I was insinuating that you are of an "us vs them" mentality. I assure you, that thought NEVER entered my mind. I think you are a class act and enjoy your posts.
DeleteI do not have a lot of time right now, so please check back later, as I will reply more completely.
First, I believe anyone using a 5% unemployment number for Bush, may have been using an AVERAGE rate for his term. I will look into that further later.
As far as the vacation days goes, please look at the following link:
http://loudmouthelephant.blogspot.com/2011/12/readers-post-1-continued-analysis-using.html
I will reply this evening when I get home from work.
Good afternoon to you as well!
DeleteJust to clarify, I didn't think that you were insinuating that I was part of that group. :)
I just wanted to make an extra effort to distance myself from that mentality, as while I am defending some principles often linked with people that act that way, I feel rather strongly against it.
Great analysis on Bush's vacation time though, thanks for the link and work on that.
Look forward to your reply!
RKen, I knew before I went there that motherjones.com was a pretty liberal web site. I really like the chart towards the bottom, MEET THE ELITE, Who are the 1%
DeleteNot working or DECEASED (What?) 4.3%
Blue Collar / Service 3.8%
Professors and Scientists 1.8%
Government (look at that again), teachers and Social Services 0.8%
Wow, so demonizing the living rich isn't enough, they have to drag in the dead rich into it too. That's just funny to me. Sorry.
Anyway, RKen, I don't buy into this Income Distribution horse squeeze. Those people EARNED their money (for the most part, some inherited it but someone earned it to leave it) it wasn't distributed to them.
Another little thing the lame stream media like to whine about is how the rich own more stocks and bonds (etc). Is there some rule that keep people from investing in the middle/lower class? No there isn't. In fact with e-trade and other online companies, it is now easier than ever to own stocks. Most CHOOSE not to. Why is that the rich's fault? Should they give some of their stocks away just because they CHOSE to buy stock in Apple when everyone else chose to buy an i-phone instead?
They just can't get me worked up and mad over this. I don't care how rich anyone is. The people that spew this kind of stuff try to make it seem as if the rich drove their Mercedes into the ghetto and robbed everyone while they were gone. I see it more as a jealousy/envy kind of thing. When I was making good money, I had no guilt over me having more than most either. I worked hard for it and earned it. Making money isn't rocket science.
And thanks for the compliment. I had heard people spout those exaggerated numbers so much I couldn't stand it anymore. I thought it was impossible to rack up that many days of "vacation" as President, so I spent about 3 days researching all that stuff.
Have a great weekend, RKen.
Great article!
ReplyDelete