Saturday, April 29, 2017

Taxes are relative

An analyst, Alan Viard, at the American Enterprise Institute,

says administration officials will almost certainly ensure that no one pays a higher rate on the same income. Yet the elimination of most deductions could nudge some wealthier Americans into higher brackets, he says.  Overall, Marr notes the Tax Policy Center has estimated the top 1% of households would see a 14% increase in after-tax income, while low and middle-class Americans would see gains of just 1.2% to 1.8%.  (link)

But consider this opinion piece from the American Conservative:

The latest IRS data reveals that the top 1 percent of earners pay over 39 percent of total personal income tax revenues, while the top 5 percent pay 60 percent. Trump’s proposed reduction of the top personal income tax rate from 39.6 percent to 35 percent—the same rate that prevailed as recently as 2012 when Barack Obama and Nancy Pelosi were in charge—would not fundamentally change this equation. What might change, however, is the willingness of the rich to keep paying their taxes in the first place. The fact that a Republican-controlled government will not even propose a rate below 35 percent sends an unambiguous message to the wealthy. America has arrived at a new national consensus: a populist Republican Party now agrees with the Democrats that a tiny sliver of Americans should pay for everyone else’s entitlements.

Without those entitlements, most Americans would not have healthcare, public education, or a chance for retirement.  Remember that most of the funding for the entitlements that I mentioned comes from the FICA tax, not the personal income tax.  

But the bigger picture may be that as long as I gte mine, I'm happy.   Maybe we no longer care about being American.  What do you think?

8 comments:

  1. "Maybe we no longer care about being American." What does "being American" really mean? From reading Gordon's book, it seems that the US was built on the idea that making your personal life better means a better, more prosperous society/nation. I would argue this has not been the case. People's individual lives have gotten better (at least for some demographics), yet somehow, healthcare, public education, and a chance for retirement have deteriorated. It's almost as if the definition of "American" has always been work hard for yourself, and everything else will just (magically) work out on its own.

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  2. A tiny sliver of Americans should pay for everyone else's entitlements, because they hold such a large majority of the wealth.

    I am not sure if this means we are moving towards being un-American. I feel like many people expect the country to continue to operate on the same set of principles as we did when we won our independence and grew into the economic power the US is today. Things change, we must evolve with them. If the upperclass holds such a large portion of economic power, they should be responsible for providing the lower class (their fellow compatriot) with benefits like education and health care.

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  3. I think that the foundation of the American Dream is the idea that everyone has a chance at success. Of course, this has never been the case for all Americans. I agree with Nick, the upper class should be expected to subsidize the lower classes, whether they want to or not.

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  4. Even though by any kind of standard, the rich are supposed to subsidize the lower classes, the game about universal health care we played shows that the upper class in real life is less willing to do so.

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  5. I would have to agree with Zoe. The American Dream is the idea that everyone has a chance to do whatever they want and build the life they desire. And yes, the upper class should probably subsidize the lower class. They make soooooo much money. It's crazy.

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  6. The language here is very interesting, "everyone SHOULD have a chance at the American dream". That statement assumes that not everyone will achieve said dream. The problem with wanting the rich to subsidize the poor is that many of those people in the upper class have paid their dues and rightfully earned their money. Why should they have to give it away to people who did not make as profitable decisions as they did, and why should they not take advantage of loopholes in tax codes that lets them claim most of their assets as investments and avoid hefty income taxes. There are no good answers to any of these questions when we have an overpopulated planet and everyone wants to live like Americans. Its just not feasible. We can at least start by trying to limit the influence that people with lots of money have on the decisions we should all make as a whole.

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  7. I agree with the previous comments. It seems that there is this traditional idea of the American dream and then everyone has a personal view of that. Either way, as patriotic as everyone tries to be, there is a lot of selfishness and there is no help for those who do not have all the resources to obtain their dream. I think there should be some pride in helping others and if this comes through subsidizes then so be it.

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  8. Kriti brings up a good point. What does "being American" truly mean? I think that everyone's idea of the being American is different but the main objective is to strive for personal gains. Everyone is acting in their own self interest and when people get in the way of that, there becomes a divide, which we are experiencing right now.

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