Okay, as a percentage of income, what are the taxes paid by each income
group? By the way, maybe those who make the argument about the poor paying
little in taxes, are making that argument based on what the Federal
government takes in, perhaps?
Post by DMJoshi Post by P. Rajah Post by Jerry Okamura
Is the question which system is better or worse, or should the question
be, are any of these systems sustainable?
security(internal and external), equality under the law(meaning you
shouldn't be punished for simply not being able to afford legal
defense), basic education of its people, and basic healthcare. Is basic
universal healthcare sustainable? It sure is. When you factor in all the
overheads of the insurance companies, their agents, their profits, the
cost of treating the uninsured, the economic cost of untreated sick
people and so on, it becomes a no-brainer. It is actually cheaper,
overall, to provide universal basic healthcare, and people would overall
be healthier because they would be diagnosed and treated earlier.
Except, of course, if you subscribe to the theory that it is criminal
not to allow corporations to make profits on anything and everything.
Okay, let us address this issues one point at a time, shall we? Legal
defense...you need an attorney, when the government charges you with a crime
which a court of law has to adjudicate. But let us look at what happens to
someone who the government "suspects" is in this country illegally. Do,
they all get a chance to prove their innocence in a court of law, or does
the government simply assume they are guilty and deports them out of the
country? Why is basic education the responsibility of the government and
not the responsibility of the parent? What good is having free healthcare,
if the payer cannot afford to continue paying for that healthcare? Why
would you want to depend on someone else to pay for your healthcare, when by
doing so, you also gave them the right not to pay for your healthcare?
can a healthcare system be sustainable with a medical inflation rate running
at around 8% per year? Why is the solution having health insurance? Why
isn't the solution figuring out a way for people to pay for the own
healthcare needs? And as far as being cheaper is concerned, it is true that
a single payer system can minimize the fixed cost element of the system, but
even if you had zero fixed cost, you still have a cost problem, because the
cost problem is not in the fixed cost area of the system, it is in a
variable cost part of the system. And unless you address the variable cost
part of the problem, you have not solved the cost problem.
Btw, the article that Jay the jyotishit linked to, the "Obamacare"
article, seems to say let's do away with insurers altogether, and go
directly with a patient-doctor relationship. Disregarding the fact that
most doctors do not want to get tied down chasing payments from each
patient or judging the patient's creditworthiness prior to treatment,
the article itself is not anti "Obamacare", but anti insurance company,
and thus also anti "Bushcare" or whatever else one would like to call
it. Quite a pointless article, imo.
Yes, ultimately if you want the best healthcare system in the world, then
you want the user of the system to be the one making the rationing decision,
and not someone other than the person who uses the system to make that
rationing decision for them. It is the most effective way man has devised
to get the most bang for the buck. That is why in this country, food is
affordable, because each person decides what they can afford to eat. I
might add, the other reason we do have inexpensive food, is exactly because
the government allows businesses to be "greedy" as some would call it.
Their selfish needs to make money, means that they make more money "if" they
can sell what they want to sell, at the lowest price possible.
Looks in Obamacare intermediation of Medical Insurance is not done
If a US Citizen is totally on doles, can he afford to pay insurance?
I believe it is not possible in US either to increase Income Tax on
the rich or increase tax on petrol to pay for healthcare for the poor.
Our taxes are very low when compared to other industrialized nations.
That we are overtaxed is a lie put forward by Republicans.
1. Poor Americans do pay taxes.
Gretchen Carlson, the Fox News host, said last year "47 percent of Americans
don't pay any taxes." John McCain and Sarah Palin both said similar things
during the 2008 campaign about the bottom half of Americans.
Ari Fleischer, the former Bush White House spokesman, once said "50 percent
of the country gets benefits without paying for them."
Actually, they pay lots of taxes-just not lots of federal income taxes.
Data from the Tax Foundation show that in 2008, the average income for the
bottom half of taxpayers was $15,300.
This year the first $9,350 of income is exempt from taxes for singles and
$18,700 for married couples, just slightly more than in 2008. That means
millions of the poor do not make enough to owe income taxes.
But they still pay plenty of other taxes, including federal payroll taxes.
Between gas taxes, sales taxes, utility taxes and other taxes, no one lives
tax-free in America.
When it comes to state and local taxes, the poor bear a heavier burden than
the rich in every state except Vermont, the Institute on Taxation and
Economic Policy calculated from official data. In Alabama, for example, the
burden on the poor is more than twice that of the top 1 percent. The
one-fifth of Alabama families making less than $13,000 pay almost 11 percent
of their income in state and local taxes, compared with less than 4 percent
for those who make $229,000 or more.
2. The wealthiest Americans don't carry the burden.
This is one of those oft-used canards. Sen. Rand Paul, the tea party
favorite from Kentucky, told David Letterman recently that "the wealthy do
pay most of the taxes in this country."
The Internet is awash with statements that the top 1 percent pays, depending
on the year, 38 percent or more than 40 percent of taxes.
It's true that the top 1 percent of wage earners paid 38 percent of the
federal income taxes in 2008 (the most recent year for which data is
available). But people forget that the income tax is less than half of
federal taxes and only one-fifth of taxes at all levels of government.
Social Security, Medicare and unemployment insurance taxes (known as payroll
taxes) are paid mostly by the bottom 90 percent of wage earners. That's
because, once you reach $106,800 of income, you pay no more for Social
Security, though the much smaller Medicare tax applies to all wages. Warren
Buffett pays the exact same amount of Social Security taxes as someone who
3. In fact, the wealthy are paying less taxes.
The Internal Revenue Service issues an annual report on the 400 highest
income-tax payers. In 1961, there were 398 taxpayers who made $1 million or
more, so I compared their income tax burdens from that year to 2007.
Despite skyrocketing incomes, the federal tax burden on the richest 400 has
been slashed, thanks to a variety of loopholes, allowable deductions and
other tools. The actual share of their income paid in taxes, according to
the IRS, is 16.6 percent. Adding payroll taxes barely nudges that number.
Compare that to the vast majority of Americans, whose share of their income
going to federal taxes increased from 13.1 percent in 1961 to 22.5 percent
(By the way, during seven of the eight George W. Bush years, the IRS report
on the top 400 taxpayers was labeled a state secret, a policy that the Obama
administration overturned almost instantly after his inauguration.)
4. Many of the very richest pay no current income taxes at all.
John Paulson, the most successful hedge-fund manager of all, bet against the
mortgage market one year and then bet with Glenn Beck in the gold market the
next. Paulson made himself $9 billion in fees in just two years. His current
tax bill on that $9 billion? Zero.
Congress lets hedge-fund managers earn all they can now and pay their taxes
years from now.
In 2007, Congress debated whether hedge-fund managers should pay the top tax
rate that applies to wages, bonuses and other compensation for their labors,
which is 35 percent. That tax rate starts at about $300,000 of taxable
income-not even pocket change to Paulson, but almost 12 years of gross pay
to the median-wage worker.
The Republicans and a key Democrat, Sen.Charles Schumer of New York, fought
to keep the tax rate on hedge-fund managers at 15 percent, arguing that the
profits from hedge funds should be considered capital gains, not ordinary
income, which got a lot of attention in the news.
What the news media missed is that hedge-fund managers don't even pay 15
percent. At least, not currently. So long as they leave their money, known
as "carried interest," in the hedge fund, their taxes are deferred. They
only pay taxes when they cash out, which could be decades from now for
younger managers. How do these hedge-fund managers get money in the
meantime? By borrowing against the carried interest, often at absurdly low
rates-currently about 2 percent.
Lots of other people live tax-free, too. I have Donald Trump's tax records
for four years early in his career. He paid no taxes for two of those years.
Big real-estate investors enjoy tax-free living under a 1993 law President
Clinton signed. It lets "professional" real-estate investors use paper
losses like depreciation on their buildings against any cash income, even if
they end up with negative incomes like Trump.
Frank and Jamie McCourt, who own the Los Angeles Dodgers, have not paid any
income taxes since at least 2004, their divorce case revealed. Yet they
spent $45 million one year alone. How? They just borrowed against Dodger
ticket revenue and other assets. To the IRS, they look like paupers.
In Wisconsin, Terrence Wall, who unsuccessfully sought the Republican
nomination for U.S. Senate in 2010, paid no income taxes on as much as $14
million of recent income, his disclosure forms showed. Asked about his
living tax-free while working people pay taxes, he had a simple response:
Everyone should pay less.
5. And (surprise!) since Reagan, only the wealthy have gained significant
The Heritage Foundation, the Cato Institute and similar conservative
marketing organizations tell us relentlessly that lower tax rates will make
us all better off.
"When tax rates are reduced, the economy's growth rate improves and living
standards increase," according to Daniel J. Mitchell, an economist at
Heritage until he joined Cato. He says that supply-side economics is "the
simple notion that lower tax rates will boost work, saving, investment and
When Reagan was elected president, the top marginal tax rate (the tax rate
paid on the last dollar of income earned) was 70 percent. He cut it to 50
percent and then 28 percent starting in 1987. It was raised by George H.W.
Bush and Clinton, and then cut by George W. Bush. The top rate is now 35
Since 1980, when Reagan won the presidency promising prosperity through tax
cuts, the average income of the vast majority-the bottom 90 percent of
Americans-has increased a meager $303, or 1 percent. Put another way, for
each dollar people in the vast majority made in 1980, in 2008 their income
was up to $1.01.
Those at the top did better. The top 1 percent's average income more than
doubled to $1.1 million, according to an analysis of tax data by economists
Thomas Piketty and Emmanuel Saez. The really rich, the top one-tenth of 1
percent, each enjoyed almost $4 in 2008 for each dollar in 1980.
The top 300,000 Americans now enjoy almost as much income as the bottom 150
million, the data show.
6. When it comes to corporations, the story is much the same-less taxes.
Corporate profits in 2008, the latest year for which data are available,
were $1,830 billion, up almost 12 percent from $1,638.7 billion in 2000.
Yet, even though corporate tax rates have not been cut, corporate income-tax
revenues fell to $230 billion from $249 billion-an 8 percent decline, thanks
to a number of loopholes. The official 2010 profit numbers are not added up
and released by the government, but the amount paid in corporate taxes is:
In 2010 they fell further, to $191 billion-a decline of more than 23 percent
compared with 2000.
7. Some corporate tax breaks destroy jobs.
Despite all the noise that America has the world's second-highest corporate
tax rate, the actual taxes paid by corporations are falling because of the
growing number of loopholes and companies shifting profits to tax havens
like the Cayman Islands.
And right now America's corporations are sitting on close to $2 trillion in
cash that is not being used to build factories, create jobs or anything
else, but acts as an insurance policy for managers unwilling to take the
risk of actually building the businesses they are paid so well to run. That
cash hoard, by the way, works out to nearly $13,000 per taxpaying household.
A corporate tax rate that is too low actually destroys jobs. That's because
a higher tax rate encourages businesses (who don't want to pay taxes) to
keep the profits in the business and reinvest, rather than pull them out as
profits and have to pay high taxes.
The 2004 American Jobs Creation Act, which passed with bipartisan support,
allowed more than 800 companies to bring profits that were untaxed but
overseas back to the United States. Instead of paying the usual 35 percent
tax, the companies paid just 5.25 percent.
The companies said bringing the money home-"repatriating" it, they called
it-would mean lots of jobs. Sen. John Ensign, the Nevada Republican, put the
figure at 660,000 new jobs.
Pfizer, the drug company, was the biggest beneficiary. It brought home $37
billion, saving $11 billion in taxes. Almost immediately it started firing
people. Since the law took effect, Pfizer has let 40,000 workers go. In all,
it appears that at least 100,000 jobs were destroyed.
Now Congressional Republicans and some Democrats are gearing up again to
pass another tax holiday, promoting a new Jobs Creation Act. It would affect
10 times as much money as the 2004 law.
8. Republicans like taxes too.
President Reagan signed into law 11 tax increases, targeted at people down
the income ladder. His administration and the Washington press corps called
the increases "revenue enhancers." Reagan raised Social Security taxes so
high that by the end of 2008, the government had collected more than $2
trillion in surplus tax.
George W. Bush signed a tax increase, too, in 2006, despite his written
ironclad pledge never to raise taxes on anyone. It raised taxes on teenagers
by requiring kids up to age 17, who earned money, to pay taxes at their
parents' tax rate, which would almost always be higher than the rate they
would otherwise pay. It was a story that ran buried inside The New York
Times one Sunday, but nowhere else.
In fact, thanks to Republicans, one in three Americans will pay higher taxes
this year than they did last year.
First, some history. In 2009, President Obama pushed his own tax cut-for the
working class. He persuaded Congress to enact the Making Work Pay Tax
Credit. Over the two years 2009 and 2010, it saved single workers up to $800
and married heterosexual couples up to $1,600, even if only one spouse
worked. The top 5 percent or so of taxpayers were denied this tax break.
The Obama administration called it "the biggest middle-class tax cut" ever.
Yet last December the Republicans, poised to regain control of the House of
Representatives, killed Obama's Making Work Pay Credit while extending the
Bush tax cuts for two more years-a policy Obama agreed to.
By doing so, Congressional Republican leaders increased taxes on a third of
Americans, virtually all of them the working poor, this year.
As a result, of the 155 million households in the tax system, 51 million
will pay an average of $129 more this year. That is $6.6 billion in higher
taxes for the working poor, the nonpartisan Tax Policy Center estimated.
In addition, the Republicans changed the rate of workers' FICA
contributions, which finances half of Social Security. The result:
If you are single and make less than $20,000, or married and less than
$40,000, you lose under this plan. But the top 5 percent, people who make
more than $106,800, will save $2,136 ($4,272 for two-career couples).
9. Other countries do it better.
We measure our economic progress, and our elected leaders debate tax policy,
in terms of a crude measure known as gross domestic product. The way the
official statistics are put together, each dollar spent buying solar energy
equipment counts the same as each dollar spent investigating murders.
We do not give any measure of value to time spent rearing children or
growing our own vegetables or to time off for leisure and community service.
And we do not measure the economic damage done by shocks, such as losing a
job, which means not only loss of income and depletion of savings, but loss
of health insurance, which a Harvard Medical School study found results in
45,000 unnecessary deaths each year.
Compare this to Germany, one of many countries with a smarter tax system and
smarter spending policies.
Germans work less, make more per hour and get much better parental leave
than Americans, many of whom get no fringe benefits such as health care,
pensions or even a retirement savings plan. By many measures the vast
majority live better in Germany than in America.
To achieve this, unmarried Germans on average pay 52 percent of their income
in taxes. Americans average 30 percent, according to the Organization for
Economic Cooperation and Development.
At first blush the German tax burden seems horrendous. But in Germany (as
well as in Britain, France, Scandinavia, Canada, Australia and Japan),
tax-supported institutions provide many of the things Americans pay for with
after-tax dollars. Buying wholesale rather than retail saves money.
A proper comparison would take the 30 percent average tax on American
workers and add their out-of-pocket spending on health care, college tuition
and fees for services, and compare that with taxes that the average German
pays. Add it all up and the combination of tax and personal spending is
roughly equal in both countries, but with a large risk of catastrophic loss
in America, and a tiny risk in Germany.
Americans take on $85 billion of debt each year for higher education, while
college is financed by taxes in Germany and tuition is cheap to free in
other modern countries. While soaring medical costs are a key reason that
since 1980 bankruptcy in America has increased 15 times faster than
population growth, no one in Germany or the rest of the modern world goes
broke because of accident or illness. And child poverty in America is the
highest among modern countries-almost twice the rate in Germany, which is
close to the average of modern countries.
On the corporate tax side, the Germans encourage reinvestment at home and
the outsourcing of low-value work, like auto assembly, and German rules
tightly control accounting so that profits earned at home cannot be made to
appear as profits earned in tax havens.
Adopting the German system is not the answer for America. But crafting a tax
system that benefits the vast majority, reduces risks, provides universal
health care and focuses on diplomacy rather than militarism abroad (and at
home) would be a lot smarter than what we have now.
Here is a question to ask yourself: We started down this road with Reagan's
election in 1980 and upped the ante in this century with George W. Bush.
How long does it take to conclude that a policy has failed to fulfill its
promises? And as you think of that, keep in mind George Washington. When he
fell ill his doctors followed the common wisdom of the era. They cut him and
bled him to remove bad blood. As Washington's condition grew worse, they
bled him more. And like the mantra of tax cuts for the rich, they kept
applying the same treatment until they killed him.
Luckily we don't bleed the sick anymore, but we are bleeding our government