Debt Debate in Congress

[guido911]

It's not envy, it's numbers.  The rich have benefited far more than any other tier of society from the Bush tax structure, as well as how the recession-n-recovery have progressed.  You benefit more, you pay more . . . or at least that's how it's always been.  But tax rates on the folks who've benefited more are lower than they've been since the 1920's.  Meaning, that the folks who've benefited are actually paying far less than they have in generations.  

So:  is it fair that this group is making far more than ever before, but contributing less then they have in almost a century?

I will agree with you that the wealthier folks have handled the recession better than those not so wealthy. But when it hit, I, like many, lost nearly 50% of my portfolio. So it's not like I didn't suffer. But the rich should be taxed more because they have been taxed less? Not buying it.

I do not think we need to rehash the "rich benefit more from society than the poor" argument because we are hopelessly entrenched in our positions.

[we vs us]

I will agree with you that the wealthier folks have handled the recession better than those not so wealthy. But when it hit, I, like many, lost nearly 50% of my portfolio. So it's not like I didn't suffer. But the rich should be taxed more because they have been taxed less? Not buying it.

I do not think we need to rehash the "rich benefit more from society than the poor" argument because we are hopelessly entrenched in our positions.

I'm not going after you.  You aren't the problem.  The money you have and the money you make -- keep what you've got. As a matter of fact, I'll bet we're of a similar cohort, or maybe you're in the next bracket, but either way the problem isn't with you or me.  The problem is with people who make an unfathomable amounts of money.  This is money you and I will never see in our lifetimes, no matter how hard we work or how lucky we get.  It will never happen.  These are the people who benefited, and whose taxes are ridiculously low.  

Did you know that one of the tax loopholes the Dems are hoping to close is an exemption for private jets?  These are the people who've benefited, and these are the people who can afford to pay a little bit more.  

And edited to add: yes, the rich should be taxed more because they have been taxed far far less. 

[guido911]

I'm not going after you.  You aren't the problem.  The money you have and the money you make -- keep what you've got. As a matter of fact, I'll bet we're of a similar cohort, or maybe you're in the next bracket, but either way the problem isn't with you or me.  The problem is with people who make an unfathomable amounts of money.  This is money you and I will never see in our lifetimes, no matter how hard we work or how lucky we get.  It will never happen.  These are the people who benefited, and whose taxes are ridiculously low.  

Did you know that one of the tax loopholes the Dems are hoping to close is an exemption for private jets?  These are the people who've benefited, and these are the people who can afford to pay a little bit more.  

And edited to add: yes, the rich should be taxed more because they have been taxed far far less. 

That loophole should be closed in my opinion, and all loopholes should be scrutinized. Now that being settled, let's look at why nearly half of us pay no federal income tax before looking to raise anyone else's taxes.

You mentioned the higher taxes of the 1920s. I wasn't around then, and given that I am too lazy to look it up, I was wondering how many people that actually affected? Seriously, was there a magic number like $250K that triggered the highest tax bracket? Because as it stands now, folks making $250K would get hit with the same tax rate as the mega-wealthiest of us.

[nathanm]

That loophole should be closed in my opinion, and all loopholes should be scrutinized. Now that being settled, let's look at why nearly half of us pay no federal income tax before looking to raise anyone else's taxes.

You mentioned the higher taxes of the 1920s. I wasn't around then, and given that I am too lazy to look it up, I was wondering how many people that actually affected? Seriously, was there a magic number like $250K that triggered the highest tax bracket? Because as it stands now, folks making $250K would get hit with the same tax rate as the mega-wealthiest of us.

When the income tax was first instituted, most people didn't pay, for what it's worth. It was only around WWII (as I recall) that it was pushed downwards to the not-wealthy.

And yeah, one of the big stupids of the Bush tax structure is that people who aren't at all similarly situated are taxed at the same rate. You shouldn't pay what Buffett or Koch pays. They should pay more. Income should be treated the same, no matter how it is earned. Someone on food stamps shouldn't pay as much as you pay.

Isn't the private jet 'loophole' the same as any other equipment used in business? Or is there something special about aircraft?

[Conan71]

I'm not going after you.  You aren't the problem.  The money you have and the money you make -- keep what you've got. As a matter of fact, I'll bet we're of a similar cohort, or maybe you're in the next bracket, but either way the problem isn't with you or me.  The problem is with people who make an unfathomable amounts of money.  This is money you and I will never see in our lifetimes, no matter how hard we work or how lucky we get.  It will never happen.  These are the people who benefited, and whose taxes are ridiculously low.  

Did you know that one of the tax loopholes the Dems are hoping to close is an exemption for private jets?  These are the people who've benefited, and these are the people who can afford to pay a little bit more.  

And edited to add: yes, the rich should be taxed more because they have been taxed far far less. 

But that's the point I clinch my jaw and think: "Class warfare, wealth envy, and income redistribution"

I find it really disingenuous when people like Warren Buffet and Bill Gates start talking about not paying enough in taxes.  Either one of them is always welcome to step up and pay more without revising the tax code for everyone else who makes less than they do but still earns $250K/year.

Loopholes and favoritism in the current code as well as some incredibly expensive bureaucracies to monitor, collect revenue, and enforce tax codes is precisely why I like the "Fair Tax" concept.  That's one of the reasons I lean toward Herman Cain as a presidential candidate, he's an advocate of it.  Unfortunately, I'm afraid the IRS is pretty much like the military, you can make all the promises you want on how you are going to change it, but once you are sitting in the big chair you find out who is really in charge.

[we vs us]

But that's the point I clinch my jaw and think: "Class warfare, wealth envy, and income redistribution"

But what I've said is factually true, not based on ideology.  Even the part that sounded ideological.  It really IS money that Guido and I won't see in our lifetimes (statistically speaking).  And the people I'm talking about really DO have an unfathomable amount of money (it must be literally unfathomable, because it seems that a couple of folks here think they'll see that amount of money in their lifetime and so want to protect their aspirational tax bracket -- when the odds of that happening are statistically impossible). But most importantly, this richest 1% has benefited far more than everyone and their taxes are historically very very low.

What's weird is that the way income sits in our country right now is out of the ordinary.  It isn't normal.  It doesn't track our successful history or follow how we've traditionally thought of taxes and success.  And yet we have the GOP going to the mat to keep this imbalance in place.  They are willing to do ANYTHING -- and to date, that means defaulting on our debt and completely tanking our economy -- to keep this weird new system going.

Also:  why is it envy or class warfare when none of that money is going to come to me?  I won't get an extra paycheck from the richies on the nice side of the tracks.  I also won't suddenly get a fatter return.  At this point, I'm hoping the rich's taxes go up so I don't LOSE current benefits. 

[Conan71]

But what I've said is factually true, not based on ideology.  Even the part that sounded ideological.  It really IS money that Guido and I won't see in our lifetimes (statistically speaking).  And the people I'm talking about really DO have an unfathomable amount of money (it must be literally unfathomable, because it seems that a couple of folks here think they'll see that amount of money in their lifetime and so want to protect their aspirational tax bracket -- when the odds of that happening are statistically impossible). But most importantly, this richest 1% has benefited far more than everyone and their taxes are historically very very low.

What's weird is that the way income sits in our country right now is out of the ordinary.  It isn't normal.  It doesn't track our successful history or follow how we've traditionally thought of taxes and success.  And yet we have the GOP going to the mat to keep this imbalance in place.  They are willing to do ANYTHING -- and to date, that means defaulting on our debt and completely tanking our economy -- to keep this weird new system going.

Also:  why is it envy or class warfare when none of that money is going to come to me?  I won't get an extra paycheck from the richies on the nice side of the tracks.  I also won't suddenly get a fatter return.  At this point, I'm hoping the rich's taxes go up so I don't LOSE current benefits.

You want someone else to cover your benefits because they have more?

That's entirely ideology.  The only fact is those people have more money.  Just because they have more, that isn't in itself an excuse to confiscate it at a vastly higher rate.  That would be like me simply deciding to take one of my neighbor's cars because he owns ten of them, yet he can only drive one at a time.  He has more cars than I will ever own at once in my life time, so I should be entitled to it.

Explain to me how that's any different.

In a system where everyone pays a percentage of their income, the wealthiest are paying more money to the treasury. 

You are also incredibly blind if you think the GOP is soley responsible for what you consider an unjust tax code, Democrats have been just as complicit in helping to cobble loopholes for their large benefactors and are every bit as beholden to big business as are Rethugs.

[we vs us]

You want someone else to cover your benefits because they have more?

I've been covering someone else's since I started working at Subway back when I was 14.  I continue to cover someone else's as I work right now.  I'll continue to cover someone else's right up until the point that I retire.  That's the point.  We're covering each other. 

Do I want more from the rich than I'm willing to give?  No.  But our system and its level of spending is predicated on a tax scale that is more FDR-through-Clinton than Bush II-Obama. That's not radical, unless you think the tax structure of the last 70 years is radical.  Once again, it brings us back to being in a suddenly weird moment that doesn't reflect our recent history at all. Why should we not go back to rates that give us enough money to succeed?

And the GOP is all alone in trying to keep this situation the new normal.  Maybe it's a measure of how polarized we've become, but I consider a mixed bag of benefit cuts and tax increases to be pretty rational, while I think saying no new taxes ever never ever never a la the GOP is the height of ideological rigidity. But maybe you think differently. If that's true, things are a lot more discombobulated than I thought.

[Conan71]

I've been covering someone else's since I started working at Subway back when I was 14.  I continue to cover someone else's as I work right now.  I'll continue to cover someone else's right up until the point that I retire.  That's the point.  We're covering each other.  

Do I want more from the rich than I'm willing to give?  No.  But our system and its level of spending is predicated on a tax scale that is more FDR-through-Clinton than Bush II-Obama. That's not radical, unless you think the tax structure of the last 70 years is radical.  Once again, it brings us back to being in a suddenly weird moment that doesn't reflect our recent history at all. Why should we not go back to rates that give us enough money to succeed?

And the GOP is all alone in trying to keep this situation the new normal.  Maybe it's a measure of how polarized we've become, but I consider a mixed bag of benefit cuts and tax increases to be pretty rational, while I think saying no new taxes ever never ever never a la the GOP is the height of ideological rigidity. But maybe you think differently. If that's true, things are a lot more discombobulated than I thought.

Unfortunately history disputes your position.  The Bush tax cuts were extended in December of 2010 prior to the new Republican majority being seated.  Please don't try and obfuscate.  The Democrats were still sworn in and still in power.

And I think I've been pretty clear my position is that tax cuts for the sake of tax cuts is incredibly stupid.  That's one place I've departed from the GOP, because there's not a shred of fiscal conservatism in tax cuts at all cost.

[heironymouspasparagus]

But guido, closing the private plane loophole would be a tax increase...  probably a near tragedy, or at least a catastrophic event for the people who lose it.

The 90% tax rate originally was pointed at one person;  John D. Rockefeller.  But he got so many loopholes, he could still take home 30 or 40 million a year.  In 1910's to 20's.

Rockefeller info
http://www.nytimes.com/learning/general/onthisday/bday/0708.html

Up at Woolaroc, they have one of Frank Phillips canceled checks for a years salary from about 1923.  It was for $1.00.  That is how he worked the system, using the loopholes and scamming the system that his and Rockefeller's buddies got elected to build.  Same one that continues today.

There is a simple solution to all the tax inequities.  Let all income count the same - capital gains taxed as regular income.  We have proven for decades that the "freebie" capital gains does nothing to stimulate any real investment, so there is no reason to continue the preferential treatment and the absolute redistribution of wealth it entails.

[Red Arrow]

There is a simple solution to all the tax inequities.  Let all income count the same - capital gains taxed as regular income. 

Be careful what you wish for...

Sell your house for a bit more than you paid?  Regular income. (No deferral even if you buy another house within any timeframe.)
One of your junker cars becomes a collector item and you sell for a gain, regular income.
Sell some old coins your grandfather gave you, regular income.
Look at what the IRS considers to be income.  It will make you paranoid.

[Teatownclown]

But guido, closing the private plane loophole would be a tax increase...  probably a near tragedy, or at least a catastrophic event for the people who lose it.

The 90% tax rate originally was pointed at one person;  John D. Rockefeller.  But he got so many loopholes, he could still take home 30 or 40 million a year.  In 1910's to 20's.

Rockefeller info
http://www.nytimes.com/learning/general/onthisday/bday/0708.html

Up at Woolaroc, they have one of Frank Phillips canceled checks for a years salary from about 1923.  It was for $1.00.  That is how he worked the system, using the loopholes and scamming the system that his and Rockefeller's buddies got elected to build.  Same one that continues today.

There is a simple solution to all the tax inequities.  Let all income count the same - capital gains taxed as regular income.  We have proven for decades that the "freebie" capital gains does nothing to stimulate any real investment, so there is no reason to continue the preferential treatment and the absolute redistribution of wealth it entails.

A tax break is an EXPENDITURE. Where did these people go to school?

[heironymouspasparagus]

House example;  pay 100,000.  Sell for 120,000.  Taxable increase = 20,000.  Tax at regular rate of about 18%.  Ok, I can live with that.  About what it always was until just the last few years. 

Would paying tax on house gains make me stop buying a house??  Get real...not gonna happen for me or anyone else who is interested in home ownership.  Red, would you not buy a house just because you had to pay a tax on the increase??  No, you would not.  (That means you would go ahead and buy the house.)

Gains on gifts ARE taxed at regular rates on the amount over cost basis.  Coins, airplanes, stocks, old cars,also winnings from Jeopardy or Las Vegas or the local casinos.

You do get to inherit quite a bit more now than previously (not sure where it is this year - $5 million or so?? - haven't looked lately, since it won't ever apply to me.)  But if the benefactor 'gives' it to you early, there can be some adverse side effects.

[Red Arrow]

House example;  pay 100,000.  Sell for 120,000.  Taxable increase = 20,000.  Tax at regular rate of about 18%.  Ok, I can live with that.  About what it always was until just the last few years.

Where are you getting 18%?  My 2008 booklet for Form 1040 puts a taxpayer filing as single (me) at 25% for taxable income over $32,500.  In 2003, it was 25% for any taxable income over $28,400. In 1998, it was 28% for taxable income over $25,300.  In 1989, 28% over $18,500 and 33% over 44,900. In 1986, there were 15 brackets ranging from 11% to 50% with 50% starting above $88,270.  I know we all made less money then.  Remember, this income will be in your top bracket, not spread out like your regular income.

Would paying tax on house gains make me stop buying a house??  Get real...not gonna happen for me or anyone else who is interested in home ownership.  Red, would you not buy a house just because you had to pay a tax on the increase??  No, you would not.  (That means you would go ahead and buy the house.)

Of course you would buy a house.  You may not get the one you want since the house you buy probably increased the same percentage as the one you sold but you didn't get to roll the money into the new one.

Gains on gifts ARE taxed at regular rates on the amount over cost basis.  Coins, airplanes, stocks, old cars,also winnings from Jeopardy or Las Vegas or the local casinos.

In my example, the car was not a gift. It would be one you bought for say $500 and sold for $1000.  I concede on actual gifts.

You do get to inherit quite a bit more now than previously (not sure where it is this year - $5 million or so?? - haven't looked lately, since it won't ever apply to me.)  But if the benefactor 'gives' it to you early, there can be some adverse side effects.

I told my dad he really needed to leave me independently wealthy.  He disagreed.

[guido911]

You do get to inherit quite a bit more now than previously (not sure where it is this year - $5 million or so?? - haven't looked lately, since it won't ever apply to me.)  But if the benefactor 'gives' it to you early, there can be some adverse side effects.

Such as?