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View Diary: I'm confused. Is it GOOD or BAD for Americans to avoid paying taxes? (153 comments)

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  •  US Blues - hard to do in the US (7+ / 0-)

    Given that it would take a Constitutional Amendment to tax wealth it's hard to create much wealth redistribution just through the income tax. Higher estate taxes would help, but even then it would likely take a wealth tax to make a real difference.

    "let's talk about that"

    by VClib on Tue Sep 18, 2012 at 03:57:49 PM PDT

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    •  The Tobin Tax (25+ / 0-)

      on stock transactions would go a good ways to getting the speculators to pay their fair share. We should also change the capital gains tax to make it progressive, and revive tariffs on goods imported from any country that does not match or exceed American standards for the protection of workers, consumers, and the environment.

      Al Qeada is a faith-based initiative.

      by drewfromct on Tue Sep 18, 2012 at 04:01:45 PM PDT

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      •  Repeal corporate welfare. (14+ / 0-)

        Lift the cap on the payroll tax.
        Make the payroll tax progressive.
        Close some or all of the eleventy billion loopholes that allow Americans such as Thurston Willard Gordon Gecko Romney to file 1000 page tax returns that make their effective rate lower than most filers with a 1-2 page 1040EZ or 1040A.

        No tweaking the Constitution necessary...

        Ho'oponopono. To make things right; restore harmony; heal.

        by earicicle on Tue Sep 18, 2012 at 04:12:56 PM PDT

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        •  earicicle - the payroll tax cap (3+ / 0-)
          Recommended by:
          Bob Johnson, earicicle, raster44

          There is no cap for Medicare, so we are really talking about SocSec and lifting the cap eliminates SocSec as we know it. SocSec is wage insurance, it was never intended to be a social welfare program or a way to redistribute income. It was designed by FDR with a separate funding mechanism specifically to make certain that no one would ever think of SocSec payments as any kind of welfare. It was a program where you earned a benefit because of the payments you and your employers contributed to the program. I favor raising the cap as has been done many times and allowing people paying in at the new top rate to earn a higher benefit.

          SocSec is wage insurance and the entire concept was that you would insure a portion of your wages when you retire. That's one of the reasons that non-wage income has no SocSec deduction because interest, dividends, rents, and capital gains don't end when you retire. The thought was that people who earned above the cap would have the resources to provide for other retirement income. Lifting the cap creates two issues, do you cap the benefit or let the benefit rise with the level of contribution. If you allow the benefit to rise you would have some very large SocSec benefits earned and if you cap the benefit you have lost the fundamental structure of SocSec and have just created a income tax surcharge on higher incomes. It would also be the case if you had the SocSec taxes become progressive without allowing benefit increases. It would just be a backdoor income tax.

          "let's talk about that"

          by VClib on Tue Sep 18, 2012 at 05:26:55 PM PDT

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          •  I didn't realize there was no cap to the Medicare (4+ / 0-)

            tax. Thanks. Great news.

            I agree with your basic arguments on SS, although we certainly need to raise the cap. And I feel we (on the left) have already allowed SS to become perceived as more 'welfare-y' by discussing SS (and Medicare) as 'entitlements,' rather than earned insurance benefits.

            I think there is a reasonable conversation to be had about what to do at the very top end for Social Security. For Medicare beneficiaries, high earners--the top 5%--pay higher premiums for Parts B & D. We're talking $50-300/month more for people making $85-450k and up. Perhaps they should be 'returning' more of the $1500 SS ck they clearly don't need by also paying Medicare Part A premiums (which retail at $451 this year). I don't know. I just think we need to have the discussion.

            Ho'oponopono. To make things right; restore harmony; heal.

            by earicicle on Tue Sep 18, 2012 at 06:21:22 PM PDT

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      •  drew - there was a diary yesterday (4+ / 0-)
        Recommended by:
        Bob Johnson, goodpractice, annan, raster44

        regarding a transaction tax

        I thought that this bill, and the specific level of taxes it proposed, was very thoughtful and demonstrated a real understanding of various kinds of investments and the yields, and transaction fees, associated with them. I definitely support a transaction fee, but most of the proposals I have seen make no sense. I haven't looked carefully at the Tobin Tax and would be curious how it compares to the bill outlined in yesterday's diary.

        I don't favor progressive capital gains taxes. I think they should be higher than 15% but because higher capital gains tax rates do not lead to higher capital gains tax revenue I think that having the highest capital gains taxes in the G20 wouldn't be on our collective interest. For many decades capital gains rates were 50% of your top marginal rate. That might be a good measure to return to and the Clinton rates do just that with a top marginal rate of just under 40% and capital gains rates at 20%.

        I support your tariff idea in concept but it will take years to negotiate that through our current trade agreements.

        "let's talk about that"

        by VClib on Tue Sep 18, 2012 at 05:09:51 PM PDT

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    •  I beg to differ VClib (13+ / 0-)

      It's a piece of cake to redistribute wealth through taxes. All developed nations do so -- to this day.

      Take a look at these two 30 year periods:

      In the GREEN years, a strong middle class was created. Infrastructure, too.

      In the RED years, the middle class was slowly destroyed. Infrastructure, too.

      All accomplished via tax rates (lower chart).

      A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

      by Pluto on Tue Sep 18, 2012 at 05:03:20 PM PDT

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      •  Pluto - a few thoughts (2+ / 0-)
        Recommended by:
        goodpractice, raster44

        Higher marginal rates would clearly make it harder to accumulate wealth, but would not make much of a dent in the wealth already accumulated.

        Your tax rate chart makes no distinction between the top marginal rates before the Tax Reform Act of 1986 and those after. They aren't comparable. TRA86 so fundamentally changed the code as it relates to individual US tax payers that the rates before 1986 and those after are apples and oranges. A chart of effective rates would show a line with significantly fewer peaks and valleys. There is no definitive data on effective rates before 1986 but most experts estimate that the numbers are about half the top marginal rate.  

        "let's talk about that"

        by VClib on Tue Sep 18, 2012 at 05:16:09 PM PDT

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