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View Diary: Krugman for Treasury Secretary (49 comments)

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  •  This is a faulty analysis (5+ / 0-)
    Doh... sounds like they are getting a good deal to me. I mean, if I understand it right: the top 10% (and this is before BushCo pushed the figures higher) have 71% of the wealth but only pay 50% of the taxes.
    Constitutionally, the federal government doesn't tax "wealth" (which can have any one of a number of different definitions.  It DOES tax income.  So, according to the IRS, for 2011 (the last year they published data):

    - the top 1% has 18.9% of the income and pays 37.4% of the income tax;

    - the top 5% (2 income AGI of about $162,000 and up) has 33.8% of the income and pays 59.1% of the income tax.

    - the top 10% (2 income AGI of about $117,000 and up) has about 45.2% of the income and pays 70.6% of the income tax.  

    The IRS data is summarized in a chart here.  (The Tax Foundation generally is conservative tax-wise, but they publish this summary of IRS data each year and the data is always accurate.  But I've linked the IRS site if you want to check for yourself.)

    •  okay. but (0+ / 0-)

      it doesn't make my statement wrong... i did not say that people were taxed on wealth, but that those holding 71% of the wealth accounted for 50% of taxes.

      In fact, I would argue that writes offs and other ways of skirting taxes on actual income are not factored in what ends up being paid.

      •  How is the Wealth Measured? (2+ / 0-)
        Recommended by:
        coffeetalk, VClib

        If a person gets $1,000/mo from an annuity or investment portfolio, presumably the value of that asset would be included.  However, if a person receives $1,000/mo from Social Security or a pension are we going to include the equivalent value as if it were an annuity with inflation adjustments?  What of Medicare and Medicaid and pensions?

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Mon Jan 07, 2013 at 01:48:00 PM PST

        [ Parent ]

      •  It's a false premise (1+ / 0-)
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        to think that comparing the amount of "wealth" someone has (how is that measured?) with the amount of income taxes  someone pays tells you anything.  Comparing "wealth" to "income taxes" tells you nothing.  

        If you want to see whether the rich are paying anything that's fair, you have to compare their percentage of the "income" versus the percentage of "income taxes" they paid.   You compare their share of "what's taxed" to their share of the taxes paid on the "what's taxed."  That's the only way to determine whether that particular ttax is "fair."    

        I did not say your facts were wrong -- what is wrong is that you put the two together.  It's like saying I want to compare the number of teens arrested for fraud with the number of adults arrested for battery so as to see which group is more likely to smoke marijuana.  You can have bunch of facts that are correct.  They just have no meaningful relationship to each other.  

        And if this is true:

        In fact, I would argue that writes offs and other ways of skirting taxes on actual income are not factored in what ends up being paid.
        All that means is that you think the top 10%, with 45% of the income, have too many loopholes and therefore should pay MORE than 70% of the income taxes.  It does nothing to change the IRS figures which are based on AGI dollars reported, and  tax dollars paid.
    •  Recced for facts, which are always useful (0+ / 0-)

      However, perhaps we 'd have somewhat less wealth disparity if we had not exempted taxes on (or provided breaks on) certain kinds wealth, or ways of acquiring wealth.

      It would be interesting to know historically what percentage of "wealth", by whatever definition, was held by the various quintiles - and what percent of total taxes did they pay? What did that look like during Eisenhower. Before/after Reagan? During Clinton admin?

      "No one life is more important than another. No one voice is more valid than another. Each life is a treasure. Each voice deserves to be heard." Patriot Daily News Clearinghouse & Onomastic

      by Catte Nappe on Mon Jan 07, 2013 at 11:47:00 AM PST

      [ Parent ]

      •  States can tax wealth, federal government cannot (1+ / 0-)
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        State legislatures have plenary power, which means they can do anything not prohibited by their constitutions.  States DO tax "wealth." A property tax is a "wealth" tax -- for many people, the majority of their "wealth" is their house, so taxing the value of their house is a tax on their "wealth."

        Congress does not have plenary power -- it can only do what it is expressly authorized to do under the constitution.  That's what the whole health care case was about.  Congress needed something in its enumerated powers (Article I, section 8) that authorized it to pass that law.  The SCOTUS said the power to regulate interstate commerce did not give Congress the power to impose a fee on those who did not buy insurance, but then said that the fee could be construed as a "tax," and Congress had the power to tax income (the fee is to be paid as part of your income tax returns).    

        The 16th Amendment was necessary even to give Congress the power to impose a "tax on incomes."  For  brief discussion of why the 16th Amendment was necessary, see here.

      •  And there's no reliable measure of "wealth" (2+ / 0-)
        Recommended by:
        VClib, nextstep

        by the federal government as far as I know.  The IRS can provide data on income because it is reported to the IRS.  But "wealth" is not reported to any government entity.  Most people do not do personal financial statements and provide those to the government, which is the kind of thing you would need to measure "wealth" (assets minus liabilities).

        Then there's the whole question of what is "wealth" and how do you measure that?  Just by way of example, is an intangible right -- a copyright, or  trademark, "wealth" and how do you value that?  If you run a small business --  a corner dry cleaner, say -- do you want to include the business "good will" as part of the value of the business, and thus part of the owner's "wealth?"  

        Even for the really rich, the best we can do is make "estimates" of their wealth, based on the some valuation of their major assets.  Those "estimates" generally have a pretty big margin of error, because we don't have audited financial statements to use.  

        So, I don't think there's any reliable way to measure "wealth" of the various quintiles historically -- at least not the the same degree of accuracy as the IRS data.  

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