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View Diary: I.R.S.: U.S. Income Inequality Has Reached Record Level (w/Update) (186 comments)

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  •  Making the Bush tax cuts permanent (21+ / 0-)

    will continually accelerate this trend unless it is mitigated in some other way. I don't see how it can be mitigated without the top tiers taxes being increased.

    But instead we've got the secret treaties being negotiated and the admin's goal of flattening the tax code and cutting corporate tax rates, which just seems unconscionable.


    "Justice is a commodity"

    by joanneleon on Tue Sep 10, 2013 at 03:28:30 PM PDT

    •  The Obama administration has made the tax code (2+ / 0-)
      Recommended by:
      duhban, ban nock

      MORE progressive - not less.

      "The way to see by faith is to shut the eye of reason." - Thomas Paine

      by shrike on Tue Sep 10, 2013 at 03:34:41 PM PDT

      [ Parent ]

    •  Income taxes were raised on top income earners (5+ / 0-)

      this year.  Plus tax rates on capital gains were raised slightly and Medicare taxes on investment income were increased by 3.8% this year to fund Obamacare.

      These tax increases were not nearly enough obviously, but adjusted for inflation they are close to where they were in 2000 for the top tax bracket.  In addition the administration and Democrats would like hundreds of billions in deductions and loopholes for the rich and for corporations to be done away with.  It is such deductions and loopholes that make the actual taxes paid by corporations so low.

      The problem it seems to me, at least with regard to tax policy, is that there is a significant bloc of Americans who are opposed to raising any taxes, even on the rich.  Hint:  it's not President Obama and the Democrats.  

      "Those who have wrought great changes in the world never succeeded by gaining over chiefs; but always by exciting the multitude." - Martin Van Buren

      by puakev on Tue Sep 10, 2013 at 03:44:43 PM PDT

      [ Parent ]

      •  Your explanation is so polite! (1+ / 0-)
        Recommended by:
        puakev

        and accurate as well.

        But in the blog world - wordy!

        "The way to see by faith is to shut the eye of reason." - Thomas Paine

        by shrike on Tue Sep 10, 2013 at 04:10:41 PM PDT

        [ Parent ]

      •  Actually, the recent tax increases will (4+ / 0-)
        Recommended by:
        shrike, VClib, puakev, Sparhawk

        put taxes on the 1% at the highest they have ever been, at least since 1979, when the CBO began keeping score.  

        The facts are in the historical effective federal income tax rates, which (though not perfect) is a more accurate representation of what people actually pay in federal income taxes -- it takes into account variations in rates, deductions, etc.  For the data in a readable form, see the SECOND chart here.  You will notice the the top 1% paid the most in federal income taxes during the Clinton years -- more than they did in 1979, when the top rate was 70%.  (That has to do with, among other things, the tax reform act of 1986.)  We've capped/phased out a few deductions since 1996, so the effective rate on the top 1% this year will probably be slightly higher.

        •  Does that include capital gains? (3+ / 0-)
          Recommended by:
          Betty Pinson, Calamity Jean, Chi

          Capital gains are still taxed at a lower rate are they not?  The 1% and the .1% derive significant income from capital gains rather than actual work.

          •  Mage11an - Long term capital gains taxes (2+ / 0-)
            Recommended by:
            jeff in nyc, Sparhawk

            were raised from 15% to nearly 24% for the top 1%, a significant increase. It is still at a lower level than earned income with a top rate just under 40%.

            Long term capital gains have always been taxed at a lower rate than earned income since the inception of the income tax with the exception of those few years after the Tax Reform Act of 1986, when both rates were capped at 28%. Every member of the G20 taxes long term capital gains at a lower rate than earned income. In some cases the rate is higher than the US, but in every case it is lower than their top rate for earned income.

            "let's talk about that"

            by VClib on Tue Sep 10, 2013 at 07:00:35 PM PDT

            [ Parent ]

            •  Thanks for the clarification (0+ / 0-)

              That is actually a fairly significant increase -- it would be better if it were at the same rate as real income -- but for truly long term capital gains -- i.e., from real investment not just gambling on up or down of the market -- there might be some value in encouraging investment.  The 40% top rate is too low too -- but my own views on this -- that, yes progressive taxation is wealth redistribution and that's a good thing -- are horribly unpopular.

              •  Mage11 - to qualify for long term capital gains (0+ / 0-)

                rates a capital asset must be held for a minimum of one year. So people who are short term traders pay earned income rates on their net gains.

                "let's talk about that"

                by VClib on Wed Sep 11, 2013 at 01:57:23 PM PDT

                [ Parent ]

          •  yes. capital gains are income. (0+ / 0-)

            so in that chart they are included in the income tax numbers.  

    •  I don't think the math works that way (1+ / 0-)
      Recommended by:
      elwior

      especially given that the top 1% is way above any of the permanent tax cuts.

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