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View Diary: Open thread for night owls: austerity (106 comments)

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  •  Disagree (0+ / 0-)

    Of course most financial assets are owned by the wealthy, but they do pay taxes.  If you look at all income taxes by income  levels, the top 1% and top 10% pay a huge fraction of the taxes paid in the US, the bottom 50% pay almost none.  Our income tax system is in fact highly progressive.  What is not progressive is sales taxes and payroll taxes, but the  first are state imposed and the second fund Social Security.  A look at the total tax burden of all  kinds by income level show a  mildly progressive system.  I think we do need to raise taxes once this economy is mended, it worked for Clinton and undoing the Bush tax cuts are a good idea, but to suggest we don't need to either raise taxes or cut spending is fiscal nonsense.
    We are not at peace, but the Iraq war commitment is winding down rapidly, and while Afghanistan is costing 7 billion/year, that is not a material factor in our deficit, even if we shut that war down we still would have a mammoth structural deficit at full employment (unsustainable 4% of GDP).  As to  asset taxes, they can work, but  with lots of negatives, I just think you have not properly thought through the consequences of such a system on the economy, savings, and investing.  One of the problems we have had is too little savings.  An asset tax will exacerbate that.

    •  Since they have nearly all the wealth (0+ / 0-)

      of course they pay a huge fraction of the taxes.

      However, the highest actual rates aren't paid by the top 1%, but by the rest of the top 10%.

      The Plastic Surgeon making 500k pays pretty hefty taxes - a much rate than the 15 million dollar a year hedge fund manager.

      Afghanistan is costing us over 100billion a year in direct short term costs, not counting the wear and tear on equipment or the costs to the VA.

      Where you got 7 billion from is beyond me.

      "The road to Hell is paved with the good intentions of people who refused to listen to Paul Krugman." ~ Drew J Jones, mostly.

      by JesseCW on Fri Jul 16, 2010 at 09:23:34 AM PDT

      [ Parent ]

      •  Meant to say 7 billion per month (0+ / 0-)

        It is about 7 billion per month in AFghanistan, I miswrote, but our deficit currently is 1.3 trillion, the Afghan war is a fraction of that.  It is not correct to sum the total spending on the wars over the last 10 years and use that as an argument that we don't have a deficit issue going forward.  

    •  if the tax burden (0+ / 0-)

      is targeting the rich and the little guy is paying nothing, how is it that the rich keep getting much richer much faster?

      Is it that they are that much smarter?  

      Your willingness to dismiss the costs of Afghanistan and Iraq and the fact that we are at war and occupying two countries pretty much makes everything else you say suspect.

      Sure doesn't look like Iraq is winding down to me

      Or how about this?

      According to a Congressional Budget Office (CBO) report published in October 2007, the U.S. wars in Iraq and Afghanistan could cost taxpayers a total of $2.4 trillion dollars by 2017 when counting the huge interest costs because combat is being financed with borrowed money. The CBO estimated that of the $2.4 trillion long-term price tag for the war, about $1.9 trillion of that would be spent on Iraq, or $6,300 per U.S. citizen.[9][10]

      Stiglitz, former chief economist of the World Bank and winner of the Nobel Prize in Economics, has stated the total costs of the Iraq War on the US economy will be three trillion dollars in a moderate scenario, and possibly more in the most recent published study, published in March 2008.[11] Stiglitz has stated: "The figure we arrive at is more than $3 trillion. Our calculations are based on conservative assumptions...Needless to say, this number represents the cost only to the United States. It does not reflect the enormous cost to the rest of the world, or to Iraq."[11]

      A recent study indicated that the long term health care costs for wounded Iraq war veterans could range from $350 billion to $700 billion.[14]

      •  Income Disparities (0+ / 0-)

        Tax rates are not the deciding factor of income disparities, which is why we can have rising income inequality even though the tax system is mildly progressive.  There are many factors that have helped the rich.  We live in an increasingly winner take all economy, where the very best get the lion's share, see Alex Rodriguez or Kobe Bryant or Steven Spielberg.  There has been a collapse of earning power for the minimally educated, you can't get a middle class blue collar job with a high school diploma anymore, there is increased competition from illegal immigrants at the lowest end of the job market pushing down wages, there is a tendency for educated males to marry professional females, the doctor now marries another doctor instead of a nurse, concentrating income in upper bracket households, single motherhood is more common but it depresses wages and household income, poverty rates for married couples are much lower than single mothers, and the increasing professionalization of the workforce concentrates income in the upper 20% with advanced education, our punitive criminal justice system puts lots of poorly educated males into the prison system, both white and black, causing lifelong harm to their income potentials, etc etc.  Tax rates have little to do with those much more potent forces at work.

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