You think you are paying high taxes? Think again...

[Duel of Fates]

[Bryant]

First income tax was for WWI -> taxes went down but not to prewar levels
Second income tax hike for great depression - note low earners did not have tax increase
Third income tax hike was for WWII -> note large increase for low earners
Income tax returned to pre-war levels after Reagan
Tax rate went down => % of gdp revenue did NOT change
Tax rate went down => gdp went UP
Tax rate went down => revenue went UP
Spending from .5 to over 4 trillion (pop ~2x, spending 8x)

The country's gross economic growth during the periods you mention has very little to do with lower taxes. It can be ascribed to increasing globalization, the lowering of international tariffs after the Depression, and the growth of multinational corporations that maintain workforces and outlets in multiple different countries. Changes in the income tax (for the top 1%) have never drastically affected the growth of the economy.

I never said that lower taxes were the reason for economic growth, only that the economy did grow under lower taxes. My biggest points were actually that the % revenue did not change when the tax rates changed, and that spending has drastically gone up. Also, I'm of the firm belief that only 100 years of taxes is not enough time to create statistically valid arguments - especially when so much was changing at the time (industrialization, globalization, world wars). To many other strong variables have been changing over that short period of time to determine exactly how taxes affect the economy.

LOL, prior to 1913 the country was isolated - there was little regular interaction with foreign powers, and it wasn't such a great time. Besides, the government made money by taxing whiskey, furs, and other luxury items (which, guess what, were purchased primarily by the wealthy).

My point was that people survived just fine. I believe we have big questions to answer about what exactly we want our government to do, what it's going to cost (in both money and freedoms), and at what level we want these things decided (fed/state/local - which I believe can be a powerful means of compromise for many issues).

[Duel of Fates]

[Bryant]

and I know it is very difficult for the eyes to read so much in such tiny letters (at least that's my case), but if you hold on a little more read this.. a quote from an article in The Economist (moderate conservative by the way, and even they admit the situation is bad):

Whatever its causes, the stratification of American society is having profound consequences. A country that prides itself on its social mobility is already less mobile than most people think and is almost certainly becoming even less so. As the box with the previous article showed, standard measures of inter-generational mobility in America are lower than in Canada and much of Europe. Most of this has to do with the difficulty of escaping from the bottom rungs of America’s income ladder. According to Markus Jantti, a Finnish economist who has studied mobility across countries, more than 40% of the sons of the poorest 20% of Americans stay in that quintile, compared with around 25% in Nordic countries. The evidence is mixed on whether social mobility has lessened or simply stayed the same over the past 30 years. But it is clear that there has been no improvement in mobility to compensate for widening inequality.

And even the most recent studies of social mobility look at the earnings of people who were children over two decades ago. Since disparities in income, education and social behaviour now strongly reinforce each other, future mobility might be a lot lower still. A study by Sean Reardon of Stanford University suggests that the gap in standardised test scores between schoolchildren from high- and low-income families is roughly 30-40% bigger today than it was 25 years ago. Bob Putnam, of Harvard University, puts it starkly. Put away the rear-view mirror and look at future social mobility, he says, and “we’re about to go over a cliff.”

The other side of the coin to mobility is motivation. There are many theories about the effects of the so called "welfare nation" on desire for social mobility. However, that is difficult to measure and difficult to come up with a humane solution. No matter what the reason, I do believe that we should be concerned about mobility (or the the more patriotic phrasing: "The American Dream"). I don't really have a solution by the way, but I would say the challenges are to let businesses feel that they are in a stable environment with respect to the government (ie no sudden drastic policy changes, that could otherwise keep them from expanding), that if taxes are increased on top-earners that it would be done in a way which minimizes the impact on money going towards job investments (such money is not 'excess' wealth and benefits those in lower strata), and lastly that we find a way to boost low-earners mobility and not just simply handing them a paycheck.

Sorry for the double post

[CommanderOtto]

and I know it is very difficult for the eyes to read so much in such tiny letters (at least that's my case), but if you hold on a little more read this.. a quote from an article in The Economist (moderate conservative by the way, and even they admit the situation is bad):

Whatever its causes, the stratification of American society is having profound consequences. A country that prides itself on its social mobility is already less mobile than most people think and is almost certainly becoming even less so. As the box with the previous article showed, standard measures of inter-generational mobility in America are lower than in Canada and much of Europe. Most of this has to do with the difficulty of escaping from the bottom rungs of America’s income ladder. According to Markus Jantti, a Finnish economist who has studied mobility across countries, more than 40% of the sons of the poorest 20% of Americans stay in that quintile, compared with around 25% in Nordic countries. The evidence is mixed on whether social mobility has lessened or simply stayed the same over the past 30 years. But it is clear that there has been no improvement in mobility to compensate for widening inequality.

And even the most recent studies of social mobility look at the earnings of people who were children over two decades ago. Since disparities in income, education and social behaviour now strongly reinforce each other, future mobility might be a lot lower still. A study by Sean Reardon of Stanford University suggests that the gap in standardised test scores between schoolchildren from high- and low-income families is roughly 30-40% bigger today than it was 25 years ago. Bob Putnam, of Harvard University, puts it starkly. Put away the rear-view mirror and look at future social mobility, he says, and “we’re about to go over a cliff.”

The other side of the coin to mobility is motivation. There are many theories about the effects of the so called "welfare nation" on desire for social mobility. However, that is difficult to measure and difficult to come up with a humane solution. No er what the reason, I do believe that we should be concerned about mobility (or the the more patriotic phrasing: "The American Dream"). I don't really have a solution by the way, but I would say the challenges are to let businesses feel that they are in a stable environment with respect to the government (ie no sudden drastic policy changes, that could otherwise keep them from expanding), that if taxes are increased on top-earners that it would be done in a way which minimizes the impact on money going towards job investments (such money is not 'excess' wealth and benefits those in lower strata), and lastly that we find a way to boost low-earners mobility and not just simply handing them a paycheck.

Sorry for the double post

that's a very moderate and well thought answer. If only everyone was like that...

yeah but Duel, although everyone looses if grades are redistributed, it isn't that simple in the economy. If the lower sectors of the population are doing very badly in income through time, then that means social mobility decreases, racial problems increase, health problems increase, and the economy is weakened as people cannot afford buying things like they used to... and then companies loose money, unemployment increases...

there is also the effect that Bryant is talking about, where some inequality actually allows some people to earn more and reinvest it...it is true, but this effect is usually weaker than the first. It's not like in grades of an exam, where my results have no effect on someone else's well being (if I get 4.0 or 1.0, nobody will be affected). My GPA will never affect my classmates, so it's not the same thing as income. If a handful of people get good grades, that will not be an impediment for other people to get good grades. While if income is very unequal, it reduces the chances of lower income citizens to gain access to higher income. So while grade redistribution is terrible, it doesn't mean it is terrible in income. Note, as Bryant said, just handing checks isn't great either. There are other ways of doing it without giving free money to poor people.

For example, when the government raises taxes on high income (like those american taxes from 1930's to 1981), the government can redistribute the extra income by investing in infrastructure and education. Is that free money? Nope. People have to work for it and the economy and society is better off. Just my two cents. And again, im not saying that everyone is going to be magically equal... im just saying that we shouldn't be like this (right end of the graph):

[(SWGO)DesertEagle]

Like I showed before, tax rate did not increase income as a % of GDP. So the government does not benefit from higher tax rates, but you are hurt. Also, even if you were to somehow say that's a fluke, Republicans have very good ideas about taxes - but also different ideas about spending. There was a time when government was about simple protections, and people had to be responsible for themselves... I'm for much smaller government, which means less spending, less taxes, and I chose were my money goes - not some criminal in DC.

Growth in GDP is not the measure for the economic and/or social result of higher/lower tax rates. That neglects the country's gain with respect to the construction of more hospitals and more schools, increased funding to disease and space research programs, etc.

First income tax was for WWI -> taxes went down but not to prewar levels
Second income tax hike for great depression - note low earners did not have tax increase
Third income tax hike was for WWII -> note large increase for low earners
Income tax returned to pre-war levels after Reagan
Tax rate went down => % of gdp revenue did NOT change
Tax rate went down => gdp went UP
Tax rate went down => revenue went UP
Spending from .5 to over 4 trillion (pop ~2x, spending 8x)

The country's gross economic growth during the periods you mention has very little to do with lower taxes. It can be ascribed to increasing globalization, the lowering of international tariffs after the Depression, and the growth of multinational corporations that maintain workforces and outlets in multiple different countries. Changes in the income tax (for the top 1%) have never drastically affected the growth of the economy.

I found a graph on Wikipedia (and graphs are good)! It's important to note that the first spike is WWI, the second spike (red) is the great depression, and the third spike (blue/red) is WWII. Also, notice that before 1913 there was practically no tax (it's a wonder they ever survived for over 130 without the government's "help").If we went back to the tax-rates you were talking about, then we'd be in full wartime government operation!

LOL, prior to 1913 the country was isolated - there was little regular interaction with foreign powers, and it wasn't such a great time. Besides, the government made money by taxing whiskey, furs, and other luxury items (which, guess what, were purchased primarily by the wealthy).

Oh good. A self proclaimed socialist pontificating on the nature of taxes. Glad I didn't miss a thing.

The ad-hominem does nothing to reduce his credibility. Sure, his views influence his thinking, but he has every right to contemplate tax laws and the same right to share his view with others - especially considering that what he's saying is true.

Income equality means that everyone is equally poor. You prefer that or some people being poor and some being rich and the rich people trying to make even more money by investing, which creates more jobs...etc.

You would make a fantastic modern newscaster. Why? Because you love soundbites, simple rhetoric you can throw at people without substantiating anything. That isn't true at all, LOL. What facile argument you did include is actually inaccurate, as reductions in tax rates have NOT seen corresponding increasing in corporate investment or hiring. What really happens is that the executive's salary is boosted, pension plans are extended, etc.

Lower taxes for rich people mean they get rich at everyone's expense.

But they don't pay lower taxes than everyone else, they actually pay more, even with a flat rate, so it's not "at everyone's expense."
They earned their money, they are entitled to it.
If you eliminate tax brackets, you reduce the need to pay games with the system to get into a lower bracket.
And splitting hairs on "well people below 20k don't pay so it's not really a flat rate" is not helpful.

Anyone who lives on unclaimed land is entitled to all the money they make, yes. If you move to a small, uninhabited, never-before-seen Pacific Island, find a gold mine and sell the gold to tourists who stop by (because exporting it would make you subject to tariffs and sales taxes in other countries), you can keep ALL of your money. BUT, when you live in a civilized society, you cede some of your income for your (and others') benefit.

Because we, as people, rely on each other, we are responsible for each other. You pay taxes to support the military that protects your shipping routes, you pay taxes to support the poor so that they can afford to send their children to college (where, after graduating, they may come work for you), you pay taxes to pave the roads so you can travel, you pay taxes to support federal agencies that regulate food and water so you don't die of contamination, you pay taxes to support the overall health of the economy so that you can stand to make even more, and you pay taxes to support the hospitals so that if/when any of your family becomes chronically ill, they have a place with access to specialists and sub specialists who provide good care for them.

And if someone has abundant reserves of cash, they should pay a higher percentage of that income than someone who doesn't.

And where, pray tell, did I suggest that rich people should not pay taxes?

And why, pray tell, should we disincentivize making money?

I'm not the one spouting rhetoric, just making simple observations that seem to conflict with your unrealistic view of the world. Zero support for the idea that the rich should pay a higher percentage.

[deadmeow]

Wow, there are so many assumptions in this post. People have the right to control their own bodies and lives, without harming others. Civilized communities do not have government, and they do not kill, rape, or commit genocide. Government is the largest tool of violence and genocide on the planet. The key to our problems is people need to reject fear, disengage from government, and engage with each other, helping each other voluntarily. Utopia will not come in our lifetime, but this will happen.

As for our current situation, taxes will never be fair. Even if a large number of people are satisfied with tax systems or government, another large group will not like it. Government is a corrupt, dishonest system, therefore those in government who are the most corrupt and dishonest, will have the higher advantage. There is no fair system of government. People will always argue left vs right, socialism vs capitalism, and so on and so forth. All systems have strengths and weaknesses.

For me, I engage with government as little as I need to. Although I understand it has no right to exist, I also understand that people will do violent things to me, and perhaps kidnap and cage me if I do not follow certain arbitrary rules. This may sound very funny like I joke I am saying, but this is because we are all fed the same propaganda all our lives.

The key to utopia or heaven, or whatever name you want to give it is non-violence. When we all choose non-violence we will have the world we are looking for.

For taxes, I think a flat tax would be an interesting thing to try, and give people making less than 30,000 a refund. Panama made a great point earlier about an IRS agent who questioned the income tax system, asking where the law was that income tax was required to be payed, and she ended up getting harassed and put in jail. the silly government makes silly rules and they can't even follow their own rules.

The military in this imperial state we live in is so gigantic. It is just a weapon of the corporations that run things. This is a good post, but we can type about how fair or unfair the taxes are forever.

[11_Panama_]

Thank you deadmeow. I found it troubling that no one cared. That in itself explains a lot about why things are the way they are... no one cares. Some of you rather drink the kool aid, no questions asked.. then ask what's in it. Taking a hiatus for awhile, see you all in the near future. God willing.

[(SWGO)DesertEagle]

Wow, there are so many assumptions in this post. People have the right to control their own bodies and lives, without harming others. Civilized communities do not have government, and they do not kill, rape, or commit genocide. Government is the largest tool of violence and genocide on the planet. The key to our problems is people need to reject fear, disengage from government, and engage with each other, helping each other voluntarily. Utopia will not come in our lifetime, but this will happen.

As for our current situation, taxes will never be fair. Even if a large number of people are satisfied with tax systems or government, another large group will not like it. Government is a corrupt, dishonest system, therefore those in government who are the most corrupt and dishonest, will have the higher advantage. There is no fair system of government. People will always argue left vs right, socialism vs capitalism, and so on and so forth. All systems have strengths and weaknesses.

For me, I engage with government as little as I need to. Although I understand it has no right to exist, I also understand that people will do violent things to me, and perhaps kidnap and cage me if I do not follow certain arbitrary rules. This may sound very funny like I joke I am saying, but this is because we are all fed the same propaganda all our lives.

The key to utopia or heaven, or whatever name you want to give it is non-violence. When we all choose non-violence we will have the world we are looking for.

For taxes, I think a flat tax would be an interesting thing to try, and give people making less than 30,000 a refund. Panama made a great point earlier about an IRS agent who questioned the income tax system, asking where the law was that income tax was required to be payed, and she ended up getting harassed and put in jail. the silly government makes silly rules and they can't even follow their own rules.

The military in this imperial state we live in is so gigantic. It is just a weapon of the corporations that run things. This is a good post, but we can type about how fair or unfair the taxes are forever.

I agree with the attitude, but disagree with the approach. We need to be involved in government or others are going to control it for us.

Whatever that means for you, great. But you get the government you vote for (or don't vote for). I'm not planning on running for office, but I will try to make educated decisions when voting.

[MATTHEW'S_DAD]

There's too many charts and graphs here guys. The government is wasting MY money on crap. The government is always going to waste a certain percentage of what we give them. Do we want them to waste 30% of our money or 15%? 50% waste on 30% revenue is a lot more than 50% waste on 15% revenue. If you can fix the waste then most probably wouldn't mind 30%. I like nice roads, bridges, parks and libraries. I don't like seeing people sitting on their front stoop 12-14 hours a day drinking beer and smoking pot while I drive to and from work.