Is this another form of protectionism? As for treaties, they are just a formality like the bankruptcy laws. Maybe we should apologize to the Swiss for him as he apologized for Harry Truman. What goes around, comes around. Hope we don’t cut off our noses to ….

I’m not worried about cutting off our noses. I’m more concerned over cutting off avenues of escape.
It is appalling at what the American people did not hear in the last presidential campaignand are now up in arms over.
It is equally appalling what the rest of the world hears from the current White House. The ’status quo’ is unacceptable, but having friendly nations really is desirable, one would think.

If 1% of us are paying 40% of the bill, shouldn’t they have a least equal representation in Congress as, say, Wyoming?

This table raises two additional questions in my mind: 1) what is the avg AGI for each of these categories of taxpayers; and 2) what is the average total benefits received from the government, by category? Only showing one side of the ledger often tells a distorted story, but in this case perhaps not?

There is another side to this story. Obama is often acccused of wanting to re-distribute the wealth. But no one seems to acknowledge that beginning with Reagan, wealth has gradually been re-distributed to the wealthy. What you neglect to point out is the magnitude of tax breaks that go to the wealthy, thanks to all the lobbying in Washington. If you stack up the the tax code - it must be 5 ft. high. Ninety percent of that is geared for breaks for the corporations & wealthy.

This table is accurate but incomplete. For years the government has been collecting excess FICA taxes and using the excess in the general fund. Because of the way they have been treated, the FICA taxes are an income tax, not a pension plan. Please add in the FICA taxes(both employee and employer)paid by each income group and see how it affects the numbers.

wstumpf
Sorry, I don’t understand your reasoning. Maybe you could share. Look at the table. The top 5% of earners make 37.44% of Adj Gross Income, yet they pay 60.63% of income tax. Maybe they should get some tax breaks. How much more would you take from them? How long do you think they will stand and take it before they simply move off shore or retire or do an Atlas Shrugged? It is NOT immoral to be successful, despite what the current group of socialists would have one think. Something is wrong with a system where nearly 50% of the citizens pay 0 income tax, yet they get the same vote as those who foot the bill. The day of reckoning is coming for the tax and spend crowd, probably early Nov 2010. As Margaret Thatcher said, “Socialism is great until you run out of people to tax.” Or better yet, Thomas Jefferson, “The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

Hi mkern
Please note that adj is adjusted gross income. This means that the 5 ft stack of tax law has already reduced the gross income. (for the wealthy this can be a huge amount). Also as harriscf points out this table does not include FICA. The wages of a person making less than $100K are taxed continuously. Those people can never get out from under the FICA tax. But many Wall St executives pay this off in the first week. So, we have before Reagan & after Reagan. Before Reagan: the little guy also had some breaks: car loans, credit card interest were tax deductable. Now the credit companies issue usury rates and these are not deductable. (At least not for the consumer) I don’t believe the rich will be running anywhere soon. They have too many lobbyists working the system for them. But in the end I do agree the system is broken. The problem is that it cannot be fixed. The only way to fix this is to scrap everything and start over. Greed kills! I hope I am not around for the days of reckoning.

wstumpf
Like mkern, I do not understand your reasoning in either of your posts. [M]kern addressed your first post.

As to your second …

The point about FICA confuses two different tax structures, one (income tax) covering current Federal budgetary operations and the other (FICA) which is, in effect, people’s cost of admission to the Social Security system.

If an employee wants the opportunity to enjoy at least a subsistence level of Social Security cash after retirement, then he/she has to pay the dues.

As for the matter of income tax breaks, there are plenty to go around for everybody. A plethora of deductions, exclusions, exemptions and tax credits are the tools selected by Congress over the years that have reduced the income tax burden on the bottom 50% and 75% of the taxpayers to such notably low levels.

In fact, some low income folks with children receive Form 1040 “refunds” of taxes they’ve never paid. It’s effectively a disguised form of welfare.

I fully agree that the current system is a travesty of common sense, but that doesn’t change the facts underlying the chart above.

Hi wstumpf
Thanks for sharing your reasoning. I agree the tax code is hideous in many ways. It’s far too complicated. However, I have always felt it is absolutely unamerican to tax those who make more at a higher PERCENTAGE. I have no problem with excluding the first xx dollars or percentage of income from taxes. That guarantees that those at the bottom don’t pay taxes on income required for minimal living costs. However, above that amount a dollar is a dollar and it should be taxed at the same PERCENTAGE for all income. By the way, don’t underestimate the number of people who are choosing to stop doing whatever they did and go underground, abroad or …. In fact, I know two of those folks VERY well!!

Hello bazwm
Looks like my post crossed with yours. Just to carry the FICA story a bit further, the “wealthy” are paying a disproportionate share of FICA. I went back and computed my contributions plus what my employer contributed (in reality part of my comp). Had those dollars been invested at a modest 4% annual return and stayed invested at 4% even after benefits payments started, there would have been enough to fund my actual benefits plus 25% forever!! Not until I die, forever!! So, where did the money go? How many others did I pay for? So after 40+ years of working and paying my government wants to cut the promised medicare and seems to have squandered my retirement funds. Only the unions have done worse at handling their fiduciary duties to their respective constituents. So who keeps the unions and Washington honest?

mkern
“So who keeps the unions and Washington honest?”

Off topic, I know … The unions are a private matter among the bosses and their members; and may it ever be so, although I now have growing concerns about the truth of their “private” nature.

But it’s people like you, me, and all others who have concluded that Washington is broken. We simply must take it upon ourselves to try and fix things via a major change in attitudes.

There’s one benefit, at least, of retirement … it affords the time to send cards, letters, emails, write at places like here, and attend any and all meetings with our Dear Electeds of both political parties, all in an effort to encourage them to think in terms of common sense, not party-speak. (As an aside, it’s nice to be busy these days!)

Hi mkern & bazwrn,
Your proposed solution for a flat tax above a certain threshold could work. I suppose there would be some debate on where to set the threshold. But in any case, a simple formula:

AGI = GI - Threshold.

And FICA, Medicare, etc. could also be rolled in. I’m ok with the concept.

The govt can be blamed for many things including instigation of the financial crisis. But then again, perhaps govt acted on behalf of the business lobbies. If you apply Mr Dent’s demographic theories in addition, one gets the feeling that we are all in deep yogurt!

Finally, in line with the subject of this post - the wealthy are getting wealthier. Please refer to the following link for explanation:

http://www.nytimes.com/2009/01/30/business/30rich.html

Thanks for your thoughts in this interesting & friendly debate.

bazwm
Agree on the unions. If they stay “private”, great. My concern is that once there is a gov health plan, the union trust funds will suddenly go missing and the union memebers will end up on the public plan supported by taxpayers. In the headlines today, unions will not support any Dem who does NOT support a gov health plan. Why should they care unless there is something in it for them? I realize we are off topic here, sort of, but no one else seems to be here.
PS Same concern with state and local gov employees/retirees.