US household income disparity

Someone just sent me this chart:



Here's a little quiz for you guys.

Anybody notice something just a little bit fishy? Originally Posted by CaptainMidnight

What is it that you find fishy? That it only includes income tax?

And you can go calculate it for yourself at this web site. It's not very complete, but should serve as a basic template. Nothing for oil and gas income, so I had to manually calculate my depletion allowance. Nothing for foreign tax credits on your overseas investments, which can be substantial. And no distinction between passive and active income and deductions, but you can manually figure that.

http://www.mytaxburden.org/

Hard to say since I don't have a good feel for what my income will be for this year, but looks like Bush's cuts will save me almost $40,000. Obama's proposal will hit me up for about $24,700 of that. But that frankly seems quite fair to me.

Calculating on the best year I've had since the cuts, the cuts save $75,000, of which Obama takes back $63,900.

Do your own situation and see what your tax burden is in the third column -- what you tax would be under Obama. I ran several scenarios for what I perceive to be a more normal fifty to sixty percentile scenario -- guy makes $75k, wife makes $50k, etc. -- and all ended up with less tax under Obama proposal.

If you want to raise overall federal income, you are going to need to a) redo the tax code so multi-billion dollar corporations aren't able to come out with zero taxes, and b) change the tax code so that the 1% of the population who own and/or control more than 3/4 of the wealth cough up dollars in same percentages as the shrinking middle class. Forget taxing the masses... there is no money to be made where there isn't money to begin with.

The argument always comes down to tax someone else, but don't tax me... demagogues from both parties ignore common sense and pander to their special interests. Both parties are equally guilty of this, and we the voters are the ones to blame because we keep voting their asses back into office.

If you wanna change it, then change has to come from the bottom up. I don't forsee leadership in Washington bucking the system and ignoring all the highly-paid lobbyists who pay for their re-election campaigns.

If you taxed 100% of the top 1%, it wouldn't make a dent in the deficit. (Assuming they even kept recognizing income at that level -- which they wouldn't).

If you taxed 100% of the top 1%, it wouldn't make a dent in the deficit. (Assuming they even kept recognizing income at that level -- which they wouldn't). Originally Posted by pjorourke

Yea but the topic was income inequity.



Second, the top 1% have much more sway with how much is spent. So they are way more to blame for this deficit than some poor smock trying to make ends meet. If investment banks are worried about the deficit quit taking bailout money. How the heck can you expect to wean the poor from entitlements when the kingpins are raking it in? Really hard to blame the unions for wanting whet corporate big wigs are getting.

oh, I agree 100% there is nothing worse than government picking winners/losers -- whether its unions, corporations or individuals through bullshit attempts to make things "fairer".

The proper role of government is like the house in a poker game -- keeps the table honest, doesn't care who wins and takes a SMALL rake out of each pot to cover the cost.

So let me get this straight.

The upper 50% of citizens are the only real federal taxpayers (save and except social security and payroll taxes). According to the following link, estimated receipts from all sources, save social security and payroll taxes (which “all sources” are obviously controlled and provided by that upper 50%) for 2010 are $1.441 Trillion ($2.381 Trillion less $940 Billion).

http://en.wikipedia.org/wiki/2010_United_States_federal_bud get

Estimated discretionary spending for the entire federal government for 2010 is estimated to be $1.368 Trillion…some $73 Billion less than all upper 50% citizen receipts. So, that upper 50% is covering all the costs of the entire federal discretionary spending for both 50%’s of the citizens.

Considering the fact that ½ of social security taxes are paid by employers (also the upper 50% of the citizen base) and the upper 50% also pays the employee contribution portion of the social security taxes on itself (at a much higher dollar amount than the lower 50%) then it would appear that the upper 50% is paying probably more than 75% of the social security taxes.

So, that would all mean that the upper 50% is paying, in receipts to the Fed Gov, some $2.146 Trillion ($1.441 Trillion plus 75% of $940 Billion). Such $2.146 Trillion is only $81 Billion short of covering all the discretionary spending of the Fed Gov (yep WTF, that would include all defense), plus all the social security benefits paid, plus the interest on the national debt.
All other Fed Gov spending is providing benefits to the lower 50%. Seems like they could fade that themselves considering they are asking the upper 50% to provide everything else.

It also seems a bit incongruous for that lower 50% to be bitch’n at the upper 50% for not picking up the tab at the state and local level.

But hey, that’s just me.

What is it that you find fishy? Originally Posted by TexTushHog

As a preface, let me refer to a quote from earlier in this thread:

Early in my career I had a boss scream at me (a day before a review with the Board) , "Just get me some God Damn data that I can cite. I can make it say whatever the hell I want!" Originally Posted by atlcomedy

Some variation of that is often invoked.

"Torture the data long enough and you can get it to say anything you want!"

That graph was posted by thinkprogress.org, a left-wing website. Obviously they support rescinding the tax cuts for top bracket individuals, so it's understandable that they might want to put a happy face on optimistic estimates of the additional revenue that might be collectible therefrom.

Note that the bar graph shows that a "typical" couple with $1 million of taxable income would owe about $307K in tax under the 2011 bracket structure, but only $254K in 2010. That's just a little more than a 20% increase.

But the expiration of the tax cuts means that the top bracket rate goes from 35% to 39.6%, only a 13% increase! (Note also that our hypothetical couple would pay the 39.6% rate only on income exceeding about $373K, so the top rate would only be paid on about 67% of the $1 million.)

How did they come up with something like this? Who knows, but it sure looks like somebody did some "creative selecting" in order to find hypothetical couple(s) who possess some rather diverse sets of opportunities for deductions or exclusions. Some interesting datapoint selection somewhere along the way, it would appear.

How do people promulgating this kind of stuff get away with it? I guess they figure there's no limit to the innumeracy of a typical American.

I might also note also that projections of this type are almost always too optimistic for another reason. People who earn their incomes from businesses and investments often change their behavior in fundamental ways when facing tax hikes. Perhaps the scheduled tax rate increase isn't large enough to make a huge difference, but I'm pretty sure there will be some effect. For instance, some business owners realize income from Sub S corporations and pay personal income tax at the 35% rate, which happens to be the same as the corporate tax rate. That will no longer be the case in 2011, since the corporate rate is not scheduled to rise. Therefore, some taxpayers may be counseled to shift some of their income into another type of entity in order to lighten their tax burdens.

When big-spending politicians get all giddy about tax increases on the "rich", they often find to their disappointment that a lot of that taxable income pulls a disappearing act.

( MAKE MINE ANGEL FOOD)

It also seems a bit incongruous for that lower 50% to be bitch’n at the upper 50% for not picking up the tab at the state and local level.

But hey, that’s just me. Originally Posted by Rudyard K

That upper 50% you speak so highly of isn't even covering the cost of paying for the Federal Government. We can argue all day about who should pay what but there ain't much room for argument on the fact that we ain't covering the bills. Now if you wanna tax the poor at a higher rate, ok by me, I ain't poor (nor am I rich btw) but I don't figure that would do much good a closing the income disparity gap**. Another little ditty, until the rich can fund a war properly, I sure as hell wouldn't be bragging about how much they pay in taxes. I mean this nation building seems like a lame ass thing to undertake when we have plenty of nation building that needs working on in our own damn country. But that’s just me. Speaking of my favorite subject , war, the very same people never seem to bitch about the transfer of wealth from the average taxpayer to large corporations and their cronies by way of war funded projects. That has always struck me as strange.


**WE keep going like we are going and have us a full blown depression then the rich really will be in a pinch. Maybe another FDR come along and break up the rich fellows club and really give the top 1% something to bitch about. Problem then is nobody will listen to them. And then the circle we be complete and ready to start anew!

That graph was posted by thinkprogress.org, a left-wing website. Obviously they support rescinding the tax cuts for top bracket individuals, so it's understandable that they might want to put a happy face on optimistic estimates of the additional revenue that might be collectible therefrom. Originally Posted by CaptainMidnight

CaptainMidnight, the chart is actually from the Wall Street Urinal:

http://online.wsj.com/article/SB1000...592147682.html

If you would read the note from ThinkProgress, they make clear that they reprinted it from there. So it's that left wing pinko paper that Rupert Murdoch owns that you're bitching about.

But go look at real data:

http://www.mytaxburden.org/

The site is run by The Tax Foundation, which is to the right of Atila the Hun. But it still shows that people with modest incomes get substantial breaks under Obama's plan. People like me that got huge windfalls under Bush pay more taxes.

Wall Street Urinal Originally Posted by TexTushHog

Cute.

Just a hunch, but I'm guessing you do not refer to The New York Times as The New York Slimes.

Since the chart was posted by Matthew Yglesias, who is on the far left, I assume he wished to use it to support the intimation that rescission of the Bush tax cuts would raise a lot of revenue from the affluent and thus help to restore what his readers would consider greater "tax fairness."

But I'm not sure why the WSJ would want to post the chart. Maybe they wanted to exaggerate the effect of top bracket rate increases since their readers have views of "tax fairness" opposite those of the liberal site!

In any event, you're going to have a pretty hard time extracting 20% more tax from someone by applying a 13% higher tax rate on a little less than two-thirds of their taxable income (since the top tax bracket only kicks in for income above about $370K). An increase in total tax of a little over 8% is more like it.

I have no idea why the creator of this chart missed the discrepancy. Perhaps someone just made a simple keypunching error.

By the way, TexTushHog, here's a straightforward question for you.

In response to this:

Krugman and I are still right on the stimulus. Originally Posted by TexTushHog

I asked this:

Really?

If you seriously believe that, can you point to an instance where adding massive new spending to an economy that already has large structural deficits has ever increased a nation's prosperity?

Of course not. One doesn't exist, even though it's been tried many times. Originally Posted by CaptainMidnight

...and you blithely moved on.

If you actually believe that Krugman is "right about the stimulus" (that is, that we need even more deficit spending, with little regard for how the money is spent), would you like to provide an example of a case where that's actually worked, or, barring that, take a stab at explaining why you think it would work now?

Or do you simply take left-wing talking points at face value?

( MAKE MINE ANGEL FOOD)

That upper 50% you speak so highly of isn't even covering the cost of paying for the Federal Government. We can argue all day about who should pay what but there ain't much room for argument on the fact that we ain't covering the bills. Now if you wanna tax the poor at a higher rate, ok by me, I ain't poor (nor am I rich btw) but I don't figure that would do much good a closing the income disparity gap**. Another little ditty, until the rich can fund a war properly, I sure as hell wouldn't be bragging about how much they pay in taxes. I mean this nation building seems like a lame ass thing to undertake when we have plenty of nation building that needs working on in our own damn country. But that’s just me. Speaking of my favorite subject , war, the very same people never seem to bitch about the transfer of wealth from the average taxpayer to large corporations and their cronies by way of war funded projects. That has always struck me as strange.


**WE keep going like we are going and have us a full blown depression then the rich really will be in a pinch. Maybe another FDR come along and break up the rich fellows club and really give the top 1% something to bitch about. Problem then is nobody will listen to them. And then the circle we be complete and ready to start anew! Originally Posted by WTF

Well WTF, what the above showed was the upper 50% is paying for all the operations of the US...including servicing the debt...your broken record war machine included too. The only part of the federal budget that they have trouble keeping up with is the giveaway programs that the lower 50% vote in for themselves.

Cute.

Just a hunch, but I'm guessing you do not refer to The New York Times as The New York Slimes. Originally Posted by CaptainMidnight

I do, just as I say Wall Street Urinal, and New York shitty when I refer to N.Y. city.

If you actually believe that Krugman is "right about the stimulus" (that is, that we need even more deficit spending, with little regard for how the money is spent), would you like to provide an example of a case where that's actually worked, or, barring that, take a stab at explaining why you think it would work now?

Or do you simply take left-wing talking points at face value? Originally Posted by CaptainMidnight

The irony is what you consider a left-wing / Krugman stimulus is still cheap and pale in comparison to the right wing GW Bush stimulus: Iraq/Afghanistan war game stimulus cost is by now way over 1 trillion USD!

And not included in this 1 trillion USD war game stimulus, are all the "smaller" stimuli for the production of war game equipment.

Take the Boeing C-17 as an example:

No one in the civilian sector uses this air-craft, all use the Ilyushin Il-76, and even the US army heavily relies on the Ilyushin Il-76 in Iraq / Afghanistan.
There are plenty of reasons for this fact: one being that on unpaved, dirt-road runways (in US milirary slang: "small austere airfields") the Il-76 is superior to the C-17.


BUT the Boeing C-17 has a strong bi-partisan lobby, so plane after plane the production of this shit keeps going.


the bi-partisan lobby website is here: http://www.c17foramerica.com/

and of course the worker union is part of the game:
http://www.uaw.org/articles/uaw-says...ndustrial-base

and a good background story on this bi-partisan lobby:
http://www.businessweek.com/magazine...4046738593.htm

The irony is what you consider a left-wing / Krugman stimulus is still cheap and pale in comparison to the right wing GW Bush stimulus: Iraq/Afghanistan war game stimulus cost is by now way over 1 trillion USD! Originally Posted by ..

(Note: I'm a Libertarian and did not support the Iraq War, and I am no fan of George W. Bush, so please don't compartmentalize like so many around here.)

Let's make an effort to keep things in context, shall we?

The approximately $1 trillion spent on the Iraq War was obviously not positive for the economy; it was clearly not a "stimulus." A major blunder, yes, but no one intended to spend a trillion dollars to "stimulate" the economy.

The stimulus package that Krugman says is too small, by contrast, was an intentional effort to run up more deficit spending, even though all the out-of-control spending from 2003-2007 made it far more unaffordable and irresponsible.

And perhaps worse yet, it was designed as a political stimulus package, not an economic one. It was named the American Recovery and Reinvestment Act of 2009. If there were truth-in-advertising rules, it would be called the Political Payoff, Government Growth, and Entitlement Expansion Act of 2009.

I do agree that there are massive quantities of defense industry pork. Eisenhower warned of the growing military-industrial complex almost fifty years ago. Now it has metastisized and it's sometimes referred to it as the "military-industrial-congressional" complex. It's obviously no accident that supply chains and projects of various sorts are spread across many dozens of congressional districts.

All of this crap needs to be cut. Bloated military budgets, stuff designed to fight the last war, obese bureaucracies, public employee union payoffs, entitlement expansions, poorly designed health care "reform" bills, agricultural subsidies, lots of stuff that answers to the name of "corporate welfare", you name it. We can't afford it.

I'm afraid we're hurtling toward a horrific fiscal bust. Politicians aren't making difficult choices in any area. They're like doting parents who tell their charming little kids they can have all the ice cream they want; the fat kid down the street will eat their broccoli for them.

Krugman's prescription just strikes me as a fiscal kamikaze mission.

Well WTF, what the above showed was the upper 50% is paying for all the operations of the US...including servicing the debt...your broken record war machine included too. The only part of the federal budget that they have trouble keeping up with is the giveaway programs that the lower 50% vote in for themselves. Originally Posted by Rudyard K

What is shows is that like any large corporation the top of the heap will extract the bulk of all the profit and promise to give the actual working man who is doing the work (and fighting the wars) a living wage and a stipend in the future all the while knowing the company is going broke. They will then bitch about future obligations that they have promised, as excessive, never once thinking THEY just might be part of the problem. They worked hard for their wealth with an underling assumption that no one else did. They never once take into account that had they been born 2 blocks over they would be that poor hard working stiff trying to make ends meet.

Of course they have all the money and power by this time (or the kids and grandkids do because by this time they have written laws that insure dynastic welfare wealth) and can afford to spread propaganda towards Mexicans or Gays or any other easy target their excessive greed and disoriented sense of fairness wish to lay off what in actuality is their insecurity and guilt. But really, in the end we all die and I suppose it doesn't really matter. But the topic was income inequity not buying off God. So if some of you think that income inequity is such a good thing, I suppose we should quit bitching about securing our borders and just go ahead and merge with Mexico and their huge income inequity policies.



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The Upper Class
Upper class values include higher education, the accumulation and maintenance of wealth, the maintenance of social networks and the power that accompanies such networks. Children of the upper class are typically schooled on how to manage this power and channel this privilege in different forms. It is in large part by accessing various edifices of information, associates, procedures and auspices that the upper class are able to maintain their wealth and pass it to future generations.

The middle class
The middle class places a greater emphasis on income. The middle class views wealth as something for emergencies and it is seen as more of a cushion. This class comprises people that were raised with families that typically owned their own home, planned ahead and stressed the importance of education and achievement. They earn a significant amount of income and also have significant amounts of consumption. However there is very limited savings (deferred consumption) or investments, besides retirement pensions and homeownership. They have been socialized to accumulate wealth through structured, institutionalized arrangements. Without this set structure, asset accumulation would likely not occur.




The welfare class

Those with the least amount of wealth are the welfare poor. Wealth accumulation for this class is to some extent prohibited. People that receive AFDC transfers cannot own more than a trivial amount of assets, in order to be eligible and remain qualified for income transfers. Most of the institutions that the welfare poor encounter discourage any accumulation of assets

(Note: I'm a Libertarian and did not support the Iraq War, and I am no fan of George W. Bush, so please don't compartmentalize like so many around here.)

Let's make an effort to keep things in context, shall we?

The approximately $1 trillion spent on the Iraq War was obviously not positive for the economy; it was clearly not a "stimulus." A major blunder, yes, but no one intended to spend a trillion dollars to "stimulate" the economy.

The stimulus package that Krugman says is too small, by contrast, was an intentional effort to run up more deficit spending, even though all the out-of-control spending from 2003-2007 made it far more unaffordable and irresponsible.

And perhaps worse yet, it was designed as a political stimulus package, not an economic one. It was named the American Recovery and Reinvestment Act of 2009. If there were truth-in-advertising rules, it would be called the Political Payoff, Government Growth, and Entitlement Expansion Act of 2009.

I do agree that there are massive quantities of defense industry pork. Eisenhower warned of the growing military-industrial complex almost fifty years ago. Now it has metastisized and it's sometimes referred to it as the "military-industrial-congressional" complex. It's obviously no accident that supply chains and projects of various sorts are spread across many dozens of congressional districts.

All of this crap needs to be cut. Bloated military budgets, stuff designed to fight the last war, obese bureaucracies, public employee union payoffs, entitlement expansions, poorly designed health care "reform" bills, agricultural subsidies, lots of stuff that answers to the name of "corporate welfare", you name it. We can't afford it.

I'm afraid we're hurtling toward a horrific fiscal bust. Politicians aren't making difficult choices in any area. They're like doting parents who tell their charming little kids they can have all the ice cream they want; the fat kid down the street will eat their broccoli for them.

Krugman's prescription just strikes me as a fiscal kamikaze mission. Originally Posted by CaptainMidnight

Finally a post I can agree with. But until the right is willing to make cuts, why should the left?

That is the problem I have with the Tea Party, they target left wing spending and leave the bulk of the right wing waste alone. So I of course in my infinite wisdom come on here and make fun of them. Their intentions seem good but they are no where near fair in what that propose to cut.