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Independent study concludes that under Romney lower and middle class will endure tax burden

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    Independent think tank released analysis of both Presidential nominees tax ideas. It was found that Romney would cut even more taxes on  the super rich and shift the burden onto the lower and middle class.

    It's a good read
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    It's fair because they can afford to and gained their wealth, for the most part, off the hard work of the poor and with help from the government they despise so much.

    You don't stop. It's a never ending battle between the wealthy and the rest of us. We all want to be wealthy so we let them get away with it thinking they are smarter than we are. 

    And, on the subject of income taxes:

    http://www.cbpp.org/cms/index.cfm?fa=view&id=3505
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    We discussed this in another thread. I'm duplicating the main points here.

    Focusing on just income taxes doesn't tell the whole story.  The Center for Tax Justice has compiled numbers that include federal, state and local taxes.

    Who Pays Taxes in America, April 4, 2012

    It’s often claimed that the richest Americans pay a disproportionate share of taxes while those in the bottom half pay nothing. These claims ignore the many taxes that most Americans are subject to — federal payroll taxes, federal excise taxes, state and local taxes — and focus instead on just one tax, the federal personal income tax. The other taxes are mostly regressive, meaning they take a larger share of income from a poor or middle-income family than they take from a rich family.

    Virtually every person in America pays some type of tax. Everyone who works pays federal payroll taxes.Everyone who buys gasoline pays federal and state gas taxes. People who shop in stores pay the sales taxes that most state and local governments impose. State and local property taxes affect everyone who owns or rents a home. (Even renters pay property taxes because landlords pass some of the tax on to them in the form of higher rents). Most states also have income taxes, most of which are not particularly progressive.


    According to the CTJ analysis, the lowest 20 percent income bracket (average income $13,000) pays 17.4 percent of their income in taxes.

    The top 10 percent ($105,000 average income) pays 29.5 percent of their income in taxes. They also pay 15 percent of the total taxes collected.  That's considerably below the 70 percent figure cited by Kenmore.

    The top 1 percent ($1,371,000 average income) pays 29.0 percent of their income in taxes.



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    I am new to this forum. But I challenge you all to read your own Forum Rules and advise as to why any free thinking American would want to be on this site. You actually have rules  to limit criticism regarding Democrats and to be supportive and positive towards them? But you say you do not have many rules on what you can post on conservatives ? Are you serious or is that a joke ? Welcome to the Echo Chamber ! (feels just like MSNBC) .  I recommend you read the rules and do the American thing. Goodbye.
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    F and B Wrote: I am new to this forum. But I challenge you all to read your own Forum Rules and advise as to why any free thinking American would want to be on this site. You actually have rules  to limit criticism regarding Democrats and to be supportive and positive towards them? But you say you do not have many rules on what you can post on conservatives ? Are you serious or is that a joke ? Welcome to the Echo Chamber ! (feels just like MSNBC) .  I recommend you read the rules and do the American thing. Goodbye.

    Is that "Good-bye" means you're not coming back to the site?  Please do...I'd like to hear your side of the story. This might be a website for the Democrats (like yourself) but that does not goes to say Conservatives (Democrats/Republicans) have no freedom to voice their minds on any subject.  We might differ with our views but that also does not goes to say we can not agree to disagree.  We might be of the same political affiliation but the distinction of Conservative, Liberal, Progressive is how we view the current "on goings" in our political outlook on things.  I already like the way you tag MSNBC as "Echo Chamber", why do you think so?  Do we really sound like  MSNBC?   To my prospective, I see MSNBC as a guide only within the perimeter of truth versus the false which we hear all over the place.  So tell me, how you differ from MSNBC and why do we sound like MSNBC to you.
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    Schmidt ....This could have been a very good statistical point for Kenmore, and the answer he's looking for in his comment.  Too bad the moderator had suspended his membership
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    Schmidt Wrote: We discussed this in another thread. I'm duplicating the main points here.

    Focusing on just income taxes doesn't tell the whole story.  The Center for Tax Justice has compiled numbers that include federal, state and local taxes.

    Who Pays Taxes in America, April 4, 2012

    It’s often claimed that the richest Americans pay a disproportionate share of taxes while those in the bottom half pay nothing. These claims ignore the many taxes that most Americans are subject to — federal payroll taxes, federal excise taxes, state and local taxes — and focus instead on just one tax, the federal personal income tax. The other taxes are mostly regressive, meaning they take a larger share of income from a poor or middle-income family than they take from a rich family.

    Virtually every person in America pays some type of tax. Everyone who works pays federal payroll taxes.Everyone who buys gasoline pays federal and state gas taxes. People who shop in stores pay the sales taxes that most state and local governments impose. State and local property taxes affect everyone who owns or rents a home. (Even renters pay property taxes because landlords pass some of the tax on to them in the form of higher rents). Most states also have income taxes, most of which are not particularly progressive.


    According to the CTJ analysis, the lowest 20 percent income bracket (average income $13,000) pays 17.4 percent of their income in taxes.

    The top 10 percent ($105,000 average income) pays 29.5 percent of their income in taxes. They also pay 15 percent of the total taxes collected.  That's considerably below the 70 percent figure cited by Kenmore.

    The top 1 percent ($1,371,000 average income) pays 29.0 percent of their income in taxes.





    You are partially correct Schmidt. The commenter referred to Federal Income taxes, and the comment was accurate to that point (almost half pay nothing, the top 10% pay 70%). FIT are by far the largest taxer of all that you mention. The source of that info is the IRS website,( not the CTJ, which is self recognized as left wing liberal). However, everybody who works on a W-2 pays "payroll taxes" of approx. 7+% - but these taxes are contributions to Social Security and Medicare- so unless the argument is that everybody should not have to contribute to their own SS/Medicare, then that is not a good road to go down either. I am uncomfortable using CTJ "facts"/ results due to their bias, and I prefer to go right to the IRS or CBO for the facts. However, even using the CTJ numbers :
    - the 13,000 average pays 2262 tax , approx 900 of which is SS/Medicare
    -the 105,000 average pays 30,975 tax , approx. 8000 SS/Medicare -note he makes 8 times more money, but pays 14 times more taxes than the 13,000 person
    -the 1,371,000 average pays 397,590 tax, approx 30,000 SS/Medicare - note he makes 105 times more money, but pays 175 times more taxes than the 13000 person
    Just wanted to clear the deck on the facts !
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    You are correct Kaytie, but that is just the simple escalating scale of our income taxes as they should be.  If I made 1.3 million, I wouldn't mind paying
    ~ 400K in taxes on it.  Gosh, that would leave me with a mere 900K  to do with as I please.  We all should me that fortunate.   
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    The point being missed here is that we need a progressive tax system and we need changes to the tax code that would result in true progressively higher tax rates as you make more money.  Although top marginal rate for the super rich is at 35 percent, most of their income comes from qualified dividends and capitals gains, which are taxed at 15 percent.  Loopholes in the tax laws also allow hedge fund managers to claim capital gains on their income for managing those fund although they are basically fees for services. Hence you find people like Warren Buffet and Mitt Romney paying an effective tax rate in the order of 15 percent.

    The Bush Tax cuts of 2001 and 2003, particularly the reduction in the capital gains to 15 percent, were largely responsible for the reductions in taxes for the super rich. According to the Tax Policy Center, 37.7 percent of the benefits of the Bush Tax cuts went to the top 1 percent. The bottom 60 percent on the other hand received only 19.5 percent of the benefits.

    A bar graph in the Brookings Institute link provided  by Zach above shows the outcome of Mitt Romney's proposals for tax. You can also find the same analysis at the Tax Policy Center.

    The analysis shows that Mitt Romney's tax proposals would have an 8.3 percent benefit ($175,000 in additional after tax income) for those with incomes over $ 1 million.

    Those making between $75,000 and $100,000 would see a smaller increase in after tax income of 2.4 percent (on average, a $1,800 tax cut).

    Finally, although individuals making less than $75,000 would see an increase in after-tax income of 0.1 percent (about a $200 tax cut per person), those at the very bottom of the income distribution—Americans who make less than $30,000 per year—would actually see a small tax increase because tax provisions in the 2009 stimulus bill and subsequently extended through 2012 expire.


    So if Mitt Romney's tax proposals were enacted it would result in a further widening of the disparities in after tax incomes between those at the top and those in the middle class and below.

    So why does this matter?  Aren't the super rich the "job creators?"

    This May 29, 20102 article by Paul Buchheit in Common Dreams, How the "Job Creators" REALLY Spend Their Money, tells a different story.  I'll extract a few lines:

    Marketwatch estimates that over 90% of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), the stock market, and real estate. According to economist Richard Wolff, about half of the assets of the richest 1% are held in unincorporated business equity (personal business accounts). The Wall Street Journal notes that over three-quarters of individuals worth over $20 million are invested in hedge funds.

    Angel investing (capital provided by affluent individuals for business start-ups) accounted for less than 1% of the investable assets of high net worth individuals in North America in 2011.

    The Mendelsohn Affluent Survey confirmed that the very rich spend less than two percent of their money on new business startups. The last thing most of them want, apparently, is the risky business of hiring people for new innovation.

    In fact, the very rich may not care about U.S. jobs in any form. Surveys reveal that 60 percent of investors worth $25 million or more are investing up to a third of their total assets overseas. Back home, the extra wealth created by the Bush tax cuts led to "worst track record" for jobs in recorded history. The true American job creator, as venture capitalist Nick Hanauer would agree, is the middle-class consumer


    So the millionaires and billionaires not only do not spend their extra tax dollars on job creation, their money is also not spent on activities that would help the economy...i.e. their extra income provides little stimulative effect on the economy.  It's what Warren Mosler calls Demand Leakage.  The money is taken out of circulation, or at least is not used to buy consumer goods and services.

    So my view is that the stimulative effect on the economy of the tax cuts for the rich is about the same as stuffing the money under a mattress. Mitt Romney's proposed tax cuts for the rich are simply more greed demonstrating that he has little regard for the plight of the middle class and little understanding of what drives the economy.

    Comments invited.







     
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    michaels39301 Wrote: You are correct Kaytie, but that is just the simple escalating scale of our income taxes as they should be.  If I made 1.3 million, I wouldn't mind paying
    ~ 400K in taxes on it.  Gosh, that would leave me with a mere 900K  to do with as I please.  We all should me that fortunate.   



    "as they should be" ? Maybe, maybe not- what about a flat % for all ?  Everyone pays their "fair share" . Why does it escalate so much as you earn more? Why do I hear continually that the rich are not paying their fair share ? That the 1% are screwing everyone else ? FYI I am not wealthy, and do not expect to be. It just seems inequitable that half pay nothing, 10% pay 70%, and I have to listen to the demonization of the people who were successful. I suspect a lot of blood, sweat and tears went into that 1.3M person. I suggest they are smarter, and did work harder than me to get there.My choice. Their choice. So be it.
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    Kayetie --

    I guess my post didn't change your thinking.  We have discussed income and wealth disparity many times in this website.  I don't propose to go back and haul out all those posts.  However, I think that a May 2011 Vanity Fair article by Joseph E. Stiglitz entitled, Of the 1%, by the 1%, for the 1%, captures the essence of our discussions.  I would encourage you to read the entire article and then we can have a discussion. Stiglitz states:

    Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

    Basically what Stiglitz is saying is that the widening wealth gap in America, much of it brought on by inequities in the tax system, but also in the greed of corporate CEOs in not sharing the productivity gains made by their employees, IS NOT SUSTAINABLE. I'm happy to engage you in any part of Stiglitz's article.  Pick and choose and let's discuss.

    The Occupy Wall Street (OWS) movement is just the start of a popular resistance to that wealth disparity.  Pay attention. It will gather energy.

    Schmidt
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    Schmidt Wrote: Kayetie --

    I guess my post didn't change your thinking.  We have discussed income and wealth disparity many times in this website.  I don't propose to go back and haul out all those posts.  However, I think that a May 2011 Vanity Fair article by Joseph E. Stiglitz entitled, Of the 1%, by the 1%, for the 1%, captures the essence of our discussions.  I would encourage you to read the entire article and then we can have a discussion. Stiglitz states:

    Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.

    Basically what Stiglitz is saying is that the widening wealth gap in America, much of it brought on by inequities in the tax system, but also in the greed of corporate CEOs in not sharing the productivity gains made by their employees, IS NOT SUSTAINABLE. I'm happy to engage you in any part of Stiglitz's article.  Pick and choose and let's discuss.

    The Occupy Wall Street (OWS) movement is just the start of a popular resistance to that wealth disparity.  Pay attention. It will gather energy.

    Schmidt



    Afraid not- thinking is not changed- I am already familiar with the article and recognize Mr. Stiglitz as a leading speaker for liberal thought. But for every one of them there is an equally bright conservative with a totally different opinion. And by opinion I do not mean spin - there is too much of that out there. In any event my points are not the arguable issue of "income equality". They are  tax equity (and I do not believe that is the same thing) and overspending. I believe in capitalism as the solution, not the socialist embarrassment happening now in Europe. On taxes, I read a comment a couple days ago when I first joined this site from a person whose name I cannot remember (and the monitors kicked them off the site for posing this heresy ! but thats another issue). The point broadly, to which I agree, posed a question : as half of Americans pay no federal income tax and the top 10% pay 70% of the taxes : how is this fair and when does the government stop?
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    capitalism as the solution
    We all love capitalism but we know "We must police big business they will not police themselves."
    When we weaken the laws on big business  we have the mess we have now. Sadly the huge problem with monopolies was recognized in the 1880's and laws have evolved  to handle the problems.  Then the de-regulation took place and what a mess we have.  The science channel had a great show on mapping the brain to see if a sociopath's brain is truly different from the norm.  Yep, a difference did show up  in a larger number of brains in prison and in one other place.  You guessed it......brains of CEO's of large companies. 
    "We must police big business they will not police themselves."