Armed Polite Society

Main Forums => Politics => Topic started by: makattak on October 08, 2009, 02:42:29 PM

Title: 80% Effective Marginal Tax rate
Post by: makattak on October 08, 2009, 02:42:29 PM
http://taxprof.typepad.com/taxprof_blog/2009/10/80-marginal-.html (http://taxprof.typepad.com/taxprof_blog/2009/10/80-marginal-.html)

Quote
N. Gregory Mankiw (Harvard University, Department of Economics) speculates that marginal tax rates under the Baucus health care "concept" could be as high as 80%:

Jim Capretta looks at the Baucus healthcare bill and concludes that, because the subsidies phase out as income rises, it imposes an effective marginal tax rate on income of about 30% for many families. Add that figure to the income tax, the payroll tax, and the phase-out of the EITC and "the effective, implicit tax rate for workers between 100 and 200 percent of the federal poverty line would quickly approach 70 percent — not even counting food stamps and housing vouchers."

Indeed, Jim seems to understate matters, as he includes only the employee half of the payroll tax. Including both the employee and employer halves, as economic theory says is appropriate, appears to give a marginal tax rate closer to 80%. And, of course, many states impose income and sales taxes as well, and these would further raise the overall marginal tax rate. Jim was doing a rough back-of-the-envelope calculation.

I hope some Congressman asks CBO to do a more thorough analysis of the issue. Given all the income-linked programs already in existence and now being contemplated, what would effective marginal tax rates be for typical families? This is surely a question that needs answering before Congress can cast an intelligent vote on the healthcare bill.

Soooo, when I get to keep what I earn one day out of a five day week.... that's not slavery?

Work for the master 4 days, work one day for yourself.

Going Galt is looking more and more attractive...
Title: Re: 80% Effective Marginal Tax rate
Post by: AZRedhawk44 on October 08, 2009, 02:46:00 PM
Quote

Going Galt is looking more and more attractive...

When does it ever NOT look attractive?
Title: Re: 80% Effective Marginal Tax rate
Post by: Viking on October 08, 2009, 03:01:33 PM
Think 80% is bad? How about 102%? Yep, I'm serious...
Quote
In 1976, a scandal arose in Sweden when (Astrid) Lindgren's marginal tax rate was publicized to have risen to 102%.
All your income and then some. :rolleyes:. THAT is slavery.
Title: Re: 80% Effective Marginal Tax rate
Post by: El Tejon on October 08, 2009, 03:12:20 PM
Wow, spooky.  I know I've yammered about this before but when I was at the Chapman Academy years ago I went through a class with 2 FBI Agents who worked in an office involving "research and planning".

The feds told us that the most likely catalyst for a civil insurrection scenario that the FBI forecasting/planning for was not gun confiscation but a tax revolt.  They told us by 2015 that the USA had to have a tax rate of 80 to 90% as the Welfare State could not sustain itself otherwise and there was too much power at stake to dismantle the Welfare State.  They forecast civil unrest that would lead to an organized resistance.
Title: Re: 80% Effective Marginal Tax rate
Post by: makattak on October 08, 2009, 03:16:59 PM
Wow, spooky.  I know I've yammered about this before but when I was at the Chapman Academy years ago I went through a class with 2 FBI Agents who worked in an office involving "research and planning".

The feds told us that the most likely catalyst for a civil insurrection scenario that the FBI forecasting/planning for was not gun confiscation but a tax revolt.  They told us by 2015 that the USA had to have a tax rate of 80 to 90% as the Welfare State could not sustain itself otherwise and there was too much power at stake to dismantle the Welfare State.  They forecast civil unrest that would lead to an organized resistance.

Interesting. I have always assumed when the welfare state can no longer be supported, we'd simply become a failed state like Argentina.

I wonder if the American psyche is substantially different from those other countries that just accept the new paradigm and move on.
Title: Re: 80% Effective Marginal Tax rate
Post by: AZRedhawk44 on October 08, 2009, 03:17:28 PM
Spooky, El T.

So, did those agents care to advertise what side of the issue they and their agency came down on?  Did their research department intend to support an 80% or higher tax rate, or were they warning as an arm of bureaucracy of impending danger and trying to inform higher-ups?
Title: Re: 80% Effective Marginal Tax rate
Post by: MicroBalrog on October 08, 2009, 03:25:12 PM
Think 80% is bad? How about 102%? Yep, I'm serious...All your income and then some. :rolleyes:. THAT is slavery.

...wait, Astrid Lindgren?

You mean these vermin stole the profits she got from Karlsson  and Detective Blomkvist?

...what new socialist monstrosity is this?
Title: Re: 80% Effective Marginal Tax rate
Post by: El Tejon on October 08, 2009, 03:34:52 PM
Quote
So, did those agents care to advertise what side of the issue they and their agency came down on?  Did their research department intend to support an 80% or higher tax rate, or were they warning as an arm of bureaucracy of impending danger and trying to inform higher-ups?

It wasn't a matter of support.  It is more of a matter of getting prepared for what is to come.  Just like FEMA, DHS, FBI, etc. is doing now.

An agency has to know what scenarios they are to ready for, so these guys sat around and wargamed them out before the training and resources needed to be allocated.
Title: Re: 80% Effective Marginal Tax rate
Post by: Viking on October 08, 2009, 03:46:44 PM
...wait, Astrid Lindgren?

You mean these vermin stole the profits she got from Karlsson  and Detective Blomkvist?

...what new socialist monstrosity is this?
Yep, Astrid Lindgren.
Apparently they "fixed it" to a reasonable level - knowing that the tax rates began to spike in the 70's when we were busy with social engineering and such, I'd guess she still paid quite a bit of her income to the state :rolleyes:.
From what I've understood, the tax rates were comparatively low up until the 70's, when the politicians started to go overboard with their social engineering. Hell, there was even an old social democrat who said something along the lines of "taxes are a necessary evil, and every wasted krona is an insult to the tax payers". He's probably rotating at high speed in his grave now.
Title: Re: 80% Effective Marginal Tax rate
Post by: RevDisk on October 08, 2009, 04:04:37 PM
Wow, spooky.  I know I've yammered about this before but when I was at the Chapman Academy years ago I went through a class with 2 FBI Agents who worked in an office involving "research and planning".

The feds told us that the most likely catalyst for a civil insurrection scenario that the FBI forecasting/planning for was not gun confiscation but a tax revolt.  They told us by 2015 that the USA had to have a tax rate of 80 to 90% as the Welfare State could not sustain itself otherwise and there was too much power at stake to dismantle the Welfare State.  They forecast civil unrest that would lead to an organized resistance.

Technically, we should have a tax rate of 80-90% at the moment.  If we averaged taxes now, I wouldn't be surprised if it was 40-45% at the moment.  We're running at roughly 50% deficit spending.  To run a balanced budget, we would need to double tax revenues (slightly more than double tax rates).

The FBI's forecasting is simply common sense and looking at the majority of previous internal revolutions.  Folks do not rebel against their government when their government takes away their liberty, folks rebel when they get (metaphorically) cold, hungry and have nothing to lose.
Title: Re: 80% Effective Marginal Tax rate
Post by: Balog on October 08, 2009, 04:11:02 PM
Technically, we should have a tax rate of 80-90% at the moment.  If we averaged taxes now, I wouldn't be surprised if it was 40-45% at the moment.  We're running at roughly 50% deficit spending.  To run a balanced budget, we would need to double tax revenues (slightly more than double tax rates).

The FBI's forecasting is simply common sense and looking at the majority of previous internal revolutions.  Folks do not rebel against their government when their government takes away their liberty, folks rebel when they get (metaphorically) cold, hungry and have nothing to lose.

Or, you know, literally cold and hungry. :)
Title: Re: 80% Effective Marginal Tax rate
Post by: AZRedhawk44 on October 08, 2009, 04:16:48 PM
Quote
Folks do not rebel against their government when their government takes away their liberty, folks rebel when they get (metaphorically) cold, hungry and have nothing to lose.

Except for, you know, America.  This country here. :rolleyes:
Title: Re: 80% Effective Marginal Tax rate
Post by: MicroBalrog on October 08, 2009, 04:57:09 PM
Quote
Folks do not rebel against their government when their government takes away their liberty, folks rebel when they get (metaphorically) cold, hungry and have nothing to lose.

That's just a plain historical untruth.

There are numerous example of people around the world rebelling 'just' for liberty, without a massive decline in their quality of life to serve as the trigger.
Title: Re: 80% Effective Marginal Tax rate
Post by: Balog on October 08, 2009, 07:38:05 PM
Maybe he meant "successfully" rebelling.
Title: Re: 80% Effective Marginal Tax rate
Post by: RevDisk on October 08, 2009, 09:46:04 PM

Balog is correct, as usual.

Yes, I am aware that folks can and have rebelled to secure liberty.  I'm also saying...  It's pretty rare.  Necessity or throwing off foreign occupation is much more likely of a cause.
Title: Re: 80% Effective Marginal Tax rate
Post by: Headless Thompson Gunner on October 08, 2009, 09:56:27 PM
Necessity indeed.

...All experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed...
Title: Re: 80% Effective Marginal Tax rate
Post by: Strings on October 09, 2009, 09:49:24 PM
Ok... so I have to ask...

Given El T's scenario... how exactly would that start out?

Are we talking overtaxed Americans revolting (an extreme version of what we're seeing in the TEA Parties), or welfare recipients revolting when the public teat dries up?

Or maybe some combination of the two?
Title: Re: 80% Effective Marginal Tax rate
Post by: Monkeyleg on October 09, 2009, 10:56:33 PM
Quote
...or welfare recipients revolting when the public teat dries up?

Already starting to happen in Detroit. Everybody thinks Obama's going to give them money (and they do think it's Obama who's giving them money). But there's not going to be enough to go around. Watch the fires burn when more than three quarters of those folks don't get money.
Title: Re: 80% Effective Marginal Tax rate
Post by: Thor on October 10, 2009, 02:41:06 PM
Already starting to happen in Detroit. Everybody thinks Obama's going to give them money (and they do think it's Obama who's giving them money). But there's not going to be enough to go around. Watch the fires burn when more than three quarters of those folks don't get money.

I had heard that some 50,000+ people showed up for some 3500 applications. 1/10th of the people will maybe get their applications approved.
Title: Re: 80% Effective Marginal Tax rate
Post by: El Tejon on October 12, 2009, 08:33:54 AM
Quote
Are we talking overtaxed Americans revolting (an extreme version of what we're seeing in the TEA Parties), or welfare recipients revolting when the public teat dries up?

The FBI Agents mentioned Argentina, Central America and Mugabestan.

The Parasitic Class keeps demanding free stuff, the Productive Class gets a clue and starts to flee or drag their feet (not pay, not declare income, etc.), and Government has to Hyperinflate the money to keep paying benefits.

Riots break out and feed on themselves.  Government overreacts which causes organized resistance to take shape.
Title: Re: 80% Effective Marginal Tax rate
Post by: HankB on October 12, 2009, 09:02:57 AM
We're getting there on tax rates.

I have a pretty decent salary so far, but I don't consider myself wealthy. (My congresscritter makes considerably more $$$ than I do, and don't get me started on benefit comparisons!)

But just from adding up what I can actually put a hard number on, I pay more in taxes than I do on food, clothing, shelter, and transportation combined - and this doesn't include the "hidden" taxes in the goods & services I purchase.

And yet the <expletives> in Washington say that's still not enough.  :mad:

At some point - after the Bush tax cuts expire (Thanks for putting in an expiration date, GOP!), if cap-and-tax is imposed, if health care taxes are imposed, if Nancy Pelosi's VAT proposal gets traction . . . I can see things getting ugly. Maybe to the point where normal law enforcement won't be able to handle the unrest . . . whereupon the military may be called on.

A few years ago, this would have been solidly in tinfoil-hat territory . . . but now, I'm not so sure.

I'm not looking forward to that sort of thing.  =(
Title: Re: 80% Effective Marginal Tax rate
Post by: RoadKingLarry on October 12, 2009, 09:33:22 AM
Nothing to worry about as long as we still have Monday Night Football and And "whichever bogus reality show is currently popular" on TV.
Won't be no rebellin' goin' on as long as people can set on their butts and watch the idiot box.
Take away the pacifier and the baby might get fussy.
Title: Re: 80% Effective Marginal Tax rate
Post by: MicroBalrog on October 12, 2009, 09:49:50 AM
Maybe he meant "successfully" rebelling.

English Revoluton.

First French Revolution (far more successful than people give them credit - 500,000 people were freed from serfdom, and about that same number - from actual slavery).

Title: Re: 80% Effective Marginal Tax rate
Post by: Balog on October 12, 2009, 11:08:35 AM
English Revoluton.

Which one?

Quote
The term "English Revolution" has been used to describe two different events in English history. The Glorious Revolution of 1688, whereby James II was replaced by William III and Mary II as monarch and a constitutional monarchy established, was described by Whig historians as the English Revolution.[1] In the twentieth-century, however, Marxist historians used the term English Revolution to describe the period of the English Civil Wars and Commonwealth period 1640-1660, in which Parliament challenged King Charles I's authority, engaged in civil conflict against his forces, and executed him in 1649. This was followed by a ten-year period of republican bourgeois government, the "Commonwealth", before monarchy was restored in the shape of Charles' son, Charles II, in 1660.





Quote
First French Revolution (far more successful than people give them credit - 500,000 people were freed from serfdom, and about that same number - from actual slavery).

That is a questionable example.


So..... even allowing your examples, that's two in the history of the world. Are you familiar with the term "anomaly"?

Title: Re: 80% Effective Marginal Tax rate
Post by: MicroBalrog on October 13, 2009, 05:03:20 AM
Quote
That is a questionable example.

Unless you were a slave or a serf, I suppose.

Quote
Which one?

Glorious.

Quote
So..... even allowing your examples, that's two in the history of the world. Are you familiar with the term "anomaly"?

They're examples. The world's history knows hundreds upon hundreds of revolutions.
Title: Re: 80% Effective Marginal Tax rate
Post by: Balog on October 13, 2009, 09:15:43 AM
Which once again brings up the question... successful ones?
Title: Re: 80% Effective Marginal Tax rate
Post by: MicroBalrog on October 13, 2009, 09:20:07 AM
Which once again brings up the question... successful ones?

But then the questions is, how do you define success? If the Revolution overthrows, say, a king to establish a Republic, but then the people lose their freedom 100 years later, were they successful? Fifty? Twenty? Ten?
Title: Re: 80% Effective Marginal Tax rate
Post by: RoadKingLarry on October 13, 2009, 09:21:29 AM
Which once again brings up the question... successful ones?

Cuba and Castro come to mind. From his perspective it was successful.
Title: Re: 80% Effective Marginal Tax rate
Post by: Balog on October 13, 2009, 03:17:50 PM
But then the questions is, how do you define success? If the Revolution overthrows, say, a king to establish a Republic, but then the people lose their freedom 100 years later, were they successful? Fifty? Twenty? Ten?

I dunno Micro, how do you define it?
Title: Re: 80% Effective Marginal Tax rate
Post by: Tallpine on October 13, 2009, 03:50:46 PM
Based on the current state of affairs, one could argue that the American Revolution was not a success.   =|
Title: Re: 80% Effective Marginal Tax rate
Post by: Nick1911 on October 13, 2009, 03:53:47 PM
Based on the current state of affairs, one could argue that the American Revolution was not a success.   =|

Eh?  Last time I checked we're still a sovereign country...
Title: Re: 80% Effective Marginal Tax rate
Post by: brimic on October 13, 2009, 03:58:08 PM
Quote
Going Galt is looking more and more attractive...

There are people where I work that talk about such things every day when it comes to Cap and Tax and Socialist healthcare- and they have never even heard of Ayn Rand.

I have a feeling that if the Tard in Chief gets what he wants, there are going to be a lot of formerly productive people who would relish sitting on their porch enjoying their favorite 6-pack while watching their city burn- if they haven't already hightailed it to a fairly isolated rural location where other formerly productive people already have second homes to go to.

My only shortcoming is that I have too much cash and not enough minerals with 'intrinsic value.'

Its the classic story of the Ant and the Grasshopper.