Kathianne
04-08-2011, 08:43 PM
Dropping a blurb from Instapundit. Including the links and some blurbs from them. Comments?
http://pajamasmedia.com/instapundit/118245/
TAXING THE RICH: The math just doesn’t work. But as we’ve seen, Obama and the dems seem deep in the grip of innumeracy — or, alternatively, they hope the voters are.
http://www.theatlantic.com/business/archive/2011/04/eat-the-rich/237000/
Eat the Rich
By Megan McArdle
Reader Trimalchio does the math on taxing the rich
For anyone who wants to discuss the revenue side of the budget debate knowledgably, I highly recommend spending some time with the IRS's Statistics on Income. Table 1.1 under Individual Statistical Tables is a good place to start: http://www.irs.gov/pub/irs-soi...
You can see, for example, that total taxable income in 2008 was $5,488 billion. Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion. Effective tax rates as a percentage of taxable income seem to top out around 27%.
You can estimate the effects of various proposals in the best case, which is that each percentage point increase in the marginal rate translates to an equal increase in the effective rate. Going back to 2000 ("Clinton era") marginal rates on income over $200,000, let's call it a 5 percentage point increase in the marginal rate, would therefore yield $59 billion on a static basis. Going from there to a 45% rate on incomes over $1 million (another 5 percentage point increase) yields an additional $31 billion. Or, instead, on top of 2000 rates over $200,000, 50%/60%/70% on $500,000/$5 million/$10 million? An extra $133 billion, or nearly 1% of GDP. That's not accounting for the further middle class tax cuts that are usually proposed along with these "millionaires' taxes."
Now, compare this to deficits of $1,413 billion in 2009 and $1,293 billion in 2010, and using optimistic White House estimates, $1,645 billion in 2011 $1,101 billion in 2012, $768 billion in 2013, and continuing at over $600 billion after.
Alternatively, you might also notice that while taxable income in 2008 was $5,488 billion, adjusted gross income on all returns was $7,583 billion on taxable returns only (with an additional $680 billion on untaxable returns), which means that $2,095 billion isn't even in the tax base. $592 billion of that difference is exemptions, which are not tax expenditures, and $1,512 billion is deductions, which are mostly tax expenditures.
My point is just that I don't see how deficits this large can be closed with income taxes on the rich, even at marginal rates far higher than anything we've seen in the post-1986 era. Paying for spending at near-term levels, not even considering entitlement and interest payments that will accelerate a decade out, would have to include meaningful base broadening by eliminating tax expenditures like the mortgage interest deduction or the employer health case deduction, or would have to rely on new taxes like a VAT.
Virtually every economist and wonk I know (left and right) thinks we're going to end up with a VAT. But virtually every politician I know vehemently disagrees. Yesterday at lunch, I suggested renaming our VAT to something less offensive--my suggestion was "Fred". This suggestion was surprisingly well received by the economists. Which is something of a measure of how desperate they're getting...
Well the second part of the links, hold your hats on:
http://pajamasmedia.com/instapundit/118181/
April 7, 2011
MORE ON Obama’s scoffing at high gas prices’ impact on Americans. “Obama fills the role of clueless aristocrat by telling a man who explains that he can’t afford to fill his gas tank at current prices that he should instead buy a new car. If the press reported it, the retort would prove rather embarrassing — which may be why the Associated Press scrubbed it from their coverage of the event. . . . Just think how Marie Antoinette would have fared with a media so devoted to spinning for her.” I saved a screenshot for the record. There’s also a link to video.
UPDATE: More on Obama and gas prices. “Obama insisted yesterday that ‘There is no magic formula to driving gas prices down.’ That is true. But there are also things the government can do that will drive the price of gas up. And the Obama administration has done many of them.”
ANOTHER UPDATE: Did the AP’s scrubbing violate their corrections policy?... There are lots more links, but all insinuating or coming right out and saying that Obama & Co, want the high gas prices.
So comments or disagreements?
http://pajamasmedia.com/instapundit/118245/
TAXING THE RICH: The math just doesn’t work. But as we’ve seen, Obama and the dems seem deep in the grip of innumeracy — or, alternatively, they hope the voters are.
http://www.theatlantic.com/business/archive/2011/04/eat-the-rich/237000/
Eat the Rich
By Megan McArdle
Reader Trimalchio does the math on taxing the rich
For anyone who wants to discuss the revenue side of the budget debate knowledgably, I highly recommend spending some time with the IRS's Statistics on Income. Table 1.1 under Individual Statistical Tables is a good place to start: http://www.irs.gov/pub/irs-soi...
You can see, for example, that total taxable income in 2008 was $5,488 billion. Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion. Effective tax rates as a percentage of taxable income seem to top out around 27%.
You can estimate the effects of various proposals in the best case, which is that each percentage point increase in the marginal rate translates to an equal increase in the effective rate. Going back to 2000 ("Clinton era") marginal rates on income over $200,000, let's call it a 5 percentage point increase in the marginal rate, would therefore yield $59 billion on a static basis. Going from there to a 45% rate on incomes over $1 million (another 5 percentage point increase) yields an additional $31 billion. Or, instead, on top of 2000 rates over $200,000, 50%/60%/70% on $500,000/$5 million/$10 million? An extra $133 billion, or nearly 1% of GDP. That's not accounting for the further middle class tax cuts that are usually proposed along with these "millionaires' taxes."
Now, compare this to deficits of $1,413 billion in 2009 and $1,293 billion in 2010, and using optimistic White House estimates, $1,645 billion in 2011 $1,101 billion in 2012, $768 billion in 2013, and continuing at over $600 billion after.
Alternatively, you might also notice that while taxable income in 2008 was $5,488 billion, adjusted gross income on all returns was $7,583 billion on taxable returns only (with an additional $680 billion on untaxable returns), which means that $2,095 billion isn't even in the tax base. $592 billion of that difference is exemptions, which are not tax expenditures, and $1,512 billion is deductions, which are mostly tax expenditures.
My point is just that I don't see how deficits this large can be closed with income taxes on the rich, even at marginal rates far higher than anything we've seen in the post-1986 era. Paying for spending at near-term levels, not even considering entitlement and interest payments that will accelerate a decade out, would have to include meaningful base broadening by eliminating tax expenditures like the mortgage interest deduction or the employer health case deduction, or would have to rely on new taxes like a VAT.
Virtually every economist and wonk I know (left and right) thinks we're going to end up with a VAT. But virtually every politician I know vehemently disagrees. Yesterday at lunch, I suggested renaming our VAT to something less offensive--my suggestion was "Fred". This suggestion was surprisingly well received by the economists. Which is something of a measure of how desperate they're getting...
Well the second part of the links, hold your hats on:
http://pajamasmedia.com/instapundit/118181/
April 7, 2011
MORE ON Obama’s scoffing at high gas prices’ impact on Americans. “Obama fills the role of clueless aristocrat by telling a man who explains that he can’t afford to fill his gas tank at current prices that he should instead buy a new car. If the press reported it, the retort would prove rather embarrassing — which may be why the Associated Press scrubbed it from their coverage of the event. . . . Just think how Marie Antoinette would have fared with a media so devoted to spinning for her.” I saved a screenshot for the record. There’s also a link to video.
UPDATE: More on Obama and gas prices. “Obama insisted yesterday that ‘There is no magic formula to driving gas prices down.’ That is true. But there are also things the government can do that will drive the price of gas up. And the Obama administration has done many of them.”
ANOTHER UPDATE: Did the AP’s scrubbing violate their corrections policy?... There are lots more links, but all insinuating or coming right out and saying that Obama & Co, want the high gas prices.
So comments or disagreements?