9 Comments

  1. Mark Erickson

    In tax policy, progressive means not just that the rich pay more tax, but that they pay a larger percentage of their income than poorer people – at every level of income. Even just the federal tax code is no longer progressive at the highest income levels. Add in state and local taxes (don’t forget property taxes!) and the overall US tax system is already flat or even regressive at some income levels.

    But my main point is that a progressive flat tax is an oxymoron.

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    1. This is what I mean….

      No taxes on food but on luxury items, more tax

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    1. A progressive tax is defined as a tax the poor doesn’t pay, such as On food.

      We could call this a progressive/graduated flat tax. In other words, you pay to play. Food and even some clothing escape taxes.

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  2. Skid

    Mark– you seem to imply that the rich don’t pay more % than the rest of us. According to the IRS web site the very rich pay on average about 25% of their income as federal taxes and the middle income payers average about 7.5%. This may not be as progressive as you would like but it’s not what you imply. Joel is right, the entire tax code needs to be scrapped and replaced with a very simple and fair/progressive code without the thousands of loopholes. Very little support for this from either party. Choose carefully what you vote for because the agendas are more important than misleading talk coming from all sides. As for churches, they should stick to faith and ethics but the individual should follow his or her faith in political activity. This does present a slight conflict for church leaders who by definition speak for the multitude.

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    1. Mark Erickson

      Skid, your figures don’t include payroll taxes, which I failed to mention above as well. Total federal (income + payroll) effective tax rate is around 15% for middle incomes. Add local sales and property taxes and it goes up. The point is that the federal income tax rates have to be very progressive in order to overcome the regressive payroll, sales and property tax burdens.

      I said it wasn’t progressive at the highest income levels. Many top earners get most of their income in capital gains or carried interest, and these rates are lower than the top marginal tax rate. So at the rich end of the spectrum, the more you earn, the more likely you pay a lower rate on your total income because it isn’t wage income.

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  3. Skid

    According to the politicians those who pay payroll taxes will get it all back as cash payments like any other investment. Not 100% true but we all believe what we want. If I had all of my payroll taxes in an account earning nominal interest I could be living comfortably on just the interest. I know because I calculated it from the SS report of the actual numbers. While you are at it why not add in the property taxes which would swing things in the other direction. I’m not sure what is fair but I am in favor of the truth and looking at the actual facts rather than repeating some pundits cheap talk coming from both sides of the media. Even the fact check sites are sometimes biased.

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  4. Skid

    The numbers I posted were average of those reporting more than one million dollars. Of course there are many exceptions, most of them probably older individuals who have put their assets in tax exempt bonds, etc. This reinforces the fact that a total scraping of the current tax laws is essential. The problem is not so much the tax rate but the exemptions. I’m not sure about this but I have seen it reported that the loopholes account for a loss of near a trillion dollars per year.

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