Higher Taxes = Greater Revenue

[GenSeneca]

For more than a century the Left has offered a magical solution for our problems with debt, "Raise Taxes!" For anyone who thinks this is a viable solution to our debt problem, you're welcome to make your case.

Two things first,

1. Attacking plans to lower taxes is NOT a legitimate defense of your claim that raising taxes increases revenue.

2. Please, no specious claims or logical fallacies.

If you've heard anything from the Left as it relates to our debt problem then you have heard them say, "Raise Taxes!" and it goes without saying that they don't want their tax rates to go up... Just raise taxes on those evil "rich" people. And despite the top 1% of taxpayers footing more than 33% of the tax bill, and the top 5% paying more than 53% of the tax bill, the Leftists still wish to claim, "The rich don't pay their fair share!"

Here's a little article that puts that nasty piece of agitprop to rest:

Who Pays the Most Income Tax?

Feeling overtaxed? Under the U.S. income tax system, most of the taxes collected are supposed to be paid by the people who make the most money. Thanks to President Bush's tax cuts, that is exactly the way the system works, says the U.S. Treasury Department.

According to the Office of Tax Analysis, the U.S. individual income tax is "highly progressive," with a small group of higher-income taxpayers paying most of the individual income taxes each year.

In 2002 the latest year of available data, the top 5 percent of taxpayers paid more than one-half (53.8 percent) of all individual income taxes, but reported roughly one-third (30.6 percent) of income.

The top 1 percent of taxpayers paid 33.7 percent of all individual income taxes in 2002. This group of taxpayers has paid more than 30 percent of individual income taxes since 1995. Moreover, since 1990 this group’s tax share has grown faster than their income share.

Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes. In all years since 1990, taxpayers in this group have paid over 94 percent of all individual income taxes. In 2000, 2001, and 2002, this group paid over 96 percent of the total.

Before you claim that things changed since this article was written, you're right... The income tax has become even more Progressive:

In FY'08 the top 1% payed more than 38% of the Income tax bill, the top 5% payed more than 58%, the top 10% more than 69%, the top 25% payed more than 86%, the top 50% payed more than 97% , and that just leaves the bottom 50% who payed less than 3%! - National Taxpayers Union

Enough of who really pays income taxes... Common sense would seem to tell us that raising taxes would result in greater revenue but thanks to historical data that shows tax revenue as a % of GDP, we know this is not true (same can be said for those who think lowering taxes will result in greater revenue, that is also not true)

http://www.cbo.gov/budget/data/historical.pdf - Page 4 shows Revenue as a % of GDP. This document debunks two claims: 1. Higher taxes = greater revenue and 2. Lower taxes = greater revenue. Neither claim is supportable based on actual historical data.

The relationship between taxes and revenue is correlative, not causal, but because people mistakenly believe that tax rates have a causal effect on revenue, politicians on both sides use the issue of raising and lowering taxes to distract voters from the real problem - Spending.

The high point in revenue as a % of GDP was 20.9% and this occurred in FY 2000 when the top marginal rate was 39.6%. Now if higher taxes actually increased revenue as a % of GDP, then the years between 1968 and 1981 should have seen the highest recorded revenue as a % of GDP. During that 13 year span, the top marginal rate was 70% but revenue as a % of GDP never went above 19.6%. Those who claim that higher taxes = greater revenue on the basis of "Common Sense" or "Simple Math" need to offer something more substantial to back their claim when it's so easily debunked by historical data.

I've offered the historical data as evidence to prove that raising taxes does not have the causal effect of increasing revenue but I know many of you still believe otherwise. So this is your chance to make your case and offer some solid proof that raising taxes will increase revenue. Good luck.

 

[Rick]

Taxes are a burden on business, suppress economic activity, and lower the revenue collected from taxes on that activity - even a moron should be able to grasp that.

 

[steveox]

I favor higher taxes who are making $500,000 a year or more.

 

[nobull]

Evern corporate tax only accounts for 12% of the total tax collected by IRS so it is negligible. In fact it should be eliminated entirely and use a corporation as a pass through entity like a partnership and that would increase tax collection to nearly 20% and it would be a lot cheaper for corporations to not have to do quarterly returns. It would same businesses billions a year.

In fact if the corporation tax was dropped entirely in the USA it would attract business rather than repel it but there are a lot of other reason why corps don't want to come to the US: workforce, obamacare, EPA and lots of gov regulation. The gov and Obama are bad for business. And taxing businesses more is not going to improve life in America.

doug

 

[GenSeneca]

Taxes are a burden on business, suppress economic activity, and lower the revenue collected from taxes on that activity - even a moron should be able to grasp that.

On certain forms of taxation that is correct... Cigarettes are an excellent example. Every time they raise taxes on smokers the pinheads project a massive increase in revenue only to find that once implemented, smoking declines and revenue from Cigarette taxes are actually less than they were prior to raising the tax.

However, I was dealing specifically with income taxes in my post, which do not affect businesses as they are subject to corporate taxes. Some people with large salaries do trade part of their salary for stocks, the sale of those stocks are taxed at a much lower rate with the capital gains tax and the drop in salary keeps them out of the higher brackets, allowing them to make the same amount of money and pay less overall in taxes.

 

[Gipper]

We have been down this road Gen. Though I admire your persistence. No amount of factual data and logical thinking will convince the Left of this fallacy.

We know the left thinks the title of this thread is true. And, we know from history that the left is almost always wrong.

A more factually correct thread title would be Lower Taxes = Greater Revenue

But, we also know the Left does not believe this fact.

So, we must conclude the Left is stupid. How does one debate stupidity?

 

[Gipper]

On Tax Day, revisiting this thread makes sense.

I heard Art Laffer today. He said it quite well...I paraphrase...

He said raising tax rates on the producers will only result in LOWER revenues to the Treasury. He said history shows this to be true. He said the thing to do is NOT to raise tax rates but raise tax revenues. We need pro-growth policies so that revenues increase to the Treasury as the economy grows. He said the wealthy have many options open to them to get around higher tax rates. So, raising their tax rates will not generate more revenue and very likely will reduce revenue. Secondly, the wealthy are the ones who hire people. Raising their tax rates will increase unemployment.

He did say raising rates on the middle class will raise revenue because they have few options for avoiding higher taxes.

He said Presidents Kennedy and Reagan had it right. He called LBJ, Nixon, Ford, and Carter the Four Stooges for their terrible tax policies.

 

[TruthSeeker]

We have been down this road Gen. Though I admire your persistence. No amount of factual data and logical thinking will convince the Left of this fallacy.

We know the left thinks the title of this thread is true. And, we know from history that the left is almost always wrong.

A more factually correct thread title would be Lower Taxes = Greater Revenue

But, we also know the Left does not believe this fact.

So, we must conclude the Left is stupid. How does one debate stupidity?

You can't debate stupidity, Gipper. And since liberalism is a mental illness, you also can't debate somebody who is mentally ill. Believe me, I know. My first wife was nuts.

 

[Hobo1]

Don't raise taxes? I read today in the news that over half the households will not pay any tax. Is that fair? Let's not raise taxes, but let's also make sure that everybody pays their fair share. Read it and weep:

"Today is the last day to file your taxes without incurring a penalty, but for about 45 percent of U.S. households, or about 69 million, the amount owed to Uncle Sam will be zero, according to the nonpartisan Tax Policy Center.

Most of those not paying federal taxes are low earners, but not all. Here's how it breaks down, according to the Tax Policy Center:

* Under $50K - 63.2 million tax filers
* $50K-$100K - 4.3 million tax filers
* $100K-$500K- 485,000 tax filers
* $500K-$1 million - 14,000 tax filers
* Over $1 million - 4,000 tax filers

Most of those households do pay state, local, property and payroll taxes, but those who don't owe any federal income taxes can thank the myriad tax breaks available — many of which help low earners reach zero liability. Very high earners who don't pay federal taxes usually get their income from "tax-exempt bonds or from overseas sources for which they get foreign tax credits."

If all those tax breaks were removed, a possibility suggested by some politicians to help lower the budget deficit, the number of households not owing taxes would drop to 27 percent, the Tax Policy Center estimates.

Tax Liability Down for All Earners

According to the IRS, in 2007 (the latest data available), more than half of the nation's tax revenue came from the top 10 percent of earners, whose federal income tax rate dropped from 26 percent in 1992 to about 17 percent in 2007. The average federal income tax rate for all tax payers dropped from 9.9 percent to 9.3 percent over that same period." ​

 

[GenSeneca]

Don't raise taxes? I read today in the news that over half the households will not pay any tax. Is that fair?

Hey, I'm with you... If we're going to have an income tax, then every single American with an income should have to pay and nobody should get back more than they put in. Personally, I like the Fair Tax (minus the prebates) but I'd be all for a fixed percentage Flat Tax on income, say 15% of every American. At least then the tax code would actually be fair and attempts to raise the tax rate would affect all Americans, making use of the tax code as a tool for class warfare a relic of the past.

Funny how Obamanites complain about people with no "skin in the game" but they'd be the first to raise bloody hell if you tried to get the bottom 50% to pay their "fair share" of the tax burden.

As one of the bottom 50% who actually does pay more in taxes than I get back, and as someone who's worked his way from nothing all the way up to a state of extreme poverty, I don't think there's any reason NOT to have every American paying their "fair share" and putting some "skin in the game".

 

[pocketfullofshells]

Hey, I'm with you... If we're going to have an income tax, then every single American with an income should have to pay and nobody should get back more than they put in. Personally, I like the Fair Tax (minus the prebates) but I'd be all for a fixed percentage Flat Tax on income, say 15% of every American. At least then the tax code would actually be fair and attempts to raise the tax rate would affect all Americans, making use of the tax code as a tool for class warfare a relic of the past.

Funny how Obamanites complain about people with no "skin in the game" but they'd be the first to raise bloody hell if you tried to get the bottom 50% to pay their "fair share" of the tax burden.

As one of the bottom 50% who actually does pay more in taxes than I get back, and as someone who's worked his way from nothing all the way up to a state of extreme poverty, I don't think there's any reason NOT to have every American paying their "fair share" and putting some "skin in the game".

Let me ask you this

what is more efficient...

a family of 3 gets federal aid to to very low income...household income is say 18,000

Idea one...don't tax and they recive some help from goverment to pay for medical costs or food or what have you..

or B...same guy makes 18,000...but we tax him....now he has say....16,000....Now more help is required so more money is given back to them to help with food and or health or housing or what have you.

does it make sense to charge taxes to the poorest and then use tax money to help them out? Would it not be smarter and more efficient not to tax them in the first place and make there need harder?

again this only covers one tax, not all there taxes...state, payroll, sales tax, property tax, ext.

the bigger issue is

"* $50K-$100K - 4.3 million tax filers
* $100K-$500K- 485,000 tax filers
* $500K-$1 million - 14,000 tax filers
* Over $1 million - 4,000 tax filers


why are they not paying taxes? I made 32000 last year, I still paid in about 3000 not counting SS medicare and other taxes...total was some 5-6000 I think. But yet our coupt system of loopholes lets 500,000 people who made 6 figures pay nothing?

KNowing how many paid nothing of that over 100,000 group...how many more do you think paid very little?

 

[Pidgey]

Y'all need to expand your definition of taxes. For instance, if the Fed keeps steathily buying Treasuries through the Primary Dealers, essentially monetizing the debt and increasing the money supply, then the resultant inflation of commodity prices (oil, food, etc.) IS as good as a tax. It MEANS that your paycheck (income) quite simply won't go as far. And it DOES hit the lower classes harder than the higher ones because the basics of life consume a much higher percentage of their discretionary spending.

So... from that basis, the current Obama Administration is already out-taxing every past administration--they're just doing it by stealth. And, right now, they're literally beating the living H*ll out of The Poor like nobody's business.

As far as a comparison to what amounts to The Fair Tax, though... you have to understand that payscales would shift to make up the difference, Pocket. The Poor would end up going a tad upwards in pay to make up for it. One of the things that y'all AREN'T getting, though, is that if we simplified the tax code to The Fair Tax, there's one whole H*lluva' lot of attorneys, CPA's, accountants and whatnot that would be unemployed relatively quickly.

 

[Hobo1]

Y'all need to expand your definition of taxes. For instance, if the Fed keeps steathily buying Treasuries through the Primary Dealers, essentially monetizing the debt and increasing the money supply, then the resultant inflation of commodity prices (oil, food, etc.) IS as good as a tax. It MEANS that your paycheck (income) quite simply won't go as far. And it DOES hit the lower classes harder than the higher ones because the basics of life consume a much higher percentage of their discretionary spending.

So... from that basis, the current Obama Administration is already out-taxing every past administration--they're just doing it by stealth. And, right now, they're literally beating the living H*ll out of The Poor like nobody's business.

As far as a comparison to what amounts to The Fair Tax, though... you have to understand that payscales would shift to make up the difference, Pocket. The Poor would end up going a tad upwards in pay to make up for it. One of the things that y'all AREN'T getting, though, is that if we simplified the tax code to The Fair Tax, there's one whole H*lluva' lot of attorneys, CPA's, accountants and whatnot that would be unemployed relatively quickly.

We haven't had inflation during the Obama Administration.

Second point: I am not a big fan of flat tax or Fair Tax because non-progressive taxes impose a greater burden on the poor. If I make $20,000 per year, the 10% tax you impose on me is going to hurt a lot more because my budget is already tight. If I make $100,000 per year, I can pay the 10% in a heart beat, particularly if you take away all my other taxes.

A progressive tax with NO DEDUCTIONS, levied on all people with incomes above the poverty line makes more sense to me.

 

[Gipper]

Y'all need to expand your definition of taxes. For instance, if the Fed keeps steathily buying Treasuries through the Primary Dealers, essentially monetizing the debt and increasing the money supply, then the resultant inflation of commodity prices (oil, food, etc.) IS as good as a tax. It MEANS that your paycheck (income) quite simply won't go as far. And it DOES hit the lower classes harder than the higher ones because the basics of life consume a much higher percentage of their discretionary spending.

So... from that basis, the current Obama Administration is already out-taxing every past administration--they're just doing it by stealth. And, right now, they're literally beating the living H*ll out of The Poor like nobody's business.

As far as a comparison to what amounts to The Fair Tax, though... you have to understand that payscales would shift to make up the difference, Pocket. The Poor would end up going a tad upwards in pay to make up for it. One of the things that y'all AREN'T getting, though, is that if we simplified the tax code to The Fair Tax, there's one whole H*lluva' lot of attorneys, CPA's, accountants and whatnot that would be unemployed relatively quickly.

Agreed. Many experts claim inflation is running much higher than the government is reporting. Nothing is more disingenuous and harmful to Americans than it's government purposely inflating the currency...other than Obama's policies.

And now S&P downgrades outlook to NEGATIVE.

The brain dead liberal's response to this...tax the rich more.

Wall Street shares slump as S&P downgrades US debt outlook
Ratings agency cuts long-term outlook from stable to negative for first time since Pearl Harbor attack 70 years ago

http://www.guardian.co.uk/business/2011/apr/18/us-economy-credit-rating

 

[TruthSeeker]

We haven't had inflation during the Obama Administration.

Second point: I am not a big fan of flat tax or Fair Tax because non-progressive taxes impose a greater burden on the poor. If I make $20,000 per year, the 10% tax you impose on me is going to hurt a lot more because my budget is already tight. If I make $100,000 per year, I can pay the 10% in a heart beat, particularly if you take away all my other taxes.

A progressive tax with NO DEDUCTIONS, levied on all people with incomes above the poverty line makes more sense to me.

We haven't had inflation during the Obama Administration, at least according to the Obama Administration. Since food and fuel costs, two of the biggest expenditures in any home, aren't calculated into the inflation and cost of living statistics, of course it looks like there's been no inflation in the past 2+ years.

The truth is, gasoline prices have DOUBLED since Obama took office, and food prices have increased by as much as 30-50% on staples such as meat and bread and milk and eggs.

Hobo1, based on your comment about taxes and the mythological "greater burden on the poor", you have obviously not read the Fair Tax Plan. I will also add that the "poor" don't pay any taxes to begin with, so any "tax burden" on the poor is a figment of your imagination.