(Advertisement)

COMMENTARY: It’s Not OK To Allow The Poor To Be Hungry

FEDERAL PROGRAM MODEST, MEANINGFUL WAY TO ACT ON RESPONSIBILITY TO LOVE ONE ANOTHER

Posted: June 23, 2013 at 5 a.m.

The notion it is OK for some people to live in luxurious wealth while others struggle in poverty is not acceptable from a biblical or a Christian perspective.

This story is only available from our archives.

(Advertisement)



« Previous Story

HOW WE SEE IT: Two Lawmakers Deserve Credit F...

Shoppers walk into a local store somewhere in Arkansas and choose a TV. Let’s say it costs $2,000. Add sales tax and the TV may cost $2,130 or more. The shopper goes home, ... Read »

Next Story »

PUBLIC VIEWPOINT: Veterinarian A Dedicated Pr...

We don’t write letters often, but we wanted to brag a little about a Northwest Arkansas veterinarian. Read »

It is too easy to demonize income earners to push a false narrative. "Low-income Arkansans pay 12 percent of their income in state taxes, twice the rate of the wealthy 1-percenters. Our state tax system is unjust."

How does the author get this number? The people in the lowest bracket are getting tax credits and deductions to the point where they end up paying no income taxes. 47% of all tax returns paid no federal income tax and SNAP recipients stand a very good chance of being in that group.

The author even proves that point with the statement, "The average SNAP family earns $8,772 annually. SNAP fraud and error rates are extraordinarily low."

People earning $8,772 pay no FEDERAL INCOME TAX AT ALL. Fraud in SNAP has only recently come down from 9% to about 4%.

The House voted on a bill that would cut $2 Billion per year on the $80 BILLION dollar program. That is a 3% cut. The Senate bill cut $460 million per year.

THe author talks about the low rate of fraud. Maybe the definition of fraud should be examined, since activities below are probably not considered fraud.

...The legislation would achieve some of the food stamp cuts by partially eliminating what is called categorical eligibility, or giving people automatic food stamp benefits when they sign up for certain other programs. The bill would end a practice in some states of giving low-income people as little as $1 a year in home heating assistance, even when they don't have heating bills, in order to make them eligible for increased food stamp benefits.... AP article "house votes to cut food stamps by $2 billion.

It is easy to pull at the heart strings for the kids, especially hungry ones. Nobody is going to say let them starve - and they are not. Accountability and efficiency in these programs needs to be examined.

And if the economy is improving as much as the Democrats would have us believe, then the number of people on food stamps should be decreasing, not increasing. That will help alleviate some of the issues of money.

And if the argument is going to be made with numbers, make sure to use the most current and accurate ones available.

Posted by: NWAChamps

June 23, 2013 at 8:05 a.m. ( | suggest removal )

In 2012, a family of four earning $28,000 got a $3,800 personal exemption per person for $15,200. The standard deduction for married couples filing a joint return is $11,900.

That brings total Adjusted Gross Income down to... wait for it.... $900. That is without any other tax credits. Once those are added into the return, a family of four earning $28,000 not only pays zero federal income tax, they may actually get money back for a NEGATIVE INCOME TAX LIABILITY.

Posted by: NWAChamps

June 23, 2013 at 8:11 a.m. ( | suggest removal )

For about the 47th time here, THERE ARE OTHER TAXES BESIDES INCOME TAX.
Most working people pay more in payroll tax than in income tax. It is a highly regressive tax and it is applied to the lowest incomes.
Self-employment tax is 15.3% and again, it applies to people who earn very little at it such as some very poor person selling a few ricks of wood off his own property in the fall.
I also knew a man who was trying to make a living as a clown and who had to pay that 15.3% on only a few thousand a year..

Posted by: Coralie

June 23, 2013 at 2:56 p.m. ( | suggest removal )

Sales tax especially on food and other necessities hits poor people harder than the rich, because a larger portion of their income goes for necessities.
+++
The year that 47% of households filed no income tax return was at the height of unemployment during this recession.
In 2007 the figure was 40%.
About 10% of them are elderly. Others are students. Almost 30% of those who didn't pay income tax were paying payroll tax.
See charts here:
http://www.washingtonpost.com/blogs/w...

Posted by: Coralie

June 23, 2013 at 3:04 p.m. ( | suggest removal )

If there were more Christians like Lowell, I think I would have to convert, if only on principle.

Posted by: fayfreethinker

June 23, 2013 at 4:53 p.m. ( | suggest removal )

In 2012 state Sen Uvalde Lindsey reported that
8,167 Arkansans received 40% of the income.

That's around ONE TENTH of 1%.

This past session Republican Charlie Collins' bill gave the richest Arkansans a big income tax break of almost 12%.
Additionally Rep Davy Carter (R) cut the capital gains taxes( on the rich) way below their previous level.

This was the Republicans "Jubilee Year" for the rich.

I don't expect any improvements.

In all fairness, Davy Carter and David Sanders (R-L.R.) did manage to put together enough support to get Medicaid expansion passed in both Houses of the General Assembly. This will extend health insurance coverage to over 250,000 low income Arkansans.
Hats off to both of them and all who supported it.
.

Posted by: cdawg

June 23, 2013 at 5:50 p.m. ( | suggest removal )

My continued appreciation for Lowell being a prophetic voice in the wilderness. I agree with the intimation of FayettevilleFreeThinker as to Lowell's principled expressions of Jesus' teachings.

Posted by: Jim_Huffman

June 23, 2013 at 9:59 p.m. ( | suggest removal )

The taxes for social security are a defined benefit that will be paid back to them at retirement. Most like more than they ever pay in. So the 28% number in the chart who pay no income tax but still pay payroll tax is really irrelevant.

And the wealthy people that max out ever year? They are going to be means tested and taxed out of most of their contributions.

In 2009 , the number of people owing no tax or getting a check was 49%. We will see how those numbers hold up in the next couple of years. It most likely will not be going down anytime soon.

People that are not "self-employed" still pay the total 15.4 percent tax too. The employer makes part of that payment. Even though the money does not come out of your paycheck directly, it is a cost directly attributed to each worker's salary.

Arkansas is one of 14 states that tax food. Six of them are 1% to 1.25%. While that does not include all sales, FOOD (necessity) is not taxed in 36 states. Kansas rebates the tax to low income households.

Five states have no sales tax at all. Seven states have no income tax. Two have income tax limited to dividend and interest income.

It is not nearly as cut and dried as "low income people pay other taxes."

Posted by: NWAChamps

June 23, 2013 at 10:12 p.m. ( | suggest removal )

Don't get me wrong that I am ignoring the message. I don't disagree. It's just time to stop demonizing those that pay the bulk of the taxes. They are paying an enormous amount of money to the government in addition to donating their time and money to help the needy. It gets too easy to blame the evil rich guy. Wealth is not a finite commodity that is stolen from one person by another when created.

Look at Romney's tax returns.... Start with the $4 million he gave to charity.

Tax and accounting giant PriceWaterhouse Coopers, which prepared the Romneys' taxes from 1990 through 2009, issued a letter stating they paid 100% of the federal and state income taxes owed during those 20 years. PWC [ Price Waterhouse} also said their average annual effective federal tax rate was 20.2% for the period. And annually, they never paid an effective rate below 13.66%.

Another factor in his lower rate is investing in municipal bonds that fund governments. They are exempt in many cases.

Time would be better spent examining the factors that lead to poverty - children born to single mothers is number one determinate of poverty. Then take a look at the educational system that graduates kids that can't read.

Posted by: NWAChamps

June 23, 2013 at 10:35 p.m. ( | suggest removal )

Grishamn probably ought to clarify his statement about being in a higher bracket than Buffet or Romney.

I suspect he is stating marginal tax rate rather than effective tax rate. Romney's income falls in the top bracket with the highest marginal income tax rate. His effective rate is 14% due to his cap gain investment income. PWC points out his average effective rate for 2000-2009 was 20%.

Is Grisham paying an effective rate of 25% or a marginal rate of 25%?. If he is paying a 25% EFFECTIVE rate, his taxable income (after deductions and exemptions, married filing jointly in 2012) was about $300,000.

Posted by: NWAChamps

June 23, 2013 at 11:35 p.m. ( | suggest removal )

Being an ex tax person, I would have to say NWAChamps is the only one in this discussion who knows what he/she is talking about in reference to taxes. Most do not have any idea what marginal and effective tax rates are, they just spew out percentages that appear to make their own personal arguments valid.

Posted by: boyscout357

June 24, 2013 at 7:55 a.m. ( | suggest removal )

So Grisham says "It’s Not OK To Allow The Poor To Be Hungry", but keep in mind the Bible says in 2 Thessalonians 3:10 "For even when we were with you, we gave you this rule: “The one who is unwilling to work shall not eat.”.

Posted by: boyscout357

June 24, 2013 at 9:15 a.m. ( | suggest removal )

Ah, we're back to the Bible. boyscout must have missed have missed my previous post about how Lenin loved that quote from Thessalonians.
"In the 20th century it became popular with socialists....article twelve of the 1936 Soviet Constitution states:

In the USSR work is a duty and a matter of honor for every able-bodied citizen, in accordance with the principle: “He who does not work, neither shall he eat.”

While discussing the 2013 United States farm bill, Representative Stephen Fincher, Republican of Tennessee, used this quote to justify cuts to the Supplemental Nutrition Assistance Program. This provoked criticism because he received $70,554 in farm subsidies in the year 2012, and received $3.48 million in taxpayer cash from 1999 to 2012."
http://en.wikipedia.org/wiki/He_who_d...

Posted by: Coralie

June 24, 2013 at 12:46 p.m. ( | suggest removal )

Champs says "The taxes for social security are a defined benefit that will be paid back to them at retirement. Most like more than they ever pay in."
I think he is saying that people get back more in retirement income than they pay in.
There are three reasons:
1. Some die before they receive their benefits.
2. Interest
3. Inflation
Meanwhile, the government gets the use of that money.

Posted by: Coralie

June 24, 2013 at 12:51 p.m. ( | suggest removal )

Low-income people pay other federal taxes, such as those on utilities.
"Congressional Budget Office data show that the poorest fifth of households paid an average of 4.0 percent of their incomes in federal taxes in 2007, the latest year for which these data are available — not an insignificant amount given how modest these households’ incomes are; the poorest fifth of households had average income of $18,400 in 2007. The next-to-the bottom fifth — those with incomes between $20,500 and $34,300 in 2007 — paid an average of 10.6 percent of their incomes in federal taxes."
http://www.cbpp.org/cms/?fa=view&id=3505

Posted by: Coralie

June 24, 2013 at 1:02 p.m. ( | suggest removal )

The point made about social security is the social security tax should be discounted when discussing the total tax burden (fed/state/local/sales/etc) because those dollars are defined benefits.

Those tax payments come back to the payer (in theory) at retirement. It is a form of government forced retirement savings. Unfortunately, it has morphed into a vehicle to redistribute income via means testing and taxes.

People like to claim the high income earners should pay on total income rather than the $100K+/- threshold. The reason high income earners do not pay more is their defined benefits are also capped.

Posted by: NWAChamps

June 24, 2013 at 2:41 p.m. ( | suggest removal )

Wonder what the False Prophet makes a year including benefits. Wonder if he gave his fair share to the poor pitiful poor. Inquiring minds want to know.

Posted by: JailBird

June 24, 2013 at 4:55 p.m. ( | suggest removal )

"There are two ways to conquer and enslave a country. One is by the sword, the other is by debt." John Adams.

Posted by: mycentworth

June 25, 2013 at 7:54 a.m. ( | suggest removal )

Thanks for the lively debate.

The quotation about low income Arkansans paying twice the rate of their income in taxes as the top 1% comes from research published by Arkansas Advocates for Children and Families. (they are respected on both sides of the aisle for their accuracy in research).

The lowest 20% pay 12%; the next lowest 20% pay around 12.5%; the next lowest pay just under 12% of their income in Arkansas taxes. The lowest three quintiles (60% of Arkansans) are paying around 12% of their income in Arkansas taxes.

The top 1% pay under 6%; the next 4% pay 7%; the next 15% pay under 9%.

Sales taxes hit the poor much harder than they do the wealthy. Sales taxes exempt no one regardless of income.

Since the recent legislature lowered the only progressive tax that we have -- income tax -- these numbers will only get more favorable toward the wealthy. Their taxes and the percentage they pay to the state will decrease.

The commenter who asked about marginal and effective tax rates is right. My marginal tax rate was 25%. I looked back -- my effective tax rate was 18%. In my column I may have been comparing apples to oranges. Yet, is it not still true that my effective tax rate is higher than Buffett (17%) and Romney (14%)?

A just tax system would be one in which as our income increases and our ability to pay taxes increases the proportion that we pay in taxes would increase also.

Lowell

Posted by: LowellGrisham

June 25, 2013 at 8:59 a.m. ( | suggest removal )

I do believe in raising the effective rate as one makes more income, reasonably, but when we have a government that just spends so recklessly, it makes no matter how much you raise it, it will never be enough. Raising taxes too much on the wealthy will only discourage growth.

Don't forget, the poor also have a responsibility to do all they can to be independent. I don't think that is being done, either.

Posted by: mycentworth

June 25, 2013 at 9:41 a.m. ( | suggest removal )

First problem with this article is the mixing of federal and state taxes trying to make a point.

The problem with the "Twice as much" number is throwing in the payroll tax (6%) to arrive at 12% of their income. That is a defined benefit that will come back to those at retirement. Beyond that, the income brackets are graduated too, so those SNAP recipients with the average income of 8,700+/- are paying in the 3.5% bracket, not 6%. Up to $7,800 after deductions and exemptions is only 2.5%. So stating they pay 12% compared to 6% is not accurate. It is more like 3.5% gone forever.

There may be an argument for bracket adjustment upward, but the STATE has to fund itself.

I understand $7,800 is not much of a living, but a tax of $16.25 per month (.025X$7,800 annual) for all the services should be doable. The tax on my mobile phone family plan is twice as much as that each month so the poor can have free phones.

Fraud rates may have also dropped due to the increase in the number of enrollees, not any better management of the program. Here are some stats to consider:

But USDA statistics show that participation in the Supplemental Nutrition Assistance Program (SNAP) increased 93.38 percent from George Bush’s first year in 2001 compared to President Obama’s first year in 2009. When President Bush took office in 2001, there were 17.3 million people on food stamps.

During his last full year in office, 2008, there were 28.2 million on food stamps -- an increase of 10.9 million – or a 63 percent increase over an 8-year period. But from the last full year of Bush’s presidency (2008) through 2011, just three years into President Obama’s presidency, the number of people on food stamps increased 16.5 million -- going from 28.2 million to 44.7 million -- an increase of 59 percent in just a 3-year period.

A 9% fraud rate in 2001 is about 1.7 million people. A reduced fraud rate of only 4% now is 1.88 million people. So a reduction is the fraud rate can actually mean MORE FRAUD is occurring.

And let's not forget SNAP is just one of the benefits people receive (ARKkids first health, Home energy assistance, TEA, WAP, in addition to federal credits and programs). Not saying life is easy, but let's not just ignore the rest of the benefits that make up the complete picture.

http://cnsnews.com/news/article/447-m...

Posted by: NWAChamps

June 25, 2013 at 1:19 p.m. ( | suggest removal )

"a government that just spends so recklessly"
Are you talking about the present administration or the U.S. government in general--and since what year or decade?
What specifically does the government spend recklessly on?
Some people think our military budget is way too high. Do you?
Was the Iraq War reckless spending? (Est. $2-3 trillion)
Excessive government spending, Is this your justification, mycent, for an unjust tax system?

Posted by: Coralie

June 25, 2013 at 1:24 p.m. ( | suggest removal )

The reason Romney has a lower effective marginal rate is because he invests in vehicles the government deems important enough to offer reduced taxes. Namely, his investments provide capital for municipal governments to operate. He also invests in low income housing loans. He also gave $4 million to charity, while claiming only a $2.4 million deduction.

Those of you that want to lower your rate should think about investing in muni bonds, T-bills or TIPS too (if you have the stomach for it).

And you are wrong about paying a higher effective rate then Romney. His average effective tax rate (as per PWC) for the years 2000-2009 was 20% which is higher than your effective 18% rate.

Buffet is a different story. He is paying a little less than the author. However, he only takes a salary of $150,000. The bulk of his income is from investment income (which is taxed at the corporate level too - dividends are after tax distributions). His effective rate in 2011 was 17.4%. If you are looking for the guy to go after, it is Buffet, not Romney. Buffet is the awe shucks wolf in sheep's clothing.

The other problem is lumping in those who earn $250,000 per year (married) with Buffet and Romney. The Congress finally added brackets up to a 39% rate for income over $400K. They also added an investment income healthcare tax of 3.8% for those above $250,000. The top bracket now has a 43.4% marginal rate on investment income. That is almost a 24% increase in one year. And let's not forget the Alternative Minimum Tax.

Your heart, as is Romney's, is in the right place. The logic is flawed and math is just not accurate.

Posted by: NWAChamps

June 25, 2013 at 1:32 p.m. ( | suggest removal )

Coralie - Cost of both wars is just over $1.45 trillion. costofwar.com

It is hard to call a tax system unjust (the way you mean it) when half of the population pays 97% of the federal income taxes. How much more should they pay? 98% 99% or 100%

Maybe you don't like the brackets in Arkansas reaching top rates at $32,000. That may be valid to a degree. But let's not forget those taxes are deductible on the federal return (if they amount to more than the standard deduction).

Posted by: NWAChamps

June 25, 2013 at 1:38 p.m. ( | suggest removal )

The federal government lost $261 billion, or 7 percent of total spending, to fraud and waste in 2012, said Rep. Darrell...

Add in the projected $220 billion in interest we owed in 2012 due to deficit spending (all of them, not just Obama and Bush) and you have almost $500 billion wasted. If interest rates rise at all, interest will skyrocket.

"We'll be spending over $1 trillion a year on interest by 2020. That's $1 trillion we can't spend to educate our kids or to replace our badly worn-out infrastructure," said Bowles at a recent forum hosted by IHS Global Insight. "What makes it doubly bad is that trillion will be spent principally in Asia, because that's where our debt is."

http://www.usnews.com/news/articles/2...

http://www.washingtonpost.com/busines...

Posted by: NWAChamps

June 25, 2013 at 1:44 p.m. ( | suggest removal )

Coralie, I believe spending on a strong defense is not a waste of money. Nobody likes war, but the saying "peace through strength" has merit. Joining the service was always there for someone to make a career out of, which many have and to obtain an education,

Posted by: mycentworth

June 25, 2013 at 3:01 p.m. ( | suggest removal )

I have no problem with any legislator promoting legislation to cut spending. But there should be valid reasoning for cutting the spending. All I seem to hear is that spending needs to be cut because there is a deficit. If legislator can't pass bills to cut particular spending they find to be waste, fraud, or just plain unnecessary, and balance the budget that way, then they need to figure out a way to equitably increase taxes and balance the budget. Once the budget is balanced, then we can have reasoned discussions about what spending to cut without the imaginary deficit/debt crisis happening every other month.

Posted by: ecsmith2

June 25, 2013 at 4:23 p.m. ( | suggest removal )

Here are two very good articles. Take some time to read them.

http://www.policymic.com/articles/123...

...As workers increase their education, training, and productivity, they tend to move into higher income groups. Since 1970, around 50% of those in the bottom quintile moved into a higher income group and income mobility accelerated from 1999-2007 to 60%. Conversely, those in the top 20% may have their capital income fall from a drop in the stock market, reductions in their productivity, or a combination of the two, contributing to a 40% decline to "a" lower income group from those in the top income quintile over the last 40 years....

...Additionally, the Census data distorts the share of each income quintile because of the unequal number of individuals in each group. The top quintile has an over-represented amount of 24.3% of the population and the lowest quintile has only 14.8%. Thus, these quintiles are not representative of the groups in the population that they are supposed to reflect, which misrepresents income shares and biases the gap...

...The argument that the lowest quintile is worse off than in the past is a myth; this group's average real income rose by 10.5% over this period. Moreover, higher incomes not only increased consumption, but the quality of these purchases improved substantially over the last forty years. Therefore, standards of living have increased for households in the lowest quintile...

Posted by: NWAChamps

June 25, 2013 at 4:24 p.m. ( | suggest removal )

http://www.policymic.com/articles/370...

...According to the most recent data available from the IRS, the top 1% earned 17% of the total income in 2009. Meanwhile, they paid 37% of all the taxes paid. The bottom half of earners took in 13% of the 2009 total taxable income, yet paid just 2.25% of the total tax revenue...

...the wealthy are also paying more of the tab now than they did 30 years ago. In 1980, the top 5% of income earners paid 37% of all income tax revenue, while the bottom 50% paid 7%. By 2009, the top 5% of earners paid a whopping 59%, while the bottom half of earners paid just 2.25% of the total pie...

....Despite across the board tax cuts, revenues remained at or near historic levels as a percentage of GDP until the financial collapse in 2007. In fact, tax revenue as a percentage of GDP was exactly the same in 1979 as it was in 2007: 18.5%. With the recession, tax revenue has dipped to 14.9% of GDP, while spending has risen to 25%, which accounts for our widening deficit....

Tax Revenues reached $2.5 trillion last year and are projected to be $2.7 trillion for 2013 (record high), yet we are still running TRILLION DOLLAR deficits. That is reckless spending. The problem is people hear the talking points and sound bites without questioning/understanding them because the narrative fits their agenda.

Posted by: NWAChamps

June 25, 2013 at 4:33 p.m. ( | suggest removal )

Don't confuse Grisham and Coralie with facts.

Posted by: JailBird

June 25, 2013 at 4:54 p.m. ( | suggest removal )

The idea that taxes can just be raised to cover the current level of spending has been proven false.

As the article points out, people change behaviors as tax rates increase. Revenues consistently come in around 18.5% of GDP. The upper end of the range is 20%. The most recent bottom was 14.9% during the recession. Obama has been spending(deficit/stimulus) at 25% of GDP.

The result is today's economy with another $6.5 trillion dollars of National Debt and $124 TRILLION of unfunded liabilities (Social Security, Medicare, Prescription Drug Benefit).

http://www.usdebtclock.org/

As soon as the FED stops the free money train and buying $85 Billion in bonds each month, reality is going to hit fast. We got a taste of it in the last week in the stock market when Bernanke said he might cut back to $65 Billion.

Posted by: NWAChamps

June 25, 2013 at 5:11 p.m. ( | suggest removal )

NWAChamps, I read your link. The boys in these think tanks make a lot of money dispensing this nonsense you believe without, apparently, thinking about it too much. Must be you just like how it sounds. I don't get enough words to go over all the misinformation, but let's focus on #2. First, no one is demonizing the top earners. My income return gets me into the top 20%. He don't make the comparison of the bottom 20% getting real growth of 10.5% since 1970 and the top 20% increasing their real income by 56%. If there was equal distribution of income growth since 1970, those percentages would be the same. And he doesn't mention how the 56% growth is above the rate of inflation for that period, and the 10.5% is below it.

The real hilarious part of #2 is that there has been no growth of inequality of income, but because of the high tax rates in the 1970s, the high earners just did not report all their income, until Reagan and Bush lowered the rates. With the lower rates, the rich do not have to commit income tax evasion and now cheerfully report all their income, thus leading to the image of income inequality. The income inequality has always been there, the rich just never reported the income years ago. Just freakin' hilarious.

And it is sad you buy into this.

Posted by: ecsmith2

June 25, 2013 at 5:48 p.m. ( | suggest removal )

It is not trueNWAChamps. I used a 2010 IRS spreadsheet, and kept the proportions of the tax paid by the top 1%, next 4%, next 5%, next 15%, next 25%, and the bottom 50%, and the effective rate that the top 1% would pay to balance the budget would be around 50%. And that was with the deficit at over a trillion dollars. It is all quite doable.

And once the deficit is gone, then Congress could sit down quietly and have rational discussions about what other spending to cut, without an new impending deficit/debt crisis being manufactured to make cuts for no reason.

Posted by: ecsmith2

June 25, 2013 at 5:55 p.m. ( | suggest removal )

That upper end of government spending being 20% of GDP is a Republican ideal. And when revenues go down, that causes a deficit without increasing spending. And if spending stays the same, the decrease in GDP itself can cause the percentage of government spending of the GDP to go up. From 2008 Q1 to 2009 Q2, you can use the BEA's numbers of the change in the GDP to see the government's share of GDP to go from 18.5% to 22.5% with no increase in spending. The increase in spending to help blunt the effects of the recession would then only account for 2.5% of the increase to 25%.

Posted by: ecsmith2

June 25, 2013 at 6:15 p.m. ( | suggest removal )

The author is not disputing an income gap exists. The myth he is addressing is people have a lower standard of living now.

Maybe you want to re-read the article before attacking my critical thinking skills. The 10.5% income growth is real income. Real Average Income is the income of an individual or group after taking into consideration the effects of inflation on purchasing power. The goods being purchases are also better.

The lowest quintile has only 14.8% of the population (25% less than it should) compared to 24% for the upper quintile (should be 20%). Income mobility should also be recognized. Well over half move up out of the lower bracket. The people in the upper bracket also move back down.

Beyond the reporting aspect of income, people take legal means to avoid taxes too. Why do you think so many companies paid dividends before the end of the year last year?

The fact that tax revenues settle in to a range of +/- 18% is not some fiction. Ignoring it gives us trillion dollar deficits.

If you really think high income earners have not been demonized, then you have not been paying attention.

http://www.taxpolicycenter.org/taxfac...

Posted by: NWAChamps

June 25, 2013 at 6:25 p.m. ( | suggest removal )

http://taxfoundation.org/article/summ...

I would like to see how you arrived at that number of only 50% of the income balances the budget. The total AGI (2009) of the top 1% ($343K and up) is $1.3 trillion. They paid $318 Billion in taxes. To raise a trillion more from this bracket would require taking the rest of it.

Incomes above $154,000 accounted for $2.5 trillion in AGI and paid $500 Billion in taxes. That means an effective tax rate of 60% to get another trillion out of those earning more than $154K.

Using the IRS Excel sheet for 2010, it would take every penny of AGI from people over $500,000 to get $1.293 trillion. If you took their Total income, you would get $1.3 trillion. Going down to $200K, gets $2.279 trillion.

Taxable income for $200K and up is only $1.89 trillion. They are already paying almost $500 Billion. That leaves $1.39 trillion more to take via taxes.. Closing the trillion dollar deficit would require 72% of the rest of their income.

here is the irs link I used, clicking on 2010 of table 1.
http://www.irs.gov/uac/SOI-Tax-Stats-...

Posted by: NWAChamps

June 25, 2013 at 7:20 p.m. ( | suggest removal )

NWAChamps, I just looked up the the Department of Labor statistics, and that "real" growth of 10.5% means someone in the lowest 20% goes from $100.00 to $110.50. With inflation, what could be bought with the original $100.00 would cost $117.64.

On the other hand, every $100 of the top 20% of income are now getting $156.

Please explain to me how being able to buy less that you could 30 years ago is any improvement at all?

Or don't you understand the reason he was using real income figures?

Posted by: ecsmith2

June 25, 2013 at 10:48 p.m. ( | suggest removal )

As for balancing the budget. In 2010, from an IRS spreadsheet, total adjusted income for all returns was $5.503 trillion. Tax from all returns was $1.037 trillion. The effective tax rate is 18.8%. Lets say we need $1.037 trillion to balance the budget. Then we only need another 18.8% increase in the effective tax rate to generate revenue to balance the budget, or a total rate of 37.2%.

Counting just the incomes above $200,000, they had a total adjusted income of $1.891 trillion and paid tax of $0.484 trillion, for an effective rate of 25.6%. If each group is increased proportionally from what they paid originally, we simply need to double the effective rate. Those with incomes of $200,000 and above would only pay an effective rate of double what they originally paid, or 51.2%.

Do the math. It is not trickery. Yes, it would be a burden, but isn't that what the people screaming that the deficit and debt are such a terrible burden? Wouldn't it be better to have a burden with a balanced budget?

Posted by: ecsmith2

June 25, 2013 at 11:13 p.m. ( | suggest removal )

NWAChamps, that is your problem. No one is asking just the top 1% to pay for everything.

No one is trying to demonize the top 1%.

But they are getting most of the increase in income from the improving economy. Why is it they have to have a large portion of it than they got in the past? What are the top 1% doing to earn more of he productivity increases in the economy, other than they have more power to decide who gets the money?

Posted by: ecsmith2

June 25, 2013 at 11:19 p.m. ( | suggest removal )

EC - I can explain it to you, but I can't make you understand it. From Investopedia:

Definition of 'Real Income'
The income of an individual or group after taking into consideration the effects of inflation on purchasing power.

For example, if you received a 2% salary rise over the previous year and inflation for the year was 1%, then your real income only rose 1%. Conversely, if you received a 2% raise in salary and inflation stood at 3%, then your real income would have shrunk 1%.

Real income factors in inflation. The 10.5% increase is AFTER INFLATION HAS BEEN FACTORED IN TO WAGES.

http://www.investopedia.com/terms/r/r...

Posted by: NWAChamps

June 26, 2013 at 7:22 a.m. ( | suggest removal )

ecsmith - You and NWA are obviously more informed than most. However, 51.2% of one's income, rich or not, is not acceptable. Not with the spending of the government (social programs way out of wack along with other money going to pet projects, plus supporting countries that are killing Christians and hate America).

If I were one of the rich, I'd be shutting down and looking for ways out - which they will find. The government is not the judge of the rich, God is the judge of rich and poor. Many rich are giving abundantly to charities. Yes, some are greedy and corrupt, but the poor aren't free from obligation just because they are poor.

Posted by: mycentworth

June 26, 2013 at 7:32 a.m. ( | suggest removal )

As far as your balancing the budget numbers. It looks like you are using table 2, column 3 for taxable income?. As I pointed out above from table 2 of the IRS.

Your first error is the INCREASE in effective tax rate would be 100% (not 18.8%) to double it from 18.8% to 37.6%, but I understand what you are trying to say.

Second error - suggesting a 51% rate for the 200k and up group will cover an extra trillion in taxes? Or are you suggesting doubling the tax rate for all brackets? Doubling the rates on the lower brackets would crush them.

If you are talking about doubling taxes on the 200k and up only, then let me explain it again. It looks like you are forgetting to subtract the amount of taxes the group at $200k and over already pays (unless you are suggesting doubling rates in all brackets). We need an additional $1 trillion, not a total of $1 trillion.

Taxable income for $200K and up is $1.89 trillion. We agree on that.

They are already paying almost $500 Billion. We agree on that, but let's use your $486 Billion number.

Deduct the amount they are already paying in taxes ($486B) from the total taxable income of the group ($1.89 trillion). That leaves the $200k and up incomes with an additional $1.404 trillion that can be taken via taxation. Tax them $1 trillion to close the deficit.

That means the $200k and up group will be paying a total of $1.486 trillion in taxes out of $1.89 trillion taxable income for an effective rate of 78.6%. The economy goes right into recession at that rate of taxation and revenues fall at that rate.

Add in State and local taxes - Californians would be paying (13% state) 91.5% in Federal and State taxes. New Yorkers - 88.6%. Arkansans - almost 85% of taxable income.

Posted by: NWAChamps

June 26, 2013 at 8:48 a.m. ( | suggest removal )

NWAChamps, you need to be specific about your definitions or display the actual data to understand each other accurately. The government sites where I get information, real income is actual dollar amounts. You, or the author of the link, didn't display the actual data. And it doesn't change the fact that if the growth of the economy was shared as it was being shared in 1970, then the two percentages would be the same. Point #2 is still hilarious.

mycentworth, the other people are saying that the deficit /debt is unacceptable. And the people that are saying it is unacceptable cannot put forward legislation to balance the budget by cutting spending. They won't do it. Because when the people see the spending they want cut, they will be unpopular at the polls. The people that do not want to raise taxes want the people that want to tax to decide what to cut. Not a really fair thing to do.

If just cutting spending is the right thing to do, why cannot the people that just want spending cuts come forward with how to do the cutting to balance the budget?

Posted by: ecsmith2

June 26, 2013 at 9:04 a.m. ( | suggest removal )

EC - Real Income includes adjustments for inflation. That is the definition. The authors use the term as it is defined in the field. The Census Bureau includes inflation adjustment in Real Income too. Show a government source that claims the term "Real Income" does not include an inflation adjustment. Nominal Income does not include inflation adjustments.

As the article above (6 myths) points out... Many upper income earners tend to be involved in labor markets that demand higher levels of education and productivity, such as economics, engineering, technology, and information-based sectors...

The demand for skilled labor as described above raises the wages required to employ them. Minimum wage jobs require less skill and even no experience in the field. There is an abundant supply of people that can fill the jobs, leading to lower wage growth.

And again 60% of the people in the lowest bracket move up out of that bracket. It is not static. The lower bracket is low skill jobs which do not demand higher wages. People gain experience and expertise and move up out of that bracket.

I have posted the links to all the data I have used. You have not included any sources for your numbers.

Do you still believe the 51% number you put out above. Are my numbers wrong? You completely ignored it. Do you understand the errors in your math?

There are two ways to effectively close the deficit. Cut spending or increase GDP to 5 times projected spending.

Posted by: NWAChamps

June 26, 2013 at 10 a.m. ( | suggest removal )

If you want to see factors that lead to income disparity in action, go to a new Walmart when they are taking applications. There will be hundreds of people applying for the cashier and low skill jobs. That is an oversupply of low skilled labor. Wages stay low.

The labor pool dwindles when it comes to filling management positions. That is an undersupply of labor with skill and expertise. Wages increase to attract top talent.

Posted by: NWAChamps

June 26, 2013 at 10:15 a.m. ( | suggest removal )

"If just cutting spending is the right thing to do, why cannot the people that just want spending cuts come forward with how to do the cutting to balance the budget?"

EC - Give the me budget and where the monies go, and I can guarantee you I could easily cut - starting with all the money to "green" companies that haven't done anything but fail and abscond with the money. Not that I am against conserving the environment, but we are broke. I would not give to other countries, like Egypt, that are ran by the Muslim brotherhood. That is just a start.

Posted by: mycentworth

June 26, 2013 at 10:27 a.m. ( | suggest removal )

Tom Coburn publishes a list of waste every year. Last year was $19 Billion.

The Senate added a $1.5 Billion jobs bill to the immigration bill to offset the negative impact of the immigration bill. That's how they think. Another $100 million added to promote tourism courtesy of Harry Reid (for his casino buddies).

Medicare paid $26 million for prescriptions written by people that were not licensed to write scripts.

The IRS sent more than $46 million in tax refunds to 23,994 “unauthorized” alien workers who all listed the same address in Atlanta, Ga., in 2011, according to an audit report by the Treasury Inspector General for Tax Administration...

The IRS sent 11,284 refunds worth a combined $2,164,976 to unauthorized alien workers at a second Atlanta address; 3,608 worth $2,691,448 to a third; and 2,386 worth $1,232,943 to a fourth.

Other locations on the IG’s Top Ten list for singular addresses that were theoretically used simultaneously by thousands of unauthorized alien workers, included an address in Oxnard, Calif, where the IRS sent 2,507 refunds worth $10,395,874; an address in Raleigh, North Carolina, where the IRS sent 2,408 refunds worth $7,284,212; an address in Phoenix, Ariz., where the IRS sent 2,047 refunds worth $5,558,608; an address in Palm Beach Gardens, Fla., where the IRS sent 1,972 refunds worth $2,256,302; an address in San Jose, Calif., where the IRS sent 1,942 refunds worth $5,091,027; and an address in Arvin, Calif., where the IRS sent 1,846 refunds worth $3,298,877.

Medicare Fraud - $60 Billion.
Taxes owed by federal workers - $3.4 Billion
Including 36 Obama Aides - $833,000.
Al Sharpton owes a couple million in back taxes. Maybe Obama should have asked for it at the jobs summit with him.

$1.8 Billion Fraud in Social Security Disability Insurance.

Food Stamp Fraud - $750 million

The list goes on and on.

Posted by: NWAChamps

June 26, 2013 at 10:54 a.m. ( | suggest removal )

NWA - It seems the govt. doesn't seem to care about fraud, wasteful spending or non-payment of taxes. So what hope is there? I see none - except as a Christian, I do have hope.

Posted by: mycentworth

June 26, 2013 at 11:27 a.m. ( | suggest removal )

Champs says "Cost of both wars is just over $1.45 trillion. costofwar.com"
I went to your link and noted that the numbers are moving up all the time.
The estimates I was referring to by economists Joseph Stiglitiz and Linda Bilmes include the continuing costs of caring for wounded vets and paying interest on war debt.
http://en.wikipedia.org/wiki/The_Thre...

Posted by: Coralie

June 26, 2013 at 2:10 p.m. ( | suggest removal )

Yes, Coralie, I am familiar with the continuing and future costs of the war. Whether that makes the war a waste or not is still not determined. We will see in the years to come. But the 27 million women in Iraq and Afghanistan would say yes it was worth it.

Here are some future costs that are pretty bad too. Look at the unfunded liabilities of government in the us debt clock - $124 Trillion and counting.

Look at the numbers all over this live page. Some pretty bad stuff.

http://www.usdebtclock.org/

Posted by: NWAChamps

June 26, 2013 at 2:24 p.m. ( | suggest removal )

"Coburn overlooks an even bigger fraud problem: tax evasion. A 2008 report from the Senate permanent subcommittee on investigations found that the United States loses a whopping $100 billion each year from offshore tax havens."
More on Coburn's list here:
http://www.newrepublic.com/article/po...

Posted by: Coralie

June 26, 2013 at 2:26 p.m. ( | suggest removal )

You say "The 27 million women in Iraq and Afghanistan would say yes it was worth it."
However, Iraq and Afghanistan were very different countries. Under Saddam Hussein, Iraq had a secular government. Women were employed as doctors, teachers, etc. Now, because of the Shiite influence, they are in a worse position.
In Afghanistan, Afghani women are making gains very slowly. The problem was not just the Taliban but the traditional culture.
The infant mortality rate is still highest in the world.

Posted by: Coralie

June 26, 2013 at 2:44 p.m. ( | suggest removal )

A letter by Frank Newman in today's ADG lists the following items that might be cut from the Pentagon budget:
Not a whisper about cutting back the F-35 fighter program of 2,400 planes at $150 million each, the C-130 program that keeps building at $80 million each that the military doesn’t want or need, the nine military bases in Afghanistan after we are supposed to leave in 2014, the hundreds of admirals and generals and their staffs, the outrageous amounts of money paid out to U.S. military members who live off-base, the hundreds of U.S. bases overseas, a possible naval race with China in the Pacific, expanding the U.S. military into Africa, playing chicken with Iran at the behest of Israel. The F-35 program would cost at least $360 billion and we now have C-130 planes parked all over the country because the military doesn’t know what to do with them.

Posted by: Coralie

June 26, 2013 at 3:01 p.m. ( | suggest removal )

Do we really think the middle east or Iraq would be better off with Saddam in power? Too bad they did not just send a drone over with a present for him.

Posted by: NWAChamps

June 26, 2013 at 5:01 p.m. ( | suggest removal )

Didn't have "drones" back then except in the White House.

Posted by: JailBird

June 26, 2013 at 9:02 p.m. ( | suggest removal )

We are not broke, mycentworth. And you can show me all you want to cut from the budget, but you need to convince half of the people plus 1 to cut it. We don't just do things in this country because a minority wants it that way.

I am not saying there are no issues that need to be worked on, but the issues that are in front of the federal government are not as bad as the nay-sayers make them out to be.

If Congress can't make spending cuts, the conservative people here should be screaming that they raise taxes to pay for what they have spent and balance the budget.

Posted by: ecsmith2

June 27, 2013 at 12:26 a.m. ( | suggest removal )

NWAChamps, I'll concede the point on real income, it is not that important.

If income inequity was not growing, then the percentage in real income growth of the two groups would be the same. The percentages are very different, with much more income going to the top 20%.

Posted by: ecsmith2

June 27, 2013 at 12:29 a.m. ( | suggest removal )

NWAChamps, your numbers are not wrong, but you just have taxes increasing on the upper income earners. I clearly stated that if we double the amount of taxes each 20% pays, the upper 20% would have to pay only a 51% effective tax rate.

You have said we can't balance the budget with raising taxes, but you are wrong.

Here is the link to the IRS tax table I used. I used the 2010 file in table 3.5.

http://www.irs.gov/uac/SOI-Tax-Stats-...

Please let me know where I calculated wrong if you find anything wrong in what I said.

Posted by: ecsmith2

June 27, 2013 at 12:44 a.m. ( | suggest removal )

It was not really clear because you only showed the numbers for the $200k and up. That's why I put that qualifiers in my comments above.

Doubling the income tax on all groups would crush those in the lower brackets and send the economy right into recession. The tax burden on the poor is the point Grisham is trying to make in the article. As history also proves (see my link above to federal receipts and outlays) revenues will settle in around 18.5%. People will change behavior. It is proven over and over.

Posted by: NWAChamps

June 27, 2013 at 7:44 a.m. ( | suggest removal )

EC - take some time to think about the ripple effect of what you are proposing. The first reason rates can't double is 75% of the people are living paycheck to paycheck.

http://money.cnn.com/2013/06/24/pf/em...

Doubling the tax creates a disincentive to work rather than an incentive to work. People in the lowest bracket will just stop working all together because entitlements will be a better value than working.

The housing market would crash. How many people do you think (especially lower and middle class) could afford to pay twice as much in taxes and still afford their house payments? How many could afford insurance? How many could afford to go on vacation? How many could afford to buy groceries?

How many servers, bartenders, restaurant owners, bar owners, and other cash businesses are going to report all of their income? Yes, it sucks and is illegal, but it happens.

How many small business owners can afford to pay twice as much income tax and still turn a profit.

The government needs to create incentives to work and report the income. Labor participation rates are at historic lows. Food stamps are historic highs. Disability is skyrocketing as unemployment benefits run out. The programs are not creating the conditions for people to work.

Government assistance can't be a lifestyle. If unemployment ended at one year instead of two, there would be much more urgency to find a job. The entitlement programs need to be a support system to get people back on their feet as quickly as possible with education or training as needed.

Posted by: NWAChamps

June 27, 2013 at 8:51 a.m. ( | suggest removal )

I have thought about it, NWAChamps. I am not the one proposing to immediately balance the budget. That would be Republicans, especially teat party types, that will again refuse to raise the debt ceiling and put us on high alert in the upcoming months. The debt is an issue, and it should be dealt with, but with the economy as weak as it is, now is not the time to be wholesale cutting of spending. The deficit is being brought down in small increments now, in a controlled way, and it is minimizing the harmful effect on the economy.

I have heard some that want to draw a line in the sand and not raise the debt ceiling any more. That would cause a recession nearly as bad as the one in 2008, but these people think that we just need to bite the bullet and take a ax to the budget and just suffer through the pain. Raising taxes would just be a different way to suffer through the pain.

I don't particularly want to do either, I prefer the government slowly lowering the deficit, and then when the economy is back to normal, take steps to start reducing the debt after the budget is balanced.

Our problem with the economy is there is low demand. We have low demand because the lower 80% of incomes are not increasing with the economy. That is happening because of the increased income inequity that has been happening, and increasing, for the last 30-40 years.

What incentives do you propose we should have? And what incentives are needed to report income? Last I read, income tax evasion is against the law. Not reporting income got Al Capone thrown into prison.

What conditions do you want to the government to create to allow people to work? You want the government to do what to have private companies hire people and pay them living wages that increase along with management's hefty income increases.

The percentage growth of real income, if it is the same for all 5 groups, then the increases in the economy are being shared at the same proportional level. That it is increasing for the top at a higher rate than the bottom 80% means they are keeping more in the increase at the top. What incentive do you propose that they will share more equitably?

Unless he tax rate is 100%, taxation never entirely takes the profit of a company. That a business owner doesn't make enough to live on, and has to close he business can happen from a variety of reasons, not just from the amount he has to pay in taxes.

My point in going through the exercise in increasing taxes to balance the budget was to show you it could be done. Yes, it would have bad effects on he economy. But so does the also nonsensical fight that will soon happen about the debt ceiling, if they just don't raise it and get on with more rational solutions for the issue.

Posted by: ecsmith2

June 27, 2013 at 9:54 a.m. ( | suggest removal )

It's time to get beyond the false premise that incomes will all rise equally. It ignores the law of supply and demand, skill sets, economics and income bracket mobility.

If unskilled labor wages rose at the same rate as high skilled labor, the cost of goods produced by the low skilled labor would rise higher than the rise in wages itself, leading to less purchasing power.

Republicans (ryan) have proposed a balanced budget in ten years.

the debt is reaching a tipping point. The only reason it is manageable at this point is due to the FED keeping rates artificially low and buying the bonds. Otherwise, the rates would rise immediately.

My degree is in Economics and Finance with a heavy dose of accounting. I have tried again and again in this post to explain these things with data. I really don't have the time nor desire to explain all of this to you ad nauseum, but take a look at Obamacare. That is a prime example of government's good intentions meeting reality. It is one more obstacle to employers trying to hire people. It creates a disincentive for anyone to expand over 50 employees because all the regulations kick in. The 51st employee is very expensive.

Employers are cutting hours due to it. Duh! Insurance rates are rising dramatically because of this program. Duh! And the CBO projects 30 million still uninsured when it is fully implemented. And doctors? many are refusing medicare and many are just quitting. That bill is not about healthcare, it is about control and power.

Your comment is false about taxation never entirely taking the profit. They can't always pass along increases. Supply and demand again. People stop paying for products as they become more expensive. While they may go out of business for a variety of reasons, most small businesses with pass through income in the 25% bracket do not have another 25% to pay in taxes (on top of 13.5% payroll and other taxes on income) and still be profitable.

The loss of profit can make the risk reward not worth it to a business owner. The decreased profit affects cash flow, which affects value of the company and ability to borrow to finance operations and capital improvements.

If you truly believe taxes can be raised (doubled even) to balance the budget, you are ignoring the data in addition to the principles of economics and finance. Try cutting $500 Billion a year. The gutless pukes in DC could not even cut $100 Billion from a $3.5 trillion budget.

The levels of spending and debt are unsustainable at current levels of GDP. And again, if 75% of the population is living check to check, you will bankrupt many of them by raising taxes by even 50% instead of doubling them.

the best choice would be balanced reduction over a decade, but the liberal ideal of balanced is 6 to 1 increases in taxes.

Posted by: NWAChamps

June 27, 2013 at 12:26 p.m. ( | suggest removal )

Champs says "Do we really think the middle east or Iraq would be better off with Saddam in power?"
Why are you changing the terms of the argument?
I posted a letter from the ADG that there is waste in the Pentagon budget and that is your answer?

Posted by: Coralie

June 27, 2013 at 12:37 p.m. ( | suggest removal )

Oh, I see.
Because you have the simple-minded idea that women in all Mideastern countries are oppressed as much as they are in Saudi Arabia or Afghanistan, I tried to point out that Iraq wasn't like that.
Women's rights was certainly not part of our reasons for invading Iraq.
There are a lot of brutal, authoritarian leaders in the world. Should we declare war on all of them?

Posted by: Coralie

June 27, 2013 at 12:44 p.m. ( | suggest removal )

You claimed the war was a waste. My answer was to ask you to imagine a middle east with saddam still there?

That is one the reason the war was not a waste. Saddam, a man who offered $25,000 to the family of Palestinian suicide bombers, is gone. Let's not forget the 5,000 gassed dead and 10,000 injured on his resume.

And the women of Iraq and Afghanistan would probably say it was worth it too. You disagree.

Oil supply was a factor. Saddam's attempts to remove the dollar as the trading currency of oil was a factor too. And yes, the faulty intelligence on WMD's.

Again, the war was more than going after a brutal dictator. That is an overly simplistic view of what was going on at the time.

Posted by: NWAChamps

June 27, 2013 at 5:23 p.m. ( | suggest removal )

I will try to follow your last posting.

I don't have a false premise that income is rising equally in each quintile. It has not been happening for the last 40 years. Why do you think that is my premise? We are not talking about individual laborers demanding wages. We are talking about the middle class and below not receiving enough of the increases in productivity to keep demand higher. Demand comes from having disposible income to spend. The middle class income has not risen significantly in 40 years, to keep pace with the growth of the economy. For many of those years, demand was kept high with the middle class borrowing on credit cards, and then borrowing against their assets, mostly homes. This last recession has convinced the middle class to not do that anymore. so we are now stuck with low demand keeping the growth of the economy low.

I am not sure what you are trying to say about the low and high skilled labor. if everyone's wages rise proportionally with the rise in revenue, that keeps income inequity from increasing. That is not happening. More of the increase in the economy is going to the higher wage earners. It is a subjective decision that is made when revenues go up in a company. In an economy with high unemployment, labor cannot demand equitable increases. The free market allows the employer to likely be able to replace labor demanding higher wages with labor that is not employed.

Yes, the House has a budget that they cannot make into law. They refuse to compromise with a bill that could be passed in the Senate and have the President sign. What good is what they have done?

The debt is an issue. It should be dealt with appropriately. Balancing the budget by making blind cuts, or even suggesting it should be balance next fiscal year is not appropriate.

My degree is in computer science. I an a systems analyst. a system I am having trouble with currently is this discussion. It is pleasant enough, but you keep taking it places so you can make points that are away from what is being discussed. As I said, I posted that we could raise the income tax and balance the budget, and showed how, not because it is a good idea, but because you said it wasn't possible. And it is no worse, and likely a better idea than just not raising the debt ceiling that tea party members of Congress will threaten us with.

Posted by: ecsmith2

June 27, 2013 at 6:10 p.m. ( | suggest removal )

I would love to look at health care reform. Your use of "Obamacare" shows you have a bias against it, and I would hope there is actual reasoning for the bias. Yes, the reform was not done well. As a concession to Republicans, it was left as an employer based system. It should have been done that way. The better method would have been to make it single payer and remove the middleman/for-profit insurance companies from it. Health care, and insurance for it, has become just like our need to have everyone have fire protection. And I would challenge you to show how funding fire departments would be much better if we didn't tax everyone in some way to do it, but make everyone buy fire protection insurance, so you could afford to pay the fire department if they came to you residence for an emergency.

I would certainly like to discuss health care reform with you, or anyone else at greater length.

Using data is fine. I looked at yours about the raising tax thing, and could see you were just trying to raise taxes on just the high incomes. And yes, that wouldn't work. Not looking for ad nauseum presentations from you, but stay on the topic a bit more and either refute what I post or post that you accept it. I can do the same for you.

If profit is taxed, there will be profit left over unless the tax rate is 100%. if the rate is 35%, and the profit is $100,000, the tax is $35,000. if the profit is only a dollar ($1), then the tax is only $0.35. There is profit left over. Please show me how you can tax profit at less than 100% and still get all of the profit.

I was making no assumption that Congress could actually double what they receive in revenue from the income tax. That was not the point I was making.

You correctly point out the problem, we have too many people, and their number is increasing, because of the increasing income inequity. This would be what I started talking about here, and could you address the solution to this, as it would likely help create more demand in our economy.

Posted by: ecsmith2

June 27, 2013 at 6:12 p.m. ( | suggest removal )

"You claimed the war was a waste."
I've looked back and can't find where I said those words. I'd be more likely to say it was a tragedy--for our dead and wounded, and hundreds of thousands of Iraqi civilians also dead and wounded, or born with gross birth defects from DU munitions..
It took many years to get their country up and running again, and some people may still not have full electricity. The Sunnis and Shiites weren't massacring each other before we came.

Yes, I agree it was a waste of money too, Including the billions that got misplaced and the building of the largest embassy building in the world (WHY?) in Baghdad.
Again, I would say that the women of Afghanistan would be more likely to say the war was worth it (specifically for women) than the women of Iraq, who were relatively much freer in Saddam's regime than women in some other mideastern countries.
Is the Mideast better off without Saddam? Maybe. He wasn't a nice guly, no argument. Iraq is in better shape in some ways and worse in others. Iran is relatively more powerful since Iraq is less so.

Posted by: Coralie

June 27, 2013 at 6:25 p.m. ( | suggest removal )

Coralie - it looked like you were saying it was a waste in the comment way up above.

EC - Wages are determined by skill, expertise, and supply of labor (as well as demand for goods), cost of financing, return on equity and many other things.

If we artificially inflate the wages of lower skilled workers, that drives wages of the skill positions up too. It also increases the cost of goods more than the wages due to the total costs involved in employing them.

The classes are not static. These are not the same people decades later. The income level of each quintile has moved up too over the decades. The definition of poverty has changed over time too.

http://www.heritage.org/research/repo...

The republicans are not saying balance the budget in a year. One could also argue the Democrats are unwilling to compromise with the Republicans.

As to the budget? The House has passed one every year.

The Senate voted down Obama's 2012 budget 97-0 and his 2013 budget 99-0. Is the Senate unwilling to compromise with their own party's President. Kind of hard to accuse the republicans of being uncompromising when the democratically controlled senate has not passed one since 2009.

And again, the ideal to double the tax rates on everybody would be catastrophic for the reason I stated above and many more. Doubling the rates on everyone would cause an immediate recession if not depression. I did not say it was impossible to double taxes, I said it would destroy the economy.

I use the word Obamacare because it is shorter than Patient Protection and Affordable Care Act and most people recognize that term more readily than ACA or Patient Protection and Affordable Care Act.

The government is proving every day they can't manage these programs efficiently or manage abuse and fraud. Single payer is bad on so many levels. I am not going to waste my time explaining it.

Posted by: NWAChamps

June 27, 2013 at 9:14 p.m. ( | suggest removal )

Taxing individuals at higher rates can lead to paying more than they earn due to all the other taxes besides federal income tax. It happened in France due to a surcharge tax.

If taxes are at 80% of taxable income, add in self employment and other wage taxes at the federal level (15.2%). Add in State tax for New York plus city tax for Manhattan (10%). Even though you get to deduct some of those from the federal return, deductions begin to phase out and AMT may come into play.

As far as companies go... As taxes rise, the return on equity, cash flow, and book value decrease. They have to raise prices to increase the profit, but they can't always do that.

When the tax on profit becomes too high, the business is no longer profitable enough to operate and provide a return to investors (or owners) to justify the risk. They do not have to take 100% of the profit. They only have to take enough to make it not worth the risk of capital versus other uses of capital. As profit falls, return on equity, and cash flow decreases, the cost of financing rises. The higher debt service requires higher prices, which they may not be able to pass on to the consumer.

Posted by: NWAChamps

June 27, 2013 at 9:50 p.m. ( | suggest removal )

NWAChamps, ou are talking micro economics and th topic is macro economics.

If the percentage of income in each quintile does not remain the same, there is a change in income inequity. No one is saying it should be the same for everyone. But with almost all the growth going to the top 20%, that reduces demand in the economy. It doesn't matter if the individuals in the top 20% are different today from the ones that were there 10 years ago. The top 20% is not spending their increase in income sufficiently to create the demand if the increase in total income was spread over the whole income range more equitably.

Equitable does not mean equally.

Posted by: ecsmith2

June 28, 2013 at 9:22 a.m. ( | suggest removal )

enjoy some reading...

http://www.cato.org/sites/cato.org/fi...

Posted by: NWAChamps

June 28, 2013 at 9:59 a.m. ( | suggest removal )

No one is asking that low wage earners have increases that are inflated for no reason. I think what is being said is that high wage earners also should not have their wages inflated for no reason.

The reasons for changes wages is very subjective at best. And the subjective opinions of the high wage earners are what is mostly used.

Yes, not all Republicans want a balanced budget next year. It would be the radical tea party types in Congress that want that. And in the Senate, with misuse of the filibuster, it only takes one.

It is very hard to accurately tell who is not compromising when compromise does not happen. I see the position of the Democrats changing more than the position of the Republicans. I dislike the power both parties exercise over their members in our government, but in this case, the Republican position not being explained and/or changed seems to make them the biggest culprit.

And the Senate would not pass the house bill either. So what? Where is the discussion to change for compromise? The House bill changes very little from each time they pass it.

And again, I didn't post that doubling what everyone pays in income tax was a serious solution that would have no effect on the economy. I posted it because you said it couldn't be done. It can be done, And it would have no more of an effect, maybe less than cutting spending that much to balance the budget. You dislike posting things ad nauseam, well so do I. Get my point and either agree with it or refute the point. Don't make a different point out of it.

PPACA is even shorter and everyone would know what you are talking about. Well, at least the ones that have not made up their mind that anything involving Obama is evil or corrupt or un-American.

Congress is responsible for how any government program gets setup. the Post Office is setup so the CEO has to make changes in pricing only with the approval of Congress. With Congress full of people that want the USPS to look bad so they can make the claim government programs are inefficient, do you think any rational decisions are made for the USPS?

There is fraud and waste in how reimbursements are setup in our current health care system. The PPACA has in it a way to change from a pay per procedure system to paying for responsibility and quality of care instead. It would take away incentives for waste and fraud that now exist without the government spending large amounts to stop it.

For the most part, fire protection is very similar in what it does for people relative to the health care system, and it is almost always a single payer system. Why does that work and it would not work for the health care system?

Posted by: ecsmith2

June 28, 2013 at 10:13 a.m. ( | suggest removal )

Flat out wrong...

And again, I didn't post that doubling what everyone pays in income tax was a serious solution that would have no effect on the economy. I posted it because you said it couldn't be done. It can be done, And it would have no more of an effect, maybe less than cutting spending that much to balance the budget. You dislike posting things ad nauseam, well so do I. Get my point and either agree with it or refute the point. Don't make a different point out of it.

The rest is just rehashed nonsense.

Posted by: NWAChamps

June 28, 2013 at 10:56 a.m. ( | suggest removal )

Not sure anything from the Cato Institute can be read enjoyable unless its conclusion is what you want to hear.

Seems to be a lot in the paper about income data from the census. Not sure how accurate that whle thing can be taken. I prefer to discuss IRS data. It is easier to manipulate fuzzy census data and throwin lots of side issues that may or may not actually influence the issue. From page 88:

How income is defined turns out to make a huge difference, which is why this paper has repeatedly emphasized the importance of taking accounts of transfers, taxes and benefits to measure disposable income, and also adjusting for changing household size. Burkhauser found that what appears to be only a 3.2 percent rise in real median income of “tax units” from 1979 to 2007 in the Piketty and Saez estimates becomes a 15.2 percent rise for households if transfers are
included, a 23.6 percent rise if the figures are also adjusted for household size, and a 29.3 percent rise if taxes (and refundable tax credits) are taken into account (Pethokoukis: 2).

Posted by: ecsmith2

June 28, 2013 at 11:29 a.m. ( | suggest removal )

Stop bring up nonsense to rehash, then.

The discussion was in income inequity and I am trying to tie it to low demand holding back the economic growth.

Well, Mr. I Have a Degree in Economics, why don't you start our simply and explain what is really holding back the economic growth, if that isn't it.

I understand the whole thing is very complex, but stop throwing everything but the kitchen sink at it and keep your explanations simple. we can go for more detail if the discussion warrants it.

If you can't stay away from other things, explain why a business man would not grow his business, if he was relatively sure about making more money because they are going to raise the personal income tax on him, whether or not he makes his business bigger.

Posted by: ecsmith2

June 28, 2013 at 2:05 p.m. ( | suggest removal )

"The buck stops here."---HST

Posted by: JailBird

June 28, 2013 at 5:01 p.m. ( | suggest removal )

It is highly doubtful that Smitty has a degree in economics, unless it came out of a box of Post Toasties.

No rational individual would start or grow a business in an environment such as under the current regime because (s)he would realize that his business would never grow enough to justify the risk. He realizes that the intent of this administration is to magnify the income gap because it would lead to more dependence on the government. There is a difference between the essential functions of government, such as fire and police protection, and the regulations under Obamacare and the like...programs which have not solved the problem for which it was sold, and in the case of the latest entitlement, is not even intended to address the real problem.

Posted by: IrishMensa

June 28, 2013 at 9:17 p.m. ( | suggest removal )

Well said Irish even though I'm a Hollywood liberal.

Posted by: JailBird

June 28, 2013 at 9:25 p.m. ( | suggest removal )

Moving to some earlier posts (and where do we begin), Free Loader doesn't have to worry about becoming a Christian if he follows Lowell Grisham.

Grisham's writings have shown him to be nothing more than a bush-league version of Ronny Floyd who is more interested in converting Jesus to his form of religion than in actually living as Jesus would have us live.

Grisham trashes people who actually spend their own resources to help the poor while sanctifying those people (mostly his Lord Obama) who see true compassion as taking more funds from those who are fortunate enough to earn them, keeping the lion's share to spread among his friends and allies, and tossing scraps to the poor (whom he seeks to keep dependent).

Grisham has long followed the Obama line on energy development, pushing higher taxes on fuel under the assumption that it would protect the environment, when the only result is to make it more difficult for the poor to pay for food and other basic necessities.

If Grisham were actually sincere in his claim to care about the poor, then he should try something he apparently has no stomach for...using his resources and those of his church to aid the poor instead of demanding even more from those who already pay for the overwhelming share of the aid.

Posted by: IrishMensa

June 28, 2013 at 9:30 p.m. ( | suggest removal )

I have explained what is holding back growth all through this thread.

What you would like to do is correlate one data point as the absolute determinate of the economy while ignoring all the other aspects. It is not that simple.

Posted by: NWAChamps

June 29, 2013 at 6:56 a.m. ( | suggest removal )

IM implies that health care is not a legitimate function of government.
I suppose that would apply as well to Medicare?
It seems that with health care, not only has the U.S. been marching to a different drummer from the rest of the world but that it should continue to do so.
Business Insider:
"12 years ago, the World Health Organization released the World Health Report 2000. Inside the report there was an ambitious task — to rank the world's best healthcare systems.
The results became notorious — the US healthcare system came in 15th in overall performance, and first in overall expenditure per capita. That result meant that its overall ranking was 37th."
http://www.businessinsider.com/best-h...

Posted by: Coralie

June 29, 2013 at 4:47 p.m. ( | suggest removal )

I don't think that IrishMensa implied anything, Coralie, he just came right out and said it.

If the Cross (rude) Church and St. Paul's (no resemblance to the namesake) actually diverted their wealth to the poor pitiful poor then they would not have enough money to pay their false prophet leaders the exorbitant salaries.

It is what it is, two cults claiming to be Christian. For shame! Yes there are wolves among the sheep and the sheep are getting sheared and they love it.

Posted by: JailBird

June 29, 2013 at 5:38 p.m. ( | suggest removal )

The statement that people wont start or grow businesses because they would have to pay more than they do now in taxes is laughable. This is the lowest many of the tax rates have ever been, yet many business started and grew in the past under substantially higher rates.
And is that a real argument that CEO's demand higher salaries because there are few people qualified to do those jobs? I almost fell out of my chair.
As long as jobs and profits continue to be move overseas like they have been over the last 3 decades, the American economy is in trouble.

Posted by: TheHunter

June 30, 2013 at 12:16 a.m. ( | suggest removal )

This is the lowest many of the tax rates have ever been, (in arkansas, and because of the republican changeovers)yet many business started and grew in the past under substantially higher rates. (in a better economy)
and yes that is the real argument. corporate america is just as imminent a threat when the books are a unbalanced as your chair. sustainability my friend thats a word we keep hearing isnt it?

Posted by: Barefoot

June 30, 2013 at 9:36 a.m. ( | suggest removal )

Jesus H. Christ: THE POOR WILL ALWAYS BE AMONG YOU

where do you get these writers? I wish I didnt have to disparage but they are so wonderfully mundane trite and politically correct except they are wrong wrong wrong? lib libby lib lubbin luber land of the lunatics one never knows until one opens their eyes.. all around the world and my state has to be just as bad as everyone says it is.. why dear lord.. why.. just like in your times their is so much educating to do, Father knows if you put us all in a room with the proofs there would be a stoning. I pray for my country. I pray for my nieghbors. I pray for my family. What more can we do...

By Lowell Grisham
Posted: June 23, 2013 at 5 a.m.
Print item
E-mail
The notion it is OK for some people to live in luxurious wealth while others struggle in poverty is not acceptable from a biblical or a Christian perspective. (PAINT PICTURES ON THE WALLS WITH YOUR TOES DEAR AUTHOR FOR ALL WE CARE IT MAKES MORE SENSE AND WILL BE MORE WIDELY REGARDED THAN WHAT YOU WRITE CONCERNING ISSUES YOU MAKE UP, ROVING BANDS OF HOMELESS PEOPLE, ITS A CHOICE. THEY EVEN TALK ABOUT WHERE TO GO NEXT, HAVE THEIR OWN WRITTEN SIGN CODE LANGUAGE PROBABLY GOOD SIR MOST MAKE MORE THAN YOU.) so come down off that cross we've had enough rendering ours to ceaser for somebody else. When the administration stands outside and begs people to sign up for snap and hud. when they furnish pimps with house to ply their trade, allow drug users to purchase liquer and non food items. dont think we have a problem helping people. Just saying. Americans have always been that way. Do not become discouraged by people whose situations are personally preferable to responsibility. Christian much? God gives and God takes away. To those that ask it shall be given ad nauseaum ad infinitum

Posted by: Barefoot

June 30, 2013 at 10:07 a.m. ( | suggest removal )

IrishMensa, if you are so sure there is significant difference between police and fire services and what the PPACA is trying to do with health care, please explain them, and don't just claim they exist. I can't refute your simple unsubstantiated statements.

NWAChamps, I am not trying to put the economy on one absolute point I ma making, but I don't hear you addressing it all, you keep railing about micro economic issues while trying to talk macro economics. I am not saying low demand caused by income inequity is the only issue with the economy. If we can discuss this point, we can move on to others you feel are significant.

Posted by: ecsmith2

June 30, 2013 at 4:53 p.m. ( | suggest removal )

Barefoot seems to be writing free association style but I have to say, he's not as good at it as James Joyce was.
And as for logical argument...

Posted by: Coralie

July 1, 2013 at 1:07 p.m. ( | suggest removal )

He is better than James Joyce, but not as good as Edward Abbey. Good job Barefoot!

Posted by: JailBird

July 1, 2013 at 10:16 p.m. ( | suggest removal )

OK Money, what have you read by James Joyce?

Posted by: Coralie

July 3, 2013 at 1:48 p.m. ( | suggest removal )

Coralie what have you contributed of any note? Is this "it" in the main? General discontent, disbelief, ridicule and harassment of any comments contrary to your own. Articles without hint at a belief system that is not conformist, socialist and/or full of anti-cultural rhetoric are sure to receive notice. The Cav is here. You'll need to up your game to get on my level.. I think you and everyone else knows it. Your toe to toe prosaic style is every bit as limp and impotent as you claim mine. Common liberal populist. When even failing fails. Comedy. It's always funny when you're always a joke.

Posted by: Barefoot

July 3, 2013 at 7:17 p.m. ( | suggest removal )

Barefoot, you say there is a lot of things wrong, but you seem to leave out the details so that we can actually tell you might be correct.

Got anything substantial to tell us other than your wild ramblings?

Anyone trying to "up game" to your level will need a ladder, but it will be used to put it into the pit to go down to your level, not up.

Posted by: ecsmith2

July 4, 2013 at 10:04 a.m. ( | suggest removal )

Finnegans Wake I started, but got sick and used it for toilet paper.
"Fennegans Wake is a 628-page collection of erudite gibberish indistinguishable to most people from the familiar word salad produced by hebephrenic patients on the back wards of any state hospital"---Hervey Cleckley
That answer your question, Coralie?

Posted by: JailBird

July 4, 2013 at 4:45 p.m. ( | suggest removal )

I read Ulysses (for a class) but when the professor said that Finnegan's Wake was so complex that it would take a lifetime to understand it, I didn't try.
I had other things to do for a lifetime.
However I don't need to read word salad on a blog, either.
Thankfully, barefoot lately is making his posts somewhat shorter and more coherent, even if they are insulting.

Posted by: Coralie

July 6, 2013 at 1:16 p.m. ( | suggest removal )

bah blah blah "ditto" coraliar

Posted by: Barefoot

July 6, 2013 at 8:13 p.m. ( | suggest removal )

ece -Nonpareil-

Posted by: Barefoot

July 6, 2013 at 8:14 p.m. ( | suggest removal )

It's pretty simple. They wouldn't be poor in the first place if they had a scrap of intestinal fortitude and personal responsibililty.

Posted by: jeffieboy

July 15, 2013 at 6:32 p.m. ( | suggest removal )