Monday, April 18, 2011
Taxing the 'Rich' to Close the Deficit
To collect the additional revenue necessary to close the 2010 deficit, income tax rates would have to have been considerably higher than their current levels. Without altering other aspects of the tax code, if Congress collected the extra revenue by simply hiking each income bracket based on its portion of current tax collections, every tax rate would need to more than double.
President Obama has long said that he would not raise income taxes on any family earning less than $250,000 a year. That roughly corresponds to the top two income tax brackets. If, instead of raising taxes at all income levels, Congress collected it from just those making $250,000 or more per year, their rates would have to rise to levels that are not even possible. The top two rates would need to rise to 132% and 142%.
Of course, it is impossible to tax at a rate over 100%. Doing so would require confiscating savings, investment, or even other assets. Moreover, as a practical matter, it is impossible to get even close to 100% and still raise revenue because businesses, workers, and investors would simply stop producing, working, and investing as the government came close to confiscating almost every additional dollar they earned. Much of their economic activity would be driven underground.
Two quick points
1. My comments did not express disagreement with the Heritage Foundation's analysis. It simply said that they were responding to a position that no one had taken, So, given the political philosophy of the Heritage Foundation I think it is reasonable to assume that their intentions were to push a political agenda rather than a serious tax analysis.
2. As far as the "credible research" done by the Heritage Foundation I would merely point out that soon after they published their "analysis" of the Ryan Proposal the unemployment projections, unreal to begin with, disappeared down the Orwellian memory hole.
Just who exactly is the Heritage Foundation responding to with this analysis?
Posted by: Sid (real one) | Apr 18, 2011 3:59:28 PM
Sid (real one) is the omnipotent one, knowing the true intentions of the Heritage Foundation and decider of what budgetary proposals are serious and credible. There is no need for anyone to believe charts, graphs, facts, research, or the like, only what his or the NY Times opinion pieces conclusively state in a smarmy way. The Heritage Foundation is full of evil-doers who have board meetings every Tuesday to talk about how best to “scare” the American people through “political spin.”
Just kidding, Sid. Just my attempt at humor via sarcasm on Monday, through the wonderful use of ad hominem attacks. In all seriousness though, at the very least, you need to come to grips that the Heritage Foundation’s intentions are to provide credible research to a discussion of great importance to our country. Although you disagree with their conservative point-of-view, it does not make the content of their article inaccurate, off-point, or unreliable. Please consult the following for future reference: http://www.don-lindsay-archive.org/skeptic/arguments.html
Thanks in advance,
Posted by: Management | Apr 18, 2011 2:02:24 PM
No serious commentator has proposed, or even suggested that the budget deficit can be closed by taxes alone or taxes on the top earners. The Heritage study is simply an exercise in political spin, its purpose is to apparently scare those who are not sufficiently informed to see through political hype.
Regardless of whether or not one agrees with the President, he is proposing budget cuts that are far greater than tax increases to reduce the deficit. This makes his proposal serious and credible, which I am sure angers the Heritage Foundation who support the Ryan Proposal, which is neither serious nor credible, as it proposes spending cuts, but uses much of that additional savings for tax decreases on the wealthiest sector as policy to reduce the deficit.
Posted by: Sid (real one) | Apr 18, 2011 10:40:39 AM
Yes, it is all a conspiracy. President Obama should appoint you as Conspiracy Czar to investigate.
Again, the Heritage Foundation intentions are to "provide credible research to a discussion of great importance to our country." There is no need for "responding" to anyone. They are adding information, from a conservative point of view, to enhance the current dialogue. If you are hell-bent on requiring non-profit research organizations to only provide information in direct responses to others, go ahead and flip on a television. Actually, on second thought, don't turn on the television, for you will just further regurgitate opinion as if it were fact.
Have a great Tuesday!
P.S. If you would like to continue this dialogue, I suggest you schedule a doctor's appointment to have your blood pressure checked, because that is essentially where this is headed.
Posted by: Management | Apr 19, 2011 9:13:32 AM