Brad and Britt Are Back At It


The guys in Greensboro are back at it.

Today they’re discussing the tax situation as we get closer and closer to December 31st.  That’s the date, of course, that the “Bush Tax Cuts” are set to expire.

Everyone I know of agrees that we need to make permanent those cuts to folks making less than $250,000 a year.  The question is what to do with the folks making more than that.

The rich.

A couple of weeks ago I posted on this very same topic.  I hinted at it then, I’ll ask it straight up now:

Why are people dead set on raising taxes on “the rich”?

It seems to me there can only be two answers:

  1. Because we need to raise more revenue in order to reduce the deficit.
  2. Because it’s only fair that they pay their “share”.

Let’s take the second one first.

WTF are you talking about?

What is “fair share”?  What does it mean that someone should pay their fair share.  Again, if left to me, it can only mean two things:

  1. It would be fair if two people paid the same dollar amount.
  2. It would be fair if two people paid the same percentage amount.

It does NOT strike me as fair that two people not only pay different dollar amounts but that they pay different percentage amounts as well.

Anyway, no one asked me and it IS, in fact, the case that people both pay more dollars and more of a percent.

So, in 1987, the top 1% of income earners paid 24.8 percent of the Federal Income Tax.  In 2007, that top 1% paid 40.4 percent of the Federal Income Tax.    That’s a 163% increase in 20 years.  That seems like a lot to me.

Okay, so we see that the rich are already paying far FAR more than their fair share, so it can’t be #2.

Let’s look at #1; We need to raise revenue to reduce our deficit.

Again, looking at this chart:

We clearly see that no matter WHERE the marginal rate is at, the revenue brought into the US coffers is never above 20% of GDP.  EVER.

Raise the rates all you want.  Go as high as 90%; heck, even go higher.  It won’t matter, the revenue brought in won’t exceed 20% of GDP.  So, if you wanna raise revenues, you need to do it by raising the GDP.

And to raise the GDP, you do NOT raise taxes.

So, again, Brad and Britt, “Why do you think we need to raise taxes on the rich?”

Advertisements
2 comments
  1. Henry said:

    Two points:
    1) I believe that my Federal taxes are too low. There are costs to living in this great country, and I know that my tax dollars are not enough to pay for my “seat” in The United States of America.

    2) People need to study up on the “Laffer Curve” which states that…
    A tax rate of zero percent brings in zero tax dollars. A tax rate of 100 percent also brings in zero dollars because people stop working. Why work if we are required to send all of our earnings to Uncle Sam? Some place between zero and 100 is the sweet spot where revenue is the highest.

    If average folks like us that make far less than the rich at least looked at the concept of the Laffer Curve, they would see that there is a point of diminishing returns, and simply increasing tax rates does not guaranty additional tax revenue. I do not know what a fair rate is for the rich, but I do know that they are already subsidizing my place here since I am not paying enough.

    • pino said:

      2) People need to study up on the “Laffer Curve” which states that…
      A tax rate of zero percent brings in zero tax dollars. A tax rate of 100 percent also brings in zero dollars because people stop working.

      Any debate based on the Laffer Curve wins points with me!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: