Should the US have Universal Healthcare

[Philistine]

you are still not talking about payroll taxes. (social security and medicade) this rate is 15.9%, and it only applies to the first 61,000 you make a year. so if you make 313,000 per year (top 1%) you pay $9699 per year. that is about .03% is that fair?

While conceptually, you're right, your numbers are off.

The cap for SS in 2005 is $90,000 (it was $87,900 in 2004).

The rate for both SS and medicare is 7.65 % for employees and 15.30 % if you are self-employed. (The employer pays an identical amount for those who are not self-employed).

Medicare (which is 1.45% of the 7.65%) does not have a cap.

--Philistine

[jessicasimpson]

as a matter of fact, the cost for everything goes up every year. but you factored that out of your original statement by taking out inflation.

yes, sometimes the cost of living goes up faster than inflation. so then they sit in their houses that cost more and just whine about it? come on. why should we pay for someone who refuses to move when they can't afford to live somewhere?

some people are poor, and some are unlucky. but it's not our job to make them unpoor or more lucky.

no, you do not have to help these people that are less fortunate than you, but it is the right thing to do. in the fifties, the federal goverment made huge investments in things like public education, and many other federal aid programs like social security,GI Bill. the result? america saw it greatest economic growth. everyone was doing better, our workforce was smarter, more efficiant, productivity went through the roof, crime rates fell, less poverty, more people owned houses without debt. whenever the middle class is the strongest, so is the ecconomy. when you have rich and poor, with a small middle class, you get economic downturn

[jeff]

You miss my point. I'm not talking about the relative proportion of income that winds up going to the tax man. I'm talking about relative share of the total tax revenue for the nation.

And with respect to that, the data is precisely what I stated.

You're right, I did miss your point. I don't see what the relevance is, though. If a particular population segment makes 80% of the money (I'm just using arbitrary numbers here) then why should they pay less 80% of the tax. If this population segment paid 52% of the tax they would still be the majority tax payer, but not proportionate to their earnings. That would be regressive taxation, which even the flat tax people don't suggest, and even those happy with today's status quo don't openly suggest - even though that's the effect.

[jeff]

Rather than have all of us retype the same arguments as previously used, please see the thread "The US economy and politics", just a little over a year old (didn't this seem familiar to anyone but myself? ) and especially my magnum opus on page 5 (8/13/2004, 11:21am) which enumerates the issues.

Since SS caps have come up again its worth reminding everyone that the reason it is a regressive tax isn't precisely because SS pay-in is capped (since benefits pay out is capped too), but because SS has been used to pay into general funds. What this means is that a form of taxation that is capped at $90K (as Philistine points out) that is clipped to a tiny fraction of income for the wealthy, but remains the standard % for the middle class and working poor. So it's not what Larrison reasonably pointed out based on capped benefits, rather that a component of paying the countries general operational costs comes from a tax that is meaningful to most of us, and rounding error if you're rich. This permits lowering the top marginal rates on adjusted taxable income, which benefits those who have more of it. Call this 'reverse robin hood'

If this were Slashdot, this thread would be moderated down as 'redundant'. But, that's only because we haven't thought of something new to argue about.

[Amadeus]

no, you do not have to help these people that are less fortunate than you, but it is the right thing to do. in the fifties, the federal goverment made huge investments in things like public education, and many other federal aid programs like social security,GI Bill. the result? america saw it greatest economic growth. everyone was doing better, our workforce was smarter, more efficiant, productivity went through the roof, crime rates fell, less poverty, more people owned houses without debt. whenever the middle class is the strongest, so is the ecconomy. when you have rich and poor, with a small middle class, you get economic downturn

again, i point to communism as an example of how if you help the poor too much, you wind up with everyone being poor.

also, universal healthcare, as has been pointed out, would not be all that beneficial to the middle class, as their taxes would go through the roof.

and i would argue that the economy of the fifties was not caused by government spending, but rather by a boom in the economy left over from the mobilization of our industries for WW2, followed by the return of working men from overseas.

[Inquartata]

Congressmen, who know full well that for every curmudgeon there is a thousand voters who think that they are entitled to the best medical care that money can buy.

And yet, we don't HAVE it, do we?

Could it be that your assessment of the magnitude of support among voters for this sort of boondoggle is off base?

Now, if you search out all the other curmudgeons and the lot of you move to some small you could concievably become a voting majority, and send a representative to Washington DC who espouses your views. He would in almost all cases be voted down anyway.

The bulk of our representatives already DO espouse my views. At least on the topic of socialized medicine. You may have missed the fact that we don't have that over here...and are not about to get it, by all indications. It hasn't even gotten serious consideraion since the first Clinton years...when it was soundly defeated and roundly excoriated as a Bad Idea.

So there.

Don´t try to ask for, or castigate, people for their "why" opinions. It simply does not work - they will still vote for what they voted for before, just more angry at you. You gain nothing.

Sometimes lost causes are the best. And battles for their own sake can still be invigorating.

Let's face it: no one convinces anyone of anything substantial by argument. Should we then institute a Rule of silence, and become monks?

Hope springs eternal. I still hope to hear some sort of rational justification for these positions, as opposed to glittering moralistic generalities...

[Inquartata]

Still, 1% of taxpayers are paying 37% of the nation's income taxes.

33% of our 128 million "taxpayers" pay zero taxes.

There's another 15 million who don't file and thus pay zero taxes. Which raises the proportion to almost 45% of the taxpayers paying zero income tax.

No matter how you slice it, the top earners pay way more than their share. And a huge proportion of the population doesn't pay their share at all.

And if one considers the underground economy---criminal enterprises, tips not reported and other under-the-counter payments, barter and so forth, the amount of taxes not paid by the lower income tiers probably equal or exceed those not paid by means of fancy didges by the upper tiers.

But one never hears about this angle, because of the First Commandment of Political Correctness: Thou shalt only criticize the rich, never the poor.

[Inquartata]

no, you do not have to help these people that are less fortunate than you, but it is the right thing to do.

Still want to know: why?

in the fifties, the federal goverment made huge investments in things like public education, and many other federal aid programs like social security,GI Bill. the result? america saw it greatest economic growth.

And your evidence that this was causation rather than merely correlation?

[Epee_Pox]

And if one considers the underground economy---criminal enterprises, tips not reported and other under-the-counter payments, barter and so forth, the amount of taxes not paid by the lower income tiers probably equal or exceed those not paid by means of fancy didges by the upper tiers.

Estimates believed to be reliable (though of course impossible to pin down by their nature) hover within a standard deviation around 1.5 trillion dollars per year in unreported "shadow economy" income.

That's right, one and a half TRILLION per year.

That's a whole lot more people not paying their fair share. That cash-only bar down the street, the contractor erecting that scaffold over there, that intricate bribery/extortion scheme run by your neighborhood mobster/labor union, the sports book your cousin's running.... none of that income is being reported.

And a vanishingly small amount of that shadow economy involves people in the upper income levels.

So yeah, you're right Inq.

[jessicasimpson]

again, i point to communism as an example of how if you help the poor too much, you wind up with everyone being poor.

also, universal healthcare, as has been pointed out, would not be all that beneficial to the middle class, as their taxes would go through the roof.

and i would argue that the economy of the fifties was not caused by government spending, but rather by a boom in the economy left over from the mobilization of our industries for WW2, followed by the return of working men from overseas.

ok this my seem way off topic at first but prease bear with me
in the 1930's only about 10% of rural areas had electicity. the goverment thought it was it's job to supply electicity to rural areas, the idea that every one should have access to electicity. when the rural electification act was proposed, people fought it with everything they had. thay said things like
*why should my tax dollers be used to help
*that will lead to socialism
*farmers are to poor to pay for electicity, why should we help
*the goverment should not compete with private industry
*places like iowa and idaho will only ever be farm land anyway
well the rural electification act was passed in 1935. i don't think i need to describe what a fantastic succes it was. none of the horrible effects thay all it's opponenets predicted took a lasting hold.
my point is i think the goverment can make it work without distroying our country. there are so many succesful goverment programs that people fought against useing the same logic you are useing. the clean water act of 72', ban on leaded gasoline in 75',
North Carolina Senator Jessie Helms Stood up on the senate floor and said, and i quote, "Aids is a Desiese gay people deserve, and not one penny of tax payers money should be spent on it"

[jessicasimpson]

Still want to know: why?

if you don't know why helping people less fortunate then you is the right thing to do, nothing i say is going to change your mind. i am not trying to be rude, or to insult you personaly, in fact i Appoligize for the militia comment i made earlier.

[JEC]

These figures are incomplete, and misleading without context.

..... Let's not misuse statistics to give the impression that the wealthy pay more than their share of tax, when in fact they pay far less.

Jeff,
I agree that income tax should not be the only measure of how much the top X % pay in taxes. However, if your income is under 15K or 30K, you still end up paying less taxes that those who were a the top. Let's not abuse those statistics. There are absolute money contributions that are made by each earning group. The top continue to pay more, even when they are buying themselves a yacht in Bermuda, they placed it in the states for convenience, and pay maintenance, salaries and parts.
JEC

[jeff]

No doubt, JEC. Obviously each income group makes different contributions, but a better comparison would be against the middle class, who are assuming a larger share of the tax burden - especially with AMT - rather than the poorest. By the way, are you suggesting that the Earned Income Tax Credit law be ended? (hailed by Reagan as the best way to get welfare recipients off the dole and onto the payroll).

Overall, are you suggesting that taxation should be regressive?

The reference to Bermuda is apt: one of the ways that corporations and wealthy individuals get to avoid taxation is to move their tax obligations to Bermuda and other offshore havens. This is another method not available to 'just folks'.

[JEC]

The question that you ask is proportionally how wealth should be taxed? I actually support Forbes proposal of a flat income tax. It diminishes the loopholes at the top and it is more fair for middle America.

[jeff]

Yes, that is the question I asked. I have mixed feelings about it: I'd like taxation to be mildly progressive and simple; the tax policy we have now is complex and loophole infested, with the effect that it's regressive to the benefit of those at the top of the pyramid.

Good threadjack...

[jessicasimpson]

The question that you ask is proportionally how wealth should be taxed? I actually support Forbes proposal of a flat income tax. It diminishes the loopholes at the top and it is more fair for middle America.

i believe, and could be way off on this, but i heard the flat tax will do away with capital gains tax. that huge amount would have to be made up somewhere. with no capitol gains tax, the children of the mega wealthy could live their entire lives with out paying any taxes other than sales tax.(paris hilton)

[JEC]

There are ways of incorporating ANY type of NEW UNTAXED income into a flat tax.

[jeff]

Independent of flat tax' merits or lack thereof, there would be tremendous transition issues:

- impact on charitable contributions if they are no longer deductible
- ditto for mortgage interest, the largest investment for most people and largest deduction
- deductions for dependants, health care etc.

Taxpayers have structured their finances based on existing tax law - a changeover could be terrifically disruptive, even if the intended system is both revenue neutral and fair.

Reminds me: Inq, Epee_Pox: Do you have any citations for the numbers you were positing? It's interesting speculation, but it would be nice to see some substantiation for such sums. It misses the point anyway: the rich don't need cash payments to avoid taxation when they have 'perfectly legal' ways to avoid taxation on the wholesale level. It sounds like a "lucky ducky" analysis to say 'look at how the underclass benefits by their underground economy' when tax law helps the wealthiest far more. 'The law in its infinite wisdom lets both rich and poor sleep under bridges' is the old saying, but the rich for some reason don't avail themselves of the opportunity.

[gojujay]

Johnston goes on to say, "when all federal taxes are considered - from those on gasoline and beer to Social Security taxes as well as income and estate taxes - the top 1 percent's share drops to about a fourth of the total tax bill". This is substantiated in the book and in the references cited.

Why, that sounds like a consumption tax. Hmmm....

Further (now on page 13): "Politicians ... talk about how the top 1 percent earns 20.8 percent of the income and pays 37.4 percent of the income tax and suggest the burden is excessive. Seldom mentioned is that for many at the top the primary object is to take income in forms that ... do not have to be reported". Preceding text gave an example of one of many ways that the rich can shield income from taxation, in ways that are essentially unavailable to those enough who derive our income from payroll checks. The example showed how Bill Gates could have made a "charitable contribution" of Microsoft stock, sell it through a charitable trust, derive 96% of its cash value tax free, and then dissolve the trust. Many, many methods are cited in the book that permit large property holders to avoid taxation.

Just like "the poor" look for sale prices on what they buy; they're trying to keep as much of their money as possible. Why should the "rich" give away their money? Noblese oblige?

[jeff]

Why, that sounds like a consumption tax. Hmmm....

Only the taxes on gas and alcohol, certainly not the (involuntary) SS and estate taxes. And your point?

Just like "the poor" look for sale prices on what they buy; they're trying to keep as much of their money as possible. Why should the "rich" give away their money? Noblese oblige?

If I read you correctly, you're saying that both rich and poor take advantage of money savings opportunities. True as far as it goes, so what? These are completely different situations: A sale is a deliberate business choice by a vendor to attract sales by lowering prices and harms no one. The tax situation is an example where one population segment exploits loopholes in the tax code (or uses their power and influence to create them) to their benefit and to the detriment of others. So, what are you saying - that people will act in their self-interest? What does that have to do with what constitutes equitable tax policy?

BTW: Today's WSJ, page 2, has an interesting article on how flat tax is becoming a hotter topic. Adopted in Eastern Europe - which has a disfunctional economic history (duh!), and now a hot topic in the recent German elections.

The article mentions how flat taxation was a hotter topic in the US when Steve Forbes was running for office than it is now, and that there was a tug of war between lowering the flat tax percentage enough to make it attractive and having enough revenue to run the government. It says that the flat tax rate was "too high", and that's why it didn't go anywhere (don't blame me, blame the Wall Street Journal - that's what they said)