Consider all the people who do not work and who collect a government check. People who are old or on disability or welfare or criminals who sit in prisons and really mentally ill people who sit in care facilities or who collect unemployment. They might not add up to 47 percent. But still others get stuff from the government even as they work some. How far off is Romney with the 47% number?
There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax.
There's a negative income tax for low earners. So a lot of people get money from the government, a substantial portion of the population.
What I'd like to see quantified: what percentage of the population are net taxpayers? In other words, what percentage of the population pay more in taxes than they get in subsidized housing, foodstamps, medical care, unemployment, old age benefits, and other stuff paid for by the government? Is it even half the population?
Whether Romney's 47% number is accurate he's closer to the truth than Obama's liberal supporters in the media want to admit.
It used to be that you had to pay for those with zero or negative marginal productivity thru taxes and by being victims of crime. But you could still pursue your own choice of lifestyle. I think this freedom to pursue a safe middle class suburban lifestyle is going to come under increasing pressure in the future. Stanley Kurtz argues in a a new book, Spreading the Wealth: How Obama is Robbing the Suburbs to Pay for the Cities, that Barack Obama wants to wage war against independent suburbs in his second term and he's already pursuing policies to rob suburbanites to support city dwellers.
President Obama is not a fan of America’s suburbs. Indeed, he intends to abolish them. With suburban voters set to be the swing constituency of the 2012 election, the administration’s plans for this segment of the electorate deserve scrutiny. Obama is a longtime supporter of “regionalism,” the idea that the suburbs should be folded into the cities, merging schools, housing, transportation, and above all taxation. To this end, the president has already put programs in place designed to push the country toward a sweeping social transformation in a possible second term. The goal: income equalization via a massive redistribution of suburban tax money to the cities.
Unfortunately, the upper classes are so wealthy and insulated that they do not feel any common bond to the middle class. So the elites aren't going to oppose soaking the middle class for the benefit of lower classes.
One approach is to force suburban residents into densely packed cities by blocking development on the outskirts of metropolitan areas, and by discouraging driving with a blizzard of taxes, fees, and regulations. Step two is to move the poor out of cities by imposing low-income-housing quotas on development in middle-class suburbs. Step three is to export the controversial “regional tax-base sharing” scheme currently in place in the Minneapolis–St. Paul area to the rest of the country. Under this program, a portion of suburban tax money flows into a common regional pot, which is then effectively redistributed to urban, and a few less well-off “inner-ring” suburban, municipalities.
Technological trends are gradually wiping out the utility of having low skilled workers living in the same region as high skilled workers. Not many decades ago factories had engineers, managers, and blue collar workers of various skill levels. People of various gradations of intellectual ability functioned in a mutually beneficial relationship. But today the managers, analysts, marketers, and engineers living in the suburbs do not have economic relationships with poor folks living in decayed cities. Rather, the engineers and managers are tending increasingly automated factories where the number of highly skilled workers hasn't dropped while the number of assembly line workers has plummeted. Other managers and engineers are managing relationships with contract manufacturing plants in Asia. Software engineers are operating portions of factories remotely (I almost became involved with such a team right before the 2008 financial meltdown caused the project to get canceled).
I saw a chart (and I can't remember where) recently of manufacturing employment by skill category. Manufacturing is employing more highly skilled workers and fewer low skilled workers. Anyone know where that chart came from? I'm guessing that manufacturers are employing a lot more machine learning specialists.
There is still some economic demand for less skilled workers in proximity to the more highly skilled. Janitorial work, food services, road repair, gardening, and a number of other service occupations still employ large numbers of workers below 100 IQ. But advances in robotics will cut into the need for humans to do most of that work, leading to a large unemployable lower class. When that happens if the market is left to its own devices we will see the rise of a city and its suburbs which contain very few people below 100 IQ. Whole regions will specialize in highly skilled workers who still have economic value. Other regions will house the unemployable.
Came a Congressional Budget Office web page with some charts about who pays taxes. One of them is especially interesting because it goes to the question of whether the top earners are paying more or less in taxes than they used to. From 2001 projected thru 2014 under current tax law the top 20% have consistently paid over 60% of all US federal taxes. There's been a slight shift of a couple of percentage points from the top 20% to the other groups.
|Share of Total Federal Tax Liabilities|
|Top 10 Percent||50.0||48.5||48.5||47.6||48.8||48.7||48.5||48.3||48.6||48.5||47.9||47.7||47.6||47.4|
|Top 5 Percent||38.5||36.9||36.9||35.9||37.3||37.3||37.0||36.7||37.1||36.9||36.6||36.5||36.3||36.1|
|Top 1 Percent||22.7||21.2||21.1||20.1||21.5||21.3||21.1||20.7||21.1||20.9||21.2||21.0||20.8||20.7|
Think of it this way: How much would taxes have to increase on the top 20% to balance the budget? For 2012 the projection is for $2.627 trillion total revenue, $3.729 trillion total expenditures, and $1.01 trillion deficit (and I think it will be worse than that due to Peak Oil Recession II). Well, if the top 20% really pay 63.1% of total federal taxes (see table above 2012 column) then they are paying 0.631*$2.637 trillion or $1.66 trillion. Their total taxes paid would have to rise about 66% in order to close the federal budget deficit.
The page has other tables of interest. Note that since the top earners have experienced much larger increases in compensation their tax burdens have declined as a percentage of income.
The fiscal health of the United States government depends very heavily on the earning power of a small fraction of the population. The bottom 40% pay only 7% of total federal taxes. As the size of the lower earning sub-population grows faster than the higher earning sub-population will the burden on the top producers grow to support the lower earners and zero earners?
What I'd like to know: What fraction of the American population are net taxpayers? In other words, what fraction of the population gives the government more in money than it gets in services, money, and other support? I suspect the net taxpayer portion of the population is a shrinking fraction of the whole.
The U.S. Senate yesterday approved spending $4.6 billion to settle two lawsuits: one by black farmers who alleged racial discrimination by government lenders and the other by 300,000 American Indians who said they had been cheated out of land royalties dating to 1887.
Passage of the measure, by voice vote, unblocks a legislative logjam that has thwarted payouts, negotiated by the Obama administration, of $1.15 billion to the black farmers and $3.4 billion to the American Indians.
A few thoughts: First, the US government is deep in the hole and should not go around finding more reasons to pay out billions of dollars. Second, farmer aid is pretty much theft from the rest of us in the first place. If black farmers are complaining they didn't get all the legal opportunities to rip us off (and count me skeptical) that white farmers got then this seems good to me. We got a lesser injustice done to us as taxpayers because not all farmers were able to rip us off. That's the thing about the welfare state: Obstacles to getting access tos largesse are not injustices done to the denied seekers. So why should Congress reward people who failed to rip us off?
Then there are the Amerinds from the 19th century: I think there should be a statute of limitations on wrongs that kicks in after a century if not sooner. None of the people alive today were involved in what happened in the 19th century.
The country may have started its long haul back to economic recovery--if recent news that consumer spending increased slightly in January is any indication. But even so, most Americans still aren't ready to brag about their paychecks.
Except, perhaps, in Loudoun County, Va., where median household incomes are higher than anywhere else in the country. This affluent suburb of Washington, D.C., where families take home a median $110,643 annually, tops our list of America's 25 richest counties.
Many of America's wealthiest counties are centered around Washington DC.
Like Loudoun, a number of the country's wealthiest households are tightly concentrated in counties around the nation's capital. Six of the richest counties lie on the outskirts of Washington: Fairfax County, Va., Arlington County, Va., Stafford County, Va., Prince William County, Va., Charles County, Md., and Alexandria City, Va.
I would prefer that our wealth was concentrated around more wealth-producing areas of the country. But I'm old fashioned.
Friday, two freshmen representatives -- Dina Titus, from suburban Las Vegas, and Colorado's Jared Polis, representing Boulder, Vail and some of the tonier suburbs of Denver -- joined Republicans to vote against Mr. Obama's top-priority health-care overhaul when it faced a vote in their House Education and Labor Committee. One reason was a one-percentage point-surtax on couples earning between $350,000 and $500,000 -- gradually increasing to 5.4 percentage points on earnings more than $1 million -- to pay for it.
The rich have thoroughly thrown in their lots with the poor. Not only does the upper class support the importation of a large and growing Hispanic lower class but the rich have even decided to vote for the Democrats.
Of the 25 richest districts, 14 are represented by Democrats, according to Congressional Quarterly. In 1995, Democrats represented just five of those districts.
Between the growing lower class minorities, the upper class and the SWPLs the Democrats dominate demographically. The upper class seem like the least stable part of this coalition. Will the wealthy people in the Democratic Party submit meekly to marginal tax rates over 50%? If so, why?
Remember when the United States had very high marginal tax rates? Then starting with Carter and Reagan the top rates were lowered to the point where taxes weren't severely confiscatory. Well, those confiscatory days are coming back. If Obama succeeds in sticking it to higher earners in order to fund medical spending for poor people then in lots more states the top income tax rate will go above 50%.
Washington, DC, July 10, 2009 - As Congress considers a surtax on the nation's top earners to fund an expansion in federal health care, a new Tax Foundation analysis shows that 33 states would see top tax rates exceed 50%.
One new funding proposal being floated by the House Ways and Means Committee is a 4% surtax levied on couples with adjusted gross incomes (AGI) over $250,000 and individuals earning more than $200,000.
"Combining top federal and state rates, and factoring in all deductions, the government would be taking over half of every additional dollar from high-income taxpayers in two-thirds of the states under this latest funding scheme," Tax Foundation President Scott Hodge said. "In fact, even in the seven states with no income tax, the lowest top tax rate would be about 46%."
Tax Foundation Fiscal Fact No. 176, "Top Effective Marginal Rates Under a 4 Percent Health Care Surtax by State," may be found online at http://www.taxfoundation.org/publications/show/24848.html.
The hardest-hit states would be Hawaii (55.8%), Oregon (55.8%), New Jersey (55.6%), California (55.4%), Rhode Island (54.8%), Vermont (54.4%), New York (54.00%), Maine (53.6%), Minnesota (53.0%), and Idaho (52.9%). Washington, DC, and New York City would see their top effective marginal rates rise to 53.6% and 57.3%, respectively. The effective marginal tax rate takes into consideration deductions and adjustments in order to present a truer measure of an individual's rate.
To me there's something morally outrageous for the government to take half of what you earned. Whatever did the government do to deserve taking more than half? This 4% surtax will kick in above $200k for single filers.
9 states still have no income tax. So the top federal rate of 45.9% will be the top total rate for them.
Only 17 states would see their top tax rates remain under 50%, with 45.9% being the lowest in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
High earners who do not want to pay over half of their marginal dollar in taxes should think about moving to places where you will still be able to keep half of what you earn. Also, write to your elected representatives and strongly suggest that the Leviathan should be cut down rather than expanded.
Washington, DC, June 25, 2009 - New analysis of President Obama's Budget finds that he is targeting the nation's highest earners for greater income redistributions. By 2012, the federal government is scheduled to be redistributing an extra $79 billion from the top-earning 5 percent of American families, and $71 billion of that will be paid by the top-earning 1 percent of families.
"That's an additional $64,000 per family redistributed from the top-earning 1 percent," said the Tax Foundation's president Scott Hodge, "on top of the already substantial $368,000 that would have been redistributed from each family even without President Obama's new policies."
"Part of that change is higher taxes, and part is lower spending on items that benefit high-income people," said the study's lead author, Tax Foundation Senior Economist Gerald Prante.
The new study is No. 168 in the Tax Foundation Special Report series, titled, "How Much Does President Obama's Budget Redistribute Income?" by Prante and his co-author, Chief Economist Patrick Fleenor, and is available online at www.taxfoundation.org/publications/show/24783.html.
Consider the longer run context of a 4% income surtax added just for medical spending for non-retired. The US federal government is running a huge deficit that looks set to continue for years to come. That deficit creates pressure for additional tax increases to balance the budget. But if medical spending is already going to raise the top marginal tax rate above 50% in most states what will happen to that rate once taxes are increased to balance the budget? The marginal return on tax increases will go negative. As a consequence, beware of value-added tax as a way to get even more revenue once income taxes run out of steam.
While the British government abandoned (or at least temporarily shelved) secret plans to raise their VAT sales tax from 17.5% to 18.5% it is going forward with a big tax increase in higher income workers.
The Treasury is expecting to recoup £1.6 billion a year from increasing the top rate of income tax from 40 per cent to 45 per cent for workers earning more than £150,000 and a further £1.6 billion a year from scrapping the tax-free personal allowance for higher earners.
However, the influential Institute for Fiscal Studies (IFS) said that the 45 per cent rate would raise “approximately nothing”. Higher earners could avoid paying the tax by contributing more into their pension plans, giving more to charity or leaving the country.
Those earning more than £150,000 will face an effective tax rate of nearly 60 per cent once national insurance and other taxes such as VAT and fuel duty are taken into consideration, the IFS said, which would prompt those with high incomes to seek ways to avoid paying the tax.
Some of those workers have to work in Britain to make their higher income salaries. But not all of them do. What I'm looking for: the emergence of countries that high income mobile people migrate to in order to escape home country taxes. We see that some already. But will some countries become specialists in attracting these sorts of workers? Some low tax locales are not attractive for other reasons such as weather, lack of infrastructure, remote location for business trips, immigration rules, political instability, political repression, and other downsides.
Not all countries with high marginal tax rates will generate these ex-pats. The US government taxes Americans living abroad almost the same as Americans at home. One has to give up US citizenship to escape from the reach of the US Internal Revenue Service (and even then there's a tax as you depart). But some countries do not impose income taxes on their ex-pats. It is my understanding that Britain is one of the countries that do not tax citizens working abroad. Anyone know if that is correct?
The massive federal deficit which George W. Bush, a spendthrift Congress, a financial crisis, and recession leave Barack Obama is not enough to restrain his spending plans. New health care entitlements are part of Obama's plan.
Mr. Obama repeated on Saturday that his first priority would be an economic recovery program to get the nation’s business system back on track and people back to work. But advisers said the question was whether they could tackle health care, climate change and energy independence at once or needed to stagger these initiatives over time.
The debate between a big-bang strategy of pressing aggressively on multiple fronts versus a more pragmatic, step-by-step approach has flavored the discussion among Mr. Obama’s transition advisers for months, even before his election. The tension between these strategies has been a recurring theme in the memorandums prepared for him on various issues, advisers said.
Obama needs to move to the Left of George W. Bush. Given Bush's record on domestic spending that's a tall order. But Obama is up to the task. Increasing educational spending has done little to improve outcomes. Yet to admit the futility of trying to improve academic performance would require the admission of ugly truths. Can't have that. So Obama will boost educational spending on top of Bush's educational spending increases.
The economic crisis will not prevent Obama from pursuing the priorities he outlined on the campaign trail, said John Podesta, co-chair of Obama's transition team.
These include extending heath care to the nation's 47 million uninsured, reducing U.S. reliance on foreign oil, and improving public education, Podesta said.
"These are all core, if you will, economic questions and they need to be tackled together, and I think you'll have a program, and a strategy to move aggressively across all those fronts," Podesta said on CNN's "Late Edition."
We are still going to live in Warren Buffett's Squanderville under Obama just like under Bush and Clinton. Thriftville will come out of necessity, not due to political decisions to embrace it.
The president-elect has also said he intends to quickly reverse the Bush administration's decision last December to deny California the authority to regulate carbon dioxide emissions from automobiles.
California already features high tax rates along with a large welfare state and a lower class expanding as a result of immigration. The economic downturn has made California's continual fiscal crisis even worse to the point that Governor Schwarznegger has proposed a sales tax increase that will, combined with local sales taxes, put the sales tax over 10% in some areas.
A temporary 1.5 percent sales tax increase proposed Thursday by Gov. Arnold Schwarzenegger to deal with the state's worsening fiscal crisis comes just two days after Marin voters approved a quarter-cent sales tax increase for passenger rail service.
In San Rafael, it would push the sales tax to 10 percent.
First they take money out of your paycheck. Then they take more money when you go to spend what they let you keep. I thought Europe exists so that people who want to pay high sales taxes have a place to go do that. Do we really need California to serve that purpose for masochists too?
The California budget deficit has soared again as the financial crisis cut tax revenues.
Schwarzenegger, who proposed the tax hike along with another $4.5 billion in spending cuts during a news briefing, said he has little choice: Just six weeks after signing an overdue state budget intended to close a $15.2 billion deficit, the state faces an $11.2 billion deficit.
The shortfall was only $3 billion less than a month ago. California has a 7.7% unemployment rate with only 3 other states worse.
The budget gap has grown from $3 billion the state estimated when it sold $5 billion of short-term notes Oct. 16. That deficit figure was based on tax revenue projections through September and didn't anticipate projected shortfalls in October.
If you are a Californian who is thinking about getting expensive work done on your car then do it now before prices go up.
In addition to raising the sales tax, Schwarzenegger is proposing expanding its scope to include some services such as vehicle, appliance and furniture repair.
Veterinary services too. Better get Fido's teeth cleaned in December before the tax goes in effect on January 1.
Based on the governor's figures, a 11/2-cent sales tax increase would cost the average California household about $300 annually, although the actual amount is likely to be less because of spending by businesses and tourists.
This is a scene of coming attractions for the nation as a whole. Retiring baby boomers combined with growing numbers of low skilled Hispanics will cut tax revenue while boosting demand for government hand-outs and services. We face higher taxes in our future.
The latest estimate of the budget deficit for the current fiscal year, which ends June 30, is nearly four times larger than what the state Department of Finance estimated a month ago.
In California's legislature a supermajority (two thirds) is required to vote tax increases. If the California constitution ever gets amended to remove that supermajority requirement then the taxes will hit the stratosphere. As it stands now the dwindling Republican ranks in the legislature have managed to block most attempts by the Democrats to raise taxes.
Schwarzenegger's call for tax increases puts him again at odds with legislators in his own party. Republicans, a minority in both houses but strong enough to block spending plans, were steadfastly against raising taxes in the last budget, and the state Senate's GOP caucus chairman said that won't change.
But the decline of the white population and the rise of the Hispanic population will eventually make the Republican position in the legislature too small to hold back big tax increases. Those coming tax increases will accelerate the flight of productive people out of California.
Barack Obama wants major wealth redistribution in American society. He doesn't see the Warren Court as radical because it didn't redistribute wealth. Here he is in a radio interview in 2001.
He takes the need for wealth redistribution as a given. The question in his mind is how to do it.
Barack Obama will get sworn into office in late January 2009.
Update: Steve Sailer analyzes Obama's 2001 interview and gets to the heart of the matter: Obama knows he needs to redistribute to more than just blacks in order to create coalitions big enough to do the redistribution. But that means the amount of money that gets redistributed gets way way larger. Hide your wallet.
In summary, a close reading of “Dreams from My Father” shows that achieving political power to bring about redistribution of wealth from whites to blacks was the main goal of Obama’s life up at least through the book’s writing in 1995.
This interview extends that up through 2001, the year after his soul-crushing defeat in the 2000 Democrat primary for House, where he was rejected by black voters for not being black enough.
Keep in mind that Obama has never been all that big on just cutting checks for poor people. He much prefers to spend money through his political base, social service workers, letting them keep much of the increased spending.
This explains, by the way, why Obama never bothered to publish any legal scholarship, even though he had the same post at the U. of Chicago Law School, “Senior Lecturer,” as Richard Posner. He didn’t see the point: litigation just wasn’t going to be as effective at getting “redistributive change” as would be “coalitions of power.”
As a practical matter, however, he understands that to take money from whites and give it to blacks, which is what he cares about, his dreams from his father, he’ll need to assemble broad “coalitions of power.” He can’t just hand out money on a blacks-only basis. He’s got to cut all sorts of people in on the deal.
We are going to see some serious class warfare. What form might that class warfare take? How about an attack on 401k retirement plans? James Pethokoukis, money and politics blogger for U.S. News & World Report, reports on Congressional Democrats who would like to end 401k plans and replace them with government savings accounts.
I hate to use the "S" word, but the American government would never do something as, well, socialist as seize private pension funds, right? This is exactly what cash-strapped Argentina just did in the name of protecting workers' retirement accounts (Efharisto, Fausta's Blog). Now, even Uncle Sam isn't that stupid, but some Democrats might try something almost as loopy: kill 401(k) plans.
House Democrats recently invited Teresa Ghilarducci, a professor at the New School of Social Research, to testify before a subcommittee on her idea to eliminate the preferential tax treatment of the popular retirement plans. In place of 401(k) plans, she would have workers transfer their dough into government-created "guaranteed retirement accounts" for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5 percent of pay into the accounts, to which the government would pay a measly 3 percent return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee's Subcommittee on Income Security and Family Support, said that since "the savings rate isn't going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that's not generating what we now say it should."
Pethokoukis points out that forcing people out of their 401(k) plans at the bottom of the market would be pretty stupid. The bottom is when to buy, not when to sell. But that's not the worst of it. Forcing people to deposit their money with the government will just make it easier for the government to run big deficits.