Jane Galt Can't Add
Or if she can, she chooses to do it only with special, made-up numbers! See Jane obfuscate.
50 comments on that article and not ONE person has bothered to go to the IRS web site and look up the actual data? OK, maybe some of them have. Links follow.
It occurs to me that perhaps Jane ought to have done at least that before invoking the all-magic, all-powerful "he's lying" spell, usable by all sides in all political battles.
I've found reasonably complete information, in the form of spreadsheets, for the tax year 2000. It's probably fairly representative, although subject to some change.
http://www.irs.gov/taxstats/article/0,,id=96586,00.html
This link will give you an EXE file that decompresses into a series of spreadsheets. These contain plenty of data on income, distributed into fairly narrow bands.
http://www.irs.gov/pub/irs-soi/00inalcr.exe
10 minutes with Excel, and I've found the following:
The average TAXPAYER (not family) with an income under $50,000 pays an average of $2187 in federal taxes. This represents around 13.5% of his income. Since a family of four will have a lot more deductions, the $1600 tax figure seems pretty reasonable to me. According to the IRS spreadsheets, people with incomes below $50,000 pay an average of 13.5% of their income in federal income tax.
Of course, our taxpayer is ALSO paying around 15.8% (his half and employer's half) of his income for the social security boondoggle (which is actually just a flat tax system on the poor, since the money just goes in the general fund anyway). If we adjust the 15.8% for the employer portion (by adding that to total income), it becomes 14.6%.
Add the two of them together, and our guy is paying:
14.6% + 13.5% = 28.1%
Fascinating so far, huh? Our folks under 50k are all paying around 28% of their incomes to the federal government. I'd be pissed off if I was one of them.
So that means are the wealthiest 0.1% of our population are paying more, right? Let's take a look:
In 2000 there were around 240,000 returns filed with incomes in excess of $1,000,000. The average taxpayer in this bracket paid $945,191. Wow. Taxes paid by folks in these bands averaged 30.1% of income. That is ever-so-slightly higher than that paid by our 50k guy. Note that social security payments, as a percentage of income for these taxpayers, are almost non-existent. We can fairly safely factor them out.
If anybody out there wants a flat tax system, I've got news for you: We already have one. People making multi-million dollar incomes pay the same percentage as very hard-working, low-paid folks. And don't cry "investment income" or any such bullshit. All that kind of income has ALREADY been factored out of all of these calculations...taxable vs. non-taxable income.
The bottom line: Clark's numbers are right. He gives the reduction on taxes on those below 50k as around $33 Billion. A 5% tax increase on those over $1,000,000 in income (NOT including that first million), by my numbers, comes to around $35 Billion or so. Seems in balance to me, as of 2000 numbers.
Break out your spreadsheet, and crunch the numbers yourself. You want to leave everything to frickin' pundits and goddamn politicians? Or even worse...bloggers? Like me?
My socialist Canadian education taught me how to use a spreadsheet.
And one other point: If real rich folks use tactics to move more of their income out of the taxable income category, us poor folks win anyway...because to do that, they'll have to invest the money, or put it into non-taxable bonds, or some such thing. These activities benefit the public...
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§ 11 Comments
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Ross, I read Jane's response
Ross, I read Jane's response">http://www.janegalt.net/blog/archives/004540.html]response to your post, and have a couple thoughts.
I absolutely agree with you about putting ten minutes of research into blogging. Of course, I usually ignore this rule, but that doesn't affect its inherent validity.
But Jane is right that the SOI data tables are touchy sources. AGI is not the same as gross income. However, it's the best measure we have, especially with the level of detail the IRS provides in the SOI tables. AGI income doesn't adjust your results as much as her handwaving suggest.
The real crime is that Social Security and payroll taxes are so high. (Crime? Maybe a bit strong, but whatever.) I'm literally giving my money to today's elderly, at the expense of my future. In the case of the very infirm and needy, I'm okay with that. It's like a secular, bureaucratic tithe. But at the system level it's utter bullshit. Social Security Revolution Now!
By the way, if you want some real fun, get ahold of the Statistics of Income data tables for industrial tax returns for 1980-1999, and chart the explosion in American business after the 1986 tax cut and during the tech boom. It's broken down by sector, industry, and firm size, so you can watch information industries bloom as small farms wither. It's pretty cool, if you are so inclined.
Note that Jane has retracted
Note that Jane has retracted the first comment she made...I will write another post summarizing her position and my arguments against it. I don't see a single valid argument over there, yet...
So I see... advantage, Judson
So I see... advantage, Judson!
The Real Real crime is that
The Real Real crime is that payroll taxes do NOT go into paying the elderly. Mostly, they just go into the general fund. They're not treated any differently.
The GOP doesn't like to talk about the lockbox thing all that much; they're scared that people are going to figure out that payroll taxes are a plain old tax on the poor and middle class, and ONLY on the poor and middle class. Rich don't pay it.
Funny, I've been operating on
Funny, I've been operating on the theory all along that payroll taxes were just a tax on working people and nothing more.
Guess I never really thought about that too deeply, or thought about how wrong that is...
Anger rising... vehemence increasing... abstruseness bifurcating... DAMMIT! ARRGH! Give me back my damn money!
Funny, I've been operating on
Funny, I've been operating on the theory all along that payroll taxes were just a tax on working people and nothing more.
Guess I never really thought about that too deeply, or thought about how wrong that is...
Anger rising... vehemence increasing... abstruseness bifurcating... DAMMIT! ARRGH! Give me back my damn money!
Ross and I have argued about
Ross and I have argued about this - not so much about ends as about means. I still think you can talk about reducing one kind of tax without being a hypocrite. Sure - other taxes exist, but a tax cut is a tax cut. We need fundamental reform of the mechanisms our gov't uses to get revenue, and set it so that the amount coming out of the pockets of tax payers is lower.
Whether you're a family of four making $50k, or a rich bachelor tech geek making over a million, paying almost a third of your income to the gubmint (on only two taxes - not counting, state and local taxes, sales taxes, FICA, duties on imports, corporate taxes that effect the prices of goods and services, etc, etc, ad infinitum) is far, far too much.
And while we may argue about which programs are most wasteful, there is no argument that the government has too damn much of our money, and ends up wasting half of it anyway.
As the current republican congress and president show, the only way to curb government spending is to permanently reduce the amount of money coming in.
Welcome back.
Welcome back.
Super-kean-fine, government revenue needs to drop. I say we start with the folks at the bottom.
Elections are bought and paid for by people in the top income brackets. Explain to me why they shouldn't be responsible for most of the bills when they come due.
They shouldn't be any more
They shouldn't be any more responsible than anyone else. We are all citizens, we all have a responsibility to maintain the government we created (well, not you Ross; you're Canadian) to preserve our rights and general welfare.
In a just society, the same rules apply to everyone. This includes taxation. If someone making $50k pays 20%, and someone making $1m pays 20%, that's fair. Seeing as all the SS revenue goes into the general fund anyway, it should be eliminated. Sales taxes should never be deployed on a Federal level, as they are a little too regressive even for me.
One Federal tax for individuals. Flat rate, 20% or less, with deductions for yourself, spouse, children, mortgage interest and any money put into savings like 401k. Same rules for everyone, but the deductions would benefit the lower income earners proportionally more. Fair, but would not penalise marriage or homeownership, or investment.
This is dirt simple, fair, just and should have been done decades ago.
As outlined in the posting,
As outlined in the posting, we already have a flat tax system when you take the social security system into account. Poor folks pay it, rich folks don't.
Bottom line is, you either favor a progressive system of taxation or you don't. Right now we use what is effectively a flat tax system, but we pretend it's progressive.
So you don't have a problem with a guy making 25k a year paying 5k in federal taxes, while a guy making 100k a year pays 20k?
That 5k means _everything_ to the guy making 25k a year. He can't afford a damn thing in his life. You either think that's a situation that should be addressed, or you don't.
Like I said, the rich in this country control the agenda and the purse strings of government, to a large degree. They are the primary beneficiaries of its policies, bought and paid for...shouldn't they pay more of the tab?
One other thing -- GOP loves
One other thing -- GOP loves to talk about distributing the "burden" of taxes. How about the distribution of "pain" in an economy like this one? Do you think the pain of a shit economy should be evenly distributed too?