The wealthiest 10% own about 90% of all wealth, they pay under 70% of all income taxes, why not 90%?

[Union Yes]

If they own 90% of all wealth then shouldn't they pay 90% of all income taxes?

Proves that Reagan/Supply-Side/Bush/GOP taxation is regressive and shifts the burden of taxation to the middle class and poor.

You and I pay more tax so that the rich don't have to pay their fair share.

I expect elected Dems to 'change' this scam. This ponzi scheme.

[melm00se]

1. because

wealth does not equal income

[Fumesucker]

3. It takes money to make money..

The more money you have the easier it is to acquire more money.

[dmallind]

4. But the inverse does not follow

The more income you make, you are not necessarily more wealthy. Pissing it all away is quite easy.

[Fumesucker]

11. The less income you have the easier it is to piss away..

[Statistical]

33. That isn't necessarily true.

No matter how much or little income you make someone else is making ends meet with less.

Say you make $50K a year. Someone out there has a comfortable lifestyle making $40K. If he/she can do it you can to and thus increase your wealth by $10K a year.

Of course it is far easier to say it than actually do it. I have found not watching as much TV (and blocking 90%+ of ads) has helped reduce my "desire" for consumption and thus making it easier to life a lifestyle of someone making 20% less than I do (and pocket the difference).

[Fumesucker]

39. You make my point for me..

The higher your income, the easier it is to build wealth.

"Say you make $50K a year. Someone out there has a comfortable lifestyle making $40K. If he/she can do it you can to and thus increase your wealth by $10K a year."

[Statistical]

46. Someone making $50K living a $60K lifestyle would not create weath though.

However someone making $40K a year living a $30K lifestyle would.

The greatest destroyer of wealth potential has been the rise of ultra-consumerism. Products are products that just perform a function they have evolved into products for the sake of consumerism.

Just one example:
I have a friend who bought 3 different versions of the ipod, the iphone, and now is going to wait in line to get an ipad. Couple thousand dollars for products that all do roughly the same thing because consumerism has convinced him "he needs it".

A 5 year old first generation ipod would still work fine. Sure it doesn't have the latest bells & whistles but it works. Until it stops functioning the true "need" to replace it is virtually non-existent. Corporations however spend lots of money to create this artifcial need.

Couple thousand dollars in potential wealth (plus lifetime compounded value of earnings on that principle) transferred from my friend to Apple shareholders.

[Fumesucker]

55. I understand that, but ultra-consmerism is a matter of choice not necessity..

But the person making the lower income still has the same pressures to indulge in ultra-consumerism and less wherewithal to indulge his artificially generated passions.

My cell costs me $10 a month and I have a 4 gig micro SD card with over 700 tunes on it.. I don't even have a land line and I leech my wifi from relatives that live close enough for me to do so with high gain directiona antenna.. I help them out with errands and chores they can't take care of themselves so my internet costs are exactly zero in cash terms.

[Statistical]

62. It is a choice and that is the point.

Income = Wealth.

You can have very high income and end up with no wealth (Mike Tyson as an example).

Revenue > Expenses over time builds wealth.

[Fumesucker]

70. So Tyson would have been better off to have remained a street hoodlum and stayed broke?

I don't really see your point..

It's not the guy who goes broke in a huge way that literally has to skip meals, it's the guy who never had two nickels to rub together in the first place. (not true in every single case but it is as a general rule)

[Statistical]

76. At some point the ability to generate wealth is reduced to zero.

Theoretically this would be poverty rate however the actual US poverty rate is pretty much meaningless. This is why a social safety net is required because below a certain income (income required to maintain essentials to life) it is no longer possible to reduce consumption and thus produce wealth.

However if Mike Tyson had instead become a barber/engineer/teacher he never would have had a million dollar income however IF (and only if) his expenses were less than revenue he would have built wealth.

[dmallind]

60. Think Mike Tyson. I guarantee his net worth is less than mine

He has earned a crapload more and lives far more luxuriously even today, but he has very limited actual wealth.

[Statistical]

64. LOL. I just used that example above. Very good example.

A tiny fraction of his income saved and invested could have resulted in a massive amount of wealth. He didn't do that though.

His income (as great as it was) was still smaller than his expenses (mostly trivial and foolish).

Thus overtime he produced no wealth.

[ParkieDem]

7. This.

I personally believe, and think most other progressives would agree, that there are significant problems with taxing "wealth" as opposed to income. First, you have valuation problems. Illiquid assets are inherently difficult to value. Second, the potential impact on the middle class is troublesome. This is already the case with property taxes. A person may purchase a house in 2010 for $200,000. Let's say he earns $50,000 a year. Twenty years from now, that house may be worth $1 million, but he may be making only $60,000 per year. Forcing him to pay taxes on the value of his home, even if his income hasn't increased very much, is wrong.

Now, I do believe that all income -- whether earned, unearned through investments, etc -- should be taxed at the same rate. But the idea of taxing "wealth" is just too problematic.

[Xithras]

14. You get the cookie.

The federal government cannot tax wealth, only income. We'd need a new Constitutional amendment to change that.

[Usrename]

109. It would make more sense to tax wealth rather than taxing labor.

That is, if the only point of taxation is to raise revenue for government.

[dmallind]

2. You honestly want a real answer or just polemics?

Simple - we tax income not wealth. They are not the same thing. Bill Gates could make what I do for the rest of his life starting today and be far far richer than I could ever dream of. Not that I'm jealous. Just an example.

[Fumesucker]

9. As Warren Buffet has noted, his secretary pays a higher rate of income taxes than he does..

That is unconscionable..

http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

Buffett blasts system that lets him pay less tax than secretary

[Lorien]

32. Thanks! I just posted this to my FB profile

after having moderated an ugly tax dispute between two of my friends there!

[Statistical]

36. That isn't what he said. His secretary pays less TOTAL taxes than he does.

It is still wrong but important to get the facts right.

Income Tax is only a subset of all taxes paid in this country.

The problem is over last 30 years we have shifted more and more of taxation into regressive taxes (gas tax, real estate taxes, FICA, non-progressive state income taxes, etc).

[Fumesucker]

42. I'm using "rate" to mean percentage, not total amount paid..

So his secretary does indeed pay a higher percentage of her income than does Buffett.

[Statistical]

51. In total taxes not income taxes.

No secretary pays 27% of his/her income in federal income tax.

Looking at only income tax is a false metric and that is what Buffet was trying to explain.

All that matters is TOTAL TAX BURDEN
income tax + sales tax + excise taxes + payroll taxes + real estate taxes + misc taxes

Just remove the word "income" from your post. Otherwise you (unintentionally) create an incorrect and easily debunked strawman.

[Fumesucker]

65. Or just add the word "in" after "income"..

From the link about Buffett..

"Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent."

[Statistical]

68. I agree and it is technically correct unfortenately I think that choice in words

is easily confused with "income tax".

Still Buffet point is spot on. While the earned income portion of income tax structure may be progressive the loopholes for capital gains & dividends combined with regressive taxes means the whole system is not very progressive at all.

The whole system is what matters. How much total taxes are paid as a percentage of income (in all forms).

I think we are on same sheet of music though just saying it in different ways.

[MajorChode]

106. Here is his actual quote

The 400 of us pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.

http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

It's also important to note that he was only referring to the federal income tax rate. When you consider FICA, state taxes, local taxes, use taxes, fees, and other regressive taxes you previously mentioned, the difference is even more striking.

[dmallind]

53. Yep. The silliness that taxes capital gains less than work is a big problem

Never understood that one myself. I am all for encouraging investment, but we should be encouraging work too so while I would not say cpaital gains should automatically be massively taxed (little guys can get capital gains too) I would certainly make it in the same progressive brackets as income at the very least.

[RDANGELO]

20. Bullshit!

You can call it whatever you want; they are still controlling it. They game the system with lobbyists so that if something is called an investment, they don't pay taxes on it.

[dmallind]

45. No. Truth

Nothing to do with investments and tax rates as I commented on neither. Income and wealth are not the same thing.

To be honest I would actually prefer to tax wealth but that's immaterial. What you make and what you have are not the same thing. My Dad never made more than $10 an hour in his working life, but his net worth is quite decent.

[zipplewrath]

23. More accurately, consumption

We tend to tax consumption. If you look upon wages as the purchase of labor, then between that, and the various other consumption taxes (alcohol, tobacco, gas, sales, etc.) we tax consumption. Wealth itself is left "untouched". The problem being that consumption taxes are inherently regressive. They tax those the most who must spend the most portion of their wealth upon living.

This has become vastly worse since the advent of the "capital gains tax reduction". Most of the hedge fund managers, and many top executives, get compensated for their labors in terms that are deemed "capital gains". As such their tax is limited to about 15%. However, the person who is compensated for their labors by a wage are taxed at rates as high as 36%.

This is doubly worse because the laborer truly considers his skills as part of his "total value" or "wealth". His wealth gets taxed as it is bought, and then the proceeds of that sale are taxed again when he spends his wealth.

A nation must access the WEALTH of a nation in order to function as an organized society. This is not a complaint about income taxes per sea because our labor is part of the wealth of the nation. But so is gold, and oil, and all the transactions that currently are considered wealth, not income. One should not be able to sequester wealth from the ability to be used by the very nation that made it possible. A nation must be careful about not accessing wealth that is not needed for the duties of the nation. But neither should the individual be able to hide the wealth of a nation from its rightful use.

[dmallind]

57. I get the concept, but not sure I buy it

I do agree with the capital gains silliness you point out. Should at least be equal to earnexd income.

The best solution I can come up with is to have income taxed at the same rate regardless of source. Cpaital gains, work, inheritance, corporate profits, etc etc all taxed in progressive bands that increase as you get more. Money all spends the same regardless of socure, so should be taxed the same regardless of source, It still does not really address the wealth income/disparity as someone living off a trust fund interest in an inherited $10M mansion with no debt is still wealthier than anaverage middle class family with the same income and a mortgage, but it's a start,

[Union Yes]

41. I wrote an OP awhile back calling for a tax on accumulated super wealth too.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=7528733&mesg_id=7528733

[dmallind]

47. I agree with that in principle at least

It would be a buggerto implement, but would probably be the fairest tax. Unintended consequences may generate some lavish spending before tax time, but that's going to druive demand so no big worry.

[tk2kewl]

5. why not 95%

[Captain Hilts]

6. Because payroll taxes are regressive, so wages are taxed more highly than interest income. nt

[Kurt_and_Hunter]

8. wealth is not income

[mainer]

10. So you want 10% of the population to pay 90% of the taxes?

"Holding" wealth is akin to owning a fancy home. That house doesn't generate income.

[Fumesucker]

13. Sure it can, if you rent it out..

My brother owns two homes outright, he rents out the nicer one and lives in the smaller one..

[mainer]

18. And if you live in it? ARe you going to rent out bedrooms?

Owning rental income is different -- then it's a business.

My point is that most homeowners can't use their homes to generate income.

[Fumesucker]

21. No, you said that a fancy house cannot generate income..

I showed that was not true.

[mainer]

22. I said specifically HOME.

"Holding" wealth is akin to owning a fancy home.

By "home," it's generally believed that you live in it.

[Fumesucker]

24. Lots of people own more than one home..

[mainer]

27. You seem to miss the whole point of my analogy

It requires some abstract thinking.

And the analogy is meant to illustrate why wealth doesn't necessarily generate income. Owning an expensive home does not generate income, yet it's part of one's wealth. You will pay higher property taxes on it, pay more to keep it up, and on paper it may make you look like a millionaire. But if the government taxes the homeowner based on the value of that home, and the homeowner is retired and not generating any income, where is he going to get the tax money?

He'd have to sell his house. Or rent out all his rooms to boarders.

[Fumesucker]

37. I see your point but I largely disagree with it..

There aren't that many investments that are incapable of generating income, even a home you are living in can generate income as you point out by renting part of it.

That such a large and expensive home does not generate income is a matter of choice on the part of the owner, not an inherent quality of that sort of investment.

[Statistical]

98. If wealth generates income then simply use existing income tax to tax that income.

No need to reinvent the wheel with an Unconstitutional tax on wealth.

If that wealth is used to generate income then tax the income using our current taxing system.

There is nothing wrong with income tax. 99% of Americans would be better off if we:
a) got rid of all sales, excise, property taxes
b) treated all income equally
c) had a single highly progressive income tax system

[Fumesucker]

100. But as has been pointed out multiple times..

The existing income tax is inadequate, it is insufficiently progressive.

And we all know it's extremely unlikely to be made more progressive, the wealthy control the politicians.

We are basically screwed, I don't think the problem is fixable within the current system and overthrowing the system is a task which would make Sisyphus blanch and is more likely to create even more anguish than to fix anything.

[Gormy Cuss]

78. "Home" is where you live.. A former home that you now rent to others is a house.

Admittedly, realtors have blurred the line by calling properties "homes" because it's better for marketing but in normal vernacular "home" is the building where you live, "house" is the building.

If you have more than one house where you live, they can all be your homes.

[barbiegeek]

31. A million dollar Farm (in real estate value) may only earn $40,000/year for the family to live on

You have to tax income.

[Fumesucker]

50. States tax property, specifically real estate, like farms.. n/t

[Statistical]

61. State govt are not restricted by the US Constitution.

They also don't tax all wealth just one form of wealth that happens to have a liquid market and values can be obtained/verified easily.

Congress has no authority to tax wealth without a Constitutional amendment.

Prior to 16th amendment the federal govt had no authority to tax even income.

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." - 16th amendment.

The 16th is very exactly written. Congress has authority to collect taxes on income but not wealth.

[JackRiddler]

108. Sounds like it's overvalued...

In practice, states don't go by current market value.

Most houses in New York City are assessed at something like 1/10 the current market value.

Certainly in a wealth re-appropriation scheme that would take back what the rich did not earn, protections need to be built in for cases like this. (It's not so different with the subsidy to the lower income earnings in the health care reform.)

At some point we have to address the issue that those who have the billions set agendas, write policies, strangle majorities with debt, and obviously determine the bulk of investment decisions, and that they do so in their own narrowly defined economic interests; even at a time when the species itself is heading for disaster because the economic system supported by those who have the billions cannot stop consuming the biospheric basis for human and other life on earth.

This is a matter of survival, and also of fighting back in the class war waged by the rich (the top 1/10 to 1/2 percent) on the lower 90 percent. Don't conflate the need to redistribute downward with some nightmare that grandma's farm will be seized.

[mainer]

112. you're wrong -- many communities assess at full market value

That's how it is in many Maine communities these days.

[JackRiddler]

114. Thanks for reading my post past the first sentence.

Oh, you don't seem to have done so.

Perhaps the difference is that the market in Maine is not nearly as volatile or inflated as it is in New York City. Property tax payments do vary enormously from place to place. Just over the county border, in Long Island, they're much higher.

The hypothetical example given in the post I was responding to - a "million dollar" farm with $40,000 income - obviously was fictional. If it only produces $40K a year, a fairly assessed market value isn't going to be a million!

Anyway, the point is that wealth has been redistributed by the corporate government to the richest. Taking some of that back is not about assaulting a farm that makes low income. It should be about restoring and raising the capital gains and estate taxes, taxing speculative transactions, raising brackets on top incomes, and looking at how to socialize the key sectors of banking and energy (and definitely not farming!).

[DrDan]

12. taxes are paid on income - not wealth

The question is - do they make more than 70% of the income? If so, your question is valid.

[Fumesucker]

15. There are such things as property taxes on some forms of wealth..

Edited for speling.

[Xithras]

25. States can tax wealth, not the federal government.

All federal taxing authority derives from the 16th Amendment, and that amendment was narrowly written to only permit the taxing of income. To tax anything else at the federal level, you'd need a new Constitutional amendment.

[Fumesucker]

28. Then why does Warren Buffet's secretary pay a higer rate of income tax than he does?

[Xithras]

34. Because the income tax rates are broken.

Poorer people pay a larger percentage of income as a tax than wealthier people. That has nothing to do with taxing wealth and assets, and everything to do with a corrupt and broken income tax system.

[Fumesucker]

43. So it's not the wealthy who broke the tax system, it was the poor demanding higher taxes...

On themselves?

[Xithras]

54. Where did you get that?

It was the wealthy who broke the system, so they could shield more of their income from taxation. The poor are just being dragged along for the ride and are being abused by the wealthy.

A progressive income tax system should tax the incomes of the wealthy at a higher rate than that of the poor. Even a fair and flat income tax system would tax everyone at the same rate (so a person making 3x the income of a poor person would pay 3x the taxes). The US income tax system is neither progressive nor flat, and actually LOWERS your effective tax rate as your income climbs. It's regressive. The rich gamed the system in their favor.

[mainer]

56. Umm -- explain please?

You wrote:

"The US income tax system is neither progressive nor flat, and actually LOWERS your effective tax rate as your income climbs."

Then why am I paying a higher tax rate than someone who makes less than me?

[Xithras]

67. It's simple.

There's a difference between your tax bracket and your effective tax rate. We are all placed into tax brackets based on our gross incomes, and those tax brackets are set up to give the illusion of progressivity. But when you actually do your taxes, you get all sorts of deductions, exemptions, and exclusions. You might have a bracketed income tax rate of 25%, but after your deductions and exclusions are factored in, your effective tax rate might drop as low as 15%.

Wealthier people have a LOT more exemptions and exclusions than you or I do. A person making $1,000,000 per year will have a bracketed tax rate of about 35%, but after they factor in all of THEIR deductions, exclusions, and exemptions, their effective tax rate could be as low as ZERO. Single digit effective tax rates for people with multi-million dollar annual incomes are common.

So while you're paying the federal government 17% of your $50k a year, the rich guy up the street is paying the federal government 3% of his $2 million a year.

[mainer]

75. Not so with me.

The only deductions I take are business expenses (and yes, they ARE expenses), property taxes and state taxes.

And I'm still paying in the top bracket.

I don't know any of these millionaires who are paying effective rates of 3%.

[Xithras]

82. Then you aren't investing your money "properly".

There are lawyers and accountants who's sole jobs are to set up trusts and investments in a manner that will create deductions or exemptions for the income earner. You have to be making a LOT of money before the tax savings exceeds the expense of hiring those lawyers and accountants, but once you've crossed that threshold, they can be very effective at reducing or eliminating your annual taxes.

A person making $2 million a year probably couldn't get down to 3%, but with a good tax attorney and some yearlong planning, they could easily get the effective rate down to 10%-15%. A person making $100 million a year, with a small army of accountants and advisors on staff, CAN create enough exemptions and deductions to bring that number down into the single digits.

The wealthier you are, the more power you have to game the system.

[Statistical]

84. They can game the system but only so much.

The idea rich are paying single digit effective income tax rates is silly.

Even if you hold everything as a long term capital gain you are looking at 15%. AMT means deductions are pretty much meaningless for anyone making more than a million or so.

You weaken your argument by using extreme examples.

Does the income tax system need work? Yes
However
a) your examples aren't realistic
b) an even bigger threat is the massive explosion in regressive NON-INCOME taxes (payroll taxes, real estate taxes, sales taxes, excise taxes, etc)

[mainer]

88. yes, it is silly.

I have some of the best investment counselors in the business. I take advantage of every LEGAL vehicle I can to shelter my income. (Emphasis again on LEGAL).

But I'm still in a high bracket.

[Statistical]

74. you may be paying higher INCOME tax but that is meaningless.

The person you were responding was incorrect in saying that income tax declines as income climbs however

OVERALL TAXES (which is the only thing that matters) declines as a % income as income rises which is not progressive.

Things like payroll taxes capped at $108K
Sales taxes (lower income spend larger portion of income on sales tax items)
Real estate taxes (property values tend to have less than 1:1 relationship with income)
Excise taxes like gasoline (lower income pay greater % of income on excise taxes)

All contribute to an OVERALL SYSTEM that becomes regressive despite the actual income tax (which is only portion of taxes) system being progressive.

[mainer]

79. Agree with that. Consumption taxes are regressive.

[Fumesucker]

58. That was my point, it was the wealthy who broke the system..

But there are people on this thread crying that we can't tax the wealth..

:wtf:

[Xithras]

72. But the federal governemnt can't tax wealth.

The fact that the wealthy people broke the income tax system doesn't change the fact that the federal government can only tax income. It just means that we need to fix the income tax system.

Income is the money you made last year. Wealth is the collective value of everything you own. The federal government can tax your income, but not your wealth.

Politically, it would be far easier to push through fixes to the income tax system than it would be to push through a Constitutional amendment to grant the federal government additional taxing powers.

[MiniMe]

86. Except for estate taxes

That tax is on the wealth of the estate, and paid by the estate, not by an individual receiving it.

[Statistical]

91. Technically (and this is splitting hairs) IIRC the tax is a transfer tax.

Skirts the fine line of direct taxation but has survived challenge in the courts.

It it isn't imposed on wealth it is is imposed on the transfer of wealth.

[Statistical]

85. She doesn't.

She pays a higher rate of TOTAL TAXATION (as a percentage of income).

The 27% number quoted is total tax (income tax, sales tax, fica tax, real estate tax, etc).

No secretary in this country is paying 27% effective federal income tax.

Even if she used only standard deduction & exemption with no additional deductions she would need to make $295,000 to have an effective tax rate of 27%. Likely someone making $295,000 wouldn't even pay that much by reducing taxes through itemized deductions.

[DrDan]

49. I agree - the OP referenced "income tax" specifically

[Union Yes]

87. For every problem, there is a solution =)

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=7528733&mesg_id=7528733

[DrDan]

89. so an individual pays tax when he/she earns it (income etc)

and then is taxed annually on the same money so we can
- continue to wage meaningless wars,
- spend wrecklessly on bridges to nowhere,
- bail out those who take foolish risks,
- give money to foreign entities to pay them off for their "loyalty" to the U.S.,
- allow legislators to travel and perform their daily duties in luxury,
- overpay defense contractors for weapon systems that don't work

(hmmmmm - what did I miss?)

no - I don't think so.

[OneTenthofOnePercent]

16. So 10% of people pay under (up to?) 70% of all income taxes?

:shrug:

[Union Yes]

38. What is shocking is that those same 10% own 90% of every penny of wealth in America. nt

[mainer]

40. oops -- delete

[JackRiddler]

93. See post 92 for important clarifications & context.

[athenasatanjesus]

17. Too many people in this country believe that those 10% earned almost every penny.

And even many who don't believe that still don't care,they figure it's their money now so tough shit.

[NeedleCast]

19. No

Math seems to be lost on some people.

[barbiegeek]

26. I love this idea.

[Greyhound]

29. Because wealth and income are two separate things and the reason we are only allowed

to talk about income. Taxing generations of pillage is not going to be permitted while they have all the power.

Another useful tool of the parasites that you've adopted is the breakdown into quartiles and deciles, this conceals in plain sight the real obscenity of how much is owned and controlled by less than 1/10th of 1%. Take the stats global and becomes far worse.

[Statistical]

81. Taxing wealth is not permitted under the Constituion regardless of who is in power. n/t

[Greyhound]

90. Asset taxes and tariffs were the only source of income for the

government for much of our history. Both real estate and structure were taxed as was property (equipment, slaves, facilities). This tax was based on the number of rooms a house held and is the reason that so many of the grand plantations are/were huge empty boxes.

1895 Pollock v. Farmers' Loan & Trust Co., etc. were the groundwork for the 16th which effectively shifted the entire tax burden away from the parasite class and onto the individual. This of course was a direct response to to McKinley/Roosevelt trust busting.

So yes, it is at present, but was not always and does not have to remain so.

[Statistical]

96. Excise taxes & tariffs are indirect taxes. The federal govt has never taxed wealth or property.

Excise taxes & tariffs are indirect taxes. They are not on wealth only on the transfer of wealth (inheritence tax is legal in that manner also).

Taxes directly paid by citizens (on wealth or income) are "direct" tax and are prohibited by Constitution (unless applied equally - i.e federal govt taxing every citizen $100 equally).

That Pollock court decision found direct taxes (in this case a limited income tax) to be UNCONSTITUTIONAL.

The 16th amendment modified the Constitution (8 years after Pollock) and allowed direct taxation however only in the form of a tax on income.

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.


So where is this original prohibition? The Constitution (Article 1, Section 8, Clause 1) prohibits direct taxes (unless apportioned by population).

Section 8: The Congress shall have power To lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

The 16th doesn't completely repeal this it simply "carves out" an exception related to taxing of income. To have a new federal wealth tax or real estate tax would require another Amendment.

[Greyhound]

99. All of which simply reiterates what was already said, and bypasses the point entirely.

:wtf:
:kick:

[Statistical]

103. No the point is very simply

A) The US govt has never taxed wealth (you claim is incorrect). The govt has taxed the transfer of wealth (and after 1913 income).
B) The court case you referenced actually showed the EXACT opposite of what you claim (that prior to 16th amend. income tax was also prohibited)
C) My point was regardless of who is in charge of the govt a tax on wealth is unconstitutional.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

...

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.

http://en.wikipedia.org/wiki/Taxing_and_Spending_Clause

So back to where we started:
Taxing wealth is not permitted under the Constitution regardless of who is in power.

[JackRiddler]

95. Really? Damn, we just sent in the property tax bill! Next time we'll take it to the SC instead!

Care to cite chapter and verse, Professor?

[Statistical]

97. You sent a property tax bill to federal govt?

Still here is the line & verse.

Originally the federal govt had NO ability to collect any direct taxes (except those on per capita basis).

This is clearly spelled out in Article 1, Section 8, Clause 1:
The Congress shall have power To lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

In 1894 the federal govt tried a limited income tax and lost in Supreme Court case finding that federal govt has no authority to collect direct taxes.

http://en.wikipedia.org/wiki/Pollock_v._Farmers%27_Loan_%26_Trust_Co.

So in 1904 Congress proposed 16th amendment (ratified in 1913).

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Thus direct taxes are UNCONSTITUTIONAL however the 16th carves out an exemption for direct taxes ON INCOME ONLY.


As far as your Property Tax bill. Limits on federal govt in the Constitution don't apply to States thus your state can tax wealth directly.

[JackRiddler]

102. Very good.

Of course, once it's in an amendment it is constitutional, so it has been for 106 years. I must admit I'm more of a fan of the amendments than the original.

But you got me. Weirdly enough, I forgot we sent that check to New York City, not Washington.

I'm surprised no anti-tax crusader ever tried to claim their individual protection against property taxes in the Constitution should count as an implied individual right and supercede the rights left to the States to impose such taxes. Or did they?

Anyway, the federal govt. regularly seizes property under eminent domain, in criminal cases and emergencies such as war. They should start with Moody's and then round up the banksters from there. (They could have had the lot of them just by allowing them to go bankrupt.)

I also wonder whether corporate property will always be viewed to have the same protections as private.

[slackmaster]

30. Most taxes are based on earnings and other forms of income

Not net worth.

[Cleita]

35. They should be paying 100% of income taxes collected. That doesn't even

make a dent in their overall wealth. This is what progressive taxation should do. Those on the lowest third tier of the income ladder shouldn't have to pay any FIT at all.

[mainer]

44. I think your numbers are incorrect. Top 20% owns 80%

according to this article

http://findarticles.com/p/articles/mi_m1141/is_n26_v31/ai_16932856/

The top 20 percent of Americans -- households worth $180,000 or more -- have more than 80 percent of the country's wealth,

[melm00se]

48. data point

The top-earning 10% of taxpayers (AGI >$113,018) earned 48% of the nation's income and they pay 71% of total federal income taxes collected.

[mainer]

52. More data: US top 10% controls 70%

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

About the same as Switzerland and Denmark.

[melm00se]

59. I find table #2

extremely interesting:

Debt:

Top 1 percent: 5.4%
Next 9 percent: 21.3%
Bottom 90 percent: 73.4%

Correlation?

[mainer]

63. Well, it makes sense. Richer you are, the less debt you should have

And the poorer you are, the more you have to borrow.

[melm00se]

73. or the more you borrow

the less wealth you can accumulate as you spending your potential wealth to service the debt.

a great book The Millionaire Next door looks at the prototypical "millionaire" and among the points is the fact that they describe themselves as frugal: (these are quotes, not me saying about myself)


<*>We live well below our means.
<*>We wear inexpensive suits and drive American-made cars.
<*>Only a minority of us drive the current-model-year automobile.
<*>Only a minority ever lease our motor vehicles.
<*>We are tightwads.
<*>About half of us have occupied the same home for more than twenty years.


All of those, at least to me, indicate that they do not live a consumerism lifestyle and thus avoid the debt that goes along with it.

[mainer]

77. the best advice I ever got from my lawyer:

"True wealth is having no debt."

The first thing I did, when I could afford it, was to pay off my mortgage. It was the best thing I could have done.

Yep, I'm a tightwad. But I have no debt.

[melm00se]

80. THAT

is the 100% God's honest truth.

I like Dave Ramsey and his story:

http://www.daveramsey.com/company/about-dave/
and his seven steps:
http://www.daveramsey.com/new/baby-steps/

[mainer]

104. ironically, it's the tightwads who'd get hit with a wealth tax

Because they were careful to save and not go into debt.

My dad accumulated wealth because he too was a tightwad. He was just a cook, but by the time he died, he owned his California house free and clear and he'd sunk every penny into stocks and bonds which grew.

[Statistical]

105. Which is another uninteded consequence on taxing wealth.

[proteus_lives]

101. +1

My father told me over and over growing up "no debt".

He was right. I don't make much money but I don't owe a penny to anyone. I'm doing alright.

[Statistical]

83. Exactly. Wealth in simply the difference between income and expenses.

Sadly the stagnation in wages has lead to an explosion in debt. People were content because their "lifestyles" kept getting better by living on borrowed money (CC, HELOC, lines of credit, refinancing, etc).

Obviously that isn't sustainable. This is one situation where credit being harder to get is a good thing.

In the absence of more credit goods can not rise in price unless wages rise. Thus wages should rise by AT LEAST rate of inflation (something that for first time didn't happen in the 2000s). Wages didn't keep up with inflation because people (mostly in middle class) kept up consumption by using more and more debt.

If you make $50K a year live on $45K
If you make $100K a year live on $95K
If you make $25K a year live on $20K

Easy in theory hard in practice but that is how you end up a self made millionaire.

Very good book BTW. :)

[h9socialist]

66. I agree -- and I would go further . . .

. . . but one correction! Wealth and income are not the same thing. The upper 10% does not have 90% of the income -- so attack the maldistribution of wealth can't be solved through income taxation. Moreover, the upper 10% controls 90% of financial wealth, not physical wealth -- which is primarily residential real estate. This does not diminish the problem: financial wealth is the source of political power under capitalism.

It would help to go back to a top rate of 94% as in the 1940s, and confiscatory taxes on large estates. But to do this you need to embrace socialism -- as I do -- because this would amount to the development of the public sector as the main source of investment resources. As long as it's small-d democratic, and control of capital is strictly monitored, this sort of investment paradigm should be functional and desireable.

[paulsby]

69. faulty logic

income tax isn't based on what you POSSESS

it's based on your income

huge difference

if i have a million dollars, but don't receive any income from it (or i receive tax free income like investing it in municipal bonds), my tax is ZERO

hth

[Tierra_y_Libertad]

71. "Those who have the gold make the rules" - Or, pay politicians to do it for them.

[JackRiddler]

92. Please watch out for the distortion - they don't pay 70 percent of the budget...

Only income taxes.

The consolidated budget includes Social Security and Medicare. Social Security is financed by taxes on workers that are capped at a relatively low income. It has produced a gargantuan surplus since the FICA tax increase under Reagan. Currently 2.6 trillion dollars are invested in the "Social Security fund" consisting of Treasury bills.

These Treasury bills have financed the discretionary budget - which is where income taxes also go, and most of which is for the war machine. The SS surplus has thus been used to hide a large part of the enormous deficits of the discretionary budget (i.e., even more enormous than usually presented), which are caused mainly by war. (More recently, also by the vital need to rescue the banksters so they could continue plundering the world on our behalf.)

So income taxes don't cover all of the discretionary budget. The rest comes from borrowing and from the Social Security trust fund. (More recently, the Fed just buys stacks of t-bills.)

Of course, the war machine, the ample corporate welfare and the mountain of interest payments that result from all this are mainly for the rich, so they should be paying for it.

So, agreeing entirely with your point that the rich should pay more in taxes - like the 1950s, when the top bracket was 90 percent and yet, contrary to the free-market ideologists who are also on this thread, the rich still managed to stay rich and get richer.

Apparently "it takes money to make money," but the best kind of money is other peoples' including the huge subsidies that the discretionary budget provides to corporations and thus the rich.

[Greyhound]

94. Lies, damn lies, and statistics. n/t

[JackRiddler]

107. Also, they don't pay 70 percent of their income...

but a far smaller fraction that happens to add up to 70 percent of the total income taxes (only - not FICA etc.) paid, because, ahem, the incomes are concentrated in the top 10 percent. Actually the top 1 percent. Actually, the top 1/10 or 1/100...


THE L-CURVE
http://www.lcurve.org/

[murdoch]

110. They should pay 100%

I guess I just believe that old socialist idea that the government's sole purpose is to forcibly enforce the idle rich's expropriation of surplus labor time from workers.

That workers are financing the instrument of their own oppression - cops evicting families and the like - is just a cruel joke by the rentiers.

[SaintD]

111. Wealth vs. Income

The big problem is the difference between wealth and income. Some of the most hard working, most qualified people in the workforce, make "good" incomes. This is in contrast to those that hold vast amounts of capital. These are the ones that don't have large tax burdens. I like a system that provides opportunity for the early bird that gets after a 16 hour day and makes something happen. In the same light, people need to be educated that business owners benefit from public transit when their workers can actually get to work every day. The real scam is the .1% of the wealth holders making the working poor and middle class get pissed off at the small business owners and other "upper middle class" people in the world. I'd argue that the municipal worker filling potholes has more in common with his kid's pediatrician than the people with 9 digit net worth.

The gap between the upper middle class and the true upper class is so vast, none of us can even imagine. When we are jealous of our neighbor, or the guy int the "tony" subdivision down on the other side of town, we are fooling ourselves. This is just the difference between the short term, material comfort of people on a single generation timeframe. The real rich don't worry about these things. Real wealth does not depend on a W2. Remember that, and think about it. Don't begrudge someone for making a solid income. There are people out there who have no concept of grinding away the weekdays in poorly lit cubicles, or workin a shovel...that's the .1%, and they don't give a shit about any of us.

[BailoutBill]

113. How about corporations?

What is their tax rate?