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Obama Social Security Talk Spurs Tax Plans

Funny you should mention that, they are specifically mentioned in the group of those inclined to oppose progressive taxation.

The Wikipedia article I previously referenced has multiple footnotes with the cites you are looking for. Of course, by its very nature, the majority of taxpayers will favor a progressive system, because it seems more "fair" to the majority.

They have three references for this: "In most western European countries and the United States, advocates of progressive taxation tend to be found among the majority of economists and social scientists."

And they have three cites for this: "Arguments against progressive taxation tend to be found among libertarians and some conservatives. Among economists and social scientists, and to a lesser extent the general population, opponents of progressive taxation tend to be in the minority."

Like Europe doesn't have a progressive tax system... what's your point?

I'm just trying to counter-balance the impression that is always given when someone mentions "oh, the top 1% of the income earners pay 30% of the taxes" as if that means something is broken. No, it's not broken, that's exactly what it's intended to be. You may not like the intention, but the system largely does what it's designed to do.

Except for your European client, of course, but I suppose he'll get the month of August off instead! ;-)

-Mark Bole

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Reply to
Mark Bole
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I'm well in favor of staying on-topic. IMHO this thread has stayed mostly on topic. I'm surprised no one has pointed out that Congress, not any party's presumptive presidential nominee, makes the tax laws. If the OP had simply said, "what about SS taxes increasing next year", it would have been spot-on.

The following m.i.f-p. topics have been touched on in this thread:

1) shifting income from one year to the next in anticipation of tax law changes (*that* topic has certainly been fodder here before). 2) evaluation of SS taxes and benefits as if they were a pension instead of social insurance 3) impacts of progressive taxation on wealthier individuals, how does it potentially change their behavior?

And probably more that I've missed.

-Mark Bole

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Reply to
Mark Bole

"rick++" wrote

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says the cutoff each year is:

($60,600, the cutoff in 1994) * (average wage for two years ago)/(average wage for 1992)

The wages referenced are per individual, not per household.

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case I am figuring the Obama plan sans donut will affect around 5% of wage earners. With the donut, it appears under 2% will be affected. Thanks, Rick, for elaborating in your other post on how you see your personal taxes potentially changing.

kastnna, sure. But the "don't bite the hand that feeds you" guide goes both ways: Workers need executives and vice versa. The repercussions from workers could be just as severe as those from executives. Workers haven't the bucks but they do constitute many more bodies.

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Reply to
Elle

Google is your friend "The chief executive of a Standard & Poor's 500 company made, on average, $14.2 million in total compensation in 2007, according to preliminary data from The Corporate Library." from the first hit on CEO PAY.

Further down that article, "The chief executive officers of large U.S. companies averaged $10.8 million in total compensation in 2006, more than 364 times the pay of the average U.S. worker, according to the latest survey by the United for a Fair Economy."

Elle was trying to make a point, and did. The only clarification I'd add would be 'large US company'. Of course the title CEO can apply to much smaller companies that can't pay so much. So that would answer your objection, Dave, the remark didn't apply to the smaller companies. Still for the S&P 500, that's $700B/yr. Joe

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Reply to
joetaxpayer

I would suggest that tax changes *always* have unintended consequences. Most tax revenue projections assume that people do not change their behavior because of the change. Nonsense. I do, you do, why does no one else?

It is particularly true for the upper income brackets where people have much more control on the timing and nature of their income. The most obvious example is the capital gains tax. To the extent you can control the sale of an asset, you can control the payment of the tax.

I don't have the figures at hand, but it is my understanding that lowering the gains tax percentage almost always increases the revenue collected by the tax. People are more inclined to move money around if the tax is lower. This is also more efficient economically as capital can seek it's best use.

-- Doug

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Reply to
Douglas Johnson

"Dave Dodson" wrote

snip for brevity

Google {CEO income worker} for hits like

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(click on "Facts and Figures, Executive Pay and Worker Pay Worldwide")

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A ratio of a few hundred to one has been popular for the media to throw around for I'd say a couple decades now.

Please address further queries or comments to me by email. I am OT.

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Reply to
Elle

I think you've been listening to sound bites from a particular political party...

-Will

william dot trice at ngc dot com

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Reply to
Will Trice

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> IOW, with the donut, less than 5% of taxpayers are likely to see this rate > increase. Probably far less than 5%. And, oh my gosh, it may fix the > Social Security budget crisis. Obama's a problem solver! Can anyone > believe this? making 5% of the taxpayers, who are already footing the vast majority of the tax bills, "solve" the problem of the other 95% is not my idea of a solution.

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Reply to
Gil Faver

That will teach me to post without facts in front of me. I get accused of listening to Republicans. The next time I do it, I'll probably get accused of listening to Democrats. Since this is not a political newsgroup, I'll do an anti-politics thing and introduce some facts. They are not 100% on point, but they are in the ballpark.

Here is a table showing individual Net capital gains (gains less losses) in millions of current year dollars. It doesn't show long vs. short term, nor does it include businesses. The income data is from:

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The table also shows the maximum cap gains rate for that year. The data is from
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There are some years where there are somecomplexities in the rate that I can't really reflect in a simple table. So Iarbitrarily selected what seemed like the "typical" rate. The tax paid column is simply my spread sheet calculating the product of the gains times the tax rate to show (roughly) what the government actually collected.

If we look at declared net cap gains income, it tends to bounce around a lot, presumably reflecting the state of the economy and markets.

The cap gains rate was lowered in 1978, 1981, 1982, 1997, and 2003. In 1982,

1997, and 2003 the tax collected was lower than the previous year, but the second year is higher than the year before the reduction and all subsequent years are higher. This tends to support the "republican" view.

While the revenue collected after the 1979 and 1981 reductions declined, net cap gains income increased, so the revenue "loss" was less than would be indicated by simply assuming people do not change their behavior.

There was one cap gains increase in 1987. Revenue immediately increased and continued to be higher than the year before the increase. This tends to support the "democratic" view.

Year Net Capital Gains Tax Rate Tax Paid

1977 $20,777 39.9% $8,290 1978 $23,231 39.9% $9,269 1979 $28,448 28.0% $7,965 1980 $29,660 28.0% $8,305 1981 $30,819 23.7% $7,304 1982 $34,404 20.0% $6,881 1983 $49,408 20.0% $9,882 1984 $54,519 20.0% $10,904 1985 $68,278 20.0% $13,656 1986 $132,842 20.0% $26,568 1987 $137,399 28.0% $38,472 1988 $152,841 28.0% $42,795 1989 $145,631 28.0% $40,777 1990 $113,159 28.0% $31,685 1991 $102,776 28.0% $28,777 1992 $118,230 28.0% $33,104 1993 $144,172 28.0% $40,368 1994 $142,288 28.0% $39,841 1995 $170,415 28.0% $47,716 1996 $251,817 28.0% $70,509 1997 $356,083 20.0% $71,217 1998 $446,084 20.0% $89,217 1999 $542,758 20.0% $108,552 2000 $630,542 20.0% $126,108 2001 $326,527 20.0% $65,305 2002 $238,789 20.0% $47,758 2003 $294,354 15.0% $44,153 2004 $473,662 15.0% $71,049 2005 $668,015 15.0% $100,202

Gee, wasn't that fun.

-- Doug

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Reply to
Douglas Johnson

The correlation is actually to the stock market performance, not so much the tax rate.

The true question is whether we will live better as a nation paying more taxes or less. History shows that governments are big wasters and more revenue always leads to more bureaucracy and to a more expensive one, with less of each tax dollar ending up in quality services.

In the end, more taxes just fund more special interests, be them through farm-bills or through contracts, but not we the people, at least in any substantial way.

======================================= MODERATOR'S COMMENT: Posters to this thread should relate comments to general financial planning.

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Reply to
Augustine

FROM THE MODERATORS:

This thread is drifting away from financial planning and will be closed unless future comments deal with the financial planning aspects of the subject.

Thank you.

-HW "Skip" Weldon Columbia, SC

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Reply to
HW "Skip" Weldon

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