Berkeley CSUA MOTD:Entry 32882
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2018/11/15 [General] UID:1000 Activity:popular
11/15   

2004/8/13 [Reference/Tax] UID:32882 Activity:insanely high
8/12    CBO reports Bush tax cuts have shifted tax burden to middle class
        http://www.washingtonpost.com/wp-dyn/articles/A61178-2004Aug12_2.html
        The CBO is headed by a former senior economist from the Bush white
        house, Douglas Holtz-Eakin.
        And the Bush response?
        "Girding for the study's release, Bush campaign officials have already
        begun dismissing it as 'the Democrat-requested report.'"
        \_ General question about tax increases and tax cuts for the
           liberal-minded sodans.  Say we agree that progressive taxation is
           good.  So whenever the government raises taxes, it does so in a
           progressive way (the rich pay more).  Shouldn't it, when lowering
           taxes, do so in a regressive way for the result to be the inverse
           operation?  Why is this raising such furor?  Is this just
           emotion politics? -- ilyas
           \_ Yes it is.
           \_ Assume you have some progressive graph of total income in the
              x-axis and total taxes on the y-axis.  In a progressive system,
              this curve would look something like a hyperbola monotonically
              converging to the max tax rate.  Multiplying the curve by some
              constant, say 0.9 would fairly lower taxes by 10% for everyone.
              The problem is if you change the shape of the curve in a way that
              it's overall 'progressiveness' is reduced.  If Bush's tax cuts
              preserved the progrssiveness, than everyone would have seen their
              total taxes decrease by the exact same percentage, but in reality
              the rich saw a much larger percentage drop in the amount they
              were paying.
              \_ Careful, you're making Motd Debate Mistake #1: trying to argue
                 with ilyas.
                 \_ It's not debating or arguing with the guy; it's pointing
                    out to everyone else on the motd why his argument is clearly
                    misleading.
                    \_ That's my whole point - once you are in the IlyaLogic
                       zone, normal rules do not apply.  Its best just to ignore
                       him.
                       \_ I think you guys pick on him because he is both
                          smarter than you and thinks more clearly and
                          logically than you.  And his real crime is he
                          questions your assumptions and beliefs.  The only
                          thing you can do is dismiss him without comment
                          because you can't win against someone smart and
                          right.
                          \_ actually, ilyas' brain has a lot of weaknesses.
                             it's too theoretical and ivory towerish.
                             he tends to think autistically, unable to
                             keep an open mind in examining others'
                             point of view.  he also likes to project his
                             own rather narrow and limited experience onto
                             problems he has no clue about, like "affirmative
                             action is bad for US, so it must be bad for
                             India" or "Libertarianism is what I like, so I
                             support Taiwan declaring independence", etc.
                             Like software, his brain could possibly be
                             upgraded to a better version, but it would
                             require some effort.
                          \_ Actually, I personally think he makes a lot of
                             not well-supported statements, just like in this
                             post.  I try to explain why.
                          \_ There are people on the motd who get picked on
                             because they're smarter, know more, and are too
                             willing to show it, but ilyas is not one of them
                             (except for the showy part).
                             He is an example of someone who pushed himself
                             (or get pushed) through education that is just
                             beyond his own capacity.  He and Tom show that
                             one doesn't necessarily become wiser by getting
                             higher degrees, and vice versa.  No, I am not
                             against education, but just think what a waste
                             it is of everybody's time and resource to pursue
                             graduate degree without knowing how to reason.
           \_ No, the progressiveness should be fixed, like each income
              bracket paying a portion of the total taxes.  Now, as a
              percentage, the top 1% is paying less.
           \_ The question is "how progressive is progressive enough"?  If one
              assumes that taxes are currently (after the Bush tax cuts to the
              rich and the removal of the dividend tax) not progressive enough,
              then to become more progressive, you can either (1) Lower the
              tax rates on the poor, (2) Perform (1) but lower the tax rates
              on the right by a smaller amount, (3) Increase taxes on the
              rich, or (4) Both (1) and (3).
              rich, the removal of the dividend tax, and the phasing out of the
              inheritance tax) not progressive enough, then to become more
              progressive, you can either (1) Lower the tax rates on the poor,
              (2) Perform (1) but lower the tax rates on the right by a smaller
              amount, (3) Increase taxes on the rich, or (4) Both (1) and (3).
              If, on the other hand, as you suggest, we lower taxes on
              the poor and rich at the same rate, you leave the tax system
              at the same level of progressiveness (which takes you from
              "not progressive enough" to the same level of "not progressive
              enough", given the initial assumption).
              \_ Uhm, ok, but as far as I know, the tax cuts were never made
                 permanent.  I think it's 2011 they all revert back to the
                 pre-Bush tax era.  Please correct me if I'm wrong.
                 \_ You are likely correct.  It is also true that it does
                    not change the original argument.
           \_ To clarify my earler comment.  Suppose you start with a system of
              progressive taxation where one person pays $100 taxes on $1000 of
              income and another person pays $1000 taxes on $5,000 of income.
              To fairly reduce taxes by 10%, you'd see the poor guy's tax bill
              go to $90/$1000 and the rich guy's tax bill go to $900/$5000.
              An unfair reduction in taxes would be to reduce the  poor guy's
              taxes by 5%, to $95/1000, but reduce the rich guy's taxes 15% to
              $850/5000.
              \_ Ok.  So the general feeling is 'current tax system is not too
                 progressive.'  Did I get that right?  Because if it _was_ too
                 progressive, you would need to reduce taxes regressively to
                 fix it.  Next question: what's 'progressive enough?' -- ilyas
                 \_ we did reduce the taxes regressively.
                    \_ So was that good or bad?  -- ilyas
                 fix it.  Next question: what's 'progressive enough?'
                 To clarify: assuming you believe progressive taxation is a good
                 idea, AND assuming the current rates are 'just the right level
                 of progressiveness', you would want to reduce uniformly.
                 If you believe it's not progressive enough, you reduce
                 progressively, if you believe it's too progressive, you
                 reduce regressively.  So is the outcry about Bush's reduction
                 stemming from the fact that there's the belief the current
                 rates are not progressive enough?  What is progressive enough?
                 Btw, I was really flabbergasted by the level of shit in this
                 thread earlier today.  I was trying to understand the liberal
                 mindset in criticizing regressive reductions.  You would think
                 I would be encouraged to be more open minded, but I guess
                 not. -- ilyas
                 \_ The outcry was because the tax cuts were regressive, that
                    is, they made the tax structure less progressive.
                    \_ Yes ... but the outcry only makes sense if you believe
                       the system before Bush's cuts wasn't too progressive
                       (i.e. either just right or not progressive enough).
                       Do people here believe this to be so? -- ilyas
                       \_ That's a topic all its own.  Me personally?  I think
                          it should be more progressive.
                          \_ Well... the way I see it, you can't separate the
                             'outcry' from this topic.  And yes, it's a big
                             topic.  The fact that a regressive cut being good
                             or bad seems so disconnected in people's minds
                             from what a fair progressive tax system ought to
                             be makes me suspicious that it really is some sort
                             of hot button issue (the poor are getting screwed
                             more than the rich!).  -- ilyas
           \_ I thought ilyas is reasonably smart.  how come he doesn't even
              understand the difference between velocity and acceleration.
              \_ check your assumptions.
              \_ IlyaLogic is "different" than normal logic.
                                          \_ from
              \_ He does, he's just trying to lead you into a trap.
        \_ Since payroll taxes aren't being cut, most of the taxcut should
           go to the middle class.  Bush and Co always leave this bit out.
2018/11/15 [General] UID:1000 Activity:popular
11/15   

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Cache (2716 bytes)
www.washingtonpost.com/wp-dyn/articles/A61178-2004Aug12_2.html
Back Tax Burden Shifts to the Middle They point to a different set of numbers within the CBO study that show that the rich are actually paying more in individual federal income taxes. If Social Security, Medicare and other federal levies are excluded, the rich are paying a higher share of income taxes this year than they would have paid with no tax changes, the CBO found. If none of the tax cuts had passed, the top 20 percent would pay 784 percent of income taxes this year. In contrast, the middle-class share of income taxes dropped to 54 percent, from 64 percent if no tax cuts had passed. Friday's Question: The Summer Olympics begin today with the opening ceremonies in Athens. Which senator was captain of the US Olympic judo team at the 1964 games? For the bottom 20 percent of households, the combined Bush tax cuts averaged $250 each. The middle 20 percent received $1,090, while the top 1 percent garnered $78,460, said Democrats on the Joint Economic Committee who analyzed the report. The tax cuts this year will boost the income of millionaires by 101 percent, while middle-income families see a boost of 23 percent, the Democrats said. Congressional Republican aides said the CBO analysis has its limitations. For instance, it assumes that the beneficiaries of business tax cuts passed in 2002 and 2003 are the taxpayers who own stocks, bonds and other stakes in the businesses that received the reductions. But that analysis does not consider new workers hired because of the tax cuts, or higher wages that may have been granted because of the boost to the bottom line. It also does not reflect that during the 1990s, the tax rates on lower-income households fell considerably due to an expansion of the earned income tax credit and other forms of low-income relief. In that sense, GOP aides said, tax cuts for the wealthy were overdue. Besides, Holt said, looking narrowly at the distribution of tax cuts ignores the broader benefits -- such as investment, consumer spending, and job creation -- that flow from leaving more money in people's hands and that are spread far more evenly through the economy. "Tax relief is about fairness, but it's also about economic growth," he said. "So the president's tax relief was both fair and effective, when it comes to bringing us from recession to growth." But Republicans predicted that Kerry will make the report a major political event, and Furman said the results will be too stark to spin. "This is the first really detailed government report that says not only did the wealthy get an enormous tax cut, but, if the conclusions are what we expect, the middle class will be left paying a larger proportion of the taxes than they were before," he said.