This one is for MBI

[digitaldiscipline]

Every so often, I get an email with a subject along the lines of "this might be good for conversation on the blog." Earlier this week, it was the Boston Globe summary of why making users change their system passwords was counterproductive (my tl;dr summary for y'all: "I can't remember my fucking password, so I'm going to blame the entire IT industry").

So, in the spirit of turnip bouts are fair play, and because he's an incessant proponent "stop taxing the rich bastards," I provide, in very succinct form, why I consistently think his economic policy smells about as good as his bathroom an hour after he's eaten two helpings of asparagus in a rich cream sauce:






For folks who want more graphs, here is the Matthew Iglesias article to which Planet Money referred.

But don't take my snarky-ass word for it... take Mr. Iglesias':

As is well-known, the Top 400 [richest Americans] are considerably more talented than the rest of us. And this decline in their tax rates has created exciting new incentives for them to apply their talents. And that, in turn, is why the 2000s were a so much more economically successful decade than the 1990s, not just for the Top 400 but for the rest of us as well. Thanks to their skyrocketing incomes and falling tax rates, we’re currently all enjoying the fruits of prosperity, rapid growth, and low unemployment. Thanks rich guys!

Comments

[hellsop.livejournal.com]

Iglesias confuses "economic success" with "economic bubble".

[etcet.livejournal.com]

Given the overall trendline of the income of the group as a whole, it looks like their bubble stopped bursting around 2003, and has reinflated very nicely since then.

Unless you're saying that the current day also represents a wealth bubble for the top of the economic heap? (I admit to not being steeped enough in the topic to comment on larger trends than "the richest are getting richer, and the rest of us get to suck it.")

[hellsop.livejournal.com]

Nah, the bubble I'm talking about is the one for the rest of us. Most of the top tier (and 400 is a *really* top end. That's about 0.000001% of the US population) weren't affected by the housing bubble (which wiped out hundreds of billions of dollars spent on houses that a few years later weren't worth the paper printed on the them), but were affected by the Dot Com version (since a large percentage of them were rich on the basis of owning shit-tons of tech stocks). But it's not anything that could be called successful economic times worthy of praising their savvy for.

[mighty-man.livejournal.com]

I find it amusing that you failed to post the one I sent you weeks ago on this topic: http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.

In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.

Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Barack Obama and Democrats in Congress. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year.

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.

The federal income tax is the government's largest source of revenue, raising more than $900 billion -- or a little less than half of all government receipts -- in the budget year that ended last Sept. 30. But with deductions and credits, especially for families with children, there have long been people who don't pay it, mainly lower-income families.

The number of households that don't pay federal income taxes increased substantially in 2008, when the poor economy reduced incomes and Congress cut taxes in an attempt to help recovery.

In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center.

In 2008, President George W. Bush signed a law providing most families with rebate checks of $300 to $1,200. Last year, Obama signed the economic recovery law that expanded some tax credits and created others. Most targeted low- and middle-income families.

Obama's Making Work Pay credit provides as much as $800 to couples and $400 to individuals. The expanded child tax credit provides $1,000 for each child under 17. The Earned Income Tax Credit provides up to $5,657 to low-income families with at least three children.

There are also tax credits for college expenses, buying a new home and upgrading an existing home with energy-efficient doors, windows, furnaces and other appliances. Many of the credits are refundable, meaning if the credits exceed the amount of income taxes owed, the taxpayer gets a payment from the government for the difference.

The government could provide the same benefits through spending programs, with the same effect on the federal budget, Williams said. But it sounds better for politicians to say they cut taxes rather than they started a new spending program, he added.

Obama has pushed tax cuts for low- and middle-income families and tax increases for the wealthy, arguing that wealthier taxpayers fared well in the past decade, so it's time to pay up. The nation's wealthiest taxpayers did get big tax breaks under Bush, with the top marginal tax rate reduced from 39.6 percent to 35 percent, and the second-highest rate reduced from 36 percent to 33 percent.

But income tax rates were lowered at every income level. The changes made it relatively easy for families of four making $50,000 to eliminate their income tax liability.

[etcet.livejournal.com]

I managed to lose that email in the slush pile, since I can't check gmail at work any more, and it scrolled past in the mess *sigh*

[mighty-man.livejournal.com]

And frankly, if I'm talented -- that means *I* am talented. *I* am the one doing the work and earning the money. It doesn't mean the lazy ass people on the street get to ride my back because they have no talent.

I don't have a problem with the government collecting taxes -- I do have a large problem with them enacting large spending programs and expecting the rich to pay for it.

People and governments need to learn to spend within their budgets and everyone needs to pitch in the same.

[etcet.livejournal.com]

You're not going to get any argument out of me for espousing (and returning to) a balanced budget; the last time we had a budget surplus was when Clinton was in office.