Robert Reich, Why The Superrich Should Pay Their Bill

[a-train]

Even if the flat tax had no exemption for the lower incomes, it would still be better than what goes on now. I pay a little over half my income in taxes through federal income, social security, medicare, state income, city income, property, sales, and utility taxes. Slavery, that's what it is. A millionare is spending 15 - 20% while I pay 55%, I'll take a flat 27% any day!!!!

-a-train

[FrankJL]

Say for instance, higher income groups pay 7.4% and lower income groups pay 8%. Those who make the laws would argue that this is fair because the rich still pay more due to their higher incomes. Politically this is possible because Utah is a one party state.

I'm still not sure where you get the idea that Utah's income tax is regressive?

Those numbers don't match what I've found online for Utah's state income tax rates. The top marginal rate is 6.98 for income over 5k, which pretty much equals a flat tax with a few very very low progressive tax brackets. It is interesting though, for Utah being such a red state thats a fairly high overall state income tax rate. I live in Pennsylvania (a blue state) and our state income tax is a flat 3.07% regardless of income.

Utah sales tax is 4.75% and 2.75% on food, and nothing on prescription drugs. In PA our sales tax is 6%, but there is no sales tax on food, drugs (OTC and prescription), and clothing.

Having a $500,000 dollar Italian sports car charged the same assessment as a similar year lowest end model of Subaru is politically possible due to the desirability choice Utah Jazz seating with those nice lobbyists.

Lobbyists exist at every level of government... Thats nothing new.

[Canuck Mormon]

A few years ago our Provincial Gov't instituted a flat tax for all Albertans. It was, ironicaly, set at 10%. We have NO provicial sales tax. Right now, Alberta is one of Canada's richest provinces. Granted some of this is due to the oil boom at the moment. A flat tax is possible if implemented the correct way.

BTW - We still have our Federal Taxes, and all told, we still pay over 50% in taxes.

[Palerider]

<div class='quotemain'>

I thought it was Steve Forbes who had a better idea of a Flat Tax compared to what others offered.

You would probably love Utah's regressive State income tax: The rich pay a lower percentage of tax than the working poor.

Also, the yearly assessment tax on a limo is the same as an econo-box.

not sure why I would love it....if I am still paying alot of taxes....

[prisonchaplain]

I'm not sure who has it better--WA State, or OR. We pay nearly 10% in sales tax, but have no income tax. OR has an income tax, but no sales tax. OR's is more progressive, but I'm guessing my family does better with the sales tax (most foods exempt).

[Elphaba]

As late as the 1950s the top rate was 90%, I believe. The rate stayed up into the 70s until Reagan slashed the top rates. http://www.truthandpolitics.org/top-rates.php

Thanks for the information PC. I see what you're talking about now. I did some searches and came up with between 60 percent to 90 percent. Also, I think it should be noted these percentages are pre-deductions. However, your point states.

To be overly simplistic, "rich" = a net worth of $2.5 million and annual income of $200K or more. http://www.investmentu.com/IUEL/2007/20070607.html

Just a minor clarification. If I read your link correctly, the $200k or more annual income was an old requirement.

Thanks again PC. This is information of which I was not aware.

Elphaba

[boyando]

<div class='quotemain'>Your concerns can all be worked out. I don't believe that just because someone makes less income they shouldn't be responsible for helping fund the workings of government, even in some small way. Everyone should pay something for the privilege of living in a free country, even if it's a pittance. To misquote and twist an old phrase, freedom shouldn't be free.

I never said they shouldn't pay anything. But I don't think the working poor should have to take a harder hit, relatively, than anyone else. That's all.

Elphaba

Who are the working poor and at what level (same means test as the rich) are they no longer poor.

Sincerely asking, allmosthumble

[boyando]

<div class='quotemain'>

When was this? As far as I am aware, the rich always found ways to not pay taxes.

I don't define rich as six figures. I'm not sure what defines "rich." Can anyone give me a figure?

Elphaba

As late as the 1950s the top rate was 90%, I believe. The rate stayed up into the 70s until Reagan slashed the top rates. http://www.truthandpolitics.org/top-rates.php

To be overly simplistic, "rich" = a net worth of $2.5 million and annual income of $200K or more. http://www.investmentu.com/IUEL/2007/20070607.html

From memory, I believe that you are right. But I think that the rich, originally were hit by the 90% tax in WWII, were tax breaks were given too those who would help the war effort. I think that the highest tax bracket was dropped too 38%, by Congress, right after President Kennedy was assassinated, because it was one of the things that JFK, wanted. Reagan got it down too 27% but took out a lot of the loop holes.

This is all from memory and my memory ain't what it once was, so if I get the figures wrong, I'm sorry.

[Old Tex]

Robert Reich, the former secretary of labor and author of "Supercapitalism, responds to previous comments made in The Economist:

You might think that Democrats would do something about the anomaly in the tax code that treats the earnings of private-equity and hedge-fund managers as capital gains rather than ordinary income, and thereby taxes them at 15%—lower than the tax rate faced by many middle-class Americans. But Senate Democrats recently backed off a proposal to do just that. Why? It turns out that Dems are getting more campaign contributions these days from hedge-fund and private-equity partners than Republicans are getting. They don't want to bite the hands that feed.

What surprises me is that the pint-size semi-socialist acknowledges that his bedfellow Democrats are the main problem.

[FrankJL]

Who are the working poor and at what level (same means test as the rich) are they no longer poor.

Those who are working yet still remain below the poverty threshold (10k for individuals, 20k for a family of 3). Though it doesn't need to be full time work, I think minimum is 26 hours a week as a textbook definition. Working a 40hr week at the current federal minimum wage (5.85) will gross around 11k a year (8.7k net). Though when you factor in the government assistance one would be entitled to at that income level you still come out over that threshold.

Though poverty in this country is a relative term.

• Forty-three percent of all poor households actu­ally own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
• Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
• Only 6 percent of poor households are over­crowded. More than two-thirds have more than two rooms per person.
• The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
• Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
• Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
• Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
• Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.

Source

From memory, I believe that you are right. But I think that the rich, originally were hit by the 90% tax in WWII, were tax breaks were given too those who would help the war effort. I think that the highest tax bracket was dropped too 38%, by Congress, right after President Kennedy was assassinated, because it was one of the things that JFK, wanted. Reagan got it down too 27% but took out a lot of the loop holes.

Also don't forget to still factor in the Alternative Minimum Tax in that. When the AMT was drafted in 1969 is was only supposed to effect (or is it affect I always mess those up) less then 200 specific individuals , now it hits hundreds of thousands of taxpayers, hitting small business owners the most.

[Old Tex]

I'm not sure who has it better--WA State, or OR. We pay nearly 10% in sales tax, but have no income tax. OR has an income tax, but no sales tax. OR's is more progressive, but I'm guessing my family does better with the sales tax (most foods exempt).

Texas does not have an income tax, but the sales tax is 8%. (or 8.25%). Some Texas politicians have talked about a state income tax for years, but they soon found themselves out of office. A sales tax is a consumption tax and supposedly is easier on us poor folks because we can't afford to buy anything that cost a lot, especially in my case since my oil well in the back yard went dry. (Everybody in Texas has one, you know).

[Elphaba]

What surprises me is that the pint-size semi-socialist acknowledges that his bedfellow Democrats are the main problem.

Reich did not say the Democrats wre the "main problem."

Elphaba

[prisonchaplain]

<div class='quotemain'>What surprises me is that the pint-size semi-socialist acknowledges that his bedfellow Democrats are the main problem.

Reich did not say the Democrats wre the "main problem."

Elphaba

It goes without saying...

[FrankJL]

Republicans are not much help either. They will take your tax money to spend on pork projects with such haste and glee that it would shock and amaze even the most die hard liberal.

We could lower taxes for everyone if they government wouldn't waste 9billion dollars to fund a bridge to an island where less then 14,000 people live. Ted Stevens little pet project...and he's a Democrat or Republican (please circle one)?

[BenRaines]

Robert Reich, defender of the poor has just been named as the head of Citigroup. Glad he likes paying so much in taxes since he will probably earn 100 million or more over the next couple of years.

Ben Raines

[boyando]

Robert Reich, defender of the poor has just been named as the head of Citigroup. Glad he likes paying so much in taxes since he will probably earn 100 million or more over the next couple of years.

Ben Raines

Maybe he will pay tax's. It has happened to people like Reich before.

The one thing we do know, is that he will have the opportunity, to pay 65% of that 100 million.

Our government will then blow 95% of that will go away, too bureaucracy. That does leave about 3.25 million or about 2% of what they just spent on the capitol.

I you ask me, we need more 100 millionaires.