From the right: The bottom 10% are "lucky duckies"

[axi]

A look at the offshore companies? But how can you look at them without binoculars? They're so far awaaaay....

[Sava]

Those statistics don't take into account the off-shore tax dodging... or any tax dodging in general.

[DanS]

I can draw some conclusions above and beyond what the WSJ talks about (I haven't read the editorial--I have come to my opinions on my own).

First and foremost, in order to have greater buy-in for "Republican" policies, we need to have greater stock/bond ownership by those in the bottom 50%. This is so that, as Jules points out, business-friendly policies will have wider impact. For instance, removing the double taxation of dividends would be a good thing for American business overall, but presently would mean no immediate benefit for about 40-50% of the population.

I would recommend futzing with the "third rail" of politics--social security reform, in order to put stocks/bonds in people's pockets. If the discussion doesn't kill the Republican party in the short run, it can't help but be better for America and the GOP in the long run.

[uh Clem]

A call for social engineering. Hmmmm.

[DanS]

Well, the social engineering is already being done with payroll taxes.

If a mere 1/3rd or 1/4th of the payroll taxes were moved to private activity, this would benefit both America and the GOP pretty hugely over the long run.

I don't think Bush will take this opportunity because it's risky for '04, but you never know. I would much prefer it versus accellerating the tax cuts, for instance.

[Ogie Oglethorpe]

Originally posted by DanS
I can draw some conclusions above and beyond what the WSJ talks about (I haven't read the editorial--I have come to my opinions on my own).

First and foremost, in order to have greater buy-in for "Republican" policies, we need to have greater stock/bond ownership by those in the bottom 50%. This is so that, as Jules points out, business-friendly policies will have wider impact. For instance, removing the double taxation of dividends would be a good thing for American business overall, but presently would mean no immediate benefit for about 40-50% of the population.

I would recommend futzing with the "third rail" of politics--social security reform, in order to put stocks/bonds in people's pockets. If the discussion doesn't kill the Republican party in the short run, it can't help but be better for America and the GOP in the long run.

While I agree that this would be a good thing, my guess is the greater public at large would not have the same degree of buy-in to a Social Security mutual fund/index fund as they would have say in their 401-k's as normally have direct control over investment stratgies within the 401-k. Whether the overall public opinion and subsequent policies to the US industries would become more favorable depends greatly on the communication of the vested interest all folks would have. I'm not sure that concept would translate well.

[Dauphin]

Originally posted by JohnT
Dolphin:
Compared to the NTU numbers ( http://www.ntu.org/links/FAQs/whopaysincometaxes.php3 ), I think it is obvious that the US's personal income tax rates are far more "progressive" than the UK's. The middle class and the poor pay a higher percentage of the income taxes in the UK than they do in the US. Hell, compared to US millionaires, the ones in the UK pay 40% less in income taxes! Is the UK the newest tax haven for the super-wealthy?

UK income tax is 40% for all and everyone earning over ~$50,000, 22% for ~$9,000-$50,000, 10% for ~$7,000-$9,000 and nil% below ~$7,000. What are the US tierings?

Unless your figures are hugely different what I think what is clear from the stats is that the rich-poor divide in the US is greater than in the UK.

I think the reason the rich are footing most of the tax bill is because they are also getting most of the income. If the rich earn a lot more relative to the poor then they pay a lot more in taxes. The figures for comparative tax bills are not indicative of progessive taxation differences, but of income distribution differences.

[DanS]

"I'm not sure that concept would translate well."

I agree with you. Risky political business.

But one note of hope in the last election was that the social security "privatization" label that the democrats used was surprisingly ineffective--everybody in Washington believed the voting public to be much more "conservative" on the issue (i.e., not for changing the current system). For instance, Coleman in Minnesota didn't run away from the issue and actually turned it around to his benefit.

[DanS]

SD: The marginal rates are as follows...

http://www.infoplease.com/ipa/A0106989.html

These marginal rates are after all sorts of deductions--at least $6,500 for an individual. Also consider that state income taxes are based in large part on federal income taxes. So by and large if you don't pay federal, you also don't pay state.

I assume when you say $, you mean GBP?

[Spiffor]

Originally posted by JohnT
I wonder what the percentages for European countries are. How many of them demand the top 25% of taxpayers pay for 84% of the total income tax bill?

FYI, in France :
About half of the households don't pay the income taxes as they're under the threshold. The tax is progressive and reaches 54% for the highest incomes. This max. rate has been lowered some years ago, I don't remember what the max. was before.

However, our politicians have bypassed the "problem" in all hypocrisy : there are 2 new taxes taken by the state, officially to pay back the debt of our social security : "Contribution Sociale Généralisée" and "Remboursement de la Dette Sociale" take about 9% of all incomes, coming from work or from capital.

European pressures and presidential demagogy mean income taxes will lower in the upcoming years. The government told us taxes were lowered by "5%". I don't know the details, but it seems the people paying 54% of their income are the most favored by this change.
Income tax represent about 20% of the State's income.

Also, since we're talking about sales taxes in this thread, the French "Taxe sur la Valeur Ajoutée" (TVA) is 19,5% IIRC on all products except food, medication, and cultural goods (5,5% in this case). There used to be a higher TVA for luxuries, but I don't know if it continues.
TVA is 40% of the income for the state, being the most rewarding tax. TVA is a "hidden" tax, because all prices are written with all taxes included : you have to look twice on your bills to know how much you paid to the state. OTOH, income tax is obvious : one has to fill a complex form every year or more to pay his income tax, and eventually knows precisely what he paid.

Of course, politicians cynically raise TVA whenever they want a boost of popularity by lowering income taxes. This is consistent with EU demands.

There are also specific sale taxes for cigarettes / alcohol, and for fuel. They are significantly higher than TVA (about 80% of the fuel's price is taxes)

[DanS]

TVA/VAT isn't progressive at all. Why do y'all except it?

[uh Clem]

One fly in the ointment is that if lower income citizens had so much stock ownership that their perceptions became more nearly those of owners than workers...

...(or in other words, if those at the bottom of the pyramid owned proportionately MORE, while those at the top owned proportionately LESS),...

...then it would undermine the entire point of having a George W Bush administration in the first place, wouldn't it?

Since Reagan/Thatcher, the transfer of wealth has been upwards, not downwards. I doubt that the people who set policy for this administration see themselves as having been put in power in order to reverse this trend.

Sounds almost Clintonian, in fact. (Okay, low blow...)

[Spiffor]

Originally posted by DanS
TVA/VAT isn't progressive at all. Why do y'all except it?

Maybe it wasn't clear from my previous post, but I don't. It's an extremely unjust tax, which combines taxing the poor more heavily than the rich (since poor people have to use a much higher part of their income to consumption), and disrespecting the taxpayer, at least in France where the tax is semi hidden.
I absolutely hate it, and consider income taxes should be heavily raised in France to make up for the necessary heavy lowering of VAT/TVA. That's my opinion, but I think most people in favor of progressive taxes hate VAT/TVA as much as I do.

[DanS]

"That's my opinion, but I think most people in favor of progressive taxes hate VAT/TVA as much as I do."

I think I grok the political dynamics.

It seems unlikely that nice socialists like yourself would be for increasing the income tax rate for the lower tax brackets nearly enough to make up for the loss of TVA/VAT.

Your politicians understand that because of this, the higher earners would be taxed at an outrageous rate (rather than the 63% that is implied now--i.e., 54% + 19.5% of the remainder), so they take the expedient route and go TVA/VAT.

In the US, we just soak the rich, believe it or not. We can do this, because the overall tax burden on society is smaller.

For instance, if you lived in Maryland/Montgomery County, you would pay the 38.6% marginal federal income tax rate + 23% marginal state income tax rate = 61.6%. Then add FICA, which is about 8% paid by the employee (and 8% paid by the employer) on the first $75,000 in income. Then real estate taxes at .838% of your home's value. Then sales tax at 5% on some items.

[GePap]

JohnT:

Don't get so damn worked up.

As for the 'GOP', the Fox affiliate here in NYC reported that the editors of ther WSJ had asked their writer ot phase out using GOP. Take it up with Rupert if you have a problem with his media- empire's reporting.