R tax cuts have always had the objective of having the wealthy pay a smaller and smaller share while enticing everyone else with pennies. RR’s OMB, Stockman spoke after school and called them “a Trojan Horse. Don’t believe it. RR and Bush paid for tax cuts by washing a Social Security surplus that would have paid for the Baby Boomers into the general budget. I would like to see all the loop-holes, tax dodges, and just plain fraud eliminated, the rest of us pay our fair share on a relatively small part of GDP. Just look at Walz’s income sources and you can see he and his wife are not part of the Uber rich trying to cut back on real recipients of government programs to finance the insatiable quest for more $. I used to work with income and wealth distribution statistics in the US….I know.
Rich people absolutely hate the idea of a flat tax because all their loopholes and little tricks to pay nothing would disappear.
So the top 5% of the wealthy who have 80% of the wealth should pay the same rate as the rest of us? Wonder who came up with that idea?
Surely income tax is an amount based on earnings and not GDP? Is USA income tax not measured as a percentage of income? I mean if someone earns 100k, and pay 5%, they would pay, erm, 5000 yet, if another earned 1m, and paid 5%, they would pay 50000 tax? (I've ignored banded rates where higher earners may pay a higher rate, say 10%).
I agree that loopholes should be closed but we also need to get real about it. If the UK or the US closed all loopholes those with a mindset for creating wealth/jobs, would shift their financial base to some other country where taxation is lower. They may even shift their wealth creation and job creation to that other country, away from their home country and then where would the rest of us be then? Imagine; no job and no system to help. (eg UK benefits system, which would be even more unaffordable without their income tax and corporate tax receipts).
In theory, the US tax system is progressive with the %increasing as the income goes up. In reality the complex system actually results in the wealthy escaping taxes with the tricks of the system. A real issue is the mal-distribution of income and wealth with a very significant amount accruing to a very small percentage of rich. As an economist I’m using GDP as a stand in for all the economic goodies. The concentration of economic wealth in the US is much more concentrated than in other industrialized nations.
That members of congress are allowed to do insider trading is the first indicator that the apples are rotten.
So, If tax cuts generate more investment and economic activity; And that increase in economic activity generates an increase in employment, in tax receipts; is that a bad thing ? One could just buy gold coins and stash them away. Investing in our economy, our workforce, our towns is a good thing. Would love to see deductables for political and charitable donations capped.
