Thursday, April 28, 2016

Taxing the Rich: Let's Make a Deal

Good to see corporations are paying less and less in taxes over the last 40 years, since corporations cannot actually pay any taxes, as I have noted before, their customers ultimately do.

But we keep hearing to top 1% (it's actually 2.7%) pay over 50% of USA Fed taxes. 
In 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes, though they accounted for only 2.7% of all returns filed, according to our analysis of preliminary IRS data. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.7%. By contrast, people with incomes of less than $50,000 accounted for 62.3% of all individual returns filed, but they paid just 5.7% of total taxes. Their average tax rate was 4.3%.
I wonder if the 5.7% collected is worth the cost of processing the 62.3% of all returns filed?  Or is this third world stuff of costing more to collect than is gained?

But back to that 2.7%, them's the facts narrowly stated, but those same people are also the greatest welfare queens, getting far more in benefits than they pay in taxes.  The whole 2.7% pay 51% is a sham.  The easiest to spot is the Third Undersecretary for Humourous Gaits who earns $250,000 in DC and "pays taxes" (with 100% of his pay contributed by taxpayers) and gets a handsome pension as well.

When the Alaska Airline folk make stupendous sums buying Virgin Airlines with malcredit two things are happening at once.  Branson is bailing out of a game that is now over: borrow malcredit and mulct fabulous wealth from the income stream.  Alaska Air is making a play to get too big to fail.  It might work since Delta and United have such onerous legacy pensions that need busting, the powers that be may go with that outcome.

The reason not everyone is borrowing malcredit is they know the crash will be soon.  Debt does not reduce even though prices and income does.  To have $100 million in debt but not the revenue from investments of the 100 mil to make even negative interest rate principal payments, then it's bankruptcy, and there goes all the beautiful personal pension plans.  Whereas no one cared 8 years ago, the politics are different now, "the people" may demand a 99% tax on pensions above the first $36,000 in pension income.

Here is a rehearsal of an absurd idea again...
All told, individual income taxes accounted for a little less than half (47.4%) of government revenue, a share that’s been roughly constant since World War II. The federal government collected $1.54 trillion from individual income taxes in fiscal 2015, making it the national government’s single-biggest revenue source. (Other sources of federal revenue include corporate income taxes, the payroll taxes that fund Social Security and Medicare, excise taxes such as those on gasoline and cigarettes, estate taxes, customs duties and payments from the Federal Reserve.) Until the 1940s, when the income tax was expanded to help fund the war effort, generally only the very wealthy paid it.
As if...  corporations cannot pay taxes.  Their customers do.  So consumers pay all taxes, no matter how they are disguised.

We have a system where people are forced to pay for the guy who refuses to work.  In making such payments, the taxpayer of course nets less, and thus is forced to live next door to the guy who will not work, because the taxes paid keep the taxpayer poor.  That's fair. Isn't it?

There is a solution to this, let's make a deal.  Takeaway all the welfare payments to those in the top 2.7%.  Then watch what happens.  The false economy will fall, there will be a renaissance in business, the tax burden will spread, and the 2.7% will have nothing to complain about, or brag about, or whatever it is when they say they pay 51% of the taxes.

Feel free to forward this by email to three of your friends.