A tax-cut parable

[Cheyenne]

This was in the Sun. Mar. 4 Chicago Tribune, It nicely provides a story/analogy which addresses the arguments for not giving a tax cut to the wealthy (remember: anyone who makes more than $40,000 yearly is wealthy by IRS and the Democrats' standards).

FT. WORTH -- Every night, 10 men met at a restaurant for dinner. At the end of the meal, the bill would arrive. They owed $100 for the food that they shared. Every night they lined up in the same order at the cash register.

The first four men paid nothing at all.
The fifth, grumbling about unfairness of the situation, paid only $1.
The sixth man, feeling very generous, paid $3.
The next three men paid $7, $12 and $18, respectively.
The last man was required to pay the remaining balance, $59. He realized that he was forced to pay for not only his own meal but the unpaid balance left by the first five men, but did not protest.

However, the 10 men were quite settled into their routine when the restaurant threw them into chaos by announcing that it was cutting its prices.

Now dinner for the 10 men would only cost $80.
This clearly would not affect the first four men. They still ate for free.
The fifth and sixth men both claimed their piece of the $20 right away.
The fifth decided to forgo his $1 contribution to the bill.
The sixth pitched in $2.
The seventh man deducted $2 from his usual payment and paid $5.
The eighth man paid $9.
The ninth man paid $12, leaving the last man with a bill of $52.

Outside of the restaurant, the men began to compare their individual savings from the $20 reduction,and angry outbursts began to erupt.

The sixth man yelled, "I only got $1 back out of the $20, and he got $7," pointing at the last man.
The fifth man joined in. "Yeah! I only got $1, too. It is unfair that he got seven times more than me."
The seventh man cried, "Why should he get $7 back when I only got $2?"
The nine men formed an outraged mob, surrounding the 10th man.
The first four men followed the lead of the others: "We didn't get any of the $20. Where is our share?"

The nine angry men carried the 10th man up to the top of a hill and lynched him.

The next night, the nine remaining men met at the restaurant for dinner.

But when the bill came, there was no one to pay it.

 

[Cync]

Chey, you're cute and all, but your analogy is full of shit!

The problem with the current tax rules are that they are already skewed to the super-rich.

Up until the end of 1982 the tax bracket for the wealthiest portion of society was a 70% hit on their annual income. In 1982 Reagan passed a tax cut plan, somewhat simliar to Bush's I suppose, that lowered the highest tax rate to 50%. Since then the highest tax bracket has taken a bit of a roller-coaster ride and now resides at 39%.

Would you like to take any guesses how much the LOWEST income tax bracket has changed? According to the sites I've visited, its stayed exactly the same - 15%.

Now you can spew forth all that conversative bullshit you want, but the numbers speak for themselves - the wealthiest 1 or 2 percent have received a 50% tax cut over the past 20 years whereas the middle class, the average joe, has gotten squat - a pittance perhaps!

Bush's plan would be to make further cuts to the highest income tax bracket - to 33% - and oh, btw, you poor slobs paying 71% of the taxes that the government collects each year, oh yeah, we'll throw you a bone too!

I hate to keep quoting newsweek, but as far as magazines go its keeps a rather central view. They did a piece maybe a month ago which had a few examples regarding what a family earns and what they could hope to get back at the end of the year.

Under Bush's plan the average return for a family of four making what - $60,000 (clearly "wealthy", right?) - would get back $1,600 year in taxes whereas the wealthiest 1% would get back around $45 - 50,000. Whats wrong with this picture? I'll go you one better, that $1,600 that the 'target' family would receive? $1,000 of that comes from simply doubling the child tax credit, so guess what? If you make $60,000 and don't have any kids? Well here's your $600, thanks for playing!

Want to talk about this nonsense about repealing estate taxes? Perhaps you'd like to justify why Bush has backed off on CO2 emissions and maybe why he's allowing companies to dump aersnic in the water at unprecidented levels? Oh, while we're talking I suppose we can mention why he supported bankruptcy reform as quickly as he did (I suppose MBNA being his largest contributor was just a coicidence, hmm?) and finally, why do YOU think he doesn't support a full reform of campaign finance reform?

Chey, as I said, you're a great gal, I'd love to get to know you better, but really - take your head out of your ass and look at what dubya is REALLY up to!

 

[Ally C]

Under Bush's plan the average return for a family of four making what - $60,000 (clearly "wealthy", right?) - would get back $1,600 year in taxes whereas the wealthiest 1% would get back around $45 - 50,000. Whats wrong with this picture? I'll go you one better, that $1,600 that the 'target' family would receive? $1,000 of that comes from simply doubling the child tax credit, so guess what? If you make $60,000 and don't have any kids? Well here's your $600, thanks for playing!

There will always be dividing lines which seem unfair. The examples you give paint the picture of inequality rather clearly. Don't forget that your country is founded on principles which push this inequality to extremes. If you want 'the dream', expect others to have nightmares. Happens everywhere.

 

[Samuari]

Hey Cync, lighten up! Your post is harder to read then the tax code.

What would be wrong with a flat tax rate that exempted the first 25K of income?

 

[WriterDom]

Chey, you're cute and all, but your analogy is full of shit!

The problem with the current tax rules are that they are already skewed to the super-rich.

Up until the end of 1982 the tax bracket for the wealthiest portion of society was a 70% hit on their annual income. In 1982 Reagan passed a tax cut plan, somewhat simliar to Bush's I suppose, that lowered the highest tax rate to 50%.

You seem to think the super rich should have 70% of their income sucked up by the government. Perhaps you want to go back to pre-Kennedy days when the top rate was 90%. Are you going to go whistling off to work if you are only getting a dime for every dollar you make. No, you'll take off the rest of the year and go dig for relics in Ireland, or play golf everyday. Every time taxes are cut the government takes in more money not less. But you don't give a shit about how much the government takes in revenues. You this want the evil rich punished for being successful.

And it's very deceiving to make arguments about the lowest tax rates because it's a marginal rate once all the deductions and exemptions kick in. A poor married couple making 20,000 does not pay 15% or 3000 dollars. They pay nothing. A single person pays 1943 or less than 10%. And under the bush plan they'll save 300 dollars a year which is a 15.5% cut.

 

[Cheyenne]

Up until the end of 1982 the tax bracket for the wealthiest portion of society was a 70% hit on their annual income. In 1982 Reagan passed a tax cut plan, somewhat simliar to Bush's I suppose, that lowered the highest tax rate to 50%. Since then the highest tax bracket has taken a bit of a roller-coaster ride and now resides at 39%.

Yes, and thank God for that! 90% in the 60's finally down to 39%- what took so long?

Would you like to take any guesses how much the LOWEST income tax bracket has changed? According to the sites I've visited, its stayed exactly the same - 15%.

Would you rather pay 15% or 39%? Quit whining.

Now you can spew forth all that conversative bullshit you want, but the numbers speak for themselves - the wealthiest 1 or 2 percent have received a 50% tax cut over the past 20 years whereas the middle class, the average joe, has gotten squat - a pittance perhaps!

You didn't like the Chicago Tribune analogy, did you? Did you understand any of it?

Originally posted by Cync
Under Bush's plan the average return for a family of four making what - $60,000 (clearly "wealthy", right?) - would get back $1,600 year in taxes whereas the wealthiest 1% would get back around $45 - 50,000. Whats wrong with this picture?

Not a thing. (Although your $45k-$50k sounds a tad high, so maybe your math is off a bit.)

 

[Samuari]

Relax Chey, he just got sucked in by the class warfare concpircy nuts. I've reserved a room for him between Todd and Deborah. Won't that be fun to watch?

 

[Cync]

I'm not trying to start a class warfare thread, and I certainly don't hold the principle that the super rich are inherently evil close to my heart either, but I think in the intrest of keeping the economy strong the tax code should be more balanced in favor of the middle class. No, not the portion of society in the 15% tax bracket, but everybody paying over 15% and below 39%.

I think I've clearly demonstrated how the wealthiest segment of society has received significant tax breaks in the past. Would it all of a sudden be unfair for someone to suggest that perhaps the middle class (read: NOT the 15% bracket) could use the occassional relief as well?

Lets talk about that other tax cut that your boy seems to be hot on - the death tax - as it so clearly defines Bush's committment to the rich.

As the tax law is now setup, a person with under $675,000 in assests at the time of his death pays no tax whatsoever. Additionally, someone with over that amount can bequeath everything to a spouse tax free.

Now lets assume for just a second that someone has more wealth then is exempted and no spouse to pass it along to. They would join the 1.8 percent of the population that gets hit with the estate tax each year (that is to say that 98 out of 100 people do NOT pay this tax) and their heirs would be required to surrender between 35 and 55% of their estates.

Now here's where you right wing nuts will start losing it. THIS IS A GOOD THING!!! The redistrubtion of wealth guarentees that there are not that haves and the have nots in this country. In order for this country to survive as it has, there has to be certain checks in the system to keep the privlidged families of our history from having gobbled up the whole damn country by now.

The tax is levied to support a government that is for the people, or those people that worked to make the rich - well, Rich!

Let me give you one tiny example, using something that I heard on the television just yesterday.

As you may have heard, Disney is laying off 4,000 people. It carries about 155,000 on staff, so 4,000 isn't really THAT many, but if you just happen to be one of the people losing their jobs, well sorry, don't forget to write! Okay, it happens - companies get worried when the economy starts looking uncertain, and they let people go - I understand how this works, hell, I'm THERE right now for gods sakes!

Alright, here's the gotcha! Disney just opened a new hotel and as part of its revealing they awarded Eisner, CEO of Disney operations a multimillion dollar bonus.

Now call it class warfare, but when one segment of the population is getting bonuses while another is getting a kick in their ass I sure as hell want to know my government is there to step in a balance the scales just a little bit!

 

[Deborah]

Hey Samuari, at least I don't have to call the city to get a possum out of my house four days later. That sucker would have been dinner at my house that very evening. Just think about how many tax dollars were spent on that little possum hunt of yours.

 

[Cync]

Cync--I love the Disney example. Too many directors on too many boards have checked their consciences at the door.

I really don't see how these people can sleep at night!

 

[Samuari]

Hey Samuari, at least I don't have to call the city to get a possum out of my house four days later. That sucker would have been dinner at my house that very evening. Just think about how many tax dollars were spent on that little possum hunt of yours.

Some of the best spent tax $ ever! Targeted for a purpose that improved the quality of life for two families. No conspircy involved (damn it).

 

[Cheyenne]

I'm not trying to start a class warfare thread, and I certainly don't hold the principle that the super rich are inherently evil close to my heart either, but I think in the intrest of keeping the economy strong the tax code should be more balanced in favor of the middle class. No, not the portion of society in the 15% tax bracket, but everybody paying over 15% and below 39%.

This is me. Contrary to your assumption, I'm not in the top bracket.

Would it all of a sudden be unfair for someone to suggest that perhaps the middle class (read: NOT the 15% bracket) could use the occassional relief as well?

We are getting it.

Now lets assume for just a second that someone has more wealth then is exempted and no spouse to pass it along to. They would join the 1.8 percent of the population that gets hit with the estate tax each year (that is to say that 98 out of 100 people do NOT pay this tax) and their heirs would be required to surrender between 35 and 55% of their estates.

This is also me.

Now here's where you right wing nuts will start losing it. THIS IS A GOOD THING!!! The redistrubtion of wealth guarentees that there are not that haves and the have nots in this country. In order for this country to survive as it has, there has to be certain checks in the system to keep the privlidged families of our history from having gobbled up the whole damn country by now.

The tax is levied to support a government that is for the people, or those people that worked to make the rich - well, Rich!

WE ARE NOT COMMUNISTS! Do you hear yourself?

I am not from a priviledged family. I've been downsized several times. I got off my ass and back in the game somewhere else. I'm a hard worker and a good investor.

Redistribution of wealth? I paid tax when I earned the wages. I paid tax when I earned income on the investment of those wages. Now you want me to pay another 35% to 50% tax just to be able to die? Give me a fucking break. Want to know where my assets go when I die? They first go to take care of my parents, as I do now. Social security and pension provides the basics of life. I try to give them the extras, like a car, and a vacation now and then. If my parents are dead before me, my brother/sister get 10% each, and my nieces and nephews split evenly that which I haven't set aside for charity. The money will be held in trust to pay for their schooling, any medical bills, etc.

I can redistribute my "wealth" just fine on my own, thank you very much. My choice of charity and my relatives deserve the fruits of my labor/investing much more than the government does. The government has taken its share from me several times already.

 

[Cync]

WE ARE NOT COMMUNISTS! Do you hear yourself?

You know, this comes about as close to my reaction when I first heard this as well. I believe my exact words were, "and how does this differ from socialism?" - and then it was explained to me.

Lets play a game of what-if, hmm? What if Bill Gates, the richest man in the world, and who btw does NOT support repealing the death tax - far from it! - were to die today? Assuming his wife is already dead and there is no tax avoidance there, his family would stand to inherit 45% of his estate. Of his 41.8 BILLION dollar net worth, they would get a paltry 18.8 BILLION to split among them - hardly enough to live on really!

Now lets speed up the what-if clock about a year and there's no more death tax. Mr. Gates croaks again (sorry Bill!) and his family now stands to inherit ALL 41.8 BILLION dollars! In theory this is a good idea, BUT... keeping the money in the hands of the few (his family) is bad for the economy.

The 'death tax' has been around since the late 1700's. Imagine for a second if some colonial big shot had put away $100,000 earning a steady 5% return? By today, without the estate tax, his descendents would OWN this country.

One of the principles this country has is that the super-rich (keep in mind, this is only 1-2% of the population) made their money in a system condusive to them - a system they shall not take full credit for and shall contribute a portion of their funds to at the time of their death.

Going back to that Disney example for a second, Eisner got his multimillion dollar bonus, right? He's good at what he does you might be under the impression he deserved every penny he got, but ask yourself this. What kind of business man would he be if the economy wasn't so hot (to which I doubt even he can take full credit for) and people stopped going to his theme parks, or maybe didn't have the extra cash lying about to see his company's latest film. If Disney's earnings take a hit you think he might still be getting that bonus?

Listen, I know I come off sounding like a super liberal putz but I really don't begrudge there being people that have more money then I do, its a fact of life and I can deal with it, but if the estate tax has been in place for 200+ years and has kept the balance, WHY would we now want to risk upsetting that?

Check out some of the better written, better explained op-ed pieces that contrast your opinion. You might find them to be somewhat intresting when you look at the larger picture.

 

[April]

So...If my mother were to die, and had $675,001, I should count myself truly blessed to pay the government up to 55% of her estate? After she had already been taxed on it?

Hell no!! Double taxation, I say. I think the whole estate tax is stupid and fucked up. Anybody that rich probably has already consulted lawyers, and distributed most of it so as to avoid the tax. It's pointless, really.

 

[Cync]

So...If my mother were to die, and had $675,001, I should count myself truly blessed to pay the government up to 55% of her estate? After she had already been taxed on it?

Hell no!! Double taxation, I say. I think the whole estate tax is stupid and fucked up. Anybody that rich probably has already consulted lawyers, and distributed most of it so as to avoid the tax. It's pointless, really.

Well I'd hide the dollar and you should be fine. Seriously though, its a sliding system, so the more you have (beyond the 675,000 - soon to be raised to a million) the more you pay. If your estate is worth in excess of 3 million (which I assume will be going up as well), you hit the high limit and its 55% baby!

But you made a good point! One of the things that estate tax DOES encourage is for those that know they are going to be taxed when they die to make tax-deductabe contributions to the charities of their choice - A voluntary redistribution if you will.

Before you rule the estate tax as being 'stupid and fucked up' ask yourself, if it were such a bad and evil thing then why is the richest man in this country against repealing it???

 

[April]

How do you (not you particularly) justify taxing moneys that have already been taxed? I just don't get that. To me, it's not right.

Kinda like the military pay system. Yeah, yeah, I know. Don't get her started on that again. LOL With that, you are taxed on mil. pay, which is used to pay your paycheck, which is taxed again. Round and round.

ERGH! I should just quit while I'm behind. LOL

 

[Cync]

How do you (not you particularly) justify taxing moneys that have already been taxed? I just don't get that. To me, it's not right.

Kinda like the military pay system. Yeah, yeah, I know. Don't get her started on that again. LOL With that, you are taxed on mil. pay, which is used to pay your paycheck, which is taxed again. Round and round.

ERGH! I should just quit while I'm behind. LOL

Well the military is only one expense in the budget, fed by the federal income taxes of all civilian and military employees, but I'll take your advice and not go there.

As for the estate tax bit, I'm not for the taxing of moneys that have already been taxed, I'm for balancing the needs of the family against the needs of the country. See my 1700's example before and do the math. How much would $100,000, invested in say 1780 at a 5% rate, be worth today?

Its way to late and I've never been all that great calcuating compound intrest but I'd venture to guess that its got quite a few more zeros on the end of it. Now for giggles and grins go ahead and compound the intrest for another 225 years into the future and what could one family possibly do with that much money??? The government balances things by making sure that from generation to generation something is given back to the system in which the family was able to flourish.

But thats all I've got for tonight, its 2:30 am and this little boy needs some sleep!

Night Angel!

 

[Laurel]

from http://www.kowaldesign.com/budget/percentages.html

http://www.kowaldesign.com/budget/images/interest.gif

Interest on the national debt, as you can see, is 20% of the Federal Budget. 20% of your tax dollars go to paying the interest on our debt!

So one would think if we all really wanted to lower our taxes, we would continue to pay down the national debt. Less debt = less taxes. Sounds logical, right?

Then why do people scream for a very slight tax cut that's going to balloon the debt, and thus the interest on the debt, which will in turn balloon our taxes?

Frankly, GW's proposed tax cut would benefit me personally - in the short-term. But the harm it would do to the economy that would take years to repair, and this will hurt my earning potential - ALL of our earning potentials. I'm not stupid enough to grab for that rotten carrot, thankyouverymuch.

Think about it. Is it really worth it to get a couple bucks back now, only to be laid off next year when your employer folds because of the recession? Is it worth it if the US is in a WORSE position - not better - in four years?

People are so short-sighted & gullible. Dangle a couple bucks in their face and they'll follow you straight into a pit.

Of course, what GW will do for the economy is nothing like what he's going to do for the environment.

 

[Samuari]

The simple fact is that every tax cut in modern history (since JFK's 1961 tax cut) has resulted in stimulateing the economy, with tresury getting more revenue, not less. The problem with the Regan tax cuts was that the Congress spent thos dollars faster than the improving ecnowmy could generate them. In fact the only time in the last 20 years that the rate of growth of federal revenues has slowed down was after the Bush tax increase and the Clinton tax increase in his first year. When you look at the numbers, look at the total revenues produced, not the total dollars spent, and the message is clear that the rates are too high. Can they be reduced to a place where they stop producing increased revenue, is a seprate question. The answer is of course, but they can lowered alot before they become counterproductive.

The other side of this issue is should we use tax policy to effect social change? Personaly, I don't think that it works very well, there are just to many unintended consequences. An example is that in the 70s Carter wanted a tax that would only hit the wealthy, so he asked for and got from congress a sur-tax on privite pleasure boats over 20 ft in length. The result? A booming Canadian boat industry, and the death of it in New Engaland, with a large number of people out of work and [ilower[/i] federal tax revenues. If you want to make socal changes it is best to do it directly, and just confiscate the property that you don't think someone should have.

 

[Ally C]

I can redistribute my "wealth" just fine on my own, thank you very much. My choice of charity and my relatives deserve the fruits of my labor/investing much more than the government does. The government has taken its share from me several times already.

Sounds like the government want you to be faithful law abiding American citizens even after death? I agree with the principles behind your view, but the cut-off point between state intervention and personal freedom is prone to fluctuations - especially when money is involved.

 

[Cheyenne]

Listen, I know I come off sounding like a super liberal putz but I really don't begrudge there being people that have more money then I do, its a fact of life and I can deal with it, but if the estate tax has been in place for 200+ years and has kept the balance, WHY would we now want to risk upsetting that?

You're using faulty logic again. What makes you think the estate tax has kept the balance for 200 years? Show me the numbers.

Very little is collected by the IRS for estate taxes in comparison to the total taxes in the U.S.- the articles I've read say the IRS spends more money on administering the estate tax than they collect from it. It is so immaterial to the total tax collected that it really has no effect whatsoever towards your communist view of taking assets from one group of people to give them to another.

I stick with my original comments. I can redistribute my assets to my heirs just fine, thank you. I don't need or want the government stealing from me.

 

[WriterDom]

WE ARE NOT COMMUNISTS! Do you hear yourself?

Lets play a game of what-if, hmm? What if Bill Gates, the richest man in the world, and who btw does NOT support repealing the death tax - far from it! - were to die today? Assuming his wife is already dead and there is no tax avoidance there, his family would stand to inherit 45% of his estate. Of his 41.8 BILLION dollar net worth, they would get a paltry 18.8 BILLION to split among them - hardly enough to live on really!

Why stop there? Suppose he has 10 heirs. You would probably say a million is enough for anyone. Lets take 41.790 BILLION and give it to people that didn't fucking earn it.

 

[Cheyenne]

Check out some of the better written, better explained op-ed pieces that contrast your opinion. You might find them to be somewhat intresting when you look at the larger picture.

Check this out:

http://www.house.gov/jec/fiscal/tx-grwth/estattax/estattax.htm

Pay particular attention to the part about how the estate tax tears apart those small family businesses that provide jobs to so many people in the U.S.

"This paper documents the extensive costs associated with the federal estate tax. Specifically, the report finds:

The existence of the estate tax this century has reduced the stock of capital in the economy by approximately $497 billion, or 3.2 percent.
The distortionary incentives in the estate tax result in the inefficient allocation of resources, discouraging saving and investment and lowering the after-tax return on investments.
The estate tax is extremely punitive, with marginal tax rates ranging from 37 percent to nearly 80 percent in some instances.
The estate tax is a leading cause of dissolution for thousands of family-run businesses. Estate tax planning further diverts resources available for investment and employment.
The estate tax obstructs environmental conservation. The need to pay large estate tax bills often forces families to develop environmentally sensitive land.
The estate tax violates the basic principles of a good tax system: it is complicated, unfair and inefficient.

In addition, a review of the arguments in favor of the estate tax suggests that the tax produces no benefits that would justify the large social and economic costs.
The estate tax is a "virtue tax" in the sense that it penalizes work, saving and thrift in favor of large-scale consumption.
Empirical and theoretical research indicates that the estate tax is ineffective at reducing inequality, and may actually increase inequality of consumption.
The enormous compliance costs associated with the estate tax are of the same general magnitude as the tax's revenue yield, or about $23 billion in 1998.
The deduction for charitable bequests stimulates little or no additional giving.
The estate tax raises very little, if any, net revenue for the federal government. The distortionary effects of the estate tax result in losses under the income tax that are roughly the same size as estate tax revenue."

[Edited by Cheyenne on 03-30-2001 at 07:10 PM]

 

[Thumper]

A little clarification....

The Estate tax, theoretically, is a way to prevent the rise of and "aristocracy" in this country. A privileged class if you will. It has failed. In a capitalist society a certain few will, through greed, eventually garner enough wealth and hence power to circumvent the government. We already have that. And that is precisely what our "founding fathers" fought against. Any politician who is able to get elected is inherently already wealthy or in the pockets of the wealthy. He knows on which side his bread is buttered and so he/she tows that line. This is why capitalism always degrades....too much money/power in very few hands. Just ask Louis XIV and Marie Antoinette what happens. Or the last Czar in Russia. The distribution of wealth in this country is far too lopsided and getting more so.

Pulling Apart: A State-by-State Analysis of Income Trends

Key findings of the report include the following:

For the U.S. as a whole in the late 1990s, the average income of families in the
top 20 percent of the income distribution was $137,500, or more than 10 times
as large as the poorest 20 percent of families, which had an average income of
$13,000. In nine states — New York, Arizona, New Mexico, Louisiana, California,
Rhode Island, Texas, Oregon and Kentucky — the average income of the richest
fifth of families was more than eleven times as great as the average income of
the bottom fifth of families.

From the late 1970s to the late 1990s, in every state but three the incomes of
families in the top 20 percent of the income distribution have grown, with average
growth exceeding $34,000 (in 1997 dollars) after adjustment for inflation. In 31
states, the incomes of the upper fifth of families jumped by more than 30 percent
over the past two decades.

Incomes of the poorest fifth of families declined in 18 states between the late
1970s and the late 1990s. In some states, the decline was very steep. In six
states, the average income of the bottom fifth of families declined by more than
$2,000 (per family, in 1997 dollars): Wyoming (-$5,600); Arizona (-$3,900); New
York (-$2,900); California (-$2,900); New Mexico (-$2,400); and West Virginia
(-$2,200).

In eleven large states, income increases for the top five percent of families
ranged from 35 percent (in Texas) to 75 percent (in Pennsylvania). By contrast,
the incomes of the bottom fifth of families either declined or grew very little
between the late 1970s and late 1990s in ten of these eleven states. For
example, the highest-income five percent of New York families gained nearly
$108,000 per family, while the lowest-income 20 percent of New Yorkers lost
$2,900 per family.

Even so, taxes are a poor way to tackle this problem.

My stance on a tax cut....I'm for it....but I don't really care if it doesn't pass. Why? Because it will mean a whopping 300 extra dollars a year...sure I could use it but it won't change my lifestyle at all....well I maybe could get the Super Size meal at McDonalds once a week

April....if you die and leave 675,001 dollars, only the excess dollar is taxed at the 55% rate. Your heirs would owe 55 cents.

WriterDom...As for your comment on giving it to "people who didn't earn it" would you be kind enough to define these people and give us some actual numbers. If you eliminated TANF entirely you might save 10% of the annual budget...but then you would bitch about all the beggars in the streets.

If ya really want to save money then kill the corporate "welfare" first. It far outstrips the social spending. For example...why does the government still provide subsidies for tobacco? It is harmful and a drain on society. It's rather luidicrous to pay a farmer to grow tobacco (price supports) and then pay for an end stage lung cancer patient's oxygen through medicare. Why does the government build logging roads for the logging companies....let them build their own roads.

I do not hate the rich. I do not blame the rich. Blame is a word the Conservatives have brought into vogue. But likewise I do not feel sorry for them either. If you make ten million a year and pay 39% in taxes...you still take home $6,100,000 dollars. Thats roughly $117,000 a week, or $16,750 a day or $2,100 an hour....not a bad chunk of change methinks.

 

[Cheyenne]

A little more clarification....

The Estate tax, theoretically, is a way to prevent the rise of and "aristocracy" in this country. A privileged class if you will.

Wrong, that was never the intended purpose. Here is the history of the tax:

http://www.house.gov/jec/fiscal/tx-grwth/estattax/estattax.htm

"The first federal death tax in this country was a death "stamp" tax established in 1797 to pay for a naval buildup in response to heightened tensions with France, and abolished just five years later in 1802. The federal death tax was absent the next 60 years, until Congress reenacted it in 1862 to raise revenue for the Civil War. After the war ended, Congress repealed the tax in 1870. The third federal death tax was enacted in 1898 to finance the Spanish-American War. As before, the estate tax was abolished after the war in 1902. With the advent of World War I, the estate tax was reintroduced in 1916 and has existed in various forms since."

And consider these details about the "rich" and how they got their money:

"A study of wealthy investors by Prince & Associates found that just 7 percent of respondents identified inheritance as the source of their wealth. The vast majority – 83 percent – earned their fortune through hard work, a family business, a professional practice such as law or medicine, or corporate employment. In their book The Millionaire Next Door, authors Thomas Stanley and William Danko report that 81 percent of millionaires are first-generation rich, and just 14 percent of millionaires cite inheritance as the source of their wealth. Most millionaires did not receive one dime of inheritance, and the vast majority (80 percent) received less than 10 percent of their wealth through inheritance.

The fact that just four out of five millionaires are first generation rich raises the question: if inheritance is not the source of their wealth, how did these did these individuals become millionaires? Stanley and Danko's survey indicates that the primary mechanism of achieving wealth is for families to manage their money effectively and lead a frugal lifestyle. Contrary to conventional wisdom, most millionaires do not lead high-priced lifestyles. For example, the typical millionaire has never spent more than $400 on a suit and paid just $24,800 for his current automobile. Aside from Visa and MasterCard, the two most common credit cards held by millionaires are Sears and J.C. Penny's.

In the context of Stanley and Danko's findings, it is perhaps not surprising that public support for confiscatory estate taxation is not very strong. A survey of public opinion polls about wealth and income reveals that most Americans continue to view and support the concept of America as a land of opportunity. Overwhelming majorities of Americans believe that hard work allows anyone to get ahead. In fact, close to 90 percent of Americans admire people who get rich though hard work. Most Americans (56 percent) believe that wealth accumulation is permissible. Even at the lowest income levels, a majority of Americans continue to support the opportunity to accumulate wealth."