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Tuesday, April 21, 2009

Time for a Little Socialism?

It is a long-standing argument by US conservatives that progressive taxation is unfair, and that the answer to our economic ills is tax cuts for the wealthy.

In support of that argument, the often-quoted figure is that the top 10% of earners pay 40% of the taxes. That sounds unfair, doesn't it?

According to the IRS, in 2005, the top 10% of earners had 48.5% of the income. The top 1% had 21% of all income.

In other words, the top 10% earned about 8.5 times the average of the bottom 90%, the top 1% earned 26.3 times the average of the other 99%.

In addition, when calculating the taxes per dollar earned, using the conservatives' own figures, the lower 90% pays at a rate which is 1.4 times that of the top 10%.

8 comments:

James Higham said...

Never time for a little socialism.

sobers said...

Life's not fair. Get used to it.

AntiCitizenOne said...

So the people who are most productive must be fined?

What a moronic idea!

Paddington said...

Anti - I know some of these people, and am not sure how productive they are. As for the rest, my very simple calculation shows (as Warren Buffet has noted) that the middle class actually pay a higher marginal rate than the rich.

RobW said...

The point here is no matter how hard people try they cannot tax the rich to the level they want to.

Socially and in terms of capital they are far more mobile than the rest of us. So they never have to put up with sh*t for long.

Therefore the tax burden always falls on the hardworking middle and lower classes.

The only fair system is a low tax system.

Unless you want to restrict people's movement and the flow of capital. But then that would be full blown communism. And that would just make us all poor.

Sackerson said...

I don't think the real issue is tax - income tax is only a small part of the UK government's funding sources. More relevant is corporate governance - both how execs run businesses, and how pay is fairly assessed. The Fat (and Crooked, and Incompetent) Cat issue will not go away, or at least shouldn't.

AntiCitizenOne said...

Sackerson,

Tax rent-seeking (and return the money raised directly to citizens) not income and you will find fair taxation.

Sackerson said...

Must have another look at your proposals.