It would probably take trillions of messages consisting only of relevant facts to change her beliefs.
--- In Politics_CurrentEvents_Group@yahoogroups.com, Bruce Majors <majors.bruce@...> wrote:
>
> sheeple your leaders like Rahm Emauel and Tom Daschle profit off of tax
> serfs
>
> but Bill Gates and Oprah Winfrey and Peter Theil don't profit off you and
> your family
>
> you couldn't do anything to make the wealth they have created
>
>
> On Fri, Dec 24, 2010 at 4:37 AM, Sheep&Goatlady
> <springcreek@...>wrote:
>
> >
> >
> > what folks do in other countries is in other countries, not here, the rich
> > profits off the back of the working folks and that is a fact,
> >
> > ----- Original Message -----
> > *From:* Bruce Majors <majors.bruce@...>
> > *To:* DefeatLibs <defeat_liberals@yahoogroups.com>
> > *Sent:* Thursday, December 23, 2010 3:59 PM
> > *Subject:* [Politics_CurrentEvents_Group] Fwd: The Facts About the Rich &
> > Taxes
> >
> >
> >
> > DECEMBER 23, 2010 - Wall Street Journal Taxes and the Top Percentile Myth
> > A 2008 OECD study of leading economies found that 'taxation is most
> > progressively distributed in the United States.' More so than Sweden or
> > France.
> > By ALAN REYNOLDS<http://online.wsj.com/search/term.html?KEYWORDS=ALAN+REYNOLDS&bylinesearch=true>
> >
> > When President Obama announced a two-year stay of execution for taxpayers
> > on Dec. 7, he made it clear that he intends to spend those two years
> > campaigning for higher marginal tax rates on dividends, capital gains and
> > salaries for couples earning more than $250,000. "I don't see how the
> > Republicans win that argument," said the president.
> >
> > Despite the deficit commission's call for tax reform with fewer tax credits
> > and lower marginal tax rates, the left wing of the Democratic Party remains
> > passionate about making the U.S. tax system more and more progressive. They
> > claim this is all about payback—that raising the highest tax rates is the
> > fair thing to do because top income groups supposedly received huge
> > windfalls from the Bush tax cuts. As the headline of a Robert Creamer column
> > in the Huffington Post put it: "The Crowd that Had the Party Should Pick up
> > the Tab."
> >
> > Arguments for these retaliatory tax penalties invariably begin with
> > estimates by economists Thomas Piketty of the Paris School of Economics and
> > Emmanuel Saez of U.C. Berkeley that the wealthiest 1% of U.S. households now
> > take home more than 20% of all household income.
> >
> > View Full Image
> > [image: reynolds2]
> > Images.com/Corbis
> > [image: reynolds2]
> > [image: reynolds2]
> >
> > This estimate suffers two obvious and fatal flaws. The first is that the
> > "more than 20%" figure does not refer to "take home" income at all. It
> > refers to income before taxes (including capital gains) as a share of income
> > before transfers. Such figures tell us nothing about whether the top
> > percentile pays too much or too little in income taxes.
> >
> > In The Journal of Economic Perspectives (Winter 2007), Messrs. Piketty and
> > Saez estimated that "the upper 1% of the income distribution earned 19.6% of
> > total income before tax [in 2004], and paid 41% of the individual federal
> > income tax." No other major country is so dependent on so few taxpayers.
> >
> > A 2008 study of 24 leading economies by the Organization of Economic
> > Cooperation and Development (OECD) concludes that, "Taxation is most
> > progressively distributed in the United States, probably reflecting the
> > greater role played there by refundable tax credits, such as the Earned
> > Income Tax Credit and the Child Tax Credit. . . . Taxes tend to be least
> > progressive in the Nordic countries (notably, Sweden), France and
> > Switzerland."
> >
> > The OECD study—titled "Growing Unequal?"—also found that the ratio of taxes
> > paid to income received by the top 10% was by far the highest in the U.S.,
> > at 1.35, compared to 1.1 for France, 1.07 for Germany, 1.01 for Japan and
> > 1.0 for Sweden (i.e., the top decile's share of Swedish taxes is the same as
> > their share of income).
> >
> > A second fatal flaw is that the large share of income reported by the upper
> > 1% is largely a consequence of lower tax rates. In a 2010 paper on top
> > incomes co-authored with Anthony Atkinson of Nuffield College, Messrs.
> > Piketty and Saez note that "higher top marginal tax rates can reduce top
> > reported earnings." They say "all studies" agree that higher "top marginal
> > tax rates do seem to negatively affect top income shares."
> >
> > What appears to be an increase in top incomes reported on individual tax
> > returns is often just a predictable taxpayer reaction to lower tax rates.
> > That should be readily apparent from the nearby table, which uses data from
> > Messrs. Piketty and Saez to break down the real incomes of the top 1% by
> > source (excluding interest income and rent).
> >
> > The first column ("salaries") shows average labor income among the top 1%
> > reported on W2 forms—from salaries, bonuses and exercised stock options. A
> > Dec. 13 New York Times article, citing Messrs. Piketty and Saez, claims, "A
> > big reason for the huge gains at the top is the outsize pay of executives,
> > bankers and traders." On the contrary, the table shows that average real pay
> > among the top 1% was no higher at the 2007 peak than it had been in 1999.
> >
> > In a January 2008 New York Times article, Austan Goolsbee (now chairman of
> > the President's Council of Economic Advisers) claimed that "average real
> > salaries (subtracting inflation) for the top 1% of earners . . . have been
> > growing rapidly regardless of what happened to tax rates." On the contrary,
> > the top 1% did report higher salaries after the mid-2003 reduction in top
> > tax rates, but not by enough to offset losses of the previous three years.
> > By examining the sources of income Mr. Goolsbee chose to ignore—dividends,
> > capital gains and business income—a powerful taxpayer response to changing
> > tax rates becomes quite clear.
> > [image: [reynolds]]
> >
> > The second column, for example, shows real capital gains reported in
> > taxable accounts. President Obama proposes raising the capital gains tax to
> > 20% on top incomes after the two-year reprieve is over. Yet the chart shows
> > that the top 1% reported fewer capital gains in the tech-stock euphoria of
> > 1999-2000 (when the tax rate was 20%) than during the middling market of
> > 2006-2007. It is doubtful so many gains would have been reported in
> > 2006-2007 if the tax rate had been 20%. Lower tax rates on capital gains
> > increase the frequency of asset sales and thus result in more taxable
> > capital gains on tax returns.
> >
> > The third column shows a near tripling of average dividend income from 2002
> > to 2007. That can only be explained as a behavioral response to the sharp
> > reduction in top tax rates on dividends, to 15% from 38.6%. Raising the
> > dividend tax to 20% could easily yield no additional revenue if it resulted
> > in high-income investors holding fewer dividend- paying stocks and more
> > corporations using stock buybacks rather than dividends to reward
> > stockholders.
> >
> > The last column of the table shows average business income reported on the
> > top 1% of individual tax returns by subchapter S corporations, partnerships,
> > proprietorships and many limited liability companies. After the individual
> > tax rate was brought down to the level of the corporate tax rate in 2003,
> > business income reported on individual tax returns became quite large. For
> > the Obama team to argue that higher taxes on individual incomes would have
> > little impact on business denies these facts.
> >
> > If individual tax rates were once again pushed above corporate rates, some
> > firms, farms and professionals would switch to reporting income on corporate
> > tax forms to shelter retained earnings. As with dividends and capital gains,
> > this is another reason that estimated revenues from higher tax rates are
> > unbelievable.
> >
> > The Piketty and Saez estimates are irrelevant to questions about income
> > distribution because they exclude taxes and transfers. What those figures do
> > show, however, is that if tax rates on high incomes, capital gains and
> > dividends were increased in 2013, the top 1%'s reported share of before-tax
> > income would indeed go way down. That would be partly because of reduced
> > effort, investment and entrepreneurship. Yet simpler ways of reducing
> > reported income can leave the after-tax income about the same (switching
> > from dividend-paying stocks to tax-exempt bonds, or holding stocks for
> > years).
> >
> > Once higher tax rates cause the top 1% to report less income, then top
> > taxpayers would likely pay a much smaller share of taxes, just as they do
> > in, say, France or Sweden. That would be an ironic consequence of listening
> > to economists and journalists who form strong opinions about tax policy on
> > the basis of an essentially irrelevant statistic about what the top 1%'s
> > share might be if there were not taxes or transfers.
> >
> > *Mr. Reynolds is a senior fellow at the Cato Institute and the author of
> > "Income and Wealth" (Greenwood Press 2006). *
> >
> >
> >
>
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