How to Fix Our Democracy

Bamaro · Nov 18, 2018

Tidewater said:
In fairness, the last six years of the Obama Administration set records for the collection of Federal revenues.

FY 2017 - $3.32 trillion.*
FY 2016 - $3.27 trillion.*
FY 2015 - $3.25 trillion.*
FY 2014 - $3.02 trillion.*
FY 2013 - $2.77 trillion.*
FY 2012 - $2.45 trillion.*
FY 2011 - $2.30 trillion.
FY 2010 - $2.16 trillion.
* Record revenue amount.

It would seem we do not have a taxing problem, we have a spending problem.

We have a willingness to pay for it problem.

twofbyc · Nov 18, 2018

Bamaro said:
We have a willingness to pay for it problem.

So - we should just demand everything we do have for free?
As the anti-liberals so often remind us, nothing is free.
The problem is we don’t demand accountability for what we do pay - so the PTB just do whatever they want with it.
Here’s a novel idea: let’s just all stop paying taxes.

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Bamaro · Nov 18, 2018

twofbyc said:
So - we should just demand everything we do have for free?
As the anti-liberals so often remind us, nothing is free.
The problem is we don’t demand accountability for what we do pay - so the PTB just do whatever they want with it.
Here’s a novel idea: let’s just all stop paying taxes.

If we want something, we should be willing to pay for it, not borrow for it.

Tidewater · Nov 18, 2018

NationalTitles17 said:
This whole taxes vs spending argument is like the old Reese's Cup commercial when the peanut butter and chocolate finally came together after everyone was arguing one vs the other.

IOW, both are a problem and both are part of the fix to a real world issue and not some utopian fantasy either side imagines.

I would be okay with telling Congress that their appropriations for next year FY (starting 1 OCT) must be less than revenues from this year (as of 15 APR).
If they cannot agree to a budget within last year's revenues, then they are all ejected from Congress as if they had died and they can never hold any federal elective office for the remainder of their lives.
I bet that would solve both the problem of never having a federal budget and the problem of "Shazam! That tax bill did not generate as much revenue as we thought and that federal spending project came in over budget."

Alternatively, I would take both parties at their word and tell the Democrats, "Look, you argue that the rich are not paying their fair share. Fine. Give me $500 billion/year in tax increases." Then I would tell Republicans, "You say you want to reduce the size of the federal government? Fine. Give me $500 billion/year in spending cuts."
I do not think either party really means what they say, so they would not like this deal. Democrats do not really want to raise taxes, and Republicans do not really want to cut spending. They both would prefer to demagogue those issues.

twofbyc · Nov 18, 2018

Bamaro said:
If we want something, we should be willing to pay for it, not borrow for it.

No argument from me - lots of arguments from the right.
Grover says hi.

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BamaInMo1 · Nov 18, 2018

twofbyc said:
No argument from me - lots of arguments from the right.

twofbyc said:
Grover says hi.

And here is another part of the problem: Hardliners on one side always blame the other side and they never acknowledge their own part in the problems. BOTH sides (Republicans and Democrats). Like, I won't work with you because you won't work with me (translation - you won't agree to do things the way I want it done so I'm gonna take my toys, go home and throw my tantrum).

Tidewater · Nov 18, 2018

BamaInMo1 said:
twofbyc said:

No argument from me - lots of arguments from the right.

Click to expand...

twofbyc said:

Grover says hi.

And here is another part of the problem: Hardliners on one side always blame the other side and they never acknowledge their own part in the problems. BOTH sides (Republicans and Democrats). Like, I won't work with you because you won't work with me (translation - you won't agree to do things the way I want it done so I'm gonna take my toys, go home and throw my tantrum).

Click to expand...

The savage beauty of the situation is that the market will accomplish this with vicious efficiency, once the faith the world has placed in the dollar collapses. We cannot continue to accrue debt forever and once the bubble bursts, the United States will have no choice but to cut $779 billion/raise $779 billion in taxes or $779 of both cuts and taxes (i.e. the current federal deficit), immediately, because no one will loan the United States more money.
I think it will be a bloodbath similar in scale to the end of the western Roman Empire.
The will unleash a change of events that will be catastrophic for theUnited States and the world.

CharminTide · Mar 5, 2019

CharminTide said:
1. Automatic voter registration. Tie it to an ID, but make it automatic and free.
2. End gerrymandering. Politicians should never be permitted to choose their voters.
3. Re-balance the House to actually reflect the current U.S. population, and stop using a century-old map.
4. Grant D.C. and P.R. statehood so 4 million Americans aren’t being taxed by a government they aren’t allowed to participate in.

House to vote on D.C. statehood for first time in 25 years

Congresswoman Eleanor Holmes Norton (D-DC) announced Friday that the House is expected next week to debate and pass H.R. 1, the For the People Act of 2019, which, among other provisions, calls for statehood for the District of Columbia. The bill would also introduce voluntary public financing for campaigns, place stricter limitations on foreign lobbying, require states to use independent commissions to design their congressional districts and express support for a constitutional amendment to overturn Citizens United.

NationalTitles18 · Mar 17, 2019

Let this be a warning regarding how ranked choice voting is implemented:

https://reason.com/blog/2019/03/15/left-wing-journos-treat-obscure-austral

If you're first preference doesn't win after all the first preference votes are calculated, your vote is then transferred to your second choice; or if they don't win, to your third. In Senate elections, Australians are required to express a minimum of six preferences if they're voting for parties, or a minimum of 12 preferences if they choose to vote for individual candidates.The confusing nature of this system, and the low vote threshold to actually earn a Senate seat, all but guarantees that obscure or fringe candidates will manage to sneak their way into parliament. Which is exactly what happened in Anning's case.
In the 2016 Australian federal elections, Anning—a nearly bankrupt hotelier—was placed third on the list of candidates for the right-wing, anti-immigrant party One Nation, founded by Pauline Hanson, which has long been controversial in Australian politics.
In the 2016 election, One Nation grabbed 9 percent of the vote in the state of Queensland (which is kind of like Iowa but with more desert and better beaches) largely on the basis of Hanson's individual popularity.
After all the preference votes were sorted out, Hanson's One Nation party ended up with two seats, one going to Hanson, the other initially going to Malcolm Roberts, who was second on the party's list. Ironically for an anti-immigrant party, Roberts was soon booted out of parliament for being a British citizen.
That meant that One Nation's second senate seat got passed down to Anning, a man who'd never held elected office before and who only 19 voters actually gave an individual first-preference vote.
That Anning entered office with such little popular support should already disqualify him as serving as a bellwether of Australian attitudes on pretty much anything. His subsequent marginalization after entering parliament should indicate what a total pariah he really is.

What a mess!

CharminTide · Mar 17, 2019

NationalTitles17 said:
Let this be a warning regarding how ranked choice voting is implemented:

https://reason.com/blog/2019/03/15/left-wing-journos-treat-obscure-austral

What a mess!

According to Wikipedia, any person can appear on the Australian ballot if they gain 50 signatures and make a 2k deposit. Any registered party can submit a nominee with no signature threshold and only a 1k deposit.

Having such a low threshold is sure to have drawbacks. I didn't realize this Anning dude was one such consequence.

NationalTitles18 · Mar 17, 2019

CharminTide said:
According to Wikipedia, any person can appear on the Australian ballot if they gain 50 signatures and make a 2k deposit. Any registered party can submit a nominee with no signature threshold and only a 1k deposit.

Having such a low threshold is sure to have drawbacks. I didn't realize this Anning dude was one such consequence.

I had no clue until reading it. I was shocked and had to read it 2-3x before it sunk in. 19 original first votes got him into the senate.

crimsonaudio · Mar 17, 2019

twofbyc said:
As for the tax rates, how many people do you know in the top tax bracket that actually pay that marginal rate?
Trump didn’t last year (bragged he didn’t pay any), most big corporations pay a small percentage of that rate (if they pay any at all); this is why I have a problem with it.
Take away all write offs for everybody and we can talk; but the facts are those affected by the highest marginal rate have the greatest access to write offs and deductions, so they pay much less (if anything at all).
This is not true for those in the middle tax brackets, who pay a higher percentage of their marginal rate; with the possible exception of those having children (or multiple children) at years end.

The numbers do not match your assumption: https://taxfoundation.org/summary-federal-income-tax-data-2017/

TL;DR - the top 10% of AGI earners in the US account for nearly half of all tax revenues collected.

The bottom 50% pay (by far) the lowest tax rate - an average of 3.59%.

You want to get rid of all write-offs and deductions? You'll watch the middle and lower classes get crushed, but by all means go for it instead of continuing to argue that those of us who already pay more than most pay even more.

chanson78 · Mar 17, 2019

crimsonaudio said:
The numbers do not match your assumption: https://taxfoundation.org/summary-federal-income-tax-data-2017/

TL;DR - the top 10% of AGI earners in the US account for nearly half of all tax revenues collected.

The bottom 50% pay (by far) the lowest tax rate - an average of 3.59%.

You want to get rid of all write-offs and deductions? You'll watch the middle and lower classes get crushed, but by all means go for it instead of continuing to argue that those of us who already pay more than most pay even more.

Tax capital gains at the same rate as regular income. Most of these cases go by the wayside. Smart investment in the stock market isn’t rewarding joe blow taxpayer anymore. Money is coming from easy monetary policy. Large banks, computers and the 1% are the people benefiting from low capital gains taxes. A middle class worker who invests in the stock market isn’t the real source of capital investment anymorw, which used to be the reason capital gains taxes were kept low so they weren’t double punishing people who saved and invested in the stock market.

the argument will invariably be,”But I, a socially and economically sound and savvy investor have benefitted from low capital gains. Why should I be punished?” You’re right, it isn’t fair, but the rule is essentially being kept alive based upon the 5% of people who do the right thing, so that 95% of gains can be realized by the 1% of the populace.

twofbyc · Mar 17, 2019

crimsonaudio said:
The numbers do not match your assumption: https://taxfoundation.org/summary-federal-income-tax-data-2017/

TL;DR - the top 10% of AGI earners in the US account for nearly half of all tax revenues collected.

The bottom 50% pay (by far) the lowest tax rate - an average of 3.59%.

You want to get rid of all write-offs and deductions? You'll watch the middle and lower classes get crushed, but by all means go for it instead of continuing to argue that those of us who already pay more than most pay even more.

And how much of the income do the top 10% earn?
The facts match up - if you define taxpayer as those who who pay SS and FICA as well as withholding. Many of the lowest earners PAY NO TAXES because they get all of their withholding BACK. They are still “taxpayers”. So the numbers are skewed from the get go.
Look at the rate the wealthiest actually paid in 2015; what was the tax rate supposed to be? That was my opening point, but feel free to disregard the fact it’s true.
Same year, more facts (and Trump is in the 1%)...

https://www.cnbc.com/2018/07/19/what-you-have-to-earn-to-be-in-the-1-percent-in-america.html

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CharminTide · Mar 18, 2019

twofbyc said:
https://www.cnbc.com/2018/07/19/what-you-have-to-earn-to-be-in-the-1-percent-in-america.html

Bit of a tangent, but I had no idea Jackson, WY was so affluent. It's a quaint little town, and its proximity to National Parks likely inflates real estate value and attracts wealth, but still.

"There are even a handful of metro areas where the threshold [to reach the 1%] is above $1 million, notably Jackson, Wyoming... the average income of the top 1 percent nationwide is $1.32 million. In the Jackson metro area, it’s $16.2 million."

CharminTide · Mar 18, 2019

crimsonaudio said:
The bottom 50% pay (by far) the lowest tax rate - an average of 3.59%.

I don't like how they lump the entire bottom 50% into a single category. The IRS has slightly more granular data, and the most recent information I can find is from tax year 2016: LINK

It's pretty much impossible to calculate the difference between someone's marginal rate and what their actual tax rate without knowing their AGI. But this is as good as we can get.

I find the line showing percent of AGI subject to reduced tax rate (long-term capital gains and dividends) to be pretty illuminating. The highest income bracket is getting more than 50% of their income taxed at a reduced rate, and the rest is probably in a tax-advantaged pass-through entity. Many of the bottom 50% do get tax credits, but they do not have access to these tax subsidies available to the higher income brackets.

Total revenue on bottom 50% (defined as <$50,000 per your link):
78,659 million (before tax credits)
-15,790 million (after tax credits)

Average* income subject to reduced tax rate: 0.9% (range: 1-1.3%)

Total tax revenue on top 1% (defined as >$500,000 per twofbyc's link):
527,721 million

Average* income subject to reduced tax rate: 27.3% (range: 12.5-53.7%)

* note that these are super rough estimates because I simply averaged the categories without accounting for the relative populations within each. Only on my first cup of coffee here.

Even if you eliminated the tax credits, there's just not much money you can squeeze out of the bottom 50%. On the other hand, I do wonder what this spreadsheet would look like if capital gains were taxed as ordinary income, and if LLC loophopes (including the new ones added by the GOP tax bill) were closed.

crimsonaudio · Mar 18, 2019

CharminTide said:
I don't like how they lump the entire bottom 50% into a single category. The IRS has slightly more granular data, and the most recent information I can find is from tax year 2016: LINK

It's pretty much impossible to calculate the difference between someone's marginal rate and what their actual tax rate without knowing their AGI. But this is as good as we can get.

Agreed. My point remains, however - calling for removing all deductions and so-called 'loopholes' is fine as long as you also remove the minimum income standards. I'll pay more as long as everyone pays their 'fair share'.

Right now there are huge numbers of people voting for politicians who promise them things they won't have to pay for (such as UHC). If they have some (real) skin in the game, I'd be open to it, but otherwise let's not get carried away with asking the top 5-10% to pay their 'fair share' when they already account for the lion's share of tax revenues collected.

CharminTide · Mar 18, 2019

crimsonaudio said:
Right now there are huge numbers of people voting for politicians who promise them things they won't have to pay for (such as UHC). If they have some (real) skin in the game, I'd be open to it, but otherwise let's not get carried away with asking the top 5-10% to pay their 'fair share' when they already account for the lion's share of tax revenues collected.

I follow, but it's the nature of any non-regressive tax system that the highest earners will pay the most in taxes. I think the point a few people have been making is that the gross value of the tax subsidies given to the poor and rich in our system are greatly, greatly weighted toward the rich. That often gets overlooked in this discussion because the subsidies are not as obvious as a "tax credit."

The middle, of course, mostly sits on the sidelines and gets screwed by the political back and forth, as they largely cannot access either subsidy.

crimsonaudio · Mar 18, 2019

CharminTide said:
I follow, but it's the nature of any non-regressive tax system that the highest earners will pay the most in taxes. I think the point a few people have been making is that the gross value of the tax subsidies given to the poor and rich in our system are greatly, greatly weighted toward the rich. That often gets overlooked in this discussion because the subsidies are not as obvious as a "tax credit."

But considering the amounts paid isn't that 'fair'?

I mean, how much more do I have to pay as a percentage of my income to be 'fair'? Especially when you consider that a huge percentage of Americans (some 45% last I checked) have zero annual federal tax liability.

You want to fix our democracy? That's definitely one aspect that needs addressing.

Lots of people don't care about the national debt because they aren't paying anything anyway...

The middle, of course, mostly sits on the sidelines and gets screwed by the political back and forth, as they largely cannot access either subsidy.

Truth. Sad, seemingly inevitable truth.

CharminTide · Mar 18, 2019

crimsonaudio said:
But considering the amounts paid isn't that 'fair'?

I mean, how much more do I have to pay as a percentage of my income to be 'fair'? Especially when you consider that a huge percentage of Americans (some 45% last I checked) have zero annual federal tax liability.

You want to fix our democracy? That's definitely one aspect that needs addressing.

Ah, simple questions.

People have devoted their entire lives to answering this, and economists have gotten Ph.Ds. in optimal taxation theory to try and do so objectively. So I'll defer to them.

The Case for a Progressive Tax: From Basic Research to Policy Recommendations

Whether you are or are not convinced by their data, we do have decades of practical experience that shows Reagan's trickle-down theory doesn't work for the vast majority of the country. Yet that principle is still baked into our tax code. I contend we should change that. Whether or not the pre-Reagan golden age of America was "fair," it was unarguably prosperous for far more of her citizens than we see today.

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