A tax thought…A Modest Tax Proposal
by Tom aka Rusty Rustbelt
A Modest Tax Proposal
The GOP is all breathless about deficits, but this is the same GOP of Dubya Bush that fought a war in Iraq (unnecessary) and Afghanistan (overextended) funded entirely by debt.
So, the following proposal.
A 3% surtax on taxable incomes over $75,000 until the cost of both wars is paid.
This level of tax should not slow the economy, and we should face up to the responsibilities of having troops in the field.
Your thoughts?
Just like the old folks, me, who compain about school taxes because they don’t have any kids in school, I want to complain cause I was against Iraq from the start. Now I will have to pay for it? I wish there was a way for everyone who voted for bush to have to pay for his wars.
The need to pay for the wars which benefit principally the uber-wealthy demands that a range of surtaxes be put into place until the troops are withdrawn from those two theaters in Iraq and Afghanistan. That 3% range should apply on everyone making between $75K and $200K. Another 5% tranche should be added for those making between $200K and $1000K. Jump it to another 10% for those making above $1000K. Slam anyone who complains about not being patriotic, which just happens to be true. The Republican scum use those tactics on a regular basis for everything. When the fate of the nation depends on the ability to fund these misguided adventures of the Republican Party, it’s past time that their biggest funders actually pay for their mistakes.
looks like you’re getting the responses you wanted… but since we’re wading into the non-sensical weeds, i wish everyone that voted for obamao had to pay for his healthcare…
As one of the old ones, I echo both of the above comments. I would add this, we need a P.O.T.U.S. that is more than just a flim flam man, we need one who puts the countries best interests first, one who isn’t afraid to use the bully pulpit, one who will fight fire with fire, one who when he is questioned, won’t wait 2 years before setting the record straight. Sadly to say, that man doesn’t seem to be available to brcome the P.O.T.U.S. that this country needs.
Since the healthcare law would reduce the deficit, those who voted for Obama should get a rebate.
Tom
I agree wholeheartedly.
My proposal would just rescind ALL of the Bush tax cuts “for the duration” of the “deficit emergency.”
I don’t like taxing “only the rich.” It’s bad politics and bad mental hygiene.
Your thought about making it a “war tax” is probably better politics. We need to see some patriotism out there.
jeff
you pretty much disqualify yourself from serious consideration by talking about nonsensical weeds for a tax to pay for the government you bought.
i don’t know how the cost of Obama care will be distributed. I don’t like it because it is a subsidy to the current insurance-provider criminal enterprise. But the fact is that we “all” pay for it in the end. Or haven’t you heard that the high income people “pass on” the taxes to their employees and customers. At least that’s what they tell us every time we propose a tax on corporations.
The reason this country is going to hell is because people like you are too greedy to be smart.
Now this is just delusional: “Since the healthcare law would reduce the deficit…”
http://centristnetblog.com/daily/cbo-obamacare-at-least-109-billion-in-deficit-spending-over-10-years/
Says: “CBO: Obamacare = at least $109 Billion in Deficit Spending Over 10 Years; UPDATE: Former CBO Director: Obamacare Deficit will be $562 Billion over 10 years”
Why? Because of the flim flam approach to scoring Obamacare by the Dems. An example: “The big problem with that reporting, and Obama’s claim that Obamacare will be “one of the biggest deficit-reduction plans in history” is that the CBO has explicitly reported that when the “doctor fix” is enacted, the $138 billion in paper “savings” disappear and a $59 billion dollar deficit over 10 years is created by Obamacare over 10 years:…
The Republicans are like the brother-in-law who apologizes for borrowing money but has no intention of ever paying it back.
If they think it was wrong for Dubya to finance the war with debt, there’s nothing preventing them from paying for it now.
Interestingly, 3% is what Obama wanted to place on incomes over about $200,000 by not extending the Bush tax cuts for the top bracket…the republicans had a cow, and Obama caved!
I like your improvement to Rusty’s proposal but how about adding 1% for those earning below Rusty’s cut-off. Everyone should be willing to contribute, and progressivity makes sense. Oh, but exempt active duty military from any surcharge–THEY have been doing their part (and more) in the wake of 9/11 while the rest of us sacrificed by supporting tax cuts and borrowing to pay for national security (war abroad and homeland defense).
hate to burst your bubble, but it’s difficult to be greedy when you’re broke, but that’s why i try to read ‘smart’ people like you.
at any rate, my hyperbolic use of healthcare simply mirrored the use of ‘unnecessary’ or ‘overextended’ and the continued slamming of dubya; i’m not a big fan of his, but it’s old and boring. but i suppose the afghan conflict is overextended and not unnecessary simply because barry says it’s the right one, eh?
as a nam era vet, both conflicts made me very uneasy. as does this little foray into libya (kinda like being just a little bit pregnant).
i do, however, agree with your comment about “I don’t like taxing “only the rich.” It’s bad politics and bad mental hygiene.’ i believe everyone should pay something.
For those who do not know me, I am a Republican. Just for context.
The 3% was just made up on a whim, I’m thinking LBJ’s surtex was 1 or 2%.
Thank you for your service.
See my political afiliation below.
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I am a Republican
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Grover Norquist would disagree.
make it retroactive for all those who supported those wars…
I think a progressively-tiered surcharge is a good idea. I just don’t think it should be tied to US involvement in wars. Make it permanent, and maybe tie it to overall military spending, and set the rates at a level that will pay for the whole military budget over the business cycle. Or just create higher marginal tax brackets in general, without any moralistic connection between the needed revenue and any particular program.
jeff
no danger of busting my bubble. but you need to learn to think in something besides faux ridicule of the other guy.
i can’t see that being broke stops people from being greedy. greed is just an excessive attachment to money. poor people, liberals, rich people… damn near everyone suffers from it. especially in these days when we literally worship money as the god we must sacrifice to.
as for “smart people like me” i should say i am pretty sick of smart people myself… the brilliant harvard graduates who are so bright they have never had to think seriously about anything in their lives. i don’t claim to be smart, but i do try to keep thinking past my first answer.
and yes, politics gets old and boring. but the problems don’t go away just because we are tired of them.
it’s really not a matter of Bush bashing to call for a tax increase to pay for the wars that started on his watch that were going to be paid for by the tax cuts that would pay for themselves but didn’t.
even mentioning Bush is just a way to introduce the subject. Kind of like “it was a dark and stormy night…”
Rusty
i think the 3% is about what the Bush tax cuts amounted to. In any case it’s what i calculate as the cost of paying back the money borrowed from the SSTF over the time it needs to be paid back, so it is a good number to conjure with.
Which is still massively less expensive that what we’re being shaken down for *now* by the insurance companies and corporate hospitals. It’s a net profit for me.
Norquist would not merely disagree. He would excommunicate any advocate of such a tax.
Cascadian
no need to make it “moralistic.” just “we bought it. now we need to pay for it.”
as opposed to “we bought it. we can’t pay for it. lets take the children’s milk money and buy another one.”
Raising taxes to pay for a war. That sounds like a good plan. Take a closer look at the implications however.
I use 2009 tax data. I think the conclusions are still valid if you project out a few years.
In 2009 the top 25% cut off was $67,300. The $75k proposed is probably about the top 25% today. So this is a proposal to tax both rich and middle class.
In 2009 the top 25% paid $890 billion in taxes. The top 25% paid 86% of all taxes.
Now you want to raise that burden by 3%. Sorry that does not help much. 3% of $900b (2011 estimate) would come to $27b. Round that up to $30b. The Iraq/Afghan war cost $170b in 2010. We have spent more than $1T so far. So it would take 30 or more years to pay for this with your proposal.
Taxes should go up. Maybe your idea to add another $30b into the kitty is a good idea. But it is a drop in the bucket.
The folks at AB keep proposing that the solution to our problems, whether they be the cost of the military, the shortfalls at SS or the disaster called Medicare/Medicaid, with “let’s raise taxes”.
There is just not that much blood in this stone. The simple answer is that America is not as rich as it thinks it is, and we simply can’t afford to be the global cop any longer. That’s a wake up call that won’t be heard.
Your math is a little screwed up. A 3% increase in the tax rate does not result in a 3% increase in taxes collected.
For example, let’s take $100,000 of taxable income taxes at 35% and 38%. At 35%, the tax paid is $35,000. At 38%, the tax paid is $38,000, $3000 more. $3000 more is an increase of about 8.5% in collected taxes.
To add a bit on to the idea and to shut up those who complain about folks paying no income tax, how about a minimum tax for anyone who is required to file of $10. Then there will be no more noise about not paying. You could make it $1.00 if desired. There is not much revenue involved here, but it does shut up the neo-federalists about not paying any tax.
Jerry Critter
thanks for saving me the trouble of once again explaining it to Krasting.
lyle
there is no way to shut them up. i don’t know where the 40% who pay no taxes came from. but i paid more taxes when i was in the low brackets than i do now that i am in a higher bracket with deductions.
the sum and substance of the tax hysterics is no taxes is good taxes and they will Find A Reason.
I like it. Then you make a filed and properly validated tax return a useable ID for voting killing 2 birds with one stone. The voter ID nuts who run around claiming election fraud because they basically want to disenfranchise the poor and minorities will have to shut up once every voter has to show he filed a tax return.
Ditto what coberly says. I suspect that everyone knows it is true but no one wants off the free lunch as they whine that the other guy wants a free lunch.
Ditto again. Or as I have been fond of saying in the past – collect the taxes while the boomers are in their highest earning years. Opps, I just realized that it is almost too late for the early ones.
did lbj’s surtax cover the nam war?
krasting
the 900 billion that those rich folks paid is about 17% of what they reported as earned income.
so a 3% increase in their tax to about 20% is not exactly squeezing blood from a stone.
It looks to me like that extra 3% would bring in about 150 Billion, not counting the Galt effect of course. And that looks like just about enough to pay for the Afghan war on a year by year basis. Of course we really hope the war won’t go on forever.
Now I did this all in my head from memory, so I could be wrong. On the other hand I do know the difference between 3% of income and 3% of a 17% effective tax.
amateur
they don’t only want to disenfranchise the poor, they want to get us used to showing our papers to the authorities. an idea that didn’t use to be so popular in America. It will come in handy when they need to get serious about suppressing …. ah… sedition.
dilbert
i know you know this already, but i just have to say
that tax you pay to educate other people’s children is, or ought to be, one of the best things you can do with your money. not only are you helping to educate some future doctor or engineer who saves your life, you don’t want to see what becomes of the masses when they can no longer get even a public school education. that is, you don’t want to see what they will do to your nice neighborhood.
Ah! Silly me. I looked at this and drew the wrong conclusion. I thought this was a reasonable proposal. But what is actually proposed is the biggest tax increase in history.
Back to those 2009 numbers. The top 25% had earnings of 5.7 trillion. You want to increase the tax on that amount. You want to up it by 3%. That would come to $171 billion. That is a very big amount and would pay for that war. If you’re asking what to think of that plan I would say, “no chance”.
Say it did happen. proforma to 2009 total taxes would rise from 1.030 trillion to 1.2 trillion. The top 25% would be footing 90% of all personal income taxes.
That would probably suit you Coberly. But look a bit around the corner. What this would do is pull the political pendulum far to the right. In 2012 you will have a Republican president house and senate. At that point you will see your Obama care go bye bye, Medicare will go by way of Ryan, Medicaid would be gutted and P. Peterson would be the new head of SS. I know you don’t want that.
And you’ll still have all the new wars to pay for. You would also have a very big recession. As a result, all revenues would fall. Ask Bernanke, Geithner and your pal Krugman. They would all say the same. A tax increase of this size would take a big bite out of the economy.
i take my “smart” comment back…
Good memory. For 2008 3% of AGI for the top 25% of earners would be $170B in 2008, using IRS data at http://www.taxfoundation.org/news/show/250.html#Data
even when you take it away from them (read ‘them’ as congress), they spend it:
http://www.ritholtz.com/blog/2011/05/from-surplus-to-debt/
No, it was both to raise revenue and also to cool inflation.
A lot of people, especially the young and the elderly, have no need to file a tax return.
We already have plenty of paperwork, no thanks.
You’re not entitled to your own facts. The doc fix lies outside the purvue of HCR because it would have to be dealt with regardless of what was done even in the absence of HRC. THis is just a can that has been kicked down the road from previous administrations. This needs to be worked on its own merits.
the only reason that the health care reform law isn’t wildly popular is because of the cost containment provisions. “Death Panels” anyone. Or how about getting rid of Medicare Advantage or scaling it back. Or the mandate. The elements of the law that some people don’t like are precicesly those elements that are going to reduce costs going forward. And those are the elements that other side has seized upon to demigod the issue. Now these are the same creeps who are screaming about the budget deficit. It is shameless and would be surprising if these people weren’t obviously hypocrites from the jump.
I am not sure what lbj or Nixon did to pay for Vietnam, I was too busy getting my commission.
I do remember Jimmy Carter did a lot to reduce the deficits.
Historically Ike kept taxes high to reduce the debt, some have said too long too high. So JFK got to lower them.
Jimmy Carter has a bad rep as President.
He refused to deploy B-1 which was the right decision and it was no better deploy by Reagan, just one of many ways Reagan enriched the military industrial complex and reduced it to a welfare state.
All war should be paid with cash, and rationing all weapons for war in peace-time should be paid cash as well.
War drains resources from an economy and should only be entered into with the most deliberate address of the facts to the public, with the truth, not mendacious and anxious propaganda.
WW II was paid with rationing and huge debt, but it was entered into and fought competently. War profits were allowed but not permitted to decide how the war would be fought. FDR and Henry Kaiser pushed baby flatops on the admirals.
Today, war is run by unwarranted influence, and we see Sec Nav selling the 11 largest naval ships in history as flexibility and how the Japanese liked them.
“Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes … known instruments for bringing the many under the domination of the few.… No nation could preserve its freedom in the midst of continual warfare.”
— James Madison, Political Observations, 1795
Save the Rustbelts surcharge for war should be enacted.
bkrasting,
How far from Kabul is Kandahar? Which direction?
I totally agree the US cannot afford the wars. Trillions of bucks to take on the Taliban, 8000 miles away and them having no economy or such in Kandahar.
That is a lot of dough.
The wars and spending trillions on future fictional wars has taken a huge bite out of the productive side of the US economy. How can the US pay for anything?
Trillions invested on things that blow things up in Afghanistan, these resources were taken away from things to produce goods and services in the US.
The US cannot afford the new wars, either.
Where is the money coming from for Sec Nav’s two new super carriers, at $35B to keep his 11 modernized? I know Buck Mc Keon loves his armed services fiefdom and will do his darnedest to get the appropriations and he will blame ways and means for not paying for it with cash! The US economy will be pillaged for the military!!
How many roads and schools and bridges don’t get done because the US treasury is borrowing for those 100000Ton floating crap games, as Bob Hope said on one of his Christmas tours to Southeast Asia?
coberly
You are certainly right, the taxes we pay to educate children and young adults, to preserve the health of all of us, to build and maintain our infrastructure are money well spent. However, that argument does not extend to the idiotic behavior of our government since Sept 11, 2001. The wars in the middle east and so much of our “defense” spending is income distribution from the bottom upwards. Let those who have most benefited from military spending pay for their follies. Send my 3% extra to a fund limited to social, educational and health care programs. Send our Congress and Executives to the middle east.
Jack
i’ll vote for that.
The surtax for war only makes sense if it is aimed at the subsequent costs to be accrued as a result of war. We need a Constitutional amendment requiring the institution of such a “War Tax” as a part of any Congressional action which approves a commitment to war. The public should be alerted up front concerning what the cost of any declaration of war will be on an individual basis in the form of such a surtax.
krasting
i am fairly sure they would all say that. but i wouldn’t believe them. and even if the economy slowed a bit, i think it would be worth the price just to get rid of the deficit hysterics.
your proposal which was to impoverish all old people would have the same or worse effect on them as a recession. so why should they care?
btw.. your scenario is another of those nightmare scenarios which has more value to your psychiatrist than to any serious policy thinking.
This is roughly the same conclusion I made last week with my chart on the income of the top 5% of families going from 15% of national income in 1980 to 21% of national income currently. I suggested taxing it back to 18%. This would be a surtax of about 3% of national income, a sum roughly equal to the long run structural deficit.
To be in the top 5% of families takes an income of rougly $200,000.
Spencer
and i agreed with you then. which should tell you it doesn’t have a chance. and when you see what Krasting does to the arithmetic you will know why.
about a 20% tax on that 200k would leave these poor “not rich” people struggling to get by on 160k.
and since they “earned that money” and have a religion that teaches them that they did it by their own virtue and hard work and being smarter than the second raters and losers… well, they are not going to want to see it go to support welfare cheats and public employees and bureaucrats.
i mean, that 40k would go a long way, properly invested, to making them really rich. and that’s what matters in life.
never mind that that 40k, properly invested in what the government does, it what makes the 200k possible in the first place… along with the hard work and personal virtue of course.
more and more i think the only way to run a country full of human beings, is to tax them without their knowing it.
i think i’d call a meeting of the CEO’s of all the big corporations and say, see, we are going to tax you 50%. we fully understand and intend that you pass the tax on to your customers in the form of higher prices. but don’t tell them. let them think “the corporations” pay all the taxes, and you and i will know, but not tell them, that “they” are really paying them. just our secret.
I agree a War Tax would be the right idea. Authorizing an increase in collections whould have come right along with authorizing the use of force. It would have created an incentive to stay out that we are sorely lacking since we eliminated the draft.
A surcharge on the amount of tax paid should be the right way to apply the tax if the income tax were properly progressive to begin with. As it is perhaps a surtax should only be applied to captial gains. Applying it to estate taxes would give new meaning to the term Death Tax.
Any old fart who makes such a complaint about school taxes should immediately get a rebate equal to about half of their property taxes, which is about what they contribute to schools. Then their SS and Medicare should be revoked.
There is no justification to the term “death tax.” A tax on inheritance is not a tax on an estate. Inheritance is income and should, therefore, be rightly subject to taxation. If I have some defined right (or should that be divine right?) to the assets of an estate then why did I have no right to those assets prior to the death of the primary owner of the estate. It’s income. Tax it. Taxed when first earned you say? First, not necessarily. Secondly, it is the remains of life long income after taxation. Thereby it has not been taxed previously and certainly not as income of the heirs. It is simply a bullshit excuse to avoid taxing the wealthiest Americans.