In oblivious pursuit of its quest to prove once again that socialism works so long as someone has some money somewhere for the government to shovel into heaps and set on fire,
the NYT sets about that increasing taxes on the rich would provide free dosh.
The NYT must issue its writers with a macro that generates sentences like this:
When it comes to paying taxes, most Americans think the wealthy do not pay their fair share.
One wonders if most Americans, or the author of this article, referred to this chart:
From it, one thing should leap right off the screen: the top 3.8% of income earners pay more income tax than the other 96.2%
combined. Apparently, for the socialists with dollar signs in their eyes, this just isn't enough.
So the NYT spends a thousand words or so explaining why there is Free Money for Everyone! It's simple, according to economists like Nobel Prize winning Joseph Stiglitz (
whose prize clearly isn't in the category of knowing what you are writing about, but rather, like the NYT, in Advanced Looting.)
It is “absurd” to argue that most wealth at the top is already highly taxed or that there isn’t much more revenue to be had by raising taxes on the 1 percent, says the economist Joseph E. Stiglitz, winner of the Nobel in economic science, who has written extensively about inequality. “The only upside of the concentration of the wealth at the top is that they have more money to pay in taxes,” he said.
Here the NYT treats us to a chart that shows two things, both predictable enough. Our tax system is already quite progressive, and that people who earn more have more after tax income. It also engages in some NYT-strength deception. How so? The graphic shows
average tax rate — that is, the tax paid over pre-tax income. But as everyone knows, or at least should, US income tax rates are arranged in brackets (why not a continuous curve is beyond me, but that is a subject for another day).
This isn't nit picking.
To get the most accurate picture possible, throw in all the scraps of income, from the most obvious (like wages, interest and dividends) to the least (like employer contributions to health plans, overseas earnings and growth in retirement accounts). According to that measure — used by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution — the top 1 percent includes about 1.13 million households earning an average income of $2.1 million.
Raising their total tax burden to, say, 40 percent would generate about $157 billion in revenue the first year. Increasing it to 45 percent brings in a whopping $276 billion. Even taking account of state and local taxes, the average household in this group would still take home at least $1 million a year.
Notice what is going on here. With scarcely a nod, the NYT includes that which isn't currently taxed — employer contributions to health plans. Whether they should be is a topic for another time. However, I can't help but notice a glimmering of economic sanity that typically eludes both the NYT and the Social Security Administration: employers don't "provide" anything to health plans or Social Security; it is all in lieu of income.) Then it piles on that which is already taxed elsewhere, and what is taxed later.
About that last bit. The reason people put money into retirement accounts is to shield it from top marginal rates during earning years, then paying the typically lower tax rate when it is withdrawn during retirement. So what, among other things, this exercise in progressive innumeracy means is that growth in retirement savings will be taxed along the way, meaning less growth over time, then taxed again as it is withdrawn in retirement.
Do you see that mentioned anywhere in the article? I don't. Whether through stupidity or mendacity, well, that is a heck of a choice.
The vig?
Raising their total tax burden to, say, 40 percent would generate about $157 billion in revenue the first year. Increasing it to 45 percent brings in a whopping $276 billion. Even taking account of state and local taxes, the average household in this group would still take home at least $1 million a year.
Left unmentioned: how much does the top bracket have to change in order to bring the total tax burden to 45%? It isn't a simple 12% increase (to go from 33.4% to 45%), because of the lower brackets. In order to bring the total tax burden to 45%, the top bracket would have to go from 40% to roughly 52%.
In other words the tax increase in the top bracket would be 30%, and that is ignoring all the other sources that the looters have their eyes on. Which, also unmentioned, launches no small number of people into the highest bracket.
Raising their total tax burden to, say, 40 percent would generate about $157 billion in revenue the first year. Increasing it to 45 percent brings in a whopping $276 billion. Even taking account of state and local taxes, the average household in this group would still be allowed to keep at least $1 million a year.
After this para follows a laundry list of all the free stuff that would flow from this largesse: free college! free child tax credit! repealing the Cadillac Tax on high cost health plans! (wait, what?) free highway repair!
What doesn't follow is a list of all the government programs that turn people's hard earned income into smoke, or worse.
Or the IRS's inability to protect its data, or stop sending out billions in fraudulent tax refunds. Or, for that matter, the rampaging incompetence of federal agencies, for which no one is ever held accountable.
Never mind the costs of excessive regulation.
In short, why does it never occur to looters to go some distance towards putting the ravenous beast on a diet, before demanding to feed it more?
More fundamental questions remain untouched. In the quest to demonize the well off, the article fails to address fundamental questions.
Having already paid $700k in Federal taxes, the average amount for the top 1%, how much more before it becomes theft? The argument for a progressive tax system is easy enough to make, but that argument doesn't extend to infinity. That $700k is already well in excess of what those taxpayers get in return; what amount is too great?
More fairness. Picketty, the pole star for extortion minded collectivists, abundantly makes (IMHO) the mistake of confusing characteristic with composition. To him, all the wealthy are CEOs. However,
every player in major professional sports, for just one example, are in the top 1%. Yet they don't stay there for very long, and their presence in that top 1% is due to their effort, skill, and risk. The kid from Compton, who plays left tackle for 5 years: how much more does the government get to take from him?
The article asserts that such an increase "[would not do] serious damage to the economy … The big question is how much is too much, because at some point higher tax rates would discourage extra investment and work." That is a very blinkered view; after all, higher taxes do more than just discourage extra effort.
That extra bite, roughly $30,000 per year per average taxpayer in the top 1% (and who thinks the bite would stop there?), goes to the government rather than to the economy in the form of consumption or investment. One wonders what collectivists have against, say, workers on the Cadillac assembly line. The point should be clear: it only makes sense to take more in taxes if the government can spend that money better than individuals can. If it can't — and one would have to have a Pollyannaish view of government to reach that conclusion — then extracting more taxes will make the economy worse, regardless of the impact on individuals knowing that they are working for less than half-pay.
Yes, it is easy to make an argument for progressive taxation. Won and done. When 3.8% of people are paying 54% of taxes (and that is just at the federal level), one suspects that many Americans, if made aware of that fact before Pew asks its questions, might, just might, think progressive is verging on punitive. Beyond that, though, the goal of collectivism, crystal clear here despite misdirection and innumeracy and immune to fairness or cost, is this: gimme.