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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: John Koligman who wrote (24694)	9/19/2012 5:42:42 PM
From: Brian Sullivan	1 Recommendation Read Replies (1) \| Respond to of 42652

That web page is incredible vague (as is everything Obama proposes) Does it increase the Capital Gains rate or not? Or is there a separate new Alternative Minimum Tax form? Why not propose a fix for the current Alternative Minimum Tax (which is the original Buffet Rule from 1969) What is considered income that contributes to the $1,000,000 limit? Does it include interest paid by Tax-Free Municipal Bond issued by State and Local Governments? What about charitable donations are they still deductible or not? Does the new tax rate only apply to income above the $1,000,000 level? en.wikipedia.org

To: John Koligman who wrote (24694)	9/19/2012 8:11:58 PM
From: Lane3	1 Recommendation Respond to of 42652

this sounds reasonable.... I'm less interested in what anyone comes up with as a proposal than I am with how they come up with it--the rationale, to the extent that there may be one, the hierarchy of values represented, the interests considered, etc. You, for example, seem focused on achieving fairness. Others might want to maximize revenues or the effect on the economy. There are lots of ways to look at it. Seems to me the process would involved determining what you want to achieve and prioritize the objectives. Once that was set, then you can look at ways to achieve each, see which are most feasible, balance off the conflicts, etc. Fairness is only one potential goal, not the only one, probably not the most important one. And even if fairness were the key goal, there are all sorts of variations on what is fair. I tend to approach these things systematically, top down. I realize that most people don't. Most people hear something from somebody they like and just jump on the bandwagon. That seems backwards to me. Still, if one is going to do that, I would at least want to reverse engineer it and back into what the objectives, values, interests, etc were reflected in it. Most people either don't find that necessary or are unable to do it. Sometimes we can look at other people's proposals and they just feel wrong in the gut. I can understand why you might have that reaction to Romney paying a lower percentage than some secretary. Perhaps you can understand that someone else might react that way to the notion that any citizen in a country of political equals, however wealthy, would be required to financially support a small city before being considered to be contributing his fair share. You'd have to be pretty tone deaf not to get that. I would not propose that we design a tax system around how many welfare recipients each level of income should support with the richest supporting perhaps a small city and the median earner supporting perhaps .67 fellow citizens, although it might be a fun exercise. But it would make as much sense as doing it by the ratio of tax rates among the various levels of earner. Each would be better, though, than using shoe size.

To: John Koligman who wrote (24694)	9/19/2012 9:37:25 PM
From: TimF	Respond to of 42652

We already have an alternate minimum tax, a tighter AMT with an even higher rate, doesn't seem to make a lot of sense to me. Esp. as it would represent a large tax increase on investment income, and probably not bring in additional revenue (for one thing the very rich have the most ability to determine when, where, how, and if they realize income, and you can't tax income that isn't realized). On the more general issue of "fair share", that seems just about entirely subjective to me. Fair share could be no tax (since any taxed is a forced taking), any amount that is low and by a government whose spending is reasonably focused on the common good, equal amounts (the same from everyone), equal percentages, "from each according to his ability", or any number of other criteria. You'll never get a solid consensus about what's fair. Ask three people and you might get four opinions.

To: John Koligman who wrote (24694)	9/25/2012 6:12:26 AM
From: Lane3	2 Recommendations Read Replies (1) \| Respond to of 42652

From today's Post, FYI. Why Romney’s tax rate should be low Posted by Dylan Matthews on September 24, 2012 at 12:12 pm Text Size Print Reprints Share: More » Capital rates preference, 1913-2012. Mitt Romney’s Cayman Island hideouts and unusually stuffed IRAs get most of the attention, but the main explanation for his low tax rate isn’t at all nefarious: 80 percent of his income comes from investments, and the top tax rate on capital gain and investment income is 15 percent. That’s compared to a top tax bracket of 35 percent on ordinary income. Why does investment income get this big bonus? On 60 Minutes, Romney gave one reason. “Capital has already been taxed once at the corporate level, as high as 35 percent,” he said, which justifies the lower rate when the income is taxed again. This doesn’t really fly, most obviously because the “double taxation” charge can also apply to wage income. Almost all economists agree that while investors like Romney bear the brunt of the corporate income tax, employees of the taxed company pay too. The Tax Policy Center estimates that 20 percent of the tax is ultimately paid by workers. So if Romney gets to plead double-taxation, so do typical workers. The rationale economists – even liberal ones – give is quite different. Take Emmanuel Saez and Peter Diamond. Saez is best known for the work he’s done with Thomas Piketty detailing the rise in inequality over the last century. Diamond is best known for winning a Nobel prize even as congressional Republicans blocked his appointment to the Federal Reserve’s Board of Governors. All three have advocated marginal tax rates far above those being considered by either Democrats or Republicans right now. And yet, even they think savings and investment income should be taxes at a lower rate. The basic idea here is that you investing is a form of savings. And economists don’t really want to tax savings, in part because the effects of taxing savings can be a little weird. Saez and Diamond imagine that there’s a 30 percent tax on income, whether or not it’s saved. They then imagine you save that money for 40 years, and earn 5 percent interest every year. If savings weren’t taxed at all, then you could take that money out after 40 years and pay the 30 percent rate. But if the savings were taxed before it was saved and after it’s pulled out, the total rate comes to a staggering 73.8 percent. So there is, in effect, a massive incentive to spend money now rather than save it and spend it later on. Some economists argue that this means there shouldn’t be any tax on capital, because as the number of years you save approaches infinity, the tax rate on savings starts to become truly exorbitant. But Saez and Diamond (as well as Saez and Thomas Piketty in another paper) note that this only makes sense if you assume people live as though they’re immortal. It’s not as crazy an assumption as you might think. Many people earn income not just for themselves to spend, but for their children to inherit. If people keep thinking like that, then treating families as a single, immortal, money-maximizing individual isn’t so nuts. The problem, as Saez and Diamond argue, is that people don’t actually treat their children like themselves. They’re more selfish than that. And when people actually save to help themselves more than their children, there’s a limit to how much time they can save money, and thus how much taxes can punish that savings. There are other problems too. It’s hard, in practice, to distinguish wage and investment income. Romney is a great example of this. His income as head of Bain Capital counted, technically, as investment income, but he got it for doing a workaday job. A zero tax rate on investment income would provide a huge incentive to pretend wage income is investment income. That said, Saez and Piketty conclude that there should probably be some advantage for investment income, because of the savings disincentive. And it’s worth noting that while Saez, Piketty and Diamond support taxing investment, many other economists disagree. Greg Mankiw, Matthew Weinzierl and Danny Yagan make the case for zero taxation here. So the disagreement among economists isn’t about whether people like Romney are paying too little. It’s about whether or not they’re paying too much.