
Bernie Sanders’s Tax Plan Would Test an Economic Hypothesis - salmonet
http://www.nytimes.com/2016/02/09/upshot/bernie-sanderss-tax-plan-would-test-an-economic-hypothesis.html?smid=tw-nytimesbusiness&smtyp=cur
======
chris_va
""" Mr. Sanders has proposed a headline top tax rate of 52 percent, applying
only to incomes over $10 million ... “We do not assume taxpayers change their
behavior,” said Warren Gunnels, the policy director for the senator’s
campaign. """

... why?

The top marginal rate before Reagan was ~50%, and was lowered to 28%. Given
this logic, you would expect that the US net tax revenue would have declined
significantly in this period, which it did not. Basically, money just shifted
from capital gains and corporate taxes to individual returns. If we increase
the marginal rate again, it will likely just shift back without changing
anything.

~~~
momerath
Sanders would also seek to double the capital gains rate for the richest 2%,
and close various loopholes.

~~~
ck2
By what freaking magic is Congress going to pass ANY of this???

Has no-one been paying attention the past eight years?

You think he can do any of these changes with an executive order?

~~~
msbarnett
Yeah, change is hard, so we should just elect someone who isn't pursuing any.

~~~
netcan
I'm not american, so I may be missing the point. But isn't ck2's point that
this a President doesn't have the authority for this? Are't these supposed to
be congressional authorities? IE, to get these policies people should elect
legislators with these views.

~~~
msbarnett
It's not an either-or thing -- you need to elect both local representatives
AND a president who is interested in change.

A president cannot single handedly pass these changes, but he or she DOES
exercise considerable influence on the kinds of things congress passes via the
ability to refuse to sign things that congress does pass, so a president
interested in change is a vital part of the process.

Consider that Barrack Obama campaigned on health care reform, and a health
care reform package was passed during his first term. It's not a coincidence
that that happened, even though the package had to be introduced by congress
-- the electoral mandate handed to a president necessarily informs the
legislative pressures congressional members feel, be it to support such a
mandate, or to obstruct it, depending on the political inclinations of their
base.

~~~
ck2
Health insurance had been attempted by the democrats a few times so there was
definitely existing support. Also passed for children, also exists as
medicare, medicaid. So it had examples for things being better, just needed a
huge push.

Now the health insurance we ended up with is a horrible compromise (this is
personal for me, I still cannot get health insurance).

And that's with so many congress people throwing themselves into the fire and
literally ending their careers by voting for that horrible compromised bill.

How in the heck do you think the radical ideas Bernie is proposing is going to
get 51% of the house and 51% of the Senate?

Everyone needs healthcare, so they can relate somehow.

Now compare that to the radical reshuffle that would be needed for "free"
education (which to be clear I think is a good idea).

No way senate and house throw themselves into the fire for most of what Bernie
is proposing, no way.

It's a non-issue anyway, there is no way in hell America is going to elect a
78 year old Jewish man who constantly waves his arms around when he talks.

He's a great guy and a great senator and he should be proud but this country
is not going to make him president, hell the democrats won't even let him win
the primary, no way.

ps. he also ran 4.5 minute miles in high school which is amazing

------
jandrewrogers
High income tax rates do not "discourage greed", they merely cause it to
manifest in different ways. Compensation structures in high tax jurisdictions
like Europe reflect this, with myriad forms of lavish compensation for
corporate executives that are technically not income, much more so than in
locales where the taxes encourage people to simply write a check. An argument
could be made that direct cash compensation in tax jurisdictions where that
makes sense has the benefit of being a much more transparent kind of
compensation.

Tax rates don't change human nature, they merely change incentives.

------
devinhelton
Even the 73% optimal tax rate proposed by Saez and Diamond is based on bogus
analysis. The point of taxation is not to maximize government revenue -- if
the government wants to maximize revenue it could just print dollar bills. The
point is to maximize purchasing power. Thus the downside of high taxes is not
manifested in lower government revenue in dollar terms. It is manifested in
fewer startups and fewer risky investments, and thus fewer new technologies
and new products. Overly high taxes change the equation for risk taking -- why
try to start a business when if you succeed, you won't keep that much of the
winnings? If fewer people start businesses, the economy becomes more sclerotic
as big corporations no longer have to face competition from upstarts.

The problem is that it is fundamentally impossible to quantitatively measure
the impact of taxes on startups and economic dynamism. We know that if we
taxed at 100%, we would likely have very few startups. But we do not know how
much any given incremental change will hurt the economy. But as rough
estimate, if the current tax rate is ~33%, and a tax rate of 100% would kill
all startups, then a tax of 73% (the max rate proposed by Saez) would kill
about half of startups (or rather, mean that they never exist. Immigrant
founders would choose to start companies elsewhere, other founders would sell
out early to a big company, and the big company would then just ruin the
product like they normally do, etc.) Very roughly, such a tax rate might raise
around an additional $100 billion. Would increasing total government revenue
by 2% be worth killing half of all startups? That doesn't sound like a good
trade to me. (Of course I am personally biased on this issue).

~~~
Someone1234
> why try to start a business when if you succeed, you won't keep that much of
> the winnings?

I'd call $9.9 million or less a year pretty big "winnings" without hitting
these tax thresholds. Plus the way tax brackets work mean you get a pretty big
payday on the money below the top most threshold.

It is completely unrealistic to claim that people won't start businesses
because any personal profits they make over $10mil/year will be taxed too
highly. It is completely out of touch with the financial position that most
normal people are in.

~~~
devinhelton
_It is completely unrealistic to claim that people won 't start businesses
because any personal profits they make over $10mil/year will be taxed too
highly. It is completely out of touch with the financial position that most
normal people are in._

If the high tax rates only apply above $10 million, then the big impact would
be on:

1\. The most skilled global talent, who might choose to start their business
elsewhere, where there would be the prospect of becoming super rich. 2\. Angel
investors and second-time founders. A major reason these founders would want
to take risks, reinvest, and double down is to hit the home run, and have
change-the-world amounts of money. 3\. First-time founders who sell-out early
to a big company, rather than try to go big. This could really do great damage
to the pipeline of new and great products, since big companies are often where
innovation goes to die.

I do agree that a high percent tax rate on income over $10 million would not
do much to discourage run-of-the-mill new businesses, such as restaurants and
landscaping companies. But I think it could majorly discourage the types of
startups which drive the continued advancement of technology.

------
clavalle
I am a Sander's supporter so I say this more theoretically than as a criticism
of his plan:

It scares me that in our political structure that we feel like we need to
experiment with the whole country. I understand that if we don't the super
high income earners, in this case, would flee to cheaper areas but I sure
prefer the idea of trying out large shifts in policy in more gradually
widening areas than completely wholesale as we've been doing.

On a related note, what are the good software platforms for running economic
simulations? Are any of them decent?

~~~
notthegov
Federalism.

~~~
vezzy-fnord
In practice, a marble cake federalism.

------
jamiequint
Successful entrepreneurs often make huge lump sums when their company is
acquired, usually after many years of hard work and low pay.

Sanders' plan to make taxes on capital gains equal to those on ordinary income
and to increase the marginal tax rate to effectively > 80% (once state taxes
are included if you live in CA or NY) is effectively a wealth transfer from
the most productive part of the economy (new enterprise creation) to the least
productive part (government).

Its a shame that we have a presidential candidate with this level of economic
illiteracy that is still taken seriously by a large part of the country.

~~~
snowwrestler
Government does not hold the money, though, it redistributes it again through
contracts, credits, and payments.

All taxes are redistributive. If they weren't, they wouldn't need to exist--
i.e. if private income is already paying for everything the country needs,
there is no need to use taxes to move it around. But of course, private income
is not already paying for everything the country needs.

Consider a basic function of a national government: self defense. Protecting
the nation benefits all citizens. But not all citizens have the same amount of
wealth and income. So any taxes that pay for national defense, even if applied
with one flat rate to every person, will redistribute wealth. It will confer
the benefits of national defense equally on a person who paid $1 in taxes and
a person who paid $1,000 in taxes. Security is a form of wealth; the $1 payer
got a better deal than the $1,000 payer.

So, the concept that taxes are bad if they redistribute wealth is flawed,
because redistribution is the entire point of taxes. Instead, to critique tax
policies, we need to be specific about the taxes and payments and outcomes.

------
djb_hackernews
I am a Bernie supporter, but I have 2 issues: 1) I'm having a hard time
understanding how such a policy shift could happen purely from the POTUS 2)
Even if it did happen and we got single payer, I have a feeling it'd just turn
in to another benefit for the employer. When employers no longer provide
health insurance they'll just keep the money for themselves and the employees
won't see the actual benefit, just the higher taxes. If my employer is
currently paying 13k/yr for family coverage and all of a sudden doesn't have
to, I doubt they'll be adding that, or even some percentage, to my salary.

~~~
kefka
Unfortunately, my founded belief is that if a Democrat gets elected president,
the gang of Republicans that shut down government will also act to stop any
action the D-President does.

We've already seen this with Obama. It's not hard to see them doing more of
the same.

~~~
harryh
It's worth noting that any tax increase has to start as a bill in congress, so
it wouldn't so much be Republicans stopping the action of a D-President as
just not doing what he/she wants them to do.

Which...sounds like how the system is supposed to work? Checks & balances and
all...

~~~
kefka
Well, it depends.

The POTUS is the head of the executive branch. And as far as I understand it,
can order anyone of that branch to do stuff. That's also how "executive
orders" work: because the POTUS is their boss.

It's also what Obama's doing to break the gridlock: make rules that you have
to go to SCOTUS to solve, or pass bills that supersede them.

~~~
harryh
Sure, there are lots of things that can be done by executive orders. Changing
tax rates, however, is not one of them.

~~~
kefka
But "Fees" are well within the POTUS purview.

So, make "Fees" that are means-tested (charge exorbitant those whom are rich).
They aren't considered taxes. They're 'something else' (bullshit, but that's
what the courts say).

~~~
dragonwriter
> But "Fees" are well within the POTUS purview.

No, they aren't. (Except to the extent that fees have been authorized by
statute and the authority to adjust them given the executive in the statute,
but that clearly isn't what you are referring to, since you are talking about
arbitrarily introducing new fees.)

The executive has very little independent (that is, not dependent on
Congressional action) domestic policy authority.

------
grecy
A hypothesis that has been tested and proven in many countries around the
world for decades.

Not long ago my Dad was paying 50% income tax on ~$75k+ AUD. We had a nice
upper-middle class life, no worries.

~~~
merpnderp
But I'd hate to give up all these top rated hospitals. The US has more
expensive health care, but the US also has most of the best hospitals.

[http://hospitals.webometrics.info/en/world](http://hospitals.webometrics.info/en/world)

~~~
grecy
Too bad tens (hundreds?) of millions of citizens can't afford to go there.

~~~
merpnderp
I don't know about most of the hospitals for sure, but I would assume they are
similar. MD Anderson which is the top ranked cancer center in the world
according to patient outcomes, doesn't turn anyone away based on their ability
to pay. They either work it out or do the work as charity.

------
ohitsdom
This would be devastating to athletes. Take the NFL as an example. A player's
earning window is very short. Once their career is over, they often suffer
from health problems and lack of training to do anything else. I don't like
the idea of taxing these guys at 70%+ when they're giving up their bodies for
money to last them a lifetime.

I know many athletes continue to get endorsements, speaking fees, and other
income after their playing days are over. But that is only really significant
money for the stars, and continues to decline as they age.

Obviously pro athletes are a very small percentage of the population, but it's
still interesting to consider how this impacts different professions.

~~~
fnovd
> they often suffer from health problems and lack of training to do anything
> else

So do millions of Americans who did _not_ have the chance to make millions
playing sports in their twenties. A new tax plan would have the intention of
making lives easier for folks struggling with low wages, ex-footballers
included.

------
merpnderp
Won't this push a lot of highly payed professionals into early retirement?
Doctors, lawyers, and managers, at the point in their careers where they are
the most experienced and capable, will likely decide in meaningful numbers it
is no longer worth putting in the hours if they only get to keep 27% of what
they earned.

~~~
vorotato
Good, more room for the next generation.

~~~
ctdonath
Why would the next generation want to take up that room? Would you take up a
career where despite long & expensive education, long hours, hard work, and
lives-in-your-hands responsibility, you kept just 27% of your income? would
you put in a million dollars of effort to net a quarter of that in return?

~~~
dragonwriter
> Why would the next generation want to take up that room?

Because they want the things money can buy.

> Would you take up a career where despite long & expensive education, long
> hours, hard work, and lives-in-your-hands responsibility, you kept just 27%
> of your income?

Maybe, maybe not, but, anyway, that's not how marginal rates in a progressive
tax system work. Even if the _marginal_ rate that kicks in at $10 million is
73%, that means you only keep 27% of the amount _after_ $10 million, and some
greater amount of the part below $10 million. Obviously, an increase in the
top marginal tax rate decreases the incentive to work to _increase_ income
once you've reached the annual income level at which the higher tax rate
applies, but doesn't it really hurt anyone that people already making at least
$10 million/year prioritize making _additional_ income less over other
priorities?

~~~
ctdonath
Ronald Regan, as a movie star, regularly _didn 't_ make movies precisely
because the progressive tax system would head into confiscatory levels making
the effort worthless to him. Such rates denied both the public at large from
products they wanted, and the government tax revenue. I don't want my world to
actively discourage the talented from producing.

I want to _encourage_ people to make insane amounts of money, because that is
largely the result of far-and-above productivity which everyone else benefits
from. Jobs are created, desirable products/services are generated at
affordable costs, money is invested (even banked "cash" gets loaned, and
extravagant luxuries create markets), and the general standard of living is
raised.

The cost of discouraging effort is _never_ included in these "soak the rich,
redistribute the wealth" equations.

~~~
dragonwriter
> Ronald Regan, as a movie star, regularly didn't make movies precisely
> because the progressive tax system would head into confiscatory levels
> making the effort worthless to him.

Really, if the greatest cost to society you can point to of increasing the top
marginal income tax rates is "fewer Ronald Reagan movies", I don't think you
are making a very strong case.

> Such rates denied both the public at large from products they wanted, and
> the government tax revenue.

The case that it denied government net tax revenue requires more than Reagan
not making movies, it requires a whole-economy comparison of what activity
occurred instead and the actual taxes applied against that activity.

> I want to encourage people to make insane amounts of money, because that is
> largely the result of far-and-above productivity which everyone else
> benefits from.

This "trickle down" concept is a widely held article of faith in some parts of
the population, but not a position well supported by evidence.

> The cost of discouraging effort is never included in these "soak the rich,
> redistribute the wealth" equations.

The "cost of discouraging effort" is very hard to empirically establish
without ambiguity, and there are sharply different opinions on what it
actually _is_. What proponents _think_ that cost is usually accounted for in
where the various parameters are set; people who have different views of what
the cost is, obviously, disagree that these settings are correct.

~~~
ctdonath
Pardon me for using a simple high-profile example to make the point. Detailing
the failings of socialism in a mathematically provable form would take far
more text than you are willing to read. As you note, it is very hard to
empirically establish without ambiguity the economic realities of taking from
those who earn and giving it to those who don't. Perhaps, given the
understandable disagreements, we should adhere to the notion of individual
freedoms which the Founding Fathers enacted for the USA and let those who wish
to pool their wealth do so, and those who would rather decide for themselves
do so; alas, we face the votes of those seeking to force, thru threat of
government-sanctioned violence, others to adhere to economic principles they
deeply disagree with.

------
jljljl
If the high tax rate only applies to ordinary income, won't this just shift
compensation away from ordinary income and towards stock-based or alternative
compensation?

~~~
ansy
Yes. In fact anyone earning that much has already shifted away from ordinary
income. Famously, this is what Warren Buffet does to pay a lower tax rate than
his secretary. The solution is taxing capital gains the same as ordinary
income.

The next level beyond that is to shift earnings into personal corporations
which are taxed at a corporate tax rate and enjoy other protections. This is
like what Zuckerburg recently did.

The final dodge is to move earnings overseas much like most corporations do
today.

With enough money there are always loop holes to exploit. I'm in favor of
closing as many as possible. If there's someone out there rich enough to found
their own sovereign nation in the Pacific, there's not much we can do about
that.

------
tyingq
_" Mr. Sanders...proposed a...top tax rate of 52 percent...When you combine it
with other taxes that apply to income...it would add up to a combined tax rate
of over 73 percent"_

I'm trying to imagine the scenario under which this would get through Congress
unscathed.

~~~
dragonwriter
The scenario is this "the idea is aggressively sold during the campaign, and
is a key issue in not only the Presidential election but a substantial number
of Congressional elections".

Of course, even if Sanders is elected, its likely that there won't be
sufficient support to.adopt his programs unmodified in Congress, and some
alternative or compromise will be necessary. The same is true, for that
matter, of any Presidential candidate.

Part of why you campaign on plans is to shift the public dialogue and set the
groupies ds for the eventual compromises that are necessary as part of
governing when you aren't a dictator. Holding back preemptively doesn't help
that, it just cedes ground to the other side before the work of compromise
starts.

~~~
tyingq
>> is a key issue in not only the Presidential election but a substantial
number of Congressional elections

Are there a substantial number of Democratic congresspersons that would line
up behind Bernie's tax proposals?

Edit: Yes, I get how it works. There's a point, though, where reaching too far
is counterproductive.

~~~
dragonwriter
The key question is "will their be in 2017"; there is an election for 100% of
the House and 1/3 of the Senate at the same time as the Presidential election,
and the policy proposals of the Presidential nominees of the various parties
are likely to be salient issues in each of those elections.

------
jpollock
I saw this article listing the proposed new tax brackets.

[http://www.fool.com/retirement/general/2016/02/07/bernie-
san...](http://www.fool.com/retirement/general/2016/02/07/bernie-sanders-
income-tax-brackets-how-much-would.aspx)

Personally, I can't afford a house in the valley, and the new brackets would
cost me an additional $10-15k/yr, putting home ownership out of reach for a
long time. In fact, the additional $10-15k/yr would put me close to not being
able to afford my rent.

That's even before looking at the change to capital gains, which would tax
them at the marginal rate.

------
heimatau
It seems a lot of people are misinformed in this thread about Bernie's plan.
Here is a quick video explaining Berine's plan to change Washington (by Robert
Reich):
[https://www.youtube.com/watch?v=VfIhonVoFSg](https://www.youtube.com/watch?v=VfIhonVoFSg)

tldr; Bernie wants a political revolution of voting progressives which will
put new Senators/Congressmen(women) in DC, which will allow for new FDR like
changes to occur.

------
ck2
I love his spirit but absolutely nothing Bernie is selling can pass Congress
which means absolutely nothing will change if he is elected.

You really think he could survive running for re-election at 80 years old?

Anyone old enough to remember Reagan will know what happens to people that old
in the white house.

Not crazy about Hillary but I could live with her.

If Trump is elected, I'm somehow moving to Canada, not because of him, because
of the 51% of people who elected him and having to live with them after
surviving Bush.

------
ctdonath
Being halfway thru reading "Atlas Shrugged", I find it bewildering that on a
site devoted to promoting the best of capitalistic productivity, so many
posters adhere to compulsory redistribution of wealth confiscated from the
productive.

~~~
talideon
It's 'Hacker News', not 'Objectivist News'.

~~~
ctdonath
It's a branch of Y-Combinator, funding startups with the expectations of high
rewards for high risk & effort _without_ strangers confiscating some 75% of
profits. It's the discussion forum for real-world objectivism in action.

~~~
talideon
Holy crap! I only wrote that half-jokingly, not expecting that you were took
objectivism seriously, but you do!

I don't take Rand's philosophy seriously for much the same reason I don't take
postmodernism as a whole seriously: the Continental approach (which she
employed) lacks any real rigour[1]. Great for fiction, but not so good for
being _useful_. As well as that, we objectively (see what I did there!) know
that some of her important points (such as on causation, determinism, and
free-will) are bunk, and it's not as if she was even particularly consistent
on them anyway.

The best I can say to you is to go read Hume and come back to me: he was a
much better philosopher than Rand, and had much more interesting and useful
things to say about the world. Alternatively, maybe try to broaden your
horizons with the Rationally Speaking Podcast
([http://rationallyspeakingpodcast.org/](http://rationallyspeakingpodcast.org/)).
But if you don't want to, that's fine: you do you.

[1] Even with the continental school philosophers I _do_ take at least a
little more seriously, such as Nietzsche and Camus, it's more on the level of
'oh, that's an interesting idea', 'hmm... that's an interesting line of
though', and 'oh, that's an interesting story' rather than anything seriously
_useful_. And Rand doesn't even get to that level. I'm totally OK with her
loathing Kant[2] and thinking Marxism sucks, but she doesn't offer much else
of any depth, which, I guess, at least nothing that's been published.

[2] My personal opinion of Kant is that he was a stick-in-the-mud prude, and
that deontological arguments, such as those Kant made, fall down when exposed
to the real world, even though deontology itself can be a useful tool.

~~~
ctdonath
Rand makes for a convenient & well-known reference when making a brief point
on a casual discussion board.

I have a similar reaction to many of the "soak the rich" types posting on this
thread: I don't expect they take Bernie & Bolshevism seriously but...they do!

~~~
talideon
If Rand is the best reference, then I'm not sure those boards are all that
well worth taking part in.

Sanders isn't a Maxist/Marxian by a long shot. He might _describe_ himself as
a democratic socialist, but he's really a social democrat with much more in
common with the aims of the Fabian Society than anything else: his ideas are
pretty much those of any European social democratic party (such as the British
Labour party, Dutch PvdA and GroenLinks, German SPD, French Parti socialiste),
and whatever you might somehow think, _none_ of those parties are hives of
Bolshevism.

Also, whatever about the 'soak the rich' thing (which I haven't seen much
evidence for), only one commenter seems to take Marxian though seriously here,
and even they said that he's doing himself a disservice by using the label
'democratic socialist'[1].

[1]
[https://news.ycombinator.com/item?id=11066351](https://news.ycombinator.com/item?id=11066351)

------
misiti3780
This might work in other countries but I am skeptical it would work in the
united states. I do like sanders ideas of reforming wall street:

[https://berniesanders.com/issues/reforming-wall-
street/](https://berniesanders.com/issues/reforming-wall-street/)

If he gets elected and can actually deliver on that promise, hopefully he can
manage to siphoned off enough tax base from wall street alone to fund some of
his other ideas.

------
mc32
As most middling earners, I'd support taxing people at extraordinary incomes,
but at the same time, I don't think it's prudent to shock the economy with
such a thing. Gradual does it, also work with other OECDs so that you have
framework whereby you don't have people becoming Russian residents for the
purposes of evading extraordinary taxes, thus defeating the whole purpose of
the hikes.

~~~
brbsix
The U.S. taxes citizens on worldwide income, so becoming a Russian resident is
not likely to help. There is also a significant expatriation tax for those
wishing to renounce their citizenship. I suppose you could move to Puerto Rico
or expatriate well in advance of any expected earnings.

However you're absolutely correct that there are unfathomable unseen costs and
effects.

------
ojbyrne
As a progressive (but a highly-taxed one) I'd like to see defense spending cut
by 50%+ first. That's not going to happen either.

------
tmaly
I would like to see Mr Sanders proposed rates for the middle class and what
range of income he deems to be middle class. Middle class in SF or NYC is much
different than say Detroit, MI.

Housing costs, cost of living, and local taxes are not really factored into
the current federal tax rates, and higher rates on the middle class could hurt
a lot of people.

------
MrZongle2
Of course, this assumes Sanders even makes it to the general election. Despite
his polling, the skeptic in me thinks that the Clinton campaign will be the
Democratic candidate on the ticket in November....public support be damned,
she's the candidate that the establishment wants.

------
SN76477
I think Sanders has radical ideas that will not work in America... I also
support him for this reason.

We do not need to be the next Norway, but we should have much better
healthcare, education and intolerance of greed. I think that his fresh ideas
will really bring this to fruition.

~~~
cmrdporcupine
He is running a propagandistic campaign that seems to be more about 'bending
the stick' of public perception of what is mainstream political/economic
thinking in North America.

And I think that is good and I wish him well.

But for myself, as someone who would call himself a kind of Marxian socialist,
I wish he'd stop calling himself a socialist. He is doing both himself (at
best a Euro-style social democrat) and socialism a disservice.

~~~
ph0rque
_' bending the stick' of public perception_

I prefer the term "opening the Overton window".
([https://en.wikipedia.org/wiki/Overton_window](https://en.wikipedia.org/wiki/Overton_window))

------
JDiculous
It bothers me that our politicians always talk about taxing labor income but
never talk about taxing land values and/or capital. We need more economists
coming up with tax plans rather than politicians.

(I say this as someone who will vote for Bernie Sanders)

~~~
hnal943
That's a real problem. Wealth and income are radically different numbers for
people at the top end. High income taxes end up punishing the upper middle
class instead of the truly wealthy who own assets.

------
ghouse
The US already tested the "trickle down" economic hypothesis.

~~~
ctdonath
"Trickle down" was a deliberate mischaracterization by opponents of Regan's
economic plans. What it construes wasn't implemented.

~~~
kefka
Yes, and the Capitalists whom Reagan's plans helped ended up doing what with
the gains?

That's right. They saved it. They didn't "invest" or whatever crap was spewed
then. They didn't hire more people.

------
mrfusion
Maybe we should move into doing a luxory sales tax instead? 100% sales tax on
yatches and cars over 100k? 20% tax on homes over one million?

~~~
mrfusion
People might also be more supportive of taxing things they'd never dream of
buying.

~~~
wnevets
Unlikely, a lot of americans believe they'll be rich soon.

------
greggyb
Why not make it cheaper to pay taxes than to pay accountants, lawyers, and
financial strategists to avoid those taxes in the first place?

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lintiness
there's a fundamental flaw in the reasoning: if single payer healthcare plans
save money, why do we need higher tax rates?

~~~
adventured
There's a very simple answer: the middle class pays very low income taxes in
America. Nearly all of the income tax burden is on the top 25%. If you want to
shuttle over half the population into a new single payer health insurance
system, they're almost all going to be a (big) net drain. It's an inherent
consequence of a highly progressive tax system.

Your typical middle class single person is now spending $300 to $400 per month
on health insurance (employer sponsored is closer to $100 per month, but
that's merely subsidization), and you want to shift them into single payer,
then you have to recover that $300 to $400 via taxation.

The median in the US has an effective income tax of about 3% to 5%. Put
another way, putting all of that toward their new single payer insurance,
wouldn't come close to covering how much they'll cost you (and that's before
getting into family cost structures).

~~~
kefka
> the middle class pays very low income taxes in America

Citation needed.

There's "fees", "taxes" and all sorts of hidden ways that eat into the middle
class. Not only that, but how much "Fees" were in the eggs you bought? None,
right? Not really: they're just bundled in and hidden.

Ever get a speeding ticket? That's a fucking tax. Property __tax __, car
"license plates" \- tax. Gas has taxes, and a lot of them. As does alcohol.
And then there's sales tax- just because you sold something. Hell, there's
taxes for dying.

But myopically, it looks small. I'd wager that these 'little bits' here and
there by far exceeds the percent paid in taxes than the top 1%.. and we know
it hurts the middle class far worse.

~~~
refurb
The top 10% (over $125K/yr) pay 70% of all income tax in the US. In 1990, it
was 55%.[1]

[1][http://www.ntu.org/foundation/page/who-pays-income-
taxes](http://www.ntu.org/foundation/page/who-pays-income-taxes)

~~~
kefka
But they at most work with IRS numbers regarding federal income tax.

Lets be real here: any money that's leaving my pocket that goes towards
"compliance", "fees", "fines", "tickets", or what have you is __Tax __.

Now, I don't have a problem with tax itself (as a concept). I get that
services need to be paid for, and that's us.

But what I want to know, is out of my paycheck, how much really is taxed? No
one can answer that.

