90% tax rate for working poor in U.S.

Now, what news on the Rialto?
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Azrael
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90% tax rate for working poor in U.S.

Post by Azrael »

Read here

If you're poor in the U.S., it doesn't pay to work and you can't afford to marry. The tax code must be changed to eliminate perverse incentives and the poverty trap.
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Heracleum Persicum
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Re: 90% tax rate for working poor in U.S.

Post by Heracleum Persicum »

Azrael wrote:.

Read here

If you're poor in the U.S., it doesn't pay to work and you can't afford to marry. The tax code must be changed to eliminate perverse incentives and the poverty trap.

.


If you poor, you better off in Tehran :lol:


Look, Azrael .. America not made for poor people, American attraction is for rich people


There are 2 categories of people in America .. Slaves (running just to make payments) and G_DS


The driver of America is the "illusion" Slaves can become G_DS if only word hard enough .. that engine drives America

Very similar to LOTTERY

Yes, every week we see the photo of the lottery winner with million $$$ check .. yes, true .. but the odd for you to hold that check is < 1:500,000,000 .. but, people buyin and buyin lottery tickets.. same for American dream of transformation from slave to G_D .. in that sense, Azrael, that tax code is not accidental, it is intentional made to keep American engine running .. Mr. Perfect thinks LEFTIST complaining of the rules and facts, shows how America thinks .. America thinks all this FAIR .. Human rights for America does not mean humans have a right for health care or education or not to starve .. human right for MP means homosexuals should marry and have yearly carnival on Broadway and be proud of it, that is why Ahmadinejat is an durian as he said in Iran there are no drag queens


meaning, don't waste your energy, this ain't gono change , this what's drivin America



.
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Doc
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Re: 90% tax rate for working poor in U.S.

Post by Doc »

Azrael wrote:Read here

If you're poor in the U.S., it doesn't pay to work and you can't afford to marry. The tax code must be changed to eliminate perverse incentives and the poverty trap.

One must read what the article says at the beginning.
(CNN) -- In a recent opinion column on Phil Mickelson's tax comments, I pointed out that some of the working poor face marginal tax rates "approaching 90% as they lose benefits attempting to better themselves."
Which is just another way of saying that the poor are held in their poverty as slaves of the government.

Clinton claimed he would "End welfare as we know it" But this is exactly the same problem he claimed he was solving. Though the total administrative costs are around 20% now for all forms of welfare where back then they were around 28% as I recall.
"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros
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Doc
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Re: 90% tax rate for working poor in U.S.

Post by Doc »

http://www.independent.org/newsroom/article.asp?id=2309
The Leaky Bucket
By Edgar K. Browning | Posted: Fri. September 5, 2008

It is commonplace among economists to emphasize that helping the poor with government welfare programs involves a trade-off: we get greater equality (or equity), but we sacrifice some economic efficiency. How to quantify this trade-off in a way meaningful for non-economists has always been a challenge, but the late economist Arthur Okun introduced a popular metaphor that helps clarify the role of efficiency in evaluating welfare programs.

When income is redistributed from rich to poor, Okun suggested imagining that “. . . the money must be carried from the rich to the poor in a leaky bucket. Some of it will simply disappear in transit, so the poor will not receive all the money that is taken from the rich.” Money does not literally disappear, of course, but inefficiencies produce results that can often be accurately characterized in this way. When there is no inefficiency, there is no leak in the bucket, and a dollar less for the rich means a dollar more for the poor. With inefficient policies, the bucket leaks, and the size of the leakage measures the magnitude of the inefficiency.

So, exactly how porous is the leaky bucket? When Okun wrote (1975), he thought the leakages were small, but today economists believe they are significantly larger than he supposed. Although there are too many variables to give a precise figure, we can get a rough idea that is consistent with the research literature by following a dollar on its journey from taxpayers to low-income recipients.

When the government acquires a dollar from taxpayers, it imposes a cost of greater than a dollar on them due to the inefficiencies produced by the tax policy. According to the President’s Council of Economic Advisers, taxpayers bear a cost of approximately $1.50 when the government collects a dollar in tax revenue. Of this fifty cent additional cost, ten cents is due to taxpayer compliance costs (record keeping, time spent filling out tax forms, etc.) and the remainder is attributable to distortions in economic behavior (effects on work, saving, and spending).

Armed with a dollar from taxpayers, the government spends it on a welfare program. The administrative cost of welfare programs absorbs part of this dollar, probably about ten cents on average. Thus, ninety cents worth of resources actually goes to recipients.

But recipients of welfare do not receive benefits they value at ninety cents because of the inefficiencies produced by welfare programs. Welfare programs undermine work incentives, affect living arrangements, and distort consumption decisions. The overall size of this leakage is less well established in the research literature than on the tax side of the transaction, but I estimate that a ninety-cent welfare benefit is worth only about sixty cents to recipients—a leakage of thirty cents.

One more leakage borne by low-income recipients of welfare is their compliance costs—providing evidence that they qualify for welfare benefits. I do not know of evidence regarding how large these costs are but will just assume that they are ten cents, the same as for taxpayers.

Thus, a transfer that places a cost of $1.50 on taxpayers provides a benefit worth fifty cents to recipients. In terms of the leaky bucket, two-thirds of the contents have leaked out due to the inefficiencies in the tax and transfer programs. We cannot provide a dollar in benefits to the poor at a cost of a dollar to the well off. Instead, taxpayers bear a three-dollar cost for each dollar of benefit to the poor.

Actually, this is likely to understate the size of the relevant leakage because the estimates are based on how the policies affect taxpayers and recipients at one specific time. But people do not stay in the same income classes over time—those who receive welfare benefits this year may be taxpayers next year. A recent Treasury study, for example, finds that more than half of the households in the poorest fifth of the population (likely to be receiving welfare) in 1996 were in a higher income class only nine years later (and likely to be paying taxes). What obviously matters is how the tax and transfer system affects people over their lifetimes, not just in one year.

To see why this means that the lifetime leakage will be greater than two-thirds, consider a scenario in which person A spends four years with a low income (receiving a fifty cent benefit) and one year with a high income (bearing a $1.50 cost), whereas person B has a high income for four years and a low income for one year. Person A has a significantly lower average income over the five-year period, but the 67 percent annual leak in the transfer bucket implies that A gains only fifty cents for the five-year period as a whole, while person B loses $5.50. When the leaky bucket is evaluated for the five-year period as a whole, more than 90 percent of the bucket has leaked out.

Recognizing that government policies other than welfare programs often harm the poor (such as the way immigration policy depresses wage rates for unskilled workers and ethanol subsidies increase food costs) makes it entirely possible that the welfare state as a whole ends up hurting those it is trying to help.

Each year high-income Americans transfer more than a trillion dollars to low-income Americans through a bewildering array of policies. The leaky bucket helps explain why the results have been disappointing. We should consider the possibility that the redistributive bucket is actually a sieve before we embark on a further expansion in welfare state policies.
"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros
Mr. Perfect
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Re: 90% tax rate for working poor in U.S.

Post by Mr. Perfect »

Elect Democrats, don't complain about the results.
Censorship isn't necessary
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YMix
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Re: 90% tax rate for working poor in U.S.

Post by YMix »

Mr. Perfect wrote:Elect Democrats, don't complain about the results.
Being bitter about the elections is one thing. Being goddamn boring is quite another.
“There are a lot of killers. We’ve got a lot of killers. What, do you think our country’s so innocent? Take a look at what we’ve done, too.” - Donald J. Trump, President of the USA
The Kushner sh*t is greasy - Stevie B.
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Azrael
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Re: 90% tax rate for working poor in U.S.

Post by Azrael »

Doc wrote:
Azrael wrote:Read here

If you're poor in the U.S., it doesn't pay to work and you can't afford to marry. The tax code must be changed to eliminate perverse incentives and the poverty trap.

One must read what the article says at the beginning.
(CNN) -- In a recent opinion column on Phil Mickelson's tax comments, I pointed out that some of the working poor face marginal tax rates "approaching 90% as they lose benefits attempting to better themselves."
Which is just another way of saying that the poor are held in their poverty as slaves of the government.
I read the article before I posted it.

Do you disagree with the assessment that the tax code should be changed so that the working poor stop facing marginal tax rates approaching 90%?
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noddy
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Re: 90% tax rate for working poor in U.S.

Post by noddy »

after my recent rejoining of the working poor due to the missus getting retrenched and my wage not covering housing and bills i cant even express the loathing i have for the alleged socially concious ones and their plans of taxing me more for their great plans that dont quite make it back out to me.

i predict a landslide for the non caring right wing in australia next election... the less they care about me the better, a complete and total indifference to how i spend my meagre money would be a precious thing.
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Doc
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Re: 90% tax rate for working poor in U.S.

Post by Doc »

Azrael wrote:
Doc wrote:
Azrael wrote:Read here

If you're poor in the U.S., it doesn't pay to work and you can't afford to marry. The tax code must be changed to eliminate perverse incentives and the poverty trap.

One must read what the article says at the beginning.
(CNN) -- In a recent opinion column on Phil Mickelson's tax comments, I pointed out that some of the working poor face marginal tax rates "approaching 90% as they lose benefits attempting to better themselves."
Which is just another way of saying that the poor are held in their poverty as slaves of the government.
I read the article before I posted it.

Do you disagree with the assessment that the tax code should be changed so that the working poor stop facing marginal tax rates approaching 90%?
I think that the poor on government assistance are treated like slaves. Inner cities have become modern day plantations. With the gangs being the slave owners.

But tell me do you figure that a government welfare admin or even case worker is doing anything to help people get out of their government dependent poverty? I remember back in the 90s the sixty minutes piece with the woman working in the apartment complex office saying all kinds of things about the people that lived there that sounded horrible. That they were all a bunch of lazy bums that did not deserve the benefits they were getting. Then switch to 2 or 3 women getting those benefits all saying they could not work because thy had injured backs.

Then back to the woman in the office. The camera pulls back and show that she is in a wheel chair. She had been in an accident that put her there. Disabled her son and killed her husband. The women with "injured backs" got more money each month than the women in the wheel chair with the disabled son that was working got. She just didn't want any part of being a slave.

The "top marginal tax rate" as you keep calling it is not a tax at all. It is the price of freedom.
"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros
Mr. Perfect
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Re: 90% tax rate for working poor in U.S.

Post by Mr. Perfect »

YMix wrote:
Mr. Perfect wrote:Elect Democrats, don't complain about the results.
Being bitter about the elections is one thing. Being goddamn boring is quite another.
It seems you want a sophisticated explanation for Democrats destroying things.

There isn't one. It's just what they do.

Don't shoot the messenger. Sorry it's boring. But don't blame me.
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Azrael
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Re: 90% tax rate for working poor in U.S.

Post by Azrael »

Doc wrote:
Azrael wrote:
Doc wrote:
Azrael wrote:Read here

If you're poor in the U.S., it doesn't pay to work and you can't afford to marry. The tax code must be changed to eliminate perverse incentives and the poverty trap.

One must read what the article says at the beginning.
(CNN) -- In a recent opinion column on Phil Mickelson's tax comments, I pointed out that some of the working poor face marginal tax rates "approaching 90% as they lose benefits attempting to better themselves."
Which is just another way of saying that the poor are held in their poverty as slaves of the government.
I read the article before I posted it.

Do you disagree with the assessment that the tax code should be changed so that the working poor stop facing marginal tax rates approaching 90%?
I think that the poor on government assistance are treated like slaves. Inner cities have become modern day plantations. With the gangs being the slave owners.

But tell me do you figure that a government welfare admin or even case worker is doing anything to help people get out of their government dependent poverty? I remember back in the 90s the sixty minutes piece with the woman working in the apartment complex office saying all kinds of things about the people that lived there that sounded horrible. That they were all a bunch of lazy bums that did not deserve the benefits they were getting. Then switch to 2 or 3 women getting those benefits all saying they could not work because thy had injured backs.

Then back to the woman in the office. The camera pulls back and show that she is in a wheel chair. She had been in an accident that put her there. Disabled her son and killed her husband. The women with "injured backs" got more money each month than the women in the wheel chair with the disabled son that was working got. She just didn't want any part of being a slave.
Some people game the system. Not a big surprise.

You still haven't answered my question, though. Do you disagree with the assessment that the tax code should be changed so that the working poor stop facing marginal tax rates approaching 90%? The current tax code encourages people to game the system, since gaming the system is rewarded while trying to work one's way out of poverty is punished by 90% rates. It stands to reason that far more people game the system than would if the system were better designed.
The "top marginal tax rate" as you keep calling it is not a tax at all. It is the price of freedom.
Cute metaphor, but it doesn't answer the question. Let's discuss policy, not waste time repeating bumper sticker slogans.
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Simple Minded

Re: 90% tax rate for working poor in U.S.

Post by Simple Minded »

Azrael wrote:Read here

If you're poor in the U.S., it doesn't pay to work and you can't afford to marry. The tax code must be changed to eliminate perverse incentives and the poverty trap.
Agree completely Azrael. So much of our current tax system is not the result of the desire to raise revenue for the state, but the desire to socially engineer society. The results are the unintended consequences of creating perverse incentives that reward self-destruction, or encourage "shrugging."

How to reduce the pain of the individual without creating an incentive for that individual to remain in the state they find painful is a timeless question. Does not matter if the painful condition is poverty, obesity, a bad relationship, stupidity, a health problem, etc. Anything that numbs the pain is an incentive to not change. Narcotics are addicting.

"The road to hell is paved with good intentions!"

The social engineers never want to address the issue of unintended consequences, perverse incentives, and hidden costs of their plans.

come to think of it..... I know a lot of parents who have the same problem.... :)
Simple Minded

Re: 90% tax rate for working poor in U.S.

Post by Simple Minded »

How bout handing out participation trophies or gold stars as a benny.....

Its been so long since I haven't paid my fair share, that I can't recall if the transition from "not paying my fair share" to "paying my fair share" involved a warm fuzzy feeling that offset the increased financial penalty.

I really don't recall ever focusing on the part of the paycheck that was confiscated before I got it. Nor do I recall ever thinking that life was "unfair" because Nelson Rockefeller was richer than I. I do recall a sense of pride from having earned some modest income though.

I knew lots of people who did though, strangely enough, they all seemed unhappy. As do their ideological heirs of today.....

Is this a financial problem.... or an attitude problem.....
Hoosiernorm
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Re: 90% tax rate for working poor in U.S.

Post by Hoosiernorm »

You know if they doubled my income, I would be paying twice as much in taxes.


Just putting that out there for anyone who was wondering how to incentivize the spending public and pay down the dept. :mrgreen:
Been busy doing stuff
Simple Minded

Re: 90% tax rate for working poor in U.S.

Post by Simple Minded »

Hoosiernorm wrote:You know if they doubled my income, I would be paying twice as much in taxes.

Just putting that out there for anyone who was wondering how to incentivize the spending public and pay down the dept. :mrgreen:
The idea of what motivates whom is interesting Norm. People who focus on taxes seem to be unhappy people.

http://www.ntu.org/tax-basics/who-pays- ... taxes.html

The concept of how an outside entity, such as a govt, employer, or a retailer can motivate an individual, has no doubt been the subject of much study. Look at the amount spent on advertising.

I know people who feel rich who make only a third of those I know who feel poor. As we have noted in other threads, some see opportunity where others see only oppression.

Thank God people are different. Rich and poor seem to be mental constructs more than anything else.
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