Why the Occupy Movement is Right

[AHapka]

When it is said that the bottom 47% don’t pay taxes they mean income taxes, and if the bottom 47% of our country isn’t making enough money to pay income tax that is pretty said considering that means they are making less than minimum wage.

How do you figure? Me and my wife made $76,000 last year and paid no federal income taxes whatsoever.

In fact, she had $5,000 deducted out of her paychecks for federal taxes, and we got a $8,000 tax “refund.” So not only did we not pay any taxes, we had a net gain from the government. I was on unemployment, and had no taxes withheld.

People who make way more than minimum wage don’t pay any taxes. So I’m not sure where you got your facts from, but they are wrong.

As far as state taxes go, we did have to pay state taxes though…

 

[Jim_Dandy]

How do you define “poor”? 49% of the population pay no income tax at all. I think there must be a whole lot of “poor folk” in that half. I don’t object to peaceful protests, but they have been protesting for months, sometimes unlawfully. The “Occupy” people as a whole are violent and destructive. Therefore, they don’t get much sympathy from me.

 

[markomalley]

In revenue, not percentage

Actually…

If you take a look at this Excel table from the IRS, based upon actual tax returns, you see the following picture (all of these are from 2009, the most recent year):

For those who have an annual adjusted gross income of under $40,000, the average amount of income tax paid ranges from 2% to 6% of income. For those making $200,000 and up, the average amount of income tax paid ranged from 23% to 26% of income. (To see that, divide column U (average total income tax) by column F (average adjusted gross income) for each row in the table.

We can also see that a total of $7,626,430,723,000 of individual income was reported during 2009. Out of that $7.6 trillion, we see that $1,437,150,991,000 was reported by people who reported $40,000 of income or less during the year and $1,964,295,760,000 was reported by those who reported $200,000 or more during the year. That works out to 18.9% and 25.6%, respectively.

We can also see that $35,433,335,000 of income tax was paid by people who reported less than $40,000 of annual income during 2009, while $434,280,399,000 of income tax was paid by those who reported more than $200,000 of annual income during 2009. That works out to be approximately 4% of the total tax revenue versus 50% of the total tax revenues.

(By the way, 35% of the income tax returns filed in 2009 were for $40k or less, while 1% of the income tax returns filed in 2009 were for $200k or more)

Now, if you wanted to do the bottom 99% versus the top 1%, you would see that the bottom 99% generated 71% of the total national individual income, while paying 63% of the total income tax.

Now let’s say we merely wanted to keep things the way they were in 2009, but get rid of the huge deficits. According to the Office of Management and Budget (excel file again), we had a $1,412,688,000,000 deficit in 2009. Now let’s say that we wanted to collect that $1.4 trillion from those greedy bums in the top 1%. What would we have to do?

Well, the government already collected $434,280,399,000 from them. We The People (the 99%) would have to collect an additional $1.4 trillion from them, for a total of $1,846,968,399,000. Now here’s where we run into a little bit of a problem: according to official IRS numbers, they only earned a combined total of $1,964,295,760,000 last year. That means that their effective tax rate would have needed to be raised to 94%.

I’m sorry, but I sure don’t understand any concept of justice that asserts that a 94% effective tax rate would be fair. Maybe one of you pro-occupy folks could explain that to me.

This is bad enough, but the confused occupiers want more. They want mortgage forgiveness for the 99%. They want free college tuition for the 99%. They want free health care for the 99%. They want endless unemployment insurance for the 99%. And so on.

And they want the 1% to pay for it. All of it.

The math just doesn’t work, folks. Sorry to break folks’ bubble, but the math just doesn’t work.

But, hey, these occupiers are pretty smart. Maybe they can explain how it works.

But I doubt it.

 

[mary_bobo]

Actually the rich pay less and less taxes all of the time. While the shrinking middle class pays more.

Please cite references for this. Just how much do you think the rich should pay? What is rich?

 

[Ridgerunner]

Actually the rich pay less and less taxes all of the time. While the shrinking middle class pays more.

This is true depending on what you mean by “rich”. A man who makes, say, $200,000/year can, if he does it right, make investments that give him generous deductions. A man with the same income who does not have that knowledge or expertise, pays a lot more in taxes. The tax code encourages this because it assumes those investments improve the economy, create jobs, increase capitalization, etc. Perhaps it’s true, perhaps it isn’t, but that’s the way it’s written.

the further you go up the “rich” scale, the more opportunities one has to avoid income taxes. The problem, though, with thinking of “taxing the rich” in a uniform manner, is that it takes capital to do those things that can reduce taxes. So, the middle class person who simply makes a W-2 salary, pays taxes on every dime of it. The middle class person with capital does not need to do so. There is truth to the saying that “them that has, gets”. Unfortunately, when taxes are raised on high earners, the less capital they are able to accumulate in order to make the investments, because their “capital accumulation” dollars are taxed to the full.

It’s part, but not all, of the reason why there is no particular correllation between “income” and “wealth”. High earners do not necessarily have “wealth”, and lower earners can have a great deal of “wealth”.

 

[Leegal]

I live in NY where this nonsense began. One woman was there because despite advanced degrees in Chemistry she could not find a job because of the bad economy caused by all the corrupt corporate greed. So, she was protesting and her sign said she could not find a job with her education.

She was offered a job by someone who saw her sign, and accepted it, one with a Wall Street firm – and not in Chemistry either.

So much for the message; so much the principle whatever it is.

 

[exnihilo]

I’m no socialist. I just point out that insider trading, unregulated markets and lying suck-up ratings firms will kill capitalism every time.

Regulation ain’t a sin! It helps make the game go along. That’s why there are referees and umpires, and rules the players play by. Otherwise, it’s a system of me-first shoving pigs at the trough who’ll take about ten minutes to knock everybody down before the whole thing collapses.

Insider trading is not bad. What is bad is the average American thinking he can give 5% of his income each month to some blind money making scheme aka a 401k. Of course insiders trade on information. That is unavoidable. The solution is not to pretend you can stop it but to act with such knowledge.

The rules needed are not regulation but the law that punishes fraud and negligence. The idea that you can regulate something and make it good is wrong. The best way to reguatle is to have consequences for bad acts. As it is now we have regulation and no consequences. If a regulated business fails it gets bailed out. We have destroyed the natural incentive of the market place. The referees should be the courts.

Do you not think the Princes of Wall Street, Yale degrees in hand, do not know this is anti-social behavior with negative consequences?

The Princes of Wall Street are who run the government, write the regulations, and act as the regulators. You cant beat them. Creating more regulation is actually giving them more power. Goldman Sachs is the government. These people move back and forth freely. You can even work for Goldman Sachs and not pay your taxes and be made Treasury Secretary.

 

[PatrickSebast]

How do you figure? Me and my wife made $76,000 last year and paid no federal income taxes whatsoever.

In fact, she had $5,000 deducted out of her paychecks for federal taxes, and we got a $8,000 tax “refund.” So not only did we not pay any taxes, we had a net gain from the government. I was on unemployment, and had no taxes withheld.

People who make way more than minimum wage don’t pay any taxes. So I’m not sure where you got your facts from, but they are wrong.

As far as state taxes go, we did have to pay state taxes though…

It is true that some people who don’t pay taxes make more than minimum wage, but the majority of those filing in the in the bottom 47% simply do not. 61% of the bottom 47 make less than $20k a year, which is pretty close to minimum wage for a single person, for families with two earners it is well below that.

With an income of 76k you are well within the top 25% and typically would be paying taxes. Apparently you had a lot of non-standard deductions.

 

[Holly3278]

The only thing that I really find myself agreeing with the Occupy movement on is their opposition to corporate and political greed.

 

[centurionguard]

The only thing that I really find myself agreeing with the Occupy movement on is their opposition to corporate and political greed.

Same here.

And I don’t believe a political shift in citizens votes in a federal election is going to change the way Feds and Big Corporate Business operate in cahoots with one another for big financial gain at the expense of those who struggle to make ends meet for their families and the increasingly poor. Crony Capitalism is here to stay. History often repeats itself. Empires Do Fall.

 

[TheTrueCentrist]

The only thing that I really find myself agreeing with the Occupy movement on is their opposition to corporate and political greed.

OWS is pretty much the left’s version of the tea party. The tea party opposed what they saw as an unresponsive government and advocated for stricter regulation of Washington e.g. severe spending cuts. OWS opposed what they saw as an unresponsive government by advocating for stricter regulations of corporate influence over government.

 

[JimG]

OWS is pretty much the left’s version of the tea party. The tea party opposed what they saw as an unresponsive government and advocated for stricter regulation of Washington e.g. severe spending cuts. OWS opposed what they saw as an unresponsive government by advocating for stricter regulations of corporate influence over government.

But I haven’t seen OWS advocating for federal debt reduction, which is going to be necessary to avoid collapse. Not sure if the tea party advocated debt reduction; if they did, they have to recognize that it will mean cuts in their benefits.

 

[TheTrueCentrist]

But I haven’t seen OWS advocating for federal debt reduction, which is going to be necessary to avoid collapse. Not sure if the tea party advocated debt reduction; if they did, they have to recognize that it will mean cuts in their benefits.

Debt reduction is neither as urgent as conservatives believe, nor as insignificant as liberals treat it.

 

[JimG]

Debt reduction is neither as urgent as conservatives believe, nor as insignificant as liberals treat it.

We can just keep spending each day $4 billion more than we take in, as we do now. The debt currently is $15 Trillion; it will be $23 Trillion by 2015 if interest rates don’t rise. We can just wait till the bubble bursts, and the adjustment will come naturally but nobody will like it and it could lead to extreme civil unrest. I’d prefer to stop the elevator before that occurs.

 

[TheTrueCentrist]

We can just keep spending each day $4 billion more than we take in, as we do now. The debt currently is $15 Trillion; it will be $23 Trillion by 2015 if interest rates don’t rise. We can just wait till the bubble bursts, and the adjustment will come naturally but nobody will like it and it could lead to extreme civil unrest. I’d prefer to stop the elevator before that occurs.

But much of the deficit is tied to the economic situation. As the economy stabilizes, the deficit return to more sane levels. A good sized chunk of spending over the past years has been due to increased aid to the unemployed and other needy, through programs like medicaid. Combine that with lower revenue from income taxes and you can account for almost half the deficit increases over the past few years.

 

[JimG]

But much of the deficit is tied to the economic situation. As the economy stabilizes, the deficit return to more sane levels. A good sized chunk of spending over the past years has been due to increased aid to the unemployed and other needy, through programs like medicaid. Combine that with lower revenue from income taxes and you can account for almost half the deficit increases over the past few years.

Whatever the causes, the deficit is now the sizeable elephant in the room, and growing unsustainably. If not brought down, it has the potential to cause a sovereign debt crisis. And if the current artificially held down interest rates begin to rise, the debt will increase even more rapidly.

Economic growth is assuredly needed as a corrective, yet I’m not optimistic that growth is going to come any time soon, and part of the reason is the federal debt overhanging the economy and dragging it down.

Not only that, but government policies over the past few generations have discouraged marriage and families and increased dependency on government. Official encouragement of contraception and abortion have pretty much ensured an aging population and a higher ratio of older retirees to younger workers. More people receiving benefits, fewer people working and paying taxes.

I’m afraid we’ll end up with austerity whether self-imposed or debt crisis imposed. And austerity leads to social unrest.

 

[ComputerGeek25]

This is true depending on what you mean by “rich”. A man who makes, say, $200,000/year can, if he does it right, make investments that give him generous deductions. A man with the same income who does not have that knowledge or expertise, pays a lot more in taxes. The tax code encourages this because it assumes those investments improve the economy, create jobs, increase capitalization, etc. Perhaps it’s true, perhaps it isn’t, but that’s the way it’s written.

the further you go up the “rich” scale, the more opportunities one has to avoid income taxes. The problem, though, with thinking of “taxing the rich” in a uniform manner, is that it takes capital to do those things that can reduce taxes. So, the middle class person who simply makes a W-2 salary, pays taxes on every dime of it. The middle class person with capital does not need to do so. There is truth to the saying that “them that has, gets”. Unfortunately, when taxes are raised on high earners, the less capital they are able to accumulate in order to make the investments, because their “capital accumulation” dollars are taxed to the full.

It’s part, but not all, of the reason why there is no particular correllation between “income” and “wealth”. High earners do not necessarily have “wealth”, and lower earners can have a great deal of “wealth”.

This is the issue I have with people who claim the rich “don’t pay enough.” Many of the “rich” I know are very resourceful and take advantage of deductions and loop holes that exist in the current system. This is all perfectly legal.

If we really wanted to make the rich (whoever they are ) pay their fair share (whatever that is ) a good first step is to eliminate all deductions including the ones that the poor/middle class take advantage of.

One thing that also goes overlooked by these people is that if the US wants to get the rich to “pay their fair share” and we want to go to Clinton era tax rates, are the same people willing to go back to Clinton era spending levels as well?

 

[promethius]

news.yahoo.com/hedge-fund-abuses-hurt-investors-170408923.html;_ylt=AnTg4BGKLz_M2XkW7O6jSZGw73QA;_ylu=X3oDMTMyOWk3dGZuBG1pdANBcnRpY2xlIFJlbGF0ZWQgSUIEcGtnAzZhNzFjYzljLTczNDgtMzViNi1iMjRhLWRiOWRiOTMzYWNkZARwb3MDNARzZWMDTWVkaWFJbmZpbml0ZUJyb3dzZQR2ZXID;_ylg=X3oDMTMxOWFpMzNzBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDNTUyYTFhZWUtN2Y0NC0zYzU2LTkzODYtNDA4YWJmYzY3OGI2BHBzdGNhdANidXNpbmVzcwRwdANzdG9yeXBhZ2UEdGVzdAM-;_ylv=3

This is a link to an interesting story in Forbes about classic, anti-capitalism behavior by those who are supposed to be in charge of our “capitalist” system.

I’m no socialist. I just point out that insider trading, unregulated markets and lying suck-up ratings firms will kill capitalism every time.

Regulation ain’t a sin! It helps make the game go along. That’s why there are referees and umpires, and rules the players play by. Otherwise, it’s a system of me-first shoving pigs at the trough who’ll take about ten minutes to knock everybody down before the whole thing collapses.

Do you not think the Princes of Wall Street, Yale degrees in hand, do not know this is anti-social behavior with negative consequences?

How do you think corporations engage in cut-throat, anti-competitive practices? If you’re starting up an online store, do you think Amazon is going to send their private security forces to beat you black and blue, take your money, and smash your servers? NO.

The force that corporations are REQUIRED to use if they want to legally destroy competition is the self-same law and regulation you ADVOCATE. Why? Because the government CAN legally put you out of business. The government CAN legally confiscate your property for investigations, the government CAN incarcerate you, and the government CAN fine you and award your money to the large company sueing you.

So regulation is in the best interest of the large corporations… after all, they lobby for the regulation they want with the loopholes they need to get around it. Their dollars go to the politicians who appoint regulators, and the regulatory agencies are staffed by former employees and executives of the large corporations. All this is done so that they can squash the little guy the second he gets big enough to enter into their radar and possibly change the game on them.

You want a fair system? Do away with the ability of the government to regulate to the extreme that it has. Do away with the massive number of regulations that stifle new competition from entering the market. Do away with the laws and courts that allow large corporations to sue small businesses with no justification, just to put them out of business by drowning them in legal fees. Do away with any sort of chrony capitolism that allows big corporations to use loopholes and buy the regulations and regulators they want.

And that’s the problem with OWS… they want corporations out of government, and that’s good… but they want to do it with even MORE government and MORE regulation… when those are the very tools that corporations are using to destroy fair competition right now.

 

[ComputerGeek25]

How do you think corporations engage in cut-throat, anti-competitive practices? If you’re starting up an online store, do you think Amazon is going to send their private security forces to beat you black and blue, take your money, and smash your servers? NO.

The force that corporations are REQUIRED to use if they want to legally destroy competition is the self-same law and regulation you ADVOCATE. Why? Because the government CAN legally put you out of business. The government CAN legally confiscate your property for investigations, the government CAN incarcerate you, and the government CAN fine you and award your money to the large company sueing you.

So regulation is in the best interest of the large corporations… after all, they lobby for the regulation they want with the loopholes they need to get around it. Their dollars go to the politicians who appoint regulators, and the regulatory agencies are staffed by former employees and executives of the large corporations. All this is done so that they can squash the little guy the second he gets big enough to enter into their radar and possibly change the game on them.

You want a fair system? Do away with the ability of the government to regulate to the extreme that it has. Do away with the massive number of regulations that stifle new competition from entering the market. Do away with the laws and courts that allow large corporations to sue small businesses with no justification, just to put them out of business by drowning them in legal fees. Do away with any sort of chrony capitolism that allows big corporations to use loopholes and buy the regulations and regulators they want.

And that’s the problem with OWS… they want corporations out of government, and that’s good… but they want to do it with even MORE government and MORE regulation… when those are the very tools that corporations are using to destroy fair competition right now.

Government sometimes has good intentions but has implementated things the wrong way.

I can identify with some of the goals of OWS. However, the corporations they are protesting are doing legal things, i.e. lobbying, using tax loop holes, etc. If OWS had any brains, they would be protesting the government as well.

 

[promethius]

Government sometimes has good intentions but has implementated things the wrong way.

I can identify with some of the goals of OWS. However, the corporations they are protesting are doing legal things, i.e. lobbying, using tax loop holes, etc. If OWS had any brains, they would be protesting the government as well.

Exactly the point that I was making… and the whole reason there are legal loopholes, tax loopholes, and lobbying is because the government is allowed to regulate the market so extremely. Yes, OWS is basically a version of the Tea Party that sees there is problem… but without seeing the fact that the government regulators and tax writers are intricately tied to it.