“…it is now dawning on America’s wealthy class that the times are a changin’ and they’ll soon be paying much more in taxes.”

No, moron, they’ll simply pass the cost of higher taxes on to the rest of us. You’ll see another example of that when you see a rent increase on your next lease, thanks to the latest property tax increase. Your landlord has more leverage in tax matters than you do.

“This quotation from the editorial page of The Wall Street Journal pretty much sums up the libertarian argument:”

Oh, first it was Ammar bashing Libertarians, now it’s you. Obviously, you’re both afraid that if the Democrats can’t fix the economy, everyone will look to the Libertarins for salvation. And why target Libertarians? they haven’t even done anything!

“Scholarly studies of wealth distribution show…”

Wrong again! They are politically biased studies that are done by people with an agenda, not scholars who are nonpartisan.

“First, we’d all be a lot better off in our analysis of our current situation if we made use of good data…”

Great! Let us know when you find it.

“Second, we live in a country where quality of life is not determined by how hard you work.”

True, but wouldn’t it be nice if tax-and-spend liberals understood that as well as the spend-now-and-let-the-next-guy-pick-up-the-tab Republicans do?

“Not only do we need the progressive income tax, but we need it to be more progressive than ever in this time of economic worries.”

Dan, as soon as you figure out a way to make it upwardly progressive instead of the opposite direction, I’m sold!

“The fact is that capitalism won’t work with this poor distribution of wealth.”

Dammit! You mean I’ve been reading the drivel of a socialist all along?! Oh well, fool me once, shame on you. I’m outta here.

What’s up with libertarians all of a sudden? They’re not nearly the greedy rich a-holes the Republicans are. To tell you the truth, I’ll vote for a libertarian before a Democrat of a Republican ever again. I like their ideas on tax reform. Get rid of the income tax and go with a consumption tax. Of course liberals will right tooth and nail to stop it from happening. They love taxes so much they tax the crap out of all of us. And they don’t pay their own taxes either. That’s the part that sucks.

Libertarians should be allowed to take the reins for a while. Stop taxing labor income. Labor income wasn’t always taxed, at least not back in the beginning of the income tax. Why should somebody who makes damn little have to carry the extra burden of paying a tax on their hard earned hourly wage? and when do us minimum wage workers get a break? Property taxes are another bane to low wage workers. If you rent you’ll get hit too. Your landlord will raise your rent in a heartbeat! Thanks, liberals.

Getting back to federal taxation, just look at what has happened after 96 years of the income tax. Uncle Sam now has a groundswell of revenue to fight bogus wars, pork for all the congressmen who vote the right way, and practically nothing for the people who pay those taxes. And it’s all because liberals wanted it that way.

I propose and idea that’s been floating around the Internet lately: we all pay our federal taxes to our home states. Corporate, personal income, federal excise, the whole nine yards. The federal government wouldn’t be able to do anything about it because they wouldn’t have any money to hire federal cops to come after us. And our state governments would have no choice but to go along with it because it’ll be the last money they’ll ever get if they don’t. And why not, since millions of minimum wage workers are already into it by putting “EXEMPT” on the bottom lines of their W-4’s. The IRS will never catch any of them because minimum wage workers change jobs and move around too often and it take the IRS years to pin down one single tax cheat.

Face it, folks, nothing’s gonna change until we the people spell it out for our clueless leaders. They’re already scared of us, now let’s give them a reason to be scared by doing the one thing they think we wouldn’t have the guts to do. Everybody, rich, poor, liberal, conservative, employer, employee, boxers, briefs, pay your federal taxes to your home state. It’ll be the best fun we’ve had as a country in a long time and really great fun for the kids! Shall we?

Can I have 80% of your future salary as a PhD? It would narrow the income distribution.

It’s really scary that Dan believes in these Soviet-style tactics after so much education. Econ 101 would be a good refresher course.

America is still capitalist, no matter how hard you hold your breath and squint your eyes. Why do you think Obama took a bow to the Saudi king? A socialist would never do that.

No representation without taxation!

Take the vote away from the 40% of the people who pay no taxes!

Then let us tax wealth instead of income.

‘Looking at the data another way, the top 1 percent currently loses about 2.5 percent of their income after they pays taxes — hardly a real redistribution of wealth.’

I don’t even know how this sentence makes sense.

I’ve noticed the attacks on Libertarians too. What’s the problem? And no, Dan, that quote from the Wall Street Journal is not the belief of Libertarians, but that of Republicans. The Libertarian take on taxes is that the little guy pays all the taxes in the end, which is undeniably true. Twenty-five cents of every dollar you and I spend goes to paying the corporate taxes of the company that provides all the goods and services we consume. And that’s on top of your personal income tax, property tax, sales tax, etc.

Why is it only liberals bashing Libertarians? Are they afraid Libertarians will come up with better ideas? Or is it just that liberals don’t want any challenges to their tax enslavement policies?

I come from a mid-to-lower middle class family. Neither of my parents attended college. My father is a construction worker and my mother stayed at home raising me and my siblings, and earning extra money with small jobs and businesses when she could. One of three of us kids has a college degree. We had what we needed, and a bit more. My parents drove older cars, we lived in a simple ranch home, we didn’t have cable TV. When my dad came home from work to watch me and my siblings, my mom would go to her part time night job. We took a one week vacation to Florida each year…that was our “extra.” My parents spent their free time (nights and weekends) taking side jobs, improving their home, running small businesses (teaching classes) in their home and making any extra money any way they could.

My parents weren’t about getting rich quick. My parents taught me to work hard, save and invest wisely over a long period of time, and in the end, it SHOULD pay off. They didn’t look for handouts. Us kids would have qualified for reduced priced lunches at school, but my parents refused because they were able to pay full price…they just had to take an extra job here and there to do so. They felt that they (not the government) were responsible for their own family. The also felt that they were entitled to the fruits of their decades of hard work and fiscal responsibility when it was time to retire.

It would never have even crossed my parents minds that they were entitled to a piece of somebody else’s income or wealth because they had less than somebody else. Taking from others would not have improved their situation.

My parents will retire worth several million dollars. In any year, my father never earned more than the equivalent of $35,000 in todays dollars. Hardly a fat-cat. Yet he would be considered “rich” by your standards, Dan. And you want to tax the crap out of him because “you” deserve it - you deserve a piece of his money because look…he has more than you, or more than the poor…which is clearly TOO much. Right???

Your repeated use of pre-judged assumptions shows your total lack of comprehension of the points that you are trying to make.

I understand that many wealthy families inherited a lot of money, and are rich through nothing other than being born to the right parents. However, as difficult as it may be for you to wrap your brain around, some people really do work hard and amass wealth on their own, by saving and investing (risking loss) wisely over an extended period of time. Some people are successful because of themselves, not the government. Not every wealthy person has inherited it. There are many times more millionaire families in America that are self-made than there are millionaire through inheritance alone. Take a look at the list of the 100 richest Americans right now, the majority are self-made. They became wealthy through hard work, education, risk-taking, and innovation. And that’s not to say that there aren’t people that work hard and are not wealthy. There certainly are. Working hard, earning extra when you can, saving, investing…these things only increase your chances of creating wealth. There are no guarantees. My parents always told me that the harder they worked, the luckier they seemed to be.

The problem with your argument is that the IRS cannot differentiate, and tax at different levels, individuals or families that are rich through inheritance or through hard work, innovation, investment, etc. And to progressively tax all wealthy people would certainly be “punishing” the trust-fund babies, it would also “punish” the self-made hard workers.

You see, I want to see people be successful. In my opinion, that is what American is all about. I want to see people create wealth through hard work and innovation. I don’t want it to be vilified.

This great country - which I am not afraid to say is the greatest country on earth - is great not because it has always guaranteed that everybody would be successful, and that all outcomes would be the same. It is great because it offered the OPPORTUNITY for each person to make their own bed. And they should be allowed to lie in it as well, whether it be a mat on the concrete floor, or a top-of-the line Sealey.

So, I think I miss the point. Who’s actually talking about taking more than 39% of anyone’s income? This discussion is a wonderful act of fantasy and hyperbole, but is no where near functional.

We all get taxed, get used to it. If you are fortunate enough to be rich, be prepared to pay taxes to afford the platinum side of America. If you don’t know what I’m talking about, you’re probably not rich.

“‘Looking at the data another way, the top 1 percent currently loses about 2.5 percent of their income after they pays taxes � hardly a real redistribution of wealth.’

I don’t even know how this sentence makes sense.”

It was originally written “loses about 2.5% of their share of income” before editing (which I have no control over). That is, if you look at the share of the total nationwide income for each group before and after taxes, you can calculate this number.

As to the we should tax wealth instead of income comment, that would be great. You could still just tax all of the income, but as long as some of the exorbitant amount of money the super rich are sitting on gets redistributed, I’m happy with that.

Finally, while I understand that different people are going to have to have different ways to deal with the problem of the concentration of wealth in the hands of a few (which, like it or not, is a problem for capitalism—don’t take my word for it, look at economists like Keynes, Stiglitz, etc.), perhaps the broader goal of this column is just to make it clear that there is a maldistribution of wealth and if it isn’t biting us now, it surely will at some point.

Anonymous 11:42 Excellent! Excellent!! Excellent!!! Your path to maturity mirrors my own, from borderline childhood poverty to comfortable means through parents that taught us honesty, integrity, and the discipline of hard work to improve our lives. I know many others who also eschewed the seemingly easy government handouts to preserve their independence and self respect. You are the kind of citzen I am proud to shake hands and share conversation with, over the “blue plate special” at the local diner. I’d choose that over any proffered meeting with our groveling, America loathing first family or any of the congressional muddle heads that support them.

We share the American spirit, the American ethic, and the American dream. We honestly earn our paychecks and fiercely guard our hard earned wealth and independence. We are generous to our personally selected charities and churches. We bow to no kings, congressmen, or presidents. We share a deep respect and, though we have never met face to face, I know you are a true American! Hail, Fellow Citizen! Well Met!

These are riches of integrity and character that the Dan Walters, Jim Doyles, and Barrack Obamas will never know or comprehend. Theirs is a self imposed poverty of character, misled by the illusion of marxist wealth redistribution that never makes more people rich but always makes more who are poor. As such, they can never really comprehend the normally silent majority that has been the the bedrock of the United States of America, from our founding Declaration Of Independence to the rapidly building anger with the profound mismanagement of our mis-leaders today.

Yet, it is more important than ever that we publicly resolve to defeat the petty dictators diguised as wealth redistributing socialists. In doing so, we bolster each other while reassuring the next generation that the American dream is alive and well, if you’re willing to work hard to achieve it.

Invictus Maneo

11:42 should seriously write his own column, hearing stories like that make me incredibly proud of him and his parents. My father and mother both came from poor families and were the only ones of 6 total siblings to do so. Both worked incredibly hard to get where they are, and by Dan’s logic they deserve to be taxed more so that people like their unmotivated or lazy siblings can leech off of them and their self earned savings.

11:42: if your parents truly only made about 35,000 grand a year in today’s dollars, there’s no way they are retiring millionaires. You are a liar.

Good analysis, Mr. Walters.

Wealth and income aren’t correlated? Search on “Ponds and Streams” and then within that for “copula” and you’ll find some fascinating graphics. The appendix tables, too, speak to the correlation of networth and income.

“Not only do we need the progressive income tax, but we need it to be more progressive than ever in this time of economic worries. The fact is that capitalism won’t work with this poor distribution of wealth.”

Capitalism is a social system that upholds individual rights. It is based on the principle of private property and voluntary trade, as opposed to systems that use force to expropriate private property for so-called public uses. Capitalism and wealth distribution are opposites.

Also there is no conflict between rich and poor. Allowing rich people to keep their money is especially in the interest of the poor because this wealth is invested. The vast majority of a rich person’s wealth is used for production - it is used to create new businesses, jobs, etc. This results in cheaper products, more employment and a higher standard of living for everyone.

“Second, we live in a country where quality of life is not determined by how hard you work.”

Quality of life is determined by each individual’s freedom to pursue their goals and values. There’s nothing “quality” about achieving one’s values by force. This is the way animals behave, not humans.

Kill all the golden geese!

One great big roast goose dinner and then we starve?

9:33,

I will not return the insult, but please realize that you really do need to be less close-minded. With a $10,000 investment, earning a rate of return of 15% (which CAN and IS been done with leveraged real estate investments - even with downturns like the one we are currently experiencing), and reinvesting your gains, over a 40 year period, please see what happens to your investment:

$10,000.00 $11,500.00 $13,225.00 $15,208.75 $17,490.06 $20,113.57 $23,130.61 $26,600.20 $30,590.23 $35,178.76 $40,455.58 $46,523.91 $53,502.50 $61,527.88 $70,757.06 $81,370.62 $93,576.21 $107,612.64 $123,754.54 $142,317.72 $163,665.37 $188,215.18 $216,447.46 $248,914.58 $286,251.76 $329,189.53 $378,567.96 $435,353.15 $500,656.12 $575,754.54 $662,117.72 $761,435.38 $875,650.68 $1,006,998.29 $1,158,048.03 $1,331,755.23 $1,531,518.52 $1,761,246.30 $2,025,433.24 $2,329,248.23 $2,678,635.46

This is math 101, and can certainly be done with a $35,000 income. A 25 year old would have this wealth at retirement 40 years later, at 65 years of age. It requires personal and financial discipline to reinvest your gains, and to continue to work hard day after day, week after week. While I agree that few people have the personal discipline to do so (everybody gets to make their own bed), to call me a liar is wrong.

Lunches were brown-bagged and brought to work, dinners were cooked at home, clothes were made and home and handed down, and cars were repaired not traded in. And you know what? I wouldn’t trade a childhood of dinners out, name brand clothes, new cars, and keeping up with the Jonses for anything. I see all of the stories on tv of people “struggling” to get by when they have newer homes that are larger than they need, 2 car payments on 2-year-old cars, cell phones, high speed internet, cable tv, eating out every other night, credit card debt that never gets paid off, and home equity loans that were used as ATMs; financing a lifestyle above their means. They were living paycheck-to-paycheck, and it wasn’t until the music stopped that they realized just how financially close to the edge they were living.

11:42

Not that facts matter, but the high income taxpayers are ALREADY burdened to the benefit of the tax eaters.

Do you REALLY think that it will be a good thing when only a small portion of the populace pays federal taxes? Or will that be the end of the Republic?

A very small number of taxpayers — the 10% of the country that makes more than $92,400 a year — pay 72.4% of the nation’s income taxes. They’re the tip of the triangle that’s supporting virtually everyone and everything. Their burden keeps getting heavier.

As a result of the 2001 tax cuts enacted by a bipartisan Congress and signed by President George W. Bush, the share of taxes paid by the top 10% increased to 72.8% in 2005 from 67.8% in 2001, according to the latest data from the Congressional Budget Office (CBO).

Contrary to the myth that Mr. Bush cut taxes only for the wealthy, the 2001 tax cut reduced taxes for every income-tax payer in the country. He reduced the bottom tax rate to 10% from 15% and increased the refundable child tax credit to $1,000 from $500 per child, both cuts that President Barack Obama says we should keep. In so doing, millions of lower income taxpayers were removed from the tax rolls, shifting the remaining burden to those at the top, even after their taxes were cut.

According to the CBO, those who made less than $44,300 in 2001 — 60% of the country — paid a paltry 3.3% of all income taxes. By 2005, almost all of them were excused from paying any income tax. They paid less than 1% of the income tax burden. Their share shrank even when taking into account the payroll tax. In 2001, the bottom 60% paid 16.3% of all taxes; by 2005 their share was down to 14.3%. All the while, this large group of voters made 25.8% of the nation’s income.

When you make almost 26% of the income and you pay only 0.6% of the income tax, that’s a good deal, courtesy of those who do pay income taxes. For the bottom 40%, the redistribution deal is even better. In 2001, these 43 million Americans, who earn less than $30,500, made 13.5% of the nation’s income but paid no income tax. Instead, they received checks from their taxpaying neighbors worth $16.3 billion. By 2005, those checks totaled $33.3 billion.

Today, Mr. Obama and many congressional Democrats want the “wealthy” to pay even more so there is more money for them to redistribute. The president says he wants the wealthy to pay their “fair share.” Who can argue with that? But he never defines what that means. Is it fair for 10% to pay 70% of the income tax? Does he believe they should pay 75%, or 95%, or does fairness mean they should pay it all? It’s clever politics to speak like that, but it is risky policy.

http://online.wsj.com/article/SB123958260423012269.html

Say we just have the State confiscate all wealth. How long until it’s spent? Or is it even enough to pay off the existing debt?

Keep sticking it to the tax payers and soon enough all you’ll have is tax eaters.

Yeah - this was a shallow and uneducated view of the world. Pretty much, the article sucked, and it sucked pretty bad. Why don’t we try this - become more efficient? Hmmmm novel idea.

Political science majors love theory. Communism works in theory….

Oh dear, if only people in this country were educated enough to distinguish political and economic systems from one another. This isn’t communism or socialism. It’s Keynesian capitalism. Nobody is talking about abolishing private property. Even theorists like John Locke (one of the patron saints of liberal capitalism) believed that progressive taxation could be legitimate. What a joke.

Oh, and there could hardly be a better example of the effects of ideological manipulation than when someone goes on and on about how their parents deprived themselves of everything for most of their lives to get to a net worth that the top 1% of Americans make in one year in income. Yeah, they’ve got you right where they want you—satisfied with their leftover crumbs. For them, nothing could be better. There’s no need for repression when we’re all content with whatever they decide to give us.

The difference between theory and practice is that, in theory, there is no difference between theory and practice, but in practice, there is.