The point is that we need to consider what could have been done with that money, and we need to realize that how someone else is taxed affects all of us, not just that person.

I would agree with that. I should have left a broader definition of “burdensome.” I don’t really want to get into spending (which is a WHOLE other problem), but I’d argue that if someone wants to take 75% of a millionaire’s income, they better be able to prove that what the governmet is going to spend that money on justifies nationalizing so much wealth. When a government controls too much of a nation’s spending, the economy loses its vitality and creative drive.

Income tax redistribution is not socialism, government control of production and distribution of goods is socialism. Please see the second theory of welfare economics, which involves a lump-sum _redistribution_ tax. And note welfare economics is not the economics of welfare, but how to maximize the benefits of economics for everyone.

It is fine if you are against Obama’s tax plan, you should make an effort to understand the fundamental concepts of capitalism vs. socialism though.

Nice post Alan.

However, I don’t agree that we should only consider whether we are being unduly burdened by the tax code. If I’m understanding your argument, if I’m not really suffering because of the taxes I’m paying, then I can’t say I should pay less. So if I’m a rich person that makes $3 million, the government can take a least 2.5 million of that, because honestly I wouldn’t really be suffering with a half a million. I could even still take first class (to use your example).

The point is that we need to consider what could have been done with that money, and we need to realize that how someone else is taxed affects all of us, not just that person (money is only worth something because of it’s ability to be exchanged). Even a marginal increase (from 36% to 39%) means a lot of money that could be used for other purposes–creating jobs, investing in businesses that create jobs, giving to charity, and yes, even buying goods and services (which helps support businesses that create jobs). So no, a rich person will not suffer if we increase their taxes. But I’m not worried about rich people. I’m worried about the economic impact that raising taxes on the rich might have on me and the rest of the non-rich.

So I don’t see how you anyone (even with ideology put aside) can say that raising taxes on the rich will help the economy. To Obama’s credit, he says he will delay his tax increase on the rich (which I take as an admission that his tax increase will hurt the economy), but I don’t see it as a good idea to raise taxes just as we are coming out of a recession either. And in the meantime, his tax credits would run up the deficit until he implements his tax increase of the rich, which means his tax policy would not meet your first requirement for tax policy–that it would balance the budget. (To be fair though, I don’t think McCain will be able to live up to his promise to balance the budget in 4 years).

I’ve heard the “rich are not paying their fair share” argument, but it doesn’t hold up.

Below are the numbers from the Congressional Budget Office and the source:
http://www.cbo.gov/ftpdocs/57xx/doc5746/08-13-EffectiveFedTaxRates.pdf

2008 projections:
Top quintile of tax payers (20%) are responsible for 76.8% of the income tax liabilities. The average income for that top 20% is 183K. Perhaps you don’t mean the 200K group that has been the popular definition of rich. Perhaps you mean the top 5% earning on average 380K. They pay 49.9% of the tax liabilities.

So I’ve got to ask, if that isn’t enough, how much more should they be paying?

The people who have consistantly whined for the past 30 years they are paying too much are the RICH.

The problem is that the Rich are not paying their fair share, as three decades of tax policy have resulted in ever shrinking tax burdens and ever increasing benefits.

Meanwhile, the people who have been in charge of creating this pro-rich tax policy have also been in charge of obscene increases in federal spending. Oh sure, now that the GOP are seeing they are about to get hammered in the upcoming election they are all born again fiscal conservatives, but this is nonsense.

The GOP has been in loved with deficit spending for years now because it gives them an excuse to cut federal programs they don’t like (and yet they somehow seem quite comfortable deficit spending for programs they do like).

I am perfectly willing to pay what I am paying and even a little more if the government is willing to pay down the debt and put it’s fiscal house in order. It is the GOP that lives in the fantasy world of deficits don’t matter unless the Democrats are in charge. I also want the rich to start giving something back for all of the benefits they have and repaying for all the damage done in their interests.

That’s not progressive, that’s fair.

I think, not surprisingly, that nobody’s got it right. I think a progressive system is important — which means rolling back a lot of the regressive Bush-era reforms. On the other hand, I’m pretty nervous about overdoing it with “refundable” tax credits. I think, as you’ve written, that taxes should be for raising revenue.

Sirota’s class warfare rant is, of course, in response to the Republican class warfare rants about Barack Obama being a socialist who will steal your money and give it to those who are earning less. While it’s true that Obama’s tax plan does involve some minor wealth-redistribution trickery, it is not some twisted scheme designed to sap America’s prosperity and turn us into the second coming of the Soviet Union.

Its just a response to true stuff.

Who said anything about Obama having designs to sap America’s prosperity? Obama really believes you improve prosperity by using the power of government in order to force wealthy people to give wealth they have created to the less wealthy in the form of cash payments.

What you are saying, in other words, is while it is true that Obama favors a socialist income-redistribution scheme, he is not a socialist because he does not want to hurt people while doing it.

Ask yourself this: If we all pay the same taxes at the same time on the same thing, what will politicians have to turn to next?

-Social Security
-Medicare
-Defense
-Government spending

Everyone would favor lower taxes and people would actually have an incentive to build real wealth.

That hasn’t exactly happened, as is illustrated by the growth in average income rates for executives vs. employees. It’s not so much that the workers have been stolen from as much as they’ve been lied to.

And then along side of that, the Bush tax cuts seem really really irresponsible when viewed alongside the huge increases in spending that the government has gone through over the past 8 years. It just totally comes across as a gift to the rich, who were never hurting in the first place.