Jolie Rouge
04-06-2009, 03:08 PM
Monday, April 06, 2009
Depending on the rich[i]
Clive Crook of the Financial Times deconstructs the United States budget mess in a column you should not read if you already have trouble sleeping at night. http://www.ft.com/cms/s/0/4ff28ff8-220b-11de-8380-00144feabdc0.html?nclick_check=1
Toward the end there is this interesting bit, which perhaps explains the intense emotions around the president's proposed tax increases for the "rich":
Mr Obama intends to squeeze the rich, but the scope for this may be more limited than US liberals would wish. Few Americans seem aware that the US income tax code, as a recent Organisation for Economic Co-operation and Development study showed, is already one of the most progressive. Even before the rise in top marginal rates promised by Mr Obama, the US income tax collects 45 per cent of its revenues from the highest-income decile. Compare that with Britain at 39 per cent, Canada at 36 per cent, France at 28 per cent, Sweden at 27 per cent and an OECD average of 32 per cent.
This difference is only partly explained by the less-equal US income distribution. The fact that the US has no broadly based national sales tax – value added taxes make Europe’s overall tax codes less progressive still – only underlines the point. The US tax system raises comparatively little revenue; what little it raises already comes disproportionately, by international standards, from the rich.
Of course, this also means that the fiscal condition of the United States, such as it is, depends more on the rich continuing to earn large amounts of money than other countries do. By virtue of its tax policy, our government both bashes the rich and needs them to keep working hard to a much greater degree than the rest of the OECD. The question is whether the rich will respond in the way our politicians hope they will, by producing still more.
Perhaps the rich (and those ambitious to be rich) now understand that the whole thing depends on them working harder for less after tax income, which would in turn explain the crazy popularity of a 50 year-old novel about business. http://tigerhawk.blogspot.com/2009/04/atlas-shrugged-rankings-watch.html
CWCID: Paul Kedrosky http://paul.kedrosky.com/archives/2009/04/readings_21.html
... Organisation for Economic Co-operation and Development study ...
http://www.ft.com/cms/s/0/4ff28ff8-220b-11de-8380-00144feabdc0.html?nclick_check=1
Bottom line : Obama ma & Co. have the next four years to impose a national sales tax -- among much else, of course. The "new era of responsibility" marches onward.
The politicians are not worried about how dependent the national tax revenues are upon the high income earners. When the high incomes are taxed into oblivion, the tax laws will simply adjust by Congressional vote to shift the burden onto the rest. We need to vote in new politicians.
http://tigerhawk.blogspot.com/2009/04/depending-on-rich.html
Depending on the rich[i]
Clive Crook of the Financial Times deconstructs the United States budget mess in a column you should not read if you already have trouble sleeping at night. http://www.ft.com/cms/s/0/4ff28ff8-220b-11de-8380-00144feabdc0.html?nclick_check=1
Toward the end there is this interesting bit, which perhaps explains the intense emotions around the president's proposed tax increases for the "rich":
Mr Obama intends to squeeze the rich, but the scope for this may be more limited than US liberals would wish. Few Americans seem aware that the US income tax code, as a recent Organisation for Economic Co-operation and Development study showed, is already one of the most progressive. Even before the rise in top marginal rates promised by Mr Obama, the US income tax collects 45 per cent of its revenues from the highest-income decile. Compare that with Britain at 39 per cent, Canada at 36 per cent, France at 28 per cent, Sweden at 27 per cent and an OECD average of 32 per cent.
This difference is only partly explained by the less-equal US income distribution. The fact that the US has no broadly based national sales tax – value added taxes make Europe’s overall tax codes less progressive still – only underlines the point. The US tax system raises comparatively little revenue; what little it raises already comes disproportionately, by international standards, from the rich.
Of course, this also means that the fiscal condition of the United States, such as it is, depends more on the rich continuing to earn large amounts of money than other countries do. By virtue of its tax policy, our government both bashes the rich and needs them to keep working hard to a much greater degree than the rest of the OECD. The question is whether the rich will respond in the way our politicians hope they will, by producing still more.
Perhaps the rich (and those ambitious to be rich) now understand that the whole thing depends on them working harder for less after tax income, which would in turn explain the crazy popularity of a 50 year-old novel about business. http://tigerhawk.blogspot.com/2009/04/atlas-shrugged-rankings-watch.html
CWCID: Paul Kedrosky http://paul.kedrosky.com/archives/2009/04/readings_21.html
... Organisation for Economic Co-operation and Development study ...
http://www.ft.com/cms/s/0/4ff28ff8-220b-11de-8380-00144feabdc0.html?nclick_check=1
Bottom line : Obama ma & Co. have the next four years to impose a national sales tax -- among much else, of course. The "new era of responsibility" marches onward.
The politicians are not worried about how dependent the national tax revenues are upon the high income earners. When the high incomes are taxed into oblivion, the tax laws will simply adjust by Congressional vote to shift the burden onto the rest. We need to vote in new politicians.
http://tigerhawk.blogspot.com/2009/04/depending-on-rich.html