Should the government try to equalize incomes more by raising taxes on the rich, and giving more money to the?
No. The government shouldn't try to equalize incomes. The government should ensure that no one starves, everyone has basic housing, and everyone can afford health care. That's a far, far different thing than trying to equalize (or 'redistribute') income.
Do conservatives believe that income inequality is acceptable? If so, why?
I’m not a conservative.I’d say that most liberals also believe that income inequality is acceptable.It’s inevitable.I don’t know any serious policy-maker who’s proposing doing away with income inequality entirely.What worries some of us about income inequality is not that it exists, but that it is worsening.Now, why is this a problem?Are we just bitter and begrudging hard-working rich people their success?Many conservatives think that’s what it’s about. Everyone has the right to be wrong; so let them think what they will. But there are two main reasons we care about worsening inequality:It’s impossible to decouple this process from the income stagnation we have seen for more than 90% of workers in the past half century. Simply put, we have a situation where instead of having productivity gains translate into increased income [or leisure time] for workers, it is translated into increased wealth for people who are already wealthy, a situation that is not as beneficial for the economy as a whole as if that money was instead going to people who are more likely to spend it. Spending increases demand. One person’s spending is another person’s income. So, the long term effect of worsening income inequality is decreased economic growth.The second issue is that concentrated wealth has a distorting effect on our democracy. Instead of policies being passed that benefit the majority of the population, we get policies that are only passed if the wealthiest citizens—who fund the campaigns of elected officials—approve of them.There is a famous political cartoon from the 1880s that captures it well: The Bosses of the Senate:The names of the oligarchs du jour have changed, but the spirit of this cartoon still rings true, 130 years later. We have monied interests lording over the proceedings of our elected officials, and the people’s door, far off in the corner, is not only tiny; it’s closed.These are the reasons we want income inequality to shrink. There would be no conceivable way of equalizing all income. And there is no reason it should even be a desirable outcome.
What if all incomes were equilized?
2005 income average income share of total income Highest fifth:above-92,000 160,000 50.4 Second fifth:58,000-92,000 73,000 23.0 Third fifth:36,000-58,000 46,000 14.6 Fourth fifth:19,000-36,000 27,000 8.6 Lowest fifth:0-19,000 11,000 3.4 b) If all incomes were equalized by government taxes and transfer payments, how much would the average household in each income quintile gain (via transfers) or lose (via taxes)? i) Highest fifth $ ii) Second fifth $ iii) Third fifth $ iv) Fourth fifth $ v) Lowest fifth $ c) What is the implied tax rate on the highest quintile? %
Which type of federal tax was authorized by the 16th amendment in 1913?
Technically, none. Income tax was already 'authorized'. All the 16th amendment did was authorize it to be applied without equalizing the amount between the states.
Do you think the government should force companies to lessen the disparity in wages between those who make the most and the employees who make the least? Here's an article about the ever widening wage inequality we are facing in the US.
What do wages have to do with companies? That’s a serious question! You’re acting as though wages are simply determined by the people paying them. I can see why that assumption is tempting, but it is incorrect. Like all prices, wages depend on both supply AND demand. Any company trying to pay much higher or lower than the market rate for a particular job will face problems (either paying more than necessary or not attracting any workers at all).The real question you’re asking is why some people are worth so much more on the market than others. The gov’t cannot change a person’s productivity. Although a start would be to open up America’s public education monopoly to free market competition.The statistics you have cited are EXTREMELY misleading. The top 1% is not a static group of human beings. Instead, people’s incomes change over time. Most people earn a lot more in their 50s than in their 20s. So most people shift radically between income brackets over the course of their lives.Especially these days, when a successful new idea can reach millions of customers practically overnight, many people in the top 1% will only be there for a few months before returning to a much more modest position. This is a good thing! When you look at the “top 1%”, you’re not looking at people so much as success, much of which is temporary. We want the economy to have big peaks. That means people are doing brilliant things and being rewarded for it. The more innovations which occur, the higher that “top 1%” will go, even if the entrepreneurs are spread out through the population and constantly change year by year. When you follow individuals, you typically find they are mobile between income brackets (note that mobile means they CAN move, not that all of them DO).Basically, no. Your proposed policy would have disastrous effects. Either low-skilled jobs would be further eliminated (the minimum wage already achieves this terrible effect) or highly productive people who can demand very high wages would be turned away, their skills not being fully used. Perhaps they’ll travel to other countries where such policies are not enforced. You can only confiscate material goods and money, you can never confiscate skills and a solid work ethic, which are what the poor need more than anything else.
Should the government tax people more or less?
Less! Much much less, as little as they possibly need to in order to maintain a suitable national defence force and to uphold the law. Everything else should be left to smaller local hierarchies to manage for their communities.And in comment to other answers to this post relating to the richer paying more tax than the poor, may I plead that you consider the moral as well as the economic implications of this policy, which is prevalent in many countries the world over and which causes more damage than you might think. Every individual should pay the same rate of tax, regardless of what they earn - we should all be treated the same if we are truly to live in a fair society. Economically, if you take more from the rich than the poor, the rich are less inclined to spend their wealth where it counts, since they need to hold on to more money in order to compensate for their ridiculous tax contribution.The "distribution of wealth" happens naturally when not meddled with by over eager governments.
What if there was no federal income tax for the first 60K anyone made? After/above 60K everyone is taxed a flat tax rate of 15%?
If I were Dictator-in-Chief of the United States (and that would be the only way I’d take the job), this would be my tax strategy:ALL people get taxed a percentage of their income so that last year’s budget would have been balanced. Yes, if that rate is 20% the people who made $1 this year would need to cough up $0.20. This aspect of the tax code is not to be added to, subtracted from, or meddled with in any way. Do you hate me yet?Next, all government programs formerly in the tax code need to be passed as Spending Bills, not Tax Bills. If you want to give back all taxes paid by people making less than 2x the poverty line or something like that, figure out the cost and pass it as a spending program. Earned Income Tax Credit? A spending bill. College, Child, or Savings Tax Credit? Spending bills. You surely hate me by now, right?Everyone would have “skin in the game”, and everyone would be at least somewhat concerned about whether some spending bill that doesn’t benefit themselves is truly worth paying more taxes next year. And if by some miracle government spending goes down one year? Yay! Surplus! And next year’s taxes are lower.Note that this strategy does not consider “people issues” much. So basically everyone would hate me.
If democrats want everyone to be EQUAL?
I am middle of the road and lean more left on social issues than right, but I agree with you. Everyone's dollar should be worth the same and a flat tax is the only way to support this platform.
Why does everyone in the US think "tax the rich" is the answer, when the top 1% pay more federal income tax than the bottom 90% combined?
The only real confusion seems to be the actual (level) tax dollars (the burden, or the liability) that you pay to the federal government, and the rate you're scheduled to pay.Generally as your income rises, you should pay a higher rate. That is fair. It's "progressive." If you believe that then you know the rich will pay a higher rate, and when they pay a higher rate of a real large income, the level transferred to the federal government will be similarly large. So it is true that the rich, to that extent, are indeed paying what they are supposed to be, if they're within the law, right? But we could always wonder about IRS enforcement and actual revenue.But we gotta refer to margins in order to "equalize rates." The marginal tax rate is the "percentage taken from your next dollar of taxable income above a pre-defined income threshold." And the relationship down and up the income ladder is not one-for-one. It's a pseudo-step function (I guess) that goes 10, 12, 22, 24, 32, 35, 37 for seven income brackets (see Wiki "Income Tax Rates in the US."). Ron's data from Pew is for 2016, and Pew is always a good historical source. For 2018, with single taxable income, for incomes 0-$9,525, the marginal tax rate (MTR) is 10%. The MTR is 37% at $500,001. Used to be 39.6 last year, but this lower 37% is a feature of the corporate and rich tax cut, which will cost the US approximate $1.5T in lost government revenue - http://www.crfb.org/blogs/tax-cu... - and it is an open question what effect that additional debt will have on programs for the poor.