In a leftist economy, what percentage of taxes are paid by the rich?

[Beet]

High, medium, or low?

If you answered high or medium, you would be wrong. The answer is "low". A low percentage of taxes would be paid for by the rich. Never mind that Progressive politicians are always proposing higher taxes on the rich and a more progressive tax schedule. Why?

Because in in a progressive world, the overall inequality in the economy would be low. And because overall inequality is low, the rich are relatively few in number and not earning as much income compared to the poor and middle class. So even with a very progressive, even punitive, tax schedule, their share of the total tax burden is still lower.

Look at two very extreme cases, a country under what we call 'Democratic-Socialism' and a country under 'Neo-Feudalism'.

In Democratic-Socialism, there are 100,000 families, and 90,000 of them make an average collectively of $60,000 per year. 5,000 make an average of $30,000 per year, and 5,000 make an average of $150,000 per year. The last group is heavily taxed at a 80 percent rate, while the middle group is taxed at a 50 percent rate, and the second group is not taxed. Democratic-Socialism chooses a progressive income tax schedule.
Total income in this country is $6.3 billion.
Total tax revenues are:
90,000 x $60,000 x 50% = $2.7 billion, plus
5,000 x $150,000 x 80% = $600 million
Total tax revenue is $3.3 billion, and of this, the rich pay $600 million, or 18%. The middle class pays 82%.

In Neo-Feudalism, there are also 100,000 families, but 95,000 of them make an average collectively of $20,000 per year. 5,000 families make $880,000 a year. Despite the huge income disparity let's say the denizens of Neo-Feudalism choose to implement a flat tax rate of 20%.
Total income in this country is the same as Democratic-Socialism, at $6.3 billion.
Total tax revenues are:
95,000 x $20,000 x 20% = $380 million, plus
5,000 x $880,000 x 20% = $880 million.
Total tax revenue is $1.26 billion, a lower amount, but that is ok, that is what the citizens of this country chose. However, the rich pay $880 million, or 70%, of the tax burden, while the poor and middle class only pay 30%!

Obviously, if you are poor and middle class, you would rather live in the country where you pay 82% of the tax burden and the country where you only pay 30% of the tax burden would be horrifying. The opposite is true if you are rich-- you would much rather live in the country where you pay 70% of the tax burden and would hate the country where you only pay 18% of the tax burden.

I just thought that was a bit of counter intuitive but interesting exercise.

[○∙◄☻¥tπ[╪AV┼cVê└]

I can just imagine the Wall Street Journal in the latter complaining about how the rich have to pay 70% of the taxes while being only 5% of the people.

Well, actually a flat tax is better than we have now. Bill Gates pays only 15% in taxes, which is a certainly a lower percentage than the lower middle class pay.

[opebo]

Interesting and enjoyable read, Beet.  As a wise old crazy Italian grandmother I used to know used to say, about the riches cross to bear 'too much tax to pay':

You should be so lucky!

[Derek]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

[Marokai Backbeat]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

Yes, that is a totally fair and not-regressive-at-all means of raising revenue. Perfect.

[cannonia]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

Yes, that is a totally fair and not-regressive-at-all means of raising revenue. Perfect.

It's certainly fair in a literal sense: You pay for what you use.

[memphis]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

I'm so f'ing tired of having to point this out: INCOME TAXES ARE NOT THE ONLY TAXES IN THIS COUNTRY Most of us pay far more in other taxes (payroll, sales, property, etc)

[opebo]

It's certainly fair in a literal sense: You pay for what you use.

'What you use' is a purely subjective designation.

[Democratic Hawk]

I may yet be better off as consequence of the Coalition increasing the personal tax allowance by £1000. Wor Rose (me mother) will be but she's more concerned about how many more people risk being out of work once austerity bites

[Lief 🗽]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

The top 50% of income owners also own 99% of the country's wealth, so they should be lucky they're only paying 95% of taxes. Not that I believe your statistic is correct or anything, largely because of memphis' point.

[TeePee4Prez]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

I'm so f'ing tired of having to point this out: INCOME TAXES ARE NOT THE ONLY TAXES IN THIS COUNTRY Most of us pay far more in other taxes (payroll, sales, property, etc)

Problem is people don't notice sales or payroll tax as much as they do income.  Income wil of course have a larger nominal dollar amount because you only see it once a year.  Sales is seen per transaction hence a smaller nominal dollar amount plus payroll is just a small added % on a bi-weekly paycheck.  The American public is unfortunately naive with this concept.  This is why Reaganomics was actually popular with many people not including the rich.                                             

[Derek]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

I'm so f'ing tired of having to point this out: INCOME TAXES ARE NOT THE ONLY TAXES IN THIS COUNTRY Most of us pay far more in other taxes (payroll, sales, property, etc)

Problem is people don't notice sales or payroll tax as much as they do income.  Income wil of course have a larger nominal dollar amount because you only see it once a year.  Sales is seen per transaction hence a smaller nominal dollar amount plus payroll is just a small added % on a bi-weekly paycheck.  The American public is unfortunately naive with this concept.  This is why Reaganomics was actually popular with many people not including the rich.                                             

No one would notice the VAT because it would be made up for by the decrease in prices resulting from eliminating the corporate tax. What most people don't notice unfortunately is the amount that is taken from them by the government in their pay check.

[Derek]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

Yes, that is a totally fair and not-regressive-at-all means of raising revenue. Perfect.

You actually agree with me? I think it's a good way to enforce paying as you go too.

[© tweed]

what do we mean by 'leftist'??  in a fully participatory / syndicalist economy the idea of taxes may not make sense. is a state market-infused parliamentary socialist economy economically leftist?  I wouldn't consider the social democracies of Scandinavia, for example, to be leftist. 

[True Federalist (진정한 연방 주의자)]

I just thought that was a bit of counter intuitive but interesting exercise.

Sort of a silly exercise as it assumes that fiscal policies and how wealth and income are distributed have no effect on the size of the economy.  (Or alternatively, that tax rates have no effect on income distribution or the size of the economy.)

[Bo]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

Yes, that is a totally fair and not-regressive-at-all means of raising revenue. Perfect.

You actually agree with me? I think it's a good way to enforce paying as you go too.

I think he was being sarcastic.

[Derek]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

Yes, that is a totally fair and not-regressive-at-all means of raising revenue. Perfect.

You actually agree with me? I think it's a good way to enforce paying as you go too.

I think he was being sarcastic.

Believe me I know. If you had it your way, the registered Republicans would be required to work while all of their taxes went to liberals who sat around and smoked weed and did drugs all day.

[memphis]

I saw a chart where it was the top 50% of income earners pay 95% of all the taxes. What this country needs is a system of user fees and tolls where the more someone uses services, the more they pay.

Yes, that is a totally fair and not-regressive-at-all means of raising revenue. Perfect.

You actually agree with me? I think it's a good way to enforce paying as you go too.

I think he was being sarcastic.

Believe me I know. If you had it your way, the registered Republicans would be required to work while all of their taxes went to liberals who sat around and smoked weed and did drugs all day.

Seriously, get off your cross. What job do you have that you have to pay SOOO much in taxes? By the way, http://en.wikipedia.org/wiki/Methamphetamine is our nation's greatest drug problem at the moment. It's not exactly known for its use in liberal parts of the country.