General Discussion

hfojvt

(37,573 posts)

76. ah, the myth of the loophole

Wed Dec 28, 2011, 02:36 AM

Dec 2011

How the rightwing loves that one. Sure we closed loopholes in 1986. That's why in 1986 the top 1% was paying an AVERAGE tax rate of 33.13% and that fell to 26.4% in 1987 and 24.04% in 1988 and 23.34% in 1989 and 23.25% in 1990.

Because of al those loopholes that were closed.

As for the AMT, David Cay Johnston describes its history. It was passed, not because EVERY rich person was avoiding those high marginal tax rates. The Treasury Secretary in 1966 informed Congress that 155 households (a whole 155) paid no tax in spite of having an income over $200,000 (which would be roughly $1 million in 2003). "Perfectly Legal" p. 103

So it was not really many people. It was 155, and they were not earning millions. They were earning $200,000.

Also, we still have loopholes, known as itemized deductions, to the tune of $1.3 trillion in total deductions. Taypayers who make over $1,000,000 got 11% of those itemized deductions even though they are only .28% of all tax filers. That's over $130 billion in deductions for those rich people.

And 55%of the deductions goto people making over $100,000. Whereas those making between $10,000 and $40,000 a year in AGI are 48% of tax filers and only get 11% of the total value of itemized deductions. http://journals.democraticunderground.com/hfojvt/151

One loophole that I remember from pre-1986 was that the first $100 of dividend and interest income was tax free. A loophole that mostly helped small savers and investors. Gone with the 'reform' of 1986.

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Top marginal income tax rate should be fifty percent [View all] Syrinx Dec 2011 OP

one of the lefty talkers on the radio suivezlargent Dec 2011 #1

sounds good to me Syrinx Dec 2011 #2

Even that high would not be bad for big business lefthandedlefty Dec 2011 #6

That makes sense Cresent City Kid Dec 2011 #31

You realize taxes owed are a function of 2 things (tax rate and taxable income) joeglow3 Dec 2011 #68

This message was self-deleted by its author HereSince1628 Dec 2011 #3

Anything online to read about that you can point to? BootinUp Dec 2011 #27

This message was self-deleted by its author HereSince1628 Dec 2011 #28

It's because the really rich are making money off the entire world. dkf Dec 2011 #4

This logic has limits quaker bill Dec 2011 #30

Its not flight so much as lessening the attraction for the world's best and brightest to move here. dkf Dec 2011 #32

There is little in the way of policy to fix this quaker bill Dec 2011 #34

We don't tax wealth, we tax income. Many other countries tax both. Bluenorthwest Dec 2011 #86

Here's The Rub... KharmaTrain Dec 2011 #5

All have incomes in the upper brackets. RUMMYisFROSTED Dec 2011 #10

That will give rich people even more leverage - you have to keep them rich hack89 Dec 2011 #7

50% is way too low. unblock Dec 2011 #8

If you add it all up, it already much higher than that. Minarchist Dec 2011 #9

Implying those in the top brackets actually pay all those taxes. nt Modern_Matthew Dec 2011 #11

Many of those taxes fall disproportionately on lower income earners. CJCRANE Dec 2011 #12

I agree that income taxes must be progressive, but not one of the taxes I listed Minarchist Dec 2011 #19

100 years ago was 1911... CJCRANE Dec 2011 #23

"weak governnment that is beholden to corporations" Minarchist Dec 2011 #33

Government exists for the people CJCRANE Dec 2011 #52

If only you were right--and I wish you were. Minarchist Dec 2011 #61

Tennessee Valley Authority certainly went somewhere. LanternWaste Dec 2011 #82

Are you sure you're in the right place? jmowreader Dec 2011 #103

Those who have the most are not those who work the hardest. Marrah_G Dec 2011 #53

I disagree--all of the people I know who do well, are workaholics. Minarchist Dec 2011 #62

This is not about those doing "well" Marrah_G Dec 2011 #66

You are speaking like a right-winger here LeftishBrit Dec 2011 #77

It is not right-wing for one to advocate against the Greek model of government's role. Minarchist Dec 2011 #81

First of all, the crisis in Greece is mainly due to the banking crisis, not to their 'model of LeftishBrit Dec 2011 #85

The Greek government was in cahoots with the bankers; thus, they facilitated the crisis. Minarchist Dec 2011 #89

Since the Reagan Revolution (which included decentralizing and privatizing gov't) has destroyed ... ieoeja Dec 2011 #94

Oh great. HughBeaumont Dec 2011 #92

You want to go back to how it was 100 years ago? The Genealogist Dec 2011 #69

Technology-wise? No. -- Big Government Totalitarianism-wise? Yes. Minarchist Dec 2011 #79

Big Government Totalitarianism?? In America? LeftishBrit Dec 2011 #88

100 years ago our nation was not the most prosperous but was the most grantcart Dec 2011 #72

Allow me to laugh MFrohike Dec 2011 #74

Even better is some of the taxes he lists jmowreader Dec 2011 #104

Haha, missed that MFrohike Dec 2011 #105

Lol, welcome to DU. Union Scribe Dec 2011 #35

How many billionaires do you know? Minarchist Dec 2011 #36

None. That's why I'm so surprised to hear they're truckers. Union Scribe Dec 2011 #38

Well, if you don't know any, that should tell you that there are not very many of them. Minarchist Dec 2011 #39

Ah, poor one percenters. Union Scribe Dec 2011 #47

I view all nameless-faceless individuals the same--without knowledge there can be no judgement. Minarchist Dec 2011 #63

You realize that most wealthy people in this country did exactly *nothing* to earn it? Ikonoklast Dec 2011 #71

That is not true. But I suppose it sounds good if one is engaged in the art of manipulating sheep. Minarchist Dec 2011 #80

No one is "entirely self-made", despite what Ovarian Lottery Winner Steve Forbes tells you . . . HughBeaumont Dec 2011 #90

The problem with your thesis is that PRIVATE wealth created the common wealth. Minarchist Dec 2011 #91

Ha ha ha ha ha. No man is an island. NONE. HughBeaumont Dec 2011 #93

Add up all the millionaires in this country who inherited their wealth. Ikonoklast Dec 2011 #95

"How to Become As Rich As Bill Gates" Starry Messenger Dec 2011 #101

Good grief that is an old meme The Genealogist Dec 2011 #67

Where do you thing the top rate should begin? taught_me_patience Dec 2011 #13

I am for 50% after the second $1 M and add 1 % for every additional Million until you get to 99% Vincardog Dec 2011 #22

I agree Under Dog Dec 2011 #75

As I said in the OP, I'm not sure where that top tax rate should begin Syrinx Dec 2011 #29

I have tried this approach at DU before with about the same luck NNN0LHI Dec 2011 #14

Why so low? For 40 years it was 70-90% JHB Dec 2011 #15

In the 50s and 60s there were about two dozen income tax brackets... JHB Dec 2011 #16

I disagree Stinky The Clown Dec 2011 #17

Between 55-60% is more like it with at least 3 more brackets. TheKentuckian Dec 2011 #18

I started one reply and it sounded kind of snarky... 99Forever Dec 2011 #20

specify the rate you want collected cthulu2016 Dec 2011 #21

It's possible that the surplus cash was invested CJCRANE Dec 2011 #25

That money is not stagnant hack89 Dec 2011 #41

If it's not moving around in the real economy then it's stagnant IMO. CJCRANE Dec 2011 #43

That cash can't create demand hack89 Dec 2011 #44

But if you tax the 1% more CJCRANE Dec 2011 #45

It should be 95% Taitertots Dec 2011 #24

If you're looking to maximize revenue without negative consequences to the economy overall PETRUS Dec 2011 #26

So what happens when you run out of rich people to tax at that level? hack89 Dec 2011 #37

It's not my plan PETRUS Dec 2011 #40

you have a false sense of self worth PowerToThePeople Dec 2011 #49

They are still not going to work their asses off for money they will never see. nt hack89 Dec 2011 #50

wrong PowerToThePeople Dec 2011 #51

They don't work their asses off now. nt TBF Dec 2011 #100

Great. That would open up market opportunities for other companies. Overseas Dec 2011 #55

Or give the money back to the shareholders hack89 Dec 2011 #57

I remember the days when making a decent profit was enough. We weren't crazed about maximizing Overseas Dec 2011 #84

We never did before, why would we do so in the future? Ikonoklast Dec 2011 #73

I imagine you believe no one in the top brackets worked very hard LanternWaste Dec 2011 #83

THAT is what PISSES ME OFF about our Party Leadership. bvar22 Dec 2011 #42

I agree. Overseas Dec 2011 #56

A lot of speculation. We don't need to pluck numbers out of thin air....we should look at what wiggs Dec 2011 #46

I'd be OK with it only if it kicked in at $300,000 income mainer Dec 2011 #48

Before raising any taxes, I want to see the government stop spending money on illegal wars slackmaster Dec 2011 #54

According to economist Richard Wolff the top rate was 91% during FDR's administration... truth2power Dec 2011 #58

Sadly, he ignores the other half of the equation for determining taxes owed. joeglow3 Dec 2011 #70

ah, the myth of the loophole hfojvt Dec 2011 #76

I trust my 15 years experience as a tax CPA (half for Big 4 firms) joeglow3 Dec 2011 #96

meaning you started in 1996 hfojvt Dec 2011 #97

I have studied this joeglow3 Dec 2011 #98

UNL? Well that explains a lot. Their degrees are worthless. hfojvt Dec 2011 #99

My "worthless" degree has done a lot for me joeglow3 Dec 2011 #102

I don't know. I'll send that message to him. Can't say I'll get a reply, as he gets truth2power Dec 2011 #78

Taxation should be progressive primavera Dec 2011 #59

I Agree with Your Post, However Higher Tax Rates Won't Solve The Income Gap Yavin4 Dec 2011 #60

50% isn't bad... NightTemplar Dec 2011 #64

I don't know why people keep saying 250k Syrinx Dec 2011 #106

It should be at least 70% roamer65 Dec 2011 #65

Herbert Hoover raised it to 60% when the Great Depression hit. Crunchy Frog Dec 2011 #87