The rich will pay more taxes, Boehner says

[hue]

Source: wisn.com (cnn)news

WASHINGTON (CNN) —

Taxes on the wealthy are going up, House Speaker John Boehner conceded on Wednesday in challenging President Barack Obama to sit down with him to hammer out a deal for avoiding the fiscal cliff.

Obama, however, continued to insist on Republicans first ensuring no tax hike for anyone but the top 2% of Americans as a first step toward a broader agreement on tackling the nation's chronic federal deficits and debt.

The statements reflected how negotiations on the automatic spending cuts and tax hikes set to occur on January 1 -- the fiscal cliff -- have evolved since Obama's re-election last month.

Republicans once opposed to any new revenue in their quest to shrink government now realize Obama's victory and public support for the president's campaign theme of higher taxes on the wealthy leave them with little negotiating leverage.




Read more: http://www.wisn.com/politics/The-rich-will-pay-more-taxes-Boehner-says/-/9373216/17663546/-/oo9fum/-/index.html

[loyalkydem]

1. Let's see if he will follow through

[SummerSnow]

4. Is he sober or..

His brain isn't being fried by tanning booths.

[CaliforniaPeggy]

2. ALL RIGHT !

See, Mr. President?

When you stick to your guns, good things happen!

[KWorth]

5. Well, Duh Boehner.

It took you this long to figure this out?
Raise taxes on the wealthy and bring the troops home, reduce the defense budget, rebuild the nations infrastructrure.
Seems pretty simple to me.

[onehandle]

6. Like you have a say. Weakest Speaker Ever. nt

[ladjf]

7. Maybe Boener is just saying that the Republicans will run us over the cliff which would raise

taxes on the rich and everyone else. nt

[skrempi313]

8. Spam deleted by gkhouston (MIR Team)

[starroute]

15. Closing loopholes would hit the upper middle class - not the ultra-rich

I forget where I saw it -- maybe Krugman? -- but closing loopholes or capping deductions like health costs or mortgage interest would primarily hit the people making between $250,000 and $400,000 while barely affecting those making more than than.

There's nothing that makes it clearer that the GOP is in the pocket of their billionaire sugar daddies than their absolute refusal to raise tax rates on the top earners.

[Myrina]

9. If by 'more' he means .0001% .... Big Fucking Deal.

jus' sayin' ...

[mostlyconfused]

12. how about this

We increase the amount of taxes collected from those making over a $1 million dollars by 70% from what they pay today. Those extra taxes would cover .01% of the annual debt.

[jmowreader]

14. That's still not that much

There are two classes of people making that kind of money.

The first is the entertainment and sports crowd. They make tons of money, but it can go away in a second: a bad hit on the football field, little bit slower reflexes, or a role in Eight Heads in a Duffel Bag and you're selling used cars the rest of your days. Put them on hold because there aren't enough of them to worry about.

The other bunch can take 100 percent stock options and pay 15 percent tax.70 percent increase on that and you are still looking at a 25 percent tax rate. Not enough.

There are ways to test capital gains to see if they are retirement income. Maybe over 65 and not serving as executive or director of any entity that pays more than a token amount for your services. Let retirees stay at 15 percent and tax everyone else's capital gains as ordinary income.

[PSPS]

17. Don't be silly

I like the idea of taxing any income over $1 million at 70% but saying the additional revenue would "cover .01% of the annual debt" is just silly. I presume that's something you heard Rush say. Doing something like that would more than cover the annual budget deficit in its entirety.

Assuming you're open to actual facts, here are a couple of things that, by themselves, would eliminate almost the entire annual budget deficit:

1. Remove the "must buy at rack rate" rule for prescriptions in Medicare Part D that the Bush junta forced upon the taxpayers. Instead, let the prices be negotiated like they already are with the VA.

2. Let the top marginal tax rate return to what it was under Clinton (i.e., before the Bush tax cuts for the super rich.)

Enjoy your pizza.

[mostlyconfused]

19. Not silly. Scary.

I didn't say tax them at a 70% rate, I said increase the amount of taxes they pay by 70%...

But that aside, let's look at your idea of taxing income over $1 million at a 70% rate. According to data from the IRS (source: http://www.irs.gov/uac/SOI-Tax-Stats---Individual-Statistical-Tables-by-Size-of-Adjusted-Gross-Income), there were 234,649 individual income tax returns filed where the taxable income was over $1 million.

Total taxable income from those individuals was $623.5 billion. But lets subtract the first $1 million each one of them made, and we're left with taxable income of $388.9 billion. It was taxed at some rate already. For sake of argument let's assume the low capital gains rate of 15%. That would mean $58.3 billion was already paid.

Imagine we tax that $388.9 billion of income at a 70% rate. That's $272.2 billion, subtract the $58.3 billion already paid = an increase of taxes to the government of $213.9 billion.

So, based on your suggestion of taxing everything above $1 million at a 70% rate, the government would bring in enough additional tax to cover about 15-16% of last years annual deficit. You could tax them at 100%, and not cover one year's worth of deficits.

Where else do we go to get the taxes needed to address the deficit?

[PSPS]

22. Hey, this is great!

Thanks for the link to the IRS stats. I was looking for that.

Also, I realize now that you meant an increase of 70%. Nevertheless, since such high earners likely pay little or no tax anyway, let's stick with the 70% rate for the purpose of this discussion.

I have to object to your "already paid" allowance as I assume in our fictional scenario that all income over $1 million is taxed at 70%. Using this assumption and the 2009 figures from the IRS site:

Total taxable revenue from returns in the "over $1 million" category: $727 billion
Total number of returns in this category: 236,883
Allowance for the first $1 million on each return: -$237 billion
Remaining taxable income over $1 million on each return: $490 billion
Tax at 70% rate: $343 billion

So we're both wrong. That figure alone doesn't offset the annual budget deficit but it is far more than ".01%."

FY 2012's budget deficit was about $1 trillion, so $343 billion is 34% of that, not .01%. But a third of the deficit is nothing to sneeze at, don't you agree?

Other contributors to the annual deficit (FY 2011) are:

Iraq: $49 billion
Afghanistan: $119 billion

These war costs come to $168 billion, another 17% of the deficit. So we're up to 51% of the deficit so far.

Add another $40 billion to be saved if Medicare Part D drug prices were negotiated and we're up to 55% of the deficit.

I've got to get back to work now, but you get the point. I suppose there's a considerable amount to save by eliminating unnecessary subsidies to wildly-profitable companies like oil/energy and big agribusiness.

I'll forgive your knee-jerk ".01%" remark and rescind my pizza crack. You took the time to lay out figures and work it out, which indicates a desire to get at the truth.

[mostlyconfused]

23. Our numbers are off by a bit

..as you note. I appreciate the thoughtful response.

In response to some of your points...

> High earners likely pay little or no tax anyway
If you total the gross income from all of the $1+ million earners in column (3)...remember that column is in 1000's...and compare against column (20), you see that those individuals collectively pay 24.3% of their adjusted gross income in taxes. If you allow for deductions and use their taxable income in column (11), they paid 28.4% of taxable income.

> Total taxable revenue from returns in the "over $1 million" category: $727 billion
That's actually the adjusted gross, which I assume means before deductions. If we're just talking about raising rates while still allowing deductions, then column (11) is the right basis and instead of $727 billion the number is $623.5 billion. I guess which one we use depends on whether we are seeing rate increases and the elimination of deductions, or just the rate hikes.

> I have to object to your "already paid" allowance
I'm not sure why. Based on the IRS data those in the $1+ million club are clearly paying taxes....24.3% of their adjusted gross income, 28.4% of their taxable income. We do have a somewhat progressive tax system (though not progressive enough) in that the marginal rate these people are paying on income above that million dollar mark is at a high rate than most of us pay on our income. But at the top end of earners it is much more about capital gains than income...and the capital gains rate is 15%. So these people settle an an effective rate that is somewhere between the top marginal rate and the capital gains rate, right?

These dollars are not taxed at 0% today, so we're not talking about bumping the tax on dollars above $1 million from 0% to 70%...whatever rate they are currently paying..15%, 24%, 28%...those taxes are already figured into the budget and to the $1.1 trillion deficit from FY2012. That's why I take out that allowance.

From here, I'm honestly not sure which is the right way to calculate this...

On one extreme...
Total gross revenue from returns in the "over $1 million" category: $727 billion
Total number of returns in this category: 236,883
Allowance for the first $1 million on each return: -$237 billion
Remaining taxable income over $1 million on each return: $490 billion
Already paying at least the 15% capital gains rate on those dollars: $73.5 billion
Tax at 70% rate: $343 billion
Net increase in taxes: $269.5 billion, or 24.5% of last year's deficit

On the other extreme...
Total taxable revenue from returns in the "over $1 million" category: $623.5 billion
Total number of returns in this category: 234,649
Allowance for the first $1 million on each return: -$235 billion
Remaining taxable income over $1 million on each return: $388.9 billion
Already paying the effective tax rate of 24.3% that group: $94.5 billion
Tax at 70% rate: $272.2 billion
Net increase in taxes: $177.7 billion, or 16.2% of last year's deficit

Sorry. long post, but I find this stuff quite interesting. It looks to me like increasing the tax rate to 70% on all dollars earned about $1 million would help cover somewhere between 16% and 25% of the annual deficit.

And we're getting very lost in the weeds here, but the point I come back to is that while we absolutely should be raising taxes on the wealthy in this country, we cannot raise them enough to close the deficit. Not even close.

Now...hitting "Post my reply!" and wondering how many errors I've made in my math.

[mostlyconfused]

24. What if the rate was 100%

Spending way to much time in Excel tonight, but once the model is built, it's easy to plug in other numbers to do some "what if" analysis.

Out of curiosity I plugged in a 100% tax rate on all dollars earned above $1 million, so essentially capping personal income in this country from both salaries and capital gains at $1 million.

Based on the two "extremes" modeled in my prior post, this 100% tax rate would bring in enough new taxes to cover between 26.8% and 37.9% of the FY2012 annual deficit. That's a sizable dent, but something tells me it would be a one-time deal. People would find their way around the system and those dollars would not be there to tax next year....though the banks in the Caymans would probably make a killing.

[truthisfreedom]

10. ORANGE you going to ask me how much more they're going to pay?

[mostlyconfused]

13. Victim of a terrible tanning spray accident

[John2]

11. Yeah,

the electorate considers Boehner's proposals an insult. If we wanted his offer, then Romney would be President. Now he doubles down and insults us again after the election. Maybe we need to speak his lanuage in Business terms? Ok here goes:

Think of it this way. Consider the electorate your share holders. We voted on two presentations and we made our choice. Our choice was President Obama's presentation, so we the share holders rehired him to carry out his plans. This is not personal, but its business. So quit insulting the Electorate by saying we don't count. You are delusional if you think President Obama will pay. He works for us. When you insult his offer, then you are actually insulting us. The first lesson the GOP has to learn, is respect the voters, who are the share holders.

[Javaman]

16. boner isn't a spelunker, he's a caver!

[ReRe]

18. You're damn right they will!

And I say jack them up to 75% (same as their rate was back in 1980) in 2015, when we are a majority in the House again. And make it effing PERMANENT. This country has got to stop this cut-throat vulture capitalism and get back to some REAL capitalism that made this country great for everyone.

[obama2terms]

21. haha

Elections speak louder than words!

[defacto7]

25. K&R

That's what we want, the Repugs begging for crumbs.

[wordpix]

26. "challenging President Barack Obama to sit down with him" bwahahaha, yeah, sure