Secession Petitions, the Election, and the News.

[kandrathe]

I don't hear much clamor for tax hikes, even from those supposedly concerned about the deficit...

The US has the most progressive tax system of the entire OECD.

The top 10% of US earners pay 45% of the income taxes. Italy is the next highest at 42%. Switzerland is lowest at 20%. France is 28%, Germany is 31.2%, and UK is 38.6%.

In the US, the share of market income of the top 10% is 33.5%. Italy is 35.8%, Switzerland is 23.5%, France is 25.5, Germany is 29.2, and the UK is 32.3. So the top 10% don't have that much different control of market income than other OECD nations.

If you then compare the ratio of income taxes paid (by the top 10%) to the share of income earned (by the same 10%); The US is 1.35, Italy is 1.18, Switzerland in 0.89, France is 1.2, Germany is 1.07, and the UK is 1.2. So, clearly the top 10% in the US bear a much greater burden than any other OECD nation. Only Australia (1.29) and The Netherlands (1.28) come very close.

In 2012, for Federal, State, and local governments, the estimated amount of spending is $6,271,881 (in millions). There are about 312 million people in the US, so government spending is about $62,691 per capita.

Estimated tax revenues from all levels is $5,181,216 (in millions) 35% is income tax, 21% is SSI, 22% is property tax, 8% are fees, 14% is from taxing business revenue.

There are about 138 million tax filers, of which, only 1/2 actually pay in. Spreading the revenue then to them, we are raising an average of $75,090 per tax payer who is supporting 4.53 people worth of government spending ($284,184). The amount difference at the Federal level is just about 1 trillion dollars (requiring a 42% increase in revenue).

So, do you think we can tax our way out of this? If we raise taxes, it will need to be broadly done. The current ("fiscal cliff") plan would go back to the Clinton era tax rates and will do very little ( less than 1/10th of a trillion).

My view is that the problem is 4 fold,
1) We spend too much money at all levels on stuff we don't need.
2) that the bottom 50% earn too little (< 33,048 ) per year,
3) we don't have enough tax payers in general to support the 4.53 non-taxpayers, and
4) that we use the same flat numbers regardless of cost of living applied geographically equally to rural Alabama, and Manhattan.

For #1, A) people consume services locally, and so pay local prices, and local or state governments are better able to manage geographical differences in pricing. If you live in Manhattan, you will pay high prices, and you will earn more, and pay a higher amount of taxes. But, maybe not higher rates of taxes. But, it makes no sense to tax workers in rural Alabama to pay for the high prices of someone who chooses to live in Manhattan who pays no taxes. We need to move the taxes and revenues for human services to the local level (health, education, welfare, agriculture, etc.). B) we need to form a plan that gets the US out of the business of policing the world. It can't be done suddenly, but it needs to be done. We have 47 military bases in the domestic US, and ~560 more bases across the remainder of the globe. ( http://www.tomdispatch.com/blog/175338/ ) We spend too much on defense, and for the Dept. of Homeland Security. We need to reign in the fascism and save ourselves some money in the process.

For #2, we need to create jobs (not government jobs). We do this by properly regulating what needs to be regulated, but otherwise getting out of the way. I'd also consider some substantial tax incentive (5 year plan) for businesses where they pay less if they hire more.

For #3, we need to drastically increase legal immigration for skilled and non-skilled laborers. We can start with legalizing the illegal ones here who already have jobs, and are well integrated into our culture.

For #4, the best solution is to push what can be done to the State and local level, and let the States figure out how to raise the revenue to cover their local costs.