By PAUL LEVY
Several months ago, a friend met with a high government official and expressed concern that the new health care bill would be more expensive than people were saying.
“Oh yes,” said the official, “In several years, the United States will pass a value-added tax.”
After the bill passed, Charles Krauthammer wrote this column in the National Review saying the same thing:
American liberals have long complained that ours is the only advanced industrial country without universal health care. Well, now we shall have it. And as we approach European levels of entitlements, we will need European levels of taxation.
I believe that a VAT is a move in the right direction. (I distinguish for the moment between amounts of taxation and the form of taxation.) Current tax policy in the United States discourages saving and investment and rewards consumption. Think of the double taxation on what you earn as salary and then what you earn as interest on your savings; think of income taxes on corporate profits and then again on the dividends you collect. A VAT avoids those problems.
The problem with a VAT is that it is regressive in nature, affecting lower income people more than wealthier people because lower income people spend a bigger percentage of their income on consumables. But you can adjust for that with income-based rebates or exemptions.
But, there is the danger that this tax will be able to be increased with little public scrutiny. It will not necessarily be visible because it is added at each stage of production, and so Congress could just jack it up whenever it wants. Also, you don’t hear talk of reducing other taxes as this new one is introduced. That is why some people are nervous, like the gentleman quoted here :
“Jon Hurst, president of the Retailers Association of Massachusetts, said he fears a value-added tax would simply be used to fund new programs….”
The costs of health care reform were intentionally designed not show up in a big way until well into the next Presidential term. It is thus likely that it will be a few years before the debate begins in earnest, but it is on the horizon.
Paul Levy is the President and CEO of Beth Israel Deconess Medical Center in Boston. Paul recently became the focus of much media attention when he decided to publish infection rates at his hospital, despite the fact that under Massachusetts law he is not yet required to do so. For the past three years he has blogged about his experiences in an online journal, Running a Hospital, one of the few blogs we know of maintained by a senior hospital executive.
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“You would suspect wrong, most of those making 20K or less are doing so because they refuse to put in the work required to make 200K. If they were working 60-80 hour weeks they wouldn’t be making under 20K”
According to the most recent estimates from 2005 census data, 9.6 million, or more than 1 out 4 working families in America (29%), are low-income, earning less than 200% of poverty threshold ($39,942 in 2005 for a family of 4).
Besides just dismissing the fact which you do with regularity Nate when it suits your purposes where are these jobs that you are referring to? Their are actually alot of minimum wage employers (e.g., fast food outlets, retail stores) that discriminate against older applicants.
“car payment $500”
If you are making $20k a year or so, you likely are going to have a poor credit rating. That means you interest rate for a used car will likely be north of 8% right now at least. Probably higher and even 10%.
I agree $500 is a bit higher but even a moderately priced used care at 10k at 48 months would run you around $250/month at around 10%. When you factor in insurance, gas, and maintenance it easy starts to creep up into the $500 range and possibly even higher.
“If they would pay fair wages to working folks,”
Lets completely disregard that fact that the US economic model the last 25-30 years has relied upon wage suppression to function or the numerous stats that show the annual income or PPP of people with a high school degree or less have stayed stagnant/decreased the past 25-30 years.
So people earning minimum wage are learning people who come to work high, don’t show up with regularity, and spend lots of time on the phone? Any stats to back up this assertion. My general experience of working in a factor for a few summers and doing work literally digging ditches is kind the opposite.
“what is a fair wage for an idiot that comes to work high”
Nate, can you check what a kindergarten teacher makes where you live? or a dental hygienist? or the clerk at the courthouse? or the person that checks you out at the supermarket?
“I suspect all of those with adjusted gross incomes below $20,000 and paying no income tax but substantial payroll taxes would happily change places with those earning $200,000 and above and gladly pay the relevant taxes on those incomes.”
You would suspect wrong, most of those making 20K or less are doing so becuase they refuse to put in the work required to make 200K. If they were working 60-80 hour weeks they wouldn’t be making under 20K
“car payment $500”
Right here is your problem why in the world would a “poor” person be spending that much a month on a car? Sounds like bad choices once again are the root of poverty.
Or is a $500 car now a right since the left took care fo that healthcare problem?
“If they would pay fair wages to working folks,”
Curious Margalit since you brought it up, what is a fair wage for an idiot that comes to work high, when they even come to work, can’t be bothered to work while there spending more time on personal phone calls and twitter then actually working. In your liberal mind exactly how much should my greedy ass be paying such employees?
“I normally do not read overtly biased media” please Bev you read THCB every day :)~
VAT is probably coming and the biggest reason I am against it is not that it is an additional tax but that it picks winners/losers when you decide what to tax & what not to tax.
You are seeing this already play out to some degree with state budgets this year. Given that their traditional revenues streams have cratered and likely aren’t going to return to 2008 levels until 2012 or 2013, they are desperate for ways to raise new revenues by adding new taxes on services. It creates an acrimonious environment in state capitals as lobbyists jockey to make sure that their vested interested aren’t added to the tax list.
We do need a revision away from the current system which really was based on a heavily industrialized society of early 20th century American and taxed goods & income primarily but I haven’t seen a really conclusive agreement on what that new system should look like. Even progressives and conservatives disagree with one another.
It is the same with financial regulation. There is some general agreement on basic principles (increased transparency and regulation on derivatives) but lots of disagreement if we largely have the regulations & tools already in place or we need a whole new set of regulations and agencies to deal with new financial products that have emerged the past 10 years.
“If 47% are paying nothing where exactly do you want to start this measurement of progression?”
Every conservative outlet has been pounding this figure the past week or so and yet they leave out some important facts like:
1. This percentage is only so high in part because of the very temporary income tax breaks that conservatives pushed as a part of the stimulus last year. They are set to expire relatively shortly.
2. This pool was greatly expanded by increasing the Earned Income Tax Credit during the Bush administration. The Bush administration did this in order to win enough support from Democrats to pass the tax cuts.
3. There has been a notable jump since ’07 in the amount of households and individuals who entered poverty and thus don’t pay income taxes.
I normally do not read overtly biased media from either side, and never heard of the National Review until a conservative friend sent me some (garbage) from it. But this is interesting and relevant to your conversation:
http://corner.nationalreview.com/post/?q=YjQxNzNkMzBhZjJiNTQ2N2UyMTI1ZTUyMTQwOTQ4YjM=
Yes, Nate, I do agree that everybody should pay some taxes. However, the reason so many people don’t pay taxes is because so many people are poor. I keep saying that $50,000 for a family of four is right on the cusp of poverty, but we calculate poverty in antiquated ways, so the family is considered middle class.
This family, brings home less than $3750 per month. Mortgage or rent are an average of $1000, food is another $1000, utilities are about $500, car payment $500, gas $200, clothing $100, school supplies & expenses $100, incidentals (repairs, haircuts, traffic tickets, emergency trips, etc.) …. Well, there’s only $350 left, so it will have to do.
Oh, and health insurance is not accounted for and neither are any out of pocket expenses. No vacations, no movies, no restaurants, no nothing.
I guess America is getting so poor that it can’t even tax itself anymore. On the other hand most of the wealth is now concentrated in a minuscule percent at the top which keeps complaining about having to pay so much in taxes.
Guess what? If they would pay fair wages to working folks, the workers would have enough income to pay taxes, so the “poor” rich people wouldn’t have to carry all the burden all by themselves.
And it will get much worse, because soon enough nobody in America will be able to afford buying anything but food, and I guess our patriotic capitalists can move on to the next big market in China or India. Like locust.
Nate: The usual smattering of facts that are revelatory of nothing in particular, certainly not this nonsense,
“that means 47% of the population voting for bank bail outs, take over of healthcare, and other higher tax bills aren’t actually contributing to them”.
This, I suspect, is the reason that the extreme right-wing is raving about the most recent estimate on the number of USA households not having a tax liability. A much more revealing part of the Huffington Post article is this on this particular statistic:
“The number of households that don’t pay federal income taxes increased substantially in 2008, when the poor economy reduced incomes and Congress cut taxes in an attempt to help recovery.
In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center.”
In addition there is any number of other income and tax statistics that are much more indicative of the true picture of income and tax burden in the USA.
In any case almost all of those without a tax liability have adjusted gross incomes below $20,000 per year and those are households where there are potentially two or more earners.
In addition the payroll tax rate on that income group is substantial. The rate on those with adjusted gross incomes below $10,000 in 2003 (the latest data available) was 13% while the income tax rate was minus 6.4%. The rate for those with adjusted gross incomes in the $10,000 to $20,000 range was 12% while the income tax rate was minus 2.9%.
That compares for example with a payroll tax percentage ranging from 6.1% to a vanishingly immaterial 1.5% for those with adjusted gross income above $200,000 and average income tax rates of 22% to 29%.
I suspect all of those with adjusted gross incomes below $20,000 and paying no income tax but substantial payroll taxes would happily change places with those earning $200,000 and above and gladly pay the relevant taxes on those incomes.
As I have noted in another venue, tax credits, particularly refundable tax credits, reflect the proposal by President Nixon in 1973 for a negative income tax. The current tax statistics represent more or less a realization of that proposal. Of course in the eyes of the current extreme right-wing President Nixon would be a “socialist, leftist” because of this.
A few other revelatory statistics are those from 2007 which show those with adjusted gross incomes below $20,000 represent 34% of filers while aggregate adjusted gross income for that group is 5.3% of total adjusted gross income. That compares to those with adjusted gross income above $200,000 which represent 3.1% of filers but whose percentage of total adjusted gross income is 33%.
Stunning figures: in other words the 34% of filers with low incomes earn 1/6 of the aggregate adjusted gross income of the high income group that is 1/10 of their number. On top of that about 12% of gross income to the low income group goes toward payroll taxes, along with an additional material percentage that goes to sales taxes.
“extreme rightist commentary is idiotic. No facts and little or no logic in it.”
Hi pot and Kettle meet Wendell.
“Nate might want to check the statistics published by the IRS”
Did and they show 39% and now 47% didn’t pay federal income taxes.
http://www.huffingtonpost.com/2010/04/07/income-tax-47-of-american_n_529059.html
“The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes.”
Huffington nut wing righty now Wendell? Would you call her invariably wrong or inapplicable in this case? Which would you label the NYT as that is where I first read it? Seems like instead of applying any inteligent argument you just label anything you can’t disprove as right wing extremist then move on. Very middle school type of debate if you ask me.
property taxes and sales taxes don’t fund our federal governemnt. Payroll taxes fund Medicare and Social Security, that means 47% of the population voting for bank bail outs, take over of healthcare, and other higher tax bills aren’t actually contributing to them. The argument and complaint is people that aren’t liable for any of the spending are far more likly to spend. Even your biggest lefty, Margalit do you agree?, would say this is an honest argument. People aren’t voting for everyone to fund these programs they are voting for others to fund them.
“The nutcase right-wing never bothers to distinguish since it does not believe in presenting any relevant facts about anything anyway.”
What do State taxes have to do with federal spending, talk about dishonest arguments Wendell. I know you CA, NY, and MA liberals love your federal deductions for excessive State taxes but that is totally off point.
“misleadingly to boot.”
What was misleading, you make a lot of accuzations but never a single link, argument, or fact to back it up. If my misleading you meant I was speaking over your comprehension level I apologize but that is confusing you not misleading you.
“Not a very high marginal rate in the overall scheme of things for any number of reasons.”
This is subjective and opinion, hardly what you base arguments on. Compared to the people who get a net income from our tax code 35% seems quit high. Allow me to educate you on some other reasons this is unfair. This amount is calcualted annually, say you work 10 years to grow a business and make less then minimum wage all those years. This is very common for small business owners, they will work 80 hour weeks for years building the business. Then they sell out and get hit for 35%. Compare that to the minimum wage earner who never worked more then 40 hours a week a day of their life and instead of paying taxes all those years they get credits that wipe out all liability and usually results in a check. How is 35% for 10-20 years of work not high when the person that never worked at all never paid a penny of federal income taxes in their life? I guess if your ythe person who doesn’t have to actually pay the tax then it is not high at all, and that is back to the problem, people that don’t have to pay taxes are deciding what is fair and what is not.
“which overwhelmingly favors the high-income and even more so the very high-income”
By what subjective measure do you make this assertsion?
“Fewer than one in seven individual income taxpayers reported taxable capital gains in 2006. Over half of taxpayers with gains had incomes below $75,000,”
50% making less then 75K seems to blow away your overwhelming claim. Unless your measuring the proportion of the overall capital gains they make, but you wouldn’t dare do that when just a few paragraphs before you argued that was not an honest measure.
Your words in case you forgot;
“marginal rates not gross payment of taxes”
“you might learn something”
I’ve tried, but no such luck. Commentary from the likes of Steve S or Mao Bama (or something like that) is worse than useless and invariably deliberately and gratuitously insulting.
Regrettably extreme rightist commentary is idiotic. No facts and little or no logic in it. How does idiotic not fit as an adjective to the reality of such commentary?
Unfortunately I read much of it all too often in other venues. So far I have never seen a relevant fact to the topic at hand in any of it. Astonishing, but true, It never ceases to astonish me no matter how many times I read more of it.
Commenters such as the two mentioned above are among the worst practitioners who have appeared in this weblog. Were it my responsibility I would delete such commentary and could care less about a charge of censorship.
Now Wendell, we just weaned Nate from insulting people and calling names, now to find you doing it. And the real nuts like Steve S. are ignored, not deleted. They do have right of free speech, no?
I think one has to keep in mind that, ideologically polarized as this blog (reflecting the country) may be, occasionally there is a nugget of truth in these comments from both sides, poorly expressed as it may be sometimes. Try to keep an open mind – you might learn something. I have.
“If 47% are paying nothing where exactly do you want to start this measurement of progression?”
Apparently this percentage is apocryphal. Nate might want to check the statistics published by the IRS rather than depend on the nutcase right-wing grapevine for data – invariably wrong or inapplicable.
I assume the statistic whatever it is in relation to income taxes is being hyped by extreme rightists to prove some point. The point escapes me however.
The statistic relates to federal income taxes – obviously not to all taxes since everyone is liable for sales taxes, property taxes directly or indirectly and payroll taxes or in some cases State or local income taxes most of which are regressive to some extent or other. The nutcase right-wing never bothers to distinguish since it does not believe in presenting any relevant facts about anything anyway.
When one talks about progressivity in taxes one talks about marginal rates not gross payment of taxes which Nate apparently is referring to – misleadingly to boot.
No room or desire to give a primer on taxation here, but the highest current marginal federal income tax rate in the USA is 35% that applies to taxable income (note not adjusted gross income) above about $370,000 for joint or single tax-return filers. Not a very high marginal rate in the overall scheme of things for any number of reasons.
In addition, even more despicable, the only capital gains tax rate (with a few special cases where somewhat higher rates apply) which overwhelmingly favors the high-income and even more so the very high-income, is all of 15%, although it is scheduled to rise somewhat in 2011 to 20%.
How English grammar might relate to a definition of progressivity in taxation is beyond me, but an explanation of it is above – it applies to rising marginal tax rates as income rises. The underlying economic rationale is given in a comment above.
“and I don’t see why you have no issues with spending it on encouraging corn syrup, beef and tobacco consumption, all leading to high health care costs, which in turn may be leading to VAT. Is this not the definition of insanity?”
hum I must be getting old, but I can’t remember you ever asking me how I feel about tobacco consumption, when I’m allowed to speak for myself I actually advocate for employers being allowed to deny employement to smokers, healthplans being able to charge additional premium equal to the additional risk, testing anyone who receives public assistance of any kind for nicotine and if positive taking away all assistance, but I can totally see how you mistake that for support Margalit.
One of my dream laws if I could write them for a day would be to put a $0.25 deposit on all cig butts. I hate how smokers just toss them all over the place with no concern. I would have no problem testing them for DNA and executing anyone who’s cig butt was found laying on the side of the road or my front yard.
Go smokers!
I love how liberals attack HFCS, I bet neither you nor Ezra Klien even now what it is, let alone why it is any different then sugar.
“I don’t see how this is your money, since it has not been collected yet.”
As a liberal you never do. None of it is really mine anyways, its all the product of white privalige, an unfair world that pays men more, my preferred birth, blah blah blah, and for all these resons you and everyone else are entitled to take it away from me becuase I haven’t earned it and don’t deserve it.
“It has been hard enough to maintain some progressivity in income tax rates”
Hey Wendall speaking of calling an idiot an idiot, exactly what percent of income taxes does the top 1, 3, and 5% need to pay before ypu consider it progressive? 3% of the population paying 60% of all taxes is not progressive but once you soak them for 90%? it is? Since your such a fan of proper grammer maybe you can share with us how you progressives now define the word since you seem to change it everytime you pass a new tax. If 47% are paying nothing where exactly do you want to start this measurement of progression?
I think there is an argument to be made to delete commentary from Steve S, based on his comment above.
Idiotic right-wing commentary is already well represented in this weblog from Nate, MD as HELL, among a few others who at least can write paragraphs which are somewhat grammatically correct (well, maybe not Nate’s commentary), even if otherwise generally detached from reality, but which at least eschew the type of gratuitous offensiveness in Steve S’s comment.
I don’t see how this is your money, since it has not been collected yet. On the other hand, subsidies are indeed your money (and mine), and I don’t see why you have no issues with spending it on encouraging corn syrup, beef and tobacco consumption, all leading to high health care costs, which in turn may be leading to VAT. Is this not the definition of insanity?
“It’s the social implications of tax policies of this sort. It’s like prescribing what certain people of certain means can have and what they cannot.”
I think your missing a major qualifier, no one is trying to tell poor people what they can and can not have, what we are telling people is what they can and can not buy with my money. That change in wording makes a huge difference. I don’t have a problem buying healthy food for a starving person. I do have a problem buying a cell phone and KFC. If my money is making the purchase I have every right to limit what it goes towards.
Um. Approaching the level of entitlement in Europe?
What entitlement? We’re all being forced to buy into a corrupt system, hoping that by putting money INTO that corrupt system (by having healthy people pay into it), it will magically stop keeping our money and refusing to pay it out.
I’d rather pay into a government system that is REQUIRED to pay it out.
Entitlement my respectful fanny.
Bring on the VAT. No faster way to make poor people wake up. The not poor will simple spend less as a percent of their income. That means more poor people not getting jobs, making them poorer.
Have you forgotten what happened when they raised taxes on yachts? No one bought them and the yacht builders laid off all their workers. The tax was repealed. We need to repeal and replace this administration, and fast.
“I am so friggin’ tired of being taxed and having people like you spout off your dumb-ass, liberal views upon me and my four kids.”
Didn’t you get to “tax-deduct” the cost of those kids on your return, that I, with no kids, now have to pay more taxes. Anyway, if you had any financial sense you’d have had the number of kids you could afford instead of blaming the tax system – which helped educate those kids by the way.
“Do you know if anybody in Europe is doing anything like this, and if so how?”
Absolutely yes. They all do it both by exempting certain products from the tax, which varies from country to country, or applying a lower tax rate to necessities than other items. In the UK, for example, the normal VAT rate is 17.5%. Items that are exempted are said to be “zero rated.” If the tax were applied to everything, it would, in theory, raise 1% of GDP for each percentage point of tax rate. Yet, the broadest based VAT’s in Europe raise only about 0.4% of GDP for each percentage point of rate.
To David | Apr 14, 2010 7:51:41 AM
Here’s an idea: Stop talking out of your ass!
What the hello are you trying to spout?
“Let’s be adults”
“and pay for the government we enjoy?”
“government we enjoy?”
Are you serious Dude! Really? Are you serious?
I am so friggin’ tired of being taxed and having people like you spout off your dumb-ass, liberal views upon me and my four kids.
Beat it! Please
Go away please!
Barry, it’s not the complexity of the economy I’m concerned with. It’s the social implications of tax policies of this sort. It’s like prescribing what certain people of certain means can have and what they cannot. You are defining life necessities. It can be explosive. Do you know if anybody in Europe is doing anything like this, and if so how?
“you limited food to supermarket purchases. You can probably imagine what is going on in my “liberal” mind right now…..”
Margalit – In this context, supermarkets were also meant to include convenience stores and bodegas but not restaurants. It gets complex fast, though. What about restaurants within supermarkets or fast food kiosks within convenience stores? Nothing is ever simple in a complex economy, especially when it comes to tax policy.
The problem with VAT, which is regressive in nature, is that when you try to make it progressive, like Barry was above, you necessarily make judgments on what “poor” people purchase, or should purchase. I find it interesting, Barry, that you limited food to supermarket purchases. You can probably imagine what is going on in my “liberal” mind right now…..
The inevitability of a VAT is the bullet point du jour of the “responsible” conservative punditry. I would not include Mr. Krauthammer in even that group however. He is nutcase right-wing all the time. The quotation cited for him in the article says it all. No, the USA healthcare system post-new law is nothing like European healthcare systems and no there is nothing about the USA economy that militates towards a VAT, no matter which anonymous and likely apocryphal high government official is cited.
Many individual tax-payers with relatively high to high adjusted gross incomes, i.e. $200,000 and above, a level interestingly that includes the vast majority of physicians and virtually all specialists, are always in favor of taxation on anything other than income, so the world at large will continue to hear of the “benefits” of a VAT to substitute for income taxes.
Supposedly a VAT can be made progressive, but that is unlikely were any VAT to be enacted. It has been hard enough to maintain some progressivity in income tax rates as it is despite that fact that everyone outside the extreme right-wing agrees that progressivity of taxation makes sense. One of the fundamental underpinnings of progressivity in any taxation is the very low marginal utility of additional income to the high-income, not to mention the very high income. $5,000 additional income to someone with adjusted gross income of say $1 million is of almost zero utility to the earner while its utility to someone with an adjusted gross income of say $20,000 is very high because that income will go exclusively to near or actual necessities of life – actual being medical service for example, near being a working vehicle to use to get to work.
Nate, are you for paying for programs or deficit financing? Paying as we go does not leave it to, “future generations”. How would you have paid for Bush’s War?
When does it stop, if you keep raising taxes sooner or later you hit 100%. Hopefully we wake up before it gets to that point and have something left to leave future generations
If we are going to shoot everybody in the head, we will need to raise taxes to buy more bullets.
WHAT IS WRONG WITH YOU PEOPLE!! You want more taxes?!??! You obviously have some sort of mental illness! Forget healthcare and live free! Stop spending, stop taxing! Wake up!
“I believe that a VAT is a move in the right direction.”
I believe that cutting hospital costs then passing those savings on to patients is a move in the right direction. I hope Mr. Levy that your support for this tax is not to just keep your institution’s spending habits the same. Rich people love use taxes because they end up paying less of a percentage of their income in taxes. They also usually get caps on the amount of tax to protect their purchases of boats and luxury cars etc. Canada has pretty much now gone to a 15% VAT for all provinces which also includes the VAT on dentist and lawyer charges – two of the most unaffordable professional costs there, and here as well. I would agree to some form of VAT just for healthcare if it were dedicated and transparent, but there would need to be discussion on what items it would apply to.
I fully expect the U.S. to implement a VAT within the next five years, not to pay for healthcare, but as part of a broader plan, including entitlement reform, to address the federal fiscal imbalance. It will likely be in addition to all the other taxes we already pay. From an economic standpoint, it should do less economic harm than significantly increasing marginal income tax rates which have clear disincentive effects on productive activity.
The highest VAT rate in Europe today is 25% (Denmark) with numerous other countries not far behind. The average rate is probably in the upper teens. I suspect we would want to exempt necessities like food purchased in supermarkets, gasoline and heating oil, medical care, and, probably college tuition and government purchases. I’m also not sure how the tax would be applied to capital market transactions like stock and bond purchases and sales, loans, etc. The broadest based Value Added Taxes in Europe raise about 0.4% of GDP for each one percentage point of tax rate.
The VAT lends itself best to taxing manufactured goods which are becoming less and less important as a percentage of economic activity relative to services. I think the tax could be easily avoided by small businesses and independent contractors such as plumbers, carpenters, electricians, landscapers, barbers, beauticians, personal trainers, doctors, lawyers and others who are essentially selling their time and expertise as opposed to physical products like cars and furniture. Services provided by large entities like hotel chains and restaurant chains are more likely to collect and pay the tax because they’re much more likely to be audited. On the positive side, the VAT would capture at least some money from people who are currently working off the books and not paying income or payroll taxes.
I disagree regarding the double taxation argument. While nobody knows for sure, many of us believe that corporate income taxes are just another cost of doing business that are built into the price of their products and services. There is no reason why interest and dividend income should not be taxed at the same rates as income from wages. There is a legitimate issue regarding capital gains that relates to the fact that value is often built over many years. It’s not fair, with a progressive tax structure, to tax a business or real estate that was owned for decades as though all the gain was earned in one year. That issue goes away if the top marginal rate is low enough as it was after the 1986 reforms (28%).
Finally, to protect us from runaway taxation, there should be an Alternative Maximum Tax that ensures that no taxpayer, no matter how wealthy, pays more than, say, 33% of gross income in combined federal income, payroll, excise and value added taxes.
Here’s an idea: Let’s be adults and pay for the government we enjoy. I am tired of this baby-boomer, BS thinking that one can keep cutting taxes, increasing debt and still have the government provide everything.
Grow up. NO MORE TAX CUTS. If you want your taxes cut, then you tell us what parts of the government need to be cut back. Until then, we’re going to be adults and pay for the government we enjoy.