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Senior Contributor

Higher taxes, lower incentive

http://online.wsj.com/article/SB10001424052702304066504576343611464445594.html

 

"It's true that the economy was able to absorb the Bush 41 and Clinton tax hikes and still grow at a very rapid pace. But what the soak-the-rich lobby ignores is how different the world is today versus the early 1990s. According to the Organization for Economic Cooperation and Development, over the past two decades the average highest tax rate among the 20 major industrial nations has fallen to about 45%. Yet the highest U.S. tax rate would rise to more than 48% under the Obama/Democratic tax hikes. To make matters worse, if we include the average personal income tax rates of developing countries like India and China, the average tax rate around the world is closer to 30%, according to a new study by KPMG.
What all this means is that in the late 1980s, the U.S. was nearly the lowest taxed nation in the world, and a quarter century later we're nearly the highest."

52 Replies
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Veteran Advisor

Re: Higher taxes, lower incentive

If the world average for personal income tax is around 30% then our average of a little over 24% this year places us well below the world average. and adding the 48% you talk about only brings it to less than 28%.  So I would say we are in very good shape tax wise compared to the rest of the world.

Senior Contributor

Re: Higher taxes, lower incentive

So, why are you in favor to raise tax rates if you think we are in good shape? Keep them the same or lower a bit would be my take.

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Advisor

Re: Higher taxes, lower incentive

i was following along with the calculations (some of them on proposals...and how did he come up with a "combined federal and state" number when numerous states don't have an income tax?) and started to chuckle as I was reminded of back in the day when there were 10s  of thousands of independent hog farmers and a bunch of industry relatedd magaines that we all got for free. I recalled the research articles and the advertisements that claimed you would, if you used the right breeding stock, antibiotic, vaccine, pro-biotic, dewormer, feeder, ventialtion system or drinking fountain that you could save anywhere form pennies to often up to a few dollars per pig raised.

 

A couple  of other guys and mself one night sat down and added it all together and figure out if we took the best advice we could find on all of those inputs and prodcuts (mind you, fat hogs were running inthe mid 20s to low 30s at the time) that all we'd need to do is decide which combination of stuff we would use and then figure out where it was that we should send off for the check. Thought about that also the first time somebody told me about the immensely popular computer game SimFarm.

 

BTW...The highest rate was over 90%, under a GOP administration in the fastest boom time decade of our modern history. When over half of the homes that people live in today were built. When the primary stretches of the interstate highway system were laid down.  When we were paying off  the bills from two wars.....make that one war and one "police action".

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Veteran Advisor

Re: Higher taxes, lower incentive

Did you not read the last several words in that sentence?  And did you not understand that the "good shape" refers to the rest of the world TAX RATES?  I never said nor implied that we were "in good shape" other than when our tax rates were compared with everyone else.  No we need to raise our tax rates and cut out the loop holes that the 6 figure bunch use to get out of a lot of their taxes.

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Senior Contributor

Re: Higher taxes, lower incentive

Having lived in that time I also know that there were a ton of deductions that are gone.  Along with the fact that $2000 would buy a really nice car then and state taxes were a couple of hundred dollars  (in Iowa) and now they are thousands.

 

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Advisor

Re: Higher taxes, lower incentive

You say "state taxes were a couple of hundred dollars  (in Iowa) and now they are thousands."

 

???????

 

They'd seriously be alot more if you made exactly the same number of dollars? Your state income tax rates have gone up that much in the last 50 years to change the tax on a given net income (you pick the number) from a couple of hundred to "thousands" on the same income? Seriously? Or do you have other state taxes that you are adding in there besides income tax? If you have a sales tax it doesn't all go to the state does it?

 

I swear, I'll believe me if you show me.

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Senior Contributor

Re: lest you forgot

the and  actual average tax rate for a working american is now at 51% please dont distort the facts---gov should be cut down to 10% and if that dont starve it to death cut it some more

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Senior Contributor

Re: just ask mich.ill or new york

all have raised taxes and lost citizens and income --now libs WHY IS THIS--go to downtown detroit and see what you think of dumocrat taxes and rule

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Senior Contributor

Re: Higher taxes, lower incentive

The government is the driving force for inflation.  Please be honest and admit that the $2300 car I bought in 1964 costs 10 times that amount today.  So even though my income hasn't kept pace taxes certainly have.  At the time of that purchase there was NO sales tax on the vehicle, today it's 5%.  At that time sales taxes were 1%, today they are 70 times that amount in real terms.

 

I had more money in 1964 to spend in real terms than I do today.