Bar stool economics

[Cato]

Heywood,
I don't think you're giving enough consideration to some of the criticism. Take for instance the obvious criticism that the bar stool economics lesson only takes into account income tax rates.

Income taxes make up about 41% of total tax revenue. Excise, payroll, and corporate income taxes are embedded in the price of all goods and services and are paid by everyone. The fact that this was ignored in an attempt to portray the bottom 40% of wage earners as getting a free ride with no tax liability is simply disingenuous.

[Heywood]

Also, the economist said most of these rich people don't pay any taxes at all. So the really poor people and the rich guy would pay nothing if we use the bar example.

The economist's claim that most rich people don't pay any taxes at all is false(if he indeed claim it....i don't remember). A little research indicates that rich people pay the lion-share of all taxes.

---

Heywood,
I don't think you're giving enough consideration to some of the criticism. Take for instance the obvious criticism that the bar stool economics lesson only takes into account income tax rates.

Income taxes make up about 41% of total tax revenue. Excise, payroll, and corporate income taxes are embedded in the price of all goods and services and are paid by everyone. The fact that this was ignored in an attempt to portray the bottom 40% of wage earners as getting a free ride with no tax liability is simply disingenuous.

You can't have it both ways Cato. You can't claim the poor and middle class bear the cost of taxes that are embedded in the price of all goods and services paid by everyone....then claim that a cut in those taxes only benefits the rich.

For what its worth....I would be perfectly content with the bottom third....maybe even the bottom half not paying any tax at all.

[Cato]

You can't have it both ways Cato. You can't claim the poor and middle class bear the cost of taxes that are embedded in the price of all goods and services paid by everyone....then claim that a cut in those taxes only benefits the rich.

I made no such claim.

[Surgenator]

Also, the economist said most of these rich people don't pay any taxes at all. So the really poor people and the rich guy would pay nothing if we use the bar example.

The economist's claim that most rich people don't pay any taxes at all is false(if he indeed claim it....i don't remember). A little research indicates that rich people pay the lion-share of all taxes.

First, you should post your source.

Second, I was mistaken. The economist didn't say that. It came from a friend of mine who I was talked with. I got the two conversations mixed together.

My friends point is that the super rich get access to deductions that ordinary people do not. This lowers their effective tax rate be lower than the ordinary people. Also, the rich and corporations get subsidies, tax deductions, and obtain off shore accounts that can lead to an effective tax rate of 0.

http://www.huffingtonpost.com/bill-quigl...89188.html
http://www.bankrate.com/finance/taxes/ta...ich-3.aspx
http://www.huffingtonpost.com/2013/04/29...79139.html
http://www.usatoday.com/story/money/busi...s/2480281/

[Heywood]

The economist's claim that most rich people don't pay any taxes at all is false(if he indeed claim it....i don't remember). A little research indicates that rich people pay the lion-share of all taxes.

First, you should post your source.

Second, I was mistaken. The economist didn't say that. It came from a friend of mine who I was talked with. I got the two conversations mixed together.

My friends point is that the super rich get access to deductions that ordinary people do not. This lowers their effective tax rate be lower than the ordinary people. Also, the rich and corporations get subsidies, tax deductions, and obtain off shore accounts that can lead to an effective tax rate of 0.

http://www.huffingtonpost.com/bill-quigl...89188.html
http://www.bankrate.com/finance/taxes/ta...ich-3.aspx
http://www.huffingtonpost.com/2013/04/29...79139.html
http://www.usatoday.com/story/money/busi...s/2480281/

Yes...some corporations and some rich people don't pay taxes....nevertheless the lion share of tax revenue the government collects comes from corporations and rich people. Subsidies and targeted tax breaks should be eliminated. The tax system should be simple and straight forward....earn this much money...pay this much tax.

[Surgenator]

First, you should post your source.

Second, I was mistaken. The economist didn't say that. It came from a friend of mine who I was talked with. I got the two conversations mixed together.

My friends point is that the super rich get access to deductions that ordinary people do not. This lowers their effective tax rate be lower than the ordinary people. Also, the rich and corporations get subsidies, tax deductions, and obtain off shore accounts that can lead to an effective tax rate of 0.

http://www.huffingtonpost.com/bill-quigl...89188.html
http://www.bankrate.com/finance/taxes/ta...ich-3.aspx
http://www.huffingtonpost.com/2013/04/29...79139.html
http://www.usatoday.com/story/money/busi...s/2480281/

Yes...some corporations and some rich people don't pay taxes....nevertheless the lion share of tax revenue the government collects comes from corporations and rich people. Subsidies and targeted tax breaks should be eliminated. The tax system should be simple and straight forward....earn this much money...pay this much tax.

So the the rich pay a large portion of the tax revenue recieved by the government. What is you point? They also get the most profit, and they should pay the most.

[Heywood]

Yes...some corporations and some rich people don't pay taxes....nevertheless the lion share of tax revenue the government collects comes from corporations and rich people. Subsidies and targeted tax breaks should be eliminated. The tax system should be simple and straight forward....earn this much money...pay this much tax.

So the the rich pay a large portion of the tax revenue recieved by the government. What is you point? They also get the most profit, and they should pay the most.

The conclusion of the Bar Stool economics argument is that because the rich pay the lion share of taxes.....when there is a tax cut....it will be the rich who benefit the most. This is an artifact of the system and not because tax cuts are targeted at the rich.

Consider this argument:

Premise 1: People who pay more in taxes benefit more when taxes are cut.
Premise 2: Rich people pay more in taxes than poor people.
Conclusion: Tax cuts will benefit rich people more than they will benefit the poor people.

[Surgenator]

So the the rich pay a large portion of the tax revenue recieved by the government. What is you point? They also get the most profit, and they should pay the most.

The conclusion of the Bar Stool economics argument is that because the rich pay the lion share of taxes.....when there is a tax cut....it will be the rich who benefit the most. This is an artifact of the system and not because tax cuts are targeted at the rich.

Consider this argument:

Premise 1: People who pay more in taxes benefit more when taxes are cut.
Premise 2: Rich people pay more in taxes than poor people.
Conclusion: Tax cuts will benefit rich people more than they will benefit the poor people.

Here is a more indepth explanation why this bar stool economics is a piece of crap.

The main conclusion about the percentages saves comes from applying a flat tax cut to a non-flat tax rates. To keep things fair, you should not apply a flat tax cut but a marginal one that matches the current system.

[Cato]

The conclusion of the Bar Stool economics argument is that because the rich pay the lion share of taxes.....when there is a tax cut....it will be the rich who benefit the most. This is an artifact of the system and not because tax cuts are targeted at the rich.

You keep pounding away at this even though the flaws in the simpleton's barstool economics have been exposed. To recap:
- The video uses scheduled tax rates, not actual tax rates.
- Based on income tax only.

You conveniently ignored me when I pointed out that you were arguing an assertion I never made.

[Brian37]

First, you should post your source.

Second, I was mistaken. The economist didn't say that. It came from a friend of mine who I was talked with. I got the two conversations mixed together.

My friends point is that the super rich get access to deductions that ordinary people do not. This lowers their effective tax rate be lower than the ordinary people. Also, the rich and corporations get subsidies, tax deductions, and obtain off shore accounts that can lead to an effective tax rate of 0.

http://www.huffingtonpost.com/bill-quigl...89188.html
http://www.bankrate.com/finance/taxes/ta...ich-3.aspx
http://www.huffingtonpost.com/2013/04/29...79139.html
http://www.usatoday.com/story/money/busi...s/2480281/

Yes...some corporations and some rich people don't pay taxes....nevertheless the lion share of tax revenue the government collects comes from corporations and rich people. Subsidies and targeted tax breaks should be eliminated. The tax system should be simple and straight forward....earn this much money...pay this much tax.

Oh no, this is not the only thing that needs to be done. Citizens United needs to be overturned. Our government needs to get back to enforcing our anti monopoly laws. Our trade policies need to less lopsided. And our market needs to get back to being the demand of worker and not the competition casino Wall Street as become.

You think this small admission will throw us a bone? There is more to it than just his.