So, if we break your argument into its component parts, we see that the increasing GINI Index — which is a bad thing, by the way — is, according to you, independent of the tax rate, the rate I quoted you is still wildly higher than regular people pay, and as long as there are 41 Eemocrats, we don’t have to worry about entitlements cuts. That, in a nutshell, is your counter argument.
Incorrect. My counter argument is as follows:
- There is no evidence that the new tax plan will exacerbate the GINI ratio. And a statistical analysis shows that since the mid-60’s, there has been no correlation between tax rates and income inequality.
- There is no risk of substantial entitlement cuts because anyone who tries to cut them will be tossed out on their ears by the voters. The voters are the stopgap, not the makeup of Congress.
Curiously, if you followed that chart backward in time, we’d see that the GINI Index was decreasing until that 1967, when it began its escalating increase.
Yes, I’m aware of that. 1965, I believe was the bottom, not 1967, but no reason to quibble.
Point is that statistically, BY THE MATH, income inequality is not correlated to tax policy. You can argue, if you appear willing to do, that if one goes back to the ages prior to globalization and automation, that some sort of correlation will appear. Perhaps, but the larger question on the table would then be how sane it would be to go back 80 years simply to create a correlation that no longer exists today.
A 20% base rate for pass-through LLCs will allow me to pay substantially less than the average taxpayer. But you are welcome to do the math.
If your contention is is that an LLC marginal rate of 20% will land you an effective rate of under 12%, I’ll take your word for it. I’ve never modeled an LLC and have no real interest in learning all those rules. But I quite agree, if there’s a loophole in there that allows a private business owner to do a simple restructuring that can drive their effective rate down 20 points, that’s a bug, not a feature. I always agreed with Mr. Buffett that he shouldn’t pay a lower rate than his secretary; the problem was always how to fix that without causing a problem elsewhere in the economy.
The deficit is engineered in order to provide a convenient excuse for slashing entitlements — always the entire point.
No risk of that.
So, we can see all three of your arguments have some issues.
Nothing serious. Again, it is unscientific to go back too far into the past. You’re the one desperately digging for evidence to support your views, not I.
Your defense of the rate cuts for pass-through companies had to use erroneous data in order to seem relevant.
The data, of course, was not erroneous, and I agreed with you above that if your analysis of the LLC situation is correct, then that’s not a good thing.
But sadly, the effective rate is not the base rate, so you wasted all that typing to prove no point.
Laughs at you. People alter their behavior based on what they pay, not the marginal rate.
As always, Ron, you disparage math and logic to suit your political views.
The intent is to use the resulting deficit as cover for slashing the safety net.
If you say so. But I would advise you to seek medical intervention for your paranoia. If they ever tried to SLASH stuff, myself and all the conservatives who understand the theory of the civil society would jump ship. Even the Tea Party people wanted the entitlements left alone, just reformed so they;d be there forever.
And the decrease in entitlement spending means, necessarily, more money coming out of the pockets of more lower and working class folks, decreasing the descretionary income of this sector, decreasing demand, and weakening the labor market, making sure those same workers don’t get raises.
None of which has happened or will happen.
It’s just shocking to me that you can’t follow the fairly straight line from tax cuts for the rich leading to budget deficits that are used as pretext for cutting spending, typically on helping poor people, which are the sole demographic without any real representation in Washington.
Uh……you’re claiming there’s a causality between low tax rates and deficits to the inflation of major items? :-) (Spits coffee)
Ron, you ever do any math that’s not counting on your fingers? Here’s a challenge for you. Look the federal deficit, and tell me what percentage the “rich” (however you choose to define them) would have to pay to close that gap, which today is running at about 500B a year.
Keep in mind that a percentage can’t be over 100%. :-)