Render Unto Ceasar...

[_Droopy]

That's simply not true; payroll tax is regressive. The rate does not increase as income rises. It is a constant rate that is applied from the first dollar of income, up to $106,800. For every dollar earned after that, the rate is zero.

That's correct. I'm surprised that Droopy did not know this.

You're both right - and wrong:

For 2008 average effective payroll tax rates are estimated at 8.4 percent for the bottom fifth of income earners, and 10.4 percent for the next fifth, but only 5.7 percent for the top fifth. Households in the top 1 percent will pay an estimated average of only 1.5 percent of their income in payroll taxes.

This regressivity of payroll taxes stems from two factors. First, the Social Security portion of payroll taxes is subject to a cap: in 2008 individuals pay Social Security tax on only their first $102,000 in earnings. Second, higher-income households tend to receive more of their income from sources other than wages, such as capital gains and dividends, which are not subject to the payroll tax.

http://www.taxpolicycenter.org/briefing ... -taxes.cfm

So there is some progressivity, but it peaks in the middle and then slides back down again, but not because there is a base rate that suddenly decreases. Medicare taxes are capped at a certain point and higher income earners receive income from other sources (such as capital gains, dividends etc, which are taxed in a very progressive manner).

But the whole regressivity argument is a bit disingenuous, in any case. An exemption can be made, as in the Forbes flat tax (or under Reagan, when about 12 million low earners (including myself) were simply removed from the federal tax rolls entirely) for especially low earners. In the most notable of flat tax plans, that of Steve Forbes, no income taxes are paid at all until one exceeds $36,000 in income. Now, that's well into the middle class, and hardly poor. The regressivity problem is easily solved in this way. I don't believe anyone supported a flat tax on the conservative side has ever promoted a flat tax that would kick in at minimum wage (I don't have a problem with the poor, and especially those who are not producing at any given time, contributing something to the safety net, but that's another story).

The whole idea, again, is which kind of tax system - which trade-off among all possible forms - is the closest fit according to gospel principles. Not a perfect fit, but the best that could be conceived within a pluralistic society seeking the best practical application of economic principles while, at the same time, being serious about the moral implications of both the form and rate of taxation. Flowing from this is also serious concern about how and for what purposes taxes are used by the state, and the effects this has on the larger society.

[_Droopy]

The top 1% 36.73% of all income tax

The top 5% pays 58.66%

The top 10% 70.47%

The top 25% pays 87.30%

The top 50% 97.75%

These statistics don't contradict what I said about income taxes (typically) being progressive, depending upon how much you make in capital gains

.

They're not meant to contradict taxes being progressive, but to drive home the fact.

[_just me]

Oh, hi Droopy! Long time no see...

[_moksha]

A truly benevolent theocratically ruled society seems like a way to achieve fairness while holding corruption at bay.

Just don't call it the Magisterium.

[_Analytics]

That's simply not true; payroll tax is regressive. The rate does not increase as income rises. It is a constant rate that is applied from the first dollar of income, up to $106,800. For every dollar earned after that, the rate is zero.

You're both right - and wrong:

For 2008 average effective payroll tax rates are estimated at 8.4 percent for the bottom fifth of income earners, and 10.4 percent for the next fifth, but only 5.7 percent for the top fifth. Households in the top 1 percent will pay an estimated average of only 1.5 percent of their income in payroll taxes.

This regressivity of payroll taxes stems from two factors. First, the Social Security portion of payroll taxes is subject to a cap: in 2008 individuals pay Social Security tax on only their first $102,000 in earnings. Second, higher-income households tend to receive more of their income from sources other than wages, such as capital gains and dividends, which are not subject to the payroll tax.

http://www.taxpolicycenter.org/briefing ... -taxes.cfm

So there is some progressivity, but it peaks in the middle and then slides back down again, but not because there is a base rate that suddenly decreases.

The progressivity this site is talking about is in regards to “effective” payroll tax, which is defined as total payroll taxes paid, divided by total income received, including income from transfers. So if somebody receives a high percentage of their income from something like Social Security checks or earned-income tax credits, then their “effective” payroll tax rate is lower.

You are simply dead-wrong about why payroll taxes are regressive. They are regressive because you pay a flat rate from the first dollar of earned income up to a max (which was $106,800 in 2011), and then pay zero on every dollar of earned income after that. There is in fact a base rate that suddenly decreases to zero. From the Social Security Administration’s website that I linked above:

Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit changes each year with changes in the national average wage index. We call this annual limit the contribution and benefit base. For earnings in 2012, this base is $110,100.

The OASDI tax rate for wages paid in 2012 is set by statute at 6.2 percent for employees and employers, each. Thus, an individual with wages equal to or larger than $110,100 would contribute $6,826.20 to the OASDI program in 2012, and his or her employer would contribute the same amount.

http://www.ssa.gov/oact/COLA/cbb.html#Series

Do you really think the Social Security Administration is wrong about this?

[_subgenius]

Jesus' words here, in other words, are a teaching about civil society and the requirements of the law regarding the relationship of the Christian to the state, not about economics. Saints need not agree with, and may oppose strenuous the policies of the governments in which they live, but can only do so within the boundaries of gospel principle as related to the circumstances as they may be.

I must disagree. Jesus is clearly making the glaring distinction that "money" and "property" are not Gospel Principles at all. He has on other questions challenged the natural man to discard that material things of this world as a means to illustrate what the Gospel is.
If anything He is actually proclaiming the NON-relationship between church and state. In fact this episode is a common example to justify their separation - of which i agree.

The handling of and relationship to money and property are profoundly moral questions, and even more so for the state as the state is the entity that holds a monopoly on the use of coercive force.

huh? there is no morality with money, only actions. No matter what amount you may or may not have because of the government, your actions are what constitute morality. A government tax rate of 5% is not more correct, morally, than a rate of 15%.
There is no Gospel Principle that mandates "more" money....but there are plenty of examples where money is asked to leave the room, because it has no place at the Gospel table.

The tithe is, in essence, a voluntary flat tax, in which each pays according to his ability and resources.

actually, in essence, it is anything but a flat tax....perhaps you are confusing its application...at which case i would re-state my assertion that the law of tithing is being grossly misunderstood.
There is never anything "voluntary" about a tax....it is a rather compulsory event.

1. The eighth and tenth commandments.

i disagree, this is a big stretch to apply to a tax system.

2. D&C 121:39

in context, an even bigger stretch

3. D&C 134:1
1 We believe that governments were instituted of God for the benefit of man; and that he holds men accountable for their acts in relation to them, both in making laws and administering them, for the good and safety of society.

maybe, but too arguable and abstracted in application - so far nothing has been as emphatic as you proposed
i see no relation to taxes here. You are proposing a Gospel principle with regards to money - yet we see time and time again that the Gospel denies money.

4. D&C 134:2

clearly "the right and control of property" is being attributed to Government and not to the Gospel.

We believe in being honest, true, chaste, benevolent, virtuous, and in doing good to all men; indeed, we may say that we follow the admonition of Paul—We believe all things, we hope all things, we have endured many things, and hope to be able to endure all things. If there is anything virtuous, lovely, or of good report or praiseworthy, we seek after these things.

i see nothing here that is even remotely applicable to taxes. apples and oranges. natural vs spiritual, etc..

[_Analytics]

The top 1% 36.73% of all income tax

The top 5% pays 58.66%

The top 10% 70.47%

The top 25% pays 87.30%

The top 50% 97.75%

They're not meant to contradict taxes being progressive, but to drive home the fact.

They shed no light on the matter whatsoever and are pure propaganda meant to confuse and deceive. Not only do these numbers confuse the big picture by ignoring other major taxes which are highly regressive (e.g. federal excise tax, payroll tax, and sales tax), they don’t even shed any light on whether or not income tax taxes are progressive. For example, if the top 1% of earners make 37% of the income, the assertion that they pay 36.73% of the income taxes would indicate that federal income taxes are regressive.

[_Droopy]

The progressivity this site is talking about is in regards to “effective” payroll tax, which is defined as total payroll taxes paid, divided by total income received, including income from transfers. So if somebody receives a high percentage of their income from something like Social Security checks or earned-income tax credits, then their “effective” payroll tax rate is lower.

That's fundamentally how I took the explanation above to be related to the slight progressivity built into the payroll tax, but that at the higher level, it flattens out and decreases because of transfer payments, which are taxed according to different rules.

You are simply dead-wrong about why payroll taxes are regressive.

OK, I was looking at what I knew as a basic proposition, which was that there was some progressivity built in to the payroll tax. So I suppose I should thank you for pointing out that their are some dynamics that modify that progressive trend. This is fine. My primary concern, over the years, in any case, has not been the payroll tax (which is just another form, or subset, of the income tax) but the high, progressive nature of income, capital gains, dividend, and other purely gratuitous taxes such as the estate tax (as well as ugly gimmicks such as the marriage penalty and the AMT) that punish and discourage savings, investment, entrepreneurship, and wealth creation (work, in other words, the ultimate answer to poverty).

As I think I indicated above, the regressivity argument can easily be overcome (as the Forbes plan does by not triggering the flat tax until well into middle class income levels) and, as a matter of principle, has to be looked at at a deeper level than simply a knee-jerk, trope-like emotional response when it appears that "the poor" will pay a greater share of their income in some sense than "the rich."

Any policies of this kind are, as most other policy choices we face, trade-offs, not solutions or perfect answers. A flat tax would be far fairer, over all (because, by definition, it emiminates the progressivity in the overall tax system in which the rate of tax one pays increases as income increases) as well as being far more economically rational, ie., it would incentivize work, savings, investment, economic risk taking (entrepreneurship), and productive economic behavior to a much greater extent than the progressive system (especially in the all important area of investment - dividend and capital gains taxes), which punishes such behavior as that behavior increases wealth generation.

The poor and middle classes need lower taxes, to be sure, but low taxes in and of themselves are a means, not and end. The idea here is to unleash the productive capacities and interests of a people and to stimulate economic growth (the only real "stimulus" there ever was or ever will be) and widen economic opportunity. Over the long haul, the poor benefit in numerous ways in the form of increased job creation, rising wages, low inflation, and the general rise in prosperity and living standards across the entire society.

A flat tax is fair because it is flat. It could be regressive, depending upon where the flat rate is set, but the problem I see with this argument is that, no matter where it is set, the truely poor will always be paying more for what they buy, or as a portion of total tax burden, as a percentage of income, then more affluent people. A candy bar costs a poor person more, as a percentage of total income, than it costs Mitt Romney.

The regressivity argument, then, appears to be really nothing more than a way to morally dismiss the flat tax without taking a much more detailed view of its effects over the long term and at a more complex level of analysis in favor of the steep, punitive rates favored by leftists and Marxists, the primary purpose of which is to equalize income through coercive force and maintain the core concept of leftist economic doctrine, the redistribution of wealth.

This is why this is gospel relevant, and why the position one takes and undrestanding one has of it involves moral and spiritual dynamics that cannot be gainsaid, especially as one think about how one would govern something, say a UO community, upon what principles and criteria.

[_Droopy]

The top 1% 36.73% of all income tax

The top 5% pays 58.66%

The top 10% 70.47%

The top 25% pays 87.30%

The top 50% 97.75%

They're not meant to contradict taxes being progressive, but to drive home the fact.

They shed no light on the matter whatsoever and are pure propaganda meant to confuse and deceive.

Empirical facts are deceptive? Interesting.

Not only do these numbers confuse the big picture by ignoring other major taxes which are highly regressive (e.g. federal excise tax, payroll tax, and sales tax), they don’t even shed any light on whether or not income tax taxes are progressive.

Well, if we're talking about the higher income brackets, a great amount of this is not payroll tax but income, dividend, capital gains, estate, unemployment, employer contributions to medical coverage programs, and other layered taxes that apply to anyone who is self employed, runs a small business (many small business owners file as individuals) or otherwise works for themselves (is not an employee recieveing a wage or salery).

For example, if the top 1% of earners make 37% of the income, the assertion that they pay 36.73% of the income taxes would indicate that federal income taxes are regressive.

That's very odd, Analytics, because it would indicate to me that a tiny, tiny fraction of wealth creators are contributing well over a third of all income taxes paid in America by its citizens. The above statistics are looking at a specific quintile, and hence, an aggregate class, and looking that the percentage that aggregate pays as a percentage of all taxes paid. It doesn't matter what total percentage of income this quintile makes as compared to the taxes it pays becaue income isn't made by collectives, but by individuals. All those individuals, collectively, pay 37% of all income taxes paid. That's the reality. If this top 1% made 50% of all income earned, the rate at which they pay taxes relative to the other quintiles would still mean an absolute and steep progressivity in the marginal rates at which the individuals in this qunitile actaully pay tax.

You also somehow, in your analysis above, missed a very obvious aspect of the overall economic dynamics involved, when you say that "if the top 1% of earners make 37% of the income..." Let's rephrase that as, "If the top 1% of earners generate 37% of all wealth generated in the economy..." this creates a different impression for any reader, because it implies the actual effects of that wealth creation and its processes across the greater economy. It also implies the meaning and function of the entrepreneur in an economically free society, something that lefists do not wish to discuss at any length becacuse it demolishes the pseudo-moral high ground from which they preach their gospel.

[_Buffalo]