The middle class now receives far more in government handouts than it pays in taxes.
This is very good news for Obama’s re-election prospects. A solid majority is now on the take from the government.
The only questions now are how long the top two quintiles will keep carrying the 60% slackers, and how quickly the truly rich will flee the country like Denise Rich.
The only questions now are how long the top two quintiles will keep carrying the 60% slackers,
More realistically, the question is how long foreign investors will continue to purchase US Treasury bonds.
Well, foreign investors don’t really have to purchase Treasuries as long as the Federal Reserve keeps monetizing the debt.
Help me understand the logic of this lady’s decision. The US has too high taxes for her to tolerate so she has moved to England. Are taxes lower in England?
Many taxes are higher in the U.S. than in other countries.
The U.S. has one of the highest corporate tax rates in the world, for example. And the U.S. is the only major country to tax its citizens’ income even when they don’t live or work in the country. And the estate tax is set to go to 55% next year.
I would be happy to see corporate taxes at zero. However, in the meantime, the rate is 35percent, indeed higher than many other countries. However, the effective rate after deductions, benefits, give backs, exemptions, etc are among the lowest in the world.
However the lady in question is not a corporation, she is an individual. Individuals in this country pay rather low taxes in comparison to most other nations.
She’s a billionaire, and much of her income is investment income.
Capital gains are taxed much higher in the U.S. than in other countries, especially if the Bush tax cuts expire and the ObamaCare surcharge kicks in.
Short term cap gains is taxed pretty much at the same rate as regular income.
Long term cap gains is taxed at 15 percent (which is why Gov Romney pays right at 15 percent)
Is 15 percent too much to pay? What rate sounds reasonable to you? Zero?
What is reasonable to me is not the question.
The question is what is enough of a differential to make the rich flee America. For Eduardo Saverin, Denise Rich, and thousands of other rich ex-Americans, we are past that point.
Many countries have zero capital gains tax. Others at least index it for inflation. The U.S. doesn’t, and the post-Obamacare capital gains and dividend tax rates will be among the highest in the world.
The estate tax was zero in 2010. Our effective coporate rates are low.
Steve
Irrelevant.
The estate tax is not zero going forward, and Denise Rich, Eduardo Saverin, and the thousands like them are more motivated by the U.S.’s unique “tax-you-everywhere-you-go” income tax and the capital gains, dividend, and new ObamaCare taxes than the effective corporate tax rate.
Yes, we average the corporate taxes for Solyndra, GE and WalMart, then the effective tax rate gets lower. What’s unclear, is if our “effective tax rate” is so low, when can’t we lower the max rate to the effective rate?
I’m pissed. I’m solidly in the middle quintile and I’m getting nuttin’!
Sigh. I hope that neither Mankiw or you are that stupid. We have had significant tax cuts during the time covered. We saw many unemployed receiving food stamps and UI.
The truly rich will not flee the country. They cannot find lower tax rates many other places. The upper income classes are the only ones seeing increases in income. If they have all of the money, they are going to pay the taxes. Find some way to equalize incomes if you want to equalize taxes.
Steve
If you’re receiving food stamps, you not in the middle quintile. You may or may not be if receiving UI depending on spousal income.
“The truly rich will not flee the country”
Eduardo Saverin, Denise Rich, and thousands of other rich ex-Americans beg to differ.
Did you actually read that article? Expats already living overseas are giving up their US citizenship so they dont have to pay taxes to both countries. This is not people leaving the US to avoid our taxes. Please read the articles you link.
Steve
Did you actually read the article?
1,780 last year up from 238 in 2008.
What has changed other than a new President who demonizes the rich and is radically jacking up tax rates on them, and Chuckie Schumer’s Nazi/Soviet-style exit tax?
Please read the articles I link.
I read the whole article. It says that people already living abroad are turning in their passports. It does not say people are moving to avoid taxes. Please read the articles you link.
Steve
P.S. The new socialist government in France is trying the same Obama playbook of taxing the rich. You might check out how that’s working out for them.
Steve,
Obviously, people who are going to give up their citizenship would first establish a physical and financial presence overseas.
You think that somehow negates the fact that rich people are fleeing Obama’s America?
I can’t believe you would even make such a vapid argument.
I can believe you would make such a claim when the article does not say what you claim. At any given time, we have millions of US citizens living abroad. The article you provided says that it has been motivated by the UBS decision. There is no mass exodus of rich people. You have a bunch of rich guys who have always gone to the Bahamas or someplace in the Caribbean where they have no income tax as tourists provide the taxes. By renouncing their US citizenship they avoid taxes. If you want to argue that Americans living abroad should not pay US taxes, make your argument, but you have not proved some mass exodus.
Steve
Now you’re arguing some absurd logic that tax enforcement causes the rich to leave but tax rates don’t? Mmmmkay.
I did not claim “mass exodus.”
I merely pointed out that some of the rich were likely to continue leaving. It should be fairly obvious that the more punitive the tax rate, the more rich people will look for alternative countries. Comprehending this, however, would require an ability to understand incentives, which is missing in many liberals. As I’ve said before, the defining characteristic of liberals is the inability to understand incentives.
You did, however, flatly state, “the truly rich will not flee the country,” which I think everyone will agree has been proven false. The rich are indeed leaving, and at a much higher rate under Obama than under Bush. If you choose to believe that tax rates are irrelevant and only the level of enforcement matters, please see the link about incentives again.
Nope. I said they had already left. I think they leave for multiple reasons, including avoiding taxes. I suspect that the estate tax is actually the primary one they want to avoid. They gave up their US citizenship to avoid paying taxes while they live in another country.
“The rich are indeed leaving, and at a much higher rate under Obama than under Bush.”
Then you should be able to prove it. What we know, from your article, is that people started dropping their citizenship after the UBS decision. We dont know if there was an increase in the number of people leaving to avoid taxes. We know there are lots of Americans living out of the country. We dont know why they all left.
Steve
“The rich are indeed leaving, and at a much higher rate under Obama than under Bush.”
Then you should be able to prove it.
Ummm… OK. link
That was easy.
The rich can move all their money to municipal bonds and pay 0 taxes. Would this really help the economy?
I was looking into the Hong Kong health system having been spurred into interest by JMK’s comments about it when I found an interesting chart (Table II) in this paper: http://harvardschoolofpublichealth.org/research/takemi/files/RP231.pdf . What is interesting is that, in Hong Kong, the bottom 7 deciles (i.e., 70 percent) of persons are net receivers of benefits over taxes paid.
I neglected to mention that this chart is specifically in regard to health care not overall benefits.