Hacker News new | ask | show | jobs
by ekianjo 1314 days ago
Taxes have never been as high as now in recent history. You dont have to worry about them going away.
3 comments

In the US, the highest marginal tax rate for individuals was 70% as recently as 1981. It was 92% in 1952.

Today it's 37%. So it's really the other way around — taxes have never been as low as now in recent history.

That is US federal taxes. Now go grab your check and see how much you are paying in taxes that are not called that. Then remember you also pay taxes when you buy things too. Also remember your must carry insurance (3 of those). Also in some cases just for owning something. Plus state and local. My theory is We did not really lower taxes that much. We just itemized the bill to make it look smaller.
[flagged]
Yes, it is tiring when someone posts something with absolutely no evidence is taken at face value as truth. But when someone offers evidence to the contrary, it gets argued to death. "What are taxes?" "Insurance is a type of tax." "Sales tax counts now."

None of these people are making the same arguments to the poster who offered nothing but a claim. Because "of course it's true, everyone knows it". Well, everyone is quite capable of being wrong. As those self-same people will happily tell us when it's time to enact some very mild preventative measures for the health and safety of the country that the vast majority of health professionals recommend.

22 + 12 + 3 + 5 + 10 + 7 Those are my percentages of 'tax/insurance'. Which contains must carry insurance and called by the supreme court as a tax as argued by the DoJ. Three of them contain 'hidden' taxes or as your boss's accountant puts it, 'your total compensation'. That is about ~60% of my incoming going towards 'taxes'. That is just for me where I live and my income level. I also am leaving out some others. In some states that number is more along the lines of 70-75% of your total income. We also play games with the Laffer curve so it is harder for anyone to really know what is going on.

My argument is we itemized the bill. All of the individual items look lower. Because we broke them out. The whole number is about the same. I would argue that some are too low for our spend rate but that is a different argument.

In 1952, there were so many carveouts and exemptions that few individuals payed the actual 92%. With fastidious accounting, one's personal tax liability could be zero even if one qualified for the highest income bracket. This was the case until 1970 following Congress's invention and institution of the Alternative Minimum Tax. And while 1981 wasn't the most friendly year for low income taxes, increased globalization meant easier opportunities to set up overseas tax structures for the purpose of reducing one's overall tax burden (what's commonly referred to as tax "avoidance"). To make the claim of highest or lowest tax year for the highest income bracket between 1913 and today is impossible to make without accounting for reductions available in the given year.
It's really tricky to compare marginal rates like that. Has the definition of taxable income changed over time? How many people were actually taxed at those marginal rates? And so on.
You didn't bother to interrogate the other poster on these aspects. Why is it only tricky when looking at the evidence against the claim?
It would be tricky whatever the claim
What about tax for a median citizen?
I don’t know. It’s pretty difficult to compare when the median citizen’s circumstances have also changed so much.

But in the context of reality’s absurdity reaching escape velocity from parody, it seems fitting that the rich barely pay taxes anymore and are seeking immortality cures like Thiel does. Death and taxes are the postmodern libertarian’s greatest enemies.

Taking extremes is a strawman. What matters is what most people pay.
"Average federal tax rates for all households, by comprehensive household income quintile. 1979 to 2018" at https://www.taxpolicycenter.org/statistics/historical-averag...

"Average Total Federal Tax Rate (percent)" is lower for every percentile from 1979 to 2018.

  Year                     1979  2018
  Lowest Quintile           9.3   0.0
  Second Quintile          15.0   8.1
  Middle Quintile          19.1  12.8
  Fourth Quintile          21.7  16.7
  Highest Quintile         27.1  24.4
  All Quintiles            22.4  19.3
  81st - 90th  Percentiles 23.6  20.0
  91st - 95th Percentiles  25.2  21.9
  96th - 99th Percentiles  27.1  24.2
  Top 1%                   35.1  30.2
So is "Average Individual Income Tax Rate (percent)"

  Year                     1979  2018
  Lowest Quintile          -0.2 -12.0
  Second Quintile           4.1  -2.1
  Middle Quintile           7.4   2.2
  Fourth Quintile          10.1   5.9
  Highest Quintile         15.9  15.4
  All Quintiles            11.1   9.4
  81st - 90th  Percentiles 12.3   9.0
  91st - 95th Percentiles  14.1  11.4
  96th - 99th Percentiles  16.8  15.5
  Top 1%                   22.6  23.5
That makes it really hard to accept your claim that "Taxes have never been as high as now in recent history."

Now, sure, there are state taxes, and sales taxes, and payroll taxes, and all sorts of other taxes.

Still, where do you get the numbers to back your statement that after 40+ years of Reaganism and unending legislative attempts to lower taxes, that the numbers now are higher than ever before?

In case anyone was curious, United States federal tax receipts were $463 billion in FY1979 and $3.33 trillion in FY2018, a growth of a factor of ~7.2 = ~5.2%/year. The population has grown by a factor of ~1.44 = ~0.95%/year and the effect of inflation has been a factor of ~3.63 = ~3.36%/year, which multiply together to a factor of ~5.2 = ~4.33%/year. The receipts grew faster by a factor of ~1.38 = 0.82%/year.

This calculation does not consider the growth of expenditures specifically (as opposed to receipts) and similarly does not consider the growth of GDP (as opposed to inflation).

Likewise it makes the false assumption that taxes are collected in the same year that income is received. Beginning in the 1980s, many billions of dollars that were subject to tax ended up in IRAs and 401k retirement plans where taxes are deferred for many decades in most cases. Likewise, like kind exchanges of property also defer huge amounts of taxes. So looking at annual tax receipts omits a huge amount of taxed-but-deferred income.
>This calculation does not consider the growth of expenditures

edit: was meant as reply to a different comment

Where is the data to back the claim "Taxes have never been as high as now in recent history"?

My data is half-assed, certainly. Surely you should be more critical of someone presenting no data, yes?

> "Average federal tax rates for all households

Wait, so you only pay Federal taxes in the US? That's practical if you only cherry pick a part of the data.

If you read down to the end, I wrote "Now, sure, there are state taxes, and sales taxes, and payroll taxes, and all sorts of other taxes."

I used this to ask for source data for the claim.

I don't know if taxes are higher now vs some point in history (probably higher than some, lower than others) but your implicit claim that 'taxes' == 'US Federal Income Tax Rate' is so laughable I can't believe you can make it with a straight face. Not everyone is from the US, and the people from the US know that there are like 5 levels of taxation, from local sales tax to property tax to state income tax, state personal property tax, taxes relabeled as 'fees' to circumvent state rules about new tax creation, tariffs, payroll taxes, etc etc etc etc etc. Then there are taxes like social security, disability insurance, unemployment insurance, etc.

Even if all we look at is US federal income taxes, you don't include them all. Social security is a sum of 12.4% of your income (and it is regressive!). Medicare is 2.9%. These have gone up considerably since 1979 (8.1% total in 1979, 15.3% now)

"so laughable I can't believe you can make it with a straight face"

Which is why I didn't. I specifically pointed out that there are other taxes.

My point was to get ekianjo to present data to support their claim.

Do you have better data?

This reminds me of the guy who lost his keys. He was looking by the street light when his friend asked him if he lost his keys by the light. "No, I lost them over by my car, but it's too dark to see anything over there."

Here is a graph from wikipedia that shows that taxes in the US are in total about as high as they have ever been (which was 2000). https://upload.wikimedia.org/wikipedia/commons/7/72/Federal%... You can very clearly see that while Federal taxes are gradually decreasing, that is more than made up by Payroll taxes.

Not for companies or wealthy people.
Are you either?
Irrelevant
Nope, because most people are not companies nor wealthy either, so you don't make such an argument on the extremes. That's what is truly irrelevant.
At the time of this writing, 3 Americans own as much as the bottom half of all the Americans [1] .

https://inequality.org/facts/wealth-inequality/#richest-amer...

I don't know how you qualify that. I would qualify it as extreme. The fact that "most people are not companies" doesn't matter, what matters is where the wealth is.

If that just be true for every tax group we would be in a much fairer world with less issues...
No, that is insane.

If anything, sending arbitrary amounts of money to be spent on the interest to pay for the debt of corrupt and failed political ventures is not fair in any regard.

If taxes actually paid for government services, you might have a point, but they do not.