On Wed, 26 Jul 2000, Barry Rene DeCicco wrote:
> I'm saying this because the thread seems to have
> degenerated into a pissing contest, and is shedding far more heat than
> light (and at least in the northern hemisphere, it's summer, and
> we've got all of the heat and light that we need).
Hey no contest here, I think Max is swell and his work on tax policy is a wonderful advancement for progressives. We just disagree on how much credit the 1993 tax bill should get for the increased revenue coming into the treasury.
Here are some basic numbers that Max and I would not disagree on:
Since 1993, total income tax revenues have gone from about $500 to $980 billion per year.
Part of the increase in total revenue is due to overall increases in personal income due to the expanding income
The top 1% of taxpayers pay roughly 30% of those income taxes, or roughly $300 billion per year.
The 1993 tax bill increased the top rate on them from 31% to 41%
Where we disagree is how to interpret the relationship between the last number and the first two, especially in the context of a booming economy that has delivered much of the income benefits to the wealthiest Americans.
Since the rates on the wealthy would be roughly 25% less without the 1993 tax bill, my position is that the top 1% would be paying roughly $60-75 billion less per year without the 1993 bill. That seems like a strong contribution to the surplus.
Max seems to argue that since the growing economy increased the taxes of the wealthy by increasing their income, the 1993 bill shouldn't be credited for those increases.
My response is that I would only credit the 1993 bill for the increases that have been paid because of the 1993 tax bill - namely the $60-75 billion per year I estimated.
BTW we both agree that the media concentration on capital gains' contribution is overrated, since capital gains makes up such a small portion of total government revenues- something like 5% of all federal receipts.
-- Nathan Newman