Its obvious why the Wall Street Journal defends the rich, and sociologists defend the poor for the income gap in America. Each of these points of view, the WSJ side saying the rich people deserve to keep the money they earned, inherited, or otherwise obtained (it doesn't matter how they got rich aka Donald Trump and his family of "characters"), and the "liberals" and sociologists suggesting the American economic system in the US is rigged to help the rich get richer, must be addressed to one day make America great.
America is not great and has never been great. If could be great. American values, perhaps the value expressed on the Sermon on the Mount, if achieved, could make America a great place, a great country. But tribalism, and greed keep America where every other country wallows, in a pit of self-serving beliefs and government.
Why do rich people, and the GOP / Conservatives constantly want to make the poor look like thieves as they get richer by the day?
"Tax Cuts & The Failure To Change The Economic Balance"
Written by Lance Roberts | Apr, 16, 2018
http://realinvestmentadvice.com/tax-cuts-the-failure-to-change-the-economic-balance/
"This week, Laura Saunders penned for the WSJ an analysis of “who pays what” under the U.S. progressive tax system. The data she used was from the Tax Policy center which divided about 175 million American households into five income tiers of roughly 65 million people each. This article was widely discussed on radio shows across the country as “clear evidence” recent tax reform was having a “huge effect” on average households and a clear step in “Making America Great Again.”"
Could Laura be any more Trumpian? We can acknowledge that there are different ways to slice the numbers, and agree with Laura in a manner of speaking, but Laura goes off the reservation when she tries to make taxes look favorable for the poor.
"See, the “rich” are clearly paying more.
Not really, percentages are very deceiving. If the total amount of revenue being collected is reduced, the purpose of a tax cut, the top 20% can pay LESS in actual dollars, but MORE in terms of percentage. For example:
Year 1: Top 20% pays $84 of $100 collected = 84%
Year 2: Top 20% pays $78 of $90 collected = 87% [Using percentages is magic!]
This is how “less” equals “more.”"
Laura and the Txx Center are a disingenuous lot I'd say, trying to calm the poor and hope they believe they are better off de to tax reform, as the income gap in America widens still again to benefit the rich.
By the way, the deficist are a Tax Reform "benefit" to the poor . . .
"While the “percentage or share” of the total will rise for the top 5%, the total amount of taxes estimated to be collected will fall by more than $1 Trillion for 2018. As Roberton Williams, an income-tax specialist with the Tax Policy Center, noted while the share of taxes paid by the top 5% will rise, the people in the top 5% were the largest beneficiaries of the overhaul’s tax cut, both in dollars and percentages.
Not surprisingly, as I noted previously, income taxes for the bottom 2-tiers of income earners, or roughly 77-million households, will have a negative income tax rate. Why? Because, despite the fact they pay ZERO in income taxes, Congress has chosen to funnel benefits for lower earners through the income tax rather than other channels such as federal programs [These "other" programs will be cut or eliminated.]. Since the recent tax legislation nearly doubled the standard deduction and expanded tax credits, it further lowered the share of income tax for people in those tiers."
"The 80/20 Rule
In order for tax cuts to truly be effective, given roughly 70% of the economy is driven by personal consumption, the amount of disposable incomes available to individuals must increase to expand consumption further.
Since more than 80% of income taxes are paid by the top 20%, the reality is tax cuts only have a limited impact on consumption for those individuals as they are already consuming at a level with which they are satisfied.
The real problem is the bottom 80% that pay 20% of the taxes. As I have detailed previously, the vast majority of Americans are living paycheck to paycheck. According to CNN, almost six out of every ten Americans do not have enough money saved to even cover a $500 emergency expense. That lack of savings can be directly attributed to the lack of income growth for those in the bottom 80% of income earners."
If the majority of people have limited ability to consume, our economy will not grow as needed to compensate for the huge deficits on the horizon.
"Summary
This issue of whether tax cuts lead to economic growth was examined in a 2014 study by William Gale and Andrew Samwick:
“The argument that income tax cuts raise growth is repeated so often that it is sometimes taken as gospel. However, theory, evidence, and simulation studies tell a different and more complicated story. Tax cuts offer the potential to raise economic growth by improving incentives to work, save, and invest. But they also create income effects that reduce the need to engage in productive economic activity, and they may subsidize old capital, which provides windfall gains to asset holders that undermine incentives for new activity.
In addition, tax cuts as a stand-alone policy (that is, not accompanied by spending cuts) will typically raise the federal budget deficit. The increase in the deficit will reduce national saving — and with it, the capital stock owned by Americans and future national income — and raise interest rates, which will negatively affect investment. The net effect of the tax cuts on growth is thus theoretically uncertain and depends on both the structure of the tax cut itself and the timing and structure of its financing.”
Again, the timing is not advantageous, the economic dynamics and the structure of the tax cuts are not self-supporting. As Dr. Lacy Hunt recently noted in his quarterly outlook:
“Considering the current public and private debt overhang, tax reductions are not likely to be as successful as the much larger tax cuts were for Presidents Ronald Reagan and George W. Bush. Gross federal debt now stands at 105.5% of GDP, compared with 31.7% and 57.0%, respectively, when the 1981 and 2002 tax laws were implemented.
However, if the household and corporate tax reductions and infrastructure tax credits proposed are not financed by other budget offsets, history suggests they will be met with little or no success.”
Since the current Administration has chosen to do the exact opposite by massively increasing spending, having no budget offsets, or slowing the rate of growth of either deficits or debts, the success of tax reform to boost economic growth is highly suspect.
Policymakers had the opportunity to pass true, pro-growth, tax reform and show they were serious about our nations fiscal future, they instead opted to continue enriching the top 1% at the expense of empowering the middle class.
The outcome will be very disappointing."
