Tax Parity

Felix Salmon questions the journalistic integrity of a NYTimes Editorial, stating it to be mainly based upon one partisan report (not yet statistically challenged). I will only say that the EPI, while liberal, feeds in the numbers carefully, knowing they will be eventually reviewed by the Right. Felix, though, moves on to ask where the Consumption is coming from, if the weakness in Consumption has been showing in the Middle Class. Here the Answer might be the increase in Immigration and Immigration wealth. Today’s Immigrants do not drive the junker cars of old, opting out for easy purchase contracts for new vehicles with low monthly Payments which extend forever. The same can be said for the rest of the Consumer Credit Market. The real element of the new Immigration comes in the form of their protection by the Consumer Credit extenders, who fear their return to their homelands.

Dean Baker makes an excellent Case for cutting the Wages of high-end Incomes. The real humor in the analysis lay in the fact such equalization of Incomes is easily achievable if the Income Tax system were actually Progressive. Economists do not discuss the Wage suppression process of truly progressive tax systems. Case In Point: Say there is an Income tax which demands a 30% tax on all Incomes between $50k-100k. Not much incentive to suppress Wage demands. Add a statement that Incomes over $100k will pay a tax rate of 50%. How many want to earn $120 per year?

Another Case may be more illustrative: Pass a Tax law which states that real percentage tax rates must be equal across Taxpayers. Some might say it does not matter, as lower Incomes pay nothing more than Social Security taxes. Wrong!! They pay a variety of State Property and Sales taxes and Imposts, plus Most must pay for other services like Car Insurance. Could this extended imposition by Government be included? Middle Class Taxpayers would demand that their losses from Government extortions be accounted in full. The real percentage tax rate has suddenly ballooned into a real nuisance for the high-end Taxpayers. Middle Class Taxpayers are suddenly standing with Shotguns, to officiate the Wedding of real percentage Tax rates to upper-end Income Taxpayers. The Wedding is also beneficial in removal of Deficit from the Federal budget, raises the actual Buying power of lower Incomes, and actually slows the extension of bad loans to bad Credit risks as mentioned in the first Paragraph. lgl