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Author Topic: Fiscal Responsibility Bill [On President's Desk]  (Read 9534 times)
Marokai Backbeat
Marokai Blue
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« on: November 25, 2009, 11:09:46 pm »

Quote
Fiscal Responsibility Act

Realizing that our rising budget deficit can not be left unattended indefinitely, the fundamental unfairness of our outdated income tax rates, and that we must make efforts to become more fiscally responsible, the Senate hereby authorizes the following comprehensive changes to our income tax system:

1. The following income tax brackets shall replace existing brackets for income gained in 2010 and thereafter, increasing as normal with inflation:

Single Individual

1%$0 - $8,025
14%$8,026 - $32,550
25%$32,551 - $78,850
28%$78,851 - $164,550
35%$164,551 - $367,700
41%$367,701 - $1,000,000
50%$1,000,001+

Married Filing Jointly

1%$0 - $16,050
14%$16,051 - $65,100
25%$65,101 - $131,450
28%$131,451 - $200,300
35%$200,301 - $367,700
41%$367,701 - $1,000,000
50%$1,000,001+

Married Filing Separately

1%$0 - $8,025
14%$8,026 - $32,550
25%$32,551 - $65,725
28%$65,726 - $100,150
35%$100,151 - $188,850
41%$188,851 - $500,000
50%$500,001+

Head of Household

1%$0 - $11,450
14%$11,451 - $43,650
25%$43,651 - $112,650
28%$112,651 - $182,400
35%$182,401 - $367,700
41%$367,701 - $1,000,000
50%$1,000,001+

2. The standard income tax deduction shall be raised from $5,700 to $7,000, to better care for lower income individuals and the working class of Atlasia.


Sponsor: Marokai Blue
« Last Edit: December 03, 2009, 02:50:40 am by Sen. Marokai Blue, PPT »Logged
Marokai Backbeat
Marokai Blue
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« Reply #1 on: November 25, 2009, 11:10:10 pm »

It's high time that we get serious about the fact that revenue is much needed. We can no longer continue instituting vast (but very useful, in my mind) spending programs and strengthening the safety net without some form of paying for it. We can't cut taxes forever, nor can we spend forever.

This proposal raises taxes on the current two highest tax brackets, and creates a new tax bracket targeting income over one million dollars. Keeping in mind the Income Tax Reduction Act, the bottom tax bracket is raised in this proposal by 1%, from 0. To compensate for what this may sound like, it's more than made up for by the fact that a previous proposal from Afleitch which was vetoed by President Lief, a 1% tax cut on the second tax bracket, is included, as well as a $1,300 increase in the standard income tax reduction.

The goal here, is three pronged. One, making sure that all individuals are taxed as fairly and progressively as possible, though I personally wish it went further in this regard, it accomplishes this decently enough.

Two, drastically increasing our revenues to help balance our financial situation while protecting the most vulnerable at the same time. It does this quite well, making sure all incomes are taxed, but special protection given to the bottom.

Three, it shifts the burden higher up, and will go further to reduce record levels of income inequality in Atlasia. This won't solve the problem overnight, but it will slow it without harming the economy.

I believe this proposal is fair, reasonable, and done in the most careful and responsible of ways.
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Marokai Backbeat
Marokai Blue
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« Reply #2 on: November 26, 2009, 10:49:11 am »

There's no point in a 1% rate. Just don't tax income under $8,025. I also think that a 50% rate should cut in much earlier than a million, but I suspect that I might be in a small minority on that Tongue

It should go beyond 50% for the wealthier.

Believe me, I agree with both of you personally that it should go beyond 50%, but I doubt such a thing would pass the Senate.

As for the 1% bump in the bottom bracket, I'd be fine with removing it since I see no point in putting up a big fight over it.

In general, this bill has the right idea. Tax cuts for the lower classes and a higher 50% bracket from a certain point on.

I believe in progressive taxation, and I also believe in cutting the deficit.

One thing I don't agree with here is the marriage penalty for couples that make $1 Mio. together. I see no reason we should not allow them both individually to earn that amount before coming into the 50% bracket.

50% above a million in income is quite alot of money to tax even for both of them, even if I agree there's an inconsistency. I worry about losing revenue if we simplify that penalty too much.
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Marokai Backbeat
Marokai Blue
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« Reply #3 on: November 26, 2009, 03:16:56 pm »

I want a higher bracket, Franzl wants to lessen the penalty for being married, Afleitch & Al want to keep the bottom rate 0%, so let's combine them in this amendment:

Quote
Fiscal Responsibility Act

Realizing that our rising budget deficit can not be left unattended indefinitely, the fundamental unfairness of our outdated income tax rates, and that we must make efforts to become more fiscally responsible, the Senate hereby authorizes the following comprehensive changes to our income tax system:

1. The following income tax brackets shall replace existing brackets for income gained in 2010 and thereafter, increasing as normal with inflation:

Single Individual

0%$0 - $8,025
14%$8,026 - $32,550
25%$32,551 - $78,850
28%$78,851 - $164,550
35%$164,551 - $367,700
41%$367,701 - $1,000,000
50%$1,000,001 - $2,500,000
60%$2,500,001+

Married Filing Jointly

0%$0 - $16,050
14%$16,051 - $65,100
25%$65,101 - $131,450
28%$131,451 - $300,300
35%$300,301 - $600,000
41%$600,001 - $1,500,000
50%$1,500,001 - $3,000,000
60%$3,000,001+

Married Filing Separately

0%$0 - $8,025
14%$8,026 - $32,550
25%$32,551 - $65,725
28%$65,726 - $150,150
35%$150,151 - $300,000
41%$300,001 - $750,000
50%$740,001 - $1,500,000
60%$1,500,001+

Head of Household

0%$0 - $11,450
14%$11,451 - $43,650
25%$43,651 - $112,650
28%$112,651 - $182,400
35%$182,401 - $367,700
41%$367,701 - $1,000,000
50%$1,000,001 - $2,500,000
60%$2,500,001+

2. The standard income tax deduction shall be raised from $5,700 to $7,000, to better care for lower income individuals and the working class of Atlasia.
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Marokai Backbeat
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« Reply #4 on: November 27, 2009, 05:06:36 pm »

A preliminary estimate by the Office of the GM predicts this bill will bring in between $250 billion and $600 billion. A more detailed analysis will come in the next week or so.

I can't help but question the numbers even though I was the one that asked you to comment. I certainly hope that in the detailed analysis this figure is raised up (and if this is annual/per decade) but we'll see. I look forward to it, but I would invite you to look at the effect of smaller tax hikes and large tax cuts and look at how much those cost, just for some background..

Roll Eyes I take it you don't know anybody who has lived in a big city. In NYC $1,000,000 a year is upper middle-class at best if you want to live in a decent area.

Perhaps we just don't know the rich people you do, but this is one of the most hilarious things I've read on this site, in a city where even the most expensive area's median income is $67,000, anyone who makes a million dollars a year is, needless to say, going to be sitting very pretty.

Quote
3. Who do you think gives people the money they need to start a small business? Rich people.

Er, well, no. You're assuming people use their own money to pay for a small business startup, which they largely don't do. That's not to say rich people don't start businesses, they can, but since I would wager most businesses are started by people who take out several loans for startup costs (take it from someone who's mom had to go through the whole small business deal, and we're dirt poor) I don't think the "it hurt's business" response is all that applicable.

Quote
4. Many wealthy people donate a lot of money to charities.

And so do less wealthy people. Who cares? Millionaires won't suddenly stop donating to charity, and even if they do, more effective and larger programs would be financed by the revenue generated by this increase, more than compensating.
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Marokai Backbeat
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« Reply #5 on: November 27, 2009, 05:40:36 pm »

Since when did the state finance small businesses? They only hinder them with over regulation and high taxes.

You seem to be a fan of sweeping and unsupported generalities.

Quote
Quote
Quote
3. Who do you think gives people the money they need to start a small business? Rich people.

Er, well, no. You're assuming people use their own money to pay for a small business startup, which they largely don't do. That's not to say rich people don't start businesses, they can, but since I would wager most businesses are started by people who take out several loans for startup costs (take it from someone who's mom had to go through the whole small business deal, and we're dirt poor) I don't think the "it hurt's business" response is all that applicable.

Most people get the money to start a small business from venture capitalists who, surprise, surprise, are rich.

We got our money from this new fangled institution called a bank.

Quote
Quote
Quote
4. Many wealthy people donate a lot of money to charities.

And so do less wealthy people. Who cares? Millionaires won't suddenly stop donating to charity, and even if they do, more effective and larger programs would be financed by the revenue generated by this increase, more than compensating.

Yes, but who contributes more per capita, the rich. You're assuming government programs work, which for the most part they don't. The government's size could easily be halved without significantly impacting the welfare of the general populace.

Yeah, like I said, this is a huge sweeping and totally unsupported generality. Most government programs don't work? Do you have examples? How don't they work? Which programs are you talking about? Which programs could be easily cut? These are just some of the critical questions you have to ask yourself before you make such silly generalities, and this is neither the time nor place to discuss that topic anyway.

How would it hurt small business? Because Vepres says so.
Why would charity donations suddenly cease? Because Vepres says so.
How is the government ineffective? Well, Vepres says so!

Ilikeverin once, stupidly, claimed that Vepres tries to enter a situation and talk policy, but is ignored. It's not that we ignore him, or that I do. It's because these sort of sweeping unsupported generalities where the proof only exists in Vepres' mind that I'm so adverse to discussing things with Vepres here in the Senate or elsewhere. Vepres' arguments depend on a number of presuppositions and acceptance of anecdotal evidence, which I haven't the time for.
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« Reply #6 on: November 27, 2009, 06:01:02 pm »

This fact kills the bill IMO:
Quote
...when Ronald Reagan cut taxes on his advice, tax receipts from the wealthy began to rise, and have been growing (both as an absolute amount and as a percentage of all taxes collected) ever since. It is fundamentally impossible to collect taxes from the rich without their cooperation.

http://www.caseint.com/john/taxing_the_rich.htm This article gives a compelling argument against overtaxing the rich.

See, the rich will spend more time hiding their money if taxes are raised, causing them to spend less time investing and innovating and decreasing tax revenue.

A few things:

First, the tax rates are substantially different in this proposal than what Reagan had to deal with. In fact, our taxes on most Americans/Atlasians would be lower than what Reagan had to deal with or cut them to for most of his presidency. A 50% rate on income above a million dollars is different than a 50% rate on income above 106k-200k (it varied throughout his presidency) so it's unfair to compare the two when the level of income being taxed was radically different.

Secondly, if you look at the history of tax hikes, they have not been damaging to the economy overall. What you seem to be overlooking is that Reagan himself actually raised taxes in various areas several times throughout his Presidency. FDR, also, raised taxes about ten times throughout his time in office, and there's no evidence that taxes impacted the money supply, personal income, industrial production, wage growth, GDP growth, or the stock market advance.

Clinton raised (many) taxes in 1993, and despite Republican claims that it would lead to a recession and would be a job killer (I invite you to watch Quayle's performance during the 1992 Vice Presidential debate(s), he was hilarious and his rhetoric eerily applicable to Obama) it turned out to be nothing of the sort and we hit record surpluses. (You might say this was during a boom, but A) The same argument could be made to Reagan, and B) It still didn't kill the boom, so it's a stupid point to bring up.) As Beet would say, the idea that taxes are always bad economic policy "flies in the face of the accumulated facts."

Finally, the Bush tax cuts of 2001. The achilles heel of the "tax cuts for the rich stimulate revenues and economic growth" argument. Revenues actually dropped after the implementation of the cuts.

Quote
Sen. John McCain has said President Bush's tax cuts have increased federal revenues. But revenues would have been even higher without them.

...

Federal revenue normally increases every year. In fact, revenues have declined in only five years since 1962. The 35 percent growth between 2003 and 2006 is significant – the last major growth in revenue was between 1997 and 2000, when the economy was booming and federal receipts rose 28.2 percent. But the recent three-year period also comes after three years of decreases, a drop Viard attributes to the 2001 tax cuts and the start of a recession that same year.



...

The percentage growth since 2003 may be historic, but the government’s coffers are no more flush with funds as a percentage of the economy than they have been on average for 40 years.
http://www.factcheck.org/taxes/supply-side_spin.html

As shown, the tax cuts throughout the Bush years did not increase revenue, on the contrary, it contributed to a historic reduction in tax revenue!
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Marokai Backbeat
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« Reply #7 on: November 27, 2009, 08:12:49 pm »

The rhetoric here is astounding. Truly.

First of all, as for the double-taxation point, that's really not our fault, to be honest. We can't, or at least we shouldn't, build a federal income tax bracket on the basis of what a region made impose on top of it! Such things are out of are control, vary wildly, and fluctuate routinely. It's an impractical model to take into effect the taxes of individual regions. Besides, regional governments actually need to run themselves too, you know.

We're to believe, beyond all your ridiculous assumptions, and arguments by your own admission that simply sucked, that this will result in disaster. Well it simply won't do that, and it hasn't in the past went our brackets were far higher and on a far lower income scale.

At the end of the day, we have to pay for things. This proposal is kind to lower income individuals and scales the burden to the top, as it should. Now either you want a progressive system at the end of the day, or you want to throw the burden at the bottom, which I simply won't stand for. This proposal has the interests of most Atlasians in mind, it's that simple.

If you ever wonder why people treat you as if you are a Republican, it's because of your valiant defense of the poor persecuted rich that someone might come to that assumption. Just a thought.
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« Reply #8 on: November 27, 2009, 11:40:49 pm »

Charities are good for very small scale operations and depending on in only the short term. For anything substantial or long-term a much larger organization and support is needed that the government, in that situation, can best provide.

Food banks, soup kitchens, and free health clinics are great, but they don't really compare at all to food stamps or a national health care program. Let's be realistic here.
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« Reply #9 on: November 28, 2009, 01:06:15 am »

And conveniently much of your arguments are just repeating what you've said in the past without much regard for the responses you got.

Reminds me of the Senate's debate over the national health care program, come to think of it..
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« Reply #10 on: November 29, 2009, 10:21:22 pm »

This is close to 50%, but as it is under the psychological impact of "taking half of my income" isn't there

So super-rich might have their feelings hurt if their tax rates go above 50%?

Cry me a river.

See, that attitude is what makes the rich resent the government and the poor and hide their wealth instead of using it to help society.

You know, in the interwar period, the two hundred families that ran the Bank of France thrice imposed a right-wing government after legislative elections had returned a majority on the left. This continued no matter how many conciliatory gestures were made. It would have continued indefinitely, but the two hundred families were broken in the war. Only then could the popular will be expressed.

That was a different time and a different country. Plus, that was on 200 families, what about the thousands of other rich French families?

"Two hundred families" is a euphemism. The Bank of France had 200 shareholders, but they represented French monied interests. In 1924 and 1932, Cartels des gauches were formed. Each cartel won the election, but the centrist Radical-Socialist Party switched its allegiance to the right each time when French money made it clear that it lacked confidence in a left-wing government. In 1936, the Front Populaire was elected, and Léon Blum became the first socialist and the first Jew to become Prime Minister. Despite taking every measure to appease the powers that were, including suppressing the strikes that spontaneously broke out thoroughout France, French money declared war on the Front Populaire, forcing Blum to resign within the year, and the Front to collapse by 1938. Its replacement was a group of dull centrists and right-wingers who were unable to take the necessary steps to stop the German invasion. The settings may change, but the story remains the same.

Interesting, and yet this hasn't happened in the US for almost 100 years. I've had my history lesson for the day Tongue

My friend, they don't need business plots or open resistance to left-wing policy anymore. They're already in control.

It's far more insidious in these modern times.
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« Reply #11 on: November 29, 2009, 11:34:12 pm »

Anyway, I'm not advocating for coddling the rich, I'm advocating for not punishing success.

Republican buzzwords.

Quote
So, an individual making $164,550, which is upper middle class or even rich in some areas, will pay $23,995.72 in taxes, while somebody making $367,700 will pay $96,468.23. The latter's salary is 2.23 times larger than the former, but the latter's taxes are 4 times larger than the former's. You simply cannot claim that that's fair.

I can and shall. Ultimately, "fair" is entirely subjective, and you lack any real economic point for how it's catastrophic, so you're arguing really on flimsy emotional grounds on what you do or don't find objectionable.

In the end, though, you really made my point about why I believe it to be "fair" for me. $164,000 is upper middle class even in wealthy areas. There is a certain benchmark for what is spent on bare necessities, food, energy, housing, and other essential services, as well as leisure money, but anything beyond that certain mark, which varies depending on where you live, is completely useless free-standing money that contributes little to nothing to the economy or society, and that is why it is taxed at a disproportionately higher rate.

It still allows people to become more than wealthy, and live very comfortable lives. It's simply a tax rate of a philosophy that says large amounts of money contribute absolutely nothing to the lives of Atlasia but fueling the greed of certain individuals. That money, that money that doesn't do anything or isn't put to any essential need, is instead taxed at a higher rate to provide services to the entire country when needed.

And that, come to think of it, is one of my reasons for opposing the flat tax.

Quote
Shouldn't the poor, who benefit most from social services, pay the same % of their income in taxes as the rich?

No? Why in the world should they? The poor and working classes should be able to take advantage of the services that they need to rise to a level playing field and be free to rise out of their class as unencumbered as possible. You seem to act like the poor and the rich are equally vulnerable (and productive) and that is simply a false equivalency.

Quote
My point is, the vast majority of government programs are expensive, inefficient, wasteful, and many of these don't even work.

This is the second time you make this ignorant and incredibly broad statement and it's no more supported (meaning, not at all) than it was the last time. Examples please.

Quote
BTW, on that New York thing I said, somehow I misplaced a decimal in my head. I was thinking $100,000, but my thoughts started racing with the debate.

That correction still doesn't really make sense though in the context of what you said earlier. You don't have to cover your ass on this to hide your embarrassment you know, I do forgive you for it.

Quote
Let me ask you, Marokai, why not have a flat % tax rate?

Xahar summed it up in a tl;dr version than what I would give, really. The money the lower classes bring in are much more sensitive and depended on, and the lower income groups spend a disproportionately higher amount of their income on essential needs, like food, clothing, and gas (this has been rising in recent years, so it's even more sensitive to taxation) so a flat income tax, aside from it's general infeasibility in actually paying for all our shit, would burden the lower class.

It's basically a recipe for a caste system of sorts, a kind of almost permanent freezing of the classes and social mobility, and skyrocketing levels of income inequality. I liken it to a set of video game difficulties; when you're less skilled, you play on easy, when you're more skilled, you can handle hard.

From each according to his ability, to each according to his need.
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« Reply #12 on: November 30, 2009, 11:11:25 pm »

Vepres made a valid point, education cost is making than it is harder for lower classes to climb the social ladder.

But his solution, my God, it sounds like.. like.. So-, Soc-, Socialism. Cry
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« Reply #13 on: December 01, 2009, 06:00:58 am »

Okay. Well that was 5 pages of fun wasn't it Tongue

Lets pull back a bit and remember this is Atlasia. For example the whole argument about education costs being prohibitive (while valid in reality) is not particularly relevant as education in Atlasia has been made subsidised and affordable in a previous bill (partly thanks to a small tax increase)

This system is designed to play to the strengths and weaknesses in Atlasia and in its current tax system. The GM reports it would raise revenue - check. It maintains 0% taxation for the poorest that we have had for 2 years - check. It allows us to balance the costs of our extended welfare system and hopefully pay down some debt - check. I can't oppose this bill because it adresses what Atlasia needs (and Atlasia is a vastly different place from America)

It has my support.

I tried very hard to address you and Franzl's concerns, and was hoping I could have both of your backing, and I'm very happy that this bill has that. Thank you both very much.
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« Reply #14 on: December 01, 2009, 04:30:33 pm »

I believe I can change the wording without a formal amendment as PPT, so that's not a problem.
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« Reply #15 on: December 01, 2009, 05:53:43 pm »

I think it's time for the final vote, we've gone as far in debate as we're going to do, I think.

I hereby open up a final vote on the following bill. Please vote Aye, Nay, or Abstain.

Quote
Fiscal Responsibility Act

Realizing that our rising budget deficit can not be left unattended indefinitely, the fundamental unfairness of our outdated income tax rates, and that we must make efforts to become more fiscally responsible, the Senate hereby authorizes the following comprehensive changes to our income tax system:

1. The following income tax brackets shall replace existing brackets for income gained in 2010 and thereafter, increasing as normal with inflation:

Single Individual

0%$0 - $8,025
14%$8,026 - $32,550
25%$32,551 - $78,850
28%$78,851 - $164,550
35%$164,551 - $367,700
41%$367,701 - $1,000,000
50%$1,000,001 - $2,500,000
60%$2,500,001+

Civil Partners Filing Jointly

0%$0 - $16,050
14%$16,051 - $65,100
25%$65,101 - $131,450
28%$131,451 - $300,300
35%$300,301 - $600,000
41%$600,001 - $1,500,000
50%$1,500,001 - $3,000,000
60%$3,000,001+

Civil Partners Filing Separately

0%$0 - $8,025
14%$8,026 - $32,550
25%$32,551 - $65,725
28%$65,726 - $150,150
35%$150,151 - $300,000
41%$300,001 - $750,000
50%$740,001 - $1,500,000
60%$1,500,001+

Head of Household

0%$0 - $11,450
14%$11,451 - $43,650
25%$43,651 - $112,650
28%$112,651 - $182,400
35%$182,401 - $367,700
41%$367,701 - $1,000,000
50%$1,000,001 - $2,500,000
60%$2,500,001+

2. The standard income tax deduction shall be raised from $5,700 to $7,000, to better care for lower income individuals and the working class of Atlasia.


One of the strongest AYEs I've ever cast in this body.
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« Reply #16 on: December 02, 2009, 02:45:11 am »

This bill is now passing. 24 hours to change votes.
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« Reply #17 on: December 03, 2009, 02:50:16 am »

This bill is now passing. 24 hours to change votes.

This bill has passed! I now present it to the President for his signature.
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