Your share of the state debt

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On top of your $43,075.53 share of the Federal Debt

States are taking on more debt. Here’s your state’s burden per capita

J.J's picture
J.J
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The problem with the "your share of the debt" talking point is that we don't all pay the same amount in taxes. So presenting a tax burden as per capita is disingenuous given a progressive tax system. Even if we had a flat tax, it still wouldn't work out that each person owes the same amount of money.

Common_Man_Jason's picture
Common_Man_Jason
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Jul. 31, 2007 4:01 pm
Quote J.J:On top of your $43,075.53 share of the Federal Debt States are taking on more debt. Here’s your state’s burden per capita

Weren't you the same poster who just wrote a post yesterday, stating that more Americans needed to be positive and the Obama administration needed to put a more optimistic spin on what is happening in the US?

How is focusing on federal debt focusing on the positive?

Or does it just depend on your mood?

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meljomur
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Jul. 31, 2007 4:01 pm

http://www.marktaw.com/culture_and_media/TheNationalDebt.html has a lot of charts and debt to gdp ratio, and of course the one to blame, Reagan.

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douglaslee
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Quote Common_Man_Jason:

The problem with the "your share of the debt" talking point is that we don't all pay the same amount in taxes. So presenting a tax burden as per capita is disingenuous given a progressive tax system. Even if we had a flat tax, it still wouldn't work out that each person owes the same amount of money.

Using your logic Jason, then the people who pay the most taxes and have most of the debt should get the most government services.

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PeeWee Returns
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Quote PeeWee Returns:
Quote Common_Man_Jason:

The problem with the "your share of the debt" talking point is that we don't all pay the same amount in taxes. So presenting a tax burden as per capita is disingenuous given a progressive tax system. Even if we had a flat tax, it still wouldn't work out that each person owes the same amount of money.

Using your logic Jason, then the people who pay the most taxes and have most of the debt should get the most government services.

They do, that's one of the points of progressive taxation. Wealthier people get way more government support, and have benefited way more from it.

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Common_Man_Jason
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Quote Common_Man_Jason:

They do, that's one of the points of progressive taxation. Wealthier people get way more government support, and have benefited way more from it.

Can you explain this a little Jason? From my point of view, this statement doesn't hold up to reality.

This is the way I see it. I drill my own water, septic my own waste, shoot my own burglers, dispose of my own trash, and paved my own road. I have called EMS a few times, but they are volunteer and paid for with out of pocket donations, not taxes. There is no police department in my county, but we do have a sherrif paid for with local taxes. I do recieve benifit from having our military killing bad guys, so I don't mind those dollars. For the most part, the only thing I get directly from the Federal Government is the sensation of having their hands reach for my wallet. I do anticipate getting some of my Social Security money back, but I'm not holding my breath.

On the other hand, my less industrious neighbors, who pay little to no taxes, live in subsidized housing with city water, city sewer, they call the sheriff constantly, they have trash trucks that take their trash away, and live on taxpayer paved roads.

I could go on and in great detail, but that would get boring. So here on ground level, I don't see any evidense to support the theory that the wealthy draw more government benifits. I am far from wealthy, so I am willing to accept that benifits skip the middle class. So I am listening... If we take away the commons, those items both the wealthy and poor benifit from, how can you claim that the wealthy benifit more?

Paleo-con
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Jul. 31, 2007 4:01 pm
Quote Paleo-con:
Quote Common_Man_Jason:

They do, that's one of the points of progressive taxation. Wealthier people get way more government support, and have benefited way more from it.

Can you explain this a little Jason? From my point of view, this statement doesn't hold up to reality.

This is the way I see it. I drill my own water, septic my own waste, shoot my own burglers, dispose of my own trash, and paved my own road. I have called EMS a few times, but they are volunteer and paid for with out of pocket donations, not taxes. There is no police department in my county, but we do have a sherrif paid for with local taxes. I do recieve benifit from having our military killing bad guys, so I don't mind those dollars. For the most part, the only thing I get directly from the Federal Government is the sensation of having their hands reach for my wallet. I do anticipate getting some of my Social Security money back, but I'm not holding my breath.

On the other hand, my less industrious neighbors, who pay little to no taxes, live in subsidized housing with city water, city sewer, they call the sheriff constantly, they have trash trucks that take their trash away, and live on taxpayer paved roads.

I could go on and in great detail, but that would get boring. So here on ground level, I don't see any evidense to support the theory that the wealthy draw more government benifits. I am far from wealthy, so I am willing to accept that benifits skip the middle class. So I am listening... If we take away the commons, those items both the wealthy and poor benifit from, how can you claim that the wealthy benifit more?

To begin, I know nothing of your personal situation, and haven't been given enough information to really respond in a meaningful way. I have my doubts that you're genuinely and completely self sufficient because if you were, you wouldn't have the time to be posting on message boards (and I also doubt you've created your own Internet which can somehow tap into the actual one).

Also, this goes to what I've mentioned before regarding the conservative mind set. Cons perceive things in the first person perspective, meaning if it doesn't happen to you, it doesn't matter. My response to you will be from a system's perspective, looking at the big picture, and so you won't understand it unless you understand that.

Let me give one small example, just a slice of what I'm talking about. The transportation infrastructure allows Joe six-pack to get to a job and earn anything from $8/hour to $30 or even more depending on his skill set. However, that same infrastructure allows a corporatation to hire a team of Joe six-packs (without paying for their transportation) and make millions or billions. Who benefited more?

Also, you can just look at the Federal budget and see what they spend their money on. The welfare fantasy you've expressed is a very small and insignificant portion of the income tax revenues.

And yes, you're not wealthy, so I'm not talking about you when I say wealthy.

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Income tax's are derived from Income. The evil corporation pays wages to the "team of Joe six-packs" and those wages are taxed accordingly to the US tax code. The in effect the wealthy facilitate most on the federal and state taxs.
The wealthy owner pays taxes
The Corporaton pays taxes
The Corporation pays wages that are taxed

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J.J
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Quote Common_Man_Jason:

To begin, I know nothing of your personal situation, and haven't been given enough information to really respond in a meaningful way. I have my doubts that you're genuinely and completely self sufficient because if you were, you wouldn't have the time to be posting on message boards (and I also doubt you've created your own Internet which can somehow tap into the actual one).

I never made a claim to be completely self sufficient. I made the claim that I don't benifit from a lot of tax funded benifits. From reading your second point, I think I understand why you jumped to that conclusion. It would appear that your mindset jumped immediatly to the "big picture", and ingnored the minutia of my question. As for the Internet, that is a privately funded entity, not a tax based entity. So I am not sure why it was inserted. One additional minutia point... Yes I made my own Intranet, which does tap into the Internet.

Quote Common_Man_Jason:

Also, this goes to what I've mentioned before regarding the conservative mind set. Cons perceive things in the first person perspective, meaning if it doesn't happen to you, it doesn't matter. My response to you will be from a system's perspective, looking at the big picture, and so you won't understand it unless you understand that.

Thanks Jason, this statement helps me understand a lot. First let me acknowledge that my comments are terse, but the are not meant to be hostile. I realize that I need to expand my comments so that they are not taken wrong and I am working on that.

You are absolutely right. I am a conservative, and I , as a priority, see the world in first person first, then focus on the big picture afterwards. I would like to make a small correction in your analysis. While I will put myself and my family first, and always will, I still believe things that don't directly affect me still matter. They are simply a lower priority. To catch my phrase, I said lower priority, not unimportant.

Here is what I don't understand about giving the big picture priority. How can the big picture stand without the support of the individual details? It may be a lame example, but here goes...

Liberal: What a magnificent building. It will house many needy citizens.

Conservative: It is not that magnificent. The foundation is weak, half the plumbing doesn't work, and it has no electricity. Why don't we fix it first?

Liberal: Why do you conservatives nit-pik when needy people desperately need housing. Why do you hate the poor?

Quote Common_Man_Jason:

Let me give one small example, just a slice of what I'm talking about. The transportation infrastructure allows Joe six-pack to get to a job and earn anything from $8/hour to $30 or even more depending on his skill set. However, that same infrastructure allows a corporatation to hire a team of Joe six-packs (without paying for their transportation) and make millions or billions. Who benefited more?

Because of your stated differences above, i see the benifit going to the team of individual Joe six-packs not the corporation. Just because they are working for someone does not make their benifit go away.

Quote Common_Man_Jason:

Also, you can just look at the Federal budget and see what they spend their money on. The welfare fantasy you've expressed is a very small and insignificant portion of the income tax revenues.

And yes, you're not wealthy, so I'm not talking about you when I say wealthy.

I do indeed see what the money is spent on. The vast majority is clearly spent on social services with just over a third going to defense spending. When we add in local and metro spending, the defense spending shrinks to an even smaller portion. And to defend myself from the "big picture" conclusion you drew. I never laid claim to a welfare fantasy. Not all social spending is welfare. The original context was that the poor draw more benifit from the government than the wealthy.

Paleo-con
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Jul. 31, 2007 4:01 pm

The conversation is diverging a bit, but regarding federal budget, you're simply wrong. I imagine what you're doing is pretending that Social Security is paid for with income tax revenue. It is not. It is a separate tax, and people don't have to pay it progressively after about $90K, so the benefits of it go to those paying for it (i.e. the wealthy do not share the burden of it progressively).

Also, most local budgets are paid for through property taxes and sales taxes, not income tax. State budgets do often have an income tax though.

So, since this conversation is about income tax, my original statement remains true. Welfare/social spending is a very small and insignificant portion of the income tax revenues.

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Common_Man_Jason
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Jul. 31, 2007 4:01 pm

Social Security was paid for with a tax based on income. A tax based on income sure smells, walks, looks, and appears to be an income tax, but perhaps I am being too detail oriented. It does not require any pretending to know that SS is currently being paid for from regular income taxes. A short visit to the SS web site will confirm that the SS funds are part of the general budget (thanks Lyndon Johnson), and that the cookie jar is empty. Since the SS income stream goes negative in the next two years, all SS money will come from general funds shortly

Oh well, we tried to have a conversation. As long as you hold on tightly to a belief rather than what can be easily researched an proven, this can go no further. Once again Poly has provided us with the truth: Ideology is a disease. If you wish to use actual GBO numbers on the budget, I would love to continue. Roughly two thirds of the Federal budget going towards social spending is not insignificant.

Paleo-con
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Quote Paleo-con:

Social Security was paid for with a tax based on income. A tax based on income sure smells, walks, looks, and appears to be an income tax, but perhaps I am being too detail oriented. It does not require any pretending to know that SS is currently being paid for from regular income taxes. A short visit to the SS web site will confirm that the SS funds are part of the general budget (thanks Lyndon Johnson), and that the cookie jar is empty. Since the SS income stream goes negative in the next two years, all SS money will come from general funds shortly

Oh well, we tried to have a conversation. As long as you hold on tightly to a belief rather than what can be easily researched an proven, this can go no further. Once again Poly has provided us with the truth: Ideology is a disease. If you wish to use actual GBO numbers on the budget, I would love to continue. Roughly two thirds of the Federal budget going towards social spending is not insignificant.

Social Security is different, and lives under different rules. It does not apply to this conversation, because this conversation is about progressive taxes and whether or not those paying more taxes get more benefits. The wealthy do not pay more FICA taxes than someone earning around $90/year.

Additionally, someone who paid FICA with $90/year income does indeed get a higher payout when they retire than someone who paid it at a $30/year income. So if you want to apply this, it only provides more evidence of the point I'm making.

The two main reasons Social Security is going bankrupt is because the the general budget has been using its surplus (so now it's a part of our deficit, we owe ourselves money), and because it's not a progressive tax beyond the cap. But that's another conversation, and we should probably put it in a new thread if we want to discus that more.

If you knew me better, you'd know that I don't blindly follow anything, nor lend allegiance to any ideology. My orginal response to this thread was in opposition to a liberal talking point, which is to describe the national debt as an equal amount per person debt. It's not, and never was nor will be.

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That's fine, Paleo, but if you want to include SSI checks in federal spending supported by income taxes then your side needs to drop this line about the bottom 50% not paying any "income" taxes.

In fact, since employers only have the appearance of paying half of the FICA tax, in your paradigm income tax rates start at 15.3% for the first dollar earned and top out at... 15% for billionaires living on capital gains and dividend income. The upper middle class gets the privilege of paying a lot more. Are they getting their money's worth you think?

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BadLiberal
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Quote BadLiberal:

That's fine, Paleo, but if you want to include SSI checks in federal spending supported by income taxes then your side needs to drop this line about the bottom 50% not paying any "income" taxes.

In fact, since employers only have the appearance of paying half of the FICA tax, in your paradigm income tax rates start at 15.3% for the first dollar earned and top out at... 15% for billionaires living on capital gains and dividend income. The upper middle class gets the privilege of paying a lot more. Are they getting their money's worth you think?

That is a good point BadLiberal. I cannot have it both ways. I cannot speak for all on my side, but will stop using the 47% I had been referencing.

Being an employer that pays for half the FICA tax, I can confirm that it is not an appearance, but a reality. I am not sure in your scenario why or where the upper middle class would be subject to paying a lot more. And no, they are not getting their money's worth.

Paleo-con
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Jul. 31, 2007 4:01 pm

Small corporations, or just those that do not take advantage of the ways to hide income and off-shore profits while sticking us with the externalities, are not the villains here. When we argue tax and "job creation" policies, those who are on the short end of the banksters financialization schemes also find themselves dealing with under-funded and weary government regulators--or corrupt ones. The honest but besieged ones resent the hostility with which the business folk treat their legitimate work. The corrupt ones will only play for those who pay. Who likes this?

There are honest conservative business owners who resent being treated like crooks, and there are others convinced that capitalism has to be about greed and aggression. They think regulators are pursuing some airy fairy niceness instead of dealing with reality. And then there are those who just put family and business first and society second. It is a matter of focus and priorities.

Accepting the costs of social reality and the efficiency of charity/welfare over the moralistic insistence that everyone be "responsible" conflicts with more than a secular economic theory of cost/effectiveness. In fact, it over-rides this calculation to justify serious social engineering against historical experience. In addition to the moral argument for being our brother's keeper, there is the practical one. Having to love imperfect people conflicts with our culture of individualized "self-sufficiency," but the facts of human life are more about compassion and forgiveness than about merited salvation.

The arguments about tax policy in America seem to be oblivious to very clear evidence from similar societies. The American Dream is alive and well in Europe, and well directed and relatively high taxation produces the good society. It makes sense. You invest in the infrastructure of security and prosperity, but not foolishly. You do not support imperial armies in the name of national self-defense. And you do not sell off the Commons in the strange belief that renting beats owning.

The ideological attacks on government lack any practical analysis of how our collective investments ought to be structured. Why Americans are less able to enjoy the collective savings of government over privatized social services cannot be explained by any positive argument. Does "exceptional" really mean "special" as in incapable of governing ourselves? I thought it was supposed to be about being really super if not superior.

How much employers ought to be involved in taxation for citizen public services is open to debate. It is clear that the rich use the tax laws and the courts, a very expensive public investment to run, far more than the poor. It is also clear that the policies that direct police are not run by the poor. Fire departments protect those who own property more than those who rent it.

But an even simpler question ought to settle the issue. Do those who are doing very well want to keep the system from which they benefit greatly healthy and well? Or do they think those who are not like them are a drag on their lives? Are they lazy and corrupt, just sitting around on their asses while Mr. Rich works so hard? Will unemployment insurance tempt them not to seek employment? It is so important to care about these things.

Where does this resentment against those who have done so much less well come from? Why are the winners so hateful and stingy instead of ready to buy drinks for the house? I think those in the upper middle ought to take a look up when they want to find waste and abuse. It is easier to look at the powerless and avoid confronting power, but it is bad for the soul, and the wallet.

I think the rich who are ready to give up half are onto something important for themselves. It is like a down payment on being human again. Being gods and masters of the universe comes at a price too.

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DRC
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Jul. 31, 2007 4:01 pm
Quote Paleo-con:

Being an employer that pays for half the FICA tax, I can confirm that it is not an appearance, but a reality.

It's more than just about writing the check. Let's say you're offering a position to someone and you make them an offer of $50,000 yearly salary. When you make that offer you do so knowing that you're going to have to pony up another $3500 for FICA and Medicare as well as unemployment insurance, worker's comp, etc. So let's say your total cost to employ this person is going to add up to $60,000. At the same time the prospective employee knows that when he actually gets his paycheck there will be deductions for FICA, Medicare, and Federal and State income taxes. So, depending on his W-4 situation, he might actually see a take-home of $45,000. It really doesn't matter whether you say the employee is making $60k with $15k in deductions, $50k with $5k of deductions, or just $45k with no deductions. No matter who you say is paying what, at the end of the day the employee still only has $45k and the employer's cost is still $60k.

The only material difference this split makes is that the employee pays federal and state income taxes based on the gross amount at the top of the pay stub. Saying the employer is paying half of the FICA just lowers that figure a bit resulting in less of a tax bite on the employee. No matter how you split it up, the cost of employing that person remains exactly the same for the employer.

So when you're self-employed does Paleo-employer pay the 15.3%, or does Pale-employee pay the 15.3%, or do Paleo-employer and Paleo-employee split it?

It's just counting dancing angels at some point.

I am not sure in your scenario why or where the upper middle class would be subject to paying a lot more. And no, they are not getting their money's worth.

If you start at the bottom end and look at the effective tax rate (total tax paid / total income) on combined Federal and FICA, you find that it starts at 15.3% (or 7.15% if you insist). As you move up the scale, the Federal kicks in and the marginal rate increases to a max of 35%. The effective rate increases but is never as high as the marginal rate due to some income being taxed at lower rates. At $90k or so, the FICA tops out and as income increases further, the effective rate levels off to something approaching the top marginal rate of 35%.

But the thing is that at higher incomes more and more of the total income, on average, comes from investments which are taxed at 15%.

There are as many scenarios as there are individual tax returns, but on average, the effective rate starts at 15.3%, climbs to a max of maybe 30% or 40%, and then starts to decline again. The highest effective rates are paid by professionals and business owners who have high salaries and ordinary income. The lowest paid by people who derive most of their income from investments.

If I could find a breakdown on income by source as a function of gross income I could play with a spreadsheet to nail it down better.

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BadLiberal
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Jul. 31, 2007 4:01 pm

I'm a business owner too (yes, liberals own businesses too), so let me be very clear. A business *never* pays for the taxes of its employees. This is because, unless you're a really bad business person, the employee's labor will bring in more income than the total compensation package you offer them, including any and all taxes you may have to administer on their behalf. In short, unless the employee pays for themselves and provided a profit to the business, you've made a really bad business decision and you're going to go out of business soon.

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Common_Man_Jason
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Jul. 31, 2007 4:01 pm

Thanks, Jason. I tend to nerd out on these things. And then you just come in with simple, common sense and nail it to the wall.

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BadLiberal
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Jul. 31, 2007 4:01 pm

I don't think American conservatives know what they want. They want the US to be the best country in the world (or excuse me, it already is), but they don't believe you need money to maintain a nice society. Just loads of money to kill people in far away lands.

Personally I have never been to a country which had low taxes, little spending on social services which was a nice place. I mean the tourist areas are great but once you leave those little enclaves, its a vastly different world (although I suspect conservatives don't leave the compounds- too scary)

But when you start making real life examples of their desired utopia, it tends to be that the head has to come out of the sand, and those damn rose lensed glasses removed.

Conservatives remind me of whining children, who don't want to share any of their toys, but still expect to always have all the best toys. In the end those are the kids who have no friends, and tend to live in isolation.

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