Talk:Taxation in the United States/Archive 3

Archive 1

Archive 2

Archive 3

ITEP chart is disputed by multiple sources.

ITEP estimate of the total effective tax rate for federal, state and local taxes (personal and corporate income, payroll, property, sales, excise, estate, etc.) by income level in 2011.

This chart's internal federal component shows higher rates for low income earners and lower rates for high income earners than the Tax Policy Center and CBO ([1],[2]) do. The difference is especially pronounced for the top 1%, with ITEP typically placing it around 20% while the other two sources put it around 30% (federal alone; give or take a couple of points).

Effective Federal Tax Rate for the Top 1% in 2011

TPC - 30.4%

CTJ - 21.1%

This is a huge difference, and it's consistent over time, not a one year fluke (I've posted links for other years before and can do so again if necessary). ITEP's methodology has also been directly criticized by the Tax Foundation. At best ITEP's chart is hotly disputed, and is therefore unfit to be given the prominence of an article image, much less an implicitly definitive one near the top of the page.

I'll add that Ellen has tried to make the argument on other pages, repeated in her edit summary here, that the massive discrepancy is due to ITEP attributing half of its corporate incidence to consumers (with regressive results), contrary to the CBO and TPC attributing to capital owners (with progressive results). She's posted absolutely no evidence of this, and her claim is contradicted by ITEP's public comments. I'll just post a few for now:

• ITEP FAQ: "How does ITEP estimate the incidence of corporate income taxes? It is generally agreed that corporate income taxes, at both the state and federal level, fall primarily on owners of capital. In accordance with this theory, ITEP’s incidence analyses of state corporate income taxes typically distribute the incidence of the tax according to nationwide ownership of capital assets such as stocks and bonds.....The incidence of the tax in ITEP’s analyses is generally quite progressive, because the vast majority of capital income nationwide is held by the very best-off Americans."

• WSJ piece hosted on ITEP's site: "All taxes have to be paid by somebody at some point," says Steve Wamhoff, legislative director at Citizens for Tax Justice, the liberal lobbying arm of the Institute on Taxation and Economic Policy, a research group. "The corporate tax is paid by the owners of corporate stock and business assets."

• When one searches on the ITEP site for "corporate taxes", near the top this piece pops up by CTJ (the chart source), ITEP's "sister" group and "lobbying arm": "The Corporate Income Tax Is Borne by Shareholders and Thus Very Progressive....Corporate leaders sometimes assert that corporate income taxes are really borne by workers or consumers. But virtually all tax experts, including those at the Congressional Budget Office, the Congressional Research Service and the Treasury Department, have concluded that the owners of stock and other capital ultimately pay most corporate taxes.[5] Further, corporate leaders would not lobby Congress to lower these taxes if they did not believe their shareholders (the owners of corporations) ultimately paid them. (In contrast, corporations do not lobby for lower payroll taxes, which are borne by workers)."

• CTJ reiterates that view in this testimony before the Congressional Progressive Caucus (page 7): "The owners of corporate stocks and business assets — which are concentrated among the rich — ultimately pay corporate income taxes. Corporate leaders and their lobbyists argue that corporate taxes are ultimately paid by workers who suffer when corporations leave the U.S. to find lower taxes. This cannot be true. Corporations would not spend so much time lobbying you to lower their taxes if they did not think their shareholders were the ones ultimately paying them. Several non-partisan analysts have also concluded that the corporate income tax is mostly borne by the owners of corporate stocks and business assets."

• Furthermore, while no one has been able to produce their federal breakdown, ITEP's state by state analysis attributes zero state corporate taxes to the bottom 95% in their combined state average (page 118), and by far the highest rate to the top 1%, further undermining Ellen's claim. Nowhere in any ITEP literature produced so far have they mentioned the word "consumers" in the context of corporate taxation, except to explicitly argue against attributing to consumers. That's without getting into the fact that corporate taxes wouldn't mathematically account for the gap between the TPC and ITEP even if zero were attributed to the top 1%. Clearly the "corporate incidence" defense is a red herring that fails to explain ITEP's large discrepancy with the other sources. VictorD7 (talk) 21:52, 18 December 2013 (UTC)

I have concerns myself with using their material and I've often found points of criticism with their methods. Usually it's something we can present in the context of a point of view, attributing the material and providing a counter-balance point of view, such as the Tax Foundation. But since this is such a high level article, I have problems with including it. We'd running into NPOV issues to include WP:WEIGHT. If we include anything for such all encompassing graph (which doesn't seem useful since states can vary greatly), I would much prefer something from a more neutral source. Morphh ^(talk) 22:16, 18 December 2013 (UTC)

This has been discussed in detail at Talk:United States#Quality of sources on corporate tax incidence where VictorD7 has repeatedly refused to answer my questions after saying he would do so (oh, I'm sorry, "after the ITEP thing is resolved.") I please try to read through it and let me know what you think. EllenCT (talk) 03:22, 19 December 2013 (UTC)

I'll try to read through it tomorrow, but honestly, anything that creates that much discussion / debate probably shouldn't be included in a high level article like this. Morphh ^(talk) 03:47, 19 December 2013 (UTC)

For the record, Ellen's opening paragraph in the section she linked to is stuffed with falsehoods, especially about me and what I've said in the past about corporate incidence. My position isn't at all as she described and has been entirely consistent since long before I even encountered her. I didn't want to let her derail and distract from the pertinent portion of the discussion, which is why I'm waiting until after it's settled to answer her long list of questions, but I also know unchallenged BS can set into people's minds, so take what she says with a heap of salt. VictorD7 (talk) 04:44, 19 December 2013 (UTC)

Well....yeah. I'll answer your off topic ad hominem stuff as a courtesy after we settle the stuff relevant to the article, the ITEP chart you're trying to add. It's been like pulling teeth trying to get you to answer and/or address the vital questions and facts. VictorD7 (talk) 04:00, 19 December 2013 (UTC)

I will wait for you to answer the simple, yes-or-no questions about whether you've been POV-pushing as long as it takes, "as a courtesy." If I have been dishonest then the yes-or-no answers should clear all that up, right? If not, why not? EllenCT (talk) 07:44, 19 December 2013 (UTC)

Among other things, your failure to address the mountain of evidence posted above, including a direct link to ITEP's study showing them attribute corporate taxes entirely to the top 5%, and by far the highest rate to the top 1%, establishes that you aren't interested in an intellectually honest discussion. Since you're the one campaigning for changes, your refusal to answer questions or address evidence is unwise. I hope you're not holding your breath. VictorD7 (talk) 01:15, 20 December 2013 (UTC)

EllenCT, why are you removing the TPC graph? The source of that graph has been discussed. The graph is a direct representation of the TPC data, so there is no issue with the source. The PGPF, whatever their perceived bias, is irrelevant in creating the graph - I could recreate the graph myself and it would be acceptable as it directly represents the TPC table. I certainly find it inconsistent that you object to this direct translation, but go through weeks of dispute and RFC to push a graph that is based on original research and discuss merging graphs with different X/Y axis into a single graph, likely SYN. Morphh ^(talk) 13:57, 19 December 2013 (UTC)

Because I think it is very misleading to try to show that the top 1% pays more taxes than the top 20%, in a political way. It is a direct reaction to Warren Buffet noting that he pays less of a percentage of his income than his secretary. EllenCT (talk) 00:42, 20 December 2013 (UTC)

That's not what you stated when you removed the graph and your assessment for the data is inaccurate - FactCheck. You only start to see a decline when you get to .1%, which is due to capital gain rates (lowered to encourage investment, which has to work against risk and inflation). Morphh ^(talk) 22:00, 20 December 2013 (UTC)

I'm also not sure how a graph that tries to lump state & local (which can very wildly) and federal taxes along with mixing different tax systems (income & consumption) is in any way superior. You can't even measure these the same way. Any such graph is filled with tons of assumptions and heavily modeled for tax incidence and considering the source, highly partisan. It's not even clear how they came up with these figures. If you're going to include graphs on taxation, federal taxation should be a different graph than state taxation (like the TPC graph), and consumption taxation should be separate from income taxation when showing distributional effects in order to make any logical sense out of the graph. Morphh ^(talk) 14:59, 19 December 2013 (UTC)

All taxes can be measured as a percentage of a population's income, and doing so adjusts for inflation and purchasing power. EllenCT (talk) 00:42, 20 December 2013 (UTC)

Yeah, the only complaint about the TPC chart was raised weeks ago and was based on false premises that were easily cleared up. VictorD7 (talk) 18:00, 19 December 2013 (UTC)

Since both graphs are clearly in dispute and the respondents at Talk:United States are deciding on which is superior, I propose that both be removed until the matter is resolved. EllenCT (talk) 00:42, 20 December 2013 (UTC)

You still have yet to articulate an objection to the TPC chart, so it's not being rationally disputed. It's also the status quo, and would require decisive consensus to remove. And you didn't even characterize the Talk US discussion correctly. The discussion is about whether to include your ITEP/CTJ chart, and last I checked the vote was 7 opposed to 3 support. In fact all your latest proposals are being rejected as blatantly partisan POV pushing, among other reasons. VictorD7 (talk) 01:15, 20 December 2013 (UTC)

Your statement shows you either lack the competence required for reading comprehension to read the objection above, or you have decided that attempts to deceive make an effective editing strategy. EllenCT (talk) 22:03, 20 December 2013 (UTC)

You mean your Warren Buffet comment? All that did was confirm your partisan agenda. By "articulate an objection" I meant something rational, with facts and evidence. That you accused the Tax Policy Center, a liberal leaning group, of throwing something together just to react to something a Democrat celebrity said demonstrates that you have no idea what you're talking about. While I often disagree with the TPC's policy opinions and subjective interpretations, their hard tax incidence data has been widely cited and respected across the political spectrum for years. They're a vastly superior source to an offhand talking point by Warren Buffet. VictorD7 (talk) 01:45, 21 December 2013 (UTC)

EllenCT, the TPC is not deceive. We should not be excluding a graph because it doesn't have a separate measure for the .001% Warren Buffets - that would be modifying a graph to push an agenda. The deciles need to be logical for a general article. Morphh ^(talk) 13:44, 21 December 2013 (UTC)

The Peterson Foundation graph of unreviewed TPC numbers is a deliberate attempt to try to show that taxes are progressive for the top 1%, which is not true. The ITEP graph, which I replaced it with, agrees with the peer reviewed sources that about half of corporate taxes are borne by their customers, meaning that about half fall on consumers. EllenCT (talk) 01:10, 22 December 2013 (UTC)

As I said above, federal rates are progressive for the top 1% - FactCheck. I'm still trying to figure out what the ITEP measured. Based on their FAQ, they don't split the corporate tax as you state. Morphh ^(talk) 02:26, 22 December 2013 (UTC)

Without digging into the ITEP figures, it looks like they're getting the regression via state and local sales taxes. I've seen bias publications that manipulate sales tax incidence by measuring via a single year and do so on a base other than that which is taxed (using income instead of consumption) without adjustment. What they do (looks like ITEP does this in their State by State), which is mathematically invalid, is treat any savings as completely tax free for that year, not tax deferred for future spending. Example, 10% sales tax - spend $80,000, save $20,000. They calculate that at a 10% of 80,000 = $8,000 / $100,000 = 8%. The more you save, the lower your average tax rate. So they report an 8% rate on $100,000, but what about the other $20,000? Poof - never to be taxed again (don't look at that hand - forget retirement, child's college, future spending - it's gone). They "forget" to model into that year the expected revenue on the saved income on future consumption. That's why I hate when mixing income and consumption into a single graph, because it's so easy to manipulate. The more taxes you mash into a graph, the more difficult it is for the graph to be unbiased. Morphh ^(talk) 03:40, 22 December 2013 (UTC)

There is also a bias with showing consumption rates on low income. Many low income consumers are high spenders (and this is not due to credit) - what the data shows is much consumption is via savings. As people retire (those that hold the vast majority of U.S. wealth), their incomes decrease as they shift to savings, so they have high consumption, low income - this biases a graph like this to show "low income" people with a higher tax rate than what their wealth would otherwise show. It's biased against workers and saving. Another reason to show incidence on what is actually taxed. If you're spending $50,000, but your income is only $25,000 - their average tax rate "on income" is going to show a much higher rate on that consumption than it would otherwise be. Morphh ^(talk) 04:29, 22

December 2013 (UTC)

As I review their research a bit more, it looks like they're really distorting the sales taxes - quite severely. There is way too much "interpretation" for this graph to be included in anything on Wikipedia. Morphh ^(talk) 04:29, 22 December 2013 (UTC)

Which specific figures are you referring to? EllenCT (talk) 12:37, 22 December 2013 (UTC)

This is likely the state figures included in their mashup graph. Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, Institute on Taxation & Economic Policy Morphh ^(talk) 14:13, 22 December 2013 (UTC)

There is also the question on how they split local property taxes on commercial property, do they fall to the owner, to the renter, or to the consumer? To my point above, this is another reason why mixing the graph of federal with state / local can create a bias graph, since each of these tax models can have many assumptions as to the incidence. Morphh ^(talk) 03:58, 22 December 2013 (UTC)

ITEP chooses incidences which are most likely to predict outcomes from prior historical data. EllenCT (talk) 12:37, 22 December 2013 (UTC)

Ya, I'm sure they do... Their FAQ doesn't state their method. Their complete publication on the State by State under the Models they use only says it "analyzes revenue yield and incidence of current state and local property taxes." Either way.. I don't care, the point was that mixing state/local with federal is a bad idea for a graph as it's easy to introduce a lot of bias. Morphh ^(talk) 14:20, 22 December 2013 (UTC)

Are you being serious or sarcastic? Why do you keep including the Peterson Foundation graph which only shows income tax and assumes corporations never pass their taxes on to their customers? EllenCT (talk) 04:53, 24 December 2013 (UTC)

Fourth opinion

I'll weigh in here briefly, responding to User:VictorD7's initial objection. Bottom line upfront, I think the chart is OK and there are several errors in the criticisms presented:

• The first point about the ITEP numbers differing from the TPC in federal income tax appears to be due to conflating average rates with average effective rates. The TPC link provided [3] specifically describes "average federal income tax rate" without the key word "effective". The CTJ figure more closely lines up with the IRS figures (e.g., in 2007 it was 20.6% per Income_tax_in_the_United_States#Effective_income_tax_rates) and makes sense given the importance of capital gains and dividends to this bracket. It also lines up with what you see if you look at other pages (e.g., top 400 effective (I calculate at max 23.7% which assumes the max of the ranges presented) and effective tax rate by income (where for 2009 in the 200k+ category composed of the top 3% or so only 1.8% are in the 30 to 35, 16.7% in the 25 to 30% and everyone else below and yet the "average federal rate" for the 1% is is 28.9% which seems like an inconsistent jump). I suspect the same thing is going on with the CBO which also doesn't say "effective".
• There's a link to a criticism by the Tax Foundation, but this mainly criticizes the policy recommendations. The only methodology criticism I could find was that "Including the federal offset in an analysis of state and local tax structures is misleading because it is a feature of the federal tax code, not state and local tax systems". Doesn't seem particularly relevant for our discussion here.
• With regard to incidence, while I didn't follow the links, based on the quotes it does appear that ITEP doesn't assume the incidence falls on consumers. This means it's probably a more fair comparison; if the incidence were even slightly on consumers, the effective would be regressive.

The difference in the federal rate is due to effective rates which are lower due to the long-term capital gains rate of 15% along with qualified dividends at 15%, and it is quite consistent with the available data. I don't see a good reason to exclude the chart in these arguments. II | (t - c) 05:45, 31 December 2013 (UTC) Another source I see you guys have discussed is the Peterson Foundation's chart. How did the effective income tax rate for the 1% go from 20% to about 24% in their final graph? They say this excludes state income taxes. II | (t - c) 07:06, 31 December 2013 (UTC)

II, The TPC does describe effective - the title of the data for the chart is "Average Effective Federal Tax Rates". The TPC link you specify above saying that it doesn't provide the keyword "effective" does so in the notes at the bottom. Average describes the effective rate in the deciles. I'm not sure I understand why you're comparing Bush era 2007 data as closely matching CTJ when we're looking at current data. As for the top 400, that's the top .000004%. Such a decile makes no sense when trying to neutrally present the overall burden in a top level article like this. As for capital gains and dividends, TPC references "Measuring Income for Distributional Analysis” (July, 2013) as their analysis, which appears to include them. As for the ITEP/CTJ chart, my biggest problem is not their analysis of federal taxes, though I see no actual data or breakdown behind it to analyze (as you've done with TPC). The primary issue for me is that it combines federal, state, and local, which is over 100+ tax systems into a single statistic, which makes it fairly useless and subject to a lot of assumptions (and bias). We're detailing the TPC graph because you can actually see the taxes represented (and they're just Federal), where the ITEP graph has no distinction for anything. There is no distinction in the graph between taxes (federal, state, local) or even the type of taxes, income (with subgroups) or consumption (with subgroups). The models they use on consumption can be very misleading when combine with the same measure for income taxes, as it appears there is little accounting for future consumption of savings (or the way income/wealth is measured in the different systems). If you were to split the ITEP graph in two pieces, Federal and then State, at least that would make some sense, though I even question combining all the states in one graph as they can be so dramatically different. It's like if you mashed each state bird into a single creature and said, this is what the U.S. bird looks like. There is just far too much interpretation in a graph like that for a high level article - it'd take another dozen graphs to comply with NPOV. Morphh ^(talk) 14:48, 31 December 2013 (UTC)

(insert) Morphh already corrected most of your points, but I'll add or reiterate a few things:

• "Effective tax rate" means "average tax rate" ("or average effective tax rate"). From Investopedia: "Definition of 'Effective Tax Rate' The average rate at which an individual or corporation is taxed." That's why groups like the CBO and TPC use the terms interchangeably.

• The first link you provided and claimed was the "TPC link" I provided is actually a list of CBO figures hosted on the TPC site (read the fine print; why I listed it after "CBO"). The most pertinent TPC source used above is this one, titled "Average Effective Federal Tax Rates".

• The 2007 "IRS" figures you link to appear to be only for personal income and payroll taxes (as the chart says), excluding things like corporate taxes. The CTJ figures, by contrast, purport to be for all taxes, so they shouldn't match up. Your article chart is actually just sourced to a short NY Times piece that only lists "Congressional Budget Office, 2007 data" as its source, not the IRS. No data set is provided, but the numbers look pretty close to what TPC and CBO sources typically give for just personal income plus payroll.

• The $200k+ level includes a lot more than the top 1%, as you say yourself, and I'm not sure why you feel the given figures seem out of whack. Your TPC link doesn't provide a breakdown for the top 1%, but the 28.9% rate you cite (which is actually the CBO number) seems in the right ballpark for that year given the numbers presented (2009 was a down year for tax rates due to the recession). About a fifth of those making 200k+ paid over 25% (a majority of the top 1%), and there's likely more skewing at top than at the bottom, with small numbers paying up to 80% and beyond. VictorD7 (talk) 21:10, 31 December 2013 (UTC)

• The Tax Foundation criticizes ITEP for selectively applied methodology and then presents an alternative chart of total taxation based on more reliable TPC federal rates that shows a markedly different picture. All that also underscores the legitimacy of comparing and contrasting TPC and ITEP federal rates.

• The PGPF page you linked to isn't the source page linked to by the chart discussed in the above section. This one is. That page's caption correctly describes the TPC source. The chart you refer to on the other page is from a different year than the previous one, and has an incorrect caption. I'm guessing it was a software glitch that automatically updated it on more than one page. Of course none of that is relevant to this discussion.

• I appreciate that you took the time to read the quotes and conclude that ITEP doesn't appear to attribute corporate taxes to consumers. VictorD7 (talk) 21:10, 31 December 2013 (UTC)

The Peterson Foundation graph is limited to federal income taxes only. The ITEP is a sum of all taxes, federal state, and local, income, capital gains, payroll, excise, sales, and property. Therefore the ITEP graph is clearly more appropriate for this article. Why should we include a chart about only one kind of tax in only one of three or more jurisdictions typical in the U.S. in this article? Even if you believe the Peterson Foundation effort (I would not use the term "valiant", II) to try to convince you that corporations never pass taxes on to their customers, which even VictorD7 doesn't believe, it's not even appropriate for the income tax in the US article because it omits state, county, district, and local income taxes. EllenCT (talk) 15:19, 31 December 2013 (UTC)

ITEP analysis of the average effective sales tax for different income groups of the combined 50 States (2007).

If you want to present different types of tax systems, then include multiple graphs that we can discern what is being measured. Then attribute in the caption what the graph measures and who measured it. The reference to Peterson Foundation is ad hominem - the graph accurately reflects the TPC data. And the TPC doesn't "try to convince you that corporations never pass taxes on to their customers". They pass more incidence to labor than the ITEP does. If you want to include an ITEP measure of state / local, then get a graph for state / local. Then we could balance it with the Tax Foundation measure of the same data, who is critical of ITEP, to comply with NPOV. The Frankenstein ITEP graph is inappropriate on multiple levels. Morphh ^(talk) 15:50, 31 December 2013 (UTC)

Without a legend, a description of what exactly is being measured (including the assigned pass-through rates to customers and to labor), and evidence that ITEP is expert on all the types of taxes described, the chart is misleading or wrong. I don't fully agree with Morphh that the different types of taxes (probably with different assigned pass-through rates) should be broken out, but a number of charts with different assumptions are needed if the ITEP chart is to be given. The Peterson chart is, perhaps not suitable for this article, but is unlikely to be misleading, even if inconsistent with the ITEP chart. — Arthur Rubin (talk) 18:00, 31 December 2013 (UTC)

You know the old saying, "lies, damn lies, and statistics". There are books out there about how you can make the numbers say whatever you want by how you present the chart. For that reason, it may be best to keep charts simple, and avoid combining different kinds of figures that are calculated by different methods. bd2412 T 19:17, 31 December 2013 (UTC)

The composition of state and local tax revenues by sales taxes (brown), property taxes (white), licenses and other fees (grey), individual and corporate income taxes (green) in 2007.

Let's keep in mind that the section disputed for the TPC graph is Income taxes. We already have an ITEP graph in the article for state sales taxes (shown on the right). I don't think a graph like that is meaningful, but at least it's one tax type and other viewpoints/models can be better compared. A different approach to 50 states would be something like this composition graph of state and local tax revenues. It doesn't describe burden, but it presents a nice look at the state / local tax structure. A corresponding graph that lists the relative tax burden of each state would provide more meaningful information, then something like the ITEP graph (who pays 2.1% sales tax rate?). Morphh ^(talk) 20:13, 31 December 2013 (UTC)

Since Ellen's objections to the TPC chart have been systematically debunked, would you oppose me re-adding it soon? VictorD7 (talk) 22:13, 4 January 2014 (UTC)

VictorD7 is still unable to come up with a single peer reviewed source agreeing with his newfound belief that corporations pass 0% of their taxes on to their customers, and is shown here continuing his abusive pattern and practice of trying to lie to other editors in a continuing, misguided, and pathetic attempt to insert his political opinions based on non-peer reviewed sources. EllenCT (talk) 06:52, 5 January 2014 (UTC)

You mean like this (Harberger, 1962, pp 217, 219, 234)? "This result is taken by some people as evidence that the burden of the corporation tax is borne by consumers, that is, that the tax is shifted forward. Such an inference is far wide of the mark…Insofar as individual consumers have the same expenditure pattern as the average of all consumers, they neither gain nor lose in their role as consumers….If we are prepared to accept this canceling of gains and losses as the basis for as statement that consumers as a group do not suffer as a consequence of the tax, then we can conclude that capital bears the tax....It is hard to avoid the conclusion that multiple plausible alternative sets of assumptions about the relevant elasticities all yield results in which capital bears very close to 100 per cent of the tax burden." That's the paper the CBO author said had shaped the course of academic research since, and that your own source called "seminal". The peer reviewed sources invariably focus on the capital/labor split, not consumers. That doesn't have much to do with the larger debate, but even your tangential diversions are wrong. I guess you failed to read all that stuff I posted for you above. You never did post a single quote from any source (peer review or not) supporting your claims about "consumers". I also don't appreciate you continuing to lie about me. My position isn't "newfound" (and you mangled it anyway), I've been completely honest this whole time, and I'm not the one trying to shove my political opinions into this article. You are. VictorD7 (talk) 08:00, 5 January 2014 (UTC)

1962? Well I guess that is something of an improvement, but "very close to 100%" is not the 100% in light of the several peer reviewed sources I posted from the last two decades, including the secondary meta-analyses, which are all closer to 50%. However, I commend you for finally finding the peer reviewed literature. Please read its more recent offerings. EllenCT (talk) 08:10, 5 January 2014 (UTC)

The remainder (if any exists) would be labor, not consumers. I had already posted quotes from the CBO and your own source describing that 1962 paper as the "seminal" work that's guided the scholarship that's followed. Ever since the peer reviewed literature has broken incidence into capital/labor, not consumers, as your own sources show. Please produce a single quote supporting your claim about consumers. VictorD7 (talk) 08:30, 5 January 2014 (UTC)

I see, VictorD7 - I didn't notice that the ITEP said it included corporate income tax, so it looks like there is a strange difference. Couldn't find ITEP's tax model which was cited in that paper either. Would appreciate it if Morphh could let us know what they say if they respond to his email. Not sure I agree with allocating all or most of the corporate income tax to owners but that's something I'll have to look into a little more. II | (t - c) 21:21, 1 January 2014 (UTC)

Federal tax receipts

We have these two graphs in the article. Seems they both cover the same thing and I don't think the duplication is for pov / balance reasons, so I suggest we remove one. 1950-2010 takes a historical approach, which is nice, but it's dated and not as accurate as the 2012 graph, which is noticeable with regard to income tax and payroll tax percentages. Morphh ^(talk) 20:14, 8 January 2014 (UTC)

The White House OMB (page 35) shows ind. income/payroll crunching to 41.5%/40% in 2010, but then diverging to 47.4% and 35.5% the very next year, 46.2%/34.5% in 2012, and estimates taking income to around 50% by 2018 and payroll to around 32%. 2010 is a strange and potentially misleading year for the chart to end, so it should probably at least be updated to 2011 or 2012 to capture the ongoing divergence. VictorD7 (talk) 21:09, 8 January 2014 (UTC)

I think the historical information is informative. If there was an image crowding issue then there would be reason for removing one of the images, however, at the moment this is not an issue. I do agree that the historical graph could be updated for more recent data. Also, the reason that the chart ends in 2010 is that it was created in 2012 based on a then current US Senate Joint Committee on Taxation report. Guest2625 (talk) 04:54, 9 January 2014 (UTC)

I agree that we should keep both, but update them - the historical chart should be extended every year to the current year, and the pie chart should always show the most recent year. Also, I am curious about the orange and light blue lines on the historical chart, since whatever the orange represents, it seems to be jumping to an all-time high in 2010. bd2412 T 05:24, 9 January 2014 (UTC)

Ya, I should have mentioned that the reason I noticed was that I was looking at adding more graphs and it was creating a crowding issue. But I guess we can cross that bridge later. Morphh ^(talk) 15:19, 9 January 2014 (UTC)

Tax as theft

The section is not specifically relevant to the US. Although I don't see the need for the section anywhere, it might be added to the article Taxation as theft. — Arthur Rubin (talk) 15:31, 22 March 2014 (UTC)

Describing Obamacare as a "Tax"

When asked years ago whether Obamacare could possibly be construed as a tax, Obama angrily said "no." Obamacare's individual mandate was NOT in the revenue portion of the bill. Roberts wrote most of the persuasive dissent in the Supreme Court ruling, so he knew very well that Obamacare was not really a tax, and he merely voted with the majority to try to sidestep controversy (as any number of subsequent reports indicated). The morning after the Court's ruling, the White House reiterated the obvious truth that Obamacare was not a tax. So the article ought to delve into these nuances, but instead it coldly declares Obamacare a tax. Which, of course, it isn't. — Preceding unsigned comment added by 216.49.20.187 (talk) 17:52, 27 October 2013 (UTC)

I updated this portion of the article to reflect the decision in National Federation of Independent Business v. Sebelius, where SCOTUS upheld the Act as valid under Congress's taxation power in the Constitution. The IRS itself is still disputing whether it is in fact a tax; the important thing for this article is that it is an example of an act being held as valid under the tax power. As an encyclopedia, the angry rhetoric in the preceding comment should not be reflected in the article itself. The appropriate place for a nuanced look at the PPACA is in its own article and the SCOTUS case article, not in the overview article for U.S. Taxation. Laertes513 (talk) 02:39, 25 February 2014 (UTC)

Greetings! New posts should go at the bottom of the page. That said, internal motivations aside, the Supreme Court has held that Obamacare is a tax. It is certainly fair to add analysis by tax experts who say otherwise, but we only report what the sources say. bd2412 T 02:56, 25 February 2014 (UTC)

There is no body text about the Affordable Care Act, yet we have a summary line in the lede? Also, I question its due weight as a single reference given the vast scope of the article. I know this is a current event of interest, but even assuming good faith, cherry picking one law and slapping it into the lede has the appearance of impropriety even if none is intended. Why mention this one law, and not every other that results in a "tax"? If we're going to keep this line and source, I would recommend moving them to the body of the article in an appropriate place, perhaps with the other medical (Medicare, etc) detail.It just seems vastly out of place in the lede compared to the scope, and sets it up for unecessary partisan bickering.76.238.186.96 (talk) 19:00, 15 April 2014 (UTC)

I have to agree with the user at IP76.238.186.96 to the extent that mentioning this one tax in the "lede" of this particular article if this particular tax is not covered in the body of the article might be considered a bit tangential. Not a big deal though, for me at least. I went ahead and deleted the reference. Famspear (talk) 21:56, 15 April 2014 (UTC)

I have no issue with removing it from the lede (but agree it would be fine in the article) and have to agree that it should exist in the article content before being mentioned in the lede as the lede summarizes the article (WP:LEDE). With that in mind, our lede for this article needs a good trimming. Morphh ^(talk) 23:18, 15 April 2014 (UTC)

Long standing, sourced graph unilaterally removed and replaced with dated one removed by consensus months ago.

EllenCT just replaced a long standing, properly sourced tax chart without discussion with a dated (2011), problematic one from a partisan lobbyist with an internal federal component that's dramatically contradicted by sources like the CBO and Tax Policy Center despite her participating in the discussion that formed the consensus to remove it several months ago. I'd ask that EllenCT reconsider her unilateral move, revert it, and instead attempt to first gain support for it by posting her rationale here. VictorD7 (talk) 06:30, 20 May 2014 (UTC)

I don't care to have another long tiring debate with Ellen rehashing the same thing. Consensus was not to include it and that horse is dead. Any further inclusion is just disruptive editing WP:IDHT. If we have new graphs, then we can discuss them. Let me clarify my edit summary that I was only describing the first graph when making a statement regarding the image caption being inappropriate, which was to say that it was not written from a neutral point of view. Morphh ^(talk) 21:23, 20 May 2014 (UTC)

Overall incidence

Are there any objections to including the overall incidence of taxation shown at [4]? That includes federal, state, and local per [5]. EllenCT (talk) 22:18, 17 January 2015 (UTC)

I'm pretty sure we've worn out the mashup ITEP graph discussion in the past and there were many objections, and I don't think updating it for 2014 will change that Talk:Taxation_in_the_United_States/Archive_3. So I rather not rehash that debate and prefer to move on. Morphh ^(talk) 22:44, 18 January 2015 (UTC)

Is there another source which shows the total incidence of all US federal, state, and local taxes? The only objections from last time were from those who were unable to provide such a source, and constantly insisted on sources which only depicted federal income tax. EllenCT (talk) 04:01, 19 January 2015 (UTC)

There is a reason no one else creates such a graph. It's easily misleading and a poor representation of hundreds of taxes across 50 states. That's not a reason to include it - it's a reason to exclude it, particularly when we know the source has a known bias and political agenda. Morphh ^(talk) 16:36, 20 January 2015 (UTC)

Misleading how? Is there any summary statistic in this entire article which doesn't aggregate millions of individual tax bills? I would like to see firm proof that there is any inaccuracy whatsoever before I will consider ceasing insistence on this. I suggest that your longstanding editing and advocacy of the FairTax article is a far greater source of bias than the ITEP's raw numbers summed from reliable sources. Can you find a single source even suggesting they are inaccurate in any way? EllenCT (talk) 16:45, 20 January 2015 (UTC)

We all have our editing biases and interests, as do you, and your ad hominem personal attack is noted. I've studied many tax reform proposals and often find them favorable in different ways. As for the graph, I linked above to a large discussion regarding it (as did the last discussion thread from May), which includes sources questioning the accuracy and methodology used (we also had difficultly figuring out what they measured). While I think it's important to understand the layers of tax burden, the graph is controversial and without some form of pov balance, I think it's inappropriate. Maybe User:VictorD7 would like to readdress it, since he led the objection. But for me, there was no consensus to include it and it had strong objections, which is what you asked about. Morphh ^(talk) 15:24, 21 January 2015 (UTC)

If we all have our biases, how is pointing them out a personal attack? If you know of any reason that the raw incidence numbers in question may be unreliable, then please state it. EllenCT (talk) 17:59, 23 January 2015 (UTC)

See ad hominem. I'm not going to restate it - it's already been sufficiently stated. We don't even know how they calculated the raw incidence numbers - there is no methodology presented for the calculations. I emailed them asking for more information and they never responded. Morphh ^(talk) 19:40, 23 January 2015 (UTC)

Your position is that everyone has biases but talking about their basis amounts to ad hominem attacks? Clearly they simply tally the different tax incidences and add them up, weighting by population. Who did you email? Is there a single reliable source which agrees with your suspicion that they have ever produced inaccurate totals? EllenCT (talk) 00:15, 24 January 2015 (UTC)

WP:NPA Comment on content, not on the contributor. We were not talking about biases. You brought it up as an attack on my character. It is the definition of an ad hominem attack, which is clearly stated as a personal attack in WP:WIAPA. The answer "they simply tally the different tax incidences and add them up" is not, and was not, acceptable. I emailed "itep@itep.org", and yes (which you already know). I'm not going to repeat the same tendentious debate over and over again. Morphh ^(talk) 23:03, 24 January 2015 (UTC)

Yes, the same objections outlined in incredibly extensive and patient detail on this and several other pages for the past couple of years. The chief one is that ITEP's total number is dubious since that figure's internal federal component is dramatically contradicted by the far more credible CBO, IRS, and Tax Policy Center. Its state/local figures may be way off too, but finding credible sources for that more difficult task is harder to come by, and we shouldn't accept ITEP's given the known problem with their federal figures. Your assertion that the large discrepancy was merely due to differences in scoring corporate taxes was disproved with evidence showing ITEP did the opposite of what you claimed, and yet it still produced the skewed results it did. It doesn't help that ITEP is an obscure, far left think tank and CTJ (your actual source here) is the group's partisan lobbying arm. VictorD7 (talk) 19:03, 21 January 2015 (UTC)

Where, precisely, is there a discrepancy between any of the IETP or CTJ numbers and those of the CBO, IRS, or TPC? EllenCT (talk) 17:59, 23 January 2015 (UTC)

Maybe we should put this in the FAQ in case you forget again: [6].VictorD7 (talk) 20:30, 23 January 2015 (UTC)

Again, is there anything in there showing a discrepancy? Because it sure looks like you trying to push federal income tax and capital gains only, while I am trying to write a comprehensive encyclopedia comprised of total taxes at the federal, state, and local levels. Where is the discrepancy? EllenCT (talk) 00:15, 24 January 2015 (UTC)

Anyone can click on my link and see that claim is false, and that I'm comparing federal to federal, apples to apples, to show that ITEP's federal numbers (which make up a big portion of their total numbers) are dramatically contradicted by the other sources, and therefore their totals are unusable as well. VictorD7 (talk) 04:23, 24 January 2015 (UTC)

TTB is part of DoT not DOJ

Under the Tax administration section the article stated the Alcohol and Tobacco Tax and Trade Bureau was under United States Department of Justice. This is a false fact i think someone was thinking of Bureau of Alcohol, Tobacco, Firearms and Explosives, which is under DOJ.

TBB and a part of ATF under DoT(Department of the Treasury) prior to Homeland Security Act of 2002, in which ATF was split into two separate Bureaus one for law enforcement (ATF) and one for taxation (TBB). ATF was then moved to DOJ. — Preceding unsigned comment added by Simmons123456 (talk • contribs) 03:55, 12 August 2015 (UTC)

Slightly misleading description

One of the charts in the article contains the following description:

”The U.S. federal effective corporate tax rate has become much lower than the nominal rate because of tax shelters such as tax havens.”

The wording of this passage seems to reflect a misunderstanding of what the sources are saying, a misunderstanding of tax law terms, and a misunderstanding of arithmetic.

First of all, under U.S. Federal corporate income tax law, there is no such thing as “the” nominal rate (as if there were only one rate). The tax system is a multi-rate tax system – a graduated tax rate system. This means that there are several tax rates, each applied to different levels of taxable income. So, it’s meaningless to say that the effective tax rate for a given corporation for a given year will be lower than “the” nominal tax rate. Instead, you could say that the effective rate for a given corporation for a given year is lower than its HIGHEST nominal rate for that year.

Second, by definition, the effective rate for a given corporation’s taxable income for a given year will generally be lower than the highest nominal rate for than same corporation -- regardless of whether the corporation is involved in a tax shelter or a tax haven. This is basic arithmetic.

The correct thing to say, based on the sources, would probably be something like this:

”The U.S. federal effective corporate income tax rate is much lower than the highest nominal rate in part because of tax shelters such as tax havens.”

Yours, Famspear (talk) 22:51, 21 May 2016 (UTC)

OK, I changed the description in the article accordingly. Famspear (talk) 22:54, 21 May 2016 (UTC)

I still find this a bit confusing as the first part is math, except for the degree deemed "much lower", but then we seem to state that all businesses use tax shelters as the reason. Would this be better wording? "The U.S. federal effective corporate income tax rate is lower than the highest nominal rate, which can be significant in part because of tax shelters such as tax havens." Morphh ^(talk) 19:57, 23 May 2016 (UTC)

I don't see anywhere in the article where we mention tax shelters, except in that one place. So, I don't see that we are stating that all businesses use tax shelters, or that the use of tax shelters is the reason that the effective rate is lower than the nominal rate or rate.

I think that what causes the confusion is trying to tie tax shelters to the effective rate/nominal rate concepts. As a general proposition, the national effective rate of taxation for almost any group of taxpayers will, by definition, be less than the highest marginal rate (the highest nominal rate), whether they are involved in tax shelters or not. The reason is that we don't have just "one" tax rate, under the U.S. Federal income tax system.

For example, for tax year 2015, an unmarried individual working as an employee with a gross income of $35,000 would incur a tax of $3,248. His highest nominal rate is 15%, according to the officially published tax rate schedule. Whether you compute the effective rate on his gross income (35,000) or on his taxable income ($24,700, which is $35,000 less $4,000 personal exemption less $6,300 standard deduction), you are going to get an effective rate that is lower than his highest marginal rate (lower than his highest nominal rate).

Example A: $3,248 divided by $35,000 = 9.28% effective rate.

Example B: $3,248 divided by $24,700 = about 13.1498% effective rate.

Both of those rates are less than 15%.

The effective rate will generally be lower than the highest nominal rate partly because the first $10,300 of income isn't being taxed at all (that is, it's being taxed at a tax rate of 0%) and partly because the first $9,225 of income above that initial level is being taxed at only 10%, not 15%.

Now, a tax shelter certainly lowers the taxpayer's effective rate even more -- maybe a lot more. But, it may be confusing to try to tie tax shelters to the effective rate/nominal rate concepts, because the average person probably doesn't even understand the difference between an effective rate and a nominal (specifically, a highest marginal nominal) rate. Famspear (talk) 21:17, 23 May 2016 (UTC)

PS: Yes, I like your wording: "The U.S. federal effective corporate income tax rate is lower than the highest nominal rate, which can be significant in part because of tax shelters such as tax havens." Famspear (talk) 21:36, 23 May 2016 (UTC)

I changed it to your wording, Morphh. Good work. You should get the rest of the week off -- with pay, of course. Famspear (talk) 21:41, 23 May 2016 (UTC)

Thanks - Is unrepatriated income held in shelters normally included in an effective corporate income tax rate calculation? Just concerned we may be twisting the definition to make a point outside of what the graph represents. Morphh ^(talk) 15:23, 25 May 2016 (UTC)

If the unpatriated income is legally excluded from taxable income (as defined in section 63 of the U.S. Internal Revenue Code) and is being ignored in the calculation of tax for the tax year in question, then the unpatriated income is not considered in the computation of the effective corporate income tax rate -- as we have described that rate, above.

However, the term "effective rate" is not an actual U.S. federal income tax law term from the Internal Revenue Code (at least, I don't remember seeing the term in the Code). Therefore, I suppose that an economist writing about U.S. federal income tax policy could define the term "effective rate" in different ways, depending on what kind of analysis he or she might be trying to do. There is no "tax law rule" that says that an economist could not define the "effective rate" in more than one way. For example, I guess if you wanted to do so, you could define the effective rate to be the tax amount divided by the SUM of "section 63 taxable income" and the legally sheltered income for a given year. In that case, a different effective rate would be reached.

So, I guess it's not a question of twisting the definition. It's more a question of making sure that you adequately explain what definition of "effective rate" you are using, so your reader understands. Famspear (talk) 16:09, 25 May 2016 (UTC)

Draft:Effect of taxes on employment

Of relevance, there is a long-waiting Draft:Effect of taxes on employment that could benefit from the attention of experts in this area. Cheers! bd2412 T 22:13, 2 December 2017 (UTC)

Intro section

Two things are currently strange about the intro. First is choice of year - 2010 was one of the highest deficits in US history, almost 9% of GDP. The tax % of GDP would have been artificially (and unsustainably) low. More reasonable would be some sort of rolling average (last 5 or even 10 years). The choice strikes me as political. Psm (talk) 21:17, 15 November 2017 (UTC)

Second, why use OECD data here suddenly? Is that really the best source? The diagram further down indicates a tax pressure of around 35% or more, as opposed to OECD data of 26%. At a minimum the article should explain the differences. Psm (talk) 21:17, 15 November 2017 (UTC)

@Psm: A question: What's wrong with the Organisation for Economic Co-operation and Development's numbers? Are they particularly POV? — Mr. Guye (talk) (contribs)  21:45, 2 December 2017 (UTC)

@Mr. Guye: it’s an odd choice, because OECD doesn’t do its own data collection nor analysis, nor do they make much effort to make data comparable. check their own comments on their data - they basically just replicate data provided to them by member countries, without any direct effort at making numbers comparable. which make it hard to see if there is POV (eg is the providing US administration trying to downplay or the opposite?) or just randomness (are state sales taxes included or not? etc). for an english language (US centric) wiki page to pick OECD strikes me as odd, if anything betraying POV by whomever first made that selection. Psm (talk) 01:32, 31 January 2018 (UTC)