Talk:Taxation in the United States

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)

Tax of 100% on everything over 25K

While I heard about this proposal, I had heard it was more like he floated the idea in a cabinet meeting or something but that no bill was ever drafted. If that, or something like it, is the case, it is definitely a stretch to say "Franklin D. Roosevelt tried to impose a 100% tax on all incomes over $25,000 to help with the war effort." JoshNarins (talk) 20:58, 15 April 2010 (UTC)

Tax distribution—Commentary/NPOV dispute

On Dec. 9, 2006, an editor inserted commentary about the section "Tax distribution" into that section (the new material is the part after the bullets):

Tax distribution

In the United States, the Congressional Budget Office produces a number of reports on the share of all federal taxes paid by taxpayers of various income levels. Their data for 2002 shows the following: (Table 2)

• The top 1% of taxpayers by income pay 33% of all individual income taxes, and 22.7% of all federal taxes.
• The top 5% of taxpayers pay 54.5% of all individual income taxes, and 38.5% of all federal taxes.
• The top 10% of taxpayers pay 67.4% of all individual income taxes, and 50% of all federal taxes.
• The top quintile (20%) pays 82.5% of all individual income taxes, and 65.3% of all federal

This interruption is to protest the bias in these statistics, and ask that the total amount of income earned for each of these groups be listed. For example: The top 1% of taxpayers by income pay 33% of all individual income taxes, and 22.7% of all federal taxes, and earn approximately XX% of all income. One will find that the taxes paid by group is equally near the percentage of national income earned by group. As stated, there is a misperception that the top 1% to 20% of the population is paying a disproportionate amount of the taxes, yet they earn most of the national income. The misrepresentation is commonly argued on political forums, on behalf of reducing taxes for the wealthy.

The added material is a commentary/discussion about the article and should be included on this talk page, not in the article itself. I've therefore moved it here.—Mateo SA (talk | contribs) 01:30, 10 December 2006 (UTC)

Postscript: Since the editor's concern seems to be that the above-mentioned section is biased, I've added the POV tag to that section.—Mateo SA (talk | contribs) 01:36, 10 December 2006 (UTC)

I've tried to update this per these comments. However, we may be duplicating the section "Progressive nature of income tax" - perhaps we should combine these and maybe rename the header. Morphh ^(talk) 14:00, 10 December 2006 (UTC)

I agree. Progressive/regressive nature of a tax system is tax distribution. It belongs in this section.Gmb92 07:26, 8 November 2007 (UTC)

It looks like some are trying to substitute one biased POV for another in the name of NPOV. We won't get anywhere on tax distribution until we talk EFFECTIVE tax (tax over income) to filter out the impact of tax complexity. See the third graph presented here (source data is CBO): http://economix.blogs.nytimes.com/2009/04/08/how-much-americans-actually-pay-in-taxes/.MrJ 4:07, 20 March 2011 (UTC)

History split

I think this section requires a lot of expansion and is currently sufficient to start its own article titled something like Taxation history of the United States. It should cover early American history as well such as the Boston tea party. Morphh ^(talk) 16:33, 5 January 2007 (UTC)

Support

1. Morphh ^(talk) 16:33, 5 January 2007 (UTC)
2. EECavazos 02:00, 11 July 2007 (UTC)

Oppose

Done

Since no one opposed I took the liberty of creating the article. I have not yet made a reference to this article because the separate history article requires a lot more work.EECavazos 23:38, 14 July 2007 (UTC)

Excellent - Thanks! Morphh ^(talk) 0:16, 15 July 2007 (UTC)

Mention of Fair tax?

I was wondering if it would be appropriate to mention the FairTax as an alternative which has been proposed. Brian Pearson 00:17, 11 September 2007 (UTC)

There is a brief mention of it under "Federal tax reform". I'm not sure we should give it any additional weight in this article. Perhaps we could give it a brief definition, but we would likewise need to do so for the Flat tax. Morphh ^(talk) 13:13, 11 September 2007 (UTC)

Easier said than done.:) I'd have to give it some thought. Brian Pearson 01:57, 13 September 2007 (UTC)

Effective tax rates

As suggested earlier by another poster, I think it makes sense to combine "Progressive nature" with "Tax distribution". Progressive/regressive are general descriptions of tax distribution. Also, I want to suggest a couple of sources regarding effective tax rates. The first deals with effective federal tax rates from the Congressional Budget Office. Table 1A lists the total federal effective tax rates from 1979-2001 for 5 income quintiles and the top 10%, 5% and 1% of incomes. [[1]] A similar 2004 CBO study continued this analysis. Since it assumed expiration of various 2001 and 2003 tax act provisions, estimates for years beyond 2004 are not accurate. However, since no major changes to the tax code have taken place since 2003, 2004's numbers are reasonably accurate for this article. Table 2: [[2]]

For regressive state taxes, this study lists the estimated average effective rates in graph form. This is for the year 1996, which should be noted if included in this article. I don't see any better reference in this article that covers this topic. Figure 5, page 6 of the PDF lists the graph. [[3]] For the lowest income group, the average effective rate (U.S.) is about 12.5%. For the highest income group (top 1%), the average effective rate is 6%.

Gmb92 07:46, 8 November 2007 (UTC)

Major culling needed

Editor Eastlaw has pointed out that the list of taxes and fees was fairly problematic. I have deleted some of the more obviously-undocumented items. That does not mean that these taxes or "fees" don't exist. It just means that we need to limit this list to taxes -- and just to taxes that we can actually document. This still needs work. Stay tuned. Famspear (talk) 23:34, 21 November 2007 (UTC)

Idea for New Article

I am considering writing an article on timing concepts in Federal income taxation and related case law. For example, the constructive receipt, economic benefit, and claim of right doctrines, an elaboration on cases regarding the cash method versus accrual method of accounting, etc. Does anyone think this would be worthwhile or appropriate for Wikipedians? I would outline the various doctrines at a high level and give some of the landmark cases in each category. Nathanpatterson 04:48, 30 May 2006 (UTC)

I think you guys ought to explain ways that tax money is used. —Preceding unsigned comment added by 71.191.199.175 (talk) 22:58, 26 February 2008 (UTC)

That would be covered under the area of government spending and United States federal budget. Morphh ^(talk) 14:10, 27 February 2008 (UTC)

I agree with editor Morphh. "Taxing" (bringing the money into the government treasury) and "spending" (appropriations, or paying the money out of the government treasury) are opposite concepts, and the "spending" side of things (how the government uses the money) should be kept separate -- with separate Wikipedia articles. Famspear (talk) 16:19, 27 February 2008 (UTC)

Peer-review notice

I think we're close to submitting Tax protester constitutional arguments for Featured Article status. Please help in the peer-review of this article to get it ready for submission. Thanks Morphh ^(talk) 19:24, 14 February 2008 (UTC)

Lead section

Lead section can be expanded. Per WP:Lead section, the lead should be able to stand alone as a concise overview of the article. The lead should

1. establish context;

2. summarize the most important points;

3. explain why the subject is interesting or notable, and

4. briefly describe its notable controversies, if there are any.

Per Wikipedia guidelines, the "emphasis given to material in the lead should roughly reflect its importance to the topic according to reliable, published sources. The lead should not 'tease' the reader by hinting at but not explaining important facts that will appear later in the article. It should contain up to four paragraphs, should be carefully sourced as appropriate, and should be written in a clear, accessible style so as to invite a reading of the full article." Yours, Famspear (talk) 18:22, 27 February 2008 (UTC)

I left a message on the users talk as well. Morphh ^(talk) 18:26, 27 February 2008 (UTC)

POV intro tag

(After some edit conflict) The second paragraph cats a negative light on taxation by choosing examples that are favorable to their view. It's done elegantly, but it is obvious and should be rewritten or deleted. ☆ CieloEstrellado 16:31, 30 March 2008 (UTC)

I removed the quote and did some copyedits. Perhaps this will address the concern. Morphh ^(talk) 16:30, 30 March 2008 (UTC)

Ok, I've removed the tag. Good job there, but there's still some hidden cry against the "government taking away our money," even if it's very subtle. ☆ CieloEstrellado 16:35, 30 March 2008 (UTC)

I guess such would be based on the readers view regarding levels of government spending, which is a different article. We definitely need to expand the lead to summarize the article, which may help this (such that we discuss progressive aspects on income). Morphh ^(talk) 16:47, 30 March 2008 (UTC)

Suggested move

How would the editors here feel about moving this article to Tax policy of the United States to be more along the lines of the titles of other policy articles (Category:United States federal policy). The pros would be that it would give this article a more narrowly-defined scope (it seems to have grown rather large), and that it would draw the article into a framework parallel to the other policy articles. Cons: The State-specific material may need to be farmed out to another article. johnpseudo 22:39, 2 May 2008 (UTC)

Right now, the article title parallels the tax articles of other countries (Category:Taxation by country). I prefer it the way it is based on Wikipedia guidelines (see WP:TITLE). Generally, article naming should prefer what the greatest number of English speakers would most easily recognize, with a reasonable minimum of ambiguity, while at the same time making linking to those articles easy and second nature. I wouldn't think "tax policy" would be the first thought when searching for most. I would suggest turning your suggested link into a redirect, and we could then categorize the redirect (WP:CAT-R). Or perhaps there is some way to have this article list it with that name in the category. Anyway.. that's my thoughts on it. Morphh ^(talk) 13:45, 04 May 2008 (UTC)

Tax Withholding section -- dubious claim

I was reading this in the withholding section:

"Conversely, other individuals withhold as little as possible, using the rule that withholding need only be 100% of the previous year's tax liability, and thus pay a large amount on April 15."

What rule is this that withholding need only be 100% of previous year's liability? By that reasoning, if one had no liability in 2007 (if one was a student, say), then one would not have to withhold anything in their new job regardless of the salary. This appears to directly contradict Publication 505. I've placed a dubious tag on the sentence and will wait to see if anyone finds a reference. --Meowist (talk) 22:46, 23 July 2008 (UTC)

What I think the article was talking about is the rule about the penalty for underpayment of estimated tax. This has little if anything to do with whether your employer is required to withhold federal income tax on the new job.

The employer is generally required to withhold based on the published withholding tables and schedules and the Form W-4 the employee provides to the employer (with some exceptions not material here).

By contrast, what the article is talking about is: "How much must I have paid in (whether in the form of witholding, prior year credits, or 'estimated tax Form 1040-ES payments') by April 15, 2009 to avoid the so-called 'Form 2210 penalty' for failure to timely pay 'estimated tax' for the tax year 2008?"

I edited the article to clarify this, although more clarification might be needed, 'cause it's a bit complicated. Hope this helps. Yours, Famspear (talk) 17:22, 24 July 2008 (UTC)

I've read the form 2210. This still is a bit unclear - from reading this form and others it seems that one doesn't incur a penalty for underpayment if one withheld at least as much as one had tax liability in the previous year. So in the student example above, it seems withholding nothing works. However, looking on the W-4 form, there is no way to make the employer not withhold without claiming "exempt" which requires two, not one, conditions: no liability last year and you "expect" no liability this year. Is this another one of the IRS' catch-22 tricks? If you claim that you don't expect to have liability and then end up with some amount like $10k due but form 2210 says you owe no penalty, you still appear to get a $500 penalty. Meowist (talk) 02:12, 25 July 2008 (UTC)

Dear Meowist: I'm not following you. What $500 penalty? How are you computing it? Famspear (talk) 16:40, 25 July 2008 (UTC)

PS: If you're thinking of the $500 penalty mentioned in IRS Publication 505 (rev. Feb. 2008), page 13, you're comparing apples and oranges, in a way. Famspear (talk) 17:38, 25 July 2008 (UTC)

Yes, I was speaking of that penalty. Yes, it is a bit of an apples and oranges comparison since it's for estimated tax and this is withholding, which is apparently for wages only. I'm wondering about this "expect" clause... I suppose you can always "expect" to make enough charitable contributions to bring your tax down within some credits.Meowist (talk) 05:11, 30 July 2008 (UTC)

I have a gripe about the statement that the FICA is essentially a forced savings plan. This isn't accurate. The money collected passes through to the general fund, and an IOU is left in it's place. Further, there is not direct connection between how much you put in and how much you get out! It is tied to the level you contribute at. So if I pay at the maximum rate for most of my adult life (the case...) then I'll certainly get the maximum benefit for whatever my retirement age - but it has no bearing on how much I actually paid in taxes through FICA. I would simply remove the "forced savings" from the description. —Preceding unsigned comment added by Ka6s (talk • contribs) 16:09, 28 July 2010 (UTC)

Ka6s, the more you pay in to SS, the more you get out. Generally, people pay in much closer to what they get out than you would think looking at the formula used, which decreases the payout relative to what you put in after a certain point. The reason is that higher wage workers also live longer and so receive the benefit for longer. Also, what is so bad about an IOU? In this case they are more valuable than cash since they pay interest. 0¹⁸ (talk) 17:19, 28 July 2010 (UTC)

Not really. Only the top 35 (or was it 40) years of earnings are used, and the taxable earnings, rather than the actual withholding, is used to compute the payment. There is a correlation between the payments and the payout, but the actual factor used is allowable taxable earnings.—Arthur Rubin (talk) 08:30, 29 July 2010 (UTC)

Number of Taxpayers

The number of taxpayers references an article that indicates how many people were eligible to receive rebate checks. This does not seem like a valid approximation to me, as it excludes taxpayers with incomes over a certain level (how many I do not know). Better statistics are likely to be found at the IRS website: http://www.irs.gov/taxstats/indtaxstats/index.html

I agree. I've removed those references. People who get some percentage of their payroll tax back are not paying "no taxes" -- there's some heavy spinning going on, I don't think that website is a WP:RS. -- Kendrick7^talk 06:09, 23 October 2008 (UTC)

I'm ok with the removal of the content as It did not contain any critical information but the information was accurate with regard to effective income taxes paid (regardless of proper withholding) and it is a reliable source per Wikipedia policy (regardless of their pov). Payroll taxes are discussed in the next paragraph, which includes the regressive nature and that most Americans pay more of this tax. They are discussed separately as they are different taxes and the payroll tax is technically not an income tax. Although, from the standpoint of an employee who has the FICA taxes (both Social Security and Medicare) withheld from his or her paycheck, it might be difficult to see the difference. The FICA tax is actually an "employment tax" imposed under Subtitle C of the Internal Revenue Code. By contrast, "income" taxes (individual, corporate, etc.) are imposed under Subtitle A. The estate and gift taxes are "transfer" taxes (taxes on some, but not all, transfers of ownership of property), and are imposed under Subtitle B. Morphh ^(talk) 13:04, 23 October 2008 (UTC)

Foreign earned income exclusion

I found the above article in the list of those to be wikified. Moreover, it reads like a how-to. I'm hoping that editors here will know if there is anything useful in it to be salvaged, and if so, if it should be brought in here. Itsmejudith (talk) 13:18, 23 March 2009 (UTC)

can the I R S DO AN AUDIT ON A CHILD

Just wondering if and why the IRS can or can't audit a child ?

Created article for tax statute -- how to add to the template?

I noticed there's this cool template with all the tax statutes in it. I just created Tax_Relief_and_Health_Care_Act_of_2006 last night and I don't know how to add it to that template, will someone please do that for me? Thanks. Agradman ^talk/_contribs 20:34, 15 July 2009 (UTC)

Added it. Morphh ^(talk) 23:47, 15 July 2009 (UTC)

gini as measure of progresivity

I removed the gini coefficient as a measure of progresivity graph. The reason I did this is that the payrole taxes are regressive, so I'm not really sure how they can be progressive. In addition, as I noted in my edit comment, this needs to be referenced. Morphh writes, "The image is sourced and a Gini Coefficent is a standard measure of progressivity". Please show me the non-self published ref. The current website link is a self-published source. 0¹⁸ (talk) 22:45, 17 January 2010 (UTC)

For one, the term progressivity does not mean progressive. It is used to describe both regressive and progressive taxes - it is the range of the tax incidence and is essentially short for Progressiveness/Regressiveness. Second, Payroll taxes being regressive is somewhat matter of opinion since it is payed back progressively. Aside from that, the Gini coefficient is a widely used measure of inequality that varies from 0 (perfect income equality) to 1 (perfect income inequality). So if you're expecting some negative number for regressive, you're misunderstanding the metric. The graph's purpose is to show the relative progressivity in comparison to other taxes. It shows the fact that the payroll tax is the most regressive or least progressive tax, and that the estate tax is the most progressive using a standard measure. As for the source, it's not a self-published source, it's a primary source, which is acceptable. It was written by Economist Karen Walby, Ph.D., and Economist Laurence Kotlikoff, Ph.D. If you have a better one that's fine, but it's not reason to remove it. Morphh ^(talk) 0:29, 18 January 2010 (UTC)

I understand the gini coefficient and how it works, I also understand why fairtax.org would want to use it. It's properties are very favorable to them: changes near the median affect the gini coefficient more than changes at the extremes. But, it is a measure of income inequality, using it for tax inequality is novel, and since this is not a reliable source, having it on the page that way amounts to original research.

I'd also point out that the source cited by fairtax does not in fact talk about the figure you include. The file they link to does not include any gini coefficients (they even say to look at table 5 which only has federal income tax rates, no gini coefficients). This is something that fairtax.org added and do not explain their methods for. In addition, the file that they link to is itself self-published. They claim it is revision to an NBER working paper, but the working paper that NBER publishes does not even share a title with the linked file. In any case, the version published by NBER is the one that should be considered to be non-self-published. 0¹⁸ (talk) 00:51, 18 January 2010 (UTC)

I think you may misunderstand the difference between a self-published source and a primary source. I also think you're misunderstanding a WP:RS as there is no basis to call it unreliable for an opinion on U.S. taxes (they're one of the larger tax reform groups) - certainly they have a pov and if we have other sources that balance it out, great. But they're not unreliable and it's not self-published (at least how Wikipedia describes self-published) - if we took that broad definition, then most primary sites would be self-published. It is not our purpose to verify their work. They published the information, and we can source them as a primary source for that data. Morphh ^(talk) 1:05, 18 January 2010 (UTC)

Note, I started a discussion of this source at [4]

I've started a new discussion regarding your general argument that advocacy groups can't be used as sources, that such sources are self-publishing, and that sources require academic review. None of which is based on policy. If consensus agrees and policy reflects this, than I concede the issue. Further discussion was required, a single their opinion saying the same thing without basis in policy does not override the general consensus and policy requirements. Oddly I don't even care that much for the image... it's an issue of misunderstanding or clarifying policy - I object to the reasoning. Morphh ^(talk) 16:51, 19 January 2010 (UTC)

You beat me to it.. I was actually undoing my edit as a sign of good faith until further discussion, but your majority of one is lacking in policy discussion.. and now your pissing me off edit warring over it. That image has been in there for quite a while... giving it consensus through use. Policy has been there for a while, which you seem to ignore. Again, I don't care if the image is there or not, but you've irritated me enough over it that I now want to make sure you don't take this absurd logic anywhere else. Morphh ^(talk) 17:05, 19 January 2010 (UTC)

as usual more leftists corrupting the articles with their opinions - making wikipedia a joke...what a disgrace...--173.150.32.77 (talk) 23:54, 21 February 2010 (UTC)

Expand Tax Topic

This broad topic deserves some interesting subtopics like 1) the 47% tax bracket (i.e. the 47% of Americans who pay no income taxes and how they do it) and the other brackets. 2) the tax freedom day this year figured to be April 9 where one's taxes for the year are considered paid by the work done to that point (about 1/3 of your work year pays your taxes) 3) the origin of the 1040 IRS form which suspiciously looks like half the 2080 work hours in a year which may indicate intent to conscript half of every citizen's labor to government service. 4) the actual slavery implications of economic slavery created by taxes.75.139.214.136 (talk) 22:07, 16 April 2010 (UTC)

Highest marginal tax rates, US federal income tax on individuals

I pretty much re-wrote the section on the highest marginal tax rates for individuals for the federal income tax, by going back to the actual Instructions for Form 1040 as published by the Internal Revenue Service/Bureau of Internal Revenue of the U.S. Department of the Treasury. I have all the Form 1040 forms and related instructions published by the Treasury, going back to the tax year 1913 (which was actually only for the period March 1 - Dec. 31, 1913), but for this Wikipedia article I included only those since the early 1940s (at least for now). There were a few errors in the material prior to this edit. Famspear (talk) 03:12, 29 September 2010 (UTC)

I would like to point out that the conclusions to be drawn from this review of the highest marginal income tax rates for individuals are somewhat limited. Famspear (talk) 03:20, 29 September 2010 (UTC)

All this editing apparently has put a big white space in the middle of the article, but after all these years I still don't know how to fix it. Hellllppp! Famspear (talk) 03:25, 29 September 2010 (UTC)

One thing we may want to add to the article later is that the highest marginal tax rate on individuals can be misleading. For example, the highest marginal tax rate for 1980 was 70% for individuals -- but that rate applied only to CERTAIN kinds of income. Interest and dividend income could be taxed as high as 70% above a certain income level, but "earned" income (in the sense of compensation for service, such as salary or wage) was taxed at no higher than a 50% rate for that same year. Most average folks presumably derive the bulk of their income, at least in their working years, as compensation for personal services (as an employee for example), and not from dividends or interest income, etc. Too busy to deal with that right now, though. Famspear (talk) 04:50, 29 September 2010 (UTC)

With all the phase-outs, the highest marginal tax rate may not correspond to the highest income, or may not be the nominally highest marginal tax rate. For example, if someone in the 35% tax bracket still has itemized deductions, the actual marginal tax rate may be 35.7%, due to the itemized deduction phase-out. If the taxpayer also has medical deductions, it could be 35*1.095 = 38.325% . It's possible that someone in the EIC phaseout area might actually have a higher marginal tax rate than someone in the 35% tax bracket.—Arthur Rubin (talk) 08:11, 29 September 2010 (UTC)

Hello, Arthur!

Also, the terminology can get confusing. I would tend to want to refer to the highest marginal tax rate as stated in the law itself for a given year as the "nominally" highest marginal rate for that year, while referring to an "actual" highest marginal tax rate (due to the effects of deduction phase-outs, etc., as described by Arthur) as being the "effective highest marginal tax rate." But of course, that could be confusing as well, since we use a similar term -- the term "effective rate" -- to refer to something else. At least right now, the article uses the term "highest marginal rate" to refer to what I like to call the nominal rate -- the rate stated in the statute and in the actual tax form instructions. Incidentally, I'm using the terms as I think lawyers and accountants would tend to use them. Arthur Rubin is definitely our mathematics expert here.

Another phenomenon that affects the marginal tax rate (as explained by Arthur above) would be the phase out of the exclusion for social security benefits received. Too complicated for me to explain this early in the morning, though.... Famspear (talk) 11:56, 29 September 2010 (UTC)

I can't agree strongly enough with anyone looking to prevent the abuse of marginal tax rates in articles like this. This is a sensitive political area in America today. Let's remember that the AMT was created to stop millionaires from paying nothing at all, and this was in an era of historically high marginal rates! Deductions, credits, etc have always made it difficult to determine true effective taxation from mere marginal rates. Any presentation of marginal rates should come with a presentation of effective rates as well as explanation for the difference. MrJD March 20, 2011

Removed Misleading Graphs

I have removed the two graphs at right from the article.

Historical tax rates for the lowest and highest income earners in the United States.

Total government tax revenues as a percentage of GDP for the U.S. in comparison to the OECD and the EU 15.

Both are misleading.

The first details marginal tax rates, but does not identify its content as marginal tax rates. It needs to be edited for clarity, as it covers an area of particular controversy in America today. It displays marginal tax rates, which due to credits, deductions, "payroll" taxes, etc, are an extremely poor representation of what is actually paid. The change in the impact of deductions relative to marginal rates over time overwhelms the numbers presented.

At the very least, amend the title of the graph to specifically indicate MARGINAL TAX RATES. Better still, incorporate a reflection of post-deduction reality. A graph that I've seen in a few places that does this is the third graph visible at the following link, citing CBO collection data: http://economix.blogs.nytimes.com/2009/04/08/how-much-americans-actually-pay-in-taxes/

The second graph uses a distorted Y-axis to create an impression of both disparity and volatility where considerably less exists, presumably with the goal of advancing a political agenda. MrJD March 20, 2011 —Preceding undated comment added 22:44, 20 March 2011 (UTC).

Article needs massive work

This article is lopsided in topics, inaccurate in numerous places, replete with POV, and very poorly cited. It needs a massive overhaul, or simply replacement with redirects to other articles better covering the same topics. Oldtaxguy (talk) 04:23, 8 November 2010 (UTC)

Proposed organization of article

I believe the entire article should be an overview rather than detailed coverage on each topic. We should refer to a main article on nearly every section or subsection. Here's a proposed outline:

• Intro
• Levels and types of taxation
• Income tax
  • Basic concepts
    • Worldwide taxable income
    • Graduated tax rates
      • Federal rates overview: no tables
      • State rates overview: no tables
    • Income (including reference to tax exempt)
    • Deductions and exemptions
    • Credits
    • Withholding of taxes
  • Individuals and entities
  • State variations
  • Nonresidents
  • Alternative tax bases (AMT, states)
  • Book/tax differences for businesses
  • Reporting under self assessment system
• Payroll taxes
  • Social Security and Medicare
  • State taxes on employers
  • Reporting and payment
• Sales and excise taxes
  • State and local sales taxes
  • Contrast to VAT
  • Federal excise taxes
• Property tax
  • Levels at which tax imposed
  • Types of property taxed
  • Assessment and collection
• Customs duties
  • Variable duty rates
  • Impact of treaties
• Estate and gift taxes
  • Imposed on deceased or donor
  • Taxable amount
  • Effects on income tax
  • Worldwide estate for residents
• License and user fees
• Tax administrations
  • Federal IRS and Customs are different
  • State administrations
  • Local administrations
  • Judicial appeal
• Legal basis
  • Constitutions (Federal and state)
  • Federal law
  • State laws
  • Local laws
• History overview: no historical rate tables
  • Early taxes: pre-Civil War
    • Tariffs and excise taxes
  • Pre-1913 income tax
  • Federal income tax
  • State tax after 1913
  • Social Security and payroll taxes
  • Measures to combat avoidance
    • AMT
    • State alternative taxes
    • International provisions

This article gets about 2k hits per day, so it needs to be taken seriously. The time budget to get this to true C class is likely to exceed 50 man hours. Getting to B class should be our goal for the short term (by say March 1), but that's likely a very stretch goal. Comments here, suggestions & volunteers very needed. Oldtaxguy (talk) 00:07, 23 November 2010 (UTC) Updated with proposed outline Oldtaxguy (talk) 19:14, 6 December 2010 (UTC)

That method of organization looks just right to me... Sugar-Baby-Love (talk) 19:29, 6 December 2010 (UTC)

Looks like a good outline and idea. 0¹⁸ (talk) 20:52, 6 December 2010 (UTC)

Most impressive </vader> Really drives home the scope of the article. Ravensfire (talk) 21:32, 6 December 2010 (UTC)

I think all this is great, but only focuses on federal taxation. State taxation is significant and is largely undocumented within this article. For instance, in California there are an expected $120 billion in taxes for 2010-2011. In California this is largely split into: (California Enacted Budget 2010-2011, Summary Charts)

• Personal Income Tax: $48 billion
• Sales Tax: $31 billion
• Corporation Taxes: $11 billion
• Highway Users Taxes: $5.5 billion
• Motor Vehicle Fees: $6.8 billion
• Insurance Taxes: $2.2 billion
• Estate Taxes: $0.7 billion

That's about $2531 per person in state taxes for Californians, compared to about $4820 per person in federal taxes for every American. That significant. And there are other states, with significant differences in setup. I am unsure how these should be incorporated into this article ATM. Int21h (talk) 06:21, 3 January 2011 (UTC)

I did some work on this in early December (see User:Ravensfire/Taxation in the United States for me early work) and did some off-line stuff over the holiday. You can see how some sections fairly easily mapped over. I started to get into trouble with the breakdown into Federal, State, and local levels. The purpose of those taxes changes at the different levels which is something I think is important to work into the article. I also think there is too much emphasis on the income tax for this article (example - AMT is important, but really not for this article beyond a single line mention at most). I haven't forgotten about this! BTW - if anyone else would like to work in my little sandbox, please feel free. I put the sections as sub-articles as a personal preference - would obviously need to put them in the main article at some point. Ravensfire (talk) 15:59, 3 January 2011 (UTC)

The proposed outline is organized by TYPE of tax, not JURISDICTION. If we organize by jurisdiction, there will be a lot of repitition in many areas. Note that property taxes have no Federal counterpart, but income tax definitions for most states follow Federal. In the sales and excise area, many of the principles but few of the details are the same among jurisdictions. Gasoline taxes are identical except as to rates; but Federal motor vehicle fees apply only to commercial vehicles. I strongly favor organization by type of tax.

As some examples of same vs. different: in the income tax area: California, New York, Illinois all either refer to Federal rules or incorporate them with very few differences (mostly related to things inherent in the state vs. Federal, like tax exempt interest); NJ has no itemized deductions, but follows most of Federal definition of AGI. Estate and gift taxes at the state level are almost all imposed based on Federal taxable estate or gifts. Oldtaxguy (talk) 03:29, 4 January 2011 (UTC)

This article needs to discuss both, although I am not opposed to being organized by type. There are many tax topics that will be intricately linked with a particular jurisdictional level, like customs and estate taxes. These different taxes must be referenced to make the article complete, and mixing them all up together may be confusing. The state estate taxes, for example, are based on a system of state (usually county) assessors. I am not aware of the federal government doing so independently, and probably base their assessments on such values. My fear is that with this type setup, either it will be mainly federal, or with 50 state systems all mixed in it will be difficult to understand or find the material that someone is looking for that is a state issue. We can't just ignore certain state issue or hide them because they don't fit nicely into the current scheme. Int21h (talk) 21:22, 6 January 2011 (UTC)

I agree that state and local issues MUST be covered in depth. This is one area in which the U.S. differs highly from most other countries: our system is a federal system, with independent taxation by states and municipalities. In some areas, the states rely on Federal rules, so those rules must be explained before the state rules can make sense; examples: income tax, estate tax. In other areas, there is a complete disconnect between Federal and states; example: sales and excise tax. In yet other areas, there is no Federal counterpart; example: property tax. Finally, states are prohibited from imposing customs duties. Thus, the broad spectrum of U.S. tax must cover all of these areas. Obviously, the topic is so broad that coverage cannot be deep in ANY one area. Thus, I believe each piece of the article must be the 20,000 foot summary, with all details left to "main" articles.

On a separate note, I believe your information on estate tax is incorrect, and confused with property tax. Most states impose estate tax on the gross estate, as defined in the IRC and reported on IRS Form 706, sometimes with adjustments and different deductions. Many states "piggy back" the state estate tax calculation as equal to the Federal credit for state estate tax, pro rated among states. There is no involvement of counties or assessors with the estate tax, as far as I'm aware. Also, few states do any independent examinations of estate tax returns, relying on the IRS to contest values. These observations apply to NJ and NY, whose estate tax returns start with Federal gross estate. California "piggy backs" and has a one page estate tax return (with some optional schedules), carrying numbers from the Federal return. Oldtaxguy (talk) 23:41, 6 January 2011 (UTC)

Well, OK, I may have confused the estate and property taxes. The California 2011 budget did not seem to differentiate between the two... And yes, I agree with the "20,000 foot summary", which is what I was going for with the federal taxation article. It would seem the current outline looks good. Int21h (talk) 23:54, 6 January 2011 (UTC)

Article redundancy

It looks like there was an inavertent content fork in Feburary 2010, where the large "Federal taxation" section of this article was copied to a new Federal taxation in the United States article, but the copy of the text here was not removed. I suggest that the copy of the text here should be moved to replace the text in the other article (since it looks like this version has been worked on more), and in this article the text should be replaced with a summary. Antony–22 (^talk⁄_contribs) 02:22, 26 February 2011 (UTC)

Thanks. I have proposed, and at least two others agreed, that the Federal taxation in the United States is redundant and should be changed back to what it originally was: a redirect to Taxation in the United States. That would avoid needing to maintain two articles that are inherently redundant. See discussion above and at the Federal article.

Willing to help with this article? See User:Ravensfire/Taxation in the United States to help. Uncle Jim needs you! Oldtaxguy (talk) 15:42, 26 February 2011 (UTC)

I agree that the text currently in the "Federal taxation" article should be gotten rid of. The question is whether the corresponding text in this article should stay here, or whether it should be split off into a new "Federal taxation" article, being replaced by a summary in this article. Antony–22 (^talk⁄_contribs) 19:49, 26 February 2011 (UTC)

Next steps on article overhaul

I propose the following next steps, to be done over the next two weeks:

• Copyedit article segment drafts at User:Ravensfire/Taxation in the United States
• Content fork 4 segments to new articles, leaving only small references:
  • tax rate history to History of Federal income tax rates in the United States
  • tax as a tool of social policy implementation to United States tax law and social policy
  • AMT discussion of silicon valley ISOs to Alternative Minimum Tax and stock options
  • entire progressivity discussion to Progressivity in United States income tax
• Combine segment drafts into single article under lead workspace
• Review combined article after forks to determine if complete replacement will lose any desired material
• Seriously enhance reading and see also lists
• Complete replacement approximately April 3

I've hit my personal budget limit, but want the project to continue. Get friends to help! Absent that, I plan to stick to the above. Help from interested parties in any way is appreciated. Oldtaxguy (talk) 05:10, 13 March 2011 (UTC) Rev. titles Oldtaxguy (talk) 21:02, 13 March 2011 (UTC)

I agree with splitting out much of the text of this article, but some of these new articles are redundant with existing articles. History of Federal income tax rates in the United States should be merged into the pre-existing Taxation history of the United States, and Alternative Minimum Tax and stock options should be a section of Alternative Minimum Tax. In addition, United States tax law and social policy looks too short to be a standalone article unless it is about to be expanded a lot.

Also, don't forget to remove/reduce the text in this article that you are moving or merging to other articles, otherwise it creates a content fork which is hard to sort out later (which is what had happened with Federal taxation in the United States). Antony–22 (^talk⁄_contribs) 05:08, 14 March 2011 (UTC)

One more thing. I don't think WP:UNDUE is actually the relevant policy here, since that is specifically talking about fringe opinions for which there are no reliable sources. I think the relevant policy is WP:SPINOFF. Antony–22 (^talk⁄_contribs) 05:21, 14 March 2011 (UTC)

I have gone ahead and made the changes I suggested above. Of course, feel free to revise my revisions. :-) Antony–22 (^talk⁄_contribs) 19:54, 14 March 2011 (UTC)

I disagree with merging the content of those articles that I forked with other articles. Each of the forks contains a lot of essentially trivia. As I understand WP policy, where material is extensive on minor points (as is the case in each of the four forks), it should be split into other articles to prevent overburdening the main article. The social policy article is largely POV to begin with. I regret I don't have time over the near future to spend revising articles that are of little general interest and deal with minor points. I don't think any of the content in the four forks belongs in other articles. Oldtaxguy (talk) 02:09, 15 March 2011 (UTC)

I apologize if I've interfered with your efforts to improve these articles. I agree that there needs to be a balance between concept and detail for a topic with such an extensive amount of material. However, I believe that the community norms are to improve problematic text rather than fork it out. If a certain passage is truly trivial, or has POV issues, then it doesn't belong in a new article any more than it belongs in the old one, especially if the new article has such a narrow scope that it doesn't have much potential to be expanded. I felt that this was the case for Alternative Minimum Tax and stock options and United States tax law and social policy; in the latter case, I agree that there are POV issues but since the entire passage is unreferenced, the offending portions of it can simply be removed. (If you are concerned about removing text, you can always copy it to the talk page with a note that it was deleted for other editors to review.) For History of Federal income tax rates in the United States, I thought it overlapped too much with Taxation history of the United States, although I suppose that we could have separate articles on tax rates versus other aspects of tax history. On the other hand, Progressivity in United States income tax is long enough and a broad enough topic that it does work as a separate article in my opinion. I hope this makes my resoning clear. In the future I will wait for further discussion before making these kinds of changes. Antony–22 (^talk⁄_contribs) 00:26, 16 March 2011 (UTC)

I anticipate the article from which the material was forked will be completely replaced in about 2 weeks. Without undoing the move of material back to Taxation in the US, the material will be lost. Oldtaxguy (talk) 01:32, 16 March 2011 (UTC)

Okay, with the exception of the social policy article, I had merged the text into other articles rather than this one, so they will not be lost in any case. Antony–22 (^talk⁄_contribs) 01:54, 16 March 2011 (UTC)

Major revision

Per discussion above, I have collected and posted the sub-articles that have been available for comment at User:Ravensfire/Taxation in the United States. Additional references may be useful. Oldtaxguy (talk) 01:53, 3 April 2011 (UTC)

Misleading Graphic

In Section 2 Income Tax the graph on the right shows US Tax Revenues from 1980 to 2009. This data, while accurate - appears to support the rhetorical point that taxes have never been higher. The data range does not accurately represent the historical trends of tax receipts which is no doubt its intended purpose. The highest marginal tax rate had been at 91% for fifty years prior to 1980 when it was reduced substantially.

Suggest graph be expanded to show 50 years rather than 29. This will give a more accurate picture of recent history. —Preceding unsigned comment added by 147.9.237.126 (talk) 18:50, 14 April 2011 (UTC)

Segments of the tax base who pay little or no taxes

I've reverted this section (again), and I want to specify my reasoning:

1. It should not be under "Types of taxpayers". It might be appropriate somewhere in the "tax rates" section, if it could be sourced.
2. Reference (1) (IRS statistical report for 2009) is not specifically pointed to a page, and is an interpretation of what is in the document. Even if the specific datum from the document could be identified, the IRS goes out of their way to note that what they call "income" is not what anyone else (including tax computations) calls "income", but a statistic which can be evaluated more-or-less uniformly over 1981-2009.
3. Reference (2) [ITEP 2000] is not a reliable source, as they go out of their way to note that they are not reporting what is actually on the tax returns, but their interpretations of the companies' annual reports. Furthermore, the report shows a clear bias, and we're reporting their interpretation. In particular, "paying no taxes" may refer to have their tax liability wiped out by a past or future NOL (Net Operating Loss), requiring a negative profit in that year.

— Arthur Rubin (talk) 13:15, 6 August 2011 (UTC)

Segments of the tax base who pay little or no taxes

1. Why should it not be under "types of taxpayers" ? Are "segments of the tax base who pay little or no taxes" not a "type" of taxpayer?
2. I'll do my best to find the specific page. Data, however, are not interpretive to the extent that they are evidence. How the IRS defines "income" is irrelevant to these discussions as the source material is merely a data point indicating that in 2009, 1,470 individuals earning over $1,000,000 paid no income tax. If anything, getting into a discussion about the definition of income is far more interpretive than merely indicating the number of individuals who paid no taxes.
3. In what area of the report do the authors "go out of their way" to say that they are not reporting what is actually on the tax returns? Did you read the report? To quote the first line of the report, "This study examines the federal income taxes paid or not paid by 250 of America's largest corporations in 1996, 1997, and 1998." Additionally, they indicate very clearly in their methodology section how they computed the net effective tax rates for the companies. To quote their methodology section "Conceptually, our method for computing effective corpo- rate tax rates was very straightforward. First, a company’s domestic profit was determined and then current state and local taxes were subtracted to give us net domestic pretax profits before federal income taxes. (We excluded foreign profits since U.S. income taxes rarely apply to them after credits for taxes paid to foreign governments.) We then determined a company’s federal income taxes currently payable. (Current taxes are those that a com- pany is obligated to pay during the year; they do not in- clude taxes “deferred” due to various federal “tax incen- tives” such as accelerated depreciation.) Finally, we divided taxes currently payable by pretax profits to determine effective tax rates." These are not interpretive or exotic mathematical contortions that render the source unreliable. From the sound of your argument, all that needs to be changed is the wording of the article to include "net tax liability" in describing the tax calculation cited.

Finally, the report does not show a clear bias; they are merely reporting tax data...as am I. In what way is this biased? — Preceding unsigned comment added by 99.16.91.116 (talk) 17:32, 6 August 2011 (UTC)

I am reverting the entire edits for the following reasons:

1. This article is about ALL taxes in the USA, not just income taxes. The entire discussion is about just income taxes. Anyone who buys a pack of cigarettes, earns any wages, pays any wages, owns any realty (house, factory, etc), buys any of a wide variety of imported goods must pay tax. This applies to individuals, corporations, etc. The statements as made are demonstrably false, and not supported by the citations.
2. The citations are, for the most part, by lobbying organizations advocating elimination of income taxes, and thus not RS for income taxes.
3. Under this editor's arguments, there would be thousands if not millions of "types" of taxpayers. Such a non-definition is meaningless. Oldtaxguy (talk) 20:05, 6 August 2011 (UTC)

response from 99.16.91.116

1. To your first point, you are simply incorrect. By that logic we should remove the section in the article entitled "income taxes" because, within that section, taxes other than income taxes aren't discussed. Creating a subsection is simply a method of organization that allows one to discuss the subject within that subsection. I would happily include information regarding taxation other than income tax that individuals or corporations do not pay by offsetting their liability under the section entitled "Segments of the tax base who pay little or no taxes". The statements, as made, are not demonstrably false. If you had actually read the source material, you would understand that. Additionally, the points made are substantially supported by the source material. Your claims are simply false. Nevertheless, I invite you to actually demonstrate how my edits are not supported by the source material instead of merely claiming demonstrability.
2. To the second point, the sources are not lobbying organizations. One source is the IRS itself. So, your statement is patently false. Lobbying organizations are interested specifically in advocacy whereas policy institutions conduct research. The sources I've cited are, very simply, research. And, if you spend enough time wading though the mountains of research on the websites of the policy institutions cited, you would find that, in the rare instances in which policy recommendations are made, they are made with precisely the opposite recommendation: not to eliminate taxes but to prevent individuals and corporations from being able to eliminate their tax liability or, worse, to attain a net negative tax liability. Thus, your second point is, obviously, not based in reality or, at the very least, not based on understanding or even having read the sourced material.
3. To the third point, there are millions of "types" of taxpayers. If you think the word "type" denotes a non-definition, perhaps the discussion should move to what language should head the section titled "types of taxpayers" as opposed to attacking an editor for adding reliably sourced material that you don't even have the fastidiousness to read, much less consider, before removing it unwarranted. — Preceding unsigned comment added by 99.16.91.116 (talk) 22:59, 6 August 2011 (UTC)

Still wrong.

People and/or corporation who pay no income tax are not a type of taxpayer. Types of taxpayers include individuals (and possibly married couples), corporations, partnerships, homeowner associations, and non-profits. (In fact, the entire "types of taxpayer" section probably should be under "income tax", as for example, fuel taxes and sales taxes are paid regardless of the type of entity.)

The IRS report mentions people with 2009 1982-modified AGI over $1,000,000 who paid no taxes. The reason they paid no taxes might be because of NOL carryback, people who lost over $1,000,000 to Madoff, or for various reasons which no one in their right mind would consider "loopholes". Your other sources (the Tax Foundation, and ITEP) are absurdly biased, to the point where they could not even be used for apparently factual statements, without crosschecking. What you're quoting is clear opinion for the second, and WP:UNDUE weight for the first. The 43.4 million who pay no taxes may very well have no income.

—Arthur Rubin (talk) 03:49, 7 August 2011 (UTC)

Arthur & Oldtaxguy, I think you're stepping over the line to suggest the supposed bias of well known organizations and use it as a method of exclusion. All sources have bias, even the IRS and secondary accounts in mainstream media. NPOV does not mean using non-bias sources (impossible task); It means providing proper weight, balance, and attribution to the opinions express in bias sources. The opinions regarding the number of taxpayers that allegedly pay no income taxes is not a tiny minority view, nor is it a new opinion. The notion that because an organization advocates against income taxes or changes in tax policy thus makes it an unreliable source for an income tax article is absurd. You can't exclude critical opinion by stating the sources of that opinion are bias against the article topic - that's the point. I'm not suggesting this information belongs, where it belongs, or doesn't belong based on other merits - the other positions are still valid. I just object to this specific argument regarding bias sources as it's a misapplication of policy. Morphh ^(talk) 17:38, 7 August 2011 (UTC)

The problem with the non-IRS sources provided is that it is WP:POV to imply there is something wrong with a taxpayer with a large amount of income, but also a large amount of losses, not paying tax. Even if the sources were reliable, it would be questionable to imply that any of the definitions of "income" are related to a normal definition. The IRS specifically notes the definition was adjusted to make it possible to compare incomes from different years, without regard for it being related to the accounting definition of income.

As for bias, I'm seeing distortions (not just interpretations which I find questionable) in some of the statements made in ITEP's editorial voice. This makes me wonder whether a similar problem relates to other statements treated as "fact". However, if the statements were noted as opinions and attributed, I wouldn't have as much of an objection.—Arthur Rubin (talk) 20:10, 7 August 2011 (UTC)

I agree that if these statements are presented as fact, that's a different situation. Opinions need to be attributed to those holding that point of view. Morphh ^(talk) 21:02, 7 August 2011 (UTC)

A very short essay

It seems that in matters concerning death or taxes, opinions count more than facts to many people. Wikipedia strives to be scholarly and based on reliable sources. Opinions may be quoted, if attributed and if it is stated that they are opinions, subject to WP:UNDUE. But many opinions about death and taxes are clothed as "fact" by the authors. Morpph's deleted commentary was particularly insightful in this regard.

WP requires that a source be reliable, and preferable a secondary source. Published scholarly research is given high priority in the reliability pecking order. Newspapers are given high priority when reporting events, and no priority when expressing an editorial comment. We as editors are to decide what is WP:RS and what is not. How do we tell the difference?

Scholarship traditionally requires that research details must be documented, available, verifiable, and replicable. Failure of any of these generally results in the research being considered unreliable, no matter how sound it may seem. For example, Jean-Baptiste_Lamarck proposed, researched, published, and made available extensive research on genetics. Others verified his data. Much of his work is the foundation of modern genetics. However, no one was ever able to replicate his work on one theory, because they could not get the type of lizard he used to breed. His Inheritance of acquired characteristics theory was discarded in favor of another theory. Neither has been proven, but the other theory met the four standards. Lamarck now warrants only 2 sentences in Genetics.

What, then, should we make of work by Urban Institute, Tax Foundation, and others who openly espouse particular views on tax? They publish extensive papers purporting to be research. They often do not make any details of their research available to anyone; they state openly that they have modified key measures of key items; we are asked to just trust them. Is their work scholarly? Who knows. Are details available, verifiable or replicable? Clearly not. I therefore posit that they should not be considered reliable sources. They are just opinions.

I have opinions, too. After 35+ years advising clients on detailed tax matters, I think mine are pretty good. However, I refrain from expressing them. They are, after all, just opinions.

As a final note, we should be discussing what is, not what could, might, or should be or have been. Respectfully, Oldtaxguy (talk) 03:03, 8 August 2011 (UTC)

I think you may be crossing the line between what is a low quality source vs an unreliable source, but that depends on what the material is trying to reference. It may be a great source to reference a critical opinion, but a poor source to reference a fact regarding revenue collections. I agree that we assign priority and use the most reliable and scholarly sources to reference content, though that's not to say they're without bias - scholarly research is also often commissioned by special interests. We use weight in determining what should or should not be included. We also give a higher priority to secondary sources. So if the WSJ reported the Urban Institute's opinion, that would be a reliable source for presenting both weight and opinion. If an opinion regarding tax policy is due weight, then it is perfectly acceptable, though not preferred, to use such an organization to substantiate that opinion. They're not a blog site or something that just popped up. Whether I agree with them or not, they are respected organizations and their opinion is part of the country's discourse. We should not use them as a primary source for an opinion if it has no prominence in other reliable sources though.

We don't exclude the opinion because we disagree with the methods used in presenting the argument. Critics always modify the proposals, rules, argument to fit their agenda. I include government research all the time that provides no methodology for their findings vs such organizations that do - reverse problem. It is our job to make sure the reader understands the differences in points of view and the proper comparison, not exclude them based on our own bias. If the opinion is of sufficient weight to include, we can use such sources to reference that opinion. This is common Wikipedia practice and policy. As far as what we should be discussing, is not the could, might, and should be a critique of what is? We're required to include such critique based on prominence. You're statement of "Newspapers are given high priority when reporting events, and no priority when expressing an editorial comment." is questionable (see WP:RS) - it's fine for opinion.

Tax policy is not science but, to address your lizard example, that would likely be an issue of weight (not RS), giving it two sentences due to the prominence and coverage in the overall topic. It's not because the published research was an unreliable source, it's because it was not due weight because of the other competing theories and overall topic coverage within Genetics. Similarly, our topic might also only be worthy of a sentence or two. I didn't comment on weight or the content itself. I objected to one of the reasons given for exclusion, which is based on a misuse/misunderstanding of policy regarding sources. Again, I'm not sure how productive this is since I don't dispute the content arguments, which is why I deleted my prior post. We're going to spend more energy debating policy points then actually addressing the content. Morphh ^(talk) 11:43, 8 August 2011 (UTC)

resource

More Firms Enjoy Tax-Free Status by John D. McKinnon 10.January.2012 Wall Street Journal; excerpt ...

StoneMor Partners LP, the publicly traded firm that specializes in running cemeteries, expects to see handsome profits in coming years as baby boomers age and die. But unlike its largest rivals, its corporate tax bill from the federal government will be zero. StoneMor is among the many businesses organized so they don't pay a penny in federal corporate income tax. And yet such firms don't employ an army of accountants to shield profits in complex tax shelters. Their enviable tax position is perfectly legal and has been encouraged by Congress and state governments. Known as pass-throughs, these firms pass along ...

97.87.29.188 (talk) 00:10, 11 January 2012 (UTC)

As often is the case with the press, the story tries to sensationalize the ordinary. From the article, it appears that the corporation in question is an S Corporation. As such, the shareholders are taxed on corporate profits, just like partners in a partnership. Such treatment is limited to corporations with only 100 shareholders, all of whom must be U.S. resident individuals or citizens. No special treatment here, just the ability of a closely held corporation to be treated the same as a partnership. The article's tone and misleading nature indicate that the article is not a reliable source. Oldtaxguy (talk) 04:37, 11 January 2012 (UTC)

Employment growth by top tax rate image

I've started a centralised discussion here regarding File:Employment growth by top tax rate.jpg, which is used in this article. Gabbe (talk) 09:59, 6 November 2012 (UTC)

CRS report on taxation of business types

The recent report "A Brief Overview of Business Types and Their Tax Treatment" looks like a promising source for the article. II | (t - c) 00:17, 17 June 2013 (UTC)

Chart that needs to be removed

U.S. federal effective tax rates by income percentile and component as projected for 2014 by the Tax Policy Center.

If you look at the creation history of this chart (by clicking on it) you can see that it was created by VictorD7 and is sourced to an unreliable right-wing organization known as the Peter G. Peterson Foundation. If the material is reliable and worth mentioning, it needs to be directly sourced to a weighted organization, which includes scholarship coming out of academia. VictorD7 has been insistent on pushing his right-wing agenda, which is harmful to creating a neutral presentation of data.

The reason for not being able to find a reliable source presenting this chart is because there isn't one that exists. The Tax Policy Center created no chart; the Peter G. Peterson Foundation did. By leaving out the dollar figures from Footnote #1 there is no context in relation to the tax rates, which creates a highly biased presentation. -- Somedifferentstuff (talk) 11:08, 5 November 2013 (UTC)

The PGPF is a perfectly fine source (they just drew the chart anyway) and the chart's numbers come from the Tax Policy Center (feel free to compare the figures), a perfectly fine liberal source widely cited by media and scholars. I'm not sure why me being the one who gained permission for the chart's use is relevant. The CTJ/ITEP chart it replaced was drawn by a Wikipedia user (reliable source?), and its data was produced by a leftist think tank with a liberal lobbying arm. Even if one accepted your off the mark premises, the more appropriate, up to date chart should be the least of your concerns. Also, why does it need dollar figures? How is it "biased" for an effective rate chart to not have dollar figures? That would be extra information, and they change significantly over time anyway. Your comment is irrational. It's more important that it contains informative component breakdowns, which the previous (disputed, truly biased) chart didn't. Finally, your hypocritical, off the mark personal attack against me isn't conducive to a productive discussion. VictorD7 (talk) 11:24, 5 November 2013 (UTC)

I'm not sure it makes sense to discuss this in both places... so I'm just going to point to the other discussion thread as most of the points are the same. Talk:Progressivity_in_United_States_income_tax#Chart_that_needs_to_be_removed Morphh ^(talk) 14:07, 5 November 2013 (UTC)

I moved the graph that EllenCT added to the section "Levels and types of taxation" and restored the federal graph. They show different things. As for corporate tax incidence, that can be measured (modeled) in many ways (some split the burden with shareholders and some pass it all to the consumer) - there is no defined "correct" way to measure that, just better models that reflect reality. The TPC is a more neutral source than the CTJ/ITEP. Since the TPC graph breaks down the components and covers federal taxes, it should be included. I'm not sure how useful the CTJ graph is with bundling all the burdens of the 50 states, which have a wide range of tax rates and progressivity, into a single graph. So I question its inclusion but in any case, it's not a replacement for the other graph. Morphh ^(talk) 14:49, 18 December 2013 (UTC)

I would agree that the chart does a decent job of taking complex and boring tax data and showing it graphically. The Tax Policy Center as a source is certainly a standard verifiable source for the data itself. The chart should stay in the article. N2e (talk) 00:31, 21 December 2013 (UTC)

• Remove for the reasons at [5]. The chart is propaganda intended to try to continue to lower taxes on the rich, which are more accurately illustrated by the ITEP chart. EllenCT (talk) 01:03, 22 December 2013 (UTC)

There is little basis for that assertion. The TPC is well respected and considered neutral. If anything, they fall center-left. Your objects thus far have been inaccurate and the graph you're trying to insert is bias on multiple accounts. Morphh ^(talk) 05:46, 22 December 2013 (UTC)

Do you know of any peer reviewed source which agrees with those unreviewed TPC numbers? All of the peer reviewed WP:SECONDARY sources agree with the ITEP graph. Here is an example WP:SECONDARY peer reviewed source which agrees with the ITEP corporate tax incidence. Note that not all documents on the ITEP or CTJ web sites are peer reviewed. EllenCT (talk) 12:51, 22 December 2013 (UTC)

I see no mention of the ITEP figures in that publication or that the TPC are incorrect. Also, that's not a secondary source. You're trying to source a model of tax incidence on corporate taxes. It's not even clear ITEP uses that model based on their FAQ and I haven't seen their original publication. You're failing verifiability. You can't take a graph that combines over 100 tax systems, pull out one tax in that graph, suggest that one tax uses an incidence model that is peer reviewed and thus superior as justification for the entire graph. That paper does not make that data peer reviewed. As for the TPC data, they use the Urban-Brookings microsimulation model which is peer reviewed. The model is similar to those used by the Congressional Budget Office (CBO), the Joint Committee on Taxation (JCT), and the Treasury's Office of Tax Analysis (OTA). In addition to those, the PolitiFact secondary source I linked to below uses the TPC data in their fact check, suggesting that it is a trusted source over more partisan publications. Morphh ^(talk) 13:57, 22 December 2013 (UTC)

The source is secondary because it's a meta-analysis of authenticated data sets. Just because you are unable to recognize publication categories or unable to do the verification math doesn't mean I'm failing verification. Do you think Geithner's tables include sales tax? It's the most regressive. EllenCT (talk) 16:34, 22 December 2013 (UTC)

That publication makes no mention of the ITEP or the CTJ, so how is it a secondary source for the graph? It's about the corporate income tax, so how is it a secondary source for the other 100+ taxes in that graph? You're not making any sense. Geithner's tables didn't include state level taxes and neither does the TPC graph - it's the same data. Morphh ^(talk) 16:59, 22 December 2013 (UTC)

I am confused about two things shown on this chart:

1. First, it has separate lines for "Top 1 Percent" and "Top 0.1 Percent" - is the first of these lines actually representative of those between 1% and .01%, or does it include everyone over the top 1%, including the top 0.1%? If the latter, then it seems that people in the last group are being counted twice, which does not occur anywhere else on the chart. Is there a difference if they are separated out?
2. Second, I notice that "estate tax" is included in the last few lines, but it is my understanding that people do not pay an estate tax in years in which they don't die, and that the estate tax is not connected to "cash income" for the year. For example, a person could have made a billion dollars over a fifty year period, end then retired and made no cash income for several years; their estate tax on death would be against their billion dollar estate, even if their actual cash income for that year placed them in the lowest quintile. Does this chart reflect this?

Cheers! bd2412 T 02:31, 22 December 2013 (UTC)

Are you referring to the chart in the previous section, or the ITEP chart? EllenCT (talk) 12:37, 22 December 2013 (UTC)

Sounds like the previous section. On the first question, I believe they are similar to the other percentiles, but it doesn't specifically state that. The TCP data for the graph is here but here is the breakout of percentiles which include 20, 40, 60, 80, 90, 95, 99, 99.9. So I think the label "Top 1%" was just a cosmetic choice as oppose to saying the "99-99.9 percentile" in the chart/graph. As for the second question, other publications from the TPC state that they measure estate tax if the person dies that year.[6] Morphh ^(talk) 14:52, 22 December 2013 (UTC)

Yes, I meant the previous section. I am still leery of presenting estate taxes in a way that gives the impression that they are connected to cash income for the year in which the tax is paid, and I would be quite surprised if income-earning taxpayers in the fourth quintile and the lower portion of the and lower fifth quintile were not paying at least some estate taxes, since most small business owners reside there. bd2412 T 18:30, 22 December 2013 (UTC)

The estate tax measure for the lower percentiles is less than .05 according to the data, so the TPC doesn't include it in their chart. I understand your concern, but at least in this graph, each tax is clearly indicated and the methodology for the tax is known. Here is their methodology for the estate tax. It is described in full here: Burman, Lim, and Rohaly (2008). "Back from the Grave: Revenue and Distributional Effects of Reforming the Federal Estate Tax." Morphh ^(talk) 19:03, 22 December 2013 (UTC)

Thanks, I see where the disconnect is occurring. According to the paper, the economic income against which the estate tax is measured is "a broad measure of income that includes economic returns to capital regardless of whether they are realized or not", which is something a bit different from "cash income". Assessment of the estate tax forces all property to be assessed under the stepped-up basis, thereby generating cash income for the decedent on paper wherever property values have increased since the purchase of the property. Under that measure, even someone whose actual cash income in any given year never exceeded, say, an inflation-adjusted hundred thousand dollars, could jet up to the top five percent based on the combined value of all of their property. Of course, their estate would only be susceptible to the estate tax in the first place if it was worth over $5.25 million, and this status would only be achieved following their death. bd2412 T 20:47, 22 December 2013 (UTC)

Summary - It looks like EllenCT is objecting to the corporate tax in this graph, suggesting it is not peer reviewed or that the ITEP graph model is better. The TPC uses the same method as the Congressional Budget Office (CBO) and the Treasury's Office of Tax Analysis (OTA). Their model is peer reviewed in many publications. Their figures are considered neutral and used to fact check other tax assertions. Here is what the TPC actually does with Corporate income taxes:

we estimate that 60 percent is borne by shareholders, 20 percent by all capital owners, and 20 percent by labor. Based on our review of research on the issue, we do not assign any of the burden to consumers. Previously, we assumed that the entire burden fell on all owners of capital. Our current assumptions are similar to those now made by CBO and Treasury.[7]

In addition, it looks like the ITEP, based on their FAQ, places all of the burden on capital holders (the reverse of what it seems EllenCT is arguing):

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.

So it's not even clear that the publication that EllenCT is using as a secondary source for the ITEP, which suggest a high burden attributed to labor, is the methodology the ITEP uses. See the section below for additional reasons why the ITEP graph is not suitable for inclusion. In conclusion, this graph is supported by TPC data, which is considered a non-partisan source. They use standard models that have been peer reviewed and are generally accepted. Morphh ^(talk) 17:59, 22 December 2013 (UTC)

Furthermore, Ellen has been confusing "consumers" with "labor" as demonstrated by this discussion: [8]. I was ready and willing from the beginning to refute her claims about the state of "peer reviewed literature", in part by quoting from her own sources, but her failure to support her premise regarding ITEP's corporate attribution methodology, especially in the face of proof debunking it, made the tangent irrelevant to that particular discussion. Fortunately you've gone a long way toward doing that here, lest other posters come along and get partially misled by her claims. VictorD7 (talk) 00:11, 23 December 2013 (UTC)

You have obviously not found a single peer-reviewed publication which agrees with you, although you have apparently made Morphh believe that the TPC website is peer reviewed. Are your urges to boast stronger than your desire to show taxes as progressive for the top 1% when you know corporations pass about half to their customers? EllenCT (talk) 07:11, 24 December 2013 (UTC)

Your own meta-analysis, along with some others I found, disagree with your alleged survey of "peer reviewed literature" (even ITEP does, as I quoted). You don't know the difference between "consumers" and "labor" (you misunderstood the study you linked to), you refuse to address facts like ITEP attributing all of its measurable state corporate incidence to the top 5% (especially the top 1%. Half to consumers? You mean high end jewelry shoppers?), you continue to dishonestly portray my personal comments on the matter despite me correcting you with linked quotes numerous times, and you continue to falsely project your own, explicitly stated POV "desire" onto me when I'm simply citing the most prominent sources (the TPC being left leaning at that). Ellen, you outright said in the below section that your motivation was to show that the top 1% pays less in taxes than the rest of the top 20%, even citing Warren Buffet. Wikipedia is not the venue for crusading. VictorD7 (talk) 08:46, 24 December 2013 (UTC)

The meta analysis says corporations pass about half to three fourths of their taxes to consumers, and you're pushing charts and sources that say zero when you know it's nowhere near zero. But by all means, keep digging. EllenCT (talk) 11:33, 24 December 2013 (UTC)

That meta analysis has no WP:WEIGHT. It was just released in March of this year - it's a published model that has no accepted use. Compared with the vast use and acceptance of models by the CBO, Treasury, and other tax policy research institutes - it's still WP:FRINGE research. That model is not even used by the ITEP graph you're trying to include as a replacement. Also for clarification, the meta analysis discusses a greater share attributed to labor, not consumers, and that attribution in the TPC data is not zero. To play on your last statement, there is no digging left for this argument - the hole has been dug. Morphh ^(talk) 14:33, 24 December 2013 (UTC)

That was the data set review on page 17 here which VictorD7 called a meta-analysis, which it is not. The paper you linked to is also a WP:SECONDARY source because it is the latest in a long line of actual meta-analyses, all of which are generally in agreement because none of which say corporations don't pass any taxes to consumers. Both are secondary sources, but only the Altshuler paper is peer reviewed. The Harris paper, like almost all of the rest of the TPC publications, was not peer reviewed, but its table on page 17 lists peer reviewed sources. The fact remains that, as VictorD7 has said, corporations do not pass 0% of their taxes on to their consumer customers, but closer to 50%, which means the ITEP graph is correct and the Peterson graph is intentionally misleading in this case. There is simply no counter-argument to these established facts which are applicable to the WP:V policy preferring peer reviewed sources from academic journals in the mathematical sciences and historical arts. EllenCT (talk) 02:24, 25 December 2013 (UTC)

I think we may need outside review. I'm not sure how to continue this discussion. What is in the charts, the models, and the Wikipedia policies is not as you state. Morphh ^(talk) 16:40, 25 December 2013 (UTC)

Do we actually need any chart? bd2412 T 17:15, 25 December 2013 (UTC)

If it comes down to it, no I guess we don't. I do think the graph enhances the article and it seems wrong to remove a legitimate graph (rewarding) for what appears to be illogical reasons, repetition of disproven assertions, and misapplication of verifiability policy, thus encouraging similar conflicts in the future based on the same reasoning and tactics. I rather see a consensus reject the arguments made. But yes, if we wanted to come to agreement that the article would be better served with no graph of tax rates, I'd be fine with that discussion (just not based on the reasons EllenCT has put forward). Morphh ^(talk) 19:48, 25 December 2013 (UTC)

Are we going to remove all the page's other charts too? Because I strongly object to removing a perfectly legitimate chart, one of the most informative and unbiased charts in the article, simply because a disruptive editor who has consistently behaved irrationally at best is spiteful. She hasn't even bothered to start a section about it or construct a coherent argument. I think the chart should be re-added so such behavior isn't encouraged in the future. VictorD7 (talk) 22:26, 25 December 2013 (UTC)

Ellen said: "The meta analysis says corporations pass about half to three fourths of their taxes to consumers". False. I challenge Ellen to quote where anything she's linked to says that.

Ellen said: "...as VictorD7 has said, corporations do not pass 0% of their taxes on to their consumer customers, but closer to 50%". False. I never said any such thing, which is why she hasn't directly quoted me either.

Ellen said: "which means the ITEP graph is correct and the Peterson graph is intentionally misleading in this case". False on both counts. The ITEP graph attributes corp. taxes to capital, even approvingly citing the CBO position and railing against the notion of attributing it to consumers. The "Peterson graph" is simply a faithful and visually informative representation of Tax Policy Center data. Presumably Ellen actually has a beef with the TPC, though she has yet to offer a coherent, rational critique of it or even start a Talk Page section for the purpose of ostensibly doing so.

The TPC analysis of analyses Ellen linked to (which doesn't even mention the word "consumers" on page 17, contrary to her claims) cites several attempts to empirically study the issue that reach wildly divergent conclusions, along with criticisms of some of the studies by other studies. TPC adopted the various results as assumptions, tested them each, and reached this conclusion: "Most economic studies of corporate tax incidence acknowledge that capital will bear the bulk of the burden in the short run, but there is little consensus about the long-run incidence of the tax....This paper reaches three related conclusions. First, because wage and capital income are highly correlated, higher-income taxpayers will pay a relatively larger share of the tax, regardless of whether the corporate income tax falls on labor or capital. Second, even if capital income is broadly defined to include income accrued to tax-preferred retirement accounts, this conclusion is little-changed. Third, the incidence of the corporate tax has only a modest effect on overall progressivity simply because the tax collects only a small fraction of federal revenues....The paper uses the Tax Policy Center microsimulation model to estimate the progressivity of the corporate tax—and the tax code in general—under the alternative assumptions that capital bears 20 percent, 50 percent, or 80 percent of the corporate tax burden. Under all three assumptions, average corporate tax rates generally rise with income, indicating progressivity... Furthermore, because the corporate income tax is small relative to other tax sources, assumptions about corporate tax incidence have little effect on the overall progressivity of the tax code. This paper illustrates this point by estimating average corporate tax rates under the assumption of doubled corporate tax revenue relative to the baseline. This scenario only modestly changes the tax code’s overall progressivity. These conclusions form a single lesson about corporate tax incidence and progressivity: while corporate tax incidence may affect the allocation of resources across sectors and borders, it has little impact on the corporate tax’s progressivity. Even under drastically differing assumptions, the corporate tax is a progressive aspect of the tax code."

That's from Ellen's own source. Here's a reminder of what her primary source, ITEP, has to say: "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." And ITEP's lobbying arm, CTJ (Ellen's actual graph source): "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)."

Here's a survey of peer reviewed literature by a CBO employee, which is far more credible and authoritative than Ellen's shaky personal opinions: "For years following the publication of Harberger’s seminal paper in 1962, his conclusion—that the burden of the corporate tax tends to fall entirely on capital—has largely withstood modifications to his model’s underlying assumptions...Perhaps because of the early uncertainty about how to estimate corporate tax incidence, research initially turned to new methods of empirical analysis. Krzyzaniak and Musgrave (1963) used emerging regression techniques to explain rates of return on capital as a function of tax rates. They found that more than 100 percent of the tax was shifted to consumers in the short run. This result was inconsistent with theoretical models of profit maximization in competitive markets. In several studies, economists tested Krzyzaniak and Musgrave’s results, some finding contradictory results and some confirming the analysis. Cragg, Harberger, and Mieszkowski (1967) cautioned that one should be skeptical of a framework generating fragile and volatile outcomes. Around the same time that Krzyzaniak and Musgrave were conducting their empirical analysis, Harberger (1962) was developing his general equilibrium model of corporate tax incidence. Ultimately, because of the non-robust results the empirical studies offered, the research community appeared to have abandoned the empirical line of research in favor of Harberger’s model. Harberger’s model employed a drastically different approach to the direct empirical analysis by constructing a theoretical two-sector general equilibrium model to trace the effects of a tax on capital income in one sector. A primary contribution of his model to the early analysis of corporate tax incidence was that the burden of the tax is borne by factor income—capital and labor—and is not shifted forward to consumers....Based on his model specifications and his estimates for the values of the relevant elasticities, Harberger concluded that the majority of the tax burden fell on capital. Following the introduction of Harberger’s model, numerous studies made further refinements and adjustments to the original model. Although those studies sometimes yielded different results, none of the studies ruled out the possibility that, under largely reasonable assumptions, capital would bear a large share of the corporate tax burden." (after analyzing four more recent studies with divergent results...) "Taken together, these results, albeit imperfect, suggest that an assumption that 40 percent of the corporate tax burden falls on labor and 60 percent falls on capital is consistent with open-economy models and with the current empirical evidence regarding the appropriate parameter values for those models"...(after reviewing further studies and approaches...) "This review suggests that the assumption of an open economy is not sufficient to conclude that much of the burden of the corporate tax is shifted to labor. Indeed, assumptions of highly mobile capital and highly substitutable products, internationally, are needed to ensure that the majority of the tax is borne by labor. Relaxing the assumptions of perfect mobility changes the burden allocation to indicate that, even in an open economy, a majority of the corporate tax burden, perhaps 60 percent, is still borne by capital. In addition, concerns arise over the reliance on these empirically-based general equilibrium models, extensively developed as they are, because they cannot fully reflect important aspects of the U.S. corporate tax or the nature of global interactions with other countries. Existing evidence of the linkage between U.S. tax policy and that of other countries suggests, at least with regard to the burden of the corporate income tax, that the United States operates in more of a closed economy than these models assume, even with the imperfect international mobility assumptions, suggesting capital would bear the bulk of the corporate tax. The nature of these models is to measure changes in the corporate tax and may not be appropriate for allocating the full amount of an existing tax. Given that the worldwide corporate tax should fall on worldwide capital, an alternative approach to determining the incidence of the current corporate tax may be to allocate the worldwide average to capital and to allocate country deviations from that average as changes in the corporate tax, using the open-economy model’s estimates. Under this approach, more than 90 percent of the burden of the corporate tax should be allocated to capital. Even when using the standard open-economy models, it is clear that minor additions of rigidity through immobile capital or imperfect product substitution can result in capital bearing a major portion of the tax. The open economy assumption should not be synonymous with the conclusion that labor bears more of the burden of the corporate tax than capital does."

Ellen's Altshuler paper also starts by acknowledging the 1962 Harberger study that found "the corporate tax is likely borne by all owners of capital" and that has held sway for decades, calling it "seminal". The paper goes on to analyze some recent studies finding that labor bears a large portion of corporate taxes, but cites some other recent studies that disagree. The word "consumers" doesn't appear in the Altshuler piece. It also features industry specific wage burden impacts. Obviously people don't just shop at the company they work for.

So we've got the experts agreeing that the model showing capital bearing most or all of the corporate tax burden has held sway in scholarly research for decades. In recent years there's been an increase in studies exploring the possibility that under different assumptions labor might bear at least a significant minority of the burden (though the ranges differ sharply), at least in the long term, though those studies have been criticized by other studies and the long term empirical situation lacks a clear consensus.

Meanwhile all three tax incidence sources have traditionally attributed all corporate taxes to capital, though very recently the CBO and Tax Policy Center have modified their methodologies to attribute most to capital and a minority to labor, including in the TPC chart being discussed. ITEP apparently still attributes corporate taxes solely to capital. Ellen's own link points out that corporate taxes are still progressive under even drastically differing capital/labor incidence assumptions (by contrast, consumption taxes are generally considered considered to be regressive), and are too small a component of federal revenue to significantly impact overall progressivity anyway. Even then the TPC/PGPF chart helpfully color codes the component breakdown so readers can see the corporate tax and set it aside if they want to. This entire corporate incidence tangent by Ellen is a red herring, and her statements have proved false on multiple levels. VictorD7 (talk) 01:31, 26 December 2013 (UTC)

VictorD7 said, "I tend to agree with you that corporate income taxes are passed on to consumers." I will no longer cooperate with this transparent pathetic attempt to try to disrupt Wikipedia to push his political point of view. EllenCT (talk) 02:41, 26 December 2013 (UTC)

It's dishonest of you to add the period inside the quote, as I've warned you before ([9], [10]). Here's my actual quote: "I tend to agree with you that corporate income taxes are passed on to consumers and others, but then I think other taxes are at least partially passed on in various ways too, as I illustrated earlier with my income tax hike on the rich guy comments. That said, if one is going to develop effective tax rate incidence charts, then corporate taxes should be imputed to the owners, since they're the ones most directly paying them." It was all the same post, Ellen; not even a later update. In the past you've even falsely accused me of stating that consumers bear "half" the corporate tax burden, and your repeated mischaracterizations despite me repeatedly setting the record straight demonstrate bad faith. It's unclear why my personal views are even important to you. You should invest more time into actually constructing an argument for your position. The context of the first exchange is also instructive in highlighting your poor reading comprehension and general incompetence, since that very quote was part of a corrective reply to you after you somehow misinterpreted the TPC page to the point where you claimed that group attributed taxes to "employees, and not even the owners". I had to spoonfeed you the pertinent sentences saying otherwise, at which point you exhibited surprise and indicated you'd study the matter later. VictorD7 (talk) 04:50, 26 December 2013 (UTC)

Still waiting for your source quote about "consumers", and for you to address the actual surveys of peer review literature I posted above that refute your claims. VictorD7 (talk) 04:42, 26 December 2013 (UTC)

I note that VictorD7 has still been unable to find any peer reviewed sources which agree with his newfound belief that corporations don't pass any of their taxes to their customers. I remain as unconvinced and disapproving as ever. EllenCT (talk) 05:43, 26 December 2013 (UTC)

Still waiting for Ellen's "peer reviewed" quote about "consumers" bearing "half to three fourths" of the corporate tax burden. Or anything pertinent about "consumers". VictorD7 (talk) 07:21, 26 December 2013 (UTC)

Victor, while I know this discussion is extremely hair pulling - please WP:NPA. Morphh ^(talk) 14:51, 26 December 2013 (UTC)

Ellen, since you keep repeating several things which I find contrary to the evidence, could you please answer these questions: Morphh ^(talk) 14:58, 26 December 2013 (UTC)

1. Why do you believe the ITEP attributes corporate incidence to consumers when their documents seem to suggest otherwise? Do you have a source from ITEP that describes their methodology for that graph as different from what their FAQ states?
2. Considering WP:WEIGHT, why do you believe the graph should attribute incidence to consumers, when in practice, none of the leading governmental organizations and independent tax policy centers, who use generally accepted peer-review methodologies, attribute the incidence directly to consumers (though they may be represented to some extent in the other groups)?
3. What type of evidence are you looking for that would convince you?

Gladly! (1) Because the ITEP's paper series and website is not peer reviewed, and they clearly have been slacking off letting people who can't get their ideas through peer review edit their website. (2) Because economic models which do not attribute about half of corporate taxes to consumers make less accurate predictions than those that do. (3) If you were to phone or email the ITEP people in charge of their graphs, and ask them to publish a clarification of these issues, that would convince me that you are interested in the truth. I've reached out to them but I don't want you to take my word for it if I have to do it again. I am sure they will help. Please let me know if that is something you are willing to do. EllenCT (talk) 03:20, 27 December 2013 (UTC)

I'll respond in reverse order. (3) I have emailed ITEP asking for clarification. (2) I understand that's your opinion, but it's not the current consensus of mainstream economics. (1) I don't think you answered the question, unless emailing ITEP was the response. The ITEP website and regular publications, like most tax policy institutes (I expect you meant to say TPC), is not what we would generally call peer reviewed. Few websites or paper series that provide statistic updates using existing models are considered for peer-review publications. Peer-reviewed journal publications are usually for new methodologies and research. Here is the corporate tax analysis that is the next article in that same March 2013 NTJ you posed earlier, which concludes 82% capital, 18% labor. Here is the previous article in that same March 2013 NTJ which places more than 90% of the corporate tax on domestic capital. And the one prior to that, which finds labor has thus far remained insulated from the corporate tax. Point being, peer-review in itself does not make scholarly consensus. New stuff comes out all the time - it will be reviewed by the CBO, Treasury, and tax institutes who may adjust their future models based on the totality of research. What you will often see in new publications is a previous published model being sourced and used, which is the case with the TPC model. So while I wait for my email response from ITEP, I'll add another question.

4. Why do you believe that the Urban-Brookings microsimulation model is not peer-reviewed? There are lots of National Tax Journal hits and it's similar to the assumptions made by the CBO and Treasury.

Morphh ^(talk) 16:21, 27 December 2013 (UTC)

Now do you understand why I think trying to push a propaganda chart saying 0% is so pathetic? The rich abuse the trust of libertarians. EllenCT (talk) 01:40, 29 December 2013 (UTC)

I don't understand what you're talking about. Please tell me what you think the breakdown is of the TPC corporate incidence and that of the ITEP (listed above in block quote). TPC attributes 20% to labor, if that's what you're referencing, it's not 0%. I don't even want to know how libertarians got pulled into this. Morphh ^(talk) 03:48, 29 December 2013 (UTC)

I have never said that the peer reviewed literature does not present a range of figures, only that the most recent and reliable peer reviewed secondary literature is usually just over 50%. The rich all too often manipulate statistics to try to falsely appeal to libertarians and the protestant work ethic. Arguing that corporations never pass taxes on to their consumers when you know that they do is a symptom of having fallen for it. EllenCT (talk) 03:56, 29 December 2013 (UTC)

Does the ITEP use over 50%? Based on their FAQ, they're the one at 0%. In any case, of the four articles published in the 2013 NTJ, only one suggested labor was a major factor (the one you referenced). None of them suggested consumers. While they may be the most recent, that works against them as they've not had any impact yet on mainstream economics - they fall into a tiny minority - newly published theories and models. What makes them relevant is practical use by organizations like the CBO, Treasury, and tax policy institutes after they review all the latest research. As for most reliable, that's pure speculation - they can't all be the most reliable. We're not here to cherry pick what you think is the most reliable. We'll use the industry consensus, which the TPC does. Morphh ^(talk) 04:30, 29 December 2013 (UTC)

How do you get 0% as a consensus after citing several papers, none of which are near 0%? EllenCT (talk) 06:51, 30 December 2013 (UTC)

It sounds like you're confusing labor with consumers. Several of those studies show incidence on labor, but I don't see any of them concluding incidence on consumers. Only one of those papers mentions consumers (Gravelle) while discussing the work of Harberger (1962) and Krzyzaniak and Musgrave (1963). So I'm not sure what you're talking about. Based on those four NTJ publications, they tend to place incidence on capital and labor to varying degrees. The point though is that these publications are not relevant - they represent new research in the field, not the current scientific consensus. We shouldn't look to them for the basis of weight. Morphh ^(talk) 15:22, 30 December 2013 (UTC)

Labor and consumers have a huge overlap in the U.S., more than 85% on a per-dollar basis if I remember correctly. I forget what the two per-person subset ratios are, but the point is that they are both mostly the same populations. EllenCT (talk) 01:04, 31 December 2013 (UTC)

Even if we take a 50% labor / 50% capital model, which doesn't appear to be used outside of research papers, it's still highly progressive with over 50% of the burden falling on the top 10% and half of that falling on the top 1%. So, you're not going to see some dramatic regressive new picture. Morphh ^(talk) 13:31, 31 December 2013 (UTC)

Consumers are about 69% of the economy per dollar and labor is 58.5% per capita. The number of unemployed people who are consumers is relatively small per dollar. And the number of employed people who aren't consumers is very close to zero too. I don't understand how the tax rates you made me word so carefully on Income tax in the United States would lead you to believe that reality is anything more progressive than what the ITEP graph shows, because sales, payroll, and property tax are all more regressive than income tax. EllenCT (talk) 14:51, 31 December 2013 (UTC)

Ellen said: "Labor and consumers have a huge overlap in the U.S.". I'll say. 100% of people with jobs (and at least most without) are consumers (many are also investors/corporate owners). But there's still a huge difference between taxing consumption (consumers) and taxing income (labor). The studies are referring to the mechanics of incidence. VictorD7 (talk) 19:07, 31 December 2013 (UTC)

---

As I've said before, even if ITEP does quietly attribute half to consumers, since all their public stances do the opposite, it would only undermine their credibility as a source. It would mean they've been publicly supporting the corporate tax as "very progressive" and railing against the notion of attributing to consumers while secretly scoring otherwise to make overall taxation look less progressive than it really is; dealing off both sides of the deck. Then there's the matter of why their state numbers (linked in various places on this page) only attribute corporate taxes to the top 5%, with the highest rate going to the top 1%, if they're attributing half to consumers. VictorD7 (talk) 19:55, 27 December 2013 (UTC)

If Ellen refuses to answer the questions we should restore the legitimate chart. VictorD7 (talk) 19:26, 29 December 2013 (UTC)

Victor, you need to answer the questions about this exact issue you said you would answer weeks ago. Are you true to your word? The Peterson Foundation chart is certainly not legitimate, the ITEP chart is the legitimate one. EllenCT (talk) 06:49, 30 December 2013 (UTC)

Is it possible to create a chart that reflects the points upon which everyone agrees; or conversely, to present both views and point to the sources contesting each? I'm a big fan of teaching the controversy. If there are groups out there who believe different things, then we should explain both sets of beliefs, and explain why each thinks the other is wrong (so long as there are sources for the propositions and counter-propositions at issue). bd2412 T 20:49, 29 December 2013 (UTC)

No, because there aren't two different coherent points of view here, as evidenced by one editor refusing to answer vital questions or addressing posted evidence. VictorD7 (talk) 05:25, 30 December 2013 (UTC)

Bullshit. Victor is the one who has been avoiding answering questions for weeks now. EllenCT (talk) 06:49, 30 December 2013 (UTC)

I agree with your philosophy, but this is probably not the best article to dig into varying models of corporate tax incidence. It's a high level article and I think we're dealing with WP:VALID. But let me pose this, which would be necessary to implement that idea; if we were to create a new graph of the corporate tax across these percentiles, can Ellen provide a source that specifically presents the data for federal corporate tax burdens using the methodology she suggests? To be clear, I don't want a link to the ITEP graph. I'd like actual data that is specific to (or specifically breaks out) corporate taxes with a clear explanation of the methodology. Morphh ^(talk) 16:08, 30 December 2013 (UTC)

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 ([11],[12]) 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 [13] 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)

Employment Graphs

State employment growth versus change in tax liability for top 10% income earners in the United States. Tax increases on high income earners are not linked to decreased employment growth.

State employment growth versus change in tax liability for bottom 90% income earners in the United States. Tax decreases on the bottom 90% income earners are correlated with increased employment growth. and employees.

I noticed these two graphs in the article. The seem POV and I don't see how they're helpful to the average reader. Morphh ^(talk) 20:23, 31 December 2013 (UTC)

Wikipedia has an article on Effect of taxes and subsidies on price. I would propose that we separate out materials like this into an article on Effect of taxes on employment, and let that be the venue for presenting the various claims about the taxation/employment relationship. Of course, that issue is not unique to the United States anyway. bd2412 T 20:34, 31 December 2013 (UTC)

Clearly POV and a dubious conclusion at that. Those charts should go. They're sourced to a NY Times opinion piece attacking Romney's tax plan during the height of the 2012 campaign. One author, Zidar, is just a Berkeley grad student and the column's coauthor worked for Bill Clinton's Council of Economic Advisers. Zidar also claims to have "recently" worked on the Council of Economic Advisers, presumably under Obama. The chart I'm adding to the right should go too. Its labeled source is the Congressional Research Service, but it was written by Thomas Hungerford, an Obama donor, also during the height of the 2012 campaign, and was retracted by an embarrassed CRS after widespread criticism of its shoddy methodology, and for being a transparent, low quality partisan joke. I think it was re-released in 2013 in an altered form (the graph is sourced to the original version), but that has received widespread criticism too, and this page shouldn't be about making political arguments on complex, hotly disputed issues. VictorD7 (talk) 22:14, 31 December 2013 (UTC)

I agree that this page is not the place for such arguments; however, complex, hotly disputed issues are usually notable topics worthy of encyclopedic coverage, and we should therefore have an article on the issue somewhere else. Obviously, Wikipedia can't champion one position or the other, but we can explain the arguments that have been made by partisans for various biases. bd2412 T 22:19, 31 December 2013 (UTC)

I wouldn't necessarily oppose that, but in the meantime we should delete the graphs here. Apart from being totally one sided, they're just inserted randomly and don't even have anything to do with the text. I'm adding a fourth one that should be removed that's also sourced to the same retracted Hungerford "report".VictorD7 (talk) 22:30, 31 December 2013 (UTC)

I have created Draft:Effect of taxes on employment, incorporating these charts but describing them as claims, not necessarily as facts. bd2412 T 23:08, 31 December 2013 (UTC)

Nice - I didn't even know we had that "draft" capability. Morphh ^(talk) 20:37, 1 January 2014 (UTC)

It's new - the namespace was created within the past month. bd2412 T 20:56, 1 January 2014 (UTC)

Bogus graph, original research

[14] is cited as the source yet the graph [15] does not appear in the paper. also, the graph cites the 2000 tax year, the paper was written in 1999. i will remove the graph without objection in 24-48 hours. Darkstar1st (talk) 18:43, 1 January 2014 (UTC)

I don't have any objection to updating this graph with a newer graph, but I looked at the source and the data does appear to be supported via Table 14 on page 24 (section As a Percent of Income) for "Distribution of Federal Taxes Under Current Law in 2000". Seems we're cleaning house on several graphs, so it shouldn't be hard to update this one as well in the process. Morphh ^(talk) 20:36, 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)