Talk:Progressive tax/Archive 4

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Is this material topical to the progressive tax article?

The following discussion is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

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An editor, @EllenCT: has repeatedly inserted material like this quoted below into the Progressive tax article. Is it appropriate / on topic or does it belong in another article?Mattnad (talk) 12:58, 18 January 2014 (UTC)

[[:File:US household income by education.png|thumb|Mean income of U.S. families by education of head, 1989-2010. Government investment in college tuition subsidies usually pay for themselves many times over in additional tax revenue.]]

Public subsidy of college tuition will increase the net present value of income tax receipts because college educated taxpayers earn much more than those without college education.

Nobel laureate and John Bates Clarke Award Winner Gary Becker, professor economics and sociology at the University of Chicago and a senior fellow of the Hoover Institute, argues that the root cause of income inequality is differing levels of educational attainment. Consequently, the "rise in returns on investments in human capital is ben­eficial and desirable" to society, according to Becker because it increases productivity and standards of living. Becker points to the widening gap in earnings between the college and graduate school educated and those who did not go to college. In 1980, the average income of a college graduate was 30% larger than the average income of a high school graduate. The average income of a worker with a graduate degree was 50% larger than the average income of a high school-educated worker. By 2007, the average college graduate earned 70% more than a non-college graduate and the income premium of a graduate degree was over 100%. Becker argues that while education is widening the income gap, it is simultaneously creating more opportunities for the poor and for marginalized ethnic and gender groups. According to him, the income growth with respect to education for women parallels the growth for men and the same is true between blacks and whites. Globalization, which has been spurred on by growing educational attainment, has also helped increase income and overall wealth inequality. Rapidly growing globalization during the 1980s due to the rise of emerging markets and increased demand for complex products increased the demand for high-skilled, highly educated workers because their marginal product of labor increased while the marginal product of labor for unskilled workers remained the same. This occurred because high-skilled workers were needed to operate new technology and to perform services that could not be done by low-skilled, low-educated laborers. Accordingly, the real wage of college graduates increased and declined for low-skill laborers which widened the wealth gap. Additionally, globalization combined with increased educational opportunities shifted the economy away from a manufacturing base to a finance and services-dominated market. Becker argues that this rise in income inequality is only a temporary and necessary transitory stage as the ever rising rates of return on investment in education will simply serve to raise living standards, productivity, and human capital across the board as more and more people become college and post-undergraduate level educated. He even argues that income inequality could reverse itself as more and more Americans get college degrees.

• Off-topic – discusses, in an indirect way, what should be done with the tax money once raised. This article deals with the raising of tax funds and who gets to pay what. Sales taxes, VATs, tariffs, etc. have progressive aspects to them because wealthier people tend to buy more stuff. But it doesn't matter if people with more education have or earn more money. How they got that education has nothing to do with tax schemes. – S. Rich (talk) 17:13, 18 January 2014 (UTC)

@Srich32977: - Your statement is incorrect. The taxes you list are not progressive, they are regressive because wealthy people spend a smaller proportion of their income on goods taxed in those ways. If this view was essential to your "off-topic" view, please reconsider. SPECIFICO talk 15:19, 23 January 2014 (UTC)

[Insert to Specifico] – Not essential to the off-topic argument at all. I might have included luxury taxes or estate taxes, which are "progressive". Where and on what tax money is spent (for example, spending by Mark Ridley-Thomas#Controversy) has nothing to do with the progressiveness or regressiveness of the taxes or this article. – S. Rich (talk) 17:26, 23 January 2014 (UTC)

The progressiveness of the tax has as much to do with the income distribution of the tax base as the marginal rate of the schedules. EllenCT (talk) 22:37, 18 January 2014 (UTC)

Not really. You can have a progressive tax system that does relatively little for lower income households. The US for instance has one of the most progressive income tax systems according to the OECD, does less well on measures like poverty or the Gini Index. I think you might agree that the US does less to support lower income households than Canada. Canada has a less progressive tax system than the US but a better post tax gini index number, socialized medicine, affordable post-secondary education, some provinces have $7 a day government managed daycare etc. Mattnad (talk) 15:29, 25 January 2014 (UTC)

• Off-topic - Again... I'll also note that the first sentence and image caption is not supported by the source, which was previously discussed. Morphh ^(talk) 18:35, 18 January 2014 (UTC)
• Off-topic This reminds me of Groundhog Day.Mattnad (talk) 19:02, 18 January 2014 (UTC)
• Include The Groundhog Day analogy is apt: once again we see libertarian Randroids unable to publish in the peer reviewed literature or produce accurate predictions or simulations which predict actual historical outcomes from prior data trying to push their unsupported political biases into Wikipedia, this time by whitewashing the relationship between the income distribution of the tax base and the progressiveness of the resulting taxation. That abuse of the accuracy policies needs to stop. EllenCT (talk) 22:31, 18 January 2014 (UTC)

If you feel editors are abusing policy, please take it up at whatever noticeboard you see fit. Please.Mattnad (talk) 23:00, 18 January 2014 (UTC)

It's much more than a feeling, and directly pertinent to this RFC. EllenCT (talk) 23:26, 18 January 2014 (UTC)

• Off topicIs that not the same graph that there was a previous consensus not to include? Martin Hogbin (talk) 22:35, 21 January 2014 (UTC)
• Include but trim Invited here by wikibot. Some context can be included, as this is an alternate policy that shares the same goals. (For example, negative income tax is described in the article on minimum wage.) However, the section as displayed above is overweight. LK (talk) 06:01, 23 January 2014 (UTC)

LK, economic equality is an effect, which may or may not be a goal when creating the tax scheme. Such a tax may have many goals/effects and I don't agree with including sections or content just because they share the same goals. Once you make the jump that this article is not about progressive taxation, but about the goals of reducing inequality and that it covers any spending (subjects that other articles cover), then you could justify inserting just about any policy that seeks that goal (healthcare, housing, welfare, etc). If we have a sub-topic that is directly effected by a progressive tax rate, then include it, but we need to be careful about WP:COATRACK and WP:SCOPE. In your example of the negative income tax being described in minimum wage, that makes sense, because the negative income tax provides a minimum wage. Does education attainment provide a progressive tax rate? Does a progressive tax rate provide education attainment? We have to make the jump - education attainment can increase economic equality and so can progressive taxation. What else can increase economic equality - should we include content for each subject here? Those topics are best left for the articles on economic equality. What we should say here is that progressive taxation does reduce economic equality, but any jump to related goals makes little sense. As for your edit, I don't object to adding some balancing pov for existing content that does directly relate to the subject, but it may need to be reworded, because the content seems twisted and I'm not sure the source supports the current wording. I don't think the source states that lowering income equality increases education attainment, at least not without education spending (which may or may not be via progressive taxation). It says the reverse, that "the rise in inequality accompanied a rise in the payoff to education and other skills." So I think the context is reversed, though perhaps is cyclical with education spending. The source does not say that "progressive taxation may also increase educational attainment" - in fact, it says the opposite. Morphh ^(talk) 14:53, 23 January 2014 (UTC)

For many, the solution to an increase in inequality is to make the tax structure more progressive—raise taxes on high-income households and reduce taxes on low-income households. While this may sound sensible, it is not. Would these same individuals advocate a tax on going to college and a subsidy for dropping out of high school in response to the increased importance of education? We think not. Yet shifting the tax structure has exactly this effect. A more sensible policy is to try to take greater advantage of the opportunities afforded by the higher returns to human capital and encourage more human capital investment. Attempts to raise taxes and impose other penalties on the higher earnings that come from greater skills could greatly reduce the productivity of the world’s leading economy by discouraging investments in its most productive and precious form of capital—human capital.[1]

• Re-write The text appears to imply several degrees of SYNTH and the relation of its content to "progressive taxation" is not stated by any single source. I see no problem with an "effects" section in this article if the effects can be well-sourced and directly related to the topic. The current section appears to confuse the effect of increased income for a single taxpayer with the aggregate effect of increased income for a large number of taxpayers, and seems to entail many assumptions or ceteris paribus conditions which are beyond the scope of this article. If a shorter version is included in the article, I think the views described therein should be attributed to the source and not stated in WP's voice as fact. SPECIFICO talk 21:33, 23 January 2014 (UTC)

There is an effects section in the article Progressive_tax#Economic_effects. The problem is that the RFC content is not an effect of progressive taxation, so I'm not sure how would you rewrite it. What would you suggest for a rewrite to make it on-topic to a progressive tax rate? Morphh ^(talk) 01:45, 24 January 2014 (UTC)

If there is an RS which says it's an effect of progressive taxation -- for example if Gary Becker stated that view -- then we could cite and attribute that view to the source. SPECIFICO talk 02:00, 24 January 2014 (UTC)

Right - I agree with that. I think the only thing Gary said in regard to progressive taxation was that it would hurt educational attainment, which I quoted above. We do include a sentence in the section already on that topic. Morphh ^(talk) 02:45, 24 January 2014 (UTC)

• Comment Based on LK & Specifico's comments, I reviewed the source's for links / effects directly about progressive taxation and education attainment and tried to rewrite / add trimmed content that was verifiable and on topic. Morphh ^(talk) 14:54, 24 January 2014 (UTC)

@Lawrencekhoo: I had trouble verifying "progressive taxation increases educational attainment of the poor" via the sources. Only one source mentions taxation and it supports the opposite argument. I think it needs to be reworded, but I think I understand where you're going. Assuming that a progressive rate lowers taxes on the poor, they will have more income to save/spend on education. Alternatively, if taxes on high earners is redistributed to the poor or to education spending, it could increase education attainment. In either case, we're dealing with after-tax spending, so we need to be careful. Morphh ^(talk) 16:02, 25 January 2014 (UTC)

• Off-topic Entirely off-topic and unsupported by refs that connect to the article. Capitalismojo (talk) 15:51, 24 January 2014 (UTC)
• Off-topic I agree with Capitalismojo Fox1942 (talk) 05:40, 29 January 2014 (UTC)
• Do Not Include I was randomly selected by the 'bot for the RFC. I see that there appears to be something of a concensus that the text is not relevant and I agree, it should not be included. Also a lot of the text consists of claims which are not backed by falsifiable citations and references, claims that would discount the text's inclusion any way. Damotclese (talk) 19:25, 29 January 2014 (UTC)
• Off-topic Fully agree with Capitalismojo poor or deceptive citations used. --Molestash (talk) 00:54, 2 February 2014 (UTC)
• Do Not Include Gary Becker seems to be advocating the very opposite of a progressive tax, based on his work as linked here and elsewhere on the same website (see Morphh's comment). There was a different article on that site, which supported Miz Ellen's views, but that isn't relevant. It wasn't written by Gary Becker, and besides, it seems like an excessive digression to include so much topical U.S. public policy-specific content in an article that is supposed to be about the concept of progressive taxation in general, without undue emphasis on country locale. I am sorry, as I don't recall the URLs now. I'll try to fetch them, as corroboration. --FeralOink (talk) 05:27, 3 February 2014 (UTC)
• Trim and move The text is unnecessarily verbose, and the part about globalization is controversial and unnecessary. Perhaps a leaner version can be included on Redistribution of income and wealth or Wealth gap#Education? - Sweet Nightmares 21:58, 3 February 2014 (UTC)
• Exclude - Randomly invited comment. The text is tangential to this topic. It appears to be an agenda looking for a platform. POV pushing. Jojalozzo 15:31, 10 February 2014 (UTC)

The discussion above is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

Why use a German language source graph on the page? This is English Wikipedia.

Can someone please offer a rational explanation as to why a German income tax graph based on a German language source is more appropriate to illustrate progressivity on this general English Wikipedia topic page than the various English language source charts recently removed for dubious and/or unexplained reasons? Tax Policy Center - [2], [3]; CBO - [4]; another, even more pertinent potential CBO chart that I don't think has been posted on this article yet: [5]

I personally prefer bar graphs to illustrate the concept of progressive escalation and think the TPC/PGPF breakdown is the best looking, most informative one, but all the above are preferable to a German graph we know little about and most English speakers can't verify. BTW, the CBO tax burden share chart source also includes income shares that could be added if one is so inclined.

There are no doubt countless other potential English language options here. I'm just wondering if someone can rationally explain why this German source is better to use here than them. VictorD7 (talk) 01:32, 30 May 2014 (UTC)

Because the graph is less contentious than the other one - it presents an equally-good example of a progressive tax system while avoiding the arguments taking place around the previous graph. If there's a way to prevent and reduce conflict and argument on pages like this one that deal with contentious issues, I tend to see that as a good thing. NorthBySouthBaranof (talk) 05:12, 30 May 2014 (UTC)

My section here demonstrates that using a German language source here is contentious (I oppose it because it's absurd and unnecessary), while there was virtually no discussion here about the English language, US graphs I listed above. Certainly no rational objections were lodged against most of the graphs. The closest thing to a rational objection was LK claiming that we shouldn't include corporate taxes. It was an invalid objection, but we didn't even get to have that discussion yet because we've been focused on other things, and that doesn't explain why the alternative (sans corporate) tax graph he drew was removed anyway. While inferior, I could have lived with that as a lesser evil to what's there now. Are there any other reasons, or was contentiousness your only rationale? VictorD7 (talk) 08:16, 30 May 2014 (UTC)

The other graph is also contentious. Using the current graph to sidestep the issue was suggested by LawrenceKhoo and Morphh and is supported by myself. Wikipedia is not a voting democracy, but that's 3-1 among active editors on this page who have expressed an opinion.

By constantly claiming that everyone who is opposed to you is not "rational," you are substituting unsupported assertions for logical arguments. Claiming that everyone else's views are "invalid" merely because you say so is a rather unconvincing way of working with other editors. NorthBySouthBaranof (talk) 09:26, 30 May 2014 (UTC)

I didn't claim everyone who is opposed to me is not rational, so such comments are unhelpful. I think Morphh offered a good faith, spur of the moment brainstormed idea, but then I pointed out the language objection and no one has responded on the topic since. It's unclear which, if any posters apart from you, even still support inserting the German graph. It's not like it was the subject of extensive discussion. Do you not think the language objection is a legitimate point? Also, how was LK's graph "contentious", much less enough to merit removal? Could you please explain? Also, would you oppose replacing the German graph with the new CBO tax rate chart I listed last above? VictorD7 (talk) 18:02, 30 May 2014 (UTC)

I don't think its a problem using the German model to illustrate a progressive tax system. The article is in English, but the concept doesn't need to show an English speaking country.Mattnad (talk) 18:15, 30 May 2014 (UTC)

But, since it's purporting to show real info from a real country, isn't it preferable that the source be in English so readers can verify it? I can understand exceptions on rare occasions where there are no other options (e.g. key historical segment sourced to an untranslated work), but that clearly isn't the case here. VictorD7 (talk) 19:03, 30 May 2014 (UTC)

United States has the most progressive income tax code?

The following discussion is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

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I would like to query this statement from the end of the article, "United States has the most progressive income tax code ...", sourced to the book Growing Unequal?: Income Distribution and Poverty in OECD Countries. From what I have read, the US tax system, taken as a whole, is essentially flat. Could whoever wrote this please provide a page number and if possible a quote from the book? Thanks. LK (talk) 10:21, 16 April 2014 (UTC)

On my way out the door, so don't have time to review it, but here are a couple secondary sources. [6][7] Morphh ^(talk) 10:51, 16 April 2014 (UTC)

(Edit conflict) I don't have the OECD book, but it has elicited a lot of comment from reliable secondary sources that confirm and explain the findings. Samples from The Atlantic [8], Forbes [9], The Tax Foundation [10] which includes the tax table from the OECD report. The US does not have the highest marginal tax rates (so the richest pay less than many countries), but it also has a far less regressive tax system (much lower income and payroll tax rates for less advantaged households, fewer flat, regressive taxes). The net is a more progressive system.Mattnad (talk) 11:03, 16 April 2014 (UTC)

I read another source that listed pgs. 103, 104. for Growing Unequal?: Income Distribution and Poverty in OECD Countries, but I haven't yet verified it. Morphh ^(talk) 11:06, 16 April 2014 (UTC)

Those sources are neither peer reviewed nor WP:SECONDARY and do not appear to be fact checked. Two of them are blogs from clearly biased bloggers writing op-eds. The "overall U.S. tax system is only slightly progressive. Further, most of the progressivity of the overall tax system occurs in the lower half of the income spectrum. At upper-income levels, progressivity levels off and actually reverses...."[11] EllenCT (talk) 06:13, 21 April 2014 (UTC)

<Insert>The Atlantic and Forbes are most certainly secondary sources. They are certainly not WP:PRIMARY sources. They are deemed RS and both have a mainstream journalism reputation for professional fact-checking. Neither are blogs, neither are "op-eds". Neither holds itself out as "peer-reviewed", but so what? Most of Wikipedia's refs are mainstream newspapers and journals not academic journals. Capitalismojo (talk) 14:56, 21 April 2014 (UTC)

Here is your "biased blogger": Clive Crook is a senior editor of The Atlantic and a columnist for Bloomberg View. He was the Washington columnist for the Financial Times, and before that worked at The Economist for more than 20 years, including 11 years as deputy editor. Crook writes about the intersection of politics and economics. Doesn't seem to be just a "biased blogger" to me. Capitalismojo (talk) 15:01, 21 April 2014 (UTC)

The question was about the US "income tax", not overall US taxation, your source isn't making an international comparison (sources show overall European taxation is outright regressive, not even "slightly" progressive; [12], [13]), and for its overall incidence your source relies entirely on Citizens for Tax Justice, which it describes as a "nonprofit public interest and advocacy organization" (see partisan lobbyist), and which has been shown to be unreliable as its internals are dramatically contradicted by more prominent sources like the CBO and Tax Policy Center. Your source even ends with an appeal for people to support a tax hike like the one Chuck Schumer proposed a few years ago, lol.

On the other hand, I did enjoy this line from your source, Ellen: "Corporate taxes are generally assumed to fall on owners of capital in proportion to their income from capital (dividends, capital gains, interest, and rents) (CBO, 2007)." Fascinating.VictorD7 (talk) 07:04, 21 April 2014 (UTC)

Absolutely false. According to your preferred CBO, capital gains tax in the United States are also income taxes, and they are most of the reason that income taxes are regressive at top brackets. "The major reason for the growing unevenness in the distribution of after-tax income [in the US] was an increase ... in favor of higher income households.... over that period, the highest income quintile’s share of market income increased from 50 percent to 60 percent.... The share of market income for every other quintile declined."[14] pp. ix-x; see also pp. 10-12, especially figures 6 and 7. EllenCT (talk) 08:32, 21 April 2014 (UTC)

EllenCT, you are again missing the forest for the trees. The CBO is quite clear that US taxes, including capital gains are progressive and despite some changes in ratios over the years, are still progressive. The OECD analysis is comparative between nations. It does not disagree with the CBO and is not only a reliable source, but has also been picked up by other reliable sources (re: Forbes, Tax Foundation, The Atlantic) making it notable in ways your selected "peer reviewed sources" typically are not.Mattnad (talk) 10:55, 21 April 2014 (UTC)

Absolutely nothing I posted was false, and, as Mattnad observed, nothing you said is pertinent to this discussion. VictorD7 (talk) 18:51, 21 April 2014 (UTC)

On the contrary, did you look at figures 6 and 7 on pp. 10-12? Do you really expect anyone to believe that capital gains tax cuts since 2000 have made taxes more progressive for the rich? If so, why? EllenCT (talk) 01:47, 22 April 2014 (UTC)

Yes. Those figures do not back up your assentation and have nothing to do with Capital Gains. However, even that graph can belie the nature of a person's tax and their share of wealth over the same time period. Assume person A makes 1,000,000 year 0 and pays a tax of 50% and has 50% of market income while person B makes 40,000 and pays a tax of 25% and has a 5% market. Then in year 5 person A makes 5,000,000 and pays a tax of 60% and has 60% market while person B makes 50,000 and pays a tax of 20% and has a 4% market you would have a system where the progressive nature was increased yet the rich became "richer". Just because the rich are "richer" does not mean that the tax system is less progressive. Arzel (talk) 02:24, 22 April 2014 (UTC)

What are the suggestions for improving the article? Looks like much of this thread is a discussion about the topic in general. Remember, WP:TPNO (guideline) and WP:NOTFORUM (policy) apply. – S. Rich (talk) 02:52, 22 April 2014 (UTC)

You think comments such as that help improve the article? It's like you're in the back of a courtroom during a evidentiary hearing standing up and saying, "Objection! Your honor, the fact that the witness did not notice that the graph furthest from equality in Figure 6 on page 11 is labeled 'Capital Gains' means that we can clearly have no further proceedings in this case of Article vs. Proposed Improvements," and then bangs a gavel on the wall. I wish this place had bailiffs who cared. EllenCT (talk) 06:04, 23 April 2014 (UTC)

@Arzel: do you understand why the capital gains chart in Figure 6 on page 11 in [15] is shaped so differently from the others? EllenCT (talk) 20:54, 24 April 2014 (UTC)

The correlation between ownership in capital is correlated to a person's wealth. As the stock market goes up there is a disproportionate increase in capital assets for the very riCH. Correspondingly, when the markets go down they tend to lose the most as well. However, this does not really back up your claim. Most of this wealth is unrealized wealth. I know that your argument is that since the capital gains taxes are lower than the top marginal rates that this results in the tax system to be less progressive. However, with few exceptions, the very rich pay more in taxes as a proportion of their income than anyone else. That some are able to find ways to take advantage of certain aspects does not change the fact that for most salaried people our system is very progressive. My previous example was not meant to be a scenario related to this aspect of capital gains. You seem to be also making arguments that we are not progressive because even if you pay more in taxes as your income increases, those with higher incomes still make more because of their base income and have a larger share of the income/wealth. You don't like my argument fine, but you still have not provided reliable sources that back up the statements you want to make. Arzel (talk) 20:18, 26 April 2014 (UTC)

This debate on whether capital gains are taxed less, or more matters not. What we should depend upon is a reliable source that analyses the relative progressiveness of US taxes. We have the OECD study that has been further validated by other reliable sources. EllenCT, I readily accept that previous tax law changes advantaged those with capital gains (and dividends by the way). While the tax code was made less progressive, it did not make it regressive, particularly when compared to other nations per the OECD. I will add that whatever Bush II helped to enact, some of that has been rolled back under Obama and it's not contentious that 2013 tax law is more progressive than before.Mattnad (talk) 22:17, 26 April 2014 (UTC)

I looked at the OECD study and was meaning to comment here, but forgot. The OECD study only looks at Federal taxes, which are on the whole progressive. However, once state and local taxes are taken into account, the whole US tax system is largely flat. (See this Citizens for tax justice report.) Of course, because of different state laws, exemptions, different tax rates on income sources and other complications, the system may be progressive or regressive for individuals.

Also, once cash transfers are included (similar to the the earned income tax credit in the US), the the US looks much less progressive. For example, this Bookings article states " the current U.S. tax system is less progressive than the tax systems of other industrialized countries, and considerably less progressive today than it was just a few decades ago". Same finding from a recent IMF study [16]. So, although true, I believe it's misleading to include the statement that the US Federal tax system is the most progressive among OECD nations. LK (talk) 03:38, 5 May 2014 (UTC)

@Lawrencekhoo: thank you. Do you think [17] should be incorporated into the discussion in this article? EllenCT (talk) 11:54, 6 May 2014 (UTC)

@Arzel: is that satisfactory to you? EllenCT (talk) 11:48, 6 May 2014 (UTC)

LK, I believe it is a mistake to set "Redistributive impact of fiscal policy = Progressivity of Taxes". The edmundconway source measures the first (redistributive impact), not the latter (progressivity). You can see the difference for instance in this article by Edmund Porter in the New York Times where he says "Despite the progressivity of our taxes, according to a study of public finances across the industrial countries in the Organization for Economic Cooperation and Development, we also have one of the least effective governments at combating income inequality." This also matches the 2009 study by Prasad and Deng. From WP: "Prasad and Deng found that the progressivity of countries' tax codes is negatively correlated with the amount of redistribution they do." Many European countries have higher taxes and redistribute more income via transfers than do the US, but you must not equal this with having more progressive taxes. In fact, these transfers are to a large degree paid for by the regressive sales tax. Paul Krugman writes about this here, Why I’m Soft On Sales Taxes: "it does seem that countries with strong welfare states have less progressive tax systems than those with weak safety nets" Iselilja (talk) 14:57, 6 May 2014 (UTC)

They are different means to the same ends. If you have one, you don't need as much of the other, which is why the graph at the top of LK's source [18] stacks them on top of each other. EllenCT (talk) 00:40, 7 May 2014 (UTC)

LK, CTJ is a partisan lobbying group with internal federal figures that are dramatically contradicted by the more reliable CBO and Tax Policy Center, both of which show taxation as more progressive, especially for the top 1%. We know CTJ's federal numbers are suspect, and it's possible their state/local ones are too, though the federal skew alone is enough to seriously throw off their results. I don't have time to dig up links right now but I and others have done so numerous times on this topic before and I'll happily do so again here if necessary. Furthermore, even CTJ describes overall US taxation as "slightly progressive", which, as the sources I and others linked to earlier show, still would make it significantly more progressive than the outright regressive taxation of other developed nations. VictorD7 (talk) 18:35, 12 May 2014 (UTC)

Per VictorD7, there's no dispute that some countries have more progressive spending than the US. This article is however about taxation. Regarding state and local taxes, the OECD didn't factor those in (to my knowledge), but for households in lower income ranges, their local taxes are 100% deductible from federal taxes. As you go up in income, the AMT kicks in which reduces and eliminates deductions which is progressive. So really, we'd need a reliable source that looks at total tax rates (including regional/local) by nation. If the OECD does not, do we have an alternative source that does? If not, then we're back using the sources we have. The OECD does do that and we can rely on it until we have an alternative.

One other point on the CTJ included payroll taxes in their calculation. Most of those are for SS and Medicaid which are technically insurance and not taxes. It then become a related debate on how to attribute those by income group, particularly since CBO analyis indicates that lower income households get back significantly more from SS and Medicaid than they pay in. Accordingly, there's a lot to not like about the CTJ analysis in this regard: 1) it doesn't compare the US to other countries, and 2) it does not account for payroll taxes the way it should be if we're actually looking at "taxes". Mattnad (talk) 18:51, 12 May 2014 (UTC)

Good points, though I'll add that the Northwestern study linked above considered all taxation, and it should be noted that sources like the CBO and TPC also count payroll taxes in their total federal figures, and yet still show far more progressivity than CTJ does in its federal numbers. The discrepancy remains unexplained. For months last year Ellen argued that it resulted from CTJ counting corporation taxation as regressive rather than progressive like the other sources, until it was proved through extensive quotation from her own source that CTJ in fact also counted corporate taxes as progressive. At the time she refused to acknowledge this, claiming that CTJ/ITEP wasn't a reliable source for its own views, and that she had a secret conversation with an anonymous former employee who contradicted the group's public accounts, though I'm not sure if she still maintains that position, or clings to the incredible notion that such a scenario, if true, would somehow do anything but discredit the source even further. VictorD7 (talk) 00:28, 13 May 2014 (UTC)

Federal vs entire system

I want to come back to my original point which is that the OECD study, which the blog posts and opeds are based on, is looking at only the Federal tax system. State and local taxes make the entire tax system less progressive. I've not seen anything to contradict this point, which I feel should be made in the article, if the point about federal taxes being progressive is made. BTW, payroll and medicare levies are federal taxes (they are used to pay for federal expenditures), and the OECD treats them as such. LK (talk) 06:32, 15 May 2014 (UTC)

Well, in other countries local taxes are also present but not accounted for in the OEDC analysis. For instance in Canada the provinces layer on their own income, payroll, and sales taxes but those are also not included in the OECD analysis (but I'll add that Canadian provincial taxes are not deductible from federal taxes the way state and local are in the US for lower income households). Do you have an alternative source that examines total taxes across nations? From what you've written, it seems as if the alternative views are considering only the United States.Mattnad (talk) 11:17, 15 May 2014 (UTC)

Lawrence, did you not read these on total taxation: [19], [20]? Other developed nations rely much more on regressive consumption taxes than the US does even counting the state and local levels, and such taxes are less progressively constructed than US sales taxes to boot, as are European income taxes. On the taxation front it's not even close. VictorD7 (talk) 00:18, 16 May 2014 (UTC)

There's a lot of points to answer here, so to address a few: a) AFAIK, most OECD countries (except Canada) don't have significant state and local taxes. b) The OECD report looks only at Federal taxes, whether, after including all other taxes the US is still the most progressive, AFAIK, no source answers that. c) Many sources consider the tax and transfer system as a whole, which makes sense, cash payments to poor families can be labelled a tax rebate (EITC), or an income subsidy, the economic effect is the same. To trumpet that the US has the most progressive tax system is misleading, as it includes the EITC, but leaves out cash transfers in other countries that don't structure it as part of their tax system. I suggest noting in the article that the US tax system is more progressive than most, as long as we also leave in the caveats about state taxes, and noting that including transfers, the US system is actually slightly below average in progressiveness. I think that best reflects the totality of sources on the issue. LK (talk) 08:02, 16 May 2014 (UTC)

thumb|http://taxfoundation.org/article/comments-who-pays-distributional-analysis-tax-systems-all-50-states It's probably better just to clarify that the OECD focuses on federal taxes. If we start to focus on the state tax component, it's not clear cut that the US is not progressive either. You've selected some sources for the state tax comment that have a strong POV, but there are others, including the chart I developed on the right from Tax Foundation analysis that shows that once Federal deductions for local taxes are included, combined State and Federal taxes are still quite progressive. Also, I would challenge only Canada has local taxes. I've lived in 5 other countries and all had other forms of local tax sales, income or property with varying credits for lower income residents.Mattnad (talk) 11:23, 16 May 2014 (UTC)

[[:File:Total Effective Tax Rates 2011.jpg|thumb|Institute on Taxation and Economic Policy 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.]]

I think that Tax Foundation graph is extremely misleading compared to the ITEP graph I have added below it. And I would point out that it is confirmed if you start from File:Distribution of U.S. Federal Taxes 2000.JPG (2000) and apply the changes since as documented in e.g. figures 18 and 19 on pages 26-8 here. EllenCT (talk) 02:35, 19 May 2014 (UTC)

This article is not about income inequality and the CBO document you suggested does not address the topic here. Of course wealthier people have more after tax income than poorer people. As for your comments on the tax foundation chart being misleading - can you explain why?Mattnad (talk) 13:29, 19 May 2014 (UTC)

Yes. Which part of figures 18 and 19 on pages 26-8 here does not addresss the topic? EllenCT (talk) 23:25, 19 May 2014 (UTC)

LK, you didn't answer my question about whether you'd read the sources I linked. Most other developed nations rely much more heavily on (regressive) consumption taxes than the US, regardless of whether it's at the local or national level. On top of that their income taxes are less progressive than US income taxes (per the OECD) and their consumption taxes are more regressive than US consumption taxes, so the US is even more progressive compared to other nations when "all other taxes" are considered. Of course, as Mattnad correctly observes, the line in question currently only refers to "the United States income tax". I think adding a segment on spending differences when the topic is strictly taxation would be frivolous, and I'll point out that some of those studies that lump taxes and benefits together notoriously exclude items like European sales taxes or certain types of benefits extended in the US. Regardless, such material more appropriately belongs in articles on redistributive spending, the welfare state, or maybe inequality. The progressivity of a tax code's structure is a creature in and of itself, and has various consequences beyond income redistribution (e.g. growth, efficiency, revenue volatility, etc.), so it would seem undue to select one tangential area for consequential focus.VictorD7 (talk) 00:10, 17 May 2014 (UTC)

Here is a paragraph from p. 105-6 of the OECD document

However, the progressivity of the tax system also depends on the level of inequality of taxable income, and the effective progressivity of a given tax schedule will be greater in a country with a more unequal distribution of taxable income. Table 4.5 adjusts for this effect by showing the concentration coefficient of household taxes divided by the Gini coefficient for market income (in the third column), as well as the share of taxes paid by the richest 10% of the population compared to the share of market income they receive (sixth column). Based on the concentration coefficient of household taxes, the United States has the most progressive tax system and collects the largest share of taxes from the richest 10% of the population. However, the richest decile in the United States has one of the highest shares of market income of any OECD country. After standardising for this underlying inequality, Ireland has the most progressive tax system as measured by the ratio of the concentration coefficients of household taxes and market income, while Australia and the United States collect the most tax from people in the top decile relative to the share of market income that they earn.

It seems to "household taxes" in the OECD document refers only to federal level taxation, but correct me if I'm wrong. Note that here, the conclusion of the author is that "Ireland has the most progressive tax system".
--Ubikwit ^連絡 _{見学/迷惑} 15:28, 18 May 2014 (UTC)

No, at least not just Ireland. First, here's the earlier segment that sets the stage:

The second panel of Table 4.3 shows the distribution of household taxes (income taxes and employee social security contributions). Because taxes are deducted from household incomes, higher values of the concentration coefficient imply a more progressive distribution of household taxes. Taxation is most progressively distributed in the United States, probably reflecting the greater role played there by refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit. Overall, there is less variation in the progressivity of taxes across countries than in the case of transfers. After the United States, the distribution of taxation tends to be most progressive in the English-speaking countries – Ireland, Australia, the United Kingdom, New Zealand and Canada – together with Italy, followed by the Netherlands, the Czech Republic and Germany. Taxes tend to be least progressive in the Nordic countries, France and Switzerland. In most but not all countries taxes are more progressive for the retirement-age population than for the working-age population, reflecting the existence of various tax concessions for low-income retired people.

As this secondary source lays out, "According to the OECD, rich Americans bear a bigger share of the tax burden because they earn a bigger share of the income and because the US income tax system is more progressive." Look to your own final quoted segment: "while Australia and the United States collect the most tax from people in the top decile relative to the share of market income that they earn." Look at Table 4.5, which gives two "Alternative measures" of progressivity, side by side. On the right hand side, even with the inequality adjustment mentioned earlier, the US is the most progressive (more so than Australia). In the left side version Ireland is the most progressive, with the US second. It's legitimate to note that progressivity can be measured in different ways, sometimes yielding differing results, though I'll note that the article already mentions different measurement systems in a higher section (perhaps that point can be expanded with some more emphasis) and the segment in question here is already qualified to some degree (specifically mentioning the impact of tax credits). That said, I do commend you for digging up a pdf of the OECD source, and accompanying it with on topic commentary. Whether the current text should be left alone, slightly tweaked in some way to acknowledge that different measurements yield slightly different rankings, or possibly changed to reflect all taxes (per the Northwestern study; since the article is titled "Progressive tax", not "Progressive income tax") is what this section should be discussing, with any changes first agreed upon by consensus of course. VictorD7 (talk) 20:36, 18 May 2014 (UTC)

I'd hoped not to engage too much in this discussion, but regarding the relevant passages from the OECD study, the conclusion seems to be the clauses that your quotes sort of surround but are somehow avoid being highlighted in your post

However, the richest decile in the United States has one of the highest shares of market income of any OECD country. After standardising for this underlying inequality, Ireland has the most progressive tax system as measured by the ratio of the concentration coefficients of household taxes and market income

Also, I really don't have time to read the NW study, but perhaps you could reference something from that in relation to the "...changed to reflect all taxes (per the Northwestern study"?--Ubikwit ^連絡 _{見学/迷惑} 20:45, 18 May 2014 (UTC)

You just repeated yourself, ignoring the quotes I provided directly from the OECD study and from the secondary source about the US having the most progressive taxation (even after adjusting for inequality; look at the far right column of Table 4.5). Ireland ranks as most progressive according to one particular measure (with the US second), hence my commentary about different methods yielding slightly different results. I'll refrain from further specific commentary on the other study until (or if) you read it. VictorD7 (talk) 21:19, 18 May 2014 (UTC)

I don't have much time, so I'm just going to address one issue. VictorD7 asked me if I had read the sources [21] and [22]. The first is an oped that links to a blog that links to the second paper. Reading the paper in the second link, I note this: the authors analyze "three sets of taxes for which the LIS data are relatively complete for all 13 countries: income tax, property and wealth taxes and mandatory employee contributions (payroll taxes)". So, I'm guessing that income tax and payroll tax in the US is referring to taxes at the federal level. OTOH, I note that they find that taxes in the 12 other countries studied are downright regressive, so even if state taxes make the US essentially flat, that still make the US 'most progressive'. However, it would be a bit misleading calling something that's essentially zero the 'most positive', because all others are negative. Additionally, I note that in most of the sources cited in this discussion, they talk about the entire system of taxes and income transfers (e.g. in VictorD7's first link, the author notes "The less progressive the code, the more progressive the system" Also, [23], [24] and [25]). Discussing the tax/transfer system as a whole, as I argued previously, makes much more sense (i.e. how does market income compare to take-home income?). LK (talk) 05:55, 19 May 2014 (UTC)

Just found an interesting discussion on Brad Delong's blog from 2012 [26]. In the comments section, many economists weigh in on this issue and make many of the points that have been made on this page. To note the relevant, a) the US federal tax system is unusually progressive (compared with OECD), b) state and local taxes reduce that progressiveness and make the it essentially flat. c) When talking about taxes, economists typically mean taxes net of transfers (i.e. tax – transfers). d) When looking at tax after transfers, the US is less progressive than the majority of OECD nations. I'm happy to have all this in the article, but would object to including only US federal tax system is unusually progressive. LK (talk) 08:54, 19 May 2014 (UTC)

It's a bit a logic break to argue that some of your sources state the US is the least regressive, but we can't say it's more progressive because in aggregate we have a flat tax. Less regressive = more progressive.

I'm open to including a global tax comparison that examines all taxes (Federal equivalent and more local government entities) but I think we'd need a source. Here's where we are right now: a reliable, presumably non-partisan source (OECD) has done a study across many nations looking at federal taxes including payroll taxes. Why don't we just qualify it as such, particularly since even in the US, some state tax regimes are more progressive than others. NJ for instance has a very progressive state income tax structure and offers up to $10,000 in credits for local property taxes for lower income households which is further reinforced by Federal deductions. It's challenging to find a source that's broadly accepted that has done the homework on all state taxes (ITEP is not considered non-partisan by any means). Mattnad (talk) 13:29, 19 May 2014 (UTC)

@Mattnad:As per my reply to your query on my Talk page[27], I agree that it would be something of a rhetorical misrepresentation to claim that the US is more progressive in light of the relationship to absolute progressivity per se. If something does not meet the definition of progressive, it is not accurate to call it progressive because it is less regressive.--Ubikwit ^連絡 _{見学/迷惑} 15:22, 19 May 2014 (UTC)

I think I took a different logic class. To each their own. At any rate, the point that we need a comprehensive reliable source that examines total taxes across countries still stands if you want to bring in state taxes - otherwise we're just debating amongst ourselves.Mattnad (talk) 15:51, 19 May 2014 (UTC)

That's a little outside my cope of competence, so I'll defer to others. i will contribute to this insofar as it is possible as a generalist, so to speak.--Ubikwit ^連絡 _{見学/迷惑} 16:26, 19 May 2014 (UTC)

LK, you must not have read all of it. The study does include US state taxes. On page 438 (Oxford journal page numbering; the same page you quoted from!) it explicitly states "The USA figures do include state-level taxes." It also explains that it derives US sales taxes from BLS data. That's why I keep keep pointing out that your attempts to expand this beyond federal taxes only leads to results that make the US look more progressive vis a vis other nations. And no, taxes and spending are two distinct creatures, as our $17.5+ trillion debt shows. Redistribution isn't even historically supposed to be the purpose of US taxation, and certainly isn't the primary purpose, much less sole purpose, of any non communist nation's taxation. The Washington Post "blog" I linked to is by a liberal writer, and I mostly just linked to it for the quick and easy Kakwani visual displays he provides. His characterization of what's a "system" is less relevant (that's a nebulous description perhaps useful in a discussion on redistributive policy, but not taxation per se), but he and the study both emphasize the point of separating taxes from spending. Do they impact each other? Of course, but taxes impact many other areas too. It's not as if we go around Wikipedia to every mention of the US welfare state being less extensive than Europe's and add a "yes, but..." segment on the US having more progressive taxation, lest anyone read that and erroneously assume that the salient difference is that the US doesn't tax high earners as much (the much bigger differences are at the low and middle income levels). Also, the NW finds overall US taxation to be significantly progressive. The only source calling it near flat is the partisan lobbyist CTJ source, which is an unreliable outlier with an internal federal component that's dramatically contradicted by the CBO and Tax Policy Center, and even it calls overall taxation "progressive". No credible source has been presented that calls US taxation "flat" or "regressive". Regardless, your initial objection was to an international comparison, and since the (problematic) CTJ source makes no international comparison, it was a pointless distraction that never should have been raised in this discussion. I'm open to discussing potential article changes, but a selective mention of a tangential topic (spending) in that section would be frivolous and undue, and we certainly don't want to conflate a CTJ assessment of US only progressivity with the international comparison. Your Delong blog appears to be down right now. VictorD7 (talk) 19:38, 19 May 2014 (UTC)

I agree, looking at p438, the Prasad and Deng income study does include state taxes. It apparently doesn't include sales taxes, which may change overall progressivity, but not rankings between countries. As an aside, please stop referring to the CTJ as an unreliable 'partisan' source. Peter G. Peterson foundation is also partisan, economists treat them as reliable, so Wikipedia should as well. LK (talk) 04:55, 20 May 2014 (UTC)

Check again. I just pointed out that they say they derive sales tax info from BLS data, and the "blog" covering the study you dismissed earlier shows the Kakwani comparisons both with and without sales taxes considered. CTJ is a partisan lobbyist. It's literally described by sources (including a WSJ journal article hosted on ITEP's own website as) as ITEP's "liberal lobbying arm". Economists and media are far more likely to cite the Tax Policy Center, CBO, or Tax Foundation than CTJ. The PGPF is relatively bipartisan, but that's also irrelevant since it's only a "source" in that it drew the graph based on Tax Policy Center numbers. If I had drawn the graph myself, as a Wikipedia user drew the CTJ chart EllenCT has tried to insert into various articles, would that change things any? VictorD7 (talk) 05:47, 20 May 2014 (UTC)

VictorD7, I'ld appreciate it if we kept our responses more neutral and civil. FYI, from the paper, "We first calculate progressivity on the three sets of taxes for which the LIS data are relatively complete for all 13 countries: income tax, property and wealth taxes and mandatory employee contributions (payroll taxes). We then address how adding consumption tax changes the substantive findings for the six countries for which this calculation is possible". Main findings are made without sales taxes (LIS dataset doesn't include them), they then add in estimates of sales taxes and find that not much has changed. LK (talk) 07:48, 20 May 2014 (UTC)

My posts have been entirely civil, LK. Yes, as I said, they do calculations both with and without sales taxes. Though I wouldn't say not much changes. The US looks even more progressive vis a vis European systems when consumption taxes are considered, as the WashPo piece I linked to shows. I'm glad we've finally gotten on the same page regarding many of these basic facts. VictorD7 (talk) 08:02, 20 May 2014 (UTC)

The PGPF is very right-wing, pro-austerity, and has been strongly in favor of additional tax cuts for the rich since its inception. EllenCT (talk) 06:19, 20 May 2014 (UTC)

Accepting your unsourced description for the sake of argument, so what? You have yet to explain why the PGPF's views are even relevant when all they did was draw a graph based on Tax Policy Center numbers. Do you believe the TPC is "right wing, pro-austerity, (yada yada yada)"? VictorD7 (talk) 07:12, 20 May 2014 (UTC)

How can someone who wants to starve infrastructure, public education, and preventative health care want to balance the budget? EllenCT (talk) 16:11, 20 May 2014 (UTC)

How is that loaded question a rational reply to my question to you about why it matters who drew the chart, when the numbers come from the TPC? VictorD7 (talk) 18:44, 20 May 2014 (UTC)

[[:File:Average Effective Sales Tax of the 50 States (2007).gif|thumb|right|US average effective sales tax incidence in 2007.]]

Much if not most sales tax is local. EllenCT (talk) 23:25, 19 May 2014 (UTC)

It is not clear how this image helps. The description from its posting on Commons says "Sales tax includes state and local general sales tax." – S. Rich (talk) 00:28, 20 May 2014 (UTC)

That chart does not seem to illustrate a progressive tax, so why would it be in this article?Mattnad (talk) 02:06, 20 May 2014 (UTC)

Yeah, I'm not sure what the point of posting this chart is. VictorD7 (talk) 04:19, 20 May 2014 (UTC)

It illustrates a regressive tax, so is appropriate for this article. LK (talk) 04:55, 20 May 2014 (UTC)

The article is about progressive taxation, and the source is problematic for reasons that have already been explained. It's also alleged data from 2007. Even if it was decided to include a chart illustrating regressivity here for some reason, surely there are better examples. VictorD7 (talk) 05:02, 20 May 2014 (UTC)

|thumb|right|U.S. Payroll tax incidence in 2010.

The payroll tax incidence? EllenCT (talk) 06:19, 20 May 2014 (UTC)

Let me reiterate my view. When economists speak of taxes, they refer to the tax/transfer system. A cash transfer is the same whether its labelled a 'tax credit' (as in the US) or a 'welfare payment' (as in Europe). I have no problems with including that the US has unusually progressive taxes, as long as we also note (as most reliable commentators do) that the US tax/transfer system is less progressive than most. This seems to me eminently reasonable, if this is not acceptable, then the only way to settle this issue is with a RfD. LK (talk) 04:55, 20 May 2014 (UTC)

No, in most cases a tax credit simply lets people keep money they earn, and economists talk about stand alone tax code features (including but not limited to progressivity) all the time. Even EllenCT's CTJ source focuses solely on taxation, and so do the various tax incidence sources being discussed here and elsewhere. I'll reiterate my own comments that taxation is about a lot more than income redistribution, and arguably hasn't traditionally been about the latter at all. Per my earlier comments, and by your own logic, would you go around adding descriptions of US tax progressivity to all the mentions throughout Wikipedia of the US having less extensive welfare spending than Europe, or of European tax regressivity to descriptions of their expansive welfare states? Or are you only interested in joining the two for mentions of US tax progressivity? VictorD7 (talk) 05:05, 20 May 2014 (UTC)

The EITC is a cash payment that a household applies for. The amount of the payment is dependent on the income of the household and the number of children in the household. Economically, it is indistinguishable from a welfare payment. It is distinguished only by the fact that you apply for it on a tax return form, rather than on a separate form, and that the government nets out any tax that you may owe, before sending the money to you. If you are a low income household with children, you are likely to receive, on net, substantial income from the Federal government - it is not just a return of money already earned. LK (talk) 08:00, 20 May 2014 (UTC)

Your opinion is noted, but that doesn't change the fact that the tax incidence sources, including ones you've cited, treat taxation as a distinct phenomenon from welfare spending. I'll note that only a minority of Americans actually have a negative tax liability (meaning they get more than they pay in, and European nations have a variety of tax credits too. VictorD7 (talk) 08:21, 20 May 2014 (UTC)

This seems to be moving beyond the simple example it was intended to be and over examination pushes the weight in this article for a global context. I haven't read through all the discussion, but it seems to be moving into the scope of Progressivity in United States income tax which would be better for more in-depth analsyis of the US tax structure. Just give a simple few sentences regarding progressive comparisons - this is not a peacock show. If it doesn't help the reader understand the topic, then we should question the value. Morphh ^(talk) 20:48, 20 May 2014 (UTC)

I'll also note that one huge distinguishing trait between the EITC and welfare payments is the earned part. Earned income is required to be eligible for the former. VictorD7 (talk) 09:54, 22 May 2014 (UTC)

Total transfer incidence

EllenCT and LK, so if the EITC is a welfare payment, then so is social security, which is paid out progressively based on income, so that the bottom third of income gets 250% of their contributions back. Likewise, the average American gets back $3 in healthcare for every dollar they contribute under medicare. So by your logic for the EITC, payroll taxes are welfare and should not be included in any discussion of taxes. Oh, but you you don't want to leave payroll taxes out, since those do not support your goal of showing how regressive the overall US tax system is. So you argue against the EITC in tax calculations, but leave in payroll taxes.Mattnad (talk) 09:52, 20 May 2014 (UTC)

Please see figures 6 and 7 on pp. 10-12. EllenCT (talk) 15:23, 20 May 2014 (UTC)

What's your point?Mattnad (talk) 15:30, 20 May 2014 (UTC)

How would you characterize someone who constantly tried to indicate that total tax incidence was progressive when it was actually regressive because they drew the line between progressive and regressive instead of taxes and transfers? If you want to show all taxes, show all taxes. They have been regressive for the top 1%. If you want to show all transfers, include all of them. They are even more regressive, as shown by recent changes in the Gini coefficient. EllenCT (talk) 16:15, 20 May 2014 (UTC)

I have no idea what you're getting at with this statement about "how would you characterize someone....". Sounds like you have something else on your mind. Anyway, the charts you pointed to do not directly address the topic - perhaps they may indirectly - but you need to have a reliable source that says whatever you have in mind. What's clear from this discussion thread is that there are many ways to interpret tax progressiveness. I would encourage you to stick to the topic of the article and stop trying to turn it into an article on "regressive taxes" or "income inequality", or "tax policy in the united states" or any number of other angles that are not pertinent.Mattnad (talk) 16:28, 20 May 2014 (UTC)

Mattnad, I'm not sure what you are getting at. Are you suggesting that if we don't include Soc sec payments, we must therefore exclude payroll taxes? That doesn't make sense. That's like saying because we don't include how defense spending enriches shareholders of defense contractors, we must leave out income taxes, since they are used to pay for defense spending.

My suggestion is simple, tax is the government taking money from people, cash transfers is the government giving money to people. (By this definition the EITC is a transfer, not a tax) Economists usually net them out and talk about the tax system, meaning taxes & transfers together; as Martin Feldstein once said, "When I say 'taxes', I mean, of course, taxes net of transfers." (Transfers being, of course, only cash payments, not things like medicare.) When economists talk about the distribution of taxes by income group, we usually mean the distribution of taxes & transfers by income group. When we talk about how progressive a system is, we should talk about how progressive the taxes & transfers system is. Such as was done in the IMF report I linked to above. LK (talk) 09:23, 21 May 2014 (UTC)

So by your definition, Social Security is a transfer (a progressive one at that) but we still call it a tax. Isn't social security effectively mandatory retirement savings, and given the bottom third of household income gets back 250% of their contributions according to the CBO not really a tax? You see how slippery this gets depending on what you are trying to present. That total tax ITEP chart you and Ellen like includes the employer portion of FICA when calculating tax burden which had the effect of showing a higher tax on poorer households. But in the end, why wouldn't we use a more common definition, like the CBOs? Krugman used it, many other reliable sources use it, etc.Mattnad (talk) 10:16, 21 May 2014 (UTC)

off-topic discussion
The following discussion has been closed. Please do not modify it.
You are being unnecessarily obtuse. The levy to fund social security is a tax. Social security payments (to retirees) are a transfer, it would considered part of the tax & transfer system. LK (talk) 12:05, 21 May 2014 (UTC) Personal attacks? Really? I've been pretty polite about your desire to push an interpretation of taxes not mentioned in any of the reliable sources we've discussed to date. If you cannot do the same, perhaps you should take a wikibreak.Mattnad (talk) 14:41, 21 May 2014 (UTC) Dear Mattnad, a neutral statement of fact about behavior is not a personal attack. You are unnecessarily obscuring the matter. This is a statement about behavior. If I had written, "You are a stupid idiot" that would be a personal attack. I hope you see the difference. LK (talk) 02:25, 22 May 2014 (UTC) This is great! I so if somebody calls someone else a "stupid idiot" as a hypothetical, it's so cool. Wow, it's a good thing nobody called you a "wanker" or a "bellend". How is your abject refusal to follow the reliable source criteria anything less than a personal attack against those of us who are here to build an accurate encyclopedia? EllenCT (talk) 23:52, 21 May 2014 (UTC) EllenCT, the question wasn't directed at you, but I do have to laugh at what you just wrote. Too funny coming from you. So, how are the OECD, CBO, Tax Foundation, NY Times (all sources I've included in this discussion) not reliable sources? Please educate us all.Mattnad (talk) 01:16, 22 May 2014 (UTC)

The discussion above is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

RfC on what to include about progressiveness of US tax system

The following discussion is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.

---

Result: C, say nothing about it.

Looking purely at numbers, C wins with 6 editors supporting it as their only choice and 4 as one of two choices. A got 3 supports as only choice and additional 1. B got no supports as only choice, but 3 as one of two. There was one "none of the above" vote.

There were a number of arguments made against option A. Firstly, that the statement was based on apples-and-oranges comparisons, particularly because EITC tax credits are taken into account for the US, but equivalent tax credits/welfare payments are not taken into account for other countries. No-one has disputed this claim, so I am taking it to be true. If it is true, there is a very strong argument that statement A cannot be included in the article, at least not without clearly explaining what is wrong with it. It was also argued that it is misleading just to look at income tax when the overall picture of the fiscal system is radically different. This is logical, but an equally logical counter-argument has been made that the article is about tax, not overall fiscal policy. What seems less logical to me, though, is the particular focus on income tax to the exclusion of other forms of personal taxation.

In defence of option A, it was pointed out that the information was reliably sourced. This is not a strong argument, given that the statement involved is clearly controversial on a number of levels (this can be seen from prior discussions above) and does not constitute the only relevant information that might be disclosed to the reader. WP:RS is not a defence against a charge of ignoring WP:NPOV.

On balance, the case for option A is not strong enough to overturn option C's numerical victory. This means excluding information which might be encylopaedic if handled in the right way, which may not be ideal, but there we have it.

It has been suggested that this RfC was unfairly framed. I'm not able to say this is wrong, but exactly how it might have been unfairly framed has not been explained in enough detail for me to take the question into account. However, there is nothing to prevent further discussion and a better RfC being formulated if editors want to do that.

Please refer to the above section for details. Essentially, there is no dispute over the accuracy and reliable sourcing of the following statements, but there is dispute over exactly what should be included in this article. Should the article include:

A – The United States has the most progressive income tax code among its peer nations.

B – The United States has the most progressive income tax code among its peer nations, however, including government cash transfers to households, the US system is less progressive than the majority of its peer nations.

C – Not include mention of this issue

LK (talk) 10:05, 21 May 2014 (UTC)

Previously involved

• Either B or C. When economists talk of taxes, they typically mean taxes net of transfers, looking at the total payments of cash between government and households. (E.g. Greg Mankiw: "... it makes sense to look not just at taxes paid, but at taxes paid minus transfers received."[28]) If we make mention of the progressivity of the US system, we should treat the system as a whole; leaving out transfers would be misleading. Part of the reason that the US tax code is the most progressive is that the EITC (a cash payment to poor households with children) is part of the tax code in the US; whereas in Europe, welfare payments to poor households are not part of the tax code there. (See recent IMF study.) LK (talk) 10:17, 21 May 2014 (UTC)
• A with caveats. This RFC does not address the scope of the question discussed on this talk page. Coming back to Wikipedia guidelines, we use reliable sources. If the Congressional Budget Office and other major reliable sources include items like the EITC, then we can. LK would like to propose a different definition and constrain the RFC to parameters that suit his particular views.Mattnad (talk) 11:07, 21 May 2014 (UTC)
• A Torturing of the logic used to determine what is a tax does not help the reader. Besides,this is an article about progressive taxes, not fair redistribution of wealth. Furthermore, the IMF Study is in itself misleading. If you tax everyone a ton and then redistribute all of that back to everyone, it artifically inflates the net effect and doesn't say anything about the progressive nature of the tax system in general. There seems to be some confusion about what Progressive taxes mean, it does not mean the best redistribution of wealth, in pure outlays of cash. And if one really wants to get into the weeds, you could say that the US is sooo progressive that we redistribute our wealth outside of our country in the form of military protection to a large number of the countries in the IMF study. Arzel (talk) 13:52, 21 May 2014 (UTC)

Actually, a commonly used measure of how progressive a tax is is how much it redistributes wealth, ie. it's effect on the Gini coefficient. The IMF treatment of the tax & transfer together is entirely mainstream and commonplace. LK (talk) 02:30, 22 May 2014 (UTC)

The Gini use of transfer skews the results tremendously. If you tax everyone at 50% and then give most of that back in transfers then by that logic you have a very progressive tax even though the actual tax rate is not progressive in the least. It is nothing more than manipulation of the monetary system. Arzel (talk) 04:06, 22 May 2014 (UTC)

• A with caveats or C I understand what LK is saying regarding tax policy embedding spending policies, but there is a distinction that it is part of the tax code structure and it would be a broad deviation to reframe the topic as a country's wealth distribution system. We're describing the tax, not social spending (U.S. also has a separate welfare system) and not the overall measure of reducing income inequality. It seems the point of B is to include a pov regarding U.S. spending priorities, as to say: yes the U.S. has the most progressive tax, but they're not helping the poor as much as other countries. I'm not adverse from including additional information if brief, such as "The United States has the most progressive income tax code among its peer nations, but partners it with a regressive payroll tax and state / local taxes of varying incidence." Such wording focuses the topic on tax policy. We could certainly argue that the payroll tax has progressive spending, but again, that's not the point of this article. So I would avoid getting into the slippery slope of "direct" spending. Alternatively, I'm not sure the sentence adds much in understanding the article topic and I don't think it would be a big loss if we just removed it. Morphh ^(talk) 16:42, 21 May 2014 (UTC)
• B or C According to LK's earlier quote of taxes net of transfers along with his assertion that such is the typical use in economics discourse as well as the point on the EIC, maybe a statement combining B with elements of that suggestion by Morph would be workable with minimal delving into discourse on the terms in respect of which the "system as a whole" should be defined.

  The United States has the most progressive income tax code among its peer nations; however, considered in conjunction with government cash transfers to households, the US system of taxation is overall less progressive than the majority of its peer nations.

  It seems that differentiating between "income tax" and "payroll, state and local" taxes would confuse things, so the more abstract terminology of "government transfer to households" would be preferable. The more abstract the better, avoiding political implications if possible. It seems like it would be ignoring a substantial amount of the RS material on progressive taxation that has been raised here if the scope were limited to the "income tax code". Maybe it would be possible to put a statement in the lead of the article to the effect that economists typical mean "taxes net of transfers" when they discuss taxation, use the Feldstein quote, etc.--Ubikwit ^連絡 _{見学/迷惑} 17:21, 21 May 2014 (UTC)

I don't think there is anything typical about including government spending in the definition of a tax. What you often see is taxes being discussed as a component in a larger topic, such as income inequality or wealth redistribution ("system as a whole"), as done in the IMF publication. But don't confuse the context with the individual components. Had the larger topic been economic growth, there would be little mention of transfer payments. IMO, B tries to shove A into a particular context and insert a pov outside of the taxation structure itself. Morphh ^(talk) 21:50, 21 May 2014 (UTC)

OK. I'm a novice to this subject matter who happened upon a couple of these discussions and am trying to contribute on a generalist level, so I'm certain that you and most other participating have a far more comprehensive understanding than me.

One issue I see relates to the definition of government spending. Check this very recent thread and related edits to the article Talk:Government_spending#Seemingly_Inconsistent. According to that, it seems that transfers are technically not included in public spending.--Ubikwit ^連絡 _{見学/迷惑} 22:39, 21 May 2014 (UTC)

Right - I used an overly broad term there, sorry. Transfer payments are sort of their own thing - a use of revenue after taxation that is not counted as part of the national income (the government spending as a percentage of GDP). We don't want to count it twice. In general discussion, I consider it spending (it's the third section in that article), but it is an accounting budget distinction that is made since it's not an expenditure on goods and services for government function. Morphh ^(talk) 00:15, 22 May 2014 (UTC)

To be honest, I haven't read the entire discussion myself, so I probably shouldn't be offering additional comments. Based on the RFC, it seems the dispute is over if the Earned Income Tax Credit was considered a transfer payment instead of a tax credit, then it would make the tax structure less progressive comparatively or the other structures more progressive if you considered their transfer payments as instead being tax credits. But at that point, I believe you're no longer comparing the tax system, but the entire wealth distribution system and its effect on income equality. So placing a goal / context (wealth distribution) around the tax and adjusting the comparison to fit that context. That's my take thus far... Morphh ^(talk) 00:52, 22 May 2014 (UTC)

Ubikwit, you are correct that transfers are not part of government spending. Morphh, for future reference, you should know this. If you crack open almost any Macro textbook, it will explain that government spending (G) do not include transfers between households, and that tax (T) is tax collections net of cash transfers. This is longstanding convention. There is a good reason for doing things this way, as you end up messing up the national accounting if you include cash transfers in government spending. LK (talk) 04:40, 22 May 2014 (UTC)

Yes, I stated that above in my reply but it's not the tax either - it's an after tax transfer and has it's own accounting line, which we simplify to T when compared to expenditures G. Morphh ^(talk) 11:41, 22 May 2014 (UTC)

• D none of the above. There is no evidence that taxes have returned to progressivity for the top 1%, which has an inordinate impact on whether the middle class is growing or shrinking. EllenCT (talk) 23:50, 21 May 2014 (UTC)

What about this and that? Looks the CBO and NY Times (a little more expert in these matters than some) would disagree with you.Mattnad (talk) 01:05, 22 May 2014 (UTC)

Do either of them include sales taxes and state payroll taxes? EllenCT (talk) 01:14, 22 May 2014 (UTC)

They include payroll taxes but not sales tax. But the last I checked, this is an article about progressive taxation, and the income tax is considered progressive. Are you going to argue that sales taxes mean the top 1% do not pay a higher percentage of their income than the bottom 10%?Mattnad (talk) 01:23, 22 May 2014 (UTC)

• A: Because taxes are distinct from government spending, and this article is strictly about tax progressivity. Tax code features, including progressivity, aren't just about income redistribution. Assuming otherwise and forcing a highly selective off topic caveat/counterpoint into the segment would be blatant POV. Taxation is a creature in and of itself. Most sources, including all tax incidence sources presented here, and certainly the OECD source already used in the segment, treats it as such. Progressivity has consequences in areas like growth, revenue volatility, and discussions about shouldering a "fair share" of the burden not mentioned here that have absolutely nothing to do with income redistribution. Tax progressivity is a legitimate stand alone topic. There are certainly contexts where the points belong together, but this is not one of them. By ignoring my questions on the matter, LK has made it perfectly clear that he has no intention of going around Wikipedia and inserting "yes, but..." tax progressivity info into welfare and other government spending segments, or ones dealing with inequality. And transfer payments most certainly are government spending. They don't count toward GDP, but that has nothing to do with this issue. Not all government spending counts toward GDP. Transfer payments are government outlays, however. From the CBO: "...analyzing the distribution of most federal spending—including spending on transfers and a host of other government activities...". Of course anyone familiar with federal budget documents knows Social Security and other programs form a huge part of government spending, and have been increasingly contributing to the national debt. I'll close by pointing out that I think this RFC was premature. The situation isn't ripe for it. It contains a cherry-picked focus that ignores many other possibilities that this discussion has barely if it all begun to touch upon, and a skewed, certainly factually inadequate intro. Inviting drive by commentary from people not familiar with this discussion risks taking a confused situation and turning it into an even more chaotic mess. What's more, this discussion (and related ongoing ones on other pages) have been productive, with certain participants making factually false claims, being corrected on them (as exchanges like this show), and eventually acknowledging the correction. As this discussion has progressed editors have steadily (albeit slowly) converged closer to an agreement on the basic pertinent facts. This discussion should continue until that process plays out, and then, once we're all on the same factual page, if there's still some disagreement on how to proceed, an RFC would be appropriate. I'll add that unless there's an overwhelming consensus for "C" the segment that initiated LK's complaint should be restored, as it's been here since at least 2010 and his unilateral removal of the status quo text was improper. That means if there's no consensus for any of these proposals the long standing segment should be restored. VictorD7 (talk) 09:00, 22 May 2014 (UTC)

By common convention among economists, cash transfers are not government spending. Instead, cash transfers are negative taxes. In economic models, taxes are always net taxes, taxes net of transfers. Greg Mankiw, former chairman of the Council of Economic Advisers under Bush has written on this, and also, see the page on government spending. LK (talk) 11:08, 22 May 2014 (UTC)

You're confusing a narrow technical application with proper use of the word "spending". We aren't calculating GDP here. On the more important point Mankiw is right that it makes sense to combine taxes and transfer spending in certain circumstances, as I've already said (in other circumstances, like deficit analysis, combining taxes with other things like total government spending is warranted), but an article on progressive taxation isn't one of them. Posting one or two examples of sources combining taxes and transfer payments totally misses the point, since many examples of sources separating them have also been provided. The question isn't whether it's alright to ever combine them, but whether it's alright to ever report tax progressivity as a stand alone phenomenon. Clearly it is since so many prominent economists and government publications do so, and if it's ever warranted it would be in the "Progressive tax" article. Indeed this article's very existence implies a Wikipedia judgement that tax progressivity merits stand alone coverage.

Regarding whether transfer payments are spending, I'll add that policy prohibits Wikipedia from being considered as a source for content for good reason. The "Government spending" page you link looks to have been heavily edited recently by you, EllenCT, and some fellow travelers, and the opening paragraph appears warped and off point (at least for the lede). I already quoted the CBO calling transfers "government spending" and I'll add some more examples.

• North Carolina State University: "Government spends money in two categories: It can provide services like roads and schools, public safety and garbage collection. And it can provide financial resources to people. The latter category is called transfer spending. N.C. State University economist Mike Walden explains what this includes and how it's changed in the last 30 years. "It's the largest single category now of government spending, and it's grown immensely," says Dr. Walden, a professor of agricultural and resource economics. "Its share of total government spending here in North Carolina, for example, has doubled in the 30 last years. "Now in terms of what we include in transfer spending -- many categories. But the big parts would be Social Security, assistance with medical programs (payments like Medicare, Medicaid), cash welfare and food stamps."

• Federal Reserve Bank of St. Louis high school curriculum assistance: "Explain that government spending can be broken down into two very large categories: 1) government purchases of goods and services and 2) transfer payments."

• BEA FAQ: "BEA seems to have several different measures of government spending. What are they for and what do they measure?...BEA's national accounts measure government spending in three ways:....Government current expenditures: Total spending by government is much larger than the spending included in GDP. Current expenditures measures all spending by government on current-period activities, and consists not only of government consumption expenditures, but also current transfer payments, interest payments, and subsidies (and removes wage accruals less disbursements). Payments such as transfer payments and interest payments are excluded from the calculation of GDP because these payments do not represent purchases of goods and services, though income from transfer and interest payments may fund consumption expenditures or investment in other sectors of the economy."

Since the BEA, St. Louis Fed, and university economists seem to be overwhelmingly reliable sources for this basic issue, it seems to be firmly established that transfers payments are a form of "government spending", though I would appreciate it if other editors would acknowledge this so new readers don't assume this is still a point of contention. Getting people to admit they were objectively wrong on various points in this discussion has been like pulling teeth so far, but progress has been coming bit by bit. VictorD7 (talk) 20:22, 22 May 2014 (UTC)

Acknowledged - This is also how I have experienced the term's use. So that is to say that LK is correct in a specific context, but I find that context outside the scope here and the general use of what is a tax and spending (as described in the United States federal budget) applicable. But as I !voted above, I don't see that it really adds anything to the article, so I'm perfectly fine with deleting it too. Morphh ^(talk) 15:55, 24 May 2014 (UTC)

Previously uninvolved

• C and strongly, too. This is a judgment call. There is clearly no consensus from economists about the level of progressiveness, if any, of taxation on the United States. There is even disagreement about what constitutes "progressiveness" and whether this is a "good thing" of not. Wikipedia is not the place for promoting any of these points of view. We should stick to making references to reliable, third-party sources. -The Gnome (talk) 02:26, 22 May 2014 (UTC)

• C I actually question the accuracy of the statement, but ok, assuming it is accurate, what of it? the article is not about the US tax system and if an example of progressive taxation is needed perhaps the article should use one about which editors can agree. Elinruby (talk) 21:37, 24 May 2014 (UTC)

At this point editors don't seem to disagree with the statement on US taxation (except maybe EllenCT; it's hard to keep up with what her unsourced assertions currently are). This is more about the op not liking that stand alone statement and wanting to insert off topic material as some sort of cherry-picked counterpoint. If it's alright to include stand alone commentary on other nations' tax progressivity, which the article currently contains without complaint, then the statement about the US should be fine too. VictorD7 (talk) 21:57, 24 May 2014 (UTC)

• C I also question the validity of the above system. From living in the US my entire life, I am pretty sure that the tax system is anything but progressive with all the tax loopholes used today. I am not trying to turn this thread into a political debate, but I don't really think that the US tax system should qualify as the most progressive tax system. I would rather avoid the problem with saying that the US has the most progressive tax system by avoiding mention of that controversial detail to begin with. The phrase seems more like an opinion than a fact anyway. PointsofNoReturn (talk) 22:01, 25 May 2014 (UTC)

• C - It seems as if the question of whether or not the U.S. system is "the most progressive" or not is a matter of opinion, debate and speculation among a variety of sources, and is not in any way an unchallenged fact that could be stated in Wikipedia's voice, as proposed. NorthBySouthBaranof (talk) 22:59, 25 May 2014 (UTC)

"It seems"? A vague personal anecdote? Neither of the above two editors offered a shred of evidence or a source, and it's unclear if they've even fully read the discussion. This is the type of drive by commentary I warned about that can result from premature RFCs. Wikipedia is not a democracy. The consensus process is determined by actual legitimate arguments, not blind votes or claims based on erroneous premises. VictorD7 (talk) 04:33, 26 May 2014 (UTC)

And you don't get to be the judge of what is or is not a legitimate argument, given that you obviously disagree with my argument. Your disagreement is noted. NorthBySouthBaranof (talk) 08:07, 26 May 2014 (UTC)

VictorD7, your strongly worded, persistent commentary ("This is the type of drive by commentary I warned about"; "hard to keep up with what her unsourced assertions currently are"; etc) in a section that is supposed to be devoted to voting is over the line. -The Gnome (talk) 17:33, 29 May 2014 (UTC)

Your opinion is noted. Let me know if you have something substantive to contribute. VictorD7 (talk) 21:10, 29 May 2014 (UTC)

The "substance" part is in my vote. You persist in harassing editors who have a different opinion from yours. May I suggest you contain your disagreements in the appropriate section? It's the one titled "Threaded discussion", immediately below. Take care. -The Gnome (talk) 06:52, 1 June 2014 (UTC)

Commenting on votes/rationales immediately under them is common in RFCs (and isn't "harassing"), and it looks like at least 6 other posters had engaged in such discussion here before I did. By "substantive" contribution I meant points or facts addressing the topic at hand, not repeating your feelings about me. Let's not distract from the pertinent discussion. VictorD7 (talk) 09:04, 1 June 2014 (UTC)

You have, thus far, "commented" against practically every Vote in this section that is not to your liking. This is a section devoted to voting. There is a separate section below for Discussions. It's one thing to offer a comment or two, and quite another to be the only one rushing after every vote : Please note that you are, thus far, the only editor engaging in this sort of practice. (BTW, I have no "feelings" whatsoever towards your person, and I hope it's reciprocal). -The Gnome (talk) 11:54, 2 June 2014 (UTC)

The Gnome, while I also approved option C, I think such responses from VictorD7 (though perhaps a bit brash) are primarily a product of the RFC wording, which I feel presented a misleading picture. When the !votes can often depend on how the question is asked and presented, I'm not surprised that someone tries to point out the additional complexities and seeks that responding editors examine the larger arguments and context assumptions involved. The idea of the !vote is discussion and making sense of the arguments - if editors are just voting without understanding the arguments (due to the RFC presentation), I sort of expect someone is going to challenge it. Darx9url's comment below is a good example and VictorD7's response is dead-on. Should it just be left alone - I guess... if we assume the closing admin can determine which !votes are based on understanding the issue, but they still hold weight. So, while I also stated C, I don't fault VictorD7 for trying to deal with the RFC spin to make sure their vote is an informed one. Morphh ^(talk) 15:11, 2 June 2014 (UTC)

Agreed. The RFC was not presented in a way that represents the discussion. It was designed to drive to a conclusion favored by LK.Mattnad (talk) 15:33, 2 June 2014 (UTC)

• C and strongly, just like The Gnome said. It's not necessary for this page and its controversial. If anything is there it should be B, presenting only one side in a controversy is just wrong (and breaks the WP:NPV rule). Darx9url (talk) 03:25, 31 May 2014 (UTC)

Except it's not controversial among the sources, which is what should matter, and this isn't a two sided debate. This RFC cherry-picked one off topic tangent for potential expanded coverage (income redistribution; that's what would violate NPOV), disregarding the fact that other potential tangents (laid out on this page) also exist. So it would be POV to edit based on the selective assumption that the topic (or "controversy") here is income redistribution, with a need to show "both" sides or neither. VictorD7 (talk) 14:31, 31 May 2014 (UTC)

• C - Adding a statement like either of these will just cause the page to be in need of constant update, since countries and their administrative divisions can and do change the application of various taxes frequently. The fact that a specific tax in a specific country is/was "progressive" during a specific time period doesn't necessarily say anything at all about that country's overall tax policy, which is a separate and infinitely more complex topic. Instead of a general comparison which will become outdated, and to avoid leading the reader to draw perhaps inaccurate general conclusions from a specific example, it may be more appropriate to use as examples two taxes from the same country, one progressive and one not, and specify the time period so that the example will not lose accuracy with time. —Anne Delong (talk) 13:17, 9 June 2014 (UTC)
• C with distant second choice B - the article is Progressive Tax, so think article focus is to be on the concept and nature, not on comparisons. Giving more examples of different types of progressive taxes seems fine, or the principles generally known behind them are stated seems fine. But going into comparison to other nations seems off topic of talking about tax and does not seem to have a reason to be in this article, plus it seems to lead into long discussion of 'what does more progressive mean' and lacks any impact to the article. If there is a reason to go there from within OECD or elsewhere, it seems too small to have been prominent in discussion. If it is decided to do comparison anyway, then my second choice is B because I favor progressive tax consider giving examples of more kinds and including negative taxes if they seem effectively a progressive tax. Markbassett (talk) 03:09, 11 June 2014 (UTC)

Threaded discussion

As far as I can tell, there was only agreement that the US "income tax code" could be said to be the most progressive. There is a dispute as to what constitutes the "tax system" overall, and that is where the concerns regarding definition and qualifiers originates. Most everyone acknowledging the broader definition does disagrees with the characterization that the US has the most progressive tax system considered as a whole.

If the article can't provide an adequate overview of the concept by using actual examples from different countries as illustration due to political friction associated with such characterizations, then it should probably be rendered in as abstract a format as possible.

That would mean "C" for this RfC accompanied with the removal of references to other countries codes/systems.--Ubikwit ^連絡 _{見学/迷惑} 12:48, 26 May 2014 (UTC)

No, I think there was actually finally agreement that overall US taxes are even more progressive vis a vis other developed nations than on income tax alone (where it's also the most progressive by multiple measures). LK feels taxes should be combined with welfare spending (at least when on the topic of US tax progressivity; apparently not elsewhere), and his latest proposal, per his own RFC intro, is whether to add a new segment observing that the US welfare state doesn't redistribute income as much as many other developed nations do. But a point of order: the old segment already only mentions "income" taxes, with a qualified description gleaned from the OECD source at that. This RFC isn't about removing anything, since the segment in question that precipitated LK's quest wasn't even accurately presented in the RFC intro. It's about what, if anything, to add. The old segment has been in the article for years, was recently improperly removed, and will be restored soon. Consensus is required to remove it, not keep it. If consensus is to be gauged by RFC, removing it would require a fresh RFC that quoted or at least fully described the segment and that honestly acknowledged its long standing nature. Also, it's unclear if you meant the references to Australia and other nation's tax codes currently in the article should be removed. VictorD7 (talk) 18:11, 26 May 2014 (UTC)

Well, aren't you overlooking, for example, the bit about the EIC vis-a-vis the systemic difference of the accounting therefor between the US and EU?--Ubikwit ^連絡 _{見学/迷惑} 18:28, 26 May 2014 (UTC)

No, that was a blind stab in the dark by LK, not a concrete basis for removing a segment that's been in the article since at least 2010. Are you overlooking the replies observing that other developed nations have tax credits too (which are counted), or the fact that the article segment was already qualified with a reference to tax credits (which also include high end tax deductions, not just the EITC)? Even more importantly, the sources in question count such tax credits, as well they should (not that our opinions should matter). The EITC specifically is tied to earned income, and so isn't just another welfare program. Do you at least agree that removing a long standing segment should require a fresh consensus process that begins by fully describing the segment in question, and not offering a truncated, paraphrased version that excludes the qualifiers already present and pretends it's merely a proposed new addition? VictorD7 (talk) 18:42, 26 May 2014 (UTC)

I'll have to admit that I don't even know the long segment to which you refer. That predates my participation, I think. At any rate, this is started to become more technical than my limited knowledge, so I will have to defer to you and LK and others with the requisite expertise to work this issue out. All I seem to recall was mention that the EIC is counted as a tax deduction in the US but not in the EU, but that the effect overall on the system was similar (as a transfer), so the method of accounting was the only difference. Whether "transfers" should be considered as "welfare programs", for example is beyond my scope. The EIC seemed to problematize the schematization according to what LK said. Thanks.--Ubikwit ^連絡 _{見学/迷惑} 19:46, 26 May 2014 (UTC)

European tax credits, including versions of the EITC, are counted by the sources too. You didn't answer my question, so I'll press you a little since you voted in the RFC above. Don't you agree that a RFC to remove long standing material should be introduced by the actual quote in question or at least a full description of it, and should point out that it's long standing instead of pretending that it's merely a proposed new addition? VictorD7 (talk) 20:53, 26 May 2014 (UTC)

OK, I don't want you to think I'm stonewalling you or something. I just checked the article, and this is the reverted text to which I assume you are referring. Frankly, I find that to be an extraordinarily strangely composed, forced sentence. Further, the crux of the matter--the way I see it--is that we're trying to go beyond just the "code" to a more comprehensive representatonal model. Accordingly the reverted text is not very representative of the way consensus is developing here. I'm going to blockquote the text here for easy reference

Progressive taxation often must be considered as part of an overall system since tax codes have many interdependent variables. For example, when refundable tax credits and other tax incentives are included across the entire income spectrum, the United States has the most progressive income tax code among its peer nations.(bolding added)

It's plain for anyone examining the semantics here that we move from discussing the "system" to the "tax codes" to focusing solely on the US "income tax code". So, I'm sorry, but I disagree with your characterization of the scenario.--Ubikwit ^連絡 _{見学/迷惑} 21:10, 26 May 2014 (UTC)

But you are stonewalling. Nothing you just said answered my question. I have no idea who originally inserted the segment in question, and I'd be all for modifying it in some way. That's what this Talk Page discussion should have been focusing on from the beginning. Unfortunately LK and EllenCT got it off on the wrong foot by focusing on an off topic partisan lobbyist source that didn't make an international comparison, and LK later exacerbated the situation by launching a premature, poorly defined RFC. I'll repeat my question. Don't you agree that an RFC to remove very long standing material should actually cite the segment one is seeking to remove, and honestly describe it as long standing instead of pretending that it's merely a proposed new addition? Side note - consensus is most certainly not shaping up in favor of expanding the subject from the tax code (both the segment and article's focus) to "a more comprehensive representatonal model", if by that you mean LK's suggested expansion to cover welfare spending, taxes, and income redistribution as a combined phenomenon. Almost no one has supported that proposal (just you and LK). VictorD7 (talk) 21:21, 26 May 2014 (UTC)

Ubikwit, I don't plan to jump into this discussion much more, but I think what you describe as a comprehensive representational model is only for a specific measure regarding national income inequality. What I think is missing from that quote is the context for which it is stated. It's apparent in the publication, but not so when taken in isolation. I'd prefix it with the context of When comparing income equality of nations, progressive taxation often must be considered as part of an overall system since tax codes... The focus of the topic is important for what is being measured as taxation is a component in this context. Since this WP article is not about national income equality, but the tax code itself, using this measure is only one possible use case for a larger topic. Adding the suggested wording will change the context from the tax structure itself to that of measuring it as national income equality. Would it be proper to list all possible measures and larger context for which a progressive tax could be applied? The tax code is progressive, but if we're talking about the goal of X, then it falls short of other nations, if we're talking about the goal of Y, then it is ahead of other nations, if we're talking about the goal of Z, then it's in line with other nations. I don't see that focusing on larger goals, or more specifically framing it as only one goal, is proper. Morphh ^(talk) 14:17, 27 May 2014 (UTC)

In fact my take on the segment is that "overall system" is referring to the complexities within the tax code, judging by the material that follows, albeit worded with less than ideal clarity. The only use of "overall system" I was able to find in the OECD document was a niche topic footnote discussing the health finance system, which obviously wasn't the intent of the segment in question. I completely agree with your logical analysis regarding the diversity of potential larger (off) topics, and the need for avoiding selectively embracing one here. VictorD7 (talk) 18:49, 27 May 2014 (UTC)

Just for a quick example, one could envision a segment along the lines of The US has the most progressive income tax, but the relative drag on economic growth caused by the inefficient structure is mitigated by the nation having a smaller tax burden than most peer nations. Or maybe...The US has the most progressive income tax, and therefore more revenue volatility than most peer nations. That tax code progressivity has multiple consequences across multiple topics unrelated to income redistribution underscores the value in commenting on it as a stand alone phenomenon. VictorD7 (talk) 19:01, 27 May 2014 (UTC)

@Morphh:That sounds reasonable to me. I would suggest that you append your suggested prefixing statement as a proposed text for discussion. I have to bow out of this as it is beyond my scope of competence. It would probably be valuable to the reader to have analysis of the relationship between taxation and economics goals.

@VictorD7:Those sound like reasonable suggestions as well, but I don't understand the overall schema of the article and where such statements would belong. Would you propose making similar statements for other countries that have systemic characteristics which are remarkable (i.e., noteworthy)? As mentioned above, such examples might serve to illustrate the concept if properly presented and not politically contentious. --Ubikwit ^連絡 _{見学/迷惑} 19:38, 27 May 2014 (UTC)

No, the point was that such additions don't belong in this article. They'd be off topic, cherry-picked caveats/consequences. The article is strictly about tax progressivity, which is not the same thing as income redistribution. VictorD7 (talk) 19:44, 27 May 2014 (UTC)

The discussion above is closed. Please do not modify it. Subsequent comments should be made on the appropriate discussion page. No further edits should be made to this discussion.