You need to go back and take your math classes too.  You are comparing two different things.  All I was illustrating was that a higher percentage of less money (total tax revenue) is not relevant.

When amounts are equal, collecting a higher percentage DOES allow you to take in more income.  If a person is making $500,000 and I tax 50% of their income, I collect $250,000.  If a person is making $500,000 and I tax 40% of their income, I collect $200,000.

Now I do agree that closing tax loopholes is very important too to avoid tax avoidance, but his assertion that we collected more revenue under Reagan is just plain false and there is no evidence to support it.

I guess that makes sense if you don't count those big dips during the Reagan and Bush years.  Do you know how much more money just a few percentage points is when you are talking about GDP as a whole?  A SHITLOAD of money.  That 5% drop following the Bush tax cuts was substantial in terms of how much revenue it means we lost.  Did you even read what I posted article about increases in real revenue?

But real revenues per capita grew only 19 percent over the same period (1980-1988) — better than the likely Bush performance, but still nothing exciting. In fact, it’s less than revenue growth in the period 1972-1980 (24 percent) and much less than the amazing 41 percent gain from 1992 to 2000.

Is it really possible that all the triumphant declarations that the Reagan tax cuts led to a revenue boom — declarations that you see in highly respectable places — are based on nothing but a failure to make the most elementary corrections for inflation and population growth? Yes, it is. I know we’re supposed to pretend that we’re having a serious discussion in this country; but the truth is that we aren’t.

@ Mrstickball - Sorry about the lateness of my reply, I just read your post. I'm not to sure what the tax rate is for the top 1% of the US is, but it seems to me a lot of countries have been increasing the amount the upper band of earners pay. There must be a reason. I would imagine with the rich poor divide in USA it would work to a greater extent.

I'm not sure though, I'm not that economically savvy.

I would say that, at least in America, we raise taxes on the richest, because many rich people have loopholes to avoid taxes. When you have access to more income (make more money), you also have access to smarter means of avoiding paying taxes such as tax shelters. Because of that, taxes are usually increased to compensate for the rich people that avoid taxes. That is not how you fix the issue of taxation. You remove the shelters, to ensure that all rich people pay fairly.

From my view, that's what makes our system so lopsided, even far beyond what progressive taxation scheme we have in place at this time: Poor and lower-middle class payers don't have access to good accountants that can give them the best means of avoiding taxes, but the rich (certainly) can.

As of 2006, the Top 1% paid 39.89% of income taxes, with the Top 5% paying 60.14% of all income taxes. The question we have to ask is 'Does the Top 5% actually make 60% of all income in the US?'

The answer to that question is 'no'. The top 1% actually made only 20.0% of all US income in 2000. In fact, you have to include the entire Top 20% to equal the taxation the Top 5% bear the burden of.

Maybe it's just me, but I don't think that punishing the successful by taxing them 2-3x more than the bottom 50% is really the best way to tax people. We hurt the successful, and bless the stupid. To me, thats kind of counter intuitive to the American dream.

As for the tax rate, it's 35% for Americans earning over $357,700 filing either separately, or jointly (of course, this is changing thanks to Obama). In the UK, it's 40% for those earning over 34,600 GBP. Of course, both are before sales tax (US) and VAT in the UK.

So at any rate, I think the US tax system is a bit uneven at the moment. Maybe I'm the only one that thinks that you shouldn't add extra taxation to success.

The lowest we collected was 16%, the highest ever was 21%. So a deviation is 5% is a shitload? Ok, I will give you that. In the next year, we expect to increase spending by 19%... 19%!!!!

If 5% is a shitload, what would you call 19%?

And if you look at the best we have ever done, it’s collect 21% of GPD. No administration has ever collected more. With trying ever possible tax bracket from 92% to 28%, we have never done better than 21%. This means there is no proven methodology to eclipse that number. Why then is it ok to have an expense of 45%? Even when it gets better by Obama’s standards, it’s still sitting at 42%.

Come on man, you can’t think this is a good idea?

Britain has been forced to implement a 50% tax bracket now. Those that earn over £150,000 have to pay 50%. But it is clear that this tax strategy would not have any significant effect in America unless the tax structure is reformed somewhat. To be honest the fact that the top earners are able to exploit loopholes to pay no tax is a bit corrupt IMO.

It's like when McDonalds tried registering themselves as a charity to not pay full taxes. It worked, imagine how muc the government is losing because of the ']Help The Children' boxes on their counters. Ikea do the same thing in Sweden, they are a very corrupt company when it comes to taxes.

Exploiting the loopholes just makes the situation worse in the end.

Government increasing its share of GDP during a recession is normal, and during a recession such as this one necessary.

But yes, I totally agree with you, waging war on the national debt by raising taxes alone is not enough.  Nor is waging war on the national debt by cutting spending enough.  We have to do both.  That includes comprehensive reform of all our entitlement programs, all government spending, all government subsidies, and getting rid of sacred budget cows in both parties (like farm subsidies, which now go to corporations rather than farmers).

Obama's biggest weakness at this point is whether or not he will take this issue on.  Although I have to admit that the effect it will have on him politically is questionable.  Americans have an extremely short memory and don't ever seem to worry about the debt unless we are in a recession.  Hell, Reagan, Bush Sr., AND Bush W. got elected by Republicans running a deficit EVERY SINGLE YEAR they were in office.  All at the same time claiming they were fiscally conservative.

To the Republican Party, fiscally conservative means cutting taxes, not addressing the national debt.  I would like to see that change in BOTH parties as I think Democrats and Republicans have dropped the ball on this issue.

I have nothing against government spending in a recession. I do however think the way you spend matters. Giving large corporations billions is not the answer, employing people to do government project are however. (Improve roads, IT systems, Police stations, whatever).

But what Obama is doing is not trying to spend money during a Recession. He is trying to pass a spending bill that will obligate us beyond out tax collecting capabilities indefinitely. It’s not a short term expense. It’s a long term one.

So we agree on this text I quoted here. Being that we both thing taxing more and spending less is needed, are you for his 3.6 trillion dollar budget that will spend, long term, more than twice what we would spend without it?

China is loaning us money because it’s a good deal for China. When it no longer becomes one, they will stop lending.

Also, a loan is not free. We do have to pay it back (and pay hundreds of billion in interest every year)

Feel sorry for us Brits, we have a £200,000,000,000 hole to fill withing the banking/insurance sectors and no money to fill it with... Basically we're f***ed no matter what we do.