A Mitt Romney fan, eh? You should probably read this article, which absolutely guts the myth that only half of income earners pay taxes.

As far as the top 1% paying 40% of the taxes, I agree that is atrocious--they are supposed to be paying almost ALL of it! See, when the income tax was introduced with the 16th Amendment, it was primarily meant to be a tax on the rich. The federal tax rate for middle-class people was meant to be around 1-2% whereas the tax rate on the rich was around 7%. You can see the original 1913 tax form here.

Of course, since literally the income tax's inception, the federal government has continuously been shafting the middle classes while reducing the tax burden of the wealthy. It's about as American as apple pie by this point!

The big problem is that the government relies more and more on income tax to fund federal projects. Take a look at the graph in the article I linked to at the start of this comment and note how corporate taxes keep going down while income and payroll taxes keep going up.

It doesn't help at all that most of America's biggest businesses have offshore tax havens where they can avoid paying taxes (think Ireland for Apple, Inc., though that hasn't worked out so well for them thanks to the EU being less corporate cock-sucking than the U.S. government).

So, to solve America's tax deficit problem, the solution is pretty clear--tax rich people more (as was intended), tax corporations more and cut off their tax havens, and maybe give a tax break to the people who actually need and deserve it--the middle and lower classes.

But of course all of that sounds suspiciously like socialism, which as we all know is the devil incarnate and about as un-American as naming your kid Stalin.

>> ^renatojj:

@.


Np, glad you liked them. I'm not saying there is only one account of what went down, I'm saying that it is fact that America was most prosperous when taxes were the highest. You don't need to be a historian or theorizer to use Google and check that for yourself.

Your quick Google search brung up an article that deals only in theory, and the argument they use is that people that are taxed 0% are more motivated than people that are taxed 100% - so that the imperitive becomes to cover Govt. expenses while keeping the taxes as low as possible to maintain motivation. That makes perfect logical sense and doesn't disagree with the facts I bought to the table, that America has been most prosperous during periods of high taxation, it simply proves that low is subjective. Taxing someone who earns $10,000 50% of their income means they take home a tiny amount of money, the same tax rate on a billionaire means they still take home five hundred million dollars, more than enough don't you think? If all income was related to productivity then my argument would be different, but quite simply it's not. Look at derivatives trading or inheritence funds as a couple of examples.

Fixing tax rates is also just the beginning, there needs to be a complete overhaul of your taxation system, there is plenty of information out there that details how dozens of your fortune 500 companies are paying no tax at all (e.g. GE and Boeing), Pepco Holdings Inc had a negative 57.6% tax rate for 2010 according to this article:
http://www.reuters.com/article/2011/11/03/us-usa-tax-corporate-idUSTRE7A261C20111103

So not only are the tax rates poorly thought out, the tax system allows companies that rake in billions in profits ways by which to avoid paying any tax at all (and even get refunds).

The same goes for individuals as well, Mitt Romney, who made over twenty million in 2010, and has at least thirty million stashed in over 138 investment funds in the Caimans paid close to 15% tax in that same year. That's the same tax rate that someone earning $10,000 would have to pay.
http://abcnews.go.com/Blotter/romney-parks-millions-offshore-tax-haven/story?id=15378566#.Tx-lKm_9PUd

Is he using this additional money he's making from not paying his taxes for productive purposes? It would appear not... His motive is profit, and to that end he's closed plants, cut employee wages, laid off American workers and outsourced their jobs to other countries, all while he and his partners have made tens or even hundreds of millions of dollars, while the companies he's invested in have often ended up going bankrupt:
http://www.romneygekko.com/mitt/

So my point is that it's a pipedream to think that lower taxes on the rich has only one effect, to make them more productive, it also carries with it a myriad of negative consequences as I've illustrated, the worst one being lobbying, which is rampant in your country. In terms of Chile, you say that all education there is state funded? Have a look at this report and you will see that the total investment in tertiary education Chile makes is probably close to about half a percent of their GDP, which is indeed lower than any other country surveyed, they are also at the very bottom of the list when it comes to actual dollars invested in public education. Meanwhile the cost of education for students is the highest of any OECD country.
http://www.oecd.org/dataoecd/45/48/37864432.pdf

The reasons for that come full circle back to your economic theories. Have you heard of Augusto Pinochet? America installed him as the dictator of Chile after the CIA organised a successful air strike on the palace of the existing democratically elected leader - Allende, which resulted in his death. It's well known that Pinochet relied on the Chicago boys for economic policy, who in turn were trained by Milton Friedman. Friedman was ... the major free-market economist of his time, and it's these exact same policies that still linger around today in the education system thanks to Patricio Aylwin and others. It's clear evidence that your model has flaws, and it's also clear who benefits the most from it.