marketwatch.com— Tax the Super Rich. Tax them now. Before the other 99% rise up, trigger a new American Revolution, a meltdown and the Great Depression 2.
Mar 29, 2011View in Crawl 4
Your statement regarding the WSJ was largely true pre-Murdoch, but he has loaded the editorial board with political ideologues ever since he bought it contrary to promises he made to the Bancroft family when he was negotiating the purchase. They should have known better than to trust that weasel given his record in media.
As a tragic consequence of that sale, the Wall Street Journal no longer holds the journalistic credibility it once staunchly maintained and Rupert has, once again, proven himself to be a detriment to American society. The U.S. made a monumental mistake when it granted him citizenship.
If you consider this single article in comparison to the ongoing deluge of conservative-leaning politi-babble routinely espoused on WSJ's opinion page a contradiction, go ahead.
We all recognize a token gesture to defuse well-founded criticism when we see it. The same goes for the Koch Brother's recent PR effort to paint themselves as "victims".
Wrong. Rupert is in a class all by himself. His determination to undermine our Democracy puts him in that position.
Can you name any other person who has done more to undermine truth, objectivity and journalistic integrity in the U.S. (or anywhere else in the world)? I can't.
What's wrong? Afraid to let people know your true Digg identity? Not only are you a Koch Whore, but you're also hiding your Digg Patriot disgrace with a sad sock puppet.
Regardless of the Digg name you hide behind, we can ALWAYS see your inner ugliness and shame. Enjoy that glass house...
I have done quite a few thought experiments and analysis on the nature of economics, and I have concluded that there are two factors that determines the quality of life in a country (or any system)
1) The amount of money entering or leaving a country - If a lot of wealth is exiting a country, the quality of life will decline. If a lot of wealth starts to enter a country the overall quality of life will typically improve. Ideally, a system should be able to sustain itself as long as it is either closed, or has no net loss of wealth.
2) The evenness and speed of the "flow" of money throughout the system: This one is a little more complicated, but its arguably the most important factor. In short, the worst thing that could happen is when you have a good portion of the nations wealth within the grasp of a few people who do nothing other than sit on it.
Expanding on #2, the best thing you could have is a (relatively) even distribution of wealth that is moving freely and quickly. The faster that money changes hands, and returns back to a consumer, represents a cycle. The faster the cycles, the more production takes place. The more production and consumption that takes place, the more material wealth a country will hold.
I'm by no means anti-rich, and I don't want to come off as a communist or socialist. Capitalism can work just fine, it just needs to be controlled. The problem is that once large portions of money become stagnant, the effect is similar to deflation without a lowering in the cost of goods. Essentially, no one else has any money, and consumable goods stay the same price. I believe this is what is happening now. A large portion of US citizens have negative wealth (more debt than assets), while a small percentage of Americans have more money then they know what to do with. This represents a very inefficient system. If that stagnant wealth was being used (and contained in the US), we'd have a much healthier system .
Due to an inefficient govt, and factor #1 (the country experiencing a net loss trade deficit and movement of our wealth overseas), we could be entering an irreversible situation where we have most of our wealth siphoned out of the country. Much of it will end up in the developing countries, or maybe even some European countries that capitalize on it..
I have a bunch of potential solutions, but basically what we need is to get that stagnant wealth moving and at least partially distributed back to the majority. It is the only solution to this problem.
The best way to control capitalism is not to try. However, the government must be very limited with NO favors to give. Only then can you have competition. Every big business once they "made it" will use their money to convince government to make it too hard for competitors to enter the market, bail them out preventing the natural death cycle of stupid companies and give them subsidies, directly or as lucrative contracts.
Government is at the center of most of our problems. Who got us in Iraq AND Libya? Government did. Who gave us the Fed and the huge financial crisis? Government did.
People feel regulation would have prevented the recession, but the market takes care of that, if there is ZERO chance of a bail out in the future. When companies know they must have real profits or die, they will behave better. Wall Street has been trained for years that no matter how convoluted or stupid a scheme is Uncle Sam will come running to their rescue when the s**t hits the fan.
It is time for NO WARS, NO BAILOUTS and NO NANNY STATE. Freedom awaits!
I'm not advocating big govt. Uncontrolled capitalism, however, can eventually lead to a lot of undesirable conditions. The monopoly laws we have are due to some of these problems.
Basically, there can be a lot of unfavorable scenarios in a capitalist system. We are starting to reach one of them, and as the author of the article pointed out - we were there once already. All of the wealth is controlled by a few small groups of individuals/corporations. Pure capitalism would suggest that this would eventually "iron itself out". That is not true. In fact, having a mass of wealth and power can make it easier to maintain a control on that wealth and power. Monopolistic corporations were proof of that.
"In fact, having a mass of wealth and power can make it easier to maintain a control on that wealth and power. Monopolistic corporations were proof of that."
How do they use that power and money? They buy representation to get the laws they want. I want you understand about a true natural monopoly.
I have one for you, Alcoa. For some time they were the company to go to for aluminum. They did not do so with special deals with government. They improved the product they made to the point that the prices they offered were too low to have competition enter the field. These were not predatory prices, just the benefit of their size. They knew better than to over charge or they would invite competition. Was the nation damaged? No. We all received inexpensive aluminum for our needs. In fact, they kept innovating.
Most of the monopolies you refer to are not natural monopolies. They have much legislation on the books keeping their competition down. Some were even sanctioned by government to become utilities.
For most monopolies the most important ingredient to their "success" is the existence of government.
I do not disagree with you here.. Its just that what I'm focusing on is more of an economic model than a political one.
Its true that without any laws or any govt, you'd essentially have unrestricted capitalism. I cannot stress that this in itself is a horrible economic model. We'd be without all those laws that protect the average citizen, and large wealthy corporations would still easily trample over us. The money buys them power, even without a federal govt to buy out.
The problem you are illustrating is that the govt has passed a lot of legislation that works IN FAVOR of the large multi-national conglomerates. I agree, this is another huge problem, but very strictly against the notions of controlled capitalism, socialism or any other economic model.
What you are describing is sort of akin to facism (in the economic sense). The problem isn't that the govt is interfering as so much as its an issue of the govt picking the wrong side (the corporate side).
I would argue that these are strictly political problems - our govt is obviously very corrupt. Taking the govt out of the equation won't solve any of the underlying problems, but it might ease conditions if we were in an overly facist environment. There would likely be a change of power, but the "natural monopolies" would quickly rise and we'd be in the same position.
The problem is every government goes down that path. It ALWAYS happens due to the money buying influence.
How does a rich person hold power over you? Can his bank account force you to buy his company's goods or services? I do not think so. When he screws over his competition, not through the free market, but by manipulating government, then his money has power. Without government protection companies will boom and bust by their own actions and the actions of their competition.
No government is bad for we lose our courts and we end up with gangland settlement of disputes. That is both bloody and destructive to long lasting prosperity. Even contract law is important to the economy for nothing of consequence can be created without binding commitments.
We need just enough government to allow us to build the future, but not so much government that it tells us what that future must be.
You know what. At this point, I AM advocating 'big gov't.' I'm sick of the all this failure. When your house is on fire, you grab a hose and start spraying! You do not stand and watch saying: "I'm philosophically opposed to using water."
The world is not a thought experiment. People die. I want MORE action from everyone, not less.
That is indeed one possible solution. It does depend on what you mean by "big govt" though. Big government can be a hindrance if the spending is not directed to the right areas.
If the money collected by the government leads to more jobs at a normal living wage salary, then this would definitely help. The ideal situation would be if the government used the funds to supply services that:
1) Lowered the cost of a necessary expense (medical care, energy, food, etc)
2) Offered the services at a more affordable price
3) Displace a service that may be frequently outsourced.
I know, huh? It's not like there could possibly be any other way to have fire protection than to have government do it. . . right? I mean, society can't possibly produce the technology and know-how to have well trained and equipped fire departments without the sacred mandate of city hall. It just isn't feasible for there to be a fire-house protecting neighborhoods, paid for by a voluntary fee, such as an H.O.A. or any other means of voluntarily funding. And certainly a free market would fail us because then nobody would buy fire protection until it's too late. . . I mean, it's not like your homeowner's insurance would skyrocket to the point that you couldn't even afford a home if you didn't purchase fire protection. Yup - free market fail. Also, monopolies are good, we can't have fire departments competing for your business. . .we need to maintain order and uphold the government monopoly on such important services. . . because monopolies always produce the best quality and cheapest services. Besides, private entities are greedy, whereas the government is not. . . so private fire departments would watch your house burn down if you hadn't paid them and it would spread to other homes because of one greedy person not paying the fire-department. . . .the government would never let this happen:
Get a clue. You currently have a big government and you are "sick of all this failure" and yet people like you can't put 2 and 2 together and see that it is the root cause of "all this failure". You don't need a government to redistribute wealth, and you certainly don't need a government to provide services like fire, ambulance and police. . . . you need society for that. Society based on voluntary actions and not coerced actions backed up by a large police state will be much more peaceful and prosperous.
On the other hand, if you disagree, please explain how you think a society based on coercion (even if we're just soaking the super-rich) will somehow beget peace.
I think what's important to note, is that "small" government for a nation of 308 million plus doesn't even sound realistically effective to actually accomplish anything of benefit. They're still required to do some stuff in the public's interest (besides wars), right?
Ok Kwanijml, I'm open minded. Give me a working business model for each of the following:
- Fire departments (you've already demonstrated that voluntary fee doesn't work - though I think you were trying to say it did)
- Police protection.
- Military protection (We'll ignore the fact the Black water and it's ilk are expressly unconstitutional. You just give me are working business model where the free market will protect our borders and how they make money without government contracts.)
- The road and highway system (Note that the railroads, when built, were wholly private. Got a spar leading directly to your house?)
The myth that the mystical free market solves all problems is the stupid and that myth that a soviet government solves all problems. Smart people can see that both are needed and you only have problems when one or the other takes over.Comment is buried, click here to see the rest.
"Ok Kwanijml, I'm open minded. Give me a working business model for each of the following:"
How about this:
"I'm open minded, but not enough to think for myself."
Think about thinking for yourself?
If YOU were to sell fire protection, police protection, road/highway system... how would you do it?
I'll give a little context to assist you anyways:
- Cell phone companies are privately owned, you can go anywhere in the world and use them..even if a different company owns the line...GO FIGURE!?
- A non-territorial model would be suitable for all these issues. You buy the service you want. If you don't want it, you shouldn't be forced to buy it. This would be like all other non-government/monopolized services.
Some resources if you actually have enough of an open-mind to research the solutions we advocate:
You do not need coercive monopolies to solve these issues. Humans, like animals, have an innate desire to cooperate with one another for their own well being. This desire is why most people submit to the state. However, they don't realize the inherent flaws to this method of problem solving. Voluntary interaction is all that is necessary to foster this desire for cooperation.
"- Cell phone companies are privately owned, you can go anywhere in the world and use them..even if a different company owns the line...GO FIGURE!?"
You don't travel much, do you?
"- A non-territorial model would be suitable for all these issues. You buy the service you want. If you don't want it, you shouldn't be forced to buy it. This would be like all other non-government/monopolized services."
Ok. I know you don't travel, or watch PBS because it's 'pinko', but a little historical perspective. A fire broke out in Rome and gutted about a third of the city. About 1200 years later, much the same thing happened in London. In the lifetime of our nation, it happened in Chicago. THAT is why we have fire protection. Nobody give a s**t if your couch and refrigerator on the front porch burn. If I'm your neighbor, I want that fire the f**k out before it jumps to my house. So how would I see what we actually need? I don't know, maybe I'd block out the area we want to protect then charge everyone who lives there. Oh wait… THAT'S WHAT WE ALREADY DO!
No. I'm not 'open minded' enough to click on a lewrockwell link. If I want to be lied to, I'd just attend the republican convention.
As for voluntary action being enough to foster desire cooperation for an entire nation of 310 odd million… Dude, seriously, I have a bridge over the east river to sell you.Comment is buried, click here to see the rest.
There's a few problems with the scenario you're painting and ideology to which you cling.
First, the government didn't collapse our economy, the private sector earned that dishonor. Furthermore, the absence of regulations made it possible.
Second, we saw several institutions go belly up or be forced into an acquisition as a result of their activities (e.g., Bear Stearns, Lehman Brothers, Merrill Lynch, Wachovia, etc.). Yet, the remaining institutions persist (and even invest millions) in fighting efforts to curtail the behavior which culminated in an erosion of our economy. The ONLY social entity capable of preventing similar self-destructive private sector behavior IS the government. No other entity exists to fill the role of market referee, therefore there's nothing to prevent it and self-regulation has NEVER worked. Your view is PURE free market theory. By the way, they call it a THEORY because it has never worked.
Third, the role of the government is to stabilize the market since an unstable market benefits NO ONE, certainly not our society. If this has been lost on you, discuss it with anyone you know who is unemployed or underemployed.
Fourth, regulation and regulatory enforcement WOULD have prevented the collapse if the Republican party had not gutted them with deregulation disguised as "modernization". Simply put, the financial instruments (mortgage backed securities, credit default swaps) and business practices (expanded leveraging capabilities) most responsible for the economic collapse were once outlawed.
Finally, while I agree with some of your sentiment (i.e., ending bailouts, corporate welfare and misguided wars), I don't hold the same view that government is the problem. Instead, I consider political corruption and key players in the private sector to be the source of our problems. I mention "key players" only because there are some in the business community who are not irresponsible. Corporations spend millions on lobbying for the wrong reason...to undermine the national interest and our collective economic well-being.
While the government encouraged home ownership, they didn't force the industry into making irresponsible loans. The banking industry made that decision on their own. As proof, consider that loan underwriting standards and approvals are determined by banks, not the government.
As a former mortgage banker, I can assure you that my employer set the loan guidelines by which I granted mortgages, not the federal government.
I don't blame capitalism for those bad loans, I blame bankers who were blinded by irresponsible greed and who thought loan securitization would eliminate their business risks. They were playing a game of musical chairs with our economy thinking nothing bad would happen to them. They didn't care what happened to the economy or anyone else.
Besides, who are we kidding. All those bad housing loans the unregulated industry gave that are at fault for all this... you think is was blacks that received them? Got to one of those 'macmansion' housing developments and just try to find a non-white face. That was low class whites trying to live like high class ones.
If you must blame the victim, at least blame the right victims.
During the Clinton administration, Janet Reno read the banking committee the riot act- who told banking executives either make more minority loans or face a justice department inquiry.
The banks did give s**tloads of loans to unqualified minorities (and white trash too) and of course, they got massively screwed. It's not racist. It's f**king HISTORY.
If you don't like it, I suggest you gather the facts, sit on them and spin. The race card gets no f**king traction with me. Don't even bother throwing it on the table.
First, If Janet Reno read the banking committee the riot act, it would only have been because she had ample reason to do so. How many times have any of us seen similar behavior from a U.S. Attorney General where there was no cause to do so? Regardless of Reno's testimony, this doesn't change the fact that the private sector (i.e., financial services industry) determines lending practices and loan approval guidelines, NOT the federal government.
Second, the ONLY reason the financial industry granted those loans was because they thought they could eliminate the risk through securitization, diversification and predatory practices (e.g., adjustable rate loans with excessive rate jumps AND hidden fees). Furthermore, the industry believed it could sell those loans before the truth behind them emerged. As proof, consider the investors who were either burned by the banks selling the loans or bailed out by the government (e.g., Goldman Sachs and foreign governments).
Finally, while race was a major factor in this crime, the white collar crime committed by politicians and Wall Street is a far bigger crime that has gone unpunished. There is NO excuse for it and every party involved should have seen significant jail time for it. Instead, they've been protected by the very politicians elected to oversee their activities and clean them out...Democrat's and Republicans (past and present). President Obama holds the lion's share of the blame for not cleaning out the dirty bankers since the Justice Department falls under his authority.
You're wrong, you just don't know it. While banks and mortgage companies might have made a bad situation worse through predatory lending, they were 100% enabled by the revisions to the CRA, first enacted by Bill Clinton in 1994, 1995 and 1999 and by George Bush in 2005 and 2007. The government absolutely made it possible for this scenario to happen.
This is only the government's fault if you were under the impression they put a gun to anyone's head and FORCED them to make a bad loan.
THEY DIDN'T. Did u read the damn CRA? I did. There were actual specified guidelines that advised AGAINST at risk loans, and said safe lending guidelines were the responsibility of THE BANKS.
They don't get to weasel out by saying "well, the government didn't say we COULDN'T" which is the exact argument you're defending them with.
@dauntless1 - You're completely naive if you don't understand or believe the government is culpable in this situation. At its core, this is all about pushing mortgages off on people who previously were not able to qualify for them, and in many cases, for good reason. I'm in NO way removing blame from the lenders, but they were enabled, encouraged and in some sense, threatened to give mortgages to certain groups. In addition, in 1992 the government got Fannie Mae and Freddie Mac involved which down the road proved disastrous.
As time went by, more and more revisions to the CRA were made which made it easier for lenders to make subprime loans with less risk to themselves and also less reporting and tracking, thus they were able to fly under the radar. I suggest you read this among other things, http://www.cato.org/testimony/ct-ni3-8.html
Now, we can sit here and have a debate over who is more to blame, government or lenders, but ultimately the blame rests on the borrowers who pursued and/or agreed to loans that they had no business making. Just because a mortgage company tells me I'm approved for a loan to by a $2 million house doesn't mean I should if I know it's not within my means. And if you are going to sign your name to a document that shows you are borrowing 'X' amount, at 'X' percentage for 'X' term, you damn sure better be aware of what's at stake. And neither the government nor financial institutions deserve all of the blame for peoples stupidity who made loans they never had a chance of paying back.
If the government is culpable of ANYTHING, it's for loosening regulations on the financial services industry and NOT enforcing regulations. Care to guess who made both things possible? Here's a clue...the Republican party. You see, THIS is the aftermath from 14 years of Republican power in the U.S. After all, THEY championed efforts to deregulate the financial services industry, enabled mortgage securitization, expanded leveraging (from 15x to 40x underlying asset values) AND muzzled banking regulators. So what you say? Well, this has EVERYTHING to do with our economic collapse, NOT bad loans. If defaulted mortgages had been the lone problem to the crisis, we could have purchased most of the bad loans BILLIONS AGO.
Here's the what I'm referring to:
Prior to deregulation, a customer went to the bank and took out a mortgage to purchase a home. If the customer ran into trouble, they went to the bank and either negotiated an alternate payment plan or foreclosed. Upon which, the situation was quickly fixed. (The loan was typically worth less than 1x the underlying asset value (i.e., house).
Then, Wall Street (i.e., financial services industry) got the "bright idea" to securitize mortgages and leverage them. Now, prior to deregulation (aka "modernization), leveraging would have been limited to 15x of the security (aka home loan value) based upon prevailing regulations. Unfortunately, bankers and their pawns in D.C., Republican politician's, got the "bright" idea to increase leveraging to 40x because it would allow them to make significantly greater returns. What's the significance? Well, remember the original 1X loan, in the event of default, the banker would repossess the house and only lose a minor fraction of what they had loaned on it. However, in the "modernized" world with leveraging, the bank would need to collect up to 40 TIMES the value of securitized loan in order to recoup the initial investment. It's like trying to collect $4 million on a $100,000 house/mortgage.
If the financial implications of this abject stupidity haven't sunk in yet, multiply that asset to loan chasm by the number of foreclosures in the U.S. and you MIGHT begin to comprehend the financial hole and abject stupidity involved. THIS is why financial professionals, such as myself, are SO pissed at Republicans/Conservatives/Wall Street.
Holy cow! So that's why the banks aren't lending. They're so deep in the hole, they can't lend.
Isn't it interesting how they can still manage to cut those massive bonus checks? Speaking of which, how are they able to generate record bonus awards if they aren't lending to U.S. businesses or creating U.S. jobs (i.e., economic value)?
if the market place and capitalism had not spiraled out of control then the government wouldn't have needed to step in and save the rest of the economy.
wallstreet was operating exactly as you say... and they did it until they nearly dragged us all done the tube.
The government is not a salvation from misdeeds. It's the leading proponent of immoral actions. It recognizes the corporate status, and those with money and connections can use it to influence the system to their benefit.
you certainly are right in this way... the republican party has been successfully lobbied into taking all the rules off these narcissistic businesses and that has led to the current state of the economy. that isn't a problem with government that is a problem of unscrupulous people manipulating government. we need a short leash on people whose ethics don't include the u.s. as a whole.
It is not impossible that a rule may happen to be immoral: Removing liability for harm is not a repeal of rules, but a promotion of a double standard. Corporatism is in essence a form of double standard, where it has increasingly gained the benefits of personhood without the drawbacks of it. Republicans are not alone on this.
Power, properly mated to accountability, depends on the ability to consent. I should not have the power to act on the behalf of others, or take things from those who did not consent to it.
While many politicians in our government may be corrupt, they are not all so. The role of government is to serve as a counterweight to excessive private sector control. Without it, our economy/market self-destructs every time so your assumption that we are better off without it is beyond naive.
It appears you've assigned your justifiable concerns about corruption to the wrong party. The government is not the culprit here, it's simply the pawn. The TRUE culprit resides within elements of our private sector. As a prime example, just look at the Koch Brothers political activities, all of which are designed to undermine our Democracy/economy through bribes (aka campaign contributions) and political meddling (e.g., astroturf funding...Tea Party).
Hardcore libertarians do need to realize that the government can do better things than just leaving everything alone, even for the free market. An example is the highly underutilized Sherman Antitrust Act.
1) Wrong assumption - money =/= wealth.
2) You have just found the surface. The abolute, systematic error of the *existing* capitalism is the following:
The investor always wants at least 10% more then he put into the 'economy'. The consument works to get money, has some property but usually not towards investor like profit orientated (the home one lives for instance, the car etc.).
So while the consument lives in his house for years and years - the SAME HOUSE in the hand of an 'investor' is meant to double every 7 years.
The result - in the long run all property is taken from the consument (and worker!) who gets reduced to a hireling living from day to day while the 'investor' owns all property.
Of course 'some' of those 10% profit come from investors canibalizing each other - but not all, this just slows down the flow.
Also look at the following power disparity in capitalism:
Person A has skill, health and prowess to work, but no money and no property.
Person B has no skill, health or prowess to work, has no money but has property.
Person C has nothing but money.
Who has the power to decide anything and everything in this system under current capitalistic economy?
Only C
Well for #1, I don't merely equate wealth as money... quite the opposite. When I'm describing the money changing hands as fast as possible, this typically involves products or material goods. A system where money changes hands at high rates would involve the accumulation of material possessions (in addition to the essentials). This includes real estate, tech gadgets, cars, etc. Some of this can be exchanged for money, while most of it is "disposable" and value can never be regained. It doesn't really matter as long as any form of wealth does not accumulate and stagnate.
As far as #2 goes, this is why I've said capitalism has to be "controlled" if its going to become an efficient system. You are very right when you say Person C has the power. If left uncontrolled, we can easily reach an end condition where both skilled and unskilled workers are basically left in servitude. The American dream where one can start their own business and become wealthy does still exist, but its becoming rare and very difficult unless you find a niche market. In reality, you can not compete in the normal market. Wal*Mart, Target, or any large competitor will crush you.
In my terms, the solution does involve limiting the potential to accumulate wealth that is not "moving" in the economy. You'd need to structure your economic system to either prevent this or make it very difficult to gather this much wealth.. It can be done in a capitalistic system. Its definitely possible. It is easier in a *partially* socialistic system (i.e. controlled capitalism).
Yes, controlled capitalism can be made to work. The American version is seriously broken though. The Germans in particular are whipping American businesses, and they are doing it by focusing on small businesses, not the "too big to fail" dinosaurs.
I think that is the most retarded analysis I have seen in a while.
Also the Investor always wants a rate of return that is proportional to the risk, if there's more risk then obviously he wants the possibility of a higher profit. There is no arbitrary 10% rate of return that an investor just wants.
The SAME HOUSE in the example, will rise in value or fall in value regardless of the owner. Imagine Scenario A in which the owner lives in the house, and Scenario B in which an investor owns the house. Now say in both scenarios there is a buyer who wants to buy the house off the owner. The buyer is not going to think "Oh the house is owned by an investor, I should pay more for the house!"
And you assume that an investor WILL make a 10% return. This is not the case, Investors often do make a loss from bad investments. Think of the housing bubble. There would have been lots of investors buying property, yet most, if not all would have made a loss in recent years.
In your second paragraph you essentially said that Person C has no skills has lots of money but Person A with skills has no money. Do you see the error in that statement? You just said that a person who has skill, therefore likely no education at all is the one with lots of money and the person with education/skill is the one that is poor, which obviously is not true, in fact the opposite is true. It is the people who have skilled up, ie educated that make the most money, and there is absolutely no refuting this point. Unskilled workers make less money than skilled workers, therefore they have less money and property.
So you're saying that ALL investors want a 10% rate of return and that skilled people have no money/property and unskilled people have lots of money/property?
Also, you don't know how to "analyze". What you did there wasn't proper analysis, you just make up a lot of bulls**t like "Investors want 10% rate of return" and then form an argument based on said "facts"
i so agree. you can't have a free market without control or fairness. monopolies form and the first thing that happened before lobbying government is in ability to capitalize a new business or idea.
microsoft is a perfect example. they routinely surveyed the market for good ideas and when they saw something they liked they announced a competitive product. the funds dried up for the business that thought it up and developed it and microsoft often bought that company for 10 cents on the dollar. all because... "who is foolish enough to try to beat microsoft."
people will cite how much microsoft did for the economy but they never talk about the damage it did to innovation and the ability for the little guy to bring a product to market. THE FREE MARKET. that number is staggering as well as incalculable. families and careers were crushed. there is more than just economics involved.
there is one issue... i don't know that i disagree with you. its not an argument as much as its a fact. the only way we have ever seen smaller economies and underdeveloped nations and people join the 1st world is by this process of using those people as cheap labor. the transfer of those jobs is the way its happened... the only way. we need to find another process to allow those people in underdeveloped economies to raise their standard of living or they will become impoverished hordes at our gates. i have no answer.
I've thought about the developing market too, and the way I like to picture it is:
What if all economies were closed? This is certainly not the case today, but it provides for a nice thought experiment.
All pricing would be relative, so even if they were making $5 a day, that wouldn't necessarily matter. What matters is what $5 a day gets them. If that $5 is a month's rent, that is actually pretty good then.
The problem really lies when you factor in globalization. A country that doesn't produce anything, have any natural resources, and a very poor infrastructure has little relative wealth. The way the monetary exchanges work tends to be a disadvantage to these people, because their currency is worthless outside of their country. Nothing their money buys has any use to the rest of the world, unlike say a Euro or a dollar.
This typically wouldn't be a problem if they had some sort of infrastructure or stable economy already in place... but they don't. Things like heavy machinery, manufacturing plants, etc. are completely out of their grasp.
This eventually leads to US companies shipping production to places like this, lowering cost. It does infuse capital into the region... but the most important effect isn't the labor IMO. Its the investment placed into the infrastructure. Manufacturing plants are developed, power plants constructed, roads and building are built, etc. This is what allows for sustainable future growth, and allows the local economy to begin producing for itself.
So what is my point? If you wanted to avoid losing jobs to this country, you could instead subsidize the construction of a real infrastructure that would allow them to do essentially the same thing that 30 years of wage/currency exploitation would bring.
In the end though, either through direct or indirect subsidization, it constitutes simply giving another country wealth that comes from us. Considering today's world, its a tough sell to people.
ya. its a tough sell no matter what you do. i keep coming back to the idea that the only thing that makes it easy is to start importing wealth from off earth sources.
now, whatever we do seems to be derived from social engineering to make developing infrastructure possible. i think its tearing society apart. there is no way to make a plan that everyone can look at, understand and put there ideology aside to sign on to it.
if we developed space based means of energy production that essentially... over time reduced the cost of energy to the point it isn't a big factor in the equation... and brought resources in the same way... so their expense isn't a significant factor...
then you've changed the problem from social engineering to a problem of real engineering and logistics. those are things we humans can do very well when we need to. we could quantify that and put a date on its delivery.
Nixon made a point of attempting to increase the ratio of American product exports/imports, but that entire way of thinking departed from his party along with the election of Reagan.
In other words, you've got to keep the rich from being too greedy and not paying their workers/consumers enough money to buy the things the workers/consumers are making.
This is in essence the core reason why every great civilization has fallen. The rich hog all the wealth and rich and poor end-up being poor.
Let the rich make as much profit as they can, but let's have standard protection of worker's wages.
I heartily agree with you about wealth leaving a country.... and the decline of that country's quality of life.
But if the wealthy deposit their money into a bank, or invests it in a company, etc.... there is no stagnant money. Banks loan the money out. Companies buy capital.
Well, I do agree that large deposited of wealth COULD lead to a flow of money... its just not necessarily an EVEN flow of money (I'll explain this in a bit). The other problem is that in an economic slowdown, the banks hoard the money like they are doing now. There is also no guarantee that the money stays in the country once its given to the bank. Banks could give loans to foreign companies, invest the money in Asia and other emerging markets, etc.
I probably should clarify what I said earlier: the movement of money ideally involves a relatively even flow through everyone. A loan does increase the number of transaction (speed of the flow), but it also creates a sort of "negative flow" in the form of debt. The money really doesn't belong to the people, and they have to pay it back (usually more then they borrowed). The difference between what they borrowed and what they paid (the interest) actually goes in the opposite direction. Some goes to the bank, and some goes back to the wealthy people who gave the banks a boat load of cash.
So what happens here is that the people end up with less money and assets to their name than if they had not taken the loan, while the wealthy and large banking institutions end up with more. This type of process really does the opposite of what we want - it creates bigger stagnant pools of wealth.
The other negative effect it has is that this flow is "artificial". Really, we've borrowed from future money flow to create the illusion of more liquidity. The money does need to be paid back, and money going back into the bank means that future flow is reduced. This is essentially what has brought us to our current situation. Everyone has debt, and no money. Currently, there is no flow of money because everyone is defaulting on their debts and money that would have been in use now is being used to repay the banks. Question is, where has the money pooled up and stagnated? Possibly some of it is overseas, in the hands of the wealthy and in the hands of the banks. Its definitely not in the hands of the average person..
As far as investing the money, this one is actually more complicated if we are talking about the open stock market. This movement of money really doesn't "count". The reason is that the money is exchanged for a stagnant asset (stock holding) and what happens to the money then is up to the person who sold the stock (they have the money now). The money could literally go to anyone this day in age: a person trading with their retirement money, a hedge fund, a day trader, etc. They in turn might spend it, they might re-invest it, or they might hold the cash. We don't know... the point is though, the money is not truly circulated through this process. Its sort of like a black box, where the money doesn't start circulating until its out of the black box...
Typically though, money moves in and out of this "black box" pretty freely... and over time it must mathematically have an "even flow" in and out. You can almost pretend its not even there in most scenarios..
Sorry about the 8/10. It was lazy of me.
Forced redistribution would not solve the real problems.
For example:
The health care bill that was passed is probably a small 'good' for the average American. In a certain sense it is a forced redistribution of wealth. In this case 'wealth' refers to availability of medical care rather than money in pocket.
But at the same time that wealth is being redistributed from top to bottom the mechanisms that allow this redistribution have created an environment in which the health care providers are further empowered.
In the first case the government has mandated a 13-15 percent increase in enrollment. This is not necessarily going to result in more profit in a direct sense but it does remove a niche that could've been served by a different business model.
The stability created by this will result with the most efficient companies differentiating themselves from their peers and eventually - through mergers or buyouts - consolidating the industry until it is dominated by a few major players.
(Same thing is happening with the cell phone providers.)
So has accumulation of wealth been prevented? Clearly not. In fact government intervention seems to have accelerated it.
What about assigning an agency (we'll call it Paul) to take money directly from rich people and give it to poor people. Who's being empowered in this example?
(Paul is)
You point out the value of faster production cycles (good observation by the way) but Paul's actions are slowing the cycle.
Far too many of the 'interventions' that have been created by our government are contributing factors to the accumulation of wealth. Every time you create and enforce a law you run the risk of creating an uneven playing field or a loophole. If you subsidize the airlines then you might be putting two trucking companies out of business.
I like where you're going with this but I don't think you're seeing it all the way through to the end. I agree with you on most of what you said but I take issue with the things you haven't said.
I agree that it is easy to spot the problem, but hard to find an elegant solution.
There are a lot of different ways you can go about attempting a solution, but its hard to do so without being unfair or completely disrupting the current eco-system. For instance:
The best anti-wealth distribution arguments I've seen bring up the point that businesses and major corporations provide most of the jobs, and taking steps against them would otherwise alienate them AND could hurt the job market by making them take away jobs. This is actually correct in the short run. In order for this process to be graceful, you'd have to start creating jobs at a faster pace then you are taking them away from the larger corporation. That is certainly not easy. The solution is undoubtedly complicated.
As for your points, I don't disagree with a lot of what you say. The last thing we want is intervention that consolidates the number of corporations (taking away competition) and makes some of the existing players even bigger. This will have the opposite effect, as you mentioned. The only thing I can say is that whatever solution is devised, it would need to be clever enough to prevent this.
Obviously its really really difficult to do. I think the bigger problem nowadays is that we can't even agree on the problem. Too many people believe the "trickle down" concepts, where we give big business greater profits and wait for our share. It doesn't ever reach the average man... Its going to be really difficult to ever find a solution if people don't even recognize the problem..
i think you are leaving something out of your analysis.
i realize that you weren't speaking of single payer health care and its bureaucracy but my point is on the business end and i think its worth pointing out that business has bureaucracy and whether its thousands of businesses/ bureaucracies or it merges into a few large bureaucracies... they all have a profit motive.
they deliver the least service for the greatest cost so that they can give investors a return. these investors are of no benefit to the actual process of providing health care.
i turned around on single-payer because i realized that too many people think it's a right. I don't necessarily agree with that idea but i know that i don't speak for the people - especially when I'm a part of the minority.
since health care has transformed from a luxury into a necessity then it's reasonable to think about providing it through the government for the reasons that you've suggested. (along with one other that I'll come back to)
You are off-target when you talk about bureaucracies. The profit motive works both ways. When there is ample competition then prices are driven downward to the minimum sustainable (profitable) margin and then companies are forced to provide better service if they wish to differentiate themselves.
The consumer receives the benefit of a price that is near the minimum limit and the consumer also receives the benefit of an environment that is conducive toward quality of service.
Hypothetically speaking a non-profit could undercut the prices but in practice this is usually not the case.
In the first place a non-profit that dominates the market is under very little pressure to reduce costs. Status quo is perfectly acceptable. Additionally a non-profit that dominates the market is under no financial pressure to provide good service.
Returning to the insurance industry, there is one additional factor that should be considered. The insurance business model relies on statistical analysis to calculate risk, the cost of premiums and the cost of payouts when something happens. Insurance companies work better the bigger they get. Competition in other words is self defeating in that particular case. This is one of the only industries in which one large organization is better for the people than many smaller ones.
An industry that features many small companies also provide more jobs than an industry that features a few large companies. A large company enjoys the benefits of economy of scale. It's true that bureaucracy (I don't think that's exactly the right term for this but I'll use it to remain consistent with your post) can affect a large company by introducing inefficiencies but where a company like Walmart excels is in limiting the inefficiencies while maximizing the economy of scale. If you consider 'economy of scale' as synonymous with 'getting rid of redundant jobs' then you can see where I'm going with this.
ROTFL! I wan't trying to be ironic and was just stating facts! OMG, bitten by Poe's law just after citing Poe's Law in the context of accidental trolling.
...No, I would just love for a reasoned and informed debate in Capitol Hill about our outrageous tax code where Warren Buffet has a lower effective tax rate than his secretary...
its very simple. the government taxes income not wealth creation. so warren simple pays himself 100k a year, somehow subsists on that, and allows his wealth to grow in holdings which most often don't pay dividends, and he doesn't sell, thus incurring cap gains. if he had a huge salary and massive bonus and regularly churned his portfolio instead of looking to invest for the long term (10 ish years) he would pay taxes massively above a secretary. but he chooses to wisely order his life amidst the constraints of the American form of taxation.
its the same rules for everyone...
everyone wants to be rich, yet, until they are rich, they jealously want to stick it to the man, the very man they wish to be someday.
buffet simply and slowly built wealth. just like every other american has a similar chance to.
i would hope our government dramatically limits spending, and leads by example and spends within its means, like everyone else, and in doing so, eventually weans itself to govern from the proceeds of all the other taxes we pay, and simply drop the income tax. unlikely. but, i like to hope.Comment is buried, click here to see the rest.
At the end of the day, the nation's "spending problems" are driven by entitlement spending which politicians do not want to touch. Non-defense discretionary spending accounts for less than 15% of the budget. Tomorrow, we could zero out every non-defense discretionary item (including the FBI, TSA, etc....) and we would still have a massive deficit. One of the accountants where I work at pointed out that a major problem (which conveniently no one is really talking about) is the "deficit" between Medicare Part A expenditures and payroll taxes. Any politician who claims to be "serious" about "restraining spending" and exempts entitlement and defense spending is not serious.
In fact, one of the main drivers for our imbalanced budget has been tax cuts which have not been paid for. Despite having been involved in 2 major wars abroad we have decided to give tax cuts.
Everyone focuses on "marginal" tax rates which after considering tax expenditures (various deductions etc..) is not as important as the effective tax rate.
As far as "sticking it to the man" this is an argument which is irrevelant. Buffet himself said if their is any "class war" his class is winning.
The top tax bracket currently pays 35% of their income in federal taxes. How much should they pay? 45%? 50%? (I'm not being facetious or even necessarily disagreeing with you--I'd really like to know your opinion.)
The 35% is the top marginal tax rate. This means that over the threshold, the last dollar they earn is taxed at the 35% rate. This is a little different than 35% of income...Remember that this is assessed against "taxable" income. This is income after all of the deductions and exemptions have been factored in. Ideally we could limit exemptions to (maybe 25%?) percent and actually "lower" the 35% marginal tax rate. The biggest "revenue" problem we have are so called tax expenditures.
I'll just make the obvious point that if you divide everything from the "super rich" amongst everyone it won't actually amount to much. To get real revenue you're going to have to hit small business owners. Collectively they hold a lot of wealth. But I think it will probably be less popular to tax the local pizza place into bankruptcy.
We'll see where it goes. I'll note that few list men like Warren Buffet as targets even though he's built his own business around avoiding taxes. He own insurance companies that pay no income tax. He buys and does not sell companies and so does not incur income tax. When he wants to use the value he borrows against their value instead with low interest loans. Loans are tax free and the interest rate is much lower then the income tax rate. Then he runs charities which allows him to write off nearly any personal expense as a charity expense making it not only tax free but tax deductible.
The problem with the tax system is it's own complexity. It lets clever people nullify most taxes. If you want to stop this you need to simply the code.
Raising progressive rates won't work. You could set the rate to 100 percent and they still wouldn't pay much more then they pay now. If you want them to pay you need to simply the code.
I feel like you didn't actually read his comment. He said:
1. Just taxing the rich is not going to get us to our goals - we'll also need to tax the sacred cow known as "small business owner".*
2. Many fail to see how rich people like Warren Buffett abuse the complexity of the system to avoid paying taxes.
3. Simplifying the tax code would make it harder for businesses and the super rich to get out of paying taxes, thus raising revenue without actually raising rates.
* This is probably true - under our current tax system it would be hard to tell the difference between a guy who makes $100k/yr profit running his own pizzeria and a guy who makes $100k/yr on a million or two dollars of passive investments. If there was just a good way to track the time people spent in productive endeavors (e.g. work) you could give them a "time spent working" deduction - thus the guy who earned $100k by owning and operating a pizzeria would pay less tax than the guy who earned $100k by owning the pizzeria and having someone else operate it.
Don't blame him, he's republican programmed to auto-response to certain debate topics in a certain way. He's a lost cause who is not open to further discussion, pity him and move on.Comment is buried, click here to see the rest.
As to the tax code. The more and more I look at it, the more I think we should do away with the income tax and instead go to a consumption tax or an import tax.
Both are pretty similar the only difference is that import taxes don't tax domestic production. For the majority of the country's history the federal government funded itself entirely on an import tax.
Today this is thought to be bad economic policy because it discourages the global trade market by favoring domestic production. I think there is some validity in that argument if you're an industrial export economy. The US is now a services economy and while we do still produce very high quality and quantity industrial goods it is no longer the center of our economy just as agriculture gave way to industry. Furthermore, no country really does have free trade. We have lots of subsidies for different types of industry which work out to the same thing. Effectively we make some good artificially cheap instead of artificially expensive. The primary difference between what we're doing now and an import tax would be that all domestic industry would benefit without special subsidies and the system would generate revenue instead of costing revenue.
Finally, and this is my favorite reason for liking the import tax... It forces the federal government to police the borders. The primary way of evading import taxes is smuggling. All the energy we currently throw at the IRS would would be shifted to border patrol to stop people from importing things into the country without paying the tax. This would passively serve our national security needs at the same time.
As I said though, some people really don't like import taxes. So instead we might try a "VAT" tax which is basically just a flat sales tax on all goods and services. This is how European countries fund their healthcare programs. Not by taxing the rich but by taxing everyone through a large sales tax on everything.
The virtue of these sorts of taxes is that they're very cheap to maintain and very hard to evade. The IRS requires detailed knowledge of every company's accounting books and every individual's accounting books. There are also endless definitions of what is and is not income. Then there are deductions which subtract from income and then even credits which often can lead to the government giving the tax payer money instead of the other way around.
Then you have to take into consideration that a consumption or import tax would supply a constant supply of revenue where as an income tax produces a couple big shots of income every year and nothing the rest of the year. An advantage of having income come in constantly is that the government has a much better idea of what it's revenue will look like because it's constantly got it finger on the pulse of the nation's economy. The politicians seem to be constantly surprised by surpluses and deficits. They always think they're going to collect more or surprised when they do collect more. But if the money is coming in all the time then there are fewer surprises and those surprises are much smaller.
I could go on. But the point is that the income tax as it exists is badly conceived. It is too complicated, requires too much work on the part of tax filers to comply, and too much work on the part of the government to audit and enforce. It's a bad system.
We could make more money in a more reasonable fashion with less work on all parties by shifting to less burdensome systems.
I generally agree. I simply wonder if an import tax isn't better then a straight up VAT tax.
I like the import tax idea more because it would focus the government's interest on the borders. They seem intrested in endlessly regulating our lives but not doing the one thing they were created to do... guard the country. That's what the federal government is there for in the first place. The states are supposed to deal with just about everything else. But the federal government wants to be involved in everything except for border enforcement.
It's absurd. An import tax would refocus the federal government on the borders since that would be how they collect revenue. If they don't secure it then smugglers will eat into their revenue. if they do make it hard to smuggle into the US then they'll also make the nation safer against terrorists and other sorts of issues.
The idea is somewhat controversial. A vat tax would be fine as well. But if we do a vat then we must dispense with the income tax. It isn't a both situation but an either/or situation.
"a consumption or import tax would supply a constant supply of revenue where as an income tax produces a couple big shots of income every year"
I find this a little hard to follow - income tax is taken out of every paycheck. Are you saying my employer only remits these funds to the treasury a few times each year?
It depends. Some companies pay quarterly, others semi annually, and others annually. It varies.
The point is that it's not consistent. They don't get a day by day income. They get a few big hits of cash every year and the rest of the time it's a trickle of outliers and late/early filings.
The patterns are more consistent with large companies and more random with smaller companies.
One of the reasons the government is rarely correct when it predicts what the economy will be like in the following year is that they have very poor feedback on what the economy is doing at any given point in time. They're always surprised when the returns come in. It's like betting on horses. There are systems you can use to be wrong less often but no system will let you be right much consistency.
The only way to solve that is to make the tax collection system real time all the time. The government would collect today what is bought or sold or imported today. Nothing more and nothing less... every day.
Thanks for the clarification. I don't know if I agree with you, still - what is it about an import tax that would require companies remit payments in real time and what is it about income tax that does not allow the government to require the same thing?
PS The small business owner (does 150k-300k a year) is required to file and pay his 'payroll tax' (including income tax w/h) quarterly - otherwise he would face stiff penalties.Comment is buried, click here to see the rest.
Because what is and isn't income isn't so easy to define. Once you add in deductions, credits, etc the numbers change.
And those figures are not calcuated every month or every week but at most once quarterly and very often they're only done annually.
Even if the company pays you up front they often submit paper work later in the year that forces the government to give a portion back or credit their next tax return for that amount.
It's too complicated to do in real time. I might make X dollars now but is that income? Because a portion of that might be needed to pay for things which means it isn't income but rather capital.
You're aware of the notion of business expenses? Well, businesses expenses are not income even though they're paid for out of money that is earned through business.
Think of it like this, if I make 100 dollar moving freight on a trucking company, and must pay out 30 dollars in gas then you have to deduct 30 dollars from the 100 dollars before charging income taxes. Well, what if I earn the 100 dollars first and only pay for the gas later? See?
You can't manage that in real time because sometimes these things don't happen in convienent orders and you'd be constantly crediting people back in many cases up wards of 90 percent of the money you collected.
A sales tax or import tax however is very simple. There are no exceptions to it and it can be managed very easily in real time.
Yes, businesses are more complex. I am thinking from the position of an employee - I pay my calculated income tax every pay period, and at the end of they ear I can claw back any overpayment. Since I have a side business, I also try to project its earnings for the rest of the year and adjust my w/h accordingly so I don't end up with a big tax burden.
But this still leaves me with a somewhat different interpretation from yours: The government takes in money almost constantly (from income tax) and occasionally (especially in the February-Apr period) has to make refunds.Comment is buried, click here to see the rest.
You seem to both be admitting that the tax system takes money in big bursts and also takes in little bits all the time. That's true but it's still inconsistent and inherently unpredictable. A consumption tax would be incredibly simple to set up, be very hard to dodge, be very cheap to maintain, and would give the government real time feedback on the economy. the Income tax can't do that.
To prefer an income tax is to prefer a system that is so complex no one understands it, is easy for anyone that's clever to cheat it, is very expensive to maintain, and gives the government at best a murky picture of the economy.
Which system sounds like a better deal? Imagine you were going into a car dealership. Which car are you going to buy? The one that's slow, expensive, ugly, and unsafe? Or the one that's fast, a steal of a deal, a chick magnet, and safest thing on four wheels?
The income tax system made sense during WW1 and WW2 as temporary taxes to get a bit more out of the rich during time of war. But as a workhorse tax system for everyone it is the worst system imaginable. This is especially true since it impacts everyone. The income tax isn't so bad for big corporations or the very rich since they can afford the accountants to fill out the forms for them. But for everyone else it's a stupid system. There was a time in this country when most people didn't have to fill out tax forms. The whole system is needlessly complicated and burdensome while accomplishing nothing of use that much simpler and cheaper system couldn't do better.
"You seem to both be admitting that the tax system takes money in big bursts and also takes in little bits all the time."
Not exactly - my impression is that the government receives income almost continuously, even though any particular business may only send 1-4 checks per year. Why? Because they don't necessarily all send their checks at once.
On the other hand, the government needs to pay out a lot of tax refunds all at once at tax return time.
"A consumption tax ... would give the government real time feedback on the economy"
Again, there's no reason to believe that government and businesses would agree to remit those payments continuously. Hour by hour? Day by day? No way. Maybe month by month...
"To prefer an income tax is to prefer a system that is so complex no one understands it"
Not necessarily. The income tax has been perverted by tax credits, deductions, penalties, etc. A simple one-rate system with a per-person deduction would simplify matters greatly.Comment is buried, click here to see the rest.
It would be very easy to have the banks do it automatically.
As to your notion of simplification... If you allow deductions then it will leak like crazy.
Look, if you're addicted to a bad system, that's fine. Lots of people feel the same way. But then don't complain about it. You've made your bed, now lie in it. The system is going to be easy to exploit. That's one of it's many weaknesses. Accept it or be prepared to change it radically.
Take note that I'm probably not as knowledgeable as you, as I can tell from your writing that you are informed and intelligent.
The problems I see with the proposed import tax is that the U.S. is an importing state. The theory that the U.S. is too big to fail seems to come to my mind. Countries importing goods into the U.S. would be highly discouraged with this tariff on their imported good. Not only that, but other countries may also support protectionist policies as the U.S. causing a trade-war-esque thing. I don't want to go into it, but protectionism is usually terrible for economic growth.
The problems I see with the VAT's is that it encourages underground markets, which don't account towards GDP. The VERY small businesses can easily avoid VAT's through the underground markets (not to be confused with a sketchy entity, but rather a market that has no recorded accounts so they are not taxed). This would undoubtedly lower GDP, which is merely an indicator of economic success in a country. Although, it is just an indicator, many investors and even domestic people use it as the end-all indicator of whether or not the country was successful economically. The drop in GDP would discourage foreign investors and even domestic consumers.
I do agree that the tax code is very complicated and avoidable given the cunning and wealth of some individuals, however, I feel like these taxes will create other problems that affect a nation's relations with other nations. Not to say that income tax is the best way, I just feel like these solutions have various flaws that should be considered.
I'll first point out that we had this system during the time of highest economic growth in the US. From the revolution to WW1 we had import taxes that funded the federal government. It worked fine. So the doom and gloom over the issue seems overblown.
Furthermore, while it will doubtless cause reprisals from other countries you must remember that while we are an importing economy we are also a country with a huge trade deficit. An import tax would probably eliminate the trade deficit all by itself. We would also get more domestic production which would mean more American jobs. Note, Honda and Toyoda probably would not have to pay such a tax because they make cars in the US. They might have to pay something if they import parts from other countries. But remember that no one would be paying an income tax including the corporations. So it will balance out.
Really, a trade war wouldn't hurt the US so badly at this point. It would have hurt us in the 60s or 50s since we were an export economy at the time. We are not anymore and thus that economic policy likely doesn't serve our interests anymore.
And I'll say again, there is no such thing as free trade anyway. Every country subsidies businesses in different ways. An import tax is only more obvious not more relevant. If you're against an import tax because it interferes with free trade then you should also be against all the corporate subsidies that so much of american business gets one way or the other. And before you tell me that you are... remember that a lot of businesses would just fire millions of workers and go out of business if you did that.
So really it's just a sham anyway.
As to causing an international conflict, countries have a right to regulate their own economy as they see fit indifferent to what other countries want. The US for example tells china to change its currency policy all the time. China ignores us because it isn't our right to tell them how to regulate their own currency. Likewise, china has no right to tell us how we can and cannot levy taxes within our own territory. Doubtless any change to the status quo will have complaints but after everyone gets used to it those will go away. The reality is that it worked better in the past then the current system and is inherently more fair then anything we currently are doing.
I'm against the import tax because it will discourage foreign nations to import to the import nation of the world, the U.S. This will make domestic producers able to raise their prices to a price just below world price in order to maximize profits. With that said, this will hurt the American consumers pockets; note that GDP's major component that makes up 66% of the U.S. GDP is consumer spending. This is essentially a pseudo tax to the American people, and if other countries adopt a similar protectionist policy of large import taxes, then their people will suffer the same fate. The money velocity would come to a halt, thus causing little to no growth in every economy.
Also, I think you underestimate the idea of globalization. The U.S. plays a significant role in the world economy. If it goes down the crapper, the whole world takes her lead. Ex. the recent depression.
A lot of small businesses rely on those "tax loopholes" to exist. They can't offer real health insurance, or any sort of 401k matching because they don't make enough to suppose those. Close these loopholes and you'll see what little benefits they already offer dry up very quickly.
this is very true is which is why at the same time we close the loopholes we need to also lower taxes to a rate that most companies can pay. Our notion of what companies and people can pay is distorted by the fact that most companies do not pay the official rate because they use so may loopholes and have used so many loopholes for generations.
IF we suddenly required that their taxes go up by a factor of five in some cases then it might mean a lot of companies go out of business which would mean unemployment would sore.
Add up the value of all the 250 thousand to 5 million dollar businesses and you'll get bigger number then anything you'll take out of the top 2 percent.
Those are the small businesses. Mindlessly attacking them at the behest of marxists isn't going to help anyone.
We do not have a tax collection problem. We have a spending problem. If you can't grasp the math then you're not clever enough to be in this discussion.Comment is buried, click here to see the rest.
You didnt actually do the math, did you? As of 2007, the top 1% of households owned 34.6% of all privately held wealth. In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity.
If you don't know the difference between income and wealth then you're going to have a hard time taxing people that do know the difference.
A great example that I made above is warren buffet. Very high wealth but very low income. Why? Because the system has ways of defining increases in wealth that are not income. Smart business people exploit those loopholes ruthlessly.
If you want to close the loopholes then you need to simply the system. Period.
I did the math. Many of them pay both corporate and personal income tax (along with state).
To balance the budget based on what they have left, you'd need to tax the top 1% at a rate of over 104%. That means: 4% more than the entire amount they make.
I say "over" because I know there are taxes like Social Security that I haven't accounted for. Plus they're being taxed at more than they bring in, so you probably have to pay them welfare. Plus you give them no rational reason to live in this country, so many will leave and that will decrease tax revenue.
That's true. What's also true is that they're increasing federal spending at a rate of 7 percent a year while the economy at best grows at 3 percent a year.
That means you could tax EVERYONE 100 percent of all their income and eventually you'd still need 7 percent more then that. And if you could some how grow the economy that year at 7 percent you'd have to grow 7 percent more the next year.
Compound interest. Every 7 percent is compounded with the last expansion of government. So in real terms each expansion is larger then the last.
This is mathematically unsustainable unless the US economy can be made to consistently grow at a rate of 7 percent or more every year. This is extremely unlikely.
Thus while there might be issues with tax collection, the primary issue is too much spending. You cannot balance the budget even with 100 percent taxes without cutting the rate at which government increases spending.
At most you can sustain a rate of between 2 and 3 percent every year... or less then half the current rate.
My favorite means of balancing the budget involves not increasing the budget for 10 years. That is to say everyone gets the same amount of money they got last year. Every program gets the same funding. Every department. Everything gets the same. But not a dime more.
If you want to increase funding to a project then you have to explain why your project needs the money more then another project. Everything must be a zero sum game. If you need five billion for project X then you need to take five billion away from other projects to pay for it.
After ten years if we do not increase spending the budget will balance on it's own and the deficit will be fully paid off. We'll even have a comfortable surplus that we can keep for a rainy day. All we have to do is stop increasing the rate of spending.
Will anyone do that? Of course not. Which is why I suspect we're going to go into hyper inflation.
If you, for instance, set the maximum personal wealth to 1 billion dollars, which is significantly more than a single human being would ever need, for any reason, that would generate 971.1 billion dollars, which could then be used to hire a f**kload of people and upgrade the infrastructure of the united states. Do you know how many roads and bridges could be built off of 971.1 billion dollars? How many miles of fibre optic cable could be routed into the up and coming cities? How many JOBS you could create?
If 5% of this money went to wages for new jobs, with an average salary of 60k per year over a 15 year period with no further funding from any sources, that would be 54 thousand new jobs.
And 5% going to wages is pretty goddamn low. Thats some really expensive materials.
This is how much wealth the rich are hording for themselves, when you can take 5% of it and pay the salaries of 54k workers for 15 solid years. Imagine if 25% went to wages? That would be 270k jobs for 15 years. We're not talking short term job creation, these are careers.
I've heard some people argue that the maximum wage should even be set much lower, say $50 million. When people are nearly starving, buying rags from thrift stores, and can't afford to fix their basic shelter, arguments like that resonate.
Maximum wage? So what should I do when I hit the max wage? Stop working? You do realize the guys that invented google would have retired entirely from life about fifteen seconds after getting their venture capital payment.
The problem with this sort of marxist nonsense is that all you get for your effort is mediocrity. Everyone slacks off because there are no rewards for trying any harder then that. *yawn* made my fifty million. Can't make anymore. So I'm done. I could invent a new cancer drug or revolutionize the internet or give everyone the benefit of a new hit song. But screw it.
or you might get people renouncing their citizenship when they hit fifty million so they can be free to earn more in places that aren't run by marxist tools.
Either/or. Anyway, easily one of the worst ideas I've ever heard out of you Novenator... and you're rather infamous for bad ideas.
A line from soviet Russia: If you pretend to pay us then we'll pretend to work. something to remember when you're robbing people. You might find that you miss their labor more then the money.Comment is buried, click here to see the rest.
"You do realize the guys that invented google would have retired entirely from life about fifteen seconds after getting their venture capital payment." That's not wage.
And if you're really only talking about wages... no one will earn a wage over the number you set. They'll just get bonuses, stock options, and other sorts of translations that technically aren't wages but still work out to the same sort of money flowing into their pocket.
The biggest mistake that the left makes when it assumes it can regulate these systems is the hubris that they're smarter then the people that live and breath finance.
You are not... and the government is not. The people in business are smarter. Any trap you set for them must be made with the assumption that the pray are more intelligent then the trapper.
A lion can bring down a man... a shake can eat a sailor. Intelligence isn't required to take something down. You just need to be simple and brutal about it.
But the instant you think you can come to some kind of elegant solution you've already lost.
It's really a choice between simplifying the system or letting the whole thing leak like a sieve. Your choice.
First, off, I didn't say I advocate it, but wanted to share the idea for discussion, so be respectful. I believe in an incentive based economics system karmashock, but not one that threatens to starve children or seize homes if the adults cannot make it. There HAS to be a social safety net.
Laisez faire capitalism turns into caveat emptor very quickly, which is precisely what we have in the US today. Our economic system should not be predatory, it should be compassionate (social capitalism).
I would argue that a maximum wage is a concept I would likely support, on the ~$1 billion range. What would more money than that every possibly do for a person?
--
From a movie I'd recommend (Wall Street):
Bud: How much is enough, Gordon? When does it all end, huh? How many yachts can you water-ski behind? How much is enough, huh?
Gekko: It's not a question of enough, pal. It's a Zero Sum game – somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred – from one perception to another. Like magic. This painting here? I bought it ten years ago for sixty thousand dollars. I could sell it today for six hundred. The illusion has become real, and the more real it becomes, the more desperately they want it. Capitalism at its finest.
Bud: How much is enough, Gordon?
Gekko: The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons – and what I do, stock and real estate speculation. It's bulls**t. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now, you're not naive enough to think we're living in a democracy, are you, buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around, pal, I've still got a lot to teach you.
What is the point of setting a max income? You're not going to collect money beyond that max. People simply won't earn more then that. Your law won't accomplish anything beyond having fewer rich people.
You wont' have less poor people. Just less rich people.
Is that a good goal? because we can do that right now by randomly burning down the nice parts of town throughout the country. Just get your gas cans out and start setting the cities on fire.
I'll be playing the lyre while it burns.
The underlying problem with your philosophy is that it is driven by envy and jelocy rather then any notion of improving anyone's lot. You want what someone else has... well, randomly stealing from or destroying other people's property is basically how you get the African economies. Who wants to improve a farm when the instant you pull all the rocks out of the ground someone will show up and take it from you? So you don't pull all the rocks out. You make a point of looking as poor as possible. You make a point of hiding any wealth you have so that thieves and thugs dont' see you as a target.
that's all you'll accomplish. Everyone will wall off and keep secrets. Everyone will go out of their way to appear poorer then they are and more often then not the only way to do that is to be quiet poor in the first place.
Greed might not be the best thing to build an economic system on but it's a LOT better then building it on envy.
Karmashock, you aren't looking at things rationally.
First, if you have a maximum wage, it strongly encourages people to follow the path in life they would like to live, as opposed to the path which they feel will earn the most money.
What if a person really, really, really likes to collect garbage? They like seeing all the parts of town, they like seeing peoples morning face as they drive past in the morning, they like the hours, et cetera. Why should they earn significantly less than a lawyer? Why should they live in different parts of town?
What about a teacher? Should they earn less than an investment banker?
No, they shouldn't. In the extreme short term, maximum wage would push away the super wealthy, but in the long term it would lead to a significantly more powerful society, happier people, and almost certainly higher standards of education, work production, and social order.
It is unhealthy, and socially and culturally disastrous (perfect example: the United States) to allow run away accumulation of wealth. It is a strawman argument to suggest it would cause any serious harm to the economy, either, beyond losing a handful of billionaires whom would most likely be the only ones seriously effected by any of these changes.
@karmashock,
When CEOs rake in 1/3rd of all the income in America (and have incomes over 400 times greater than an average worker at their company), that type of greedy profiteering is simply unsustainable, and is actually *creating* the system where there are so many poor people. We need to be more egalitarian in our outlook, or things have a way of "self correcting" themselves like what is going on in various parts of the world right now.
Note- I advocate evolution, not revolution, but it is dangerously close to being unsalvageable right now in America.
Venture capital is not income for the founders. The money goes into the business (the corporation) and the owners (founders in this case) take a reduced percentage of ownership of the business.
Play devil's advocate with your ideas a little bit please. Are you telling me you can't think of five ways to turn venture capital into personal income?
Think about it. The economy is full of people that could have bailed at the fifty million mark. Do you think we'd be better off if they had just stopped there? Because most of their best work came well after that point. But whatever...
Go soldiering on into your glorious marxist future. Enjoy the gruel... you'll eat a lot of it.
"Play devil's advocate with your ideas a little bit please. Are you telling me you can't think of five ways to turn venture capital into personal income?"
Sure - and they would all be crimes (e.g. embezzlement). You can't sell shares in your corporation, then give yourself the money and close shop. Even if you could, when it transferred from the corporate account to your personal account then it would become personal income and you'd owe tax on it.
Only about half of the ways are illegal. there are perfectly legal ways of doing it. Don't assume the legal system is your friend in this instance. it's also very complicated and anything complicated is vulnerable to exploitation WITHOUT breaking rules.
Only if you lack the creativity of a slightly soiled dish sponge.
There are several obvious ways of exploiting the system. Think of a few. I'm tired of playing captain obvious and pointing out the many many reasons you're wrong.
So you're going to have your corporation sell $50 million in stock, turn around and pay that stock to yourself and shut down the company, and you don't think there are any fiduciary problems there? i.e. you don't think the investors will sue you? Come on.
Furthermore, the Google guys could have done something like that - taken the venture capital, paid themselves big salaries and walked away. They didn't. Why? Well, it was the right call... now they are worth billions. Note that it's all paper wealth, not income - they need not pay tax on it until they sell the stock.
With an income cap (which would technically be a marginal rate of 100% on income in excess of the cap) they could only sell their stock so fast (e.g. $50 million per year) but they'd still be billionaires, and they could still donate the shares to charity if they wanted.
Again, I don't think his plan would work. When you incorporate and sell shares, you give up certain rights in exchange for the privilege of risking other people's money. If you tried to pay yourself the investors' money, beyond a reasonable and justified salary, they would sue and they would win.
Who says you couldn't take fifty million and leave the company healthy? Who says it wouldn't even be totally ethical?
What if the primary asset the company has is "me."... If I make the company and really it's all about my genius then why am I not worth fifty million dollars? And if my investors make lots of money they won't care.
The problem is that you thin you can set arbitary limits to how much people can make. that's fine if we're all equal. but the reality is that we're not all equal.
Some of us are idiots. Some of us are lazy. Some of us lack courage. Some of us lack imagination. Some of us lack vision. Some of us only have bad ideas.
And then there are those that are geniuses, work their asses off, are made of courage, come up with new ideas like they breath, see the future like its right before them, and can go throughout their whole career hopping from one great idea to the next.
Why should their income be restrained? It makes no sense.
And who are you to tell anyone what is enough?
It's all just marxist horses**t. Sorry... I don't mean to be coarse but it's garbage. I'm not saying it's great that investment bankers go giggling into the night with tens of millions they effectively stole from pension investment accounts but that doesn't mean that everyone that makes lots of money stole it.
This is part of the problem with income taxes... it turns people into busy bodies that feel the right to stick their noses into everyone else's business. Why? Because the system is so absurdly easy to cheat that you have to stick your nose into everything to keep working. And rather then taking the hint and realizing that it's a bad system you instead imagine that you really should stick your nose into everything just to support an ultimately flawed system.
Well fine. Do that. You'll fail at making it work just like everyone else in the world. Income tax systems leak all over the world. there isn't one of them anywhere on the planet that doesn't leak all over the place. The Swiss have based their whole economy on providing a safe place for all the leakage out of europe. The Bahamas soak up lots of the leakage from the US... and most other countries are so confused by their own income tax systems that they don't even need foreign banks to hide the money.
You are not going to win this fight. Your grand fathers lost it. Your fathers lost it. And you will lose it as well.
It's a stupid struggle. Your playing against a loaded deck.
The house always wins. The way to win is not to play. Dump the income tax system and finally you MIGHT have a shot at a fair system.
Otherwise... hopeless. You'd have more luck doing brain surgery with a shotgun. Just a pointless exercise in futility.
"And if my investors make lots of money they won't care."
Well, that's a horse of a different color, innit? You said that someone could just raise venture capital and walk away with it. That is very different from building a solid, profitable business for which you deserve millions of dollars.
"The problem is that you thin you can set arbitary limits to how much people can make."
I never said that. I said venture capital is not personal income.
No. I said that they could have walked away shortly after getting the venture capital money. Google made their investors lots of money long before they became a mega corporation.
They could have stopped back then with their fifty million and called it quits.
Mission accomplished. Then give the company to any jackoff that wanted it and let him run it into the ground.
Practically every great company in the US wouldn't exist with your limits. People would do just well enough to reach it and then wash their hands of it.
Again, you're replacing greed as the basis of the economy with envy. It's not better... it's a lot worse. Greed is hungry but envy is spiteful.
they clearly are trying to create a new more socially responsible business model. if you care to look into it they are not acting under your model.Comment is buried, click here to see the rest.
"Practically every great company in the US wouldn't exist with your limits."
They aren't my limits. Remember - novenator is the one who suggested the income limits.
"They could have stopped back then with their fifty million and called it quits."
So you're saying if you could only make $50 million per year, after the first year you made $50 million you'd never work again? Why? Wouldn't you like to get another $50 million next year?Comment is buried, click here to see the rest.
If you don't support the limits then what are we even talking about?
As to income limits, if your limit is just fifty million in "income" per year then most billionares could easily not pass that limit while growing their wealth by a billion a year.
Again, income is a very slippy concept. Basing your taxation system on it is not a good idea unless you're only taxing people that want to give you their money or idiots.
For example, if you put this in place and a CEO wanted to get more compensation then that, he could get stock options or other finacial devices that might not be considered income.
The company could for example give him a zero interest loan for 10,000 years. Loans are not income.
The company could give him the use of a company summer home for the rest of his life worth 100 million dollars.
The company could give him fifty sports cars collectively worth fifty million dollars... and claim they're all company cars.
It works both ways as well. One thing studios like to give actors is a percentage of the PROFITS from a movie. Why? Because the profits are income and the income is typically zero dollars. Even huge block buster movies that make the company lots of money tend to have a income of something very near zero.
So studios like to give actors a percentage of the profits. It's become something of an inside joke in hollywood. For that reason, actors instead ask for a percentage of the gross. That is the total revenue of the movie before the accountants get to play with it.
Again... basing your tax on income is just asking to get scammed because what is and is not income is inherently arbitrary.
>The problem with this sort of marxist
>nonsense is that all you get for your
>effort is mediocrity. Everyone slacks
>off because there are no rewards for
>trying any harder then that. *yawn*
>made my fifty million.
marxist? thats not marxist. do you not know that? other first world countries have huge tax rates and they haven't rolled up and *yawned*.
the guys at google are in it for social good... THEY COULD HAVE RETIRED AND DIDN'T. look at the money they are dumping into things that can't get money anywhere else under the "current system of redistribution of wealth... towards the few."
here is your biggest fallacy...
just because that money doesn't land in the pocket of one person doesn't mean it goes away.
what it does is give others the opportunity to create wealth. the question you need to answer for your assertion to have any validity is how many people don't get a chance to create that "new cancer vaccine" or other new product.
your claim is that one person good at making money might find a vaccine for cancer if we let them put as much money in the bank as they can.
the reality is that many people not so good at making money but great at making vaccines is more likely to find a cure for cancer. they will never get the chance because we don't have a free market... because of the one guy hording money.Comment is buried, click here to see the rest.
Taxing wealth is like a body eating muscle to keep itself alive. It's what a body does when it starves. Sure... you can live for a time by living off your own muscle tissue... but you grow weaker every day. And eventually, you can't even move... and then you die.
Wealth generates income. Income and wealth are different concepts.
Now, to some extent you're right in that there is a lot of wealth generated every day without incurring an income tax. This is because what is and is not income is very complicated. The tax code is as large as it is because it is very complicated. You have to have detailed knowledge of every tax payers accounts in great detail to catch tax evasion. And even then many of the rules are arbitrary. You say po-tate-oh... I say poh-tat-oh.
But anyway, I'll just make this bit clear so you'll see what a terrible idea you had there. If we started heavily taxing wealth every year as per our annual tax system the US economy would shrink every year. Every year we'd make less money then the year before and there would be less wealth generated. The body eating it's own muscle. Wealth can be a factory. Wealth can be shares in a company. Wealth can be some old lady holding on to treasury bonds.
Wealth is anything that is worth money. Lets say my house goes up in value but I have no plans to sell it? Well... if you're taxing wealth it means you're going to charge me more this year then last year because my wealth increased.
You'll have some other interesting things happen if you start taxing wealth such as the wealthy people will change their businesses such that they technically have lower wealth and perhaps higher income. Or they'll come up with a totally new way of defining value that isn't wealth or income and somehow make their fortune into that new thing.
this has happened before. Nothing new under the sun.
None of it really matters though. Because in the end we don't have a tax collection problem but a spending problem. You cannot spend 7 percent more every year unless the economy grows at a rate of 7 percent or more. That hasn't happened in the US in generations. So if you think we have a tax collection problem you're really just proclaiming that you don't understand the issue.Comment is buried, click here to see the rest.
I would go farther to say they don't seem to have a basic econ 101 grasp of economic concepts let alone our own economy. So many appear to be fundamentally ignorant. It's difficult to have a sensible conversation with them. It's a bit like trying to have a conversation about biology with a bunch of creationists.
Your mindless contributions to the thread rather then making you appear more intelligent instead make you sound like a churlish little child mocking the adults.
"Taxing wealth is like a body eating muscle to keep itself alive."
It's an interesting point. I think a lot of people fail to see the difference between profit and positive cash flow. If a hospital spends $10 million on an MRI machine, and then bring in net revenue of $10 million from using the machine in the first year, someone might see that as breaking even. But that's ridiculous - the hospital still has the MRI machine! So their profit should be $10 million minus whatever amount depreciation/amortization/whatever of the machine.
What we want to do is tax positive cash flow - this would "punish" companies who sit on cash reserves rather than investing in productive assets, thus encourage companies to invest in new ventures. (or return cash to shareholders in the form of dividends, which should also be considered in cash flow).
Positive cash flow is no less sustainable to arbitrary deductions.
Trust me. You want a consumption tax. Trying to define and track income which is what you're talking about... is very very difficult and very very easy to mislead auditors without breaking any rules.
From a "can we do it" perspective, yes, a consumption tax would probably work better. It's harder to cheat. But from a "is it a good idea" perspective, I'm not so sure.
It discourages consumption, encourages black markets and since rich people consume far less (as a percentage of income) than poor and middle class people, it probably would do nothing to increase their participation.
A consumption tax no more discourages consumption then an income tax discourages work.
They both do that but one is no worse then the other. In the end, work is a corner stone of the economy. The current people punishes people for doing their job just as a consumption tax punishes them for buying something.
It's a zero sum game. Neither one is better then the other.
As to blackmarkets, they're already common without a consumption tax and this is actually a feature. Does it help the country to have the IRS poking into everyone's finances? Not really. But what if the government spent that energy securing the border because a major way the blackmarket sustains itself is by smuggling. And the government would have to police the borders to stop smuggling. In short the border patrol would become the new IRS. Much more useful and rational.
Anyway, you seem married to the status quo. Fine. Just don't whine about the inherent problems with the system then. It confuses people like me into thinking you actually want real reform.
Based on the FairTax proposal as an example, and knowing my own spending habits for the last 7 months, the national sales tax would cost me 60% less than the federal income tax - assuming I would not change my spending habits...
Think about this: if you assume the position that, on average, Americans can not spend more money than they earn, then converting from a system in which taxes are based on income to a system where taxes are based on consumption would necessarily require the rate to increase to maintain the same revenue.
i(N)come > e(X)pense
(s)ome percentage of N > (s)ame percentage of X
s*N > s*X
for s*N = S*X, S >s.
That means if you _do_ spend all or most of your income, your total tax bill will necessarily go up under a sales tax regime. And the more money you save, the more likely your tax bill will decline under this system.
Who is more likely to spend most or all of their income? The poorest people. Who is more likely to spend little or none of their income? The richest people.
And that's the real problem - unless you add manipulation (like a prebate check) the system hurts poor people, and even with that manipulation it's going to do just as little as the current system to stop rich people from "opting out".Comment is buried, click here to see the rest.
No matter what they do with taxes, spending is too high and must be cut. that's unavoidable.
Your suggestion that the tax would have to go up to meet high spending is true however it also makes it hard for the government to raise taxes because it will not just hit some minority that no one cares about.
If the tax hits everyone then democracy will probably force congress to not raise the tax unless we're under extreme circumstances.
As to the tax hitting the poor hardest, I am not suggesting that we don't have relief programs for the poor. We'll still have various assistance programs to help out those in need.
I'll point out again that this is how europe funds healthcare. The left wants universal healthcare? Fine. This is how you do it. You can't do it without a VAT tax. of course the euros also have an income tax on top of it and a much lower economic growth rate. But I won't get into the laffer curve here.
I think we need to accept a political reality here: Taxes will never go up and spending will never be cut - not intentionally, not appreciably, not permanently. There is no acter in the system who personally benefits from raising taxes and cutting spending. That's why the Bush-Obama tax cuts were renewed, that's why they will be renewed again - unless and until the US taxation system is rewritten from scratch.
"it also makes it hard for the government to raise taxes"
As I said, it's already too hard for the government to raise taxes - too many people fail to realize that some people can afford to pay more tax and others can not, and they will vote against a tax hike regardless of who it's aimed at. That's not a "I HATE THE RICH" argument, it's pragmatic - if your city needs a new water supply you don't go hunting in the dessert.
"I'll point out again that this is how europe funds healthcare."
I'll also point out that the European countries (with some exceptions - e.g. Germany) do not have "federal" and "state" government - they are small and only have one level of government. So if you think about it, the fact that they tax both income and sales is not surprising - almost every American has both an income tax and a sales tax, in many cases two of each (federal & state income tax, state & local sales tax).Comment is buried, click here to see the rest.
As to spending not being cut. Then the currency hyper inflates and the programs collapse as the money used to pay for them becomes worthless.
You can't ignore the math.
The problem is not the taxes being too low. The problem is the radical increases in spending. Look at what we've done over the last 10 years. Which changed more? The tax rate or the spending rate?
Spending has outstripped any change in tax rates by magnitudes. You can try and spin this as a tax collection problem all you like but the math doesn't care. the math only looks at spending and collections. They don't balance which means we're putting it all on a credit card. When that comes due not only will you have to pay the debt off but you'll also have to cut spending to revenue minus debt payments. Or hyper inflate the currency and default on debt making it almost impossible to borrow money in the future at a reasonable interest rate... you know, like a third world country.
Total government overhead due to civic administration in the US is marginal. We're talking about a tiny percentage of total spending. Medicare, Medicaid, and social security currently are about 60 percent of the budget and the military WITH THREE WARS is about about 30 percent. All other federal spending not related to entitlements or the military is about 10 percent of the total budget. Of that ten percent what do you think you'd save by combining state and local governments? Because my guess is just about nothing.
You've got some really thick mental blinders on this issue. The entitlements are 60 percent of the budget and the military with three wars is still only half of that.
Wake up. Entitlements must be cut or the currency hyper inflates and all your programs crash and burn anyway.
Choose. Do you want rational cuts now or a collapse later?
We're coming to the end of the line. Our importers are warning that we're soon going to experience heavy inflation. that is already unavoidable. But if we don't shift policy soon that will only be the beginning. It won't stop until it costs more to print the money then it's worth.
We can't cut social security in the short term. The People paid their money into social security on the promise that the money would come back to them in the long run. We should just as soon default on our national debt than renege on our obligation to retirees.
To look at a ten year period I choose 1997-2007, putting us safely behind the Great Recession and the dotcom bubble pop. In 1997, revenue was $1.5T and spending was $1.6T ($2.1T and $2.2T in 2011$). In 2007, revenue was $2.6T and spending was $2.7T ($2.8T and $2.9T in 2011$). So revenue increased 33% and spending increased 32%. Of course, the significance is rather low, so better to say they both increased by around 30%.
You don't have a choice but to cut. You can cut or go into hyper inflation. The money they paid into the system was spent as it came in. Social security is literally a pyramid scheme.
Their money is gone. It was gone the instant it was collected to be paid out to someone else.
If they wanted their SS to still be there they should have had more children with more productive careers. They did not. So the system cannot sustain them. We could raise the retirement age if you like... it amounts to the same thing though.
You can either cut or hyper inflate. The math won't let you do anything else.
As to your cost projections, you're not taking into consideration that much of the growth prior to the recession and the revenue collected was the result of private sector debt. The credit crisis would not have happened if the public sector were run running up debt at an insane rate.
Thus income and spending figures have to be recalcuated with the understanding that income in that period was in fact debt. What has changed is that the private sector has deleveraged it's debt as much as possible meaning they're borrowing less and paying down debt rapidly. The government has not adjusted. In fact, the government has responded by doing the opposite and borrowing even more to sustain a level of government spending that the US economy cannot afford regardless of the tax system.
And thus here we are.
Look... I'm not arguing with you. There is nothing to argue about. You're going to get a Wily E Coyote education in physics here if you don't take the math seriously. It doesn't care what your reasoning is on the issue. We're screaming towards the ground holding a little sign that says "ouch."
It's over. you can cut or hit the ground and make an entitlement shaped hole in the ground.
The math isn't going to negociate. Either close the gap in the immediate future or we're going to go into hyper inflation and your entitlements will collapse as the money that pays for them becomes increasingly worthless.
That's just reality. Some people said the housing prices could never go down. Some said the banks could never fail. Some said obviously the financial wizards knew what they were doing.
Wake up. Anything can fail. No matter how long it's been stable or how many people are backing it. No financial wizard is going to be able to save you from inescapable systems. Bills must be paid. Debts must be honored. If you print money faster then creating the wealth that backs it then the value of the money reduces with each printing.
That is the math. If you want to ignore it, that's fine. The math doesn't need you to recognize it.
It's cold comfort that the best I'll be able to say you after the hammer drops is... "I told you so."...
But since you're indoctrinated beyond any ability to see reason there isn't much I can do about it.
That isn't an insult by the way... or at least it isn't intended as such. The future will prove one of us right and at that moment one of us will know the other was right.
We'll have to wait and see. Perhaps doing nothing and pretending everything will be alright without making any attempt to fix the system is the right course of action... but I doubt it.
if you had a choice between killing a village and saving a country or saving a villiage and losing the country and village which would you choose?
Winston Churchill had that option in WW2. Famous incident where he knew the germans were going to destroy a small town. He knew because the British had broken the german codes. If Churchill warned the town the germans would know the british broke the code and would then change it. Churchill decided to keep the fact secret which cost the townspeople their lives.
but because the allies could read the german codes and the germans didn't know it hundreds of thousands of lives were saved.
It's math. If you're not able to do simple math then you have no business even having an opinion on these issues.
Stay out of economics and geo politics. It's all math and you apparently can't do it.
"Stay out of economics and geo politics. It's all math and you apparently can't do it."
I am willing to listen to and consider what you have to say, but this kind of personal attack is uncalled for, especially since you have provided no mathematical model to even attempt to prove your claim that without entitlement cuts we will be doomed to hyperinflation.
When you say you'd rather collapse the whole country... effectively destroy it's economy just to save a few doomed entitlement programs that will fall anyway... then what am I supposed to say?
You're saying you'd rather hurt everyone then admit you're wrong. The hubris.
That you would welcome the collapse only because it will marginally delay the moment when you have to face reality. It's wrong.
If the current system is unsustainable then someone that ACTUALLY gives a damn about the people will change it so that it is sustainable. If you care for the people at all then you owe it to them to make some hard choices. Sometimes the world isn't cake and unicorns. Sometimes you have to face it and move on. But to say you'd rather collapse the system then face reality? That's just straight up evil.
Maybe you didn't realize what you were saying. But again, if you can't see this then you have no place in such discussions. That isn't an insult... that's just a reality. Blind men don't judge art and those unable to be rational have no place judging policy.
"You're saying you'd rather hurt everyone then admit you're wrong. The hubris."
Ah, you must have misunderstood me. What I said was, if you take someone's money today and promise to give it back to them tomorrow (or 50 years from now for that matter) you have to follow through.
I am completely in favor of restructuring entitlements _in the long run_. People are living longer. If you pay in, say, $200,000 from the time you are 25 to the time you are 65 and the life expectancy is 75, then it would be prudent to expect $20,000 per year in benefits. But if life expectancy jumps to 95, the annual benefit has to adjust too.
But that change has to occur on money that is paid in starting when the change occurs, not on money that's already paid in.
That is literally all I am saying - any change will have to be gradually phased in. You absolutely positively can not tell people who have already paid in to Social Security, "Sucks to be you!"
And to be perfectly honest, I am ashamed that you would rather default on our debt to the elderly rather than default on our debt to the rich people who buy Treasury Bills.Comment is buried, click here to see the rest.
(I assume you realize it is completely possible for a country to default on its debt, to decide they aren't going to repay their debts. Who's going to stop us? We've got enough nuclear weapons to end all life on Earth. Now, what would be worse: defaulting on our debt to the elderly, defaulting on our debt to treasury bill holders, or monetizing the debt enough to produce hyperinflation? I honestly do not know. But it alarms me that you have not even acknowledged how serious defaulting on our debt would be.)Comment is buried, click here to see the rest.
Ideally, I'd love to give them every penny they put into the system back.
But it's gone. It's gone. A few years ago republicans offered a new type of SS where instead of paying out current entitlements with current revenue we would instead have everyone's money go into individual retirement accounts. So no SS but you'd pay into a retirement account.
We would restrict the retirement account so you could only invest in government bonds. That's just as safe as SS but your money would grow rather then just sitting in an account. Everyone would own their account. When you reach retirement age you can draw on the money. The government also would shift most of it's foreign debt to domestic debt.
If people die before they collect then their family gets the money. No reason a man should pay in a large portion of his income for his whole life and then his family should get none of it if he dies before he collects.
The system would be sustainable, fair, and it would help the US government by moving debt into domestic hands.
But it was shot down by the democrats for the same old reasons.
We have a pyramid scheme. SS as it is now is literally a pyramid scheme. They always collapse eventually. Sorry... that's how the math works.
It's all math. Recognize or you're like someone that refuses to deal with the math in the middle of a major engineering project. Your ideas will get people killed. You not being honorable... you are being irresponsible.
It's too late for transitions. You should have done that more then a decade ago. You didn't and so that isn't an option anymore. Sorry.
"If people die before they collect then their family gets the money. No reason a man should pay in a large portion of his income for his whole life and then his family should get none of it if he dies before he collects."
This is why I prefer to think of "Social Security" as being "elderly insurance" - it is insurance against the possibility that you will one day get too old to earn money. And that's the only conceptualization I can think of ATM to explain why your family can't collect the balance of your social security. Social security payments are calculated based on the assumption that everyone will die the day they hit life expectancy. The people who die early "leave behind" money that gets used to pay the people who live longer. As long as lifespan is symmetric around the average, and we can predict the average lifespan, the payments will balance.
Under a purely private account system, as soon as you outlived life expectancy you'd be just as screwed as if there was no program.
"We would restrict the retirement account so you could only invest in government bonds. That's just as safe as SS but your money would grow rather then just sitting in an account."
I'm a little confused. You are upset that the government has "spent" the SS revenue and stuffed the SS box with government IOUs, and your solution is to force a person to put their money into an individual box, that then gets emptied of cash and filled with government IOUs? How is that different from what we have now, aside from not protecting people from outliving their peers (as described above)?
But it does make me think of an idea I had - which was to get rid of traditional taxes, and instead have individual government departments sell bonds to the American public. (So instead of a "US Treasury Bond" you'd buy a "US Department of Defense bond", etc). People would be willing to accept a lower ROI on things they _want_ the government to do, and for things they do not want the government to do, they might change their mind if the ROI was high enough.
You could really go nuts with the bond sale program. e.g. "We are auctioning $100 billion in bonds to pay for an invasion of Canada." - then if you can't drum up $100 billion worth of bids you can't do it, and that's great because it's apparently not something The People wanted you to do. And if the bond interest rate is ridiculously high (60% annually) the gov't could say "Thanks but no thanks.." and withdraw the bond offer (or pay off the bond the next day or w/e is compatible with the letter and spirit of the law).Comment is buried, click here to see the rest.
If we cut social security the worst that will happen is that some old people will have a hard time for the next 10-20 years before they die.
Terrible stuff... but it isn't a strategic threat to the United States. We can survive it.
If we default on our debt we won't be able to borrow more money.
GASP THIS... you are only paying current expenses by borrowing money. If you can't borrow the money then the entitlements will fail ANYWAY.
So you have two choices. Default AND have entitlements fail.
Or cut entitlements to avoid defaulting.
You cannot save entitlements by defaulting on debt.
The math is very very very very simple. Please tell me you get it. You cannot save entitlements. They're already dead. All we can do at this point is minimize damage. If you wanted to save entitlements you should have supported the republicans fifteen years ago when they tried to reform social security. But no... that didn't happen. So it's too god damn late now.
Tough s**t. This thing is going down. It's like swimming with a anchor. You can either let it go or go screaming to the bottom of the ocean with it.
And before you tell me about the poor old people again, remember that if you implode the current economy you're going to in debt their grandchildren.
So which would you rather save? Old people or babies?
Do the math. You sentimentality is not admirable... it's childish and naive.
"GASP THIS... you are only paying current expenses by borrowing money. If you can't borrow the money then the entitlements will fail ANYWAY."
You understand that the US Government has the ability to print money, right? Not that it's a good option - it could lead to hyperinflation. But I'm a little confused as to why you are claiming if the government can't borrow money it can't pay for entitlements, while also bitching about hyperinflation. Printing money is what causes hyperinflation.
"If you wanted to save entitlements you should have supported the republicans fifteen years ago"
You mean.. when I was in junior high?
"You cannot save entitlements by defaulting on debt."
No one is going to give us a good rate on bonds if we default. Even a bad rate on bonds is nearly as bad as not being able to sell them at all because you have to sell more of them to get the same amount of money back.
I don't know what to tell you. You seem hell bent on killing the country. So fine. I've talked to enough leftists that it appears they'd rather destroy everything then admit their entitlements are bankrupting the country.
Fine. Hyper inflation here we come.... and the entitlements will not survive that either... really most of the government won't survive it. Ironically, the military will because it keeps order. But everything else is likely going to burn.
Also once you default on debt you never get a good rate on bonds again. Our credit rating will be shot for a hundred years or so.
And before you go feeling bad about old people, it was those old people that set up this stupid system in the first place. So screw them. They were told in election cycle after election cycle that this was unsustainable and they ignored it. Now they want to pass their mistakes on to the next generation. f**k them.
No one deserves to have their retirement cut more then those bastards.
And I say that with all the love in the world. But they have no right to pass their mistakes on to their grand children. This is their disaster. They should eat it.
"And before you go feeling bad about old people, it was those old people that set up this stupid system in the first place. So screw them. They were told in election cycle after election cycle that this was unsustainable and they ignored it."
Same could be said about the bond investors. The difference is that the "old people" never had a choice whether or not to invest into social security - the investors did have a choice whether or not to lend to the government.
Of course the US government can print money. But so can any other country.
Do you think you're the first person in history to come up with the idea of just printing more money?
What happens when countries do that?
hyper inflation. Every dollar is worth less then the last until it costs more to print it then it's worth. You have HOURLY prices and people get paid significantly more EVERY DAY then the last because otherwise they can't pay for anything.
Eventually the currency becomes too much of a pain in the ass to use at all and everyone either switches to a barter economy or to another competing currency.
Eg... everyone might start getting paid in Euros because the dollar becomes worthless.
Oh my god... you know so little about economics. New rule. And I don't mean this to be insulting... but your last post proves that you have no business having an opinion about these issues. You're like someone that believes in witch craft and doesn't understand what bacteria is offering opinions on medicine. Just leave this to people that know what they're talking about until you get a clue.
And again... I'm not being insulting. I think you can get a clue at some point in the future. But that time is obviously not now.
Well now I know you aren't actually reading my post. I already pointed out that inflating the currency is not a good way to pay for things and specifically mentioned hyperinflation.
It doesn't matter. No one can say because it's all determined by market factors. Go with this "soon." The point is that it will happen if we don't cut spending radically.
You can't ignore the point. It's going to happen unless we pull back.
Fair enough. But just put yourself into the same position: your boss comes to you tomorrow and says, listen, you know that paycheck you worked the last two weeks for? Well, the company's in bad shape so we decided we're not going to pay it. But hey, at least you still have a job. And you know damn well you took an extra 15 minutes for lunch that one day.
Sure, it might be better for everyone else, it might even be better for you in the long run (assuming the alternative was that the company goes out of business and you spend years unemployed). But it's still wrong.Comment is buried, click here to see the rest.
Infrastructure is important, but building it up just to "stimulate the economy" is a terrible idea. Instead take that money and subsidize the education of the next generation of engineers, doctors, and scientists.Comment is buried, click here to see the rest.
That's not working so well since the education money seems to go people getting anthropology undergraduate degrees. And beyond that, even if you do get the engineering degree more often then not you find yourself in competition with people that immigrated from india or something where they got educated for a fraction of whatever your bills were.
It's very troubling. All sides have some sense on their side but the current status quo is toxic.
The education subsidization would have to only apply to real fields like engineering, medical, or science....the kinds of fields that will advance our society and help innovation. Psychology, business, art, law and other nonsense fields would not be eligible. In fact, bachelor level degrees in many of those fields should be done away with all together because they are useless for getting a job.Comment is buried, click here to see the rest.
Good luck reforming the university system. They're easily one of the most entrenched and regressive forces in our society which is as ironic as it is sad.Comment is buried, click here to see the rest.
melt: I'm not saying do away with the fields all together. I'm saying that bachelor level degrees aren't worth much in those fields so schools can help students by doing away with them. (Forcing students in those fields to attain a masters level degree or better.)
Engineering, medical, and science fields are the path to the economic future. Innovations in these areas drive everything in our world. If we are going to throw money somewhere then let's throw it at that.Comment is buried, click here to see the rest.
That would be a one time profit suck. After that lots of businesses would go bust or leave the country... and the next year you'd have even worse problems.
People seem to forget that our problem is that we spent too much EVERY YEAR. It isn't just that we built up a lot of debt over a lot of years but that we spend too much every single year.
If you want to balance the budget you're going to need to cut.
Or hyper inflate the currency which will make all transactions done in dollars meaningless and crash the federal reserve bank.
Choose... Cut or die. Don't argue with me. You're arguing with math. It doesn't care. The equation is going to burn us if we don't do something about it.
Not at all. But in the end you're arguing against the math. What you say or argue is irrelevant.
You are getting a Wily E Coyote eduction in physics. By all means... yell at the ground... maybe it will get intimidated and forget about the whole gravity thing.
The mathematics? You are building strawman arguments. You are claiming that certain ways of dealing with issues don't work because of some absolutely ludicrous idea that nobody other than you has mentioned. You are building these strawmen, then arrogantly attempting to divorce yourself from the argument saying "its not me, its the math." No, it is you. It is your utter inability to look at the situation from a rational point of view. You want things to be a certain way and to follow some ideological truism that has absolutely no backing in either logic or real world application.
You assert people work only for money, which is a truism. A truism that happens to be entirely false, as can be easily shown with even the most basic of human conditioning experiments and/or basic observation of the facts as presented.
You assert that the issue's cause and solution are two diametrically opposed scenarios, which is a false dichotomy. The issue is not spending versus taxes. The issue is culture. The American culture, and the world culture due to heavy American influence, has lost its ability to rationally reason. It is, as you are, built upon desperate attempts and constructing truism and dichotomy. These people are good, those people are evil. Doing this is good, doing that is evil. Living your life this way is productive, that way is lazy. These are absurd; irrational; primitive; and ultimately disastrous, both socio-culturally and economically, world views. They lead to a culture of fear, hatred, and narcissism. A world of greed, selfishness, and shallowness.
This is not inherent, innate human nature. This is a failure of culture. It is not proper, responsible, or constructive to attempt to repair aspects of the economy, law, or world politics without first confronting the failure of this age of narcissism and selfishness. It is only a matter of time before everything will revert back to how it is now: completely f**ked.
You can't spend at a faster rate then money is made.
If the budget is growing at a rate of 7 percent or more a year and the economy is growing at a rate of 3 percent or less then there are only two options.
Radically cut spending or hyper inflate the currency and destroy the credit rating of the country.
Either/or. The math is simple, entirely valid, and unarguable.
You want to play chicken with a freight train? Go for it.
You guys are winning the darwin awards in economics.
Oh really? so you think it's more complicated huh?
How?
You are spending more at a faster rate then the economy is growing. It doesn't need to be more complicated then that. That sums up your problem rather nicely.
Any added complexity would just cloud the issue which I suspect is the real reason you're complaining. You'd be much happier with a thick layer of bulls**t to hide your marxist theories under.
Well, hide them all you like. In the end, the math isn't fooled. You can fool everyone everywhere and still lose because the math isn't a person and it doesn't respond to opinion polls. You can either take it seriously or get creamed. I don't really care which.
in the end... your prescriptions have led us where we are today.
it goes back and forth but every last time our economy tanks its from unbridled greed by businesses that don't believe they have any social function other than making money. they don't want the rest of us that end up in the poor house to complain. when we do we are given numbskull admonishments like the ones you offer.Comment is buried, click here to see the rest.
Raising taxes is not the way to fix skewed wealth disparity. All it does is make the private sector poorer, and the government richer.
Instead, laws should be made which forces companies to invest "excess profits" which ordinarily go to investors or executives, back into employee salaries & benefits. The government will still end up collecting taxes anyway (arguably, even more efficiently since people who were making $30,000/year are now making $35,000/year still won't be able to afford tax loophole lawyers), the differences is you'll put spending power back in the hands of 10's of millions of Americans, rather than just a handful of them. This will be better for the US economy overall than simply taking the money from the rich and giving it directly to a spend-happy government.
Of course in a hippie dream land this would be fantastic, but then what happens is American businesses become less lucrative to invest in, lose investment money, have to fire a bunch of people, and foreign businesses start getting more of US investment dollars.
As I said, taking money DIRECTLY from the rich and giving it to the government prevents that money from first circulating through the lower and middle classes. It's these classes which drive the economy. 10 rich with $500,000 extra dollars is not as good as 100,000 people with $50 extra dollars. Let's say we're talking about going out to eat at local restaurants. 10 rich people aren't going to spend $500,000 at local restaurants because there's no need to. They can only eat so much.
Meanwhile 100,000 people will spend a lot more money collectively on local restaurants because 100,000 people will invariably need to consume more stuff than 10 people.
Thus the best way to stimulate the economy (at least on a local/small business scale) is to get as much disposable income in the hands of as MANY people as possible.
This is why if you're going to tax the rich, you're better off taxing them by making them pay their employees more money (or making the companies they invest in pay their employees more money).
But as I said, doing so will have unintended consequences which are pretty easy to foresee: the reduction in investment in American businesses.Comment is buried, click here to see the rest.
give the breaks to the poor people, tax the rich. trickle down is proven to be a huge failure. trickle up actually creates jobs because the people most likely to spend a tax rebate are the ones barely making ends meet.
The middle class is poor compared to the super rich. What you're saying is semantics and you're deliberately missing the point. Taxing the super rich and giving breaks to everyone else is what's needed and clearly what was meant.
"As I said, taking money DIRECTLY from the rich and giving it to the government prevents that money from first circulating through the lower and middle classes. "
The whole issue is that the rich are not circulating this money through the lower and middle classes. They are hoarding it.
No s**t. And how do you think taking it from them and giving it to the government so it can squander it away, will be any better?
As I already said, the government will get this money regardless. Money paid out to employees will still be taxable income. At least then the employees have more disposable income to help keep up demand for various goods and services (which in turn leads to jobs, increase in GDP etc etc).
Define "squander", because you say it as if it just disappears. What do you think happens to the money? It doesn't just go away, it gets spent on things, and thus goes back into the economy in some form.
- Unending wars in the middle east
- Ever-increasing Interest on money that is continuously borrowed from the fed
- Unaudited multi-trillion dollar bailouts with absolutely no changes or laws to prevent that sort of thing in the future
Well if tax breaks for the rich don't produce jobs, as it as been proven over the last 30 years. Why do we still continue to do this "Trickle Down"? Why are people still lying about it, claiming that it works, or would work?
I don't know whether to dig you up or down (so I guess neither). Your last paragraph is dead on, which is why it is stupid to target any segment of taxpayers (even if you're jealous of their success)..but the rest of your post has all kinds of wrong.Comment is buried, click here to see the rest.
it is not jealousy - make them pay a fair amount. I make decent money and give a lot to charity. Why should my tax burden be more than someone pulling in millions a year? The "rich" want to call it redistribution of wealth while it is simply "paying your fair share". Stop extending the tax cuts, I will be happy to pay my fair share should I ever reach that bracket.
We need to make these government chartered corporations pay their fair share for owning the combined physical and labor resources of the the United States.
300 million Americans submit their free will to live in this society, and so we should use the system most efficient for taking care of those governed. Such as system would not have the top 10-20% of the populace fighting over the majority of the wealth of an economy, while the bottom 80-90% scrape by on what is left.
If half of the country is too poor to pay taxes, you tell me that they should pay up anyways, because if we tax the other guys it wouldnt be fair? How is it fair 300 million people werent born millionaires? Life isnt fair. If we want to avoid catastrophic social and economic melt-down, we need to get this country running again. And that wont happen by making tax breaks so corporations can come in here and pillage our country, as they did when they put us in this situation in the first place.
"If half of the country is too poor to pay taxes..." that is begging the question. They are "too poor to pay taxes" because the tax code is set up in a way that allows them to not pay taxes. That's problem #1 - we have a system where 40+% of the population pays nothing in income taxes. I'd love to see what percentage get the EITC - essentially a negative income tax.
While the super wealthy might have most of the wealth in the country, even if we took every last penny of it and gave it to the government to use, that wouldn't even cover the deficit for a year. Where the "real" money is (ie, income) is in the middle class - just by simple numbers. And that group of people, if facing a tax increase, do not have the luxury (or any reason) to avoid the increase. If their bill goes up 10% from 10k to 11k, its going to be really hard to find a CPA and lawyer to go through their setup to avoid that tax - there simply isn't the margin. Either that or its all W2 - no way to avoid the tax. But for those in the highest brackets, that bill might be going from 100k to 110k - suddenly there might be the margin.
If we were to stop worrying about everyone's wealth and focus on everyone's tax burden, that would be a start. Moreover, we should also look at a consumption-based tax - that would even capture the tax that is avoided by underreporting (cash transactions, for example) or flat out evasion. And it encourages savings/disuse of debt. That's a good thing.
Sure. We can tax the middle class some more, right after we reign in corporations. No more uber-organizations. If one entity is going to control that much wealth and resources, they should be public.
After that change has taken place, then we can talk about increasing taxes on the middle class. Although any increase on the middle class will be unlikely due to how many of the nations poor will join the tax paying brackets.
With all that wealth going into public works projects and new jobs, the near 20% actual unemployment will clear up, and underemployment from poor private service sector jobs will give way to new infrastructure and manufacturing jobs with increased wages and benefits. Not to mention a reigned in single payer health system.
That way any person can start up a small business, without the worries of how to pay for healthcare for your employees, or retirement in old age. The first step is retooling the corporate system.
Lets ignore the healthcare issue - I think we both agree that is asinine that your employer is your gateway to health insurance... we don't do that for auto, homeowner's or life (all can and usually are bought elsewhere) but it is with health... insanity.
Corporations don't need to be reigned in. The fact that some do not pay taxes is misleading - either the tax code gives them breaks (green jobs/energy in GE's case), the tax code allows structures that make it a pass-through entity (S-Corps... that income is paid by the individual), the tax code allows to recoup past losses (carryback/carryforward) or they simply pay taxes in other jurisdictions (ie, you paid taxes for profits earned in England? You get a credit on you US taxes for that amount). Notice that all four of those reasons are due to the tax code. Reforming that is more important than some crazy restructuring of the corporate world. The last two should probably be kept (encourage formation of new companies and expansion overseas).
But you have a HUGE gap in your logic - do you think that Mr. Unemployed Financial Guru is going to accept going down and working on an infrastructure project? Or some lawyer that can't find a job out of law school? Sure, if they get desperate enough, but many, many people will simply refuse to do manual labor... how many people hire companies to maintain their lawn (fertilize, deweed, mow, etc)?
And what infrastructure do we need? Rail? Don't make me laugh, we're too spread out and only two lines in the WORLD are profitable on their own (IIRC).
There are no simple solutions, especially since its near impossible to tell how people will react to any new scheme. Decide to tax corporate profits more heavily? Owners will find more expenses for the corporation to pay. Its tough...Comment is buried, click here to see the rest.
i've been advocating a department of government titled something like: department of science and research. things are moving so fast that society can't plan for any future the way it is now. all the planning is done by the short term needs of business.
if we as government were hiring as many science people as can graduate from college to do basic research that is then sold to private companies to develop it would give us a means to direct where the future is taking us as a society. the sale of development rights could be put back into the system to finance future research.
like it or not the future is in the hands of science. who is in charge matters. it would be better to do research for research and not leave it in the hands of the market place. we'd have no space program if we didn't fund it through government.
Not sure how much I like the idea of picking and choosing who gets raked over the coals when it comes tax time. Here's a solution that makes perfect sense:
15% flat tax on income
8% consumption tax (i.e. national sales tax)
1) Yes, they would be taxed at 15%. Right now, so many of them get away with paying nothing.
2) Simple is better. Tax breaks are done. That's the bonus you get for having a lower flat tax. If you want to avoid paying additional taxes don't spend tons of money.
The problem with your scenario is that you still face double taxation. The corporation earns profit - pays 15%. 85% remains.
They declare a dividend/distribution to the owners. They pay 15%. 72.25% remains.
You know how an effect 27% income tax.
Or how about we ditch the taxation of income and go straight to a national sales tax... there is double taxation there (taxed as earned, now taxes as spent) but you could easily get around that with prebates/rebates.
Somehow we need to ensure dividend/investment/interest income is not "income" for taxation purposes, as the money used to make the dividend/investment/interest has already been taxed.Comment is buried, click here to see the rest.
You are proposing what we have in the EU, VAT.
It crept all the way up to 20% and 21% in some countries.
Consider yourself very lucky you don't have it.
You are technically right, but they are both consumption taxes.
Revolutions have been fought for less, I hear one started because of sales taxes on tea.
Apart from technicalities, they are paid whenever a sale is made. VAT tends to be more general and affect the whole economy than "sales taxes affecting only certain goods".
They even share the property of not being paid on exports (or across states).
Now technically we have have to pay VAT on across EU countries, but that's for consumers, and a recent "innovation", I will spare you the more sordid fiscal details, it adds yet another layer of administrative complexity, as if we poor EU sods needed it.
Both form of taxes affect consumers, rather than businesses.
They are unjust as they affect equally the rich and the poor.
If you are poor, that 10 to 20% on essential goods and services might be overkill and push you further in the poverty scale.
Yes, but 8% is not 10, nor 20%... Trust your politicians and give them some time...
I know that proportional taxation may sound a strange concept in the US, but it is actually correct that the poor pay proportionally less taxes than the rich.
For a tychoon shelling out 10$ is not the same as for a single mother with kids, it hurts a lot less.
If you have a good proportional tax on income, taxing consumption is just obnoxious.
Of course taxing consumption is what the richest successfully advocated and imposed, guess why.
.. What's the difference? I mean, aside from the fact that the sales tax is taken at the last stage instead of at each stage along the line.. which has its own disadvantages.
The problem with America is we consume, we don't produce. I think a consumption tax would hurt, but hopefully provide the push to get us producing and innovating again.
Think of it this way... without direct taxation you suddenly get what you are actually paid (45k a year, minus SS+Medicare)... what are you going to do with 28% of your salary that you never had before? I imagine that some of that would be spent (i.e. put back into the economy via consumption).
Ok. I was more responding to the one Poster's suggestion that the tax plan be set up as follows:
15% flat tax on income
8% consumption tax (i.e. national sales tax)
I wasn't considering a complete Consumption tax strategy in my comments. I wonder how that Consumption Tax would have to be to maintain current levels of revenue.
That's only if you subscribe to the notion of progressive taxation.
The flat tax is a fair tax in that regardless of income, you are taxed proportionately (the same) as everyone else.
Society shouldn't get to judge another's contribution to society as not enough... because you will never see anyone say that it's too much.
The problem inherent in "progressive" tax schemes is that those who utilize the services these taxes are levied for (the good of society) the most don't pay into them. This creates a burden on the middle class and upper classes (mostly middle) and is wholly unsustainable.
There is some discussion on it, ranging from 25% to 32%.
Still, its a tax I would pay over direct income taxation. I choose whether what I am buying is worth it or not.
Most proposed consumption taxes exempt basic necessities like foodstuffs... just to disabuse any notion that the poor will be affected more adversely than anyone else.
I do like this approach. But, I'm still stuck on your comment above that "The problem inherent in "progressive" tax schemes is that those who utilize the services these taxes are levied for (the good of society) the most don't pay into them."
Which Services? If these are serivces for the poor, they receive the services because they can't afford them on their own (health care clinics and more). I still would probably favor some form of exemption at a lower level. I don't want that person making 10K per year paying a 30% tax.
The services I mostly refer to are our unfunded future liabilities... (Medicare/Social Security). Those two liabilities represent nearly 2/3rds of our debt load as a nation.
How is a consumption tax a tax break for the rich? If you tax spending rather than income with no tax breaks or shelters then the rich (who spend WAY more money than the poor) will pay more taxes.
"A few years ago an elite 300,000 Americans in “the top tenth of 1% of income had nearly as much income as all 150 million Americans who make up the economic lower half."
Big numbers like this are hard to visualize. But truly, it will eventually become a problem that 300,000 Americans have as much income as half the country. Putting that in perspective, that's like everyone in Pittsburg having incomes equal to all people living west of the Mississippi (hmmm, is that 150 million?)
this disparity has been heightened by our government's willingness to send all of our manufacturing jobs to china. It is eliminating the middle class and making CEOs wealthy beyond belief.
Perhaps the top 0.1% of Americans own 50% of the wealth, but isn't it possible that something like the top 0.1% of America (e.g. land) is worth as much as the bottom 50%?
So it's not like John Q Public can't find a place to live because Joe Millionaire owns all the land. It's more like, Joe Millionaire can buy the expensive beach front property so he never has to see or hear or think about the problems of John Q Public.
"A few years ago an elite 300,000 Americans in “the top tenth of 1% of income had nearly as much income as all 150 million Americans who make up the economic lower half." But you stop with info there. Include how much in proportion to that wealth those "rich" and those in "lower half" pay and absurd is clear. Those “the top tenth of 1% of income" paid MUCH MORE taxes vs "all 150 million Americans who make up the economic lower half" while earning similar proportion of the wealth.
Proponents of the "tax the rich" never mention that part. Voting right must be based on exactly equal percentage of the income from each voter. Than “the top tenth of 1% of income" people who earn about 1/2 of the wealth will pay about 1/2 of taxes, not 90%+ as now or even more as "tax the rich crow" wants.
What is wrong with taxing the rich? - I am from poor and destroyed Socialist country. They tried such tactics. Eventually, you run out of rich and everyone is poor and country collapses.So, stop being envious and move your butt. Make use of opportunity your country freedom provides. I know very few rich people but by coincidence or not, every single one arrived here with wealth equal to that of your average homeless man.
I'm not making an argument for 'massive tax' increases for the Rich. Though, I would support the 'removal' of the tax cuts they received in recent years (maybe back to Reagan). But, for me, what your entire comments is lacking involves the history over at least the last three decades. During a time when 99% of the country has stagnated at best, 1% has done quite well. Why? I believe a lot of this has to do with 'rigging' the political system to favor the wealthy. I believe many who have gotten rich have done so on the backs of most Americans. Many have participated in unethical or fraudulant behavior. Eventually, when less than 1% of the country earns almost all the wealth while the rest struggle, that will create major problems.
This is not just about Getting Off Your Butt. A good proportion of the 99% work hard. But the system is set up in a way that it is VERY unlikely they will every come close to joining that 1% (the american dream). I believe there are more Barriers to that then in the past.
When half of the country, 150 million people, are trying to get by on just 2.5% of this county's wealth there is no way they can move up. There is no ladder to climb.
I am not convinced to your conclusion because wealth is not a limited commodity, and the current paradigm is overshadowed by a fiat currency system and vast state-corporate collusion.
In the last election Meg Whitman stated that 1% of Californians payed 80% of the estate taxes. She thought that was so unfair. What she did not say is that 1% of Californians have 80% of the wealth in California.
The problem is more that there isn't a level playing field. Simplify government and the tax code and the average person with average resources can better compete.
I'm currently reading that book and I'm amazed at how prophetic it has become. Obviously, things are not as bad as what was portrayed in the book. But the fact that people actually think like the individuals in that book is scary.
I see everyone who believes they should pay their fair share. How about we go a step further and say everyone no matter how much money you make, you pay 15%. There are no loop holes, or credits for anyone. If we are going to make it fair it should be the same across the board. I am all for a flat tax.
do we keep social programs for the needy in this scenario? And without the tax breaks for giving to charity, I see charities suffering. I like the idea but see issues.
Giving to charity should be out of heart, and not to see a reward from the government. Each person will have more money to spend the way they deem necessary, giving them control over their own health and social needs.
Why would you ask a questions like that? So you think all those who are on Welfare are little angels using the money only to survive? The true question is how to determine what is a needed good. I still remember around the time of the superbowl seeing a whole cart of coke being purchased with food stamps. The need in this country is greatly exaggerated, people have so many opportunities to make their way and life better for them selves.
Unemployment too, you give me a chance with free money from the government. What is the need to get a job then? or you could hold out until you get the CEO position.
Well I'm glad you used an anecdote to support the idea that people abuse the systems, because that's all I ever hear. I don't care about your stories, I want real evidence that there is widespread and significant abuse that outweighs the beneficial aspects of such programs, until then pay attention to more important things.
I don't think all those who are on welfare are angels; my question to you is, do you think they're all devils?
Plenty of people get unemployment insurance benefits that are in no way "free money from the government." Are you familiar with how unemployment insurance works?
Issues how? Basically you get a % of your income directly back to you, to choose how you use it as you see fit.
If you were giving 5% of your income to charity before and getting a tax break on it... and you are suddenly taxed less by 15%, how is that going to affect you giving 5% of your income to charity minus the tax break?
And watch the super rich fleet the US. People seem to think the super rich are forced to live here. They are not. Just as many of the rich were fleeing NY and otehr states they will flee the US if we try to rape them in this manner.Comment is buried, click here to see the rest.
....says the guy repeating the same tired talking points. If the super rich roll out, someone will look at the situation with "rape level taxes" as you put it and decide that it's a good enough deal to step in and fill the void. We might even clear out a lot of dead wood this way.
Nope. There are no more big businesses or rich people in places like NY, Chicago, and L.A. The cost of business was just too great and that's why they are ghost towns now.Comment is buried, click here to see the rest.
Keep in mind, the top 1% pays 38% of the taxes. If they leave, do you seriously think the government is going to cut it's spending by that much? Of course not. They'll just make YOU pay it.
If they all actually left, the response to such an action would probably be beyond the scope of conventional discussion of the topic of taxes vs. spending.
There was a 60 Minutes piece a few weeks ago about American companies are moving to Ireland and Switzerland to avoid US taxes. And they are taking their money and jobs with them.
You're probably one to complain about outsourcing. The reality is that the more taxes and costly regulations a government imposes, the more employers are going to move to avoid them in order to stay competitive.Comment is buried, click here to see the rest.
Let me put it this way - I would gladly participate in an American revolution, and I'm Canadian. Your politics are extremely influential on our more corrupt politicians (our fascist Prime Minister, for one) and your economic status greatly affects the rest of the world, with you being the largest-earning country on the planet. If a change isn't perpetrated in the US first, the rest of the "democratic" world suffers too.
Taxes are immoral in general and punishing the wealthy is a recipe for disaster.
The solution is to end the corporate welfare state and institute true capitalism. No more corporate veil separating the owners from their business, no more government subsidies, no more anti-competitive laws.
Every dollar earned in that economy would be made by making someone better off and corporate size would be naturally restrained by the risk appetite of the owners. In a free market, no one trades unless they feel enriched by the transaction and everyone is responsible for their actions.Comment is buried, click here to see the rest.
Indeed. It is precisely because the average person is duped into thinking that more government is good for the common person and bad for the wealthy. In fact, the opposite is true.
Wealthy and well connected people are always going to exert a disproportional amount of influence on the government. Government and corporations are not enemies. They depend on each other in the current system.
You will just end up with giant all conquering monopolies that cannot be competed with. Sort of like we have now, but even worse. This is the nature of capitalism- you just snowball ahead leaving nothing for those behind you.Comment is buried, click here to see the rest.
Even in the corporate welfare state, we don’t see any evidence of all encompassing monopolies. In fact, even in those markets with very few competitors, there are normally government enforced barriers to entry and complex regulations that only large firms can handle.
In a free market system, no one would be prohibited from starting a business and no one would be subject to ridiculous layers of regulatory hurdles. The only monopolies that could exist (and I doubt any would) would have to be extremely good at what they did to prevent any competitors from entering the market and their profit would have to be razor thin.
Profit is an indicator that competition can enter the market and sell for less.
Loads of government regulations to start a search engine I heard. Yet Google dominates.
Smaller businesses can just be bought. How does a small business shop compete with a giant supermarket that buys in bulk. Can't be done. What you're saying just frankly isn't true.
Also a truly free market eh? ... so you disagree with patents then I take it?
A truly free market doesn't work. It really just doesn't. Things need to be enforced, dodgy practices stopped, for public and employer safety if anything.Comment is buried, click here to see the rest.
Google dominates, because they are the best at what they do. It’s not as though people are unable to use a competitor. There is nothing wrong when a company is successful because they provide the best product, As far as regulations, I’m not familiar enough with the regulatory environment of search engines to comment. However, there are hurdles with DCMA and that type of thing.
It is true that huge companies can buy in bulk and pass those savings on to customers…..isn’t that a good thing. That means they are outcompeting the small business and giving their customer a better price, which is perfectly fine. Even given that advantage, the retail market is extraordinarily competitive. No one even commands more than 10-15 percent of the market I believe.
Yes I disagree with patents and all forms of intellectual property. Property has to be severable in order to be property. Scarcity is what justifies why one person is able to deny access or use to another.
Why doesn’t it work? If anything doesn’t work, it is government. No other organization of man can claim to have killed, tortured, enslaved, and stripped the natural rights of more people.
"A truly free market doesn't work. It really just doesn't. Things need to be enforced, dodgy practices stopped, for public and employer safety if anything."
Free markets are not free of enforcement. I believe you are misunderstanding what he is describing.
An ethical, volitional exchange predicates the concept of a 'free' marketplace. Freedom to choose is always the most ethical solution, even if people make mistakes. It's a contradiction to throw away faith in humanity for faith in the monopoly of violence through a state.
You're skills in debate are good, I give you that, however I must also concede I haven't expressed the details of my thoughts accurately to you thus far.
There is nothing wrong with a specific company dominating. I agree.
What I think is a problem is when when their domination makes competition neigh impossible.
It can actually become bad for the common man.
You and I both know it is competition that drives capitalism.
Thus I think government intervention to reinforce competition one way or another is a good thing- for the common man.
Alas reinforcing and helping to equalise wealth among the population is necessary, you would find it interesting to research the effects of equality on society and how evidence seems to suggest a benefit to all walks of life on the wealth spectrum.
Please don't take my statement and brand me a communist and I'm sure you wouldn't anyway- just confirming! Humans are NOT equal, wealth should NOT be split equally, humans are NOT identical clones of one another.
I do not really wish to enter the complicated topic of patents.
I will say that I think patents are overused and over-enforced in this day and age to the point they can actually slow down technological advancement.
As much as I would prefer not to discus the matter, it is an important topic when talking about free markets and capitalism.
Your last paragraph I'm afraid is weak one, at the end of the day, and I'm certain as a smart individual you will agree. It's humans who have done that to one another. I never saw a 'government' rape someone.
The rich get richer, blah blah. We know it, and apparently accept it now. 2012 will be a telling year election wise. If people REALLY believe the rich (who own 80% of the wealth, but pay only 70% of the revenue) need a tax cut, and vote in the GOP again, this country, I fear, is set on one of 2 irrevocable paths...
Option 1: Revolution - this will only happen when everyday people can no longer afford their cell phone, Wii, PSP, and internet pablum, and have nothing better to do (those are the narcotics used by the wealthy to keep us in check).
Option 2: Serfdom - there will be a permanent class permanently indebted to the landowners.
Neither scenario is good.
We have a government that has bought into the argument that a company is too big to fail (TARP) and believes that the same people who ruined our economy are the "best" people to lead us out of recession - oh and they deserve multi-million dollar bonuses too.
Now we have a case in front of the SCOTUS with Walmart essentially saying "we're too big to be sued".
WHEN THE f**k WILL PEOPLE WAKE UP! There's a class war going on here, and we're loosing!
My recommendation, get your passports in order and have travel plans for Nov 2012. You may need to use them.
You do get that even if we taxed them at 100% it would make ZERO difference right? We would still be screwed. This is a tactic used to play on your class envy and keep you from looking at cutting where it matters and that is making deep cuts in government spending. Cutting the 4 items no politician is willing to do those being military spending, social security, Medicare, and Medicaid.Comment is buried, click here to see the rest.
Not if our leaders would have a frank non-pc non-political chat with the nation explaining the horrible state of our finances and what realistically needs to be done. I find that most people in the general public I speak to have no real idea what the bulk of our spending is going to and what is coming. I trust the American people to be willing to make the necessary sacrifices if they are given ALL the information they need. Then I would also expect many of our politicians to be fired and/or brought up on corruption and fraud charges. I.O.U.S.A should be mandatory viewing for all Americans.Comment is buried, click here to see the rest.
Would they not deem it more important that the super rich have some monies taken from them rather than people dying because they couldn't find a job though?
It wouldn't do anything. The number bare this out. You can can take ALL the rich's money and not make a dent in our fiscal problems. Only the envious and the ignorant actually believe taxing the rich would solve our problem. Taxes on EVERYONE need to go up along with a cross the board spending cuts in government.
Why cut SS? It's MAKING money and has been for over 60 years. Sure, in the next 20 years its going to fall short, but after that, it's a cash cow again. But those 20 years should be paid for from the trust fund anyway. Send all those baby boomers the IOUs there, I'm sure they'll understand that the actual money was used for tax cuts for the rich and military expenses.
Medicare / Medicaid, it expanded too much with unfunded programs. Either fund the programs (through correct tax rates) or cancel / reduce the expansions.
Military, we can't be the police of the world anymore without the GOVERNMENT getting paid. Problem with the military is, we go in, invade a country (i.e. socialize the costs), then hand over the redevelopment to big business (i.e. privatize the gains). That s**t needs to stop. How to stop it? How about a 30 - 50% corporate tax on rebuilding programs.
Different professions should pay different taxes. People who manipulate stocks to make their millions should be taxed extremely high considering they're literally contributing nothing to society. They're not putting a product on the market. They're not creating jobs. Therefore they need to be taxed higher so they are no longer what's killing this economy.
standing on the train tracks ones has at least the option of getting off it,.. not too many options left and fewer all the time,.. the thing that blows my mind is how everybody seems to see it but those in power, if those in power and wealth want to stay that way, they need to stop and go the other direction their constant grinding into the ground of the common man will lead to no option but revolt for him. ignore peacful protests you FORCE violent ones, people are not going to lay down and starve to death peacefully , the jones town aproach will not work i say , as we have no shared faith in the elites ideals and plans any longer.
I was intrigued by the title, and I don't even deny that there may be scenarios where it's true, but this article just meandered around with no clear logic or facts to back some very radical predictions. It would cite one fairly common statistic and then use that as the basis to make a wild claim. I wish it had been better written, it might have been really interesting, but this was editorializing at its worst.
Why don't we go after the poor who leech off the system? I am not talking about people who can't take care of themselves. I am referring to people who are fully capable of contributing to society (i.e. working) but choose not live off the hard work of other instead. I realize there are some rich people who didn't earn their keep but most worked very hard to get where they are today.Comment is buried, click here to see the rest.
I always get a kick out of the collectivists threatening revolution because they dont feel they're getting enough of other peoples money or don't have enough ways to violate another persons property rights. While i'm not a fan of corporations or the collectivists, i'm amused to think of the people who most oppose firearm ownership threatening revolution against people who actually have firearms. I might not be super rich, but you can start the revolution at my house first, i could use the target practice and the world could do better with less people absorbed with greed for other people money and propertyComment is buried, click here to see the rest.
I like idea of taxing ciggies like they do. Gambling, legal hookers, drinks, porn movies, marijuana, cars over 50k,boats for fishing, sport hunting,...all those luxuries should also have a sky-high tax.
Here is what we should do- We should all work and give the government all our money and then they who are so wise can redistribute the wealth in an appropriate manner. The government would definitely look out for our best interest! Then it would be great, we would have no rich or poor just everyone equal?(Socialism) We all see how well the government handles our money we give them already so we should give them more! Heaven forbid in this free nation of ours people who have gone out and work their butts off to make a lot of money should not get the benefits from their hard work, the people who are to lazy to get off their butts should get paid also.Comment is buried, click here to see the rest.
If you invented some game say, and had 10 players, and for whatever reason, one of the players was able to gobble up 99% of the points in the game, and thus get ALL the cool s**t.. the 9 other people sharing the 1% would say 'f**k this', they would simply take the points back and change the rules of the game. Essentially the game is broken.
Yes. The best player should have the highest percentage of the points, and thus the cool s**t, or there would be no point applying any effort to win. But essentially the slope down to the bottom needs to be as gradual as possible, rather than a f**king vertical plunge.
This guy makes it sound like the rich don't pay any taxes at all. The fact is that the top 5% pay over 60% of the taxes, the top 1% themselves pay 40% of the tax burden for the entire nation. Sure, maybe the rich need to pay more, but to say that they don't pay taxes is a drastic understatementComment is buried, click here to see the rest.
Regardless, the only thing that reflects is the fact that the rich have gobbled up such a large degree of the wealth that was created by working men and women in America, so it doesn't matter if what they pay is proportional. What is important is to level the playing field to allow workers to retain more the wealth they create, and to have real opportunities for economic mobility.
I agree with you that the income gap is greater than ever, but our tax system doesn't tax wealth (unless you count the estate tax). Our system taxes the ability to become wealthy (income). So are you suggesting a quasi-redistribution of wealth?
No. I am advocating changing the system so that the wealth that is *created* by working men and women stays with the workers who create it. Without labor (people who build and maintain things), there is no wealth, and current dog-eat-dog style of capitalism we allow to exist redistributed that wealth from the workers to the rich (at ever increasing amounts).
I think income taxes on the rich need to be higher. I think estates must be taxed at higher levels (anything over $1mil), and tax evaders (whether offshore or just working the system) should pay SEVERE fines (say 10x what they owe when they are caught). I know the T-word has become a dirty word in American politics, but countries with a strongly progressive tax code simply have better functioning societies.
Absolutely. The only advantage of such a code is to advantage the rich (who can afford the team of lawyers and accountants I would take to work the system).
The complexity of the tax code is to taxes, as poll taxes are to voting - a dirty trick to screw the poor.
I have done quite a few thought experiments and analysis on the nature of economics, and I have concluded that there are two factors that determines the quality of life in a country (or any system)
1) The amount of money entering or leaving a country - If a lot of wealth is exiting a country, the quality of life will decline. If a lot of wealth starts to enter a country the overall quality of life will typically improve. Ideally, a system should be able to sustain itself as long as it is either closed, or has no net loss of wealth.
2) The evenness and speed of the "flow" of money throughout the system: This one is a little more complicated, but its arguably the most important factor. In short, the worst thing that could happen is when you have a good portion of the nations wealth within the grasp of a few people who do nothing other than sit on it.
Expanding on #2, the best thing you could have is a (relatively) even distribution of wealth that is moving freely and quickly. The faster that money changes hands, and returns to the consumer, represents a cycle. The faster the cycles, the more production takes place. The more production and consumption that takes place, the more material wealth a country will hold.
I'm by no means anti-rich, and I don't want to come off as a communist or socialist. Capitalism can work just fine, it just needs to be controlled. The problem is that once large portions of money become stagnant, the effect is similar to deflation without a lowering in the cost of goods. Essentially, no one else has any money, and consumable goods stay the same price. I believe this is what is happening now. A large portion of US citizens have negative wealth (more debt than assets), while a small percentage of Americans have more money then they know what to do with. This represents a very inefficient system. If that stagnant wealth was being used (and contained in the US), we'd have a much healthier system .
Due to an inefficient govt, and factor #1 (the country experiencing a net loss trade deficit and movement of our wealth overseas), we could be entering an irreversible situation where we have most of our wealth siphoned out of the country. Much of it will end up in the developing countries, or maybe even some European countries that capitalize on it..
I have a bunch of potential solutions, but basically what we need is to get that stagnant wealth moving and at least partially distributed back to the majority. It is the only solution to this problem.
We need more tax brackets for the rich. For instance:
$$250k-1 million = 40%
$1m-10 m = 50%
$10-50m = 60%
$50-100m = 70%
$100-500m = 80%
>$500million = 90%
[possibly also >$1 billion = 100%]
It's a bit silly to have an upper middle class/lower upper class person with an income of $250,000 per year paying the same tax rate as the Kochs.
That seems silly, but I completely agree. There is really nothing an individual can buy with a billion dollars, that he can't get for 995,000. The differences are all on paper at that point, not in reality.
Of course, there are billion dollar items out there... but I don't want the Koch brothers owning an aircraft carrier. If it costs more than a billion, a government needs to buy it, not an individual.
Taxes are a convenient excuse for ignoring the problem of addressing costs. Politicians spend other people's money, and they are by consequence not going to value it to the same degree. Frugality? Forget about it.
Well meaning thieves are still thieves. The moral hazard promoted through theft is a recurrence of scarcity.
What we are all gonna rise up and rob the rich because there is a lot of us and few of them.
When did we turn into a nation of thieves and thugs?
They played by the rules, now the all the people that are too dumb or lazy to make their own money want to rob the rich. Screw that, we all make our own destiny.
Got news for ya, class warfare has been getting waged since Reagan and the conservatives took over the government. There is nothing that demonstrates this better than what the conservatives are doing today by asking working folks to sacrifice their pensions and health care at the VERY SAME TIME as they are slashing taxes for the rich and corporations.
Asking government employees to pay part of their health care and retirement like everyone else in the world, is a bad thing?
I don't think that they are slashing taxes. Obama signed the extension to the Bush tax cuts as a way to get the economy going and build the base so that people can find jobs, but then he heaped on a bunch more tax cuts as he was trying to out cut the Republicans.
The top 5% pay 60% of the taxes that are collected, but they don't use any of the services like unemployment, medicade, etc. How much do you want them to pay. Shouldn't eveyone share in the burden of paying for government?Comment is buried, click here to see the rest.
I'm not a public employee, but i know a few. Where did you get this fantasy that they don't pay for healthcare or retirement? Have you ever looked at their paychecks? Just like yours, it lists very clearly: Total earned - minus income tax - minus state tax - minus retirement (usually not social security) - minus health insurance.
There are so many lies out there, and you are just parroting them. THINK FOR YOUR SELF!
I am not sure what government agency your friend works for or if it is state, local or federal or if you have actually looked at a pay stub of an government employee. But, yes actually most don't have to pay for health care or retirement.
RN. And, yes I have looked. She showed me when all this blew up in her face after 15 years of thankless, overtime with no pay, getting bitten by delirious people, getting bled on and vomited on, having sleepless nights after needle sticks wondering if she just contracted something horrible...
Yeah, she works harder than me, and I work my ass off. I promise you she works harder than you, and ten times harder than any republican politician.
I won't call you a liar, but I will say you are SADLY misinformed and should shut the hell up before you offend any further. Public employees pay for health care AND retirement. It's not always social security, it might be a state level retirement, but no matter how you slice it, it's not free or even any cheaper that what the rest of us pay.
You still did not say if she is a local, state or federal employees, some states differ. Many provide full medical and retirement benefits after only 20 years of service.
My brother retired from the federal government with full medical and retirement benefits, without paying a cent.
You don't know me well enough to suggest that she works harder than me. I am no stranger to 100 hour work weeks and doubt that as a nurse she has seen many of those.
You accuse me of perpetrating lies, when you provide no evidence of such.
Not that it really matters, but State. Ohio, specifically. And I recommend you look at your brothers paychecks. He may not have written a check, but I promise you, just like the rest of us, retirement and medical were both withdrawn. Part of the 'net' vs 'take home' pay.
And yes, there are many different systems, with a whole kaleidoscope of different benefits, co pays and services. (note: if you are on a bad one, and you get hurt, you still get medical treatment. It's illegal to turn you away from the ER. Free Market fail.) But all these systems have one thing in common: None of them are free.
BTW: just for the record, perpetuating lies, and calling you a liar are too different things. As for your 100 hour weeks, you don't know me or her well enough to say otherwise. The point is the 'lazy, overpaid, under worked' government employee doesn't exist. Or at least doesn't exist to any greater degree that in other industries and can be expected. If you want to police the system better, then I would say that's great... But that ain't gonna be free either.
Long story short, pay your taxes, accept the benefits of a powerful government... and be quiet.
Yes I looked at my brother's paycheck and my dad's, both fed employees, neither had deductions for medical care or retirement. That is the fact.
Both of them know a lot of 'lazy' government employees. I just did a big project with a local government, I met and saw a ton of very 'lazy' government employees. If you think government employees are highly motivated and hard working, I would suggest going to your local government bureaucracy and take a look around. I cannot imaging how you would continue to think so.
Your comment "Long story short, pay your taxes, accept the benefits of a powerful government... and be quiet." is almost too outrageous to deal with. I will not accept a powerful government, I don't want that and it is a democracy so I definitely do not need to be quiet.
Well, you say what you want, but your lazy brother and lazy father both had healthcare and retirement figured into the benefit package some how, and I promise you it wasn't 'free.' It was on the books somewhere and since they were public employees it will be easy to find. In fact, if you post their names, I and anyone on earth can find it.
Your data is anecdotal, and you wouldn't accept that from me, so I won't accept it from you. Name the lazy employees and tell me how to confirm it.
You do need to shut up. You are contributing to the general 'stupid' of your party, and frankly, I think you are a little smarter than the average. It's unseemly.
My Dad was in all of WWII, both Europe and Asia. He was in all of Korea and all of Viet Nam. Maybe lazy, but I doubt it. He retired at the last moment he could, was highly decorated and saved many lives.
My brother was special forces for 25 years. The years of Grenada, Noriega, North Africa and more. Maybe lazy. He would gladly lay down his life for you.
I appreciate your appreciation for them risking their lives for your safety.
Thanks for telling me to 'shut up', I guess that means you don't like the reality I am giving you.
The bottom 50% pay plenty of taxes on goods and services. The problem is the economic system we have in place keeps them so poor that they really don't have any excess income to pay more in income tax. If we level the playing field (say a $10.hr minimum wage, etc.), then perhaps we could start to enforce a minimal income tax rate for everyone.
Of course, a $10/hour minimum wage would effectively shut down a number of small businesses who can't afford that, creating an overnight surge in unemployment. But that won't hurt the economy much.Comment is buried, click here to see the rest.
Make small businesses exempt, but only for *real small business (those with less than 20 employees, not those 500 worker "small" businesses).Comment is buried, click here to see the rest.
Economies of scale would yield the same results for the 500 employee businesses as the 20 employee business. First hit would be all those businesses with 25 to 30 employees, which would lay off by necessity to get within the imposed limit.
On a principal level, minimum wage is more than just a "we have to pay you at least this much" law. It's a "we legally don't have to pay you any more than this" law.Comment is buried, click here to see the rest.
Actually, it won't. As far as the overall economy is concerned, there is almost no difference between unemployed and underpaid. Both are populations that are not contributing to the demand.
I have to disagree do some extent, novenator. We have a lot of small businesses that are just parasitic on the system. Let them fail. We need quality goods, not just anything that can be banged out for cheap. I realize that will make an unemployment surge, but that can't be helped and it will still improve the over all economy which, in the long run, will create more and better paying jobs.
I'm for a hard and fast minimum wage with no exceptions.
Not sure how Reagan started class warfare. He inherited, from Carter, a stagnant economy with high inflation, low growth, high unemployment and very interest rates. Rich people did ok in this period, poor people and fixed income types get killed by inflation.
Reagan fixed all of these issues, but did not do anything to cause 'class warfare' as far as I can remember.
Clinton signed the welfare reform act that cut out a lot of welfare programs.
He specifically 'solved' these problems by lowering the wages of the lower middle class and poor, so that he might give equally low paying jobs to other members of the poor. The net total of cash in that class went down, not up. In total, the demand went down and the economy, which you rightly label as stagnant when he inherited it, went into a free fall. By 87, you simply couldn't get a job for over 8 bucks an hour. I know, that was the year I graduated top of my class with a good degree in a useful and up and coming field. I waited tables, cooked chicken. Started a cleaning company, believe it or not. Didn't actually get a job in my field until 89. Still low pay. Things are better now, I made a lot of money in the Clinton boom and managed to keep it during the Bush recession.
But when people tell me about how Reagan 'saved' us, I have to laugh. Reagan completely destroyed the job market and the economy tanked. I don't know how these fantasies get started, a lot of us are old enough to remember it first hand, even if you aren't, you can get all that data online. Look for yourself and the jobs numbers and the wages for all the years in question. Pay was decent though the early 70's, started to fall in the later part of that decade, the completely tanked under Reagan.
Please, I insist you not take my word for it. Look it up yourself.
How did Reagan lower the wages of lower class and poor. If anything, by stopping inflation, he increased real wages.
Please cite some statistics, you make a lot of claims that are not founded in facts. I look at a lot of financial statistics and have never seen anything like you suggest. You might be projecting your individual situation onto the economy as a whole, but that is intellectually deficient.
Reagan presided over the biggest and longest growth period in US history. That is growth in jobs, tax revenue. Difficult to understand how jobs could grow that fast and income drop at the same time. In fact, family income in this period grew substantially and was higher in real terms than any other period.
This is clearly not 'neutral' (by that I mean, it draws the only sensible conclusion from the facts given - and being simply correct is no longer 'fair and balanced' unless you put an equal about of bogus analysis in it), but it does lay out the data pretty clearly. Just ignore the analysis and cut right to the data: http://www.huppi.com/kangaroo/4Inequality.htm
Reagan did NOT preside over the biggest and longest growth period in history. That would be the FDR/Truman/Ike era (note: a mixture of democrats and republicans - but they were SERIOUS about their nation and put reality before politics). As you point out, a much shorter but HUGELY greater success was presided over by Clinton. As the evidence shows, at the end of the Reagan era, wages were down, unemployment was also down, the rich were quickly evolving into the super rich and the world economy was great, but the US buying power was way down and the consumer class of America was basically on a respirator. If Reagan was president of the world, he would have been a great one, but as a president of the US, we were much worse off when Bush took office than Reagan. Those are just the facts.
Oh, and your are right about Clinton. He did welfare reform and deregulated the industry that caused our current collapse. Of course, if we had had an adult in the Whitehorse when this all started slipping it could have been corrected, but we had Bush, so we are in the middle of a collapse.
BTW: I avoid MSNBC even more strictly than I avoid Fox.
A revolution? From stupid, lazy, coward usians? LOL. For all your gun rights, the moment you will be ordered to surrender them and march off to slavery, you will do it with meek acceptance. Give up your ill-gained sovereignty NOW and spare the world further embarassment.Comment is buried, click here to see the rest.
And, I will not give up my guns. They did that in Nazi Germany, Venezuala, Cuba, Iran, pretty much all of the socialist countries that went on to kill its own citizens.Comment is buried, click here to see the rest.
Yes. NAZI is Nationalist Socialist Party. It was characterized by a large social safety net, government control of industries and the thuggish state that always follows socialist societies.
"Fascist nationalism is reactionary in that it entails implacable hostility to socialism and feminism"
"Marxists argue that fascism represents the last attempt of a ruling class (specifically, the capitalist bourgeoisie) to preserve its grip on power in the face of an imminent proletarian revolution. "
" Fascists are fervently against: Marxism, Socialism, Anarchism, Communism, Environmentalism; etc – in essence, they are against the progressive left in total, including moderate lefts (social democrats, etc). Fascism is an extreme right wing ideology, though it can be opportunistic."
There is no way the government, that the super rich own, are going to allow taxing of the super rich. The rest of us schmucks, on the other hand.....were not so lucky.
We're not at the flash point yet ... but there will be one of three triggering factors that might ignite an American revolution, and I don't know which will hit us first or whether all three will come crashing down together like a pack of wolves biting from all directions ...
1: Peak Oil, when energy costs rise to the point where Americans can no longer enjoy their current lifestyles ...
2: Water Shortage, when the ice pack in the Rockies glaciers melts and the Ogallala Aquifer runs dry, thirst will fuel a revolution ...
3: Economic Crash, you can't fix a credit crunch by adding more credit and as our debt will soon exceed our GDP, our debt will soon become insurmountable ...
-
Properly taxing the richest 2% in an attempt to fix our third problem might leave us with enough capital to fund a few public works projects, such as heavily investing in alternative energies (wind, solar, nuclear) and building a few thousand desalination plants ...
Please. The reason they're super rich is because they have something everyone needs or have something everyone wants. The American people are not writing checks to rich people for no reason.Comment is buried, click here to see the rest.
How about the hedge fund manager, who makes millions upon millions, and only pays 15%, because they declare it as capital gains?
While you pay a higher rate and only make a small fraction of what they make.
How exactly do you propose to tax those that hold their wealth in assets? You can't tax someone on net worth - that would bankrupt the majority of America within a year.
What you can't do:
1) Tax people who don't have tangible income (super rich tend to fall here)
2) Tax investments / capital gains too much - investment/return is the basis of our economy
3) Tax the middle class - Don't you think they eat enough of the burden already?
4) Tax the poor - they don't have any money to tax
Whats this leave us with?
1) Luxury Taxes (If you can afford an M3, you can afford to pay another 20% on that M3)
2) Import taxes (when combined with lowered business taxes, brings jobs here)
3) Reduced spending
I'm going to need to take 20% of your net worth. Please tally up your life savings so I can take it. Sucks your unemployed. I'll need your house. Thanks.
This is something I have been saying for decades now. Why anyone would need billions and hundred of millions of dollars is beyond me and beyond avarice. Whether this happens is anybody's guess. I bet it doesn't though, the governments of the world are too much in love with money and those who have it to care about the rest of us.
I agree with the concepts from the article and statements by user hpmnick. However, it is important to note a strategy that is made by the US government and the large corporations: offer plenty (as excess really) of cheap and empty happiness.
Americans have so much cheap and low nutritional food that fills stomachs but leaves the body unhealthy. Americans have hundreds of television stations, movies, video games, etc. that fill their lives with entertainment where in reality most of their lives are relatively boring and lack purpose.
These two main factors leave the majority of citizens ignorantly content to work and live under the circumstances set forth by the government and the controlling media/businesses. Why protest when your life is "good" and you are "free".
Contrast this with countries in some third world countries where they have little and nothing to lose. When your government is killing people already, there is not much more fear involved with protesting and risking one's life to gain a better one at the cost of potentially getting killed in the process.
Americans feel in general like protesting or revolting provides no results and a possibility of a life worse than the one they already have. What is worse, a poor life or a poor life in jail?
This article seems to suggest that a revolution is inevitable unless Americans want the country to dissolve into a foreignly owned entity (likely Chinese, I'd say). The powers at hand would start WWIII before they would allow that to happen. Then suddenly the world should be concerned, because that will lead to its ultimate devastation.
My question is, when will the average American see this? Or rather, what would be the straw on the camel's back that will put that person out in the streets, protesting/revolting?
Great comment. I think it's dangerously close right now, and the hundreds of thousands on the streets in all 50 states (especially the Great Lakes states with new Republican political majorities) demonstrate how close folks are to just rising up and refusing to cooperate.
Alice215Mar 29, 2011
must be a leftover writer from Before Murdoch WSJ
charlotte_webMar 30, 2011
While the WSJ editorial board is fairly conservative, they have always opened up their opinion pages to differing points of view.
eraptorMar 30, 2011
Your statement regarding the WSJ was largely true pre-Murdoch, but he has loaded the editorial board with political ideologues ever since he bought it contrary to promises he made to the Bancroft family when he was negotiating the purchase. They should have known better than to trust that weasel given his record in media.
As a tragic consequence of that sale, the Wall Street Journal no longer holds the journalistic credibility it once staunchly maintained and Rupert has, once again, proven himself to be a detriment to American society. The U.S. made a monumental mistake when it granted him citizenship.
charlotte_webMar 30, 2011
Very nice, except that the article linked above contradicted your statement before you even posted it.
eraptorMar 30, 2011
If you consider this single article in comparison to the ongoing deluge of conservative-leaning politi-babble routinely espoused on WSJ's opinion page a contradiction, go ahead.
We all recognize a token gesture to defuse well-founded criticism when we see it. The same goes for the Koch Brother's recent PR effort to paint themselves as "victims".
Closed AccountMar 31, 2011
Wow...so..only people whose views you agree with should be granted citizenship.
And somehow you think that makes you look good?
eraptorMar 31, 2011
Wrong. Rupert is in a class all by himself. His determination to undermine our Democracy puts him in that position.
Can you name any other person who has done more to undermine truth, objectivity and journalistic integrity in the U.S. (or anywhere else in the world)? I can't.
Welcome to the party, Koch whore...
Closed AccountMar 31, 2011
dude...quit while you're behind.
eraptorMar 31, 2011
What's wrong? Afraid to let people know your true Digg identity? Not only are you a Koch Whore, but you're also hiding your Digg Patriot disgrace with a sad sock puppet.
Regardless of the Digg name you hide behind, we can ALWAYS see your inner ugliness and shame. Enjoy that glass house...
hpmnickMar 30, 2011
I have done quite a few thought experiments and analysis on the nature of economics, and I have concluded that there are two factors that determines the quality of life in a country (or any system)
1) The amount of money entering or leaving a country - If a lot of wealth is exiting a country, the quality of life will decline. If a lot of wealth starts to enter a country the overall quality of life will typically improve. Ideally, a system should be able to sustain itself as long as it is either closed, or has no net loss of wealth.
2) The evenness and speed of the "flow" of money throughout the system: This one is a little more complicated, but its arguably the most important factor. In short, the worst thing that could happen is when you have a good portion of the nations wealth within the grasp of a few people who do nothing other than sit on it.
Expanding on #2, the best thing you could have is a (relatively) even distribution of wealth that is moving freely and quickly. The faster that money changes hands, and returns back to a consumer, represents a cycle. The faster the cycles, the more production takes place. The more production and consumption that takes place, the more material wealth a country will hold.
I'm by no means anti-rich, and I don't want to come off as a communist or socialist. Capitalism can work just fine, it just needs to be controlled. The problem is that once large portions of money become stagnant, the effect is similar to deflation without a lowering in the cost of goods. Essentially, no one else has any money, and consumable goods stay the same price. I believe this is what is happening now. A large portion of US citizens have negative wealth (more debt than assets), while a small percentage of Americans have more money then they know what to do with. This represents a very inefficient system. If that stagnant wealth was being used (and contained in the US), we'd have a much healthier system .
Due to an inefficient govt, and factor #1 (the country experiencing a net loss trade deficit and movement of our wealth overseas), we could be entering an irreversible situation where we have most of our wealth siphoned out of the country. Much of it will end up in the developing countries, or maybe even some European countries that capitalize on it..
I have a bunch of potential solutions, but basically what we need is to get that stagnant wealth moving and at least partially distributed back to the majority. It is the only solution to this problem.
diggduggjoeMar 30, 2011
The best way to control capitalism is not to try. However, the government must be very limited with NO favors to give. Only then can you have competition. Every big business once they "made it" will use their money to convince government to make it too hard for competitors to enter the market, bail them out preventing the natural death cycle of stupid companies and give them subsidies, directly or as lucrative contracts.
Government is at the center of most of our problems. Who got us in Iraq AND Libya? Government did. Who gave us the Fed and the huge financial crisis? Government did.
People feel regulation would have prevented the recession, but the market takes care of that, if there is ZERO chance of a bail out in the future. When companies know they must have real profits or die, they will behave better. Wall Street has been trained for years that no matter how convoluted or stupid a scheme is Uncle Sam will come running to their rescue when the s**t hits the fan.
It is time for NO WARS, NO BAILOUTS and NO NANNY STATE. Freedom awaits!
hpmnickMar 30, 2011
I'm not advocating big govt. Uncontrolled capitalism, however, can eventually lead to a lot of undesirable conditions. The monopoly laws we have are due to some of these problems.
Basically, there can be a lot of unfavorable scenarios in a capitalist system. We are starting to reach one of them, and as the author of the article pointed out - we were there once already. All of the wealth is controlled by a few small groups of individuals/corporations. Pure capitalism would suggest that this would eventually "iron itself out". That is not true. In fact, having a mass of wealth and power can make it easier to maintain a control on that wealth and power. Monopolistic corporations were proof of that.
diggduggjoeMar 30, 2011
"In fact, having a mass of wealth and power can make it easier to maintain a control on that wealth and power. Monopolistic corporations were proof of that."
How do they use that power and money? They buy representation to get the laws they want. I want you understand about a true natural monopoly.
I have one for you, Alcoa. For some time they were the company to go to for aluminum. They did not do so with special deals with government. They improved the product they made to the point that the prices they offered were too low to have competition enter the field. These were not predatory prices, just the benefit of their size. They knew better than to over charge or they would invite competition. Was the nation damaged? No. We all received inexpensive aluminum for our needs. In fact, they kept innovating.
Most of the monopolies you refer to are not natural monopolies. They have much legislation on the books keeping their competition down. Some were even sanctioned by government to become utilities.
For most monopolies the most important ingredient to their "success" is the existence of government.
hpmnickMar 30, 2011
I do not disagree with you here.. Its just that what I'm focusing on is more of an economic model than a political one.
Its true that without any laws or any govt, you'd essentially have unrestricted capitalism. I cannot stress that this in itself is a horrible economic model. We'd be without all those laws that protect the average citizen, and large wealthy corporations would still easily trample over us. The money buys them power, even without a federal govt to buy out.
The problem you are illustrating is that the govt has passed a lot of legislation that works IN FAVOR of the large multi-national conglomerates. I agree, this is another huge problem, but very strictly against the notions of controlled capitalism, socialism or any other economic model.
What you are describing is sort of akin to facism (in the economic sense). The problem isn't that the govt is interfering as so much as its an issue of the govt picking the wrong side (the corporate side).
I would argue that these are strictly political problems - our govt is obviously very corrupt. Taking the govt out of the equation won't solve any of the underlying problems, but it might ease conditions if we were in an overly facist environment. There would likely be a change of power, but the "natural monopolies" would quickly rise and we'd be in the same position.
ericschc1Mar 31, 2011
"The problem isn't that the govt is interfering as so much as its an issue of the govt picking the wrong side (the corporate side)."
@hpmnick: Truer words haven't been spoken on the matter.
diggduggjoeApr 1, 2011
The problem is every government goes down that path. It ALWAYS happens due to the money buying influence.
How does a rich person hold power over you? Can his bank account force you to buy his company's goods or services? I do not think so. When he screws over his competition, not through the free market, but by manipulating government, then his money has power. Without government protection companies will boom and bust by their own actions and the actions of their competition.
No government is bad for we lose our courts and we end up with gangland settlement of disputes. That is both bloody and destructive to long lasting prosperity. Even contract law is important to the economy for nothing of consequence can be created without binding commitments.
We need just enough government to allow us to build the future, but not so much government that it tells us what that future must be.
roguegeniusMar 30, 2011
You know what. At this point, I AM advocating 'big gov't.' I'm sick of the all this failure. When your house is on fire, you grab a hose and start spraying! You do not stand and watch saying: "I'm philosophically opposed to using water."
The world is not a thought experiment. People die. I want MORE action from everyone, not less.
hpmnickMar 30, 2011
That is indeed one possible solution. It does depend on what you mean by "big govt" though. Big government can be a hindrance if the spending is not directed to the right areas.
If the money collected by the government leads to more jobs at a normal living wage salary, then this would definitely help. The ideal situation would be if the government used the funds to supply services that:
1) Lowered the cost of a necessary expense (medical care, energy, food, etc)
2) Offered the services at a more affordable price
3) Displace a service that may be frequently outsourced.
kwanijmlMar 30, 2011
I know, huh? It's not like there could possibly be any other way to have fire protection than to have government do it. . . right? I mean, society can't possibly produce the technology and know-how to have well trained and equipped fire departments without the sacred mandate of city hall. It just isn't feasible for there to be a fire-house protecting neighborhoods, paid for by a voluntary fee, such as an H.O.A. or any other means of voluntarily funding. And certainly a free market would fail us because then nobody would buy fire protection until it's too late. . . I mean, it's not like your homeowner's insurance would skyrocket to the point that you couldn't even afford a home if you didn't purchase fire protection. Yup - free market fail. Also, monopolies are good, we can't have fire departments competing for your business. . .we need to maintain order and uphold the government monopoly on such important services. . . because monopolies always produce the best quality and cheapest services. Besides, private entities are greedy, whereas the government is not. . . so private fire departments would watch your house burn down if you hadn't paid them and it would spread to other homes because of one greedy person not paying the fire-department. . . .the government would never let this happen:
http://www.wpsdlocal6.com/news/local/Firefighters-watch-as-home-burns-to-the-ground-104052668.html
Get a clue. You currently have a big government and you are "sick of all this failure" and yet people like you can't put 2 and 2 together and see that it is the root cause of "all this failure". You don't need a government to redistribute wealth, and you certainly don't need a government to provide services like fire, ambulance and police. . . . you need society for that. Society based on voluntary actions and not coerced actions backed up by a large police state will be much more peaceful and prosperous.
On the other hand, if you disagree, please explain how you think a society based on coercion (even if we're just soaking the super-rich) will somehow beget peace.
ericschc1Mar 31, 2011
I think what's important to note, is that "small" government for a nation of 308 million plus doesn't even sound realistically effective to actually accomplish anything of benefit. They're still required to do some stuff in the public's interest (besides wars), right?
roguegeniusMar 31, 2011
Ok Kwanijml, I'm open minded. Give me a working business model for each of the following:
- Fire departments (you've already demonstrated that voluntary fee doesn't work - though I think you were trying to say it did)
- Police protection.
- Military protection (We'll ignore the fact the Black water and it's ilk are expressly unconstitutional. You just give me are working business model where the free market will protect our borders and how they make money without government contracts.)
- The road and highway system (Note that the railroads, when built, were wholly private. Got a spar leading directly to your house?)
The myth that the mystical free market solves all problems is the stupid and that myth that a soviet government solves all problems. Smart people can see that both are needed and you only have problems when one or the other takes over.Comment is buried, click here to see the rest.
njdoo7Mar 31, 2011
"Ok Kwanijml, I'm open minded. Give me a working business model for each of the following:"
How about this:
"I'm open minded, but not enough to think for myself."
Think about thinking for yourself?
If YOU were to sell fire protection, police protection, road/highway system... how would you do it?
I'll give a little context to assist you anyways:
- Cell phone companies are privately owned, you can go anywhere in the world and use them..even if a different company owns the line...GO FIGURE!?
- A non-territorial model would be suitable for all these issues. You buy the service you want. If you don't want it, you shouldn't be forced to buy it. This would be like all other non-government/monopolized services.
Some resources if you actually have enough of an open-mind to research the solutions we advocate:
- Introduction to Stateless society:
http://pixel420.com/pixel420/stateless/
-One historic example of non-territorial governance, the icelandic free state
http://www.lewrockwell.com/orig3/long1.html
- Ideas for modern solutions: http://www.youtube.com/watch?v=U3ULmwn0YUc (parts 1 and 2 cover historic examples of voluntary societies: icelandic free state, merchant law, ireland)
- Google "Dispute Resolution Organizations"
- Freedomain Radio:
http://www.freedomainradio.com/
You do not need coercive monopolies to solve these issues. Humans, like animals, have an innate desire to cooperate with one another for their own well being. This desire is why most people submit to the state. However, they don't realize the inherent flaws to this method of problem solving. Voluntary interaction is all that is necessary to foster this desire for cooperation.
roguegeniusApr 1, 2011
"- Cell phone companies are privately owned, you can go anywhere in the world and use them..even if a different company owns the line...GO FIGURE!?"
You don't travel much, do you?
"- A non-territorial model would be suitable for all these issues. You buy the service you want. If you don't want it, you shouldn't be forced to buy it. This would be like all other non-government/monopolized services."
Ok. I know you don't travel, or watch PBS because it's 'pinko', but a little historical perspective. A fire broke out in Rome and gutted about a third of the city. About 1200 years later, much the same thing happened in London. In the lifetime of our nation, it happened in Chicago. THAT is why we have fire protection. Nobody give a s**t if your couch and refrigerator on the front porch burn. If I'm your neighbor, I want that fire the f**k out before it jumps to my house. So how would I see what we actually need? I don't know, maybe I'd block out the area we want to protect then charge everyone who lives there. Oh wait… THAT'S WHAT WE ALREADY DO!
No. I'm not 'open minded' enough to click on a lewrockwell link. If I want to be lied to, I'd just attend the republican convention.
As for voluntary action being enough to foster desire cooperation for an entire nation of 310 odd million… Dude, seriously, I have a bridge over the east river to sell you.Comment is buried, click here to see the rest.
eraptorMar 30, 2011
@diggduggjoe,
There's a few problems with the scenario you're painting and ideology to which you cling.
First, the government didn't collapse our economy, the private sector earned that dishonor. Furthermore, the absence of regulations made it possible.
Second, we saw several institutions go belly up or be forced into an acquisition as a result of their activities (e.g., Bear Stearns, Lehman Brothers, Merrill Lynch, Wachovia, etc.). Yet, the remaining institutions persist (and even invest millions) in fighting efforts to curtail the behavior which culminated in an erosion of our economy. The ONLY social entity capable of preventing similar self-destructive private sector behavior IS the government. No other entity exists to fill the role of market referee, therefore there's nothing to prevent it and self-regulation has NEVER worked. Your view is PURE free market theory. By the way, they call it a THEORY because it has never worked.
Third, the role of the government is to stabilize the market since an unstable market benefits NO ONE, certainly not our society. If this has been lost on you, discuss it with anyone you know who is unemployed or underemployed.
Fourth, regulation and regulatory enforcement WOULD have prevented the collapse if the Republican party had not gutted them with deregulation disguised as "modernization". Simply put, the financial instruments (mortgage backed securities, credit default swaps) and business practices (expanded leveraging capabilities) most responsible for the economic collapse were once outlawed.
Finally, while I agree with some of your sentiment (i.e., ending bailouts, corporate welfare and misguided wars), I don't hold the same view that government is the problem. Instead, I consider political corruption and key players in the private sector to be the source of our problems. I mention "key players" only because there are some in the business community who are not irresponsible. Corporations spend millions on lobbying for the wrong reason...to undermine the national interest and our collective economic well-being.
miklkitMar 30, 2011
Very well said.
angrycat70Mar 30, 2011
the government directed banks to make loans to minorities that could not pay and still you blame capitalism.
YachtRokrMar 30, 2011
While the government encouraged home ownership, they didn't force the industry into making irresponsible loans. The banking industry made that decision on their own. As proof, consider that loan underwriting standards and approvals are determined by banks, not the government.
As a former mortgage banker, I can assure you that my employer set the loan guidelines by which I granted mortgages, not the federal government.
I don't blame capitalism for those bad loans, I blame bankers who were blinded by irresponsible greed and who thought loan securitization would eliminate their business risks. They were playing a game of musical chairs with our economy thinking nothing bad would happen to them. They didn't care what happened to the economy or anyone else.
roguegeniusMar 30, 2011
It's the minorities fault. Got it.
Auto digg down for racism and stupidity.
Besides, who are we kidding. All those bad housing loans the unregulated industry gave that are at fault for all this... you think is was blacks that received them? Got to one of those 'macmansion' housing developments and just try to find a non-white face. That was low class whites trying to live like high class ones.
If you must blame the victim, at least blame the right victims.
publiclurkerMar 30, 2011
You can always count on the bigots to crawl out of the woodwork and blame everything they can on them "funy lukin minorities".
angrycat70Mar 31, 2011
During the Clinton administration, Janet Reno read the banking committee the riot act- who told banking executives either make more minority loans or face a justice department inquiry.
The banks did give s**tloads of loans to unqualified minorities (and white trash too) and of course, they got massively screwed. It's not racist. It's f**king HISTORY.
If you don't like it, I suggest you gather the facts, sit on them and spin. The race card gets no f**king traction with me. Don't even bother throwing it on the table.
Save it for somebody who actually gives a s**t about appearing to be politically correct.Comment is buried, click here to see the rest.
eraptorMar 31, 2011
@angrycat70
First, If Janet Reno read the banking committee the riot act, it would only have been because she had ample reason to do so. How many times have any of us seen similar behavior from a U.S. Attorney General where there was no cause to do so? Regardless of Reno's testimony, this doesn't change the fact that the private sector (i.e., financial services industry) determines lending practices and loan approval guidelines, NOT the federal government.
Second, the ONLY reason the financial industry granted those loans was because they thought they could eliminate the risk through securitization, diversification and predatory practices (e.g., adjustable rate loans with excessive rate jumps AND hidden fees). Furthermore, the industry believed it could sell those loans before the truth behind them emerged. As proof, consider the investors who were either burned by the banks selling the loans or bailed out by the government (e.g., Goldman Sachs and foreign governments).
Finally, while race was a major factor in this crime, the white collar crime committed by politicians and Wall Street is a far bigger crime that has gone unpunished. There is NO excuse for it and every party involved should have seen significant jail time for it. Instead, they've been protected by the very politicians elected to oversee their activities and clean them out...Democrat's and Republicans (past and present). President Obama holds the lion's share of the blame for not cleaning out the dirty bankers since the Justice Department falls under his authority.
bossm4nMar 31, 2011
You're wrong, you just don't know it. While banks and mortgage companies might have made a bad situation worse through predatory lending, they were 100% enabled by the revisions to the CRA, first enacted by Bill Clinton in 1994, 1995 and 1999 and by George Bush in 2005 and 2007. The government absolutely made it possible for this scenario to happen.
dauntless1Mar 31, 2011
"The government absolutely made it possible"
This is only the government's fault if you were under the impression they put a gun to anyone's head and FORCED them to make a bad loan.
THEY DIDN'T. Did u read the damn CRA? I did. There were actual specified guidelines that advised AGAINST at risk loans, and said safe lending guidelines were the responsibility of THE BANKS.
They don't get to weasel out by saying "well, the government didn't say we COULDN'T" which is the exact argument you're defending them with.
bossm4nMar 31, 2011
@dauntless1 - You're completely naive if you don't understand or believe the government is culpable in this situation. At its core, this is all about pushing mortgages off on people who previously were not able to qualify for them, and in many cases, for good reason. I'm in NO way removing blame from the lenders, but they were enabled, encouraged and in some sense, threatened to give mortgages to certain groups. In addition, in 1992 the government got Fannie Mae and Freddie Mac involved which down the road proved disastrous.
As time went by, more and more revisions to the CRA were made which made it easier for lenders to make subprime loans with less risk to themselves and also less reporting and tracking, thus they were able to fly under the radar. I suggest you read this among other things, http://www.cato.org/testimony/ct-ni3-8.html
Now, we can sit here and have a debate over who is more to blame, government or lenders, but ultimately the blame rests on the borrowers who pursued and/or agreed to loans that they had no business making. Just because a mortgage company tells me I'm approved for a loan to by a $2 million house doesn't mean I should if I know it's not within my means. And if you are going to sign your name to a document that shows you are borrowing 'X' amount, at 'X' percentage for 'X' term, you damn sure better be aware of what's at stake. And neither the government nor financial institutions deserve all of the blame for peoples stupidity who made loans they never had a chance of paying back.
eraptorMar 31, 2011
@bossm4n,
If the government is culpable of ANYTHING, it's for loosening regulations on the financial services industry and NOT enforcing regulations. Care to guess who made both things possible? Here's a clue...the Republican party. You see, THIS is the aftermath from 14 years of Republican power in the U.S. After all, THEY championed efforts to deregulate the financial services industry, enabled mortgage securitization, expanded leveraging (from 15x to 40x underlying asset values) AND muzzled banking regulators. So what you say? Well, this has EVERYTHING to do with our economic collapse, NOT bad loans. If defaulted mortgages had been the lone problem to the crisis, we could have purchased most of the bad loans BILLIONS AGO.
Here's the what I'm referring to:
Prior to deregulation, a customer went to the bank and took out a mortgage to purchase a home. If the customer ran into trouble, they went to the bank and either negotiated an alternate payment plan or foreclosed. Upon which, the situation was quickly fixed. (The loan was typically worth less than 1x the underlying asset value (i.e., house).
Then, Wall Street (i.e., financial services industry) got the "bright idea" to securitize mortgages and leverage them. Now, prior to deregulation (aka "modernization), leveraging would have been limited to 15x of the security (aka home loan value) based upon prevailing regulations. Unfortunately, bankers and their pawns in D.C., Republican politician's, got the "bright" idea to increase leveraging to 40x because it would allow them to make significantly greater returns. What's the significance? Well, remember the original 1X loan, in the event of default, the banker would repossess the house and only lose a minor fraction of what they had loaned on it. However, in the "modernized" world with leveraging, the bank would need to collect up to 40 TIMES the value of securitized loan in order to recoup the initial investment. It's like trying to collect $4 million on a $100,000 house/mortgage.
If the financial implications of this abject stupidity haven't sunk in yet, multiply that asset to loan chasm by the number of foreclosures in the U.S. and you MIGHT begin to comprehend the financial hole and abject stupidity involved. THIS is why financial professionals, such as myself, are SO pissed at Republicans/Conservatives/Wall Street.
YachtRokrApr 1, 2011
Holy cow! So that's why the banks aren't lending. They're so deep in the hole, they can't lend.
Isn't it interesting how they can still manage to cut those massive bonus checks? Speaking of which, how are they able to generate record bonus awards if they aren't lending to U.S. businesses or creating U.S. jobs (i.e., economic value)?
starmanjonesMar 30, 2011
if the market place and capitalism had not spiraled out of control then the government wouldn't have needed to step in and save the rest of the economy.
wallstreet was operating exactly as you say... and they did it until they nearly dragged us all done the tube.
peppermintpigMar 31, 2011
The government is not a salvation from misdeeds. It's the leading proponent of immoral actions. It recognizes the corporate status, and those with money and connections can use it to influence the system to their benefit.
starmanjonesMar 31, 2011
you certainly are right in this way... the republican party has been successfully lobbied into taking all the rules off these narcissistic businesses and that has led to the current state of the economy. that isn't a problem with government that is a problem of unscrupulous people manipulating government. we need a short leash on people whose ethics don't include the u.s. as a whole.
peppermintpigMar 31, 2011
It is not impossible that a rule may happen to be immoral: Removing liability for harm is not a repeal of rules, but a promotion of a double standard. Corporatism is in essence a form of double standard, where it has increasingly gained the benefits of personhood without the drawbacks of it. Republicans are not alone on this.
Power, properly mated to accountability, depends on the ability to consent. I should not have the power to act on the behalf of others, or take things from those who did not consent to it.
eraptorMar 31, 2011
@peppermintpig,
While many politicians in our government may be corrupt, they are not all so. The role of government is to serve as a counterweight to excessive private sector control. Without it, our economy/market self-destructs every time so your assumption that we are better off without it is beyond naive.
It appears you've assigned your justifiable concerns about corruption to the wrong party. The government is not the culprit here, it's simply the pawn. The TRUE culprit resides within elements of our private sector. As a prime example, just look at the Koch Brothers political activities, all of which are designed to undermine our Democracy/economy through bribes (aka campaign contributions) and political meddling (e.g., astroturf funding...Tea Party).
scarredupMar 31, 2011
Hardcore libertarians do need to realize that the government can do better things than just leaving everything alone, even for the free market. An example is the highly underutilized Sherman Antitrust Act.
murxMar 30, 2011
1) Wrong assumption - money =/= wealth.
2) You have just found the surface. The abolute, systematic error of the *existing* capitalism is the following:
The investor always wants at least 10% more then he put into the 'economy'. The consument works to get money, has some property but usually not towards investor like profit orientated (the home one lives for instance, the car etc.).
So while the consument lives in his house for years and years - the SAME HOUSE in the hand of an 'investor' is meant to double every 7 years.
The result - in the long run all property is taken from the consument (and worker!) who gets reduced to a hireling living from day to day while the 'investor' owns all property.
Of course 'some' of those 10% profit come from investors canibalizing each other - but not all, this just slows down the flow.
Also look at the following power disparity in capitalism:
Person A has skill, health and prowess to work, but no money and no property.
Person B has no skill, health or prowess to work, has no money but has property.
Person C has nothing but money.
Who has the power to decide anything and everything in this system under current capitalistic economy?
Only C
hpmnickMar 30, 2011
Well for #1, I don't merely equate wealth as money... quite the opposite. When I'm describing the money changing hands as fast as possible, this typically involves products or material goods. A system where money changes hands at high rates would involve the accumulation of material possessions (in addition to the essentials). This includes real estate, tech gadgets, cars, etc. Some of this can be exchanged for money, while most of it is "disposable" and value can never be regained. It doesn't really matter as long as any form of wealth does not accumulate and stagnate.
As far as #2 goes, this is why I've said capitalism has to be "controlled" if its going to become an efficient system. You are very right when you say Person C has the power. If left uncontrolled, we can easily reach an end condition where both skilled and unskilled workers are basically left in servitude. The American dream where one can start their own business and become wealthy does still exist, but its becoming rare and very difficult unless you find a niche market. In reality, you can not compete in the normal market. Wal*Mart, Target, or any large competitor will crush you.
In my terms, the solution does involve limiting the potential to accumulate wealth that is not "moving" in the economy. You'd need to structure your economic system to either prevent this or make it very difficult to gather this much wealth.. It can be done in a capitalistic system. Its definitely possible. It is easier in a *partially* socialistic system (i.e. controlled capitalism).
miklkitMar 30, 2011
Yes, controlled capitalism can be made to work. The American version is seriously broken though. The Germans in particular are whipping American businesses, and they are doing it by focusing on small businesses, not the "too big to fail" dinosaurs.
http://www.globalpost.com/dispatch/germany/101111/mittelstand-german-economy-manufacturing
immunofortMar 31, 2011
I think that is the most retarded analysis I have seen in a while.
Also the Investor always wants a rate of return that is proportional to the risk, if there's more risk then obviously he wants the possibility of a higher profit. There is no arbitrary 10% rate of return that an investor just wants.
The SAME HOUSE in the example, will rise in value or fall in value regardless of the owner. Imagine Scenario A in which the owner lives in the house, and Scenario B in which an investor owns the house. Now say in both scenarios there is a buyer who wants to buy the house off the owner. The buyer is not going to think "Oh the house is owned by an investor, I should pay more for the house!"
And you assume that an investor WILL make a 10% return. This is not the case, Investors often do make a loss from bad investments. Think of the housing bubble. There would have been lots of investors buying property, yet most, if not all would have made a loss in recent years.
In your second paragraph you essentially said that Person C has no skills has lots of money but Person A with skills has no money. Do you see the error in that statement? You just said that a person who has skill, therefore likely no education at all is the one with lots of money and the person with education/skill is the one that is poor, which obviously is not true, in fact the opposite is true. It is the people who have skilled up, ie educated that make the most money, and there is absolutely no refuting this point. Unskilled workers make less money than skilled workers, therefore they have less money and property.
murxMar 31, 2011
You have no clue how to analyze a system.
immunofortMar 31, 2011
So you're saying that ALL investors want a 10% rate of return and that skilled people have no money/property and unskilled people have lots of money/property?
You have no idea how to make a proper rebuttal.
immunofortMar 31, 2011
Also, you don't know how to "analyze". What you did there wasn't proper analysis, you just make up a lot of bulls**t like "Investors want 10% rate of return" and then form an argument based on said "facts"
starmanjonesMar 30, 2011
i so agree. you can't have a free market without control or fairness. monopolies form and the first thing that happened before lobbying government is in ability to capitalize a new business or idea.
microsoft is a perfect example. they routinely surveyed the market for good ideas and when they saw something they liked they announced a competitive product. the funds dried up for the business that thought it up and developed it and microsoft often bought that company for 10 cents on the dollar. all because... "who is foolish enough to try to beat microsoft."
people will cite how much microsoft did for the economy but they never talk about the damage it did to innovation and the ability for the little guy to bring a product to market. THE FREE MARKET. that number is staggering as well as incalculable. families and careers were crushed. there is more than just economics involved.
there is one issue... i don't know that i disagree with you. its not an argument as much as its a fact. the only way we have ever seen smaller economies and underdeveloped nations and people join the 1st world is by this process of using those people as cheap labor. the transfer of those jobs is the way its happened... the only way. we need to find another process to allow those people in underdeveloped economies to raise their standard of living or they will become impoverished hordes at our gates. i have no answer.
hpmnickMar 30, 2011
I've thought about the developing market too, and the way I like to picture it is:
What if all economies were closed? This is certainly not the case today, but it provides for a nice thought experiment.
All pricing would be relative, so even if they were making $5 a day, that wouldn't necessarily matter. What matters is what $5 a day gets them. If that $5 is a month's rent, that is actually pretty good then.
The problem really lies when you factor in globalization. A country that doesn't produce anything, have any natural resources, and a very poor infrastructure has little relative wealth. The way the monetary exchanges work tends to be a disadvantage to these people, because their currency is worthless outside of their country. Nothing their money buys has any use to the rest of the world, unlike say a Euro or a dollar.
This typically wouldn't be a problem if they had some sort of infrastructure or stable economy already in place... but they don't. Things like heavy machinery, manufacturing plants, etc. are completely out of their grasp.
This eventually leads to US companies shipping production to places like this, lowering cost. It does infuse capital into the region... but the most important effect isn't the labor IMO. Its the investment placed into the infrastructure. Manufacturing plants are developed, power plants constructed, roads and building are built, etc. This is what allows for sustainable future growth, and allows the local economy to begin producing for itself.
So what is my point? If you wanted to avoid losing jobs to this country, you could instead subsidize the construction of a real infrastructure that would allow them to do essentially the same thing that 30 years of wage/currency exploitation would bring.
In the end though, either through direct or indirect subsidization, it constitutes simply giving another country wealth that comes from us. Considering today's world, its a tough sell to people.
starmanjonesMar 30, 2011
ya. its a tough sell no matter what you do. i keep coming back to the idea that the only thing that makes it easy is to start importing wealth from off earth sources.
now, whatever we do seems to be derived from social engineering to make developing infrastructure possible. i think its tearing society apart. there is no way to make a plan that everyone can look at, understand and put there ideology aside to sign on to it.
if we developed space based means of energy production that essentially... over time reduced the cost of energy to the point it isn't a big factor in the equation... and brought resources in the same way... so their expense isn't a significant factor...
then you've changed the problem from social engineering to a problem of real engineering and logistics. those are things we humans can do very well when we need to. we could quantify that and put a date on its delivery.
we'll never agree how to redistribute the 1st world wealth to the 3rd world. we just need more wealth.Comment is buried, click here to see the rest.
langfordMar 30, 2011
Nixon made a point of attempting to increase the ratio of American product exports/imports, but that entire way of thinking departed from his party along with the election of Reagan.
starmanjonesMar 30, 2011
and wage and price controls...
roguegeniusMar 30, 2011
This is an excellent analysis, and it sparked a very thoughtful debate from several sides and viewpoints. Thank you.
hpmnickMar 30, 2011
thanks, I appreciate the feedback!
Closed AccountMar 30, 2011
Great !! Made a long comment .... you are one of the real user in digg :) I am happy to see you
hpmnickMar 30, 2011
thanks!
ren1999Mar 31, 2011
In other words, you've got to keep the rich from being too greedy and not paying their workers/consumers enough money to buy the things the workers/consumers are making.
This is in essence the core reason why every great civilization has fallen. The rich hog all the wealth and rich and poor end-up being poor.
Let the rich make as much profit as they can, but let's have standard protection of worker's wages.
daiichiMar 31, 2011
I heartily agree with you about wealth leaving a country.... and the decline of that country's quality of life.
But if the wealthy deposit their money into a bank, or invests it in a company, etc.... there is no stagnant money. Banks loan the money out. Companies buy capital.
hpmnickMar 31, 2011
Well, I do agree that large deposited of wealth COULD lead to a flow of money... its just not necessarily an EVEN flow of money (I'll explain this in a bit). The other problem is that in an economic slowdown, the banks hoard the money like they are doing now. There is also no guarantee that the money stays in the country once its given to the bank. Banks could give loans to foreign companies, invest the money in Asia and other emerging markets, etc.
I probably should clarify what I said earlier: the movement of money ideally involves a relatively even flow through everyone. A loan does increase the number of transaction (speed of the flow), but it also creates a sort of "negative flow" in the form of debt. The money really doesn't belong to the people, and they have to pay it back (usually more then they borrowed). The difference between what they borrowed and what they paid (the interest) actually goes in the opposite direction. Some goes to the bank, and some goes back to the wealthy people who gave the banks a boat load of cash.
So what happens here is that the people end up with less money and assets to their name than if they had not taken the loan, while the wealthy and large banking institutions end up with more. This type of process really does the opposite of what we want - it creates bigger stagnant pools of wealth.
The other negative effect it has is that this flow is "artificial". Really, we've borrowed from future money flow to create the illusion of more liquidity. The money does need to be paid back, and money going back into the bank means that future flow is reduced. This is essentially what has brought us to our current situation. Everyone has debt, and no money. Currently, there is no flow of money because everyone is defaulting on their debts and money that would have been in use now is being used to repay the banks. Question is, where has the money pooled up and stagnated? Possibly some of it is overseas, in the hands of the wealthy and in the hands of the banks. Its definitely not in the hands of the average person..
hpmnickMar 31, 2011
As far as investing the money, this one is actually more complicated if we are talking about the open stock market. This movement of money really doesn't "count". The reason is that the money is exchanged for a stagnant asset (stock holding) and what happens to the money then is up to the person who sold the stock (they have the money now). The money could literally go to anyone this day in age: a person trading with their retirement money, a hedge fund, a day trader, etc. They in turn might spend it, they might re-invest it, or they might hold the cash. We don't know... the point is though, the money is not truly circulated through this process. Its sort of like a black box, where the money doesn't start circulating until its out of the black box...
Typically though, money moves in and out of this "black box" pretty freely... and over time it must mathematically have an "even flow" in and out. You can almost pretend its not even there in most scenarios..
illinestMar 31, 2011
8/10
illinestMar 31, 2011
Sorry about the 8/10. It was lazy of me.
Forced redistribution would not solve the real problems.
For example:
The health care bill that was passed is probably a small 'good' for the average American. In a certain sense it is a forced redistribution of wealth. In this case 'wealth' refers to availability of medical care rather than money in pocket.
But at the same time that wealth is being redistributed from top to bottom the mechanisms that allow this redistribution have created an environment in which the health care providers are further empowered.
In the first case the government has mandated a 13-15 percent increase in enrollment. This is not necessarily going to result in more profit in a direct sense but it does remove a niche that could've been served by a different business model.
The stability created by this will result with the most efficient companies differentiating themselves from their peers and eventually - through mergers or buyouts - consolidating the industry until it is dominated by a few major players.
(Same thing is happening with the cell phone providers.)
So has accumulation of wealth been prevented? Clearly not. In fact government intervention seems to have accelerated it.
What about assigning an agency (we'll call it Paul) to take money directly from rich people and give it to poor people. Who's being empowered in this example?
(Paul is)
You point out the value of faster production cycles (good observation by the way) but Paul's actions are slowing the cycle.
Far too many of the 'interventions' that have been created by our government are contributing factors to the accumulation of wealth. Every time you create and enforce a law you run the risk of creating an uneven playing field or a loophole. If you subsidize the airlines then you might be putting two trucking companies out of business.
I like where you're going with this but I don't think you're seeing it all the way through to the end. I agree with you on most of what you said but I take issue with the things you haven't said.
hpmnickMar 31, 2011
I agree that it is easy to spot the problem, but hard to find an elegant solution.
There are a lot of different ways you can go about attempting a solution, but its hard to do so without being unfair or completely disrupting the current eco-system. For instance:
The best anti-wealth distribution arguments I've seen bring up the point that businesses and major corporations provide most of the jobs, and taking steps against them would otherwise alienate them AND could hurt the job market by making them take away jobs. This is actually correct in the short run. In order for this process to be graceful, you'd have to start creating jobs at a faster pace then you are taking them away from the larger corporation. That is certainly not easy. The solution is undoubtedly complicated.
As for your points, I don't disagree with a lot of what you say. The last thing we want is intervention that consolidates the number of corporations (taking away competition) and makes some of the existing players even bigger. This will have the opposite effect, as you mentioned. The only thing I can say is that whatever solution is devised, it would need to be clever enough to prevent this.
Obviously its really really difficult to do. I think the bigger problem nowadays is that we can't even agree on the problem. Too many people believe the "trickle down" concepts, where we give big business greater profits and wait for our share. It doesn't ever reach the average man... Its going to be really difficult to ever find a solution if people don't even recognize the problem..
starmanjonesMar 31, 2011
i think you are leaving something out of your analysis.
i realize that you weren't speaking of single payer health care and its bureaucracy but my point is on the business end and i think its worth pointing out that business has bureaucracy and whether its thousands of businesses/ bureaucracies or it merges into a few large bureaucracies... they all have a profit motive.
they deliver the least service for the greatest cost so that they can give investors a return. these investors are of no benefit to the actual process of providing health care.
illinestApr 1, 2011
i turned around on single-payer because i realized that too many people think it's a right. I don't necessarily agree with that idea but i know that i don't speak for the people - especially when I'm a part of the minority.
since health care has transformed from a luxury into a necessity then it's reasonable to think about providing it through the government for the reasons that you've suggested. (along with one other that I'll come back to)
You are off-target when you talk about bureaucracies. The profit motive works both ways. When there is ample competition then prices are driven downward to the minimum sustainable (profitable) margin and then companies are forced to provide better service if they wish to differentiate themselves.
The consumer receives the benefit of a price that is near the minimum limit and the consumer also receives the benefit of an environment that is conducive toward quality of service.
Hypothetically speaking a non-profit could undercut the prices but in practice this is usually not the case.
In the first place a non-profit that dominates the market is under very little pressure to reduce costs. Status quo is perfectly acceptable. Additionally a non-profit that dominates the market is under no financial pressure to provide good service.
Returning to the insurance industry, there is one additional factor that should be considered. The insurance business model relies on statistical analysis to calculate risk, the cost of premiums and the cost of payouts when something happens. Insurance companies work better the bigger they get. Competition in other words is self defeating in that particular case. This is one of the only industries in which one large organization is better for the people than many smaller ones.
An industry that features many small companies also provide more jobs than an industry that features a few large companies. A large company enjoys the benefits of economy of scale. It's true that bureaucracy (I don't think that's exactly the right term for this but I'll use it to remain consistent with your post) can affect a large company by introducing inefficiencies but where a company like Walmart excels is in limiting the inefficiencies while maximizing the economy of scale. If you consider 'economy of scale' as synonymous with 'getting rid of redundant jobs' then you can see where I'm going with this.
starmanjonesApr 2, 2011
then why isn't healthcare affordable right now? and single payer is a great employer and leverages economies of scale as well.
graphictruthMar 29, 2011
It's a credible analysis, not a hint of partisan perspective.
rattelerMar 30, 2011
I love it when Neo-Cons think they are being ironic, and just end up stating facts.
graphictruthMar 31, 2011
ROTFL! I wan't trying to be ironic and was just stating facts! OMG, bitten by Poe's law just after citing Poe's Law in the context of accidental trolling.
... I think I need a screenshot....
http://www.graphictruth.com/2011/03/harper-governments-job-creation.html
*snickerfit*
rattelerMar 31, 2011
Opps. Sorry...
To make up for it, you can get the T-Shirt.
http://www.cafepress.com/ratteler
graphictruthMar 31, 2011
hey, that's my schtick! :) (but good job)
CShivers3Mar 30, 2011
So true, people need to wake up and realize this
kurtwoolMar 30, 2011
Do you really want repetition pf russian October Revolution?
CShivers3Mar 30, 2011
...No, I would just love for a reasoned and informed debate in Capitol Hill about our outrageous tax code where Warren Buffet has a lower effective tax rate than his secretary...
bbowendiggMar 30, 2011
its very simple. the government taxes income not wealth creation. so warren simple pays himself 100k a year, somehow subsists on that, and allows his wealth to grow in holdings which most often don't pay dividends, and he doesn't sell, thus incurring cap gains. if he had a huge salary and massive bonus and regularly churned his portfolio instead of looking to invest for the long term (10 ish years) he would pay taxes massively above a secretary. but he chooses to wisely order his life amidst the constraints of the American form of taxation.
its the same rules for everyone...
everyone wants to be rich, yet, until they are rich, they jealously want to stick it to the man, the very man they wish to be someday.
buffet simply and slowly built wealth. just like every other american has a similar chance to.
i would hope our government dramatically limits spending, and leads by example and spends within its means, like everyone else, and in doing so, eventually weans itself to govern from the proceeds of all the other taxes we pay, and simply drop the income tax. unlikely. but, i like to hope.Comment is buried, click here to see the rest.
CShivers3Mar 30, 2011
At the end of the day, the nation's "spending problems" are driven by entitlement spending which politicians do not want to touch. Non-defense discretionary spending accounts for less than 15% of the budget. Tomorrow, we could zero out every non-defense discretionary item (including the FBI, TSA, etc....) and we would still have a massive deficit. One of the accountants where I work at pointed out that a major problem (which conveniently no one is really talking about) is the "deficit" between Medicare Part A expenditures and payroll taxes. Any politician who claims to be "serious" about "restraining spending" and exempts entitlement and defense spending is not serious.
In fact, one of the main drivers for our imbalanced budget has been tax cuts which have not been paid for. Despite having been involved in 2 major wars abroad we have decided to give tax cuts.
Everyone focuses on "marginal" tax rates which after considering tax expenditures (various deductions etc..) is not as important as the effective tax rate.
As far as "sticking it to the man" this is an argument which is irrevelant. Buffet himself said if their is any "class war" his class is winning.
betteroffedMar 30, 2011
The top tax bracket currently pays 35% of their income in federal taxes. How much should they pay? 45%? 50%? (I'm not being facetious or even necessarily disagreeing with you--I'd really like to know your opinion.)
CShivers3Mar 31, 2011
The 35% is the top marginal tax rate. This means that over the threshold, the last dollar they earn is taxed at the 35% rate. This is a little different than 35% of income...Remember that this is assessed against "taxable" income. This is income after all of the deductions and exemptions have been factored in. Ideally we could limit exemptions to (maybe 25%?) percent and actually "lower" the 35% marginal tax rate. The biggest "revenue" problem we have are so called tax expenditures.
bbowendiggApr 14, 2011
i totally agree spending has gone totally crazy.
karmashockMar 30, 2011
I'll just make the obvious point that if you divide everything from the "super rich" amongst everyone it won't actually amount to much. To get real revenue you're going to have to hit small business owners. Collectively they hold a lot of wealth. But I think it will probably be less popular to tax the local pizza place into bankruptcy.
We'll see where it goes. I'll note that few list men like Warren Buffet as targets even though he's built his own business around avoiding taxes. He own insurance companies that pay no income tax. He buys and does not sell companies and so does not incur income tax. When he wants to use the value he borrows against their value instead with low interest loans. Loans are tax free and the interest rate is much lower then the income tax rate. Then he runs charities which allows him to write off nearly any personal expense as a charity expense making it not only tax free but tax deductible.
The problem with the tax system is it's own complexity. It lets clever people nullify most taxes. If you want to stop this you need to simply the code.
Raising progressive rates won't work. You could set the rate to 100 percent and they still wouldn't pay much more then they pay now. If you want them to pay you need to simply the code.
laborerMar 30, 2011
Small business owns "real revenue"? You are an idiot. I can assure you the "real revenue" is not generated by mom and pop business'.
So because the rich are good at not getting taxed, we should therefore not tax them?? Sound logic there.
amaoicanMar 30, 2011
I feel like you didn't actually read his comment. He said:
1. Just taxing the rich is not going to get us to our goals - we'll also need to tax the sacred cow known as "small business owner".*
2. Many fail to see how rich people like Warren Buffett abuse the complexity of the system to avoid paying taxes.
3. Simplifying the tax code would make it harder for businesses and the super rich to get out of paying taxes, thus raising revenue without actually raising rates.
* This is probably true - under our current tax system it would be hard to tell the difference between a guy who makes $100k/yr profit running his own pizzeria and a guy who makes $100k/yr on a million or two dollars of passive investments. If there was just a good way to track the time people spent in productive endeavors (e.g. work) you could give them a "time spent working" deduction - thus the guy who earned $100k by owning and operating a pizzeria would pay less tax than the guy who earned $100k by owning the pizzeria and having someone else operate it.
dcjoedogv2Mar 30, 2011
Don't blame him, he's republican programmed to auto-response to certain debate topics in a certain way. He's a lost cause who is not open to further discussion, pity him and move on.Comment is buried, click here to see the rest.
karmashockMar 30, 2011
Are you talking to me?
dcjoedogv2Mar 30, 2011
no
pixi18Mar 30, 2011
Man I hope they are not talking about you
linuxpersonMar 31, 2011
Leave it to this guy to turn the conversation into a partisan bickering contest.
dcjoedogv2Mar 31, 2011
Isn't everything? Let's not be naive.
karmashockMar 30, 2011
As to the tax code. The more and more I look at it, the more I think we should do away with the income tax and instead go to a consumption tax or an import tax.
Both are pretty similar the only difference is that import taxes don't tax domestic production. For the majority of the country's history the federal government funded itself entirely on an import tax.
Today this is thought to be bad economic policy because it discourages the global trade market by favoring domestic production. I think there is some validity in that argument if you're an industrial export economy. The US is now a services economy and while we do still produce very high quality and quantity industrial goods it is no longer the center of our economy just as agriculture gave way to industry. Furthermore, no country really does have free trade. We have lots of subsidies for different types of industry which work out to the same thing. Effectively we make some good artificially cheap instead of artificially expensive. The primary difference between what we're doing now and an import tax would be that all domestic industry would benefit without special subsidies and the system would generate revenue instead of costing revenue.
Finally, and this is my favorite reason for liking the import tax... It forces the federal government to police the borders. The primary way of evading import taxes is smuggling. All the energy we currently throw at the IRS would would be shifted to border patrol to stop people from importing things into the country without paying the tax. This would passively serve our national security needs at the same time.
As I said though, some people really don't like import taxes. So instead we might try a "VAT" tax which is basically just a flat sales tax on all goods and services. This is how European countries fund their healthcare programs. Not by taxing the rich but by taxing everyone through a large sales tax on everything.
The virtue of these sorts of taxes is that they're very cheap to maintain and very hard to evade. The IRS requires detailed knowledge of every company's accounting books and every individual's accounting books. There are also endless definitions of what is and is not income. Then there are deductions which subtract from income and then even credits which often can lead to the government giving the tax payer money instead of the other way around.
Then you have to take into consideration that a consumption or import tax would supply a constant supply of revenue where as an income tax produces a couple big shots of income every year and nothing the rest of the year. An advantage of having income come in constantly is that the government has a much better idea of what it's revenue will look like because it's constantly got it finger on the pulse of the nation's economy. The politicians seem to be constantly surprised by surpluses and deficits. They always think they're going to collect more or surprised when they do collect more. But if the money is coming in all the time then there are fewer surprises and those surprises are much smaller.
I could go on. But the point is that the income tax as it exists is badly conceived. It is too complicated, requires too much work on the part of tax filers to comply, and too much work on the part of the government to audit and enforce. It's a bad system.
We could make more money in a more reasonable fashion with less work on all parties by shifting to less burdensome systems.
drazen77Mar 30, 2011
A consumption tax is the only fair tax anyway. Check out fairtax.org
karmashockMar 30, 2011
I generally agree. I simply wonder if an import tax isn't better then a straight up VAT tax.
I like the import tax idea more because it would focus the government's interest on the borders. They seem intrested in endlessly regulating our lives but not doing the one thing they were created to do... guard the country. That's what the federal government is there for in the first place. The states are supposed to deal with just about everything else. But the federal government wants to be involved in everything except for border enforcement.
It's absurd. An import tax would refocus the federal government on the borders since that would be how they collect revenue. If they don't secure it then smugglers will eat into their revenue. if they do make it hard to smuggle into the US then they'll also make the nation safer against terrorists and other sorts of issues.
The idea is somewhat controversial. A vat tax would be fine as well. But if we do a vat then we must dispense with the income tax. It isn't a both situation but an either/or situation.
amaoicanMar 30, 2011
"a consumption or import tax would supply a constant supply of revenue where as an income tax produces a couple big shots of income every year"
I find this a little hard to follow - income tax is taken out of every paycheck. Are you saying my employer only remits these funds to the treasury a few times each year?
karmashockMar 30, 2011
It depends. Some companies pay quarterly, others semi annually, and others annually. It varies.
The point is that it's not consistent. They don't get a day by day income. They get a few big hits of cash every year and the rest of the time it's a trickle of outliers and late/early filings.
The patterns are more consistent with large companies and more random with smaller companies.
One of the reasons the government is rarely correct when it predicts what the economy will be like in the following year is that they have very poor feedback on what the economy is doing at any given point in time. They're always surprised when the returns come in. It's like betting on horses. There are systems you can use to be wrong less often but no system will let you be right much consistency.
The only way to solve that is to make the tax collection system real time all the time. The government would collect today what is bought or sold or imported today. Nothing more and nothing less... every day.
drazen77Mar 30, 2011
"The powers delegated by the proposed constitution to the federal government are few and defined."
source: James Madison - Federalist Papers, No. 45
I absolutely agree. The Federal govt. has exceeded its authority in many, many areas... and all branches of govt. has conspired to make it happen.
amaoicanMar 30, 2011
Thanks for the clarification. I don't know if I agree with you, still - what is it about an import tax that would require companies remit payments in real time and what is it about income tax that does not allow the government to require the same thing?
PS The small business owner (does 150k-300k a year) is required to file and pay his 'payroll tax' (including income tax w/h) quarterly - otherwise he would face stiff penalties.Comment is buried, click here to see the rest.
karmashockMar 30, 2011
Because what is and isn't income isn't so easy to define. Once you add in deductions, credits, etc the numbers change.
And those figures are not calcuated every month or every week but at most once quarterly and very often they're only done annually.
Even if the company pays you up front they often submit paper work later in the year that forces the government to give a portion back or credit their next tax return for that amount.
It's too complicated to do in real time. I might make X dollars now but is that income? Because a portion of that might be needed to pay for things which means it isn't income but rather capital.
You're aware of the notion of business expenses? Well, businesses expenses are not income even though they're paid for out of money that is earned through business.
Think of it like this, if I make 100 dollar moving freight on a trucking company, and must pay out 30 dollars in gas then you have to deduct 30 dollars from the 100 dollars before charging income taxes. Well, what if I earn the 100 dollars first and only pay for the gas later? See?
You can't manage that in real time because sometimes these things don't happen in convienent orders and you'd be constantly crediting people back in many cases up wards of 90 percent of the money you collected.
A sales tax or import tax however is very simple. There are no exceptions to it and it can be managed very easily in real time.
amaoicanMar 30, 2011
Yes, businesses are more complex. I am thinking from the position of an employee - I pay my calculated income tax every pay period, and at the end of they ear I can claw back any overpayment. Since I have a side business, I also try to project its earnings for the rest of the year and adjust my w/h accordingly so I don't end up with a big tax burden.
But this still leaves me with a somewhat different interpretation from yours: The government takes in money almost constantly (from income tax) and occasionally (especially in the February-Apr period) has to make refunds.Comment is buried, click here to see the rest.
karmashockMar 30, 2011
I don't know what you're objecting to anymore.
You seem to both be admitting that the tax system takes money in big bursts and also takes in little bits all the time. That's true but it's still inconsistent and inherently unpredictable. A consumption tax would be incredibly simple to set up, be very hard to dodge, be very cheap to maintain, and would give the government real time feedback on the economy. the Income tax can't do that.
To prefer an income tax is to prefer a system that is so complex no one understands it, is easy for anyone that's clever to cheat it, is very expensive to maintain, and gives the government at best a murky picture of the economy.
Which system sounds like a better deal? Imagine you were going into a car dealership. Which car are you going to buy? The one that's slow, expensive, ugly, and unsafe? Or the one that's fast, a steal of a deal, a chick magnet, and safest thing on four wheels?
The income tax system made sense during WW1 and WW2 as temporary taxes to get a bit more out of the rich during time of war. But as a workhorse tax system for everyone it is the worst system imaginable. This is especially true since it impacts everyone. The income tax isn't so bad for big corporations or the very rich since they can afford the accountants to fill out the forms for them. But for everyone else it's a stupid system. There was a time in this country when most people didn't have to fill out tax forms. The whole system is needlessly complicated and burdensome while accomplishing nothing of use that much simpler and cheaper system couldn't do better.
amaoicanMar 30, 2011
"You seem to both be admitting that the tax system takes money in big bursts and also takes in little bits all the time."
Not exactly - my impression is that the government receives income almost continuously, even though any particular business may only send 1-4 checks per year. Why? Because they don't necessarily all send their checks at once.
On the other hand, the government needs to pay out a lot of tax refunds all at once at tax return time.
"A consumption tax ... would give the government real time feedback on the economy"
Again, there's no reason to believe that government and businesses would agree to remit those payments continuously. Hour by hour? Day by day? No way. Maybe month by month...
"To prefer an income tax is to prefer a system that is so complex no one understands it"
Not necessarily. The income tax has been perverted by tax credits, deductions, penalties, etc. A simple one-rate system with a per-person deduction would simplify matters greatly.Comment is buried, click here to see the rest.
karmashockMar 30, 2011
It would be very easy to have the banks do it automatically.
As to your notion of simplification... If you allow deductions then it will leak like crazy.
Look, if you're addicted to a bad system, that's fine. Lots of people feel the same way. But then don't complain about it. You've made your bed, now lie in it. The system is going to be easy to exploit. That's one of it's many weaknesses. Accept it or be prepared to change it radically.
caboose94Mar 31, 2011
Take note that I'm probably not as knowledgeable as you, as I can tell from your writing that you are informed and intelligent.
The problems I see with the proposed import tax is that the U.S. is an importing state. The theory that the U.S. is too big to fail seems to come to my mind. Countries importing goods into the U.S. would be highly discouraged with this tariff on their imported good. Not only that, but other countries may also support protectionist policies as the U.S. causing a trade-war-esque thing. I don't want to go into it, but protectionism is usually terrible for economic growth.
The problems I see with the VAT's is that it encourages underground markets, which don't account towards GDP. The VERY small businesses can easily avoid VAT's through the underground markets (not to be confused with a sketchy entity, but rather a market that has no recorded accounts so they are not taxed). This would undoubtedly lower GDP, which is merely an indicator of economic success in a country. Although, it is just an indicator, many investors and even domestic people use it as the end-all indicator of whether or not the country was successful economically. The drop in GDP would discourage foreign investors and even domestic consumers.
I do agree that the tax code is very complicated and avoidable given the cunning and wealth of some individuals, however, I feel like these taxes will create other problems that affect a nation's relations with other nations. Not to say that income tax is the best way, I just feel like these solutions have various flaws that should be considered.
karmashockMar 31, 2011
I'll first point out that we had this system during the time of highest economic growth in the US. From the revolution to WW1 we had import taxes that funded the federal government. It worked fine. So the doom and gloom over the issue seems overblown.
Furthermore, while it will doubtless cause reprisals from other countries you must remember that while we are an importing economy we are also a country with a huge trade deficit. An import tax would probably eliminate the trade deficit all by itself. We would also get more domestic production which would mean more American jobs. Note, Honda and Toyoda probably would not have to pay such a tax because they make cars in the US. They might have to pay something if they import parts from other countries. But remember that no one would be paying an income tax including the corporations. So it will balance out.
Really, a trade war wouldn't hurt the US so badly at this point. It would have hurt us in the 60s or 50s since we were an export economy at the time. We are not anymore and thus that economic policy likely doesn't serve our interests anymore.
And I'll say again, there is no such thing as free trade anyway. Every country subsidies businesses in different ways. An import tax is only more obvious not more relevant. If you're against an import tax because it interferes with free trade then you should also be against all the corporate subsidies that so much of american business gets one way or the other. And before you tell me that you are... remember that a lot of businesses would just fire millions of workers and go out of business if you did that.
So really it's just a sham anyway.
As to causing an international conflict, countries have a right to regulate their own economy as they see fit indifferent to what other countries want. The US for example tells china to change its currency policy all the time. China ignores us because it isn't our right to tell them how to regulate their own currency. Likewise, china has no right to tell us how we can and cannot levy taxes within our own territory. Doubtless any change to the status quo will have complaints but after everyone gets used to it those will go away. The reality is that it worked better in the past then the current system and is inherently more fair then anything we currently are doing.
caboose94Apr 1, 2011
I'm against the import tax because it will discourage foreign nations to import to the import nation of the world, the U.S. This will make domestic producers able to raise their prices to a price just below world price in order to maximize profits. With that said, this will hurt the American consumers pockets; note that GDP's major component that makes up 66% of the U.S. GDP is consumer spending. This is essentially a pseudo tax to the American people, and if other countries adopt a similar protectionist policy of large import taxes, then their people will suffer the same fate. The money velocity would come to a halt, thus causing little to no growth in every economy.
Also, I think you underestimate the idea of globalization. The U.S. plays a significant role in the world economy. If it goes down the crapper, the whole world takes her lead. Ex. the recent depression.
blackjackjesterMar 30, 2011
A lot of small businesses rely on those "tax loopholes" to exist. They can't offer real health insurance, or any sort of 401k matching because they don't make enough to suppose those. Close these loopholes and you'll see what little benefits they already offer dry up very quickly.
karmashockMar 31, 2011
this is very true is which is why at the same time we close the loopholes we need to also lower taxes to a rate that most companies can pay. Our notion of what companies and people can pay is distorted by the fact that most companies do not pay the official rate because they use so may loopholes and have used so many loopholes for generations.
IF we suddenly required that their taxes go up by a factor of five in some cases then it might mean a lot of companies go out of business which would mean unemployment would sore.
karmashockMar 30, 2011
Add up the value of all the 250 thousand to 5 million dollar businesses and you'll get bigger number then anything you'll take out of the top 2 percent.
Those are the small businesses. Mindlessly attacking them at the behest of marxists isn't going to help anyone.
We do not have a tax collection problem. We have a spending problem. If you can't grasp the math then you're not clever enough to be in this discussion.Comment is buried, click here to see the rest.
theonewhoknowsMar 30, 2011
You didnt actually do the math, did you? As of 2007, the top 1% of households owned 34.6% of all privately held wealth. In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity.
karmashockMar 30, 2011
If you don't know the difference between income and wealth then you're going to have a hard time taxing people that do know the difference.
A great example that I made above is warren buffet. Very high wealth but very low income. Why? Because the system has ways of defining increases in wealth that are not income. Smart business people exploit those loopholes ruthlessly.
If you want to close the loopholes then you need to simply the system. Period.
bdbrMar 30, 2011
I did the math. Many of them pay both corporate and personal income tax (along with state).
To balance the budget based on what they have left, you'd need to tax the top 1% at a rate of over 104%. That means: 4% more than the entire amount they make.
I say "over" because I know there are taxes like Social Security that I haven't accounted for. Plus they're being taxed at more than they bring in, so you probably have to pay them welfare. Plus you give them no rational reason to live in this country, so many will leave and that will decrease tax revenue.
karmashockMar 30, 2011
That's true. What's also true is that they're increasing federal spending at a rate of 7 percent a year while the economy at best grows at 3 percent a year.
That means you could tax EVERYONE 100 percent of all their income and eventually you'd still need 7 percent more then that. And if you could some how grow the economy that year at 7 percent you'd have to grow 7 percent more the next year.
Compound interest. Every 7 percent is compounded with the last expansion of government. So in real terms each expansion is larger then the last.
This is mathematically unsustainable unless the US economy can be made to consistently grow at a rate of 7 percent or more every year. This is extremely unlikely.
Thus while there might be issues with tax collection, the primary issue is too much spending. You cannot balance the budget even with 100 percent taxes without cutting the rate at which government increases spending.
At most you can sustain a rate of between 2 and 3 percent every year... or less then half the current rate.
My favorite means of balancing the budget involves not increasing the budget for 10 years. That is to say everyone gets the same amount of money they got last year. Every program gets the same funding. Every department. Everything gets the same. But not a dime more.
If you want to increase funding to a project then you have to explain why your project needs the money more then another project. Everything must be a zero sum game. If you need five billion for project X then you need to take five billion away from other projects to pay for it.
After ten years if we do not increase spending the budget will balance on it's own and the deficit will be fully paid off. We'll even have a comfortable surplus that we can keep for a rainy day. All we have to do is stop increasing the rate of spending.
Will anyone do that? Of course not. Which is why I suspect we're going to go into hyper inflation.
melthornalMar 30, 2011
If you, for instance, set the maximum personal wealth to 1 billion dollars, which is significantly more than a single human being would ever need, for any reason, that would generate 971.1 billion dollars, which could then be used to hire a f**kload of people and upgrade the infrastructure of the united states. Do you know how many roads and bridges could be built off of 971.1 billion dollars? How many miles of fibre optic cable could be routed into the up and coming cities? How many JOBS you could create?
If 5% of this money went to wages for new jobs, with an average salary of 60k per year over a 15 year period with no further funding from any sources, that would be 54 thousand new jobs.
And 5% going to wages is pretty goddamn low. Thats some really expensive materials.
This is how much wealth the rich are hording for themselves, when you can take 5% of it and pay the salaries of 54k workers for 15 solid years. Imagine if 25% went to wages? That would be 270k jobs for 15 years. We're not talking short term job creation, these are careers.
novenatorMar 30, 2011
I've heard some people argue that the maximum wage should even be set much lower, say $50 million. When people are nearly starving, buying rags from thrift stores, and can't afford to fix their basic shelter, arguments like that resonate.
karmashockMar 30, 2011
Maximum wage? So what should I do when I hit the max wage? Stop working? You do realize the guys that invented google would have retired entirely from life about fifteen seconds after getting their venture capital payment.
The problem with this sort of marxist nonsense is that all you get for your effort is mediocrity. Everyone slacks off because there are no rewards for trying any harder then that. *yawn* made my fifty million. Can't make anymore. So I'm done. I could invent a new cancer drug or revolutionize the internet or give everyone the benefit of a new hit song. But screw it.
or you might get people renouncing their citizenship when they hit fifty million so they can be free to earn more in places that aren't run by marxist tools.
Either/or. Anyway, easily one of the worst ideas I've ever heard out of you Novenator... and you're rather infamous for bad ideas.
A line from soviet Russia: If you pretend to pay us then we'll pretend to work. something to remember when you're robbing people. You might find that you miss their labor more then the money.Comment is buried, click here to see the rest.
amaoicanMar 30, 2011
"You do realize the guys that invented google would have retired entirely from life about fifteen seconds after getting their venture capital payment." That's not wage.
karmashockMar 30, 2011
It's income.
And if you're really only talking about wages... no one will earn a wage over the number you set. They'll just get bonuses, stock options, and other sorts of translations that technically aren't wages but still work out to the same sort of money flowing into their pocket.
The biggest mistake that the left makes when it assumes it can regulate these systems is the hubris that they're smarter then the people that live and breath finance.
You are not... and the government is not. The people in business are smarter. Any trap you set for them must be made with the assumption that the pray are more intelligent then the trapper.
A lion can bring down a man... a shake can eat a sailor. Intelligence isn't required to take something down. You just need to be simple and brutal about it.
But the instant you think you can come to some kind of elegant solution you've already lost.
It's really a choice between simplifying the system or letting the whole thing leak like a sieve. Your choice.
novenatorMar 30, 2011
First, off, I didn't say I advocate it, but wanted to share the idea for discussion, so be respectful. I believe in an incentive based economics system karmashock, but not one that threatens to starve children or seize homes if the adults cannot make it. There HAS to be a social safety net.
Laisez faire capitalism turns into caveat emptor very quickly, which is precisely what we have in the US today. Our economic system should not be predatory, it should be compassionate (social capitalism).
I would argue that a maximum wage is a concept I would likely support, on the ~$1 billion range. What would more money than that every possibly do for a person?
--
From a movie I'd recommend (Wall Street):
Bud: How much is enough, Gordon? When does it all end, huh? How many yachts can you water-ski behind? How much is enough, huh?
Gekko: It's not a question of enough, pal. It's a Zero Sum game – somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred – from one perception to another. Like magic. This painting here? I bought it ten years ago for sixty thousand dollars. I could sell it today for six hundred. The illusion has become real, and the more real it becomes, the more desperately they want it. Capitalism at its finest.
Bud: How much is enough, Gordon?
Gekko: The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons – and what I do, stock and real estate speculation. It's bulls**t. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now, you're not naive enough to think we're living in a democracy, are you, buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around, pal, I've still got a lot to teach you.
karmashockMar 30, 2011
What is the point of setting a max income? You're not going to collect money beyond that max. People simply won't earn more then that. Your law won't accomplish anything beyond having fewer rich people.
You wont' have less poor people. Just less rich people.
Is that a good goal? because we can do that right now by randomly burning down the nice parts of town throughout the country. Just get your gas cans out and start setting the cities on fire.
I'll be playing the lyre while it burns.
The underlying problem with your philosophy is that it is driven by envy and jelocy rather then any notion of improving anyone's lot. You want what someone else has... well, randomly stealing from or destroying other people's property is basically how you get the African economies. Who wants to improve a farm when the instant you pull all the rocks out of the ground someone will show up and take it from you? So you don't pull all the rocks out. You make a point of looking as poor as possible. You make a point of hiding any wealth you have so that thieves and thugs dont' see you as a target.
that's all you'll accomplish. Everyone will wall off and keep secrets. Everyone will go out of their way to appear poorer then they are and more often then not the only way to do that is to be quiet poor in the first place.
Greed might not be the best thing to build an economic system on but it's a LOT better then building it on envy.
melthornalMar 30, 2011
Karmashock, you aren't looking at things rationally.
First, if you have a maximum wage, it strongly encourages people to follow the path in life they would like to live, as opposed to the path which they feel will earn the most money.
What if a person really, really, really likes to collect garbage? They like seeing all the parts of town, they like seeing peoples morning face as they drive past in the morning, they like the hours, et cetera. Why should they earn significantly less than a lawyer? Why should they live in different parts of town?
What about a teacher? Should they earn less than an investment banker?
No, they shouldn't. In the extreme short term, maximum wage would push away the super wealthy, but in the long term it would lead to a significantly more powerful society, happier people, and almost certainly higher standards of education, work production, and social order.
It is unhealthy, and socially and culturally disastrous (perfect example: the United States) to allow run away accumulation of wealth. It is a strawman argument to suggest it would cause any serious harm to the economy, either, beyond losing a handful of billionaires whom would most likely be the only ones seriously effected by any of these changes.
karmashockMar 30, 2011
melt,
No. It makes people attain a certain level of success and then retire or leave the country to be free from the marxist bulls**t.
novenatorMar 30, 2011
@karmashock,
When CEOs rake in 1/3rd of all the income in America (and have incomes over 400 times greater than an average worker at their company), that type of greedy profiteering is simply unsustainable, and is actually *creating* the system where there are so many poor people. We need to be more egalitarian in our outlook, or things have a way of "self correcting" themselves like what is going on in various parts of the world right now.
Note- I advocate evolution, not revolution, but it is dangerously close to being unsalvageable right now in America.
amaoicanMar 30, 2011
Venture capital is not income for the founders. The money goes into the business (the corporation) and the owners (founders in this case) take a reduced percentage of ownership of the business.
karmashockMar 30, 2011
Play devil's advocate with your ideas a little bit please. Are you telling me you can't think of five ways to turn venture capital into personal income?
Think about it. The economy is full of people that could have bailed at the fifty million mark. Do you think we'd be better off if they had just stopped there? Because most of their best work came well after that point. But whatever...
Go soldiering on into your glorious marxist future. Enjoy the gruel... you'll eat a lot of it.
amaoicanMar 30, 2011
"Play devil's advocate with your ideas a little bit please. Are you telling me you can't think of five ways to turn venture capital into personal income?"
Sure - and they would all be crimes (e.g. embezzlement). You can't sell shares in your corporation, then give yourself the money and close shop. Even if you could, when it transferred from the corporate account to your personal account then it would become personal income and you'd owe tax on it.
karmashockMar 30, 2011
Only about half of the ways are illegal. there are perfectly legal ways of doing it. Don't assume the legal system is your friend in this instance. it's also very complicated and anything complicated is vulnerable to exploitation WITHOUT breaking rules.
melthornalMar 30, 2011
Strawman argument.
karmashockMar 30, 2011
Only if you lack the creativity of a slightly soiled dish sponge.
There are several obvious ways of exploiting the system. Think of a few. I'm tired of playing captain obvious and pointing out the many many reasons you're wrong.
amaoicanMar 30, 2011
Okay, how do you do it? If there are 5+ ways to turn venture capital into personal income legally and morally, surely you can name one.
rufus5Mar 30, 2011
Pay yourself a salary from the venture capital money.
amaoicanMar 30, 2011
So you're going to have your corporation sell $50 million in stock, turn around and pay that stock to yourself and shut down the company, and you don't think there are any fiduciary problems there? i.e. you don't think the investors will sue you? Come on.
Furthermore, the Google guys could have done something like that - taken the venture capital, paid themselves big salaries and walked away. They didn't. Why? Well, it was the right call... now they are worth billions. Note that it's all paper wealth, not income - they need not pay tax on it until they sell the stock.
With an income cap (which would technically be a marginal rate of 100% on income in excess of the cap) they could only sell their stock so fast (e.g. $50 million per year) but they'd still be billionaires, and they could still donate the shares to charity if they wanted.
amaoicanMar 30, 2011
Err - "...pay the proceeds of that stock sale to yourself..."
karmashockMar 30, 2011
rufus5 listed one of the ways. Totally legal.
amaoicanMar 30, 2011
Again, I don't think his plan would work. When you incorporate and sell shares, you give up certain rights in exchange for the privilege of risking other people's money. If you tried to pay yourself the investors' money, beyond a reasonable and justified salary, they would sue and they would win.
karmashockMar 30, 2011
Only if you took too much.
Who says you couldn't take fifty million and leave the company healthy? Who says it wouldn't even be totally ethical?
What if the primary asset the company has is "me."... If I make the company and really it's all about my genius then why am I not worth fifty million dollars? And if my investors make lots of money they won't care.
The problem is that you thin you can set arbitary limits to how much people can make. that's fine if we're all equal. but the reality is that we're not all equal.
Some of us are idiots. Some of us are lazy. Some of us lack courage. Some of us lack imagination. Some of us lack vision. Some of us only have bad ideas.
And then there are those that are geniuses, work their asses off, are made of courage, come up with new ideas like they breath, see the future like its right before them, and can go throughout their whole career hopping from one great idea to the next.
Why should their income be restrained? It makes no sense.
And who are you to tell anyone what is enough?
It's all just marxist horses**t. Sorry... I don't mean to be coarse but it's garbage. I'm not saying it's great that investment bankers go giggling into the night with tens of millions they effectively stole from pension investment accounts but that doesn't mean that everyone that makes lots of money stole it.
This is part of the problem with income taxes... it turns people into busy bodies that feel the right to stick their noses into everyone else's business. Why? Because the system is so absurdly easy to cheat that you have to stick your nose into everything to keep working. And rather then taking the hint and realizing that it's a bad system you instead imagine that you really should stick your nose into everything just to support an ultimately flawed system.
Well fine. Do that. You'll fail at making it work just like everyone else in the world. Income tax systems leak all over the world. there isn't one of them anywhere on the planet that doesn't leak all over the place. The Swiss have based their whole economy on providing a safe place for all the leakage out of europe. The Bahamas soak up lots of the leakage from the US... and most other countries are so confused by their own income tax systems that they don't even need foreign banks to hide the money.
You are not going to win this fight. Your grand fathers lost it. Your fathers lost it. And you will lose it as well.
It's a stupid struggle. Your playing against a loaded deck.
The house always wins. The way to win is not to play. Dump the income tax system and finally you MIGHT have a shot at a fair system.
Otherwise... hopeless. You'd have more luck doing brain surgery with a shotgun. Just a pointless exercise in futility.
amaoicanMar 30, 2011
"And if my investors make lots of money they won't care."
Well, that's a horse of a different color, innit? You said that someone could just raise venture capital and walk away with it. That is very different from building a solid, profitable business for which you deserve millions of dollars.
"The problem is that you thin you can set arbitary limits to how much people can make."
I never said that. I said venture capital is not personal income.
Also - just give each person $X deductions and tax them Y% on the rest. Solved.Comment is buried, click here to see the rest.
karmashockMar 30, 2011
No. I said that they could have walked away shortly after getting the venture capital money. Google made their investors lots of money long before they became a mega corporation.
They could have stopped back then with their fifty million and called it quits.
Mission accomplished. Then give the company to any jackoff that wanted it and let him run it into the ground.
Practically every great company in the US wouldn't exist with your limits. People would do just well enough to reach it and then wash their hands of it.
Again, you're replacing greed as the basis of the economy with envy. It's not better... it's a lot worse. Greed is hungry but envy is spiteful.
starmanjonesMar 30, 2011
@karmashock
google isn't a good example to support your case.
they clearly are trying to create a new more socially responsible business model. if you care to look into it they are not acting under your model.Comment is buried, click here to see the rest.
amaoicanMar 30, 2011
"Practically every great company in the US wouldn't exist with your limits."
They aren't my limits. Remember - novenator is the one who suggested the income limits.
"They could have stopped back then with their fifty million and called it quits."
So you're saying if you could only make $50 million per year, after the first year you made $50 million you'd never work again? Why? Wouldn't you like to get another $50 million next year?Comment is buried, click here to see the rest.
karmashockMar 30, 2011
If you don't support the limits then what are we even talking about?
As to income limits, if your limit is just fifty million in "income" per year then most billionares could easily not pass that limit while growing their wealth by a billion a year.
Again, income is a very slippy concept. Basing your taxation system on it is not a good idea unless you're only taxing people that want to give you their money or idiots.
For example, if you put this in place and a CEO wanted to get more compensation then that, he could get stock options or other finacial devices that might not be considered income.
The company could for example give him a zero interest loan for 10,000 years. Loans are not income.
The company could give him the use of a company summer home for the rest of his life worth 100 million dollars.
The company could give him fifty sports cars collectively worth fifty million dollars... and claim they're all company cars.
It works both ways as well. One thing studios like to give actors is a percentage of the PROFITS from a movie. Why? Because the profits are income and the income is typically zero dollars. Even huge block buster movies that make the company lots of money tend to have a income of something very near zero.
So studios like to give actors a percentage of the profits. It's become something of an inside joke in hollywood. For that reason, actors instead ask for a percentage of the gross. That is the total revenue of the movie before the accountants get to play with it.
Again... basing your tax on income is just asking to get scammed because what is and is not income is inherently arbitrary.
starmanjonesMar 30, 2011
@karmashock
>The problem with this sort of marxist
>nonsense is that all you get for your
>effort is mediocrity. Everyone slacks
>off because there are no rewards for
>trying any harder then that. *yawn*
>made my fifty million.
marxist? thats not marxist. do you not know that? other first world countries have huge tax rates and they haven't rolled up and *yawned*.
the guys at google are in it for social good... THEY COULD HAVE RETIRED AND DIDN'T. look at the money they are dumping into things that can't get money anywhere else under the "current system of redistribution of wealth... towards the few."
here is your biggest fallacy...
just because that money doesn't land in the pocket of one person doesn't mean it goes away.
what it does is give others the opportunity to create wealth. the question you need to answer for your assertion to have any validity is how many people don't get a chance to create that "new cancer vaccine" or other new product.
your claim is that one person good at making money might find a vaccine for cancer if we let them put as much money in the bank as they can.
the reality is that many people not so good at making money but great at making vaccines is more likely to find a cure for cancer. they will never get the chance because we don't have a free market... because of the one guy hording money.Comment is buried, click here to see the rest.
karmashockMar 30, 2011
Taxing wealth is like a body eating muscle to keep itself alive. It's what a body does when it starves. Sure... you can live for a time by living off your own muscle tissue... but you grow weaker every day. And eventually, you can't even move... and then you die.
Wealth generates income. Income and wealth are different concepts.
Now, to some extent you're right in that there is a lot of wealth generated every day without incurring an income tax. This is because what is and is not income is very complicated. The tax code is as large as it is because it is very complicated. You have to have detailed knowledge of every tax payers accounts in great detail to catch tax evasion. And even then many of the rules are arbitrary. You say po-tate-oh... I say poh-tat-oh.
But anyway, I'll just make this bit clear so you'll see what a terrible idea you had there. If we started heavily taxing wealth every year as per our annual tax system the US economy would shrink every year. Every year we'd make less money then the year before and there would be less wealth generated. The body eating it's own muscle. Wealth can be a factory. Wealth can be shares in a company. Wealth can be some old lady holding on to treasury bonds.
Wealth is anything that is worth money. Lets say my house goes up in value but I have no plans to sell it? Well... if you're taxing wealth it means you're going to charge me more this year then last year because my wealth increased.
You'll have some other interesting things happen if you start taxing wealth such as the wealthy people will change their businesses such that they technically have lower wealth and perhaps higher income. Or they'll come up with a totally new way of defining value that isn't wealth or income and somehow make their fortune into that new thing.
this has happened before. Nothing new under the sun.
None of it really matters though. Because in the end we don't have a tax collection problem but a spending problem. You cannot spend 7 percent more every year unless the economy grows at a rate of 7 percent or more. That hasn't happened in the US in generations. So if you think we have a tax collection problem you're really just proclaiming that you don't understand the issue.Comment is buried, click here to see the rest.
ieatskunkMar 30, 2011
You are wasting your time karamshock. 99.9% of digg users do not understand our economy.
karmashockMar 30, 2011
I would go farther to say they don't seem to have a basic econ 101 grasp of economic concepts let alone our own economy. So many appear to be fundamentally ignorant. It's difficult to have a sensible conversation with them. It's a bit like trying to have a conversation about biology with a bunch of creationists.
melthornalMar 30, 2011
Your arrogance greatly amuses me. Thank you for the laugh!
karmashockMar 30, 2011
Your mindless contributions to the thread rather then making you appear more intelligent instead make you sound like a churlish little child mocking the adults.
Try back later when when your nose hair comes in.Comment is buried, click here to see the rest.
linuxpersonMar 31, 2011
"Your arrogance greatly amuses me. Thank you for the laugh!"
This is about the best you're going to get karma.
linuxpersonMar 31, 2011
I was just about to make this exact statement.
Dugg.
amaoicanMar 30, 2011
"Taxing wealth is like a body eating muscle to keep itself alive."
It's an interesting point. I think a lot of people fail to see the difference between profit and positive cash flow. If a hospital spends $10 million on an MRI machine, and then bring in net revenue of $10 million from using the machine in the first year, someone might see that as breaking even. But that's ridiculous - the hospital still has the MRI machine! So their profit should be $10 million minus whatever amount depreciation/amortization/whatever of the machine.
What we want to do is tax positive cash flow - this would "punish" companies who sit on cash reserves rather than investing in productive assets, thus encourage companies to invest in new ventures. (or return cash to shareholders in the form of dividends, which should also be considered in cash flow).
karmashockMar 30, 2011
Positive cash flow is no less sustainable to arbitrary deductions.
Trust me. You want a consumption tax. Trying to define and track income which is what you're talking about... is very very difficult and very very easy to mislead auditors without breaking any rules.
amaoicanMar 30, 2011
"You want a consumption tax."
From a "can we do it" perspective, yes, a consumption tax would probably work better. It's harder to cheat. But from a "is it a good idea" perspective, I'm not so sure.
It discourages consumption, encourages black markets and since rich people consume far less (as a percentage of income) than poor and middle class people, it probably would do nothing to increase their participation.
linuxpersonMar 31, 2011
"It discourages consumption, encourages black markets"
Income tax creates an even bigger demand for black market activity. It's so easy to cheat the IRS, just use cash.
karmashockMar 31, 2011
A consumption tax no more discourages consumption then an income tax discourages work.
They both do that but one is no worse then the other. In the end, work is a corner stone of the economy. The current people punishes people for doing their job just as a consumption tax punishes them for buying something.
It's a zero sum game. Neither one is better then the other.
As to blackmarkets, they're already common without a consumption tax and this is actually a feature. Does it help the country to have the IRS poking into everyone's finances? Not really. But what if the government spent that energy securing the border because a major way the blackmarket sustains itself is by smuggling. And the government would have to police the borders to stop smuggling. In short the border patrol would become the new IRS. Much more useful and rational.
Anyway, you seem married to the status quo. Fine. Just don't whine about the inherent problems with the system then. It confuses people like me into thinking you actually want real reform.
amaoicanMar 31, 2011
Based on the FairTax proposal as an example, and knowing my own spending habits for the last 7 months, the national sales tax would cost me 60% less than the federal income tax - assuming I would not change my spending habits...
Think about this: if you assume the position that, on average, Americans can not spend more money than they earn, then converting from a system in which taxes are based on income to a system where taxes are based on consumption would necessarily require the rate to increase to maintain the same revenue.
i(N)come > e(X)pense
(s)ome percentage of N > (s)ame percentage of X
s*N > s*X
for s*N = S*X, S >s.
That means if you _do_ spend all or most of your income, your total tax bill will necessarily go up under a sales tax regime. And the more money you save, the more likely your tax bill will decline under this system.
Who is more likely to spend most or all of their income? The poorest people. Who is more likely to spend little or none of their income? The richest people.
And that's the real problem - unless you add manipulation (like a prebate check) the system hurts poor people, and even with that manipulation it's going to do just as little as the current system to stop rich people from "opting out".Comment is buried, click here to see the rest.
karmashockMar 31, 2011
No matter what they do with taxes, spending is too high and must be cut. that's unavoidable.
Your suggestion that the tax would have to go up to meet high spending is true however it also makes it hard for the government to raise taxes because it will not just hit some minority that no one cares about.
If the tax hits everyone then democracy will probably force congress to not raise the tax unless we're under extreme circumstances.
As to the tax hitting the poor hardest, I am not suggesting that we don't have relief programs for the poor. We'll still have various assistance programs to help out those in need.
I'll point out again that this is how europe funds healthcare. The left wants universal healthcare? Fine. This is how you do it. You can't do it without a VAT tax. of course the euros also have an income tax on top of it and a much lower economic growth rate. But I won't get into the laffer curve here.
amaoicanMar 31, 2011
"spending is too high and must be cut"
I think we need to accept a political reality here: Taxes will never go up and spending will never be cut - not intentionally, not appreciably, not permanently. There is no acter in the system who personally benefits from raising taxes and cutting spending. That's why the Bush-Obama tax cuts were renewed, that's why they will be renewed again - unless and until the US taxation system is rewritten from scratch.
"it also makes it hard for the government to raise taxes"
As I said, it's already too hard for the government to raise taxes - too many people fail to realize that some people can afford to pay more tax and others can not, and they will vote against a tax hike regardless of who it's aimed at. That's not a "I HATE THE RICH" argument, it's pragmatic - if your city needs a new water supply you don't go hunting in the dessert.
"I'll point out again that this is how europe funds healthcare."
I'll also point out that the European countries (with some exceptions - e.g. Germany) do not have "federal" and "state" government - they are small and only have one level of government. So if you think about it, the fact that they tax both income and sales is not surprising - almost every American has both an income tax and a sales tax, in many cases two of each (federal & state income tax, state & local sales tax).Comment is buried, click here to see the rest.
karmashockMar 31, 2011
As to spending not being cut. Then the currency hyper inflates and the programs collapse as the money used to pay for them becomes worthless.
You can't ignore the math.
The problem is not the taxes being too low. The problem is the radical increases in spending. Look at what we've done over the last 10 years. Which changed more? The tax rate or the spending rate?
Spending has outstripped any change in tax rates by magnitudes. You can try and spin this as a tax collection problem all you like but the math doesn't care. the math only looks at spending and collections. They don't balance which means we're putting it all on a credit card. When that comes due not only will you have to pay the debt off but you'll also have to cut spending to revenue minus debt payments. Or hyper inflate the currency and default on debt making it almost impossible to borrow money in the future at a reasonable interest rate... you know, like a third world country.
Total government overhead due to civic administration in the US is marginal. We're talking about a tiny percentage of total spending. Medicare, Medicaid, and social security currently are about 60 percent of the budget and the military WITH THREE WARS is about about 30 percent. All other federal spending not related to entitlements or the military is about 10 percent of the total budget. Of that ten percent what do you think you'd save by combining state and local governments? Because my guess is just about nothing.
You've got some really thick mental blinders on this issue. The entitlements are 60 percent of the budget and the military with three wars is still only half of that.
Wake up. Entitlements must be cut or the currency hyper inflates and all your programs crash and burn anyway.
Choose. Do you want rational cuts now or a collapse later?
We're coming to the end of the line. Our importers are warning that we're soon going to experience heavy inflation. that is already unavoidable. But if we don't shift policy soon that will only be the beginning. It won't stop until it costs more to print the money then it's worth.
amaoicanMar 31, 2011
We can't cut social security in the short term. The People paid their money into social security on the promise that the money would come back to them in the long run. We should just as soon default on our national debt than renege on our obligation to retirees.
To look at a ten year period I choose 1997-2007, putting us safely behind the Great Recession and the dotcom bubble pop. In 1997, revenue was $1.5T and spending was $1.6T ($2.1T and $2.2T in 2011$). In 2007, revenue was $2.6T and spending was $2.7T ($2.8T and $2.9T in 2011$). So revenue increased 33% and spending increased 32%. Of course, the significance is rather low, so better to say they both increased by around 30%.
Raw numbers from wikipedia, inflation adjustment from wolframalpha.Comment is buried, click here to see the rest.
karmashockMar 31, 2011
You don't have a choice but to cut. You can cut or go into hyper inflation. The money they paid into the system was spent as it came in. Social security is literally a pyramid scheme.
Their money is gone. It was gone the instant it was collected to be paid out to someone else.
If they wanted their SS to still be there they should have had more children with more productive careers. They did not. So the system cannot sustain them. We could raise the retirement age if you like... it amounts to the same thing though.
You can either cut or hyper inflate. The math won't let you do anything else.
As to your cost projections, you're not taking into consideration that much of the growth prior to the recession and the revenue collected was the result of private sector debt. The credit crisis would not have happened if the public sector were run running up debt at an insane rate.
Thus income and spending figures have to be recalcuated with the understanding that income in that period was in fact debt. What has changed is that the private sector has deleveraged it's debt as much as possible meaning they're borrowing less and paying down debt rapidly. The government has not adjusted. In fact, the government has responded by doing the opposite and borrowing even more to sustain a level of government spending that the US economy cannot afford regardless of the tax system.
And thus here we are.
Look... I'm not arguing with you. There is nothing to argue about. You're going to get a Wily E Coyote education in physics here if you don't take the math seriously. It doesn't care what your reasoning is on the issue. We're screaming towards the ground holding a little sign that says "ouch."
It's over. you can cut or hit the ground and make an entitlement shaped hole in the ground.
The math isn't going to negociate. Either close the gap in the immediate future or we're going to go into hyper inflation and your entitlements will collapse as the money that pays for them becomes increasingly worthless.
That's just reality. Some people said the housing prices could never go down. Some said the banks could never fail. Some said obviously the financial wizards knew what they were doing.
Wake up. Anything can fail. No matter how long it's been stable or how many people are backing it. No financial wizard is going to be able to save you from inescapable systems. Bills must be paid. Debts must be honored. If you print money faster then creating the wealth that backs it then the value of the money reduces with each printing.
That is the math. If you want to ignore it, that's fine. The math doesn't need you to recognize it.
It's cold comfort that the best I'll be able to say you after the hammer drops is... "I told you so."...
But since you're indoctrinated beyond any ability to see reason there isn't much I can do about it.
That isn't an insult by the way... or at least it isn't intended as such. The future will prove one of us right and at that moment one of us will know the other was right.
We'll have to wait and see. Perhaps doing nothing and pretending everything will be alright without making any attempt to fix the system is the right course of action... but I doubt it.
amaoicanMar 31, 2011
"You can either cut or hyper inflate. The math won't let you do anything else."
If that's true, then so be it. A promise is a promise. I'd rather die honorably than live dishonorably.Comment is buried, click here to see the rest.
karmashockApr 1, 2011
there is nothing honorable about hyper inflation.
if you had a choice between killing a village and saving a country or saving a villiage and losing the country and village which would you choose?
Winston Churchill had that option in WW2. Famous incident where he knew the germans were going to destroy a small town. He knew because the British had broken the german codes. If Churchill warned the town the germans would know the british broke the code and would then change it. Churchill decided to keep the fact secret which cost the townspeople their lives.
but because the allies could read the german codes and the germans didn't know it hundreds of thousands of lives were saved.
It's math. If you're not able to do simple math then you have no business even having an opinion on these issues.
Stay out of economics and geo politics. It's all math and you apparently can't do it.
amaoicanApr 1, 2011
"Stay out of economics and geo politics. It's all math and you apparently can't do it."
I am willing to listen to and consider what you have to say, but this kind of personal attack is uncalled for, especially since you have provided no mathematical model to even attempt to prove your claim that without entitlement cuts we will be doomed to hyperinflation.
For the record, my degree is in physics and I work for a company specializing in computational mathematics.Comment is buried, click here to see the rest.
karmashockApr 1, 2011
When you say you'd rather collapse the whole country... effectively destroy it's economy just to save a few doomed entitlement programs that will fall anyway... then what am I supposed to say?
You're saying you'd rather hurt everyone then admit you're wrong. The hubris.
That you would welcome the collapse only because it will marginally delay the moment when you have to face reality. It's wrong.
If the current system is unsustainable then someone that ACTUALLY gives a damn about the people will change it so that it is sustainable. If you care for the people at all then you owe it to them to make some hard choices. Sometimes the world isn't cake and unicorns. Sometimes you have to face it and move on. But to say you'd rather collapse the system then face reality? That's just straight up evil.
Maybe you didn't realize what you were saying. But again, if you can't see this then you have no place in such discussions. That isn't an insult... that's just a reality. Blind men don't judge art and those unable to be rational have no place judging policy.
amaoicanApr 1, 2011
"You're saying you'd rather hurt everyone then admit you're wrong. The hubris."
Ah, you must have misunderstood me. What I said was, if you take someone's money today and promise to give it back to them tomorrow (or 50 years from now for that matter) you have to follow through.
I am completely in favor of restructuring entitlements _in the long run_. People are living longer. If you pay in, say, $200,000 from the time you are 25 to the time you are 65 and the life expectancy is 75, then it would be prudent to expect $20,000 per year in benefits. But if life expectancy jumps to 95, the annual benefit has to adjust too.
But that change has to occur on money that is paid in starting when the change occurs, not on money that's already paid in.
That is literally all I am saying - any change will have to be gradually phased in. You absolutely positively can not tell people who have already paid in to Social Security, "Sucks to be you!"
And to be perfectly honest, I am ashamed that you would rather default on our debt to the elderly rather than default on our debt to the rich people who buy Treasury Bills.Comment is buried, click here to see the rest.
amaoicanApr 1, 2011
(I assume you realize it is completely possible for a country to default on its debt, to decide they aren't going to repay their debts. Who's going to stop us? We've got enough nuclear weapons to end all life on Earth. Now, what would be worse: defaulting on our debt to the elderly, defaulting on our debt to treasury bill holders, or monetizing the debt enough to produce hyperinflation? I honestly do not know. But it alarms me that you have not even acknowledged how serious defaulting on our debt would be.)Comment is buried, click here to see the rest.
karmashockApr 1, 2011
Ideally, I'd love to give them every penny they put into the system back.
But it's gone. It's gone. A few years ago republicans offered a new type of SS where instead of paying out current entitlements with current revenue we would instead have everyone's money go into individual retirement accounts. So no SS but you'd pay into a retirement account.
We would restrict the retirement account so you could only invest in government bonds. That's just as safe as SS but your money would grow rather then just sitting in an account. Everyone would own their account. When you reach retirement age you can draw on the money. The government also would shift most of it's foreign debt to domestic debt.
If people die before they collect then their family gets the money. No reason a man should pay in a large portion of his income for his whole life and then his family should get none of it if he dies before he collects.
The system would be sustainable, fair, and it would help the US government by moving debt into domestic hands.
But it was shot down by the democrats for the same old reasons.
We have a pyramid scheme. SS as it is now is literally a pyramid scheme. They always collapse eventually. Sorry... that's how the math works.
It's all math. Recognize or you're like someone that refuses to deal with the math in the middle of a major engineering project. Your ideas will get people killed. You not being honorable... you are being irresponsible.
It's too late for transitions. You should have done that more then a decade ago. You didn't and so that isn't an option anymore. Sorry.
amaoicanApr 1, 2011
"If people die before they collect then their family gets the money. No reason a man should pay in a large portion of his income for his whole life and then his family should get none of it if he dies before he collects."
This is why I prefer to think of "Social Security" as being "elderly insurance" - it is insurance against the possibility that you will one day get too old to earn money. And that's the only conceptualization I can think of ATM to explain why your family can't collect the balance of your social security. Social security payments are calculated based on the assumption that everyone will die the day they hit life expectancy. The people who die early "leave behind" money that gets used to pay the people who live longer. As long as lifespan is symmetric around the average, and we can predict the average lifespan, the payments will balance.
Under a purely private account system, as soon as you outlived life expectancy you'd be just as screwed as if there was no program.
"We would restrict the retirement account so you could only invest in government bonds. That's just as safe as SS but your money would grow rather then just sitting in an account."
I'm a little confused. You are upset that the government has "spent" the SS revenue and stuffed the SS box with government IOUs, and your solution is to force a person to put their money into an individual box, that then gets emptied of cash and filled with government IOUs? How is that different from what we have now, aside from not protecting people from outliving their peers (as described above)?
But it does make me think of an idea I had - which was to get rid of traditional taxes, and instead have individual government departments sell bonds to the American public. (So instead of a "US Treasury Bond" you'd buy a "US Department of Defense bond", etc). People would be willing to accept a lower ROI on things they _want_ the government to do, and for things they do not want the government to do, they might change their mind if the ROI was high enough.
So coupling this with your social security program and stipulating a balanced budget, we might be on to something.Comment is buried, click here to see the rest.
amaoicanApr 1, 2011
You could really go nuts with the bond sale program. e.g. "We are auctioning $100 billion in bonds to pay for an invasion of Canada." - then if you can't drum up $100 billion worth of bids you can't do it, and that's great because it's apparently not something The People wanted you to do. And if the bond interest rate is ridiculously high (60% annually) the gov't could say "Thanks but no thanks.." and withdraw the bond offer (or pay off the bond the next day or w/e is compatible with the letter and spirit of the law).Comment is buried, click here to see the rest.
karmashockApr 1, 2011
If we cut social security the worst that will happen is that some old people will have a hard time for the next 10-20 years before they die.
Terrible stuff... but it isn't a strategic threat to the United States. We can survive it.
If we default on our debt we won't be able to borrow more money.
GASP THIS... you are only paying current expenses by borrowing money. If you can't borrow the money then the entitlements will fail ANYWAY.
So you have two choices. Default AND have entitlements fail.
Or cut entitlements to avoid defaulting.
You cannot save entitlements by defaulting on debt.
The math is very very very very simple. Please tell me you get it. You cannot save entitlements. They're already dead. All we can do at this point is minimize damage. If you wanted to save entitlements you should have supported the republicans fifteen years ago when they tried to reform social security. But no... that didn't happen. So it's too god damn late now.
Tough s**t. This thing is going down. It's like swimming with a anchor. You can either let it go or go screaming to the bottom of the ocean with it.
And before you tell me about the poor old people again, remember that if you implode the current economy you're going to in debt their grandchildren.
So which would you rather save? Old people or babies?
Do the math. You sentimentality is not admirable... it's childish and naive.
amaoicanApr 1, 2011
"GASP THIS... you are only paying current expenses by borrowing money. If you can't borrow the money then the entitlements will fail ANYWAY."
You understand that the US Government has the ability to print money, right? Not that it's a good option - it could lead to hyperinflation. But I'm a little confused as to why you are claiming if the government can't borrow money it can't pay for entitlements, while also bitching about hyperinflation. Printing money is what causes hyperinflation.
"If you wanted to save entitlements you should have supported the republicans fifteen years ago"
You mean.. when I was in junior high?
"You cannot save entitlements by defaulting on debt."
Social Security _is_ a debt. You can't cut SS without defaulting on debt.Comment is buried, click here to see the rest.
karmashockApr 1, 2011
No one is going to give us a good rate on bonds if we default. Even a bad rate on bonds is nearly as bad as not being able to sell them at all because you have to sell more of them to get the same amount of money back.
I don't know what to tell you. You seem hell bent on killing the country. So fine. I've talked to enough leftists that it appears they'd rather destroy everything then admit their entitlements are bankrupting the country.
Fine. Hyper inflation here we come.... and the entitlements will not survive that either... really most of the government won't survive it. Ironically, the military will because it keeps order. But everything else is likely going to burn.
Also once you default on debt you never get a good rate on bonds again. Our credit rating will be shot for a hundred years or so.
And before you go feeling bad about old people, it was those old people that set up this stupid system in the first place. So screw them. They were told in election cycle after election cycle that this was unsustainable and they ignored it. Now they want to pass their mistakes on to the next generation. f**k them.
No one deserves to have their retirement cut more then those bastards.
And I say that with all the love in the world. But they have no right to pass their mistakes on to their grand children. This is their disaster. They should eat it.
amaoicanApr 1, 2011
"And before you go feeling bad about old people, it was those old people that set up this stupid system in the first place. So screw them. They were told in election cycle after election cycle that this was unsustainable and they ignored it."
Same could be said about the bond investors. The difference is that the "old people" never had a choice whether or not to invest into social security - the investors did have a choice whether or not to lend to the government.
Pay back the people you robbed at gunpoint before you pay back the people who leant to you out of self interest.Comment is buried, click here to see the rest.
karmashockApr 1, 2011
Of course the US government can print money. But so can any other country.
Do you think you're the first person in history to come up with the idea of just printing more money?
What happens when countries do that?
hyper inflation. Every dollar is worth less then the last until it costs more to print it then it's worth. You have HOURLY prices and people get paid significantly more EVERY DAY then the last because otherwise they can't pay for anything.
Eventually the currency becomes too much of a pain in the ass to use at all and everyone either switches to a barter economy or to another competing currency.
Eg... everyone might start getting paid in Euros because the dollar becomes worthless.
Oh my god... you know so little about economics. New rule. And I don't mean this to be insulting... but your last post proves that you have no business having an opinion about these issues. You're like someone that believes in witch craft and doesn't understand what bacteria is offering opinions on medicine. Just leave this to people that know what they're talking about until you get a clue.
And again... I'm not being insulting. I think you can get a clue at some point in the future. But that time is obviously not now.
amaoicanApr 1, 2011
Well now I know you aren't actually reading my post. I already pointed out that inflating the currency is not a good way to pay for things and specifically mentioned hyperinflation.
But the US prints money all the time. My question is: where is the line? How much is too much?Comment is buried, click here to see the rest.
karmashockApr 1, 2011
How much is too much?
It doesn't matter. No one can say because it's all determined by market factors. Go with this "soon." The point is that it will happen if we don't cut spending radically.
You can't ignore the point. It's going to happen unless we pull back.
amaoicanApr 1, 2011
Fair enough. But just put yourself into the same position: your boss comes to you tomorrow and says, listen, you know that paycheck you worked the last two weeks for? Well, the company's in bad shape so we decided we're not going to pay it. But hey, at least you still have a job. And you know damn well you took an extra 15 minutes for lunch that one day.
Sure, it might be better for everyone else, it might even be better for you in the long run (assuming the alternative was that the company goes out of business and you spend years unemployed). But it's still wrong.Comment is buried, click here to see the rest.
ieatskunkMar 30, 2011
Infrastructure is important, but building it up just to "stimulate the economy" is a terrible idea. Instead take that money and subsidize the education of the next generation of engineers, doctors, and scientists.Comment is buried, click here to see the rest.
karmashockMar 30, 2011
That's not working so well since the education money seems to go people getting anthropology undergraduate degrees. And beyond that, even if you do get the engineering degree more often then not you find yourself in competition with people that immigrated from india or something where they got educated for a fraction of whatever your bills were.
It's very troubling. All sides have some sense on their side but the current status quo is toxic.
ieatskunkMar 30, 2011
The education subsidization would have to only apply to real fields like engineering, medical, or science....the kinds of fields that will advance our society and help innovation. Psychology, business, art, law and other nonsense fields would not be eligible. In fact, bachelor level degrees in many of those fields should be done away with all together because they are useless for getting a job.Comment is buried, click here to see the rest.
karmashockMar 30, 2011
Good luck reforming the university system. They're easily one of the most entrenched and regressive forces in our society which is as ironic as it is sad.Comment is buried, click here to see the rest.
melthornalMar 30, 2011
So, you're basically just saying you don't understand how society and culture are the two most powerful influences to the human race?
Maybe they SHOULD make psychology and art mandatory.
ieatskunkMar 30, 2011
melt: I'm not saying do away with the fields all together. I'm saying that bachelor level degrees aren't worth much in those fields so schools can help students by doing away with them. (Forcing students in those fields to attain a masters level degree or better.)
Engineering, medical, and science fields are the path to the economic future. Innovations in these areas drive everything in our world. If we are going to throw money somewhere then let's throw it at that.Comment is buried, click here to see the rest.
scotty562Mar 30, 2011
Would you mind clarifying how you came up with 971.1 billion dollars? Sounds like an interesting idea.
karmashockMar 30, 2011
That would be a one time profit suck. After that lots of businesses would go bust or leave the country... and the next year you'd have even worse problems.
People seem to forget that our problem is that we spent too much EVERY YEAR. It isn't just that we built up a lot of debt over a lot of years but that we spend too much every single year.
If you want to balance the budget you're going to need to cut.
Or hyper inflate the currency which will make all transactions done in dollars meaningless and crash the federal reserve bank.
Choose... Cut or die. Don't argue with me. You're arguing with math. It doesn't care. The equation is going to burn us if we don't do something about it.
melthornalMar 30, 2011
You can keep building up these strawman arguments, I have counted three in this thread, but you are only tricking yourself.
karmashockMar 30, 2011
Not at all. But in the end you're arguing against the math. What you say or argue is irrelevant.
You are getting a Wily E Coyote eduction in physics. By all means... yell at the ground... maybe it will get intimidated and forget about the whole gravity thing.
*yawn*
melthornalMar 30, 2011
The mathematics? You are building strawman arguments. You are claiming that certain ways of dealing with issues don't work because of some absolutely ludicrous idea that nobody other than you has mentioned. You are building these strawmen, then arrogantly attempting to divorce yourself from the argument saying "its not me, its the math." No, it is you. It is your utter inability to look at the situation from a rational point of view. You want things to be a certain way and to follow some ideological truism that has absolutely no backing in either logic or real world application.
You assert people work only for money, which is a truism. A truism that happens to be entirely false, as can be easily shown with even the most basic of human conditioning experiments and/or basic observation of the facts as presented.
You assert that the issue's cause and solution are two diametrically opposed scenarios, which is a false dichotomy. The issue is not spending versus taxes. The issue is culture. The American culture, and the world culture due to heavy American influence, has lost its ability to rationally reason. It is, as you are, built upon desperate attempts and constructing truism and dichotomy. These people are good, those people are evil. Doing this is good, doing that is evil. Living your life this way is productive, that way is lazy. These are absurd; irrational; primitive; and ultimately disastrous, both socio-culturally and economically, world views. They lead to a culture of fear, hatred, and narcissism. A world of greed, selfishness, and shallowness.
This is not inherent, innate human nature. This is a failure of culture. It is not proper, responsible, or constructive to attempt to repair aspects of the economy, law, or world politics without first confronting the failure of this age of narcissism and selfishness. It is only a matter of time before everything will revert back to how it is now: completely f**ked.
karmashockMar 30, 2011
You can't spend at a faster rate then money is made.
If the budget is growing at a rate of 7 percent or more a year and the economy is growing at a rate of 3 percent or less then there are only two options.
Radically cut spending or hyper inflate the currency and destroy the credit rating of the country.
Either/or. The math is simple, entirely valid, and unarguable.
You want to play chicken with a freight train? Go for it.
You guys are winning the darwin awards in economics.
melthornalMar 30, 2011
There you go over simplifying everything again. nice jorb. You bore me. Goodluck with your life.
karmashockMar 30, 2011
Oh really? so you think it's more complicated huh?
How?
You are spending more at a faster rate then the economy is growing. It doesn't need to be more complicated then that. That sums up your problem rather nicely.
Any added complexity would just cloud the issue which I suspect is the real reason you're complaining. You'd be much happier with a thick layer of bulls**t to hide your marxist theories under.
Well, hide them all you like. In the end, the math isn't fooled. You can fool everyone everywhere and still lose because the math isn't a person and it doesn't respond to opinion polls. You can either take it seriously or get creamed. I don't really care which.
starmanjonesMar 30, 2011
@karmashock
in the end... your prescriptions have led us where we are today.
it goes back and forth but every last time our economy tanks its from unbridled greed by businesses that don't believe they have any social function other than making money. they don't want the rest of us that end up in the poor house to complain. when we do we are given numbskull admonishments like the ones you offer.Comment is buried, click here to see the rest.
agmlauncherMar 30, 2011
Raising taxes is not the way to fix skewed wealth disparity. All it does is make the private sector poorer, and the government richer.
Instead, laws should be made which forces companies to invest "excess profits" which ordinarily go to investors or executives, back into employee salaries & benefits. The government will still end up collecting taxes anyway (arguably, even more efficiently since people who were making $30,000/year are now making $35,000/year still won't be able to afford tax loophole lawyers), the differences is you'll put spending power back in the hands of 10's of millions of Americans, rather than just a handful of them. This will be better for the US economy overall than simply taking the money from the rich and giving it directly to a spend-happy government.
Of course in a hippie dream land this would be fantastic, but then what happens is American businesses become less lucrative to invest in, lose investment money, have to fire a bunch of people, and foreign businesses start getting more of US investment dollars.
usarugulaMar 30, 2011
"All it does is make the private sector poorer, and the government richer. "
Make the government richer? America is in debt. Cutting spending alone will not change this.
agmlauncherMar 30, 2011
As I said, taking money DIRECTLY from the rich and giving it to the government prevents that money from first circulating through the lower and middle classes. It's these classes which drive the economy. 10 rich with $500,000 extra dollars is not as good as 100,000 people with $50 extra dollars. Let's say we're talking about going out to eat at local restaurants. 10 rich people aren't going to spend $500,000 at local restaurants because there's no need to. They can only eat so much.
Meanwhile 100,000 people will spend a lot more money collectively on local restaurants because 100,000 people will invariably need to consume more stuff than 10 people.
Thus the best way to stimulate the economy (at least on a local/small business scale) is to get as much disposable income in the hands of as MANY people as possible.
This is why if you're going to tax the rich, you're better off taxing them by making them pay their employees more money (or making the companies they invest in pay their employees more money).
But as I said, doing so will have unintended consequences which are pretty easy to foresee: the reduction in investment in American businesses.Comment is buried, click here to see the rest.
austino313Mar 30, 2011
I think rinsed is the word.
Closed AccountMar 30, 2011
give the breaks to the poor people, tax the rich. trickle down is proven to be a huge failure. trickle up actually creates jobs because the people most likely to spend a tax rebate are the ones barely making ends meet.
agmlauncherMar 30, 2011
Giving breaks to the poor and taxing the rich won't solve our budget problems. A wealthier middle class, will.
sutleyMar 30, 2011
The middle class is poor compared to the super rich. What you're saying is semantics and you're deliberately missing the point. Taxing the super rich and giving breaks to everyone else is what's needed and clearly what was meant.
BluntzworthMar 30, 2011
"As I said, taking money DIRECTLY from the rich and giving it to the government prevents that money from first circulating through the lower and middle classes. "
The whole issue is that the rich are not circulating this money through the lower and middle classes. They are hoarding it.
sabz5150Mar 30, 2011
Exactly. Trickle-down only works if there is... wait for it... TRICKLE DOWN!
What's trickling down right now is yellow and smells of ammonia.
agmlauncherMar 30, 2011
No s**t. And how do you think taking it from them and giving it to the government so it can squander it away, will be any better?
As I already said, the government will get this money regardless. Money paid out to employees will still be taxable income. At least then the employees have more disposable income to help keep up demand for various goods and services (which in turn leads to jobs, increase in GDP etc etc).
A money train from the rich to the government doesn't help anyone.Comment is buried, click here to see the rest.
entroperMar 31, 2011
Define "squander", because you say it as if it just disappears. What do you think happens to the money? It doesn't just go away, it gets spent on things, and thus goes back into the economy in some form.
agmlauncherMar 31, 2011
"it gets spent on things"
- Unending wars in the middle east
- Ever-increasing Interest on money that is continuously borrowed from the fed
- Unaudited multi-trillion dollar bailouts with absolutely no changes or laws to prevent that sort of thing in the future
Shall I go on?
BluntzworthMar 31, 2011
Well if tax breaks for the rich don't produce jobs, as it as been proven over the last 30 years. Why do we still continue to do this "Trickle Down"? Why are people still lying about it, claiming that it works, or would work?
leadoffmanMar 30, 2011
I don't know whether to dig you up or down (so I guess neither). Your last paragraph is dead on, which is why it is stupid to target any segment of taxpayers (even if you're jealous of their success)..but the rest of your post has all kinds of wrong.Comment is buried, click here to see the rest.
JustSayNoPartyMar 30, 2011
People saying this is mere Jealousy way understates the issue.
torrangeMar 30, 2011
it is not jealousy - make them pay a fair amount. I make decent money and give a lot to charity. Why should my tax burden be more than someone pulling in millions a year? The "rich" want to call it redistribution of wealth while it is simply "paying your fair share". Stop extending the tax cuts, I will be happy to pay my fair share should I ever reach that bracket.
laborerMar 30, 2011
We need to make these government chartered corporations pay their fair share for owning the combined physical and labor resources of the the United States.
300 million Americans submit their free will to live in this society, and so we should use the system most efficient for taking care of those governed. Such as system would not have the top 10-20% of the populace fighting over the majority of the wealth of an economy, while the bottom 80-90% scrape by on what is left.
If half of the country is too poor to pay taxes, you tell me that they should pay up anyways, because if we tax the other guys it wouldnt be fair? How is it fair 300 million people werent born millionaires? Life isnt fair. If we want to avoid catastrophic social and economic melt-down, we need to get this country running again. And that wont happen by making tax breaks so corporations can come in here and pillage our country, as they did when they put us in this situation in the first place.
We paid them $700 billion of our tax dollars.Comment is buried, click here to see the rest.
auditortuxMar 30, 2011
"If half of the country is too poor to pay taxes..." that is begging the question. They are "too poor to pay taxes" because the tax code is set up in a way that allows them to not pay taxes. That's problem #1 - we have a system where 40+% of the population pays nothing in income taxes. I'd love to see what percentage get the EITC - essentially a negative income tax.
While the super wealthy might have most of the wealth in the country, even if we took every last penny of it and gave it to the government to use, that wouldn't even cover the deficit for a year. Where the "real" money is (ie, income) is in the middle class - just by simple numbers. And that group of people, if facing a tax increase, do not have the luxury (or any reason) to avoid the increase. If their bill goes up 10% from 10k to 11k, its going to be really hard to find a CPA and lawyer to go through their setup to avoid that tax - there simply isn't the margin. Either that or its all W2 - no way to avoid the tax. But for those in the highest brackets, that bill might be going from 100k to 110k - suddenly there might be the margin.
If we were to stop worrying about everyone's wealth and focus on everyone's tax burden, that would be a start. Moreover, we should also look at a consumption-based tax - that would even capture the tax that is avoided by underreporting (cash transactions, for example) or flat out evasion. And it encourages savings/disuse of debt. That's a good thing.
laborerMar 30, 2011
Sure. We can tax the middle class some more, right after we reign in corporations. No more uber-organizations. If one entity is going to control that much wealth and resources, they should be public.
After that change has taken place, then we can talk about increasing taxes on the middle class. Although any increase on the middle class will be unlikely due to how many of the nations poor will join the tax paying brackets.
With all that wealth going into public works projects and new jobs, the near 20% actual unemployment will clear up, and underemployment from poor private service sector jobs will give way to new infrastructure and manufacturing jobs with increased wages and benefits. Not to mention a reigned in single payer health system.
That way any person can start up a small business, without the worries of how to pay for healthcare for your employees, or retirement in old age. The first step is retooling the corporate system.
auditortuxMar 30, 2011
Lets ignore the healthcare issue - I think we both agree that is asinine that your employer is your gateway to health insurance... we don't do that for auto, homeowner's or life (all can and usually are bought elsewhere) but it is with health... insanity.
Corporations don't need to be reigned in. The fact that some do not pay taxes is misleading - either the tax code gives them breaks (green jobs/energy in GE's case), the tax code allows structures that make it a pass-through entity (S-Corps... that income is paid by the individual), the tax code allows to recoup past losses (carryback/carryforward) or they simply pay taxes in other jurisdictions (ie, you paid taxes for profits earned in England? You get a credit on you US taxes for that amount). Notice that all four of those reasons are due to the tax code. Reforming that is more important than some crazy restructuring of the corporate world. The last two should probably be kept (encourage formation of new companies and expansion overseas).
But you have a HUGE gap in your logic - do you think that Mr. Unemployed Financial Guru is going to accept going down and working on an infrastructure project? Or some lawyer that can't find a job out of law school? Sure, if they get desperate enough, but many, many people will simply refuse to do manual labor... how many people hire companies to maintain their lawn (fertilize, deweed, mow, etc)?
And what infrastructure do we need? Rail? Don't make me laugh, we're too spread out and only two lines in the WORLD are profitable on their own (IIRC).
There are no simple solutions, especially since its near impossible to tell how people will react to any new scheme. Decide to tax corporate profits more heavily? Owners will find more expenses for the corporation to pay. Its tough...Comment is buried, click here to see the rest.
Closed AccountMar 30, 2011
You are so right! We need to have national healthcare paid by taxes. See, that was easy.
peppermintpigMar 31, 2011
Technically, corporations can legally be taxed, but income taxation is unconstitutional.
starmanjonesMar 30, 2011
i've been advocating a department of government titled something like: department of science and research. things are moving so fast that society can't plan for any future the way it is now. all the planning is done by the short term needs of business.
if we as government were hiring as many science people as can graduate from college to do basic research that is then sold to private companies to develop it would give us a means to direct where the future is taking us as a society. the sale of development rights could be put back into the system to finance future research.
like it or not the future is in the hands of science. who is in charge matters. it would be better to do research for research and not leave it in the hands of the market place. we'd have no space program if we didn't fund it through government.
ascguyMar 30, 2011
Not sure how much I like the idea of picking and choosing who gets raked over the coals when it comes tax time. Here's a solution that makes perfect sense:
15% flat tax on income
8% consumption tax (i.e. national sales tax)
usarugulaMar 30, 2011
2 questions:
1. Do you count corporate profits as income?
2. Where do you stand on tax breaks?
ascguyMar 30, 2011
1) Yes, they would be taxed at 15%. Right now, so many of them get away with paying nothing.
2) Simple is better. Tax breaks are done. That's the bonus you get for having a lower flat tax. If you want to avoid paying additional taxes don't spend tons of money.
auditortuxMar 30, 2011
The problem with your scenario is that you still face double taxation. The corporation earns profit - pays 15%. 85% remains.
They declare a dividend/distribution to the owners. They pay 15%. 72.25% remains.
You know how an effect 27% income tax.
Or how about we ditch the taxation of income and go straight to a national sales tax... there is double taxation there (taxed as earned, now taxes as spent) but you could easily get around that with prebates/rebates.
amaoicanMar 30, 2011
You could easily get past the double taxation of dividends by just allowing dividends paid to be considered an expense (not a profit).
ascguyMar 30, 2011
Somehow we need to ensure dividend/investment/interest income is not "income" for taxation purposes, as the money used to make the dividend/investment/interest has already been taxed.Comment is buried, click here to see the rest.
mgf64Mar 30, 2011
You are proposing what we have in the EU, VAT.
It crept all the way up to 20% and 21% in some countries.
Consider yourself very lucky you don't have it.
ascguyMar 30, 2011
No, I'm not proposing a VAT. VATs and sales taxes are two different things.
mgf64Mar 30, 2011
You are technically right, but they are both consumption taxes.
Revolutions have been fought for less, I hear one started because of sales taxes on tea.
Apart from technicalities, they are paid whenever a sale is made. VAT tends to be more general and affect the whole economy than "sales taxes affecting only certain goods".
They even share the property of not being paid on exports (or across states).
Now technically we have have to pay VAT on across EU countries, but that's for consumers, and a recent "innovation", I will spare you the more sordid fiscal details, it adds yet another layer of administrative complexity, as if we poor EU sods needed it.
Both form of taxes affect consumers, rather than businesses.
They are unjust as they affect equally the rich and the poor.
If you are poor, that 10 to 20% on essential goods and services might be overkill and push you further in the poverty scale.
Yes, but 8% is not 10, nor 20%... Trust your politicians and give them some time...
I know that proportional taxation may sound a strange concept in the US, but it is actually correct that the poor pay proportionally less taxes than the rich.
For a tychoon shelling out 10$ is not the same as for a single mother with kids, it hurts a lot less.
If you have a good proportional tax on income, taxing consumption is just obnoxious.
Of course taxing consumption is what the richest successfully advocated and imposed, guess why.
torrangeMar 30, 2011
Nice post, I appreciate the perspective. You made me laugh out loud with "I hear one started because of sales taxes on tea."
drazen77Mar 30, 2011
The main problem with VAT in the EU is that it is in conjunction with direct taxation at already high levels.
40% of income is directly taxed
Tack on 21% tax on any purchase and you are getting annihilated with taxes.
So yes, when combined with direct taxation it adversely affects the poor more (especially if they don't exempt necessary items... foodstuffs, etc).
Do away with direct taxation and a 21% VAT is tolerable, because the individual has the choice to pay (make the purchase).
Don't blame the consumption tax, blame the entire tax scenario that has been created as a result of direct taxation.Comment is buried, click here to see the rest.
amaoicanMar 30, 2011
.. What's the difference? I mean, aside from the fact that the sales tax is taken at the last stage instead of at each stage along the line.. which has its own disadvantages.
JustSayNoPartyMar 30, 2011
I generally like the idea. But how do you get around concerns of 'stiffling' consumption? Are their exemptions for those at or below the Poverty line?
ascguyMar 30, 2011
The problem with America is we consume, we don't produce. I think a consumption tax would hurt, but hopefully provide the push to get us producing and innovating again.
drazen77Mar 30, 2011
Think of it this way... without direct taxation you suddenly get what you are actually paid (45k a year, minus SS+Medicare)... what are you going to do with 28% of your salary that you never had before? I imagine that some of that would be spent (i.e. put back into the economy via consumption).
JustSayNoPartyMar 30, 2011
Those people making 45K will not have 28% more income. There would still be a 'flat tax' and the 'consuption tax'. Do people making 45K pay 28% now?
drazen77Mar 30, 2011
Sorry, didn't bother to look up the actual tax rate on 45k... 28% is the tax bracket I am in at the federal level. It's probably 25% /shrug
And my comment was in reference to there being NO direct taxation (no income tax), only a consumption tax.
45k with no direct taxation means you get nearly all of that money straight into your pocket (minus SS+Medi). It's your own little stimulus. :)
JustSayNoPartyMar 30, 2011
Ok. I was more responding to the one Poster's suggestion that the tax plan be set up as follows:
15% flat tax on income
8% consumption tax (i.e. national sales tax)
I wasn't considering a complete Consumption tax strategy in my comments. I wonder how that Consumption Tax would have to be to maintain current levels of revenue.
mgf64Mar 31, 2011
The only problem I see is that any "flat tax" scheme is inherently injust and will cause the rich getting richer and the poor getting poorer.
If you earn 500K/year, 15% are too little a contribution to society, if you earn 10K/year, that 15% is way too heavy a burden.
JustSayNoPartyMar 31, 2011
That's a very good point. The gap is large enough already.
drazen77Mar 31, 2011
That's only if you subscribe to the notion of progressive taxation.
The flat tax is a fair tax in that regardless of income, you are taxed proportionately (the same) as everyone else.
Society shouldn't get to judge another's contribution to society as not enough... because you will never see anyone say that it's too much.
The problem inherent in "progressive" tax schemes is that those who utilize the services these taxes are levied for (the good of society) the most don't pay into them. This creates a burden on the middle class and upper classes (mostly middle) and is wholly unsustainable.
drazen77Mar 31, 2011
There is some discussion on it, ranging from 25% to 32%.
Still, its a tax I would pay over direct income taxation. I choose whether what I am buying is worth it or not.
Most proposed consumption taxes exempt basic necessities like foodstuffs... just to disabuse any notion that the poor will be affected more adversely than anyone else.
JustSayNoPartyMar 31, 2011
I do like this approach. But, I'm still stuck on your comment above that "The problem inherent in "progressive" tax schemes is that those who utilize the services these taxes are levied for (the good of society) the most don't pay into them."
Which Services? If these are serivces for the poor, they receive the services because they can't afford them on their own (health care clinics and more). I still would probably favor some form of exemption at a lower level. I don't want that person making 10K per year paying a 30% tax.
drazen77Mar 31, 2011
The services I mostly refer to are our unfunded future liabilities... (Medicare/Social Security). Those two liabilities represent nearly 2/3rds of our debt load as a nation.
leadoffmanMar 30, 2011
Fairtax.com
novenatorMar 30, 2011
I love how neocons always name whatever they propose exactly opposite of what it is! The "fair" tax is nothing but even more tax breaks for the rich.
BluntzworthMar 30, 2011
I was thinking the same thing also.
handuetMar 30, 2011
How is a consumption tax a tax break for the rich? If you tax spending rather than income with no tax breaks or shelters then the rich (who spend WAY more money than the poor) will pay more taxes.
sabz5150Mar 30, 2011
Because a "consumption tax" (read: sales tax) is regressive.
leadoffmanMar 31, 2011
No it's not
drazen77Mar 30, 2011
I believe its actually fairtax.org
JustSayNoPartyMar 30, 2011
"A few years ago an elite 300,000 Americans in “the top tenth of 1% of income had nearly as much income as all 150 million Americans who make up the economic lower half."
Big numbers like this are hard to visualize. But truly, it will eventually become a problem that 300,000 Americans have as much income as half the country. Putting that in perspective, that's like everyone in Pittsburg having incomes equal to all people living west of the Mississippi (hmmm, is that 150 million?)
Closed AccountMar 30, 2011
this disparity has been heightened by our government's willingness to send all of our manufacturing jobs to china. It is eliminating the middle class and making CEOs wealthy beyond belief.
amaoicanMar 30, 2011
Perhaps the top 0.1% of Americans own 50% of the wealth, but isn't it possible that something like the top 0.1% of America (e.g. land) is worth as much as the bottom 50%?
So it's not like John Q Public can't find a place to live because Joe Millionaire owns all the land. It's more like, Joe Millionaire can buy the expensive beach front property so he never has to see or hear or think about the problems of John Q Public.
dusanmalMar 30, 2011
"A few years ago an elite 300,000 Americans in “the top tenth of 1% of income had nearly as much income as all 150 million Americans who make up the economic lower half." But you stop with info there. Include how much in proportion to that wealth those "rich" and those in "lower half" pay and absurd is clear. Those “the top tenth of 1% of income" paid MUCH MORE taxes vs "all 150 million Americans who make up the economic lower half" while earning similar proportion of the wealth.
Proponents of the "tax the rich" never mention that part. Voting right must be based on exactly equal percentage of the income from each voter. Than “the top tenth of 1% of income" people who earn about 1/2 of the wealth will pay about 1/2 of taxes, not 90%+ as now or even more as "tax the rich crow" wants.
What is wrong with taxing the rich? - I am from poor and destroyed Socialist country. They tried such tactics. Eventually, you run out of rich and everyone is poor and country collapses.So, stop being envious and move your butt. Make use of opportunity your country freedom provides. I know very few rich people but by coincidence or not, every single one arrived here with wealth equal to that of your average homeless man.
JustSayNoPartyMar 30, 2011
I'm not making an argument for 'massive tax' increases for the Rich. Though, I would support the 'removal' of the tax cuts they received in recent years (maybe back to Reagan). But, for me, what your entire comments is lacking involves the history over at least the last three decades. During a time when 99% of the country has stagnated at best, 1% has done quite well. Why? I believe a lot of this has to do with 'rigging' the political system to favor the wealthy. I believe many who have gotten rich have done so on the backs of most Americans. Many have participated in unethical or fraudulant behavior. Eventually, when less than 1% of the country earns almost all the wealth while the rest struggle, that will create major problems.
This is not just about Getting Off Your Butt. A good proportion of the 99% work hard. But the system is set up in a way that it is VERY unlikely they will every come close to joining that 1% (the american dream). I believe there are more Barriers to that then in the past.
miklkitMar 30, 2011
When half of the country, 150 million people, are trying to get by on just 2.5% of this county's wealth there is no way they can move up. There is no ladder to climb.
peppermintpigMar 31, 2011
I am not convinced to your conclusion because wealth is not a limited commodity, and the current paradigm is overshadowed by a fiat currency system and vast state-corporate collusion.
miklkitMar 30, 2011
Here is a good visualization of our income disparity.
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/04/09/businessinsider-15-charts-about-wealth-and-inequality-in-america-2010-4.DTL
In the last election Meg Whitman stated that 1% of Californians payed 80% of the estate taxes. She thought that was so unfair. What she did not say is that 1% of Californians have 80% of the wealth in California.
That is why the revolution is coming.
"Let them eat cake!"
drazen77Mar 30, 2011
The problem is more that there isn't a level playing field. Simplify government and the tax code and the average person with average resources can better compete.
linuxpersonMar 31, 2011
"That is why the revolution is coming."
Just to be clear, are you talking about a violent revolution?
miklkitMar 31, 2011
Not sure yet.
linuxpersonMar 31, 2011
So you are potentially calling for a violent revolution. Simply incredible.
You know, that was tried once before, and it didn't end up working that well.
peppermintpigMar 31, 2011
Violence is not the answer, freedom is. So what's the question?
mbraynardMar 30, 2011
So you think the 'super rich' are just going to let you take their money?
Can someone send this smug **** a copy of of Atlas Shrugged?
Closed AccountMar 30, 2011
What for? Does he need something to level his couch?
jefftsMar 30, 2011
I'm currently reading that book and I'm amazed at how prophetic it has become. Obviously, things are not as bad as what was portrayed in the book. But the fact that people actually think like the individuals in that book is scary.
bookantMar 30, 2011
Can we throw in a copy of "Dianetics" and "The Book of Mormon" so his library of cultist fantasies will be complete?
ewagnerjr2000Mar 30, 2011
I see everyone who believes they should pay their fair share. How about we go a step further and say everyone no matter how much money you make, you pay 15%. There are no loop holes, or credits for anyone. If we are going to make it fair it should be the same across the board. I am all for a flat tax.
bigcheezerMar 30, 2011
Thats the key. No loop holes, no credits.
torrangeMar 30, 2011
do we keep social programs for the needy in this scenario? And without the tax breaks for giving to charity, I see charities suffering. I like the idea but see issues.
ewagnerjr2000Mar 30, 2011
Giving to charity should be out of heart, and not to see a reward from the government. Each person will have more money to spend the way they deem necessary, giving them control over their own health and social needs.
ewagnerjr2000Mar 30, 2011
I believe those people who have a real need (i.e drugs/alcohol) need assistance but there are WAY to may people taking advantage of the systems.
MusicManGPMar 30, 2011
How many people are taking advantage? And by how much? Where are the facts?
ewagnerjr2000Mar 30, 2011
Why would you ask a questions like that? So you think all those who are on Welfare are little angels using the money only to survive? The true question is how to determine what is a needed good. I still remember around the time of the superbowl seeing a whole cart of coke being purchased with food stamps. The need in this country is greatly exaggerated, people have so many opportunities to make their way and life better for them selves.
Unemployment too, you give me a chance with free money from the government. What is the need to get a job then? or you could hold out until you get the CEO position.
Sorry not to seem negative but the current system does not work, for a lot of different reasons.Comment is buried, click here to see the rest.
MusicManGPMar 30, 2011
Well I'm glad you used an anecdote to support the idea that people abuse the systems, because that's all I ever hear. I don't care about your stories, I want real evidence that there is widespread and significant abuse that outweighs the beneficial aspects of such programs, until then pay attention to more important things.
I don't think all those who are on welfare are angels; my question to you is, do you think they're all devils?
Plenty of people get unemployment insurance benefits that are in no way "free money from the government." Are you familiar with how unemployment insurance works?
drazen77Mar 30, 2011
Issues how? Basically you get a % of your income directly back to you, to choose how you use it as you see fit.
If you were giving 5% of your income to charity before and getting a tax break on it... and you are suddenly taxed less by 15%, how is that going to affect you giving 5% of your income to charity minus the tax break?
torrangeMar 30, 2011
what about inflation? I also think that there is a certain population that gives to charity purely for the tax credits, unfortunate but true
norman619Mar 30, 2011
And watch the super rich fleet the US. People seem to think the super rich are forced to live here. They are not. Just as many of the rich were fleeing NY and otehr states they will flee the US if we try to rape them in this manner.Comment is buried, click here to see the rest.
Closed AccountMar 30, 2011
Don't let the door hit them on the way out.
norman619Mar 30, 2011
Who do you think employs you? The stupidity of people like you always amazes me.
Closed AccountMar 30, 2011
....says the guy repeating the same tired talking points. If the super rich roll out, someone will look at the situation with "rape level taxes" as you put it and decide that it's a good enough deal to step in and fill the void. We might even clear out a lot of dead wood this way.
brewbeauMar 30, 2011
Nope. There are no more big businesses or rich people in places like NY, Chicago, and L.A. The cost of business was just too great and that's why they are ghost towns now.Comment is buried, click here to see the rest.
bdbrMar 30, 2011
Keep in mind, the top 1% pays 38% of the taxes. If they leave, do you seriously think the government is going to cut it's spending by that much? Of course not. They'll just make YOU pay it.
Closed AccountMar 30, 2011
If they all actually left, the response to such an action would probably be beyond the scope of conventional discussion of the topic of taxes vs. spending.
david4041Mar 30, 2011
There was a 60 Minutes piece a few weeks ago about American companies are moving to Ireland and Switzerland to avoid US taxes. And they are taking their money and jobs with them.
You're probably one to complain about outsourcing. The reality is that the more taxes and costly regulations a government imposes, the more employers are going to move to avoid them in order to stay competitive.Comment is buried, click here to see the rest.
Closed AccountApr 11, 2011
http://www.latimes.com/business/la-fi-ikea-union-20110410,0,5341610.story
anangrybakerMar 30, 2011
Problem is if they start getting taxed, they have enough money to leave the country.
laurahoustonMar 30, 2011
They have left the country for cheap 'slave' labor and no regulations.
you mean like BP moved out of the Gulf and off to a 3rd world country to drill and pollute at will?
just what good did the 300,000 old oil wells do for the gulf states? those states still have the worse infastructure and crumbling schools in america.
darkmatter911Mar 30, 2011
Whatever your feelings on taxing the super rich are the likely hood of a 2nd American Revolution over this matter are slim to none.
sutleyMar 30, 2011
Let me put it this way - I would gladly participate in an American revolution, and I'm Canadian. Your politics are extremely influential on our more corrupt politicians (our fascist Prime Minister, for one) and your economic status greatly affects the rest of the world, with you being the largest-earning country on the planet. If a change isn't perpetrated in the US first, the rest of the "democratic" world suffers too.
timthetaxmanMar 30, 2011
Taxes are immoral in general and punishing the wealthy is a recipe for disaster.
The solution is to end the corporate welfare state and institute true capitalism. No more corporate veil separating the owners from their business, no more government subsidies, no more anti-competitive laws.
Every dollar earned in that economy would be made by making someone better off and corporate size would be naturally restrained by the risk appetite of the owners. In a free market, no one trades unless they feel enriched by the transaction and everyone is responsible for their actions.Comment is buried, click here to see the rest.
ben0Mar 30, 2011
Read a couple of history books. Things have gone in the direction they have for a reason.
timthetaxmanMar 30, 2011
Indeed. It is precisely because the average person is duped into thinking that more government is good for the common person and bad for the wealthy. In fact, the opposite is true.
Wealthy and well connected people are always going to exert a disproportional amount of influence on the government. Government and corporations are not enemies. They depend on each other in the current system.
ben0Mar 30, 2011
You will just end up with giant all conquering monopolies that cannot be competed with. Sort of like we have now, but even worse. This is the nature of capitalism- you just snowball ahead leaving nothing for those behind you.Comment is buried, click here to see the rest.
timthetaxmanMar 30, 2011
Even in the corporate welfare state, we don’t see any evidence of all encompassing monopolies. In fact, even in those markets with very few competitors, there are normally government enforced barriers to entry and complex regulations that only large firms can handle.
In a free market system, no one would be prohibited from starting a business and no one would be subject to ridiculous layers of regulatory hurdles. The only monopolies that could exist (and I doubt any would) would have to be extremely good at what they did to prevent any competitors from entering the market and their profit would have to be razor thin.
Profit is an indicator that competition can enter the market and sell for less.
ben0Mar 30, 2011
Loads of government regulations to start a search engine I heard. Yet Google dominates.
Smaller businesses can just be bought. How does a small business shop compete with a giant supermarket that buys in bulk. Can't be done. What you're saying just frankly isn't true.
Also a truly free market eh? ... so you disagree with patents then I take it?
A truly free market doesn't work. It really just doesn't. Things need to be enforced, dodgy practices stopped, for public and employer safety if anything.Comment is buried, click here to see the rest.
timthetaxmanMar 30, 2011
Google dominates, because they are the best at what they do. It’s not as though people are unable to use a competitor. There is nothing wrong when a company is successful because they provide the best product, As far as regulations, I’m not familiar enough with the regulatory environment of search engines to comment. However, there are hurdles with DCMA and that type of thing.
It is true that huge companies can buy in bulk and pass those savings on to customers…..isn’t that a good thing. That means they are outcompeting the small business and giving their customer a better price, which is perfectly fine. Even given that advantage, the retail market is extraordinarily competitive. No one even commands more than 10-15 percent of the market I believe.
Yes I disagree with patents and all forms of intellectual property. Property has to be severable in order to be property. Scarcity is what justifies why one person is able to deny access or use to another.
Why doesn’t it work? If anything doesn’t work, it is government. No other organization of man can claim to have killed, tortured, enslaved, and stripped the natural rights of more people.
linuxpersonMar 31, 2011
"A truly free market doesn't work. It really just doesn't. Things need to be enforced, dodgy practices stopped, for public and employer safety if anything."
Free markets are not free of enforcement. I believe you are misunderstanding what he is describing.
peppermintpigMar 31, 2011
An ethical, volitional exchange predicates the concept of a 'free' marketplace. Freedom to choose is always the most ethical solution, even if people make mistakes. It's a contradiction to throw away faith in humanity for faith in the monopoly of violence through a state.
ben0Apr 17, 2011
You're skills in debate are good, I give you that, however I must also concede I haven't expressed the details of my thoughts accurately to you thus far.
There is nothing wrong with a specific company dominating. I agree.
What I think is a problem is when when their domination makes competition neigh impossible.
It can actually become bad for the common man.
You and I both know it is competition that drives capitalism.
Thus I think government intervention to reinforce competition one way or another is a good thing- for the common man.
Alas reinforcing and helping to equalise wealth among the population is necessary, you would find it interesting to research the effects of equality on society and how evidence seems to suggest a benefit to all walks of life on the wealth spectrum.
Please don't take my statement and brand me a communist and I'm sure you wouldn't anyway- just confirming! Humans are NOT equal, wealth should NOT be split equally, humans are NOT identical clones of one another.
I do not really wish to enter the complicated topic of patents.
I will say that I think patents are overused and over-enforced in this day and age to the point they can actually slow down technological advancement.
As much as I would prefer not to discus the matter, it is an important topic when talking about free markets and capitalism.
Your last paragraph I'm afraid is weak one, at the end of the day, and I'm certain as a smart individual you will agree. It's humans who have done that to one another. I never saw a 'government' rape someone.
linuxpersonMar 31, 2011
"Read a couple of history books. Things have gone in the direction they have for a reason."
Yes, because corrupt private business learned that they could easily manipulate the state due to their having more resources than the working man.
miklkitMar 31, 2011
That is why the working man Unionized in the first place, and why the working man will Unionize again.
linuxpersonMar 31, 2011
So long as the unionization you speak of is entirely voluntarily, I'm all for it!
bcarl314Mar 30, 2011
The rich get richer, blah blah. We know it, and apparently accept it now. 2012 will be a telling year election wise. If people REALLY believe the rich (who own 80% of the wealth, but pay only 70% of the revenue) need a tax cut, and vote in the GOP again, this country, I fear, is set on one of 2 irrevocable paths...
Option 1: Revolution - this will only happen when everyday people can no longer afford their cell phone, Wii, PSP, and internet pablum, and have nothing better to do (those are the narcotics used by the wealthy to keep us in check).
Option 2: Serfdom - there will be a permanent class permanently indebted to the landowners.
Neither scenario is good.
We have a government that has bought into the argument that a company is too big to fail (TARP) and believes that the same people who ruined our economy are the "best" people to lead us out of recession - oh and they deserve multi-million dollar bonuses too.
Now we have a case in front of the SCOTUS with Walmart essentially saying "we're too big to be sued".
WHEN THE f**k WILL PEOPLE WAKE UP! There's a class war going on here, and we're loosing!
My recommendation, get your passports in order and have travel plans for Nov 2012. You may need to use them.
norman619Mar 30, 2011
You do get that even if we taxed them at 100% it would make ZERO difference right? We would still be screwed. This is a tactic used to play on your class envy and keep you from looking at cutting where it matters and that is making deep cuts in government spending. Cutting the 4 items no politician is willing to do those being military spending, social security, Medicare, and Medicaid.Comment is buried, click here to see the rest.
ben0Mar 30, 2011
Cuts to Social Security, Medicare and Medicaid really would be the catalyst to some kind of uprising imo.
norman619Mar 30, 2011
Not if our leaders would have a frank non-pc non-political chat with the nation explaining the horrible state of our finances and what realistically needs to be done. I find that most people in the general public I speak to have no real idea what the bulk of our spending is going to and what is coming. I trust the American people to be willing to make the necessary sacrifices if they are given ALL the information they need. Then I would also expect many of our politicians to be fired and/or brought up on corruption and fraud charges. I.O.U.S.A should be mandatory viewing for all Americans.Comment is buried, click here to see the rest.
ben0Mar 30, 2011
Would they not deem it more important that the super rich have some monies taken from them rather than people dying because they couldn't find a job though?
norman619Mar 30, 2011
It wouldn't do anything. The number bare this out. You can can take ALL the rich's money and not make a dent in our fiscal problems. Only the envious and the ignorant actually believe taxing the rich would solve our problem. Taxes on EVERYONE need to go up along with a cross the board spending cuts in government.
bcarl314Mar 30, 2011
Why cut SS? It's MAKING money and has been for over 60 years. Sure, in the next 20 years its going to fall short, but after that, it's a cash cow again. But those 20 years should be paid for from the trust fund anyway. Send all those baby boomers the IOUs there, I'm sure they'll understand that the actual money was used for tax cuts for the rich and military expenses.
Medicare / Medicaid, it expanded too much with unfunded programs. Either fund the programs (through correct tax rates) or cancel / reduce the expansions.
Military, we can't be the police of the world anymore without the GOVERNMENT getting paid. Problem with the military is, we go in, invade a country (i.e. socialize the costs), then hand over the redevelopment to big business (i.e. privatize the gains). That s**t needs to stop. How to stop it? How about a 30 - 50% corporate tax on rebuilding programs.
manicdvlnMar 30, 2011
When you are a multi-millionaire, you are above the law, when you are a billionaire you create the law.
ZombifiedRobMar 30, 2011
Different professions should pay different taxes. People who manipulate stocks to make their millions should be taxed extremely high considering they're literally contributing nothing to society. They're not putting a product on the market. They're not creating jobs. Therefore they need to be taxed higher so they are no longer what's killing this economy.
ben0Mar 30, 2011
This seems to make basic sense, I'd like to see a few economist opinions on the matter.
ZombifiedRobMar 30, 2011
Yeah, by no means am I trying to proclaim myself as some kind of expert in the matter, but the general concept is really frustrating.
austino313Mar 30, 2011
You just knew when you saw this title that this one was going to cause a stir.
I think I might stay neutral for now, but would like to add that article does highlight well what is wrong with society today.
laurahoustonMar 30, 2011
to pay *no taxes* is for NON-profits! ,not for corporations and businesses.
corporations that pay no tax revenue- should payback, full value on any federal funds they use or low price leases they enjoy from the gov.
America can't afford this corporate welfare system -the last 15 years has handed to businesses, through their lobbyists efforts.
mentalflossedMar 30, 2011
standing on the train tracks ones has at least the option of getting off it,.. not too many options left and fewer all the time,.. the thing that blows my mind is how everybody seems to see it but those in power, if those in power and wealth want to stay that way, they need to stop and go the other direction their constant grinding into the ground of the common man will lead to no option but revolt for him. ignore peacful protests you FORCE violent ones, people are not going to lay down and starve to death peacefully , the jones town aproach will not work i say , as we have no shared faith in the elites ideals and plans any longer.
americanblarneyMar 30, 2011
I was intrigued by the title, and I don't even deny that there may be scenarios where it's true, but this article just meandered around with no clear logic or facts to back some very radical predictions. It would cite one fairly common statistic and then use that as the basis to make a wild claim. I wish it had been better written, it might have been really interesting, but this was editorializing at its worst.
farmthisMar 30, 2011
I agree the article meandered. Plus, the guy can't write in complete sentences. I largely agree with him, but his style was off-putting.
ricksiteMar 30, 2011
Why don't we go after the poor who leech off the system? I am not talking about people who can't take care of themselves. I am referring to people who are fully capable of contributing to society (i.e. working) but choose not live off the hard work of other instead. I realize there are some rich people who didn't earn their keep but most worked very hard to get where they are today.Comment is buried, click here to see the rest.
ben0Mar 30, 2011
I too believe this is just as equally important.
laurahoustonMar 30, 2011
The people using these services should be *working at the services* if they are able and not outside employed.
methdwman3Mar 30, 2011
Simplify the tax code!!
mikeymondaviMar 30, 2011
I always get a kick out of the collectivists threatening revolution because they dont feel they're getting enough of other peoples money or don't have enough ways to violate another persons property rights. While i'm not a fan of corporations or the collectivists, i'm amused to think of the people who most oppose firearm ownership threatening revolution against people who actually have firearms. I might not be super rich, but you can start the revolution at my house first, i could use the target practice and the world could do better with less people absorbed with greed for other people money and propertyComment is buried, click here to see the rest.
ben0Mar 30, 2011
Nice random assumptions you did there. Nice.
laurahoustonMar 30, 2011
I like idea of taxing ciggies like they do. Gambling, legal hookers, drinks, porn movies, marijuana, cars over 50k,boats for fishing, sport hunting,...all those luxuries should also have a sky-high tax.
ridgerunner5Mar 30, 2011
Ditto for smart phones and personal music devices.
imoverMar 30, 2011
Here is what we should do- We should all work and give the government all our money and then they who are so wise can redistribute the wealth in an appropriate manner. The government would definitely look out for our best interest! Then it would be great, we would have no rich or poor just everyone equal?(Socialism) We all see how well the government handles our money we give them already so we should give them more! Heaven forbid in this free nation of ours people who have gone out and work their butts off to make a lot of money should not get the benefits from their hard work, the people who are to lazy to get off their butts should get paid also.Comment is buried, click here to see the rest.
ben0Mar 30, 2011
That would be communism (Everyone equal).
ben0Mar 30, 2011
If you invented some game say, and had 10 players, and for whatever reason, one of the players was able to gobble up 99% of the points in the game, and thus get ALL the cool s**t.. the 9 other people sharing the 1% would say 'f**k this', they would simply take the points back and change the rules of the game. Essentially the game is broken.
Yes. The best player should have the highest percentage of the points, and thus the cool s**t, or there would be no point applying any effort to win. But essentially the slope down to the bottom needs to be as gradual as possible, rather than a f**king vertical plunge.
yaosioMar 30, 2011
If we want to stop socialism we need to do the opposite. Cut all taxes for the rich, raise taxes on the poor.
ridgerunner5Mar 30, 2011
Flat tax across the board with fewer credits.
bdbrMar 30, 2011
I'm pretty sure the rich aren't worried about revolution from people who can't even be bothered to vote.
mtduff421Mar 30, 2011
While agree with the premise, this was terribly written. Sounds kinda Beckian.
manchs07Mar 30, 2011
This guy makes it sound like the rich don't pay any taxes at all. The fact is that the top 5% pay over 60% of the taxes, the top 1% themselves pay 40% of the tax burden for the entire nation. Sure, maybe the rich need to pay more, but to say that they don't pay taxes is a drastic understatementComment is buried, click here to see the rest.
manchs07Mar 30, 2011
I also believe the rich would be more efficient with their money (job creation) than the government could be by taking it from them.
novenatorMar 30, 2011
You are only including income taxes in that scenario:
"The trend is similar if you count income taxes, social insurance taxes, excise taxes and corporate income taxes (such as capital gains) combined. The top fifth of households paid 69% of all federal taxes. The top 1% paid 28%." http://money.cnn.com/2009/04/15/pf/taxes/who_pays_most_least/index.htm?postversion=2009041511
Regardless, the only thing that reflects is the fact that the rich have gobbled up such a large degree of the wealth that was created by working men and women in America, so it doesn't matter if what they pay is proportional. What is important is to level the playing field to allow workers to retain more the wealth they create, and to have real opportunities for economic mobility.
manchs07Mar 30, 2011
I agree with you that the income gap is greater than ever, but our tax system doesn't tax wealth (unless you count the estate tax). Our system taxes the ability to become wealthy (income). So are you suggesting a quasi-redistribution of wealth?
novenatorMar 30, 2011
No. I am advocating changing the system so that the wealth that is *created* by working men and women stays with the workers who create it. Without labor (people who build and maintain things), there is no wealth, and current dog-eat-dog style of capitalism we allow to exist redistributed that wealth from the workers to the rich (at ever increasing amounts).
I think income taxes on the rich need to be higher. I think estates must be taxed at higher levels (anything over $1mil), and tax evaders (whether offshore or just working the system) should pay SEVERE fines (say 10x what they owe when they are caught). I know the T-word has become a dirty word in American politics, but countries with a strongly progressive tax code simply have better functioning societies.
manchs07Mar 30, 2011
The tax evasion issue must be addressed. I think we need to take a good look at our tax code, which was about 15,000 pages, and adjust it accordingly.
roguegeniusMar 30, 2011
Absolutely. The only advantage of such a code is to advantage the rich (who can afford the team of lawyers and accountants I would take to work the system).
The complexity of the tax code is to taxes, as poll taxes are to voting - a dirty trick to screw the poor.
hpmnickMar 30, 2011
I have done quite a few thought experiments and analysis on the nature of economics, and I have concluded that there are two factors that determines the quality of life in a country (or any system)
1) The amount of money entering or leaving a country - If a lot of wealth is exiting a country, the quality of life will decline. If a lot of wealth starts to enter a country the overall quality of life will typically improve. Ideally, a system should be able to sustain itself as long as it is either closed, or has no net loss of wealth.
2) The evenness and speed of the "flow" of money throughout the system: This one is a little more complicated, but its arguably the most important factor. In short, the worst thing that could happen is when you have a good portion of the nations wealth within the grasp of a few people who do nothing other than sit on it.
Expanding on #2, the best thing you could have is a (relatively) even distribution of wealth that is moving freely and quickly. The faster that money changes hands, and returns to the consumer, represents a cycle. The faster the cycles, the more production takes place. The more production and consumption that takes place, the more material wealth a country will hold.
I'm by no means anti-rich, and I don't want to come off as a communist or socialist. Capitalism can work just fine, it just needs to be controlled. The problem is that once large portions of money become stagnant, the effect is similar to deflation without a lowering in the cost of goods. Essentially, no one else has any money, and consumable goods stay the same price. I believe this is what is happening now. A large portion of US citizens have negative wealth (more debt than assets), while a small percentage of Americans have more money then they know what to do with. This represents a very inefficient system. If that stagnant wealth was being used (and contained in the US), we'd have a much healthier system .
Due to an inefficient govt, and factor #1 (the country experiencing a net loss trade deficit and movement of our wealth overseas), we could be entering an irreversible situation where we have most of our wealth siphoned out of the country. Much of it will end up in the developing countries, or maybe even some European countries that capitalize on it..
I have a bunch of potential solutions, but basically what we need is to get that stagnant wealth moving and at least partially distributed back to the majority. It is the only solution to this problem.
ieatskunkMar 30, 2011
The problem isn't the tax code. The problem is people's ignorance of the tax code and a fundamental lack of understanding of how our economy works.
novenatorMar 30, 2011
We need more tax brackets for the rich. For instance:
$$250k-1 million = 40%
$1m-10 m = 50%
$10-50m = 60%
$50-100m = 70%
$100-500m = 80%
>$500million = 90%
[possibly also >$1 billion = 100%]
It's a bit silly to have an upper middle class/lower upper class person with an income of $250,000 per year paying the same tax rate as the Kochs.
roguegeniusMar 30, 2011
That seems silly, but I completely agree. There is really nothing an individual can buy with a billion dollars, that he can't get for 995,000. The differences are all on paper at that point, not in reality.
Of course, there are billion dollar items out there... but I don't want the Koch brothers owning an aircraft carrier. If it costs more than a billion, a government needs to buy it, not an individual.
peppermintpigMar 31, 2011
Taxes are a convenient excuse for ignoring the problem of addressing costs. Politicians spend other people's money, and they are by consequence not going to value it to the same degree. Frugality? Forget about it.
Well meaning thieves are still thieves. The moral hazard promoted through theft is a recurrence of scarcity.
sapana543Mar 30, 2011
What we are all gonna rise up and rob the rich because there is a lot of us and few of them.
When did we turn into a nation of thieves and thugs?
They played by the rules, now the all the people that are too dumb or lazy to make their own money want to rob the rich. Screw that, we all make our own destiny.
Who is causing all this class warfare.Comment is buried, click here to see the rest.
novenatorMar 30, 2011
Got news for ya, class warfare has been getting waged since Reagan and the conservatives took over the government. There is nothing that demonstrates this better than what the conservatives are doing today by asking working folks to sacrifice their pensions and health care at the VERY SAME TIME as they are slashing taxes for the rich and corporations.
sapana543Mar 30, 2011
Asking government employees to pay part of their health care and retirement like everyone else in the world, is a bad thing?
I don't think that they are slashing taxes. Obama signed the extension to the Bush tax cuts as a way to get the economy going and build the base so that people can find jobs, but then he heaped on a bunch more tax cuts as he was trying to out cut the Republicans.
The top 5% pay 60% of the taxes that are collected, but they don't use any of the services like unemployment, medicade, etc. How much do you want them to pay. Shouldn't eveyone share in the burden of paying for government?Comment is buried, click here to see the rest.
roguegeniusMar 30, 2011
I'm not a public employee, but i know a few. Where did you get this fantasy that they don't pay for healthcare or retirement? Have you ever looked at their paychecks? Just like yours, it lists very clearly: Total earned - minus income tax - minus state tax - minus retirement (usually not social security) - minus health insurance.
There are so many lies out there, and you are just parroting them. THINK FOR YOUR SELF!
sapana543Mar 30, 2011
I am not sure what government agency your friend works for or if it is state, local or federal or if you have actually looked at a pay stub of an government employee. But, yes actually most don't have to pay for health care or retirement.
roguegeniusMar 31, 2011
RN. And, yes I have looked. She showed me when all this blew up in her face after 15 years of thankless, overtime with no pay, getting bitten by delirious people, getting bled on and vomited on, having sleepless nights after needle sticks wondering if she just contracted something horrible...
Yeah, she works harder than me, and I work my ass off. I promise you she works harder than you, and ten times harder than any republican politician.
I won't call you a liar, but I will say you are SADLY misinformed and should shut the hell up before you offend any further. Public employees pay for health care AND retirement. It's not always social security, it might be a state level retirement, but no matter how you slice it, it's not free or even any cheaper that what the rest of us pay.
So please stop perpetuating lies. You are simply wrong.Comment is buried, click here to see the rest.
sapana543Mar 31, 2011
Rogue'genius',
You still did not say if she is a local, state or federal employees, some states differ. Many provide full medical and retirement benefits after only 20 years of service.
My brother retired from the federal government with full medical and retirement benefits, without paying a cent.
You don't know me well enough to suggest that she works harder than me. I am no stranger to 100 hour work weeks and doubt that as a nurse she has seen many of those.
You accuse me of perpetrating lies, when you provide no evidence of such.
roguegeniusMar 31, 2011
Not that it really matters, but State. Ohio, specifically. And I recommend you look at your brothers paychecks. He may not have written a check, but I promise you, just like the rest of us, retirement and medical were both withdrawn. Part of the 'net' vs 'take home' pay.
And yes, there are many different systems, with a whole kaleidoscope of different benefits, co pays and services. (note: if you are on a bad one, and you get hurt, you still get medical treatment. It's illegal to turn you away from the ER. Free Market fail.) But all these systems have one thing in common: None of them are free.
BTW: just for the record, perpetuating lies, and calling you a liar are too different things. As for your 100 hour weeks, you don't know me or her well enough to say otherwise. The point is the 'lazy, overpaid, under worked' government employee doesn't exist. Or at least doesn't exist to any greater degree that in other industries and can be expected. If you want to police the system better, then I would say that's great... But that ain't gonna be free either.
Long story short, pay your taxes, accept the benefits of a powerful government... and be quiet.
sapana543Apr 1, 2011
Hi Rogue 'genius'
Yes I looked at my brother's paycheck and my dad's, both fed employees, neither had deductions for medical care or retirement. That is the fact.
Both of them know a lot of 'lazy' government employees. I just did a big project with a local government, I met and saw a ton of very 'lazy' government employees. If you think government employees are highly motivated and hard working, I would suggest going to your local government bureaucracy and take a look around. I cannot imaging how you would continue to think so.
Your comment "Long story short, pay your taxes, accept the benefits of a powerful government... and be quiet." is almost too outrageous to deal with. I will not accept a powerful government, I don't want that and it is a democracy so I definitely do not need to be quiet.
roguegeniusApr 1, 2011
Well, you say what you want, but your lazy brother and lazy father both had healthcare and retirement figured into the benefit package some how, and I promise you it wasn't 'free.' It was on the books somewhere and since they were public employees it will be easy to find. In fact, if you post their names, I and anyone on earth can find it.
Your data is anecdotal, and you wouldn't accept that from me, so I won't accept it from you. Name the lazy employees and tell me how to confirm it.
You do need to shut up. You are contributing to the general 'stupid' of your party, and frankly, I think you are a little smarter than the average. It's unseemly.
sapana543Apr 2, 2011
Hi Rougegenious.
Thanks for calling my brother and dad lazy.
My Dad was in all of WWII, both Europe and Asia. He was in all of Korea and all of Viet Nam. Maybe lazy, but I doubt it. He retired at the last moment he could, was highly decorated and saved many lives.
My brother was special forces for 25 years. The years of Grenada, Noriega, North Africa and more. Maybe lazy. He would gladly lay down his life for you.
I appreciate your appreciation for them risking their lives for your safety.
Thanks for telling me to 'shut up', I guess that means you don't like the reality I am giving you.
roguegeniusApr 2, 2011
You are welcome, but i can't take credit. It's your party, not mine, who are calling them lazy. But I accept your anecdotal evidence.
As for the 'shut up,' you can take that any way you want. I'm just saying you've got it pretty sweet now if you don't screw it up.
sapana543Mar 30, 2011
Oh yea, the bottom 50%, the people who benefit the most from wealth transfers and social payments pay only 3% of the taxes collected.
Fairness would suggest that people should pay for what they receive.Comment is buried, click here to see the rest.
novenatorMar 30, 2011
The bottom 50% pay plenty of taxes on goods and services. The problem is the economic system we have in place keeps them so poor that they really don't have any excess income to pay more in income tax. If we level the playing field (say a $10.hr minimum wage, etc.), then perhaps we could start to enforce a minimal income tax rate for everyone.
PyriteGenieMar 30, 2011
Of course, a $10/hour minimum wage would effectively shut down a number of small businesses who can't afford that, creating an overnight surge in unemployment. But that won't hurt the economy much.Comment is buried, click here to see the rest.
novenatorMar 30, 2011
Make small businesses exempt, but only for *real small business (those with less than 20 employees, not those 500 worker "small" businesses).Comment is buried, click here to see the rest.
PyriteGenieMar 31, 2011
Economies of scale would yield the same results for the 500 employee businesses as the 20 employee business. First hit would be all those businesses with 25 to 30 employees, which would lay off by necessity to get within the imposed limit.
On a principal level, minimum wage is more than just a "we have to pay you at least this much" law. It's a "we legally don't have to pay you any more than this" law.Comment is buried, click here to see the rest.
roguegeniusMar 31, 2011
Actually, it won't. As far as the overall economy is concerned, there is almost no difference between unemployed and underpaid. Both are populations that are not contributing to the demand.
roguegeniusMar 31, 2011
I have to disagree do some extent, novenator. We have a lot of small businesses that are just parasitic on the system. Let them fail. We need quality goods, not just anything that can be banged out for cheap. I realize that will make an unemployment surge, but that can't be helped and it will still improve the over all economy which, in the long run, will create more and better paying jobs.
I'm for a hard and fast minimum wage with no exceptions.
sapana543Mar 30, 2011
That is probably the worst comment and idea I have heard in a while.
roguegeniusMar 30, 2011
Dumbass. The Republicans started this class warfare, obviously. The rich have been assaulting the rest of us since the Reagan era.
What you are really asking is, who started returning fire?
sapana543Mar 30, 2011
Not sure how Reagan started class warfare. He inherited, from Carter, a stagnant economy with high inflation, low growth, high unemployment and very interest rates. Rich people did ok in this period, poor people and fixed income types get killed by inflation.
Reagan fixed all of these issues, but did not do anything to cause 'class warfare' as far as I can remember.
Clinton signed the welfare reform act that cut out a lot of welfare programs.
Please be specific with your class warfare claim against Reagan, because I don't know what you are talking about.Comment is buried, click here to see the rest.
roguegeniusMar 31, 2011
He specifically 'solved' these problems by lowering the wages of the lower middle class and poor, so that he might give equally low paying jobs to other members of the poor. The net total of cash in that class went down, not up. In total, the demand went down and the economy, which you rightly label as stagnant when he inherited it, went into a free fall. By 87, you simply couldn't get a job for over 8 bucks an hour. I know, that was the year I graduated top of my class with a good degree in a useful and up and coming field. I waited tables, cooked chicken. Started a cleaning company, believe it or not. Didn't actually get a job in my field until 89. Still low pay. Things are better now, I made a lot of money in the Clinton boom and managed to keep it during the Bush recession.
But when people tell me about how Reagan 'saved' us, I have to laugh. Reagan completely destroyed the job market and the economy tanked. I don't know how these fantasies get started, a lot of us are old enough to remember it first hand, even if you aren't, you can get all that data online. Look for yourself and the jobs numbers and the wages for all the years in question. Pay was decent though the early 70's, started to fall in the later part of that decade, the completely tanked under Reagan.
Please, I insist you not take my word for it. Look it up yourself.
sapana543Mar 31, 2011
How did Reagan lower the wages of lower class and poor. If anything, by stopping inflation, he increased real wages.
Please cite some statistics, you make a lot of claims that are not founded in facts. I look at a lot of financial statistics and have never seen anything like you suggest. You might be projecting your individual situation onto the economy as a whole, but that is intellectually deficient.
Reagan presided over the biggest and longest growth period in US history. That is growth in jobs, tax revenue. Difficult to understand how jobs could grow that fast and income drop at the same time. In fact, family income in this period grew substantially and was higher in real terms than any other period.
http://www.house.gov/jec/middle/crunch3/fig-2a.gif
Oh yeah, Clinton did welfare reform and also presided over a (tech bubble economy) that he handed to GHW Bush, which caused the recession of 1992.
You have no facts only MSNBC talking point which are incorrect.
roguegeniusMar 31, 2011
This is basically a love letter to Reagan, but it's fairly honest accurate in the data department: http://www.shmoop.com/reagan-era/economy.html
This is clearly not 'neutral' (by that I mean, it draws the only sensible conclusion from the facts given - and being simply correct is no longer 'fair and balanced' unless you put an equal about of bogus analysis in it), but it does lay out the data pretty clearly. Just ignore the analysis and cut right to the data: http://www.huppi.com/kangaroo/4Inequality.htm
Reagan did NOT preside over the biggest and longest growth period in history. That would be the FDR/Truman/Ike era (note: a mixture of democrats and republicans - but they were SERIOUS about their nation and put reality before politics). As you point out, a much shorter but HUGELY greater success was presided over by Clinton. As the evidence shows, at the end of the Reagan era, wages were down, unemployment was also down, the rich were quickly evolving into the super rich and the world economy was great, but the US buying power was way down and the consumer class of America was basically on a respirator. If Reagan was president of the world, he would have been a great one, but as a president of the US, we were much worse off when Bush took office than Reagan. Those are just the facts.
Oh, and your are right about Clinton. He did welfare reform and deregulated the industry that caused our current collapse. Of course, if we had had an adult in the Whitehorse when this all started slipping it could have been corrected, but we had Bush, so we are in the middle of a collapse.
BTW: I avoid MSNBC even more strictly than I avoid Fox.
roguegeniusApr 1, 2011
You responded to a comment above, but not this one. Hummmm. Guess if you pretend not to see the facts they go away, right?
PyriteGenieMar 31, 2011
"The Republicans started this class warfare,"
Obviously. /s
roguegeniusMar 31, 2011
Agreed. Obviously. No slash 's' required.
cbreauMar 30, 2011
Can't wait. Sick of getting taken advantage of.
frakkinbastardMar 30, 2011
A revolution? From stupid, lazy, coward usians? LOL. For all your gun rights, the moment you will be ordered to surrender them and march off to slavery, you will do it with meek acceptance. Give up your ill-gained sovereignty NOW and spare the world further embarassment.Comment is buried, click here to see the rest.
sapana543Mar 30, 2011
huh, that didn't make any sense.
And, I will not give up my guns. They did that in Nazi Germany, Venezuala, Cuba, Iran, pretty much all of the socialist countries that went on to kill its own citizens.Comment is buried, click here to see the rest.
superman101Mar 30, 2011
Really Nazi Germany == socialist..
/me sigh
sapana543Mar 31, 2011
Yes. NAZI is Nationalist Socialist Party. It was characterized by a large social safety net, government control of industries and the thuggish state that always follows socialist societies.
You should really read more.
superman101Mar 31, 2011
"It was a unique variety of fascism that involved biological racism and antisemitism.[10]"
http://en.wikipedia.org/wiki/Nazi
superman101Mar 31, 2011
"Fascist nationalism is reactionary in that it entails implacable hostility to socialism and feminism"
"Marxists argue that fascism represents the last attempt of a ruling class (specifically, the capitalist bourgeoisie) to preserve its grip on power in the face of an imminent proletarian revolution. "
" Fascists are fervently against: Marxism, Socialism, Anarchism, Communism, Environmentalism; etc – in essence, they are against the progressive left in total, including moderate lefts (social democrats, etc). Fascism is an extreme right wing ideology, though it can be opportunistic."
http://en.wikipedia.org/wiki/Definitions_of_fascism
sapana543Mar 31, 2011
Most Socialist countries end in fascism (Cuba, Venezuala, Poland, etc.).
Socialism lead so to Fascism, or at least it has in almost every case.
Yes NAZIs were socialists and fascists.
superman101Mar 31, 2011
False, a fascist cannot be a socialist.
" Fascists are fervently against: Marxism, Socialism, ..."
Reading ++
jimmyb3Mar 30, 2011
Since when is everyone in the top 1% "super rich"?
ghengiskhan1Mar 30, 2011
There is no way the government, that the super rich own, are going to allow taxing of the super rich. The rest of us schmucks, on the other hand.....were not so lucky.
superkendallMar 30, 2011
The super rich already pay 50% of the taxes collected despite being a tiny percentage of the population. And you want to tax them more? Bulls**t.
avangionqMar 30, 2011
We're not at the flash point yet ... but there will be one of three triggering factors that might ignite an American revolution, and I don't know which will hit us first or whether all three will come crashing down together like a pack of wolves biting from all directions ...
1: Peak Oil, when energy costs rise to the point where Americans can no longer enjoy their current lifestyles ...
2: Water Shortage, when the ice pack in the Rockies glaciers melts and the Ogallala Aquifer runs dry, thirst will fuel a revolution ...
3: Economic Crash, you can't fix a credit crunch by adding more credit and as our debt will soon exceed our GDP, our debt will soon become insurmountable ...
-
Properly taxing the richest 2% in an attempt to fix our third problem might leave us with enough capital to fund a few public works projects, such as heavily investing in alternative energies (wind, solar, nuclear) and building a few thousand desalination plants ...
markglMar 30, 2011
Please. The reason they're super rich is because they have something everyone needs or have something everyone wants. The American people are not writing checks to rich people for no reason.Comment is buried, click here to see the rest.
boo1Mar 30, 2011
How about the hedge fund manager, who makes millions upon millions, and only pays 15%, because they declare it as capital gains?
While you pay a higher rate and only make a small fraction of what they make.
markglMar 30, 2011
Sounds like a awesome job!
theaeneidMar 30, 2011
There's too many paid goons to protect them.
andyeddyMar 30, 2011
Am I the only one who feels like this article doesn't actually say anything?
db8fanMar 30, 2011
Wake up, rich folks. Wake up, everyone else.
blackjackjesterMar 30, 2011
How exactly do you propose to tax those that hold their wealth in assets? You can't tax someone on net worth - that would bankrupt the majority of America within a year.
What you can't do:
1) Tax people who don't have tangible income (super rich tend to fall here)
2) Tax investments / capital gains too much - investment/return is the basis of our economy
3) Tax the middle class - Don't you think they eat enough of the burden already?
4) Tax the poor - they don't have any money to tax
Whats this leave us with?
1) Luxury Taxes (If you can afford an M3, you can afford to pay another 20% on that M3)
2) Import taxes (when combined with lowered business taxes, brings jobs here)
3) Reduced spending
sabz5150Mar 30, 2011
Tax the assets.
blackjackjesterMar 31, 2011
I'm going to need to take 20% of your net worth. Please tally up your life savings so I can take it. Sucks your unemployed. I'll need your house. Thanks.
sabz5150Mar 31, 2011
Wow, you sound like a bank! You ought to look into a career change.
rrwestMar 30, 2011
This is something I have been saying for decades now. Why anyone would need billions and hundred of millions of dollars is beyond me and beyond avarice. Whether this happens is anybody's guess. I bet it doesn't though, the governments of the world are too much in love with money and those who have it to care about the rest of us.
sabz5150Mar 30, 2011
"Why anyone would need billions and hundred of millions of dollars is beyond me and beyond avarice."
Power. Its that simple.
harrisbradleyMar 30, 2011
Reduce the services and cost of government or face a revolution.
Closed AccountMar 31, 2011
Reduce the services and there _WILL_ be a revolution. Guess you don't get how that works.
puzzudMar 30, 2011
I agree with the concepts from the article and statements by user hpmnick. However, it is important to note a strategy that is made by the US government and the large corporations: offer plenty (as excess really) of cheap and empty happiness.
Americans have so much cheap and low nutritional food that fills stomachs but leaves the body unhealthy. Americans have hundreds of television stations, movies, video games, etc. that fill their lives with entertainment where in reality most of their lives are relatively boring and lack purpose.
These two main factors leave the majority of citizens ignorantly content to work and live under the circumstances set forth by the government and the controlling media/businesses. Why protest when your life is "good" and you are "free".
Contrast this with countries in some third world countries where they have little and nothing to lose. When your government is killing people already, there is not much more fear involved with protesting and risking one's life to gain a better one at the cost of potentially getting killed in the process.
Americans feel in general like protesting or revolting provides no results and a possibility of a life worse than the one they already have. What is worse, a poor life or a poor life in jail?
This article seems to suggest that a revolution is inevitable unless Americans want the country to dissolve into a foreignly owned entity (likely Chinese, I'd say). The powers at hand would start WWIII before they would allow that to happen. Then suddenly the world should be concerned, because that will lead to its ultimate devastation.
My question is, when will the average American see this? Or rather, what would be the straw on the camel's back that will put that person out in the streets, protesting/revolting?
novenatorMar 31, 2011
Great comment. I think it's dangerously close right now, and the hundreds of thousands on the streets in all 50 states (especially the Great Lakes states with new Republican political majorities) demonstrate how close folks are to just rising up and refusing to cooperate.