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Author Topic: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)  (Read 2934 times)

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Offline ZakharraTopic starter

 
Quote
If the democrats were serious about reigning in corporate power we would be seeing 70% top tier tax rates again, as is proper.

 If tax rates were 70% again, I seriously doubt the economy would be doing well, that would like give even more inventive for companies to locate outside of the US. 70% of your total gross is a bloody huge chunk of money.

 
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- Conservatives were pro-slavery, anti-civil rights.
 

 Republicans are the ones that voted in civil rights. Southern Democrates, if I remember right were against it for the most part.

 
Quote
Conservatives were against World War II
- Economic conservatives oppose universal health care

 Most of the nation was against entering WWII and the nation was governed mostly be Democrates atm. Roosevelt had a somewhat realistic view of world politics though and managed to prepare for war.

 I am mostly conservative, and I would accept universal health care. But not the abomination that Congress passed. that I oppose.

 
Quote
The democrats are using the quorum rule for its actual purpose. It can certainly be abused, but it is not anti-democratic to oppose a bill that the majority of the population genuinely opposes.

As opposed to filibustering every single bill that comes up just because they want to stall the process in general, which is the Republican initiative.

 However they are using it, it looks like the Democrats -are- running away because they know they will use.  They can use the same filibuster tactics, which is legal, and serves the same purpose, without 'cutting and running like scared rabbits.'   You can bet any amount of money that if the situation were reversed and the Republicans had run like that, the news media would be painting them as cowards.

 The rest I more or less agree with and Walker has been making some colossal mistakes.

Offline adifferenceinsize

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #1 on: February 25, 2011, 12:13:04 AM »
If tax rates were 70% again, I seriously doubt the economy would be doing well, that would like give even more inventive for companies to locate outside of the US. 70% of your total gross is a bloody huge chunk of money.

Honestly, arguing about marginal tax rates is a rather moot point when it comes to the rich anyhow. There are so many financial mechanisms and tax breaks in the code that the real value is far from the base rates.
   
Republicans are the ones that voted in civil rights. Southern Democrates, if I remember right were against it for the most part.

Technically true. However, given the huge about-face our political parties took because of the Civil Rights Act and the movement around it, the modern hardcore conservatives now basically moved from Dem to Republican, absorbed in by the traditional North-Eastern industrialist types.

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #2 on: February 25, 2011, 12:45:38 AM »
If tax rates were 70% again, I seriously doubt the economy would be doing well, that would like give even more inventive for companies to locate outside of the US. 70% of your total gross is a bloody huge chunk of money.

Like the last time we did.

Which created a period of sustained 10% growth over a span of decades. Out of the Great Depression, in a period of roughly a decade the United States came to outproduce every other nation in the world. Combined.

With no significant export economy to speak of. It was all us.

Seriously. Let the douchebags leave and terrorize some other nation. The talent that exists in the United States is not going to magically disappear just because the people who think they are worth more than ten million dollars a year have to pay their fair share.

It is not their money. It is society that determines the value of money. And if they persist in ignoring that fact, someone is going to walk in with an alternate currency and render everything they have worthless in a very short time.

Remember you wouldn't be paying 70%. You would be paying less in taxes than you are now. People making more than a million a year would be paying the 70% for everything over that first million or ten.

Quote
Republicans are the ones that voted in civil rights. Southern Democrates, if I remember right were against it for the most part.

The southern Democrats then defected to the Republican party, and then Nixon embraced the Southern Strategy.

The Republican Party isn't what it was half a century ago. Hell, the modern Democratic party is roughly where the Republicans were thirty years ago.

Quote
Most of the nation was against entering WWII and the nation was governed mostly be Democrates atm. Roosevelt had a somewhat realistic view of world politics though and managed to prepare for war.

I am mostly conservative, and I would accept universal health care. But not the abomination that Congress passed. that I oppose.

I'm speaking in economic terms there. There are important, insightful provisions in the health care bill that are absolutely necessary for our health care system no matter what happens - there are genuinely beneficial cost reduction measures in there, even if you feel the mandate is ridiculous, or the deal with the Pharma industry is, etc.

But it's hard to think of many conservative causes that actually compare with the quality, number, and magnitude of progressive ones.

But conservatism should temper progressive goals, in my opinion. "Let's stop and think about how far we're going here." <- That's a fine point of view. There are many examples of environmentalism that have gotten ridiculous to the point of being counterproductive - actually hurting the environment in the long term, for example. We'll be paying the price of anti-nuclear hysteria for a very long time.

Quote
However they are using it, it looks like the Democrats -are- running away because they know they will use.  They can use the same filibuster tactics, which is legal, and serves the same purpose, without 'cutting and running like scared rabbits.'   You can bet any amount of money that if the situation were reversed and the Republicans had run like that, the news media would be painting them as cowards.

I don't know. The media hasn't been terribly hard on Republicans for their filibuster frenzy. I will freely admit that denying quorum should be an exceptionally rare tactic. And for the most part, it is.

Quote
The rest I more or less agree with and Walker has been making some colossal mistakes.

I get the feeling this year is going to be a Pyrrhic victory for Republicans, in general.

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #3 on: February 25, 2011, 02:08:17 AM »
Like the last time we did.

Which created a period of sustained 10% growth over a span of decades. Out of the Great Depression, in a period of roughly a decade the United States came to outproduce every other nation in the world. Combined.

With no significant export economy to speak of. It was all us.

Seriously. Let the douchebags leave and terrorize some other nation. The talent that exists in the United States is not going to magically disappear just because the people who think they are worth more than ten million dollars a year have to pay their fair share.

It is not their money. It is society that determines the value of money. And if they persist in ignoring that fact, someone is going to walk in with an alternate currency and render everything they have worthless in a very short time.

Remember you wouldn't be paying 70%. You would be paying less in taxes than you are now. People making more than a million a year would be paying the 70% for everything over that first million or ten.

 And the Regan Supplyside dropped tax rates down over 8 years and fueled an economic boom that lasted for about 20 years. Pure supplyside isn't the full answer, but neither is the other side of the coin. It is likely something in the middle.

 Part of the issue is, is that  what  people think the rich should pay as a 'fair rate' is often exceeding that any of the middle class would be willing to pay. The middle class can and does take advantage of tax breaks and cuts and as a percentage of income tax, the wealthy does pay a far larger share than the middle class does. Why should they?  The answer 'Becuase they can afford it' smacks of greed on the ones who want to take it. 'I take it because I can you YOU cannot do anything about it'
 
 Technically it is their money in that they -did- earn it. Just as your money is yours. Yes society, with governmental help sets the value of money, but it is accepted that your money is yours when you earn it. It does NOT belong to 'society' or the government.


Quote
I'm speaking in economic terms there. There are important, insightful provisions in the health care bill that are absolutely necessary for our health care system no matter what happens - there are genuinely beneficial cost reduction measures in there, even if you feel the mandate is ridiculous, or the deal with the Pharma industry is, etc.

 True, but the fact it's a mandate isn't neccessarily good. As it stands, it is unconstitutional because it forces people to either pay for  health care or pay a fine. The person gets nailed either way if this bill goes in and I find it odd that a majority of the states ( 27 the last I heard) are now asking for an exemption to the bill. Because they cannot pay for it.  It's too expensive.
« Last Edit: February 25, 2011, 02:16:17 AM by Zakharra »

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #4 on: February 25, 2011, 12:58:28 PM »
And the Regan Supplyside dropped tax rates down over 8 years and fueled an economic boom that lasted for about 20 years. Pure supplyside isn't the full answer, but neither is the other side of the coin. It is likely something in the middle.

The only people who received any real benefit from the past thirty years are the top 5% of households - those now making more than $300k per year. The next 10% is breaking even. If you make more than $100k per year but less than $300k, you are doing about as well as you should.

The bottom 85% of this country has gotten poorer.

The numbers are even worse when considering discretionary income. The period between the moment discretionary income went negative for the average American and the Great Recession is measured in months. Once people could no longer spend money, the economy stopped.

A clearer way of looking at it is this.

The top 5% of the population earns roughly 25% of the nation's income, but only spends about 15%.

That's 10% of this nation's income that gets hoarded to them each year, every year. If this figure is less than GDP growth, and there are no attempts at correction, then the economy eventually faces a liquidity crisis - the people who need money the most have no means of exchanging value.

There are several means by which this can be corrected.
- Taxes are the most straightforward method. Taxes negatively impact the economy based on how much the currency would otherwise be utilized - and right now, cash is not being utilized very well at all by the rich.
- Borrow money from the rich. This is only slightly less straightforward than the above. Rather than taxing them, you agree to pay them back in the future. The rich are eager to lend to the government, but that is not happening in significant quantities.
- Get the rich to invest in the economy directly. This is what is currently happening, but it is anemic compared to wide-scale solutions. It also relies heavily on a majority of them doing this at once - or at least enough to trigger sustained growth. That is not happening on significant levels, though some business leaders are trying to push for this - GE, Buffet, Gates, etc.
- Get the rich to spend more in general. The primary problem with this is that most of this wealth is not returned to the American economy. Spending millions on foreign cars and trinkets does not provide jobs here. This is one of the reasons Reagan's top tier tax cuts were so devastating - it made the rest of the world richer, but the average American is now about 15% poorer.
- Get the rich to participate in charities. This is helping, again, but it's still anemic in comparison.

I think those cover all of the methods. But suffice to say, if the wealth transfer from those methods, plus GDP growth, is less than the amount of wealth taken, the poor are going to get poorer, and the country becomes less politically stable, and is going to suffer a liquidity crisis. A failure of demand, in other words.

Communism is not the answer, of course, but 70% top tax brackets seem to be ideal, unless you want to create a point where 'no one is worth this much' and stick 95% to that.

Quote
Part of the issue is, is that  what  people think the rich should pay as a 'fair rate' is often exceeding that any of the middle class would be willing to pay. The middle class can and does take advantage of tax breaks and cuts and as a percentage of income tax, the wealthy does pay a far larger share than the middle class does. Why should they?  The answer 'Becuase they can afford it' smacks of greed on the ones who want to take it. 'I take it because I can you YOU cannot do anything about it'

Say you have one provider, and four consumers. The consumers pay the provider for the provider's goods. If you tax the provider at 51% and the consumers at 0, the provider is earning the same as if you taxed them all at 30%.

That is a toy scenario, however. When you expand it into a macroeconomic scale, it actually gets worse - because poorer people spend their money faster, and save less, a dollar of income to them gets circulated through the economy faster than does a dollar of income to someone who will save it - or worse, sends it out of the country.

Imagine two groups.

One group - the common class - has an annual savings rate of 2%. This means that, as long as a dollar stays in that group, it gets circulated through the economy about fifty times a year on average.

The other group - the rich - has an annual savings rate of 50%. This means that money they spend gets circulated through the economy twice a year on average.

Now interconnect these two groups, and think for a moment - who is hurt more, in real income numbers, by taxing the poor group at all?

Hint: It isn't the poor. They're hurt, certainly, in meaningful and human terms. Their suffering brings -everyone- down. But in terms of actual meaningful wealth in terms of dollar income, the rich are taking that hit directly because the consumers can't spend the money on their goods.

Quote
Technically it is their money in that they -did- earn it. Just as your money is yours. Yes society, with governmental help sets the value of money, but it is accepted that your money is yours when you earn it. It does NOT belong to 'society' or the government.

If tomorrow the dollar is worthless, what good does it do me to earn it? If I refuse to respect the social contract that surrounds it - that in order to have value it must actually be used as a medium of exchange, 'use it or lose it' style, or lost - then what right do I have to complain?

This is to say nothing about the rentier class, as a rule. The payments they extract from the population - directly and indirectly - are a form of tax far more sinister than the government is. At least the government, in principle, is accountable to its citizens.

Quote
True, but the fact it's a mandate isn't neccessarily good. As it stands, it is unconstitutional because it forces people to either pay for  health care or pay a fine. The person gets nailed either way if this bill goes in and I find it odd that a majority of the states ( 27 the last I heard) are now asking for an exemption to the bill. Because they cannot pay for it.  It's too expensive.

The mandate is almost certainly going to go. Hopefully the health insurance industry will go with it.

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #5 on: February 25, 2011, 02:07:26 PM »
The only people who received any real benefit from the past thirty years are the top 5% of households - those now making more than $300k per year. The next 10% is breaking even. If you make more than $100k per year but less than $300k, you are doing about as well as you should.

The bottom 85% of this country has gotten poorer.

The numbers are even worse when considering discretionary income. The period between the moment discretionary income went negative for the average American and the Great Recession is measured in months. Once people could no longer spend money, the economy stopped.

A clearer way of looking at it is this.

The top 5% of the population earns roughly 25% of the nation's income, but only spends about 15%.

That's 10% of this nation's income that gets hoarded to them each year, every year. If this figure is less than GDP growth, and there are no attempts at correction, then the economy eventually faces a liquidity crisis - the people who need money the most have no means of exchanging value.

There are several means by which this can be corrected.
- Taxes are the most straightforward method. Taxes negatively impact the economy based on how much the currency would otherwise be utilized - and right now, cash is not being utilized very well at all by the rich.
- Borrow money from the rich. This is only slightly less straightforward than the above. Rather than taxing them, you agree to pay them back in the future. The rich are eager to lend to the government, but that is not happening in significant quantities.
- Get the rich to invest in the economy directly. This is what is currently happening, but it is anemic compared to wide-scale solutions. It also relies heavily on a majority of them doing this at once - or at least enough to trigger sustained growth. That is not happening on significant levels, though some business leaders are trying to push for this - GE, Buffet, Gates, etc.
- Get the rich to spend more in general. The primary problem with this is that most of this wealth is not returned to the American economy. Spending millions on foreign cars and trinkets does not provide jobs here. This is one of the reasons Reagan's top tier tax cuts were so devastating - it made the rest of the world richer, but the average American is now about 15% poorer.
- Get the rich to participate in charities. This is helping, again, but it's still anemic in comparison.

I think those cover all of the methods. But suffice to say, if the wealth transfer from those methods, plus GDP growth, is less than the amount of wealth taken, the poor are going to get poorer, and the country becomes less politically stable, and is going to suffer a liquidity crisis. A failure of demand, in other words.

Communism is not the answer, of course, but 70% top tax brackets seem to be ideal, unless you want to create a point where 'no one is worth this much' and stick 95% to that.

  But just arbitrarily taking it away just because  they can 'afford' it is outright theft.  Starting at a income tax rate of 70% is outrageous. There should be ways to encourage them to spend and like it or not, the economies of the world are connected to a degree that was unheard of in the 1920s, 30s, 40s and 50s. Unless you force companies and comsumers to 'Buy American', there will always be some flow of money out of the US. You want to make it easier for them to make and sell producrts here? Look at some of the tax rates and regulations and hoops they have to navigate. If it is substantiually cheaper to make or buy a product overseas, look at the reason WHY it is cheaper there than here.

Quote
Say you have one provider, and four consumers. The consumers pay the provider for the provider's goods. If you tax the provider at 51% and the consumers at 0, the provider is earning the same as if you taxed them all at 30%.

That is a toy scenario, however. When you expand it into a macroeconomic scale, it actually gets worse - because poorer people spend their money faster, and save less, a dollar of income to them gets circulated through the economy faster than does a dollar of income to someone who will save it - or worse, sends it out of the country.

Imagine two groups.

One group - the common class - has an annual savings rate of 2%. This means that, as long as a dollar stays in that group, it gets circulated through the economy about fifty times a year on average.

The other group - the rich - has an annual savings rate of 50%. This means that money they spend gets circulated through the economy twice a year on average.

Now interconnect these two groups, and think for a moment - who is hurt more, in real income numbers, by taxing the poor group at all?

Hint: It isn't the poor. They're hurt, certainly, in meaningful and human terms. Their suffering brings -everyone- down. But in terms of actual meaningful wealth in terms of dollar income, the rich are taking that hit directly because the consumers can't spend the money on their goods.

The first example didn't make any sense. The provider is paying 51% of his income, the consumers are paying none. The burdon is falling fully on the provider.



Quote
If tomorrow the dollar is worthless, what good does it do me to earn it? If I refuse to respect the social contract that surrounds it - that in order to have value it must actually be used as a medium of exchange, 'use it or lose it' style, or lost - then what right do I have to complain?

This is to say nothing about the rentier class, as a rule. The payments they extract from the population - directly and indirectly - are a form of tax far more sinister than the government is. At least the government, in principle, is accountable to its citizens.

 Not true. We have the expectation that it has value no matter who holds the dollar. By yourself, no one can refuse to accept money at it's face (market) value.  Whether it sits in an account for 10-20 years (IRAs?) or is spent the next day, the value remains the same. Not withstanding what inflation does to the value of money. 

 Renters? That's probably a whole different thread of diuscussion.

Quote
The mandate is almost certainly going to go. Hopefully the health insurance industry will go with it.

 The problem though is there was no clause in the health care bill that allows them to strip out the mandate. As I understand it, if one part is found unconstitutional and the Supreme Court says it is not constitutional, the entire bill is struck down and they have to start over at square one again in Congress.

 Health insurance providers need some work for sure. You should  be allowed to buy insurance across state/regional lines.

Offline Oniya

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Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #6 on: February 25, 2011, 02:35:39 PM »
The first example didn't make any sense. The provider is paying 51% of his income, the consumers are paying none. The burdon is falling fully on the provider.

However, the money that the consumer pays in the sale that would normally be going to taxes now goes to the provider instead of to the government.

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #7 on: February 25, 2011, 03:44:58 PM »
However, the money that the consumer pays in the sale that would normally be going to taxes now goes to the provider instead of to the government.

 That doesn't make any sense. In the example given, the provider is paying all of the tax. The consumer is paying nothing.

Offline Oniya

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Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #8 on: February 25, 2011, 04:32:41 PM »
Okay, let me break it down a bit more. (Veks, please make sure I'm interpreting right.)

Example 1:  All people paying 30% to the government.  Provider is selling something for a ring-out price of $100.

Four consumers buy the product, spending $100 each.  $70 each goes to the provider, $30 each goes to the government.  The provider ends up with $280, then pays his 30%, leaving $196

Example 2:  Consumers pay 0%, provider pays 51%

Four consumers buy the product, spending $100 each, all of which goes to the provider, for a total of $400.  Provider pays 51% to the government, leaving $196.

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #9 on: February 25, 2011, 04:39:46 PM »
  But just arbitrarily taking it away just because  they can 'afford' it is outright theft.  Starting at a income tax rate of 70% is outrageous. There should be ways to encourage them to spend and like it or not, the economies of the world are connected to a degree that was unheard of in the 1920s, 30s, 40s and 50s.

Taxation is a great way to encourage them to spend it. They can reinvest their money to avoid most of the taxation.

And the economy's globalization is one of the problems, driving down costs to the lowest common denominator - Africa.

Quote
Unless you force companies and comsumers to 'Buy American', there will always be some flow of money out of the US. You want to make it easier for them to make and sell producrts here? Look at some of the tax rates and regulations and hoops they have to navigate. If it is substantiually cheaper to make or buy a product overseas, look at the reason WHY it is cheaper there than here.

It's usually because of environmental regulations.

The United States is trying to beat China - producing goods cheaply - rather than trying to beat Germany - producing goods well. Keep in mind most of our economy is still internal, even today.

Quote
The first example didn't make any sense. The provider is paying 51% of his income, the consumers are paying none. The burdon is falling fully on the provider.

The provider is facing the full burden in both examples. Oniya has the toy scenario right, although it's accumulated income over the course of a year, in theory.

The provider is either earning 30% less for their services, and paying another 30% in taxes, for a total loss of income of 51%, or is paying 51% in taxes, for a total loss of income of 51%.

They lose, either way.

But when you have a lot of providers and a lot of consumers, the people who spend more of their income faster, taxing them makes that equation even worse - the providers earn 30% less income for a 10% tax on the consumers, for example.

It isn't 'because they can afford it'. It's a mix of 'use it or lose it' and simple economic theory.

There's a much more crazy economic term for this, but it's normally horribly explained.

Quote
Not true. We have the expectation that it has value no matter who holds the dollar. By yourself, no one can refuse to accept money at it's face (market) value.  Whether it sits in an account for 10-20 years (IRAs?) or is spent the next day, the value remains the same. Not withstanding what inflation does to the value of money. 

...of course people can refuse to accept dollars. If the trust in the dollar vanishes, or if it is supplanted because the liquidity crisis requires the adoption of a new, more usable currency, then the dollar's worth vanishes.

Quote
Renters? That's probably a whole different thread of diuscussion.

No, rentiers. People who 'earn' money without work - collecting interest payments, corporate dividends, and so on.

Quote
The problem though is there was no clause in the health care bill that allows them to strip out the mandate. As I understand it, if one part is found unconstitutional and the Supreme Court says it is not constitutional, the entire bill is struck down and they have to start over at square one again in Congress.

No. Individual parts can easily be found unconstitutional. It's rather rare for an entire bill to be struck down in its entirety. Random, unrelated example from memory.

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #10 on: February 26, 2011, 12:38:28 AM »

No. Individual parts can easily be found unconstitutional. It's rather rare for an entire bill to be struck down in its entirety. Random, unrelated example from memory.

 No, I think for that to be true, a cluase has to be inserted into the bill that allows parts to be stricken from the bill, yet allows the rest to be still legal. As far as I know, the health care bill did not have this clause in it. I wish I could remember the name. Severance clause?  I dunno, but if it doesn't have the clause, that means if one part is found to be unconstitutional and struck down, all of it is  struck down.

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #11 on: February 26, 2011, 12:47:01 AM »
Quote
No, rentiers. People who 'earn' money without work - collecting interest payments, corporate dividends, and so on.

 Such as retirement and 401k plans?

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #12 on: February 26, 2011, 10:27:34 AM »
No, I think for that to be true, a cluase has to be inserted into the bill that allows parts to be stricken from the bill, yet allows the rest to be still legal. As far as I know, the health care bill did not have this clause in it. I wish I could remember the name. Severance clause?  I dunno, but if it doesn't have the clause, that means if one part is found to be unconstitutional and struck down, all of it is  struck down.

You're thinking of contracts.

Such as retirement and 401k plans?

Drawing from savings is not rentier income, but interest payments and stock dividends are.

Essentially it is money earned without labor. Someone is taking money out of the economy without actually adding to the overall wealth of the economy.

If that money gets spent quickly - reinvested, the impact isn't too bad. But if that money is not getting reinvested quickly - such as from the banks and hedge funds that helped drive this crisis - that liquidity sits, stagnant, while they have not only refused to help the economy, but actively hurt it in a major way.

Offline RubySlippers

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #13 on: February 26, 2011, 06:22:56 PM »
Benjamin Franklin, Poor Richard's Almanac
It would be a hard government that should tax its people one-tenth part of their income.


Just have a flat income tax of 9.99% with no deductions for anything at the Federal level and live within that both citizen and corporate taxes. Food for thought at least but Estonia has a flat 24% tax with no major deductions and it seems to work just keep it one page your income, a small number of deductions say never more than five and leave it at that.

Offline Callie Del Noire

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #14 on: February 26, 2011, 06:52:45 PM »
Sorry there will always be some tool who thinks they 'merit' more exceptions or need more of their money.  Like the 'independent citizens' who say that they don't recognize the governments right to tax.

Personally I find it very interesting that the US steadfastly REFUSES to do corporate tax reform at a time when that could be what is needed to entice some of them back.

Once upon a time the US gave tax breaks for things like R&D. My dad worked for Burlington Industries when they had a R&D wing in the US. A lot of textile companies did that. Then they killed the break and you know what happened to all those tech r&D divisions?

They were shut down and assets sold off to other companies in other countries. Burlington's division was sold off to a German company.

A LOT of tech innovations came out of that tax break during the 60s and 70s. Now? Oh we're mostly coasting on what we had from then.

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #15 on: February 27, 2011, 05:44:53 PM »
Drawing from savings is not rentier income, but interest payments and stock dividends are.

Essentially it is money earned without labor. Someone is taking money out of the economy without actually adding to the overall wealth of the economy.

If that money gets spent quickly - reinvested, the impact isn't too bad. But if that money is not getting reinvested quickly - such as from the banks and hedge funds that helped drive this crisis - that liquidity sits, stagnant, while they have not only refused to help the economy, but actively hurt it in a major way.

 How many retired people have stock options and invest in the Stock Market? Alot of them, less now, but it's still very likely a large number of them. That fits the definition of rentier. Are those people bad then because they are earning money without labor so they have something in their retirement?  Should everyone be made to work then to avoid becoming a rentier?
 
 I think people who have money, want to know they are not going to be throwing away good money wioth the bad. Essentualy, they wilwl want a return on their spending. It makes little sense to spend when you see no return for it and it leaves you with less money than when you started.

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #16 on: February 27, 2011, 07:03:36 PM »
How many retired people have stock options and invest in the Stock Market? Alot of them, less now, but it's still very likely a large number of them. That fits the definition of rentier. Are those people bad then because they are earning money without labor so they have something in their retirement?  Should everyone be made to work then to avoid becoming a rentier?

You keep shifting the argument to relatively poor people. Poor in this case is any household making less than $300k per year or so.

And it depends on how long their retirement lasts. If people end up living forever, that sort of situation is not sustainable - or ethical. You're basically enslaving future generations just because they were born late.
 
Quote
I think people who have money, want to know they are not going to be throwing away good money wioth the bad. Essentualy, they wilwl want a return on their spending. It makes little sense to spend when you see no return for it and it leaves you with less money than when you started.

About two-thirds of wealthy households (those making more than $200k per year) want increased taxes for themselves. Failing that, they are certainly very eager to lend to the government, as interest rates show.

And yes, they have very legitimate concerns about the current financialized economy. Shareholders are getting ripped off, bondholders are getting scammed, with very little accountability in the financial sector right now. Taxes and direct loans to the government are comparatively secure investments.

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #17 on: February 27, 2011, 11:08:42 PM »
You keep shifting the argument to relatively poor people. Poor in this case is any household making less than $300k per year or so.

And it depends on how long their retirement lasts. If people end up living forever, that sort of situation is not sustainable - or ethical. You're basically enslaving future generations just because they were born late.
 
About two-thirds of wealthy households (those making more than $200k per year) want increased taxes for themselves. Failing that, they are certainly very eager to lend to the government, as interest rates show.

 I'm not shifting the argument to 'realitively' poor people, you're the one doing that. I am including anyone who has stock options and such. By the definition you used, anyone that has such ways of making money is, 'Someone is taking money out of the economy without actually adding to the overall wealth of the economy.'

 From what I have heard on the news, not many people are willing to lend to the government, otherwise the media would be trumpeting that fact.

Taxes are not neccessarily a quick return on investment, if any return is shown at all. I seriously doubt most of the wealthy would accept 70% of their total income being taken away.

 Sidenote: you have two different lines for a wealthy household. It's first $300k is wealthy. Anyone below that is poor, then a few paragraphs later it is $200k that is wealthy.

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And yes, they have very legitimate concerns about the current financialized economy. Shareholders are getting ripped off, bondholders are getting scammed, with very little accountability in the financial sector right now. Taxes and direct loans to the government are comparatively secure investments.

 I doubt it's that bad. Are there bad apples, yes, but you're making sound like most, if not all, of the financial sector is out of control. There is accountability and standards are probably being tightened because they are coming under scrutiny. No company wants the government to come in and dictate what they can spend money one, who and where (like corporate salaries)

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #18 on: February 28, 2011, 06:36:53 AM »
I'm not shifting the argument to 'realitively' poor people, you're the one doing that. I am including anyone who has stock options and such. By the definition you used, anyone that has such ways of making money is, 'Someone is taking money out of the economy without actually adding to the overall wealth of the economy.'

It's a true definition, and it is a serious problem when you have a number of people doing labor to support an increasing number of 'freeloaders'. Food still needs to be grown, power still needs to be provided, shelter still needs constructing and repairing, etc.

These needs still need to be performed, and the class of people who get those benefits but do not contribute to them in any way are a drag on the nation's wealth. Maybe they've earned that - for ten or twenty years, that is fine. For fifty or a hundred?

Quote
From what I have heard on the news, not many people are willing to lend to the government, otherwise the media would be trumpeting that fact.

Hardly, and your media is lying to you.

http://www.federalreserve.gov/releases/h15/data/Annual/H15_TCMNOM_Y10.txt (the monthly report is here: http://www.federalreserve.gov/releases/h15/data/Monthly/H15_TCMNOM_Y10.txt )

The 10-year (and 30 year, but the picture is much the same) treasury yield is essentially the market for loans to the United States Federal Government. When it goes down, it means there is more competition for treasuries - people are more willing to 'lend'. When it goes up, people are expecting a higher return (in the 5-7 percent range), or may be losing confidence (during Reagan's first term).

It's a reflection that there is no other place to invest right now. For many people, the US Government is the best bet. This isn't necessarily due to US fiscal policy - in the recent trend, it is because Europe isn't any better, China doesn't have open markets, Japan's are just as low (for essentially the same reason), and now all of the unrest in North Africa and the Middle East is making people squeamish about investing there.

So the rich are clamoring for the Government to take their money and spend it.

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Taxes are not neccessarily a quick return on investment, if any return is shown at all. I seriously doubt most of the wealthy would accept 70% of their total income being taken away.

It wouldn't end up being 70%. They'd pay themselves less, and reinvest more, as is proper. Though some might go a bit into the 70% for extra personal income for whatever reason.

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Sidenote: you have two different lines for a wealthy household. It's first $300k is wealthy. Anyone below that is poor, then a few paragraphs later it is $200k that is wealthy.

Because the latter is a poll result, and the former represents the breaking point for those who have disproportionately gained at everyone else's expense over the past thirty years.

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I doubt it's that bad. Are there bad apples, yes, but you're making sound like most, if not all, of the financial sector is out of control. There is accountability and standards are probably being tightened because they are coming under scrutiny. No company wants the government to come in and dictate what they can spend money one, who and where (like corporate salaries)

Like the slap on the wrist Goldman Sachs got?

The only company acting with any degree of being scared at all is Bank of America, and that isn't because of the US Government. Indeed, the USG is helping them out, from the HBGary e-mails. Not helping them out very well, obviously, but still.

Offline thymoit

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #19 on: February 28, 2011, 07:51:12 AM »

That's 10% of this nation's income that gets hoarded to them each year, every year. If this figure is less than GDP growth, and there are no attempts at correction, then the economy eventually faces a liquidity crisis - the people who need money the most have no means of exchanging value.

There are several means by which this can be corrected.

>Snip of several good valid methods<

I think those cover all of the methods. But suffice to say, if the wealth transfer from those methods, plus GDP growth, is less than the amount of wealth taken, the poor are going to get poorer, and the country becomes less politically stable, and is going to suffer a liquidity crisis. A failure of demand, in other words.

There are other methods.

-Tax Wall Street by implementing a small fedral tax (say 1%) on every stock sale.  There is no constitutional right to buy and sell stock multiple times a day.  This would go a long way to slowing down the casino that Wall Street has become.  They're no longer empowering investment.  They're bookies.  We should encourage people to only put money in a company if they think it is going to produce net value (profits), not in wagers.  A small tax on stock sales would do this.  It would also produce a lot of tax income - primarily from the rich

- Alter the tax code so that we tax net value not earnings.  This is already done a little in the form of property taxes, but net worth includes a lot more these days than just real estate.  However,it would make it easier to target the real inequality - obscene accumulation of wealth at the top.

-Print money.  Print lots of money.  This will trigger accelerated inflation.  Inflation hits the rich harder than the poor.
 At 5% inflation if your net worth is
 * 1 billion - you lose 50 million in net worth in one year
 * 1 million - you lose 50 thousand in net worth in one year
 * 100,000 - you lose 5000 in one year
 The past three decades have seen most middle-class Americans ending with almost nothing in savings except a pitiful 401K.  The poor typically have no savings whatsoever.  If you use the money you print to push from below (raise the minimum wage + large economic stimulus package to dry up the unemployment pool) then the impact to middle and lower classes is mitigated.  The dollar would weaken, but a strong dollar is a good thing for American corporations and the rich, not necessarily the rest of America.  It is why American jobs are being outsourced.  Labor is expensive here and cheaper elsewhere.  A weaker dollar would make foreign goods more expensive to Americans and encourage American's to buy American.  Another thing inflation does is encourage investment in business.  Money sitting in a bank gets eroded away by inflation.  Money invested in a business pays a return.  It's not a bad thing - unless you're one of those sitting on a pile of money and not wanting to see the value of it eroded.  The Fed has two mandates - lower unemployment and keep inflation down.  Notice which one they've made most important - keeping inflation down.

A good part of the current deficit frenzy is pure political.  The Republicans are defunding the programs that prop up the middle class, but keeping corporate welfare and rich welfare (going).  However, corporations are also scared that the Fed will loosen up our monetary policy to drive up inflation and drive down unemployment.  That's a big reason they want to focus on government deficits, because deficit spending drives inflation.    Oh, and if they really wanted to pay down the deficit, try a little inflation.  A decade of 5% inflation would make trillions of dollars of debt a lot more managable.

As you can guess, I'm very much in favor of an inflationary monetary policy.  Of the other ideas that I suggested and that Vekseid suggested as well, I don't see any of them as being politically feasible.  An inflationary monetary policy is possible and probably will become mandatory - after the next crash.  Because at the current trajectory we're heading at least for a double dip recession and possibly a full-blow depression.  You don't cut government spending in a depression!  That's basic economics.  They teach it in high school.

Offline thymoit

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #20 on: February 28, 2011, 08:18:55 AM »
Are there bad apples, yes, but you're making sound like most, if not all, of the financial sector is out of control. There is accountability and standards are probably being tightened because they are coming under scrutiny. No company wants the government to come in and dictate what they can spend money one, who and where (like corporate salaries)

The financials sector is out of control.  Wall street has become a big casino.  The financial sector continues to grow and consume more and more of our GDP.   There are banks that are considered too big to fail.  Even if you are a 100% free market believer, that's wrong.  In a pure free market economy any company regardless of size would be allowed to fail.  If a company is too big to fail, then it is too big to be allowed to exist and the government should apply existing monopoly laws to break it into smaller pieces that can be allowed to fail.

Our financial sector is currently consuming more of GDP than at any time in history.  There are no breaks on the train.  During the Great Depression people responsible for the train going off track were prosecuted and jailed.  This time they were paid bonuses - subsidized by the US government.

http://en.wikipedia.org/wiki/File:NYUGDPFinancialShare.jpg

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #21 on: February 28, 2011, 10:17:58 AM »
 I do not have an economics degree, so I am ausing just what I see and what makes sense to me in my arguments.

It's a true definition, and it is a serious problem when you have a number of people doing labor to support an increasing number of 'freeloaders'. Food still needs to be grown, power still needs to be provided, shelter still needs constructing and repairing, etc.

These needs still need to be performed, and the class of people who get those benefits but do not contribute to them in any way are a drag on the nation's wealth. Maybe they've earned that - for ten or twenty years, that is fine. For fifty or a hundred?

 I cannot buy that. You should have to work to earn money or it's being 'removed' from the economy?   What about savings accounts and interest? That's money not earned since no one is working to earn it.  That's what you seem to be saying that those who do not work, somehow are stealing money from the economy.

Quote
Hardly, and your media is lying to you.

http://www.federalreserve.gov/releases/h15/data/Annual/H15_TCMNOM_Y10.txt (the monthly report is here: http://www.federalreserve.gov/releases/h15/data/Monthly/H15_TCMNOM_Y10.txt )

The 10-year (and 30 year, but the picture is much the same) treasury yield is essentially the market for loans to the United States Federal Government. When it goes down, it means there is more competition for treasuries - people are more willing to 'lend'. When it goes up, people are expecting a higher return (in the 5-7 percent range), or may be losing confidence (during Reagan's first term).

It's a reflection that there is no other place to invest right now. For many people, the US Government is the best bet. This isn't necessarily due to US fiscal policy - in the recent trend, it is because Europe isn't any better, China doesn't have open markets, Japan's are just as low (for essentially the same reason), and now all of the unrest in North Africa and the Middle East is making people squeamish about investing there.

So the rich are clamoring for the Government to take their money and spend it.

 Nothng it stopping the rich from giving their money to the government. They can write a check and send it off and given how much the media/Democrat party hates the rich, it would be big media news.

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It wouldn't end up being 70%. They'd pay themselves less, and reinvest more, as is proper. Though some might go a bit into the 70% for extra personal income for whatever reason.

 There are some Democrats and liberals that would want it to be even higher. It used to be 90% and they would aim for that. Plus it grates in a way, WHY is this that proper? Who's to say what is proper for that? Should they invest in their companies? Yes, but why can they not get paid if the company is doing wel? 

 That aside, I do think CEOs and company officers are getting paid too big of bonuses and they should -not- be allowed to adjust their own bonuses and pay. That should be left up to the stockholders who own the company. It's like Congress being able to vote themselves raises.

Quote
Because the latter is a poll result, and the former represents the breaking point for those who have disproportionately gained at everyone else's expense over the past thirty years.

 Which you did not say. All I saw was two very different limits of what is 'wealthy'. A $100,000 difference is hardly insignificant.

Quote
Like the slap on the wrist Goldman Sachs got?

The only company acting with any degree of being scared at all is Bank of America, and that isn't because of the US Government. Indeed, the USG is helping them out, from the HBGary e-mails. Not helping them out very well, obviously, but still.

 They should have gotten a 4x4 across the head, not a slap, that I agree on. Remember though, politics, on both parties stopped them from getting much done to them, but having the government come in and  try to dictate things isn't much better given the last 11 years of spending policy. Especially the last 2 years. The national debty has skyrocketted.

Quote
-Print money.  Print lots of money.  This will trigger accelerated inflation.  Inflation hits the rich harder than the poor.

 How? At the end of the day, the wealthy would still have more money, plus material assets that are worth money, than the poorer people who have less spending power if prices rise.

 
Quote
The past three decades have seen most middle-class Americans ending with almost nothing in savings except a pitiful 401K.  The poor typically have no savings whatsoever.  If you use the money you print to push from below (raise the minimum wage + large economic stimulus package to dry up the unemployment pool) then the impact to middle and lower classes is mitigated.

 But if you raise the min. wage too high, businesses cannot afford to hire more people and the last economic stmulus packages have really worked.   How much was spent on economic stimulus (shovel ready jobs) and how much of the original package is still unspent?

Quote
You don't cut government spending in a depression!  That's basic economics.  They teach it in high school.

 Spending like a drunken sailor when you have unprecedented debt in the multiple trillions is not smart either. Everyone else is always expected to do with less isn hard times. Why does government get a pass and is expected to spend more money it doesn't have?  Do you want inflation in the double digits?

 They do not teach economics much anymore in high school.











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Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #22 on: February 28, 2011, 10:28:47 AM »
They do not teach economics much anymore in high school.

This is true, at least, it's not taught everywhere.  Even back when I was in high school,  I was taught just enough to balance a checkbook and to scare the heck out of me with regards to credit cards.  I think it was a 1-2 week unit in with the regular math class.

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Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #23 on: February 28, 2011, 10:46:14 AM »
I cannot buy that. You should have to work to earn money or it's being 'removed' from the economy?   What about savings accounts and interest? That's money not earned since no one is working to earn it.  That's what you seem to be saying that those who do not work, somehow are stealing money from the economy.

Well, I'm reasonably sure the banks aren't just giving you that interest, are they are?

They take your money, lend it to others, get more money paid back to them, and you get your interest out of that.

Someone is working for your interest, and your money made it possible.

Offline thymoit

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #24 on: February 28, 2011, 12:12:32 PM »
That aside, I do think CEOs and company officers are getting paid too big of bonuses and they should -not- be allowed to adjust their own bonuses and pay. That should be left up to the stockholders who own the company. It's like Congress being able to vote themselves raises.

Since I'm disagreeing with you on so much, I'd like to point out that I'm in absolute harmony here.  I think a great many executive boards are in breach of their duties to the corporation and skimming too much of the profits into their own pockets.  Look at what has happened to executive compensation over the past few decades:

http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20060627/

You don't have to know economics to look at that graph and know something is out of whack.

How? At the end of the day, the wealthy would still have more money, plus material assets that are worth money, than the poorer people who have less spending power if prices rise.

Everyone has less spending power, but the rich have more assets to lose.  Also I probably worded things badly.  If you just allow out-of-control inflation without propping from the bottom, then yes, the middle class and poor suffer as well.  You've got to use the money to dry up unemployment.  Low unemployment drives up salaries - compensating for inflation.


 But if you raise the min. wage too high, businesses cannot afford to hire more people and the last economic stmulus packages have really worked.   How much was spent on economic stimulus (shovel ready jobs) and how much of the original package is still unspent?

Inflation hits businesses as well.  Minimum wage affects their costs, which they pass along as higher prices, everything costs more - that's what inflation is.  There is a reflexive dread of inflation because most people have spent the last few decades with stagnant salaries (after adjusting for inflation).

If anything the original stimulus was too small.


Spending like a drunken sailor when you have unprecedented debt in the multiple trillions is not smart either. Everyone else is always expected to do with less isn hard times. Why does government get a pass and is expected to spend more money it doesn't have?

I understand this is counterintuitive.  It's called Keynesian economics:

http://en.wikipedia.org/wiki/Keynesian_economics

Basically when the government cuts goods and services, it makes things harder on people already suffering in a recession.  When they layoff workers, they directly make unemployment worse.  According to Keynesian theory the government has to spend more to prime the pump to get the economy out of a recession.  Now, economoics is not as hard a science as physics and you can dispute this as mere theory and not proven.  However, Keynesian economics is about as solid as economics gets.  It has been proven over and over by history that cutting government spending makes a depression worse and increasing government spending gets things going.  If we cut spending now, we're cutting our own throats and we'll either go into a double-dip recession or an outright depression.

Now, before you think I'm a total liberal to the core, let me agree with you that there was plenty of pork in the last stimulus and just plain bad spending.  A good stimulus should be focused mostly on employment - getting people to work.  The last one wasn't.  I'll gladly paint the Democrats with that brush as well as the Republicans.

I'll also agree that there is room to cut domestic programs and deficit spending during a depression should be coupled with reigning in during boom times.  That's particularly where we've failed and it hasn't been in the past two years.  We've been fighting two major wars for ten years now.  These are the first wars in the history of the United States that did not come with a tax increase.  As a nation, we've been living on debt, continuing to cut taxes despite being at war.  That's where most of the debt came from, not in the past two years.  Where were the fiscal conservatives when we were running up that tab?  We don't have real fiscal conservatives any more.  We have people dedicated to continuing to cut taxes on the rich, regardless of the state of the budget.  Since when did it become ok to run up debt for wars, but not ok to run up debt to save the economy?  We want to build a nation?  I've got an idea.  Let's build up the United States and stop dumping money into Afghanistan.  Fighting over that piece of Asia has destroyed many great empires and it will destroy us if we don't let it go.


 Do you want inflation in the double digits?

In my opinion, better double digit inflation than double digit unemployment.