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Author Topic: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)  (Read 2933 times)

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Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #25 on: February 28, 2011, 01:44:28 PM »
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.

 I cannot argue that.

Quote
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.

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.

 But the  rich have more assets to call upon and when the economy recovers, wouldn't they gain faster? Their relative wealth starts out at a higher level. If inflation rises, the poor have much less spending power since they have less money.

 As far as I know, minimum wage is not adjusted for inflation. It requires Congressional legislation to raise/lower the wage at the federal level. 

 What should be the goal then? To boost private sector employment or public sector employment? I can understand private, since that grows the economy when you have people working and producing goods and services. Public secotr? THAT I doi niot understand. The goverment doesn't make a profit and only gets it's money by taxation.

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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.

 But if we spend too much aren't we sadding a massive debt off on future generations? I know the Bush Administration spent a lot of money. More than it should have in fact. The Obama administration however is spending even more and has raised the debt ceiling a considerably higher than it was under Bush.

 At what point do you realize that too much unfunded spending it too much? There is a limit before you fall into a financial hole you cannot dig out from. Just printing money isn't the answer.

Quote
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.

 I cannot argue with most of that. It is annoying at how gods damned STUPID! the Presidents and Congress has been in the last decade. It's crap like that that makes me want term limits for both Houses of Congress. I think every bill and appropriations bill should be read outloud before  it is allowed to be voted on in a full session and something I think the President should have is the power to cut off riders. If it has nothing to do with the original bill, it shouldn't be included with it.

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

 At this point, if we had double digit inflation we would have double digit unemplyment as well.  We're near the 10% mark officially right now. It would not take much to push it  higher. Inflation would do that I think.

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Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #26 on: February 28, 2011, 02:20:27 PM »
There's a difference between 'spending money' and 'using money to stimulate the economy', as I understand it.  In a simple example:  If I use my government stimulus to buy a new PS3 and sit on my butt, that is simply 'spending money'.  If I use my government stimulus to buy supplies to start a home business, and then use the profits from that home business to expand it (and maybe have enough left over to buy that new PS3 to play on my days off), then I'm using money to stimulate the economy.  My home business would raise demand for my raw materials, thereby keeping the people who supply those employed, meaning that they'd have money to spend, etc.

The money that Bush et al. have spent all went overseas with no financial return.

Offline thymoit

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #27 on: February 28, 2011, 02:25:43 PM »
What should be the goal then? To boost private sector employment or public sector employment? I can understand private, since that grows the economy when you have people working and producing goods and services. Public secotr? THAT I doi niot understand. The goverment doesn't make a profit and only gets it's money by taxation.

From my perspective, the goal should be to boost private sector employment - which does not necessarily mean benefitting corporate bottom lines.  Part of the problem is that corporations are doing too well.  As you've pointed out, that doesn't mean the stockholders are doing well, too much of the money is being skimmed off the top by the executives.  Corporations can afford to pay more in taxes.  Want some startling facts?

*83 of the top 100 publicly traded corporations that operate in the US exploit corporate tax havens
*Since 2009, America’s most profitable companies such as ExxonMobil, General Electric, Bank of America and Citigroup all paid a grand total of $0 in federal income taxes
*nearly two-thirds of US corporations don't pay any income taxes, instead opting to abuse tax loopholes and offshore tax havens

We need to give corporations that do business in America incentives to hire American workers, but also if they're profiting off Americans they should pay taxes, too!

But if we spend too much aren't we sadding a massive debt off on future generations? I know the Bush Administration spent a lot of money. More than it should have in fact. The Obama administration however is spending even more and has raised the debt ceiling a considerably higher than it was under Bush.

At what point do you realize that too much unfunded spending it too much? There is a limit before you fall into a financial hole you cannot dig out from. Just printing money isn't the answer.

I don't know.  You're right.  We absolutely can't just print our way out of it.  Nor can we keep spending the way we are now and expect never to have to pay the piper.  I do know that cutting things right now is a bad move.  What's on the chopping block right now are programs that aid the poor and also trickle down to aid the states.  State governments are cutting back.  Take Texas, my home state.  We got off fairly light when the rest of the country was taking a bashing.  Now we're in deficit, how are we planning to make it up?  Cut Medicaid by 29% and cut education.  We might lose as many as 100,000 teachers.  A large chunk of Medicaid spending goes on - guess what - children.  As for teachers, how the hell can anyone say they're helping the next generation while cutting education?  It's like that all across the country.  Providence, Rhode Island sent pink slips to every single schooteacher.  We're not helping the next generation by defunding education or by cutting social programs that give children at the poverty line a chance to get out.  I know some of those programs stink and yes, there are freeloaders, but there are also a lot of kids who won't even have a small chance without them, but they're on the chopping block.

I think we need a mix of things, we need less waste in government, but we also need the wealthiest segment of our country to contribute more.  They've been given tax cut after tax cut.  Has it trickled down?  We've spent thirty years cutting taxes on the rich.  Middle class incomes have stayed stagnant while the rich have gotten richer.  Do you feel a trickle?  No?  Wait, I think I feel a trickle.  No, that's just Wall Street pissing on Main Street.

At this point, if we had double digit inflation we would have double digit unemplyment as well.  We're near the 10% mark officially right now. It would not take much to push it  higher. Inflation would do that I think.

I'd really like to see a 1% federal tax on every sale of stock.  I don't see it happening.  I think we should tax the rich more.  I don't see that happening.  I think corporations should pay at least as much as our citizens do.  I don't see that happening.  A little bit of inflation - maybe, at least that's my hope.  Although honestly, I don't think that is likely either and we're going to continue to cut taxes on the rich, fight useless wars in the Middle East while cutting the social programs that are keeping the poor and middle class above water.  I don't have a lot of hope for our government.

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #28 on: February 28, 2011, 05:16:54 PM »
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.

These are still taxes.

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

No. Inflation hits those with cash savings. It won't hit those with actual wealth (homes, stocks, hard capital).

It will, however, lower the real value of debts. The potential negative impact of this on the rich is a bit hard to speculate on, because while they get paid 'less', they do actually get paid, rather than risk defaults.

I do not have an economics degree, so I am ausing just what I see and what makes sense to me in my arguments.

 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.

Okay, I don't want to come across too harsh here, but please take this concept and internalize it.

Money is not wealth.

Wealth is a source of income, a source of production. Your tools, friends, and skills are a sort of wealth. This also makes taxing wealth a curious prospect - how do you tax skill? How do you tax friends? But anyway.

Money is just an agreed upon token of exchange. Nothing more and nothing less. It is important - as a medium of exchange - but it has no real, intrinsic value. Money does not even make good toilet paper, it chafes too much.

Money's purpose is not to be a placeholder for wealth. Money's purpose is to be a temporary token of exchange for wealth. The faster it moves in real terms - that is, the faster wages get paid and the more often people spend what they have - the bigger the economy is. This is how a couple trillion dollars in cash can float a fourteen trillion dollar economy - a dollar is spent several times throughout the course of a year.

Interest income is not earned through labor, it is a collection of someone else's labor. Specifically, when you deposit money in a bank, the bank lends it out (several times, actually), and gathers interest on those loans. You get paid a trivial fraction of what the bank earns as savings interest.

Savings is savings. You worked to put it there.

Regardless of whether or not you are working, you are consuming resources to live. Food. Power. Water.

If you are not working, you are not adding to humanity's net labor pool, and instead consuming from it. You might have earned this right. You might instead be a trust fund baby who will not work a day in your entire life - the rest of humanity is effectively your slave.

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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.

Who among the democrats hate the rich? Obama is quite enamored of the rich, it cost $28k to be in the same room as him during the campaign at some points.

And if the media would create a firestorm of it, why are you not aware of events where that has actually occurred? People have given millions to various government organizations. They were news items in their own sphere. If it would generate a media firestorm, why are you unaware of it?

In general, however, the rich want a return on their investment, or a fair system. Taxes, or bonds, but just giving the government money is throwing it away. When they do donate, it's usually directly to a program like the tevatron.

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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? 

It was Democrats who brought it down to 70%, remember. 70% is the rate at which people with enough money will still generally perform additional labor for money. 90% or higher is where you would set a 'no one is worth this much, period' point.

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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.

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

It would be more dishonest of me if I cited something that wasn't in the actual poll.

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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.

Financial regulations are a separate concept from spending policy. The government is quite capable of doing a great deal more there and, when the government was actually watching, it did a pretty damned good job of it.

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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.

As I mentioned above, the primary value for the poor and struggling is that it lowers the real value of debts, and assuming that this generation has learned its lesson, this means that everyone will have more discretionary spending, which leads to a more active economy in general.

But you are correct in stating that it is not an automatic win-win for the poor. There are tradeoffs.

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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?

 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?

Our debt looks pretty healthy given the size of our economy, compared to a lot of nations. The issue of course, is that without actually taxing the top at some reasonable rate, even a WWII level mobilization won't really do much. The postwar boom had a lot to do with the fact that most Americans were, for the first time, relatively equal.

Offline thymoit

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #29 on: February 28, 2011, 06:02:07 PM »
No. Inflation hits those with cash savings. It won't hit those with actual wealth (homes, stocks, hard capital).

It will, however, lower the real value of debts. The potential negative impact of this on the rich is a bit hard to speculate on, because while they get paid 'less', they do actually get paid, rather than risk defaults.

Ok, I could have worded things better.   Your statement is much more accurate.  Inflation does primarily erodes cash.  Homes, stocks and hard capitol get hit at a variable rate.  Inflatino doesn't hit evenly.  Their value should roughly increase as the overall economy inflates (along with wages, prices and other things), but it can be a bumpy ride.  However, that doesn't detract from the value of an inflationary policy.  Part of the problem right now is that for companies right now 'Cash is King'.  I know I hear that all the time at my company.  Corporations and also the wealthy are sitting on mountains of cash.  A higher inflation rate encourages them to do something with that cash.  Cash invested into a business doesn't erode under inflation the way it does when just held in an account.

Also it weakens the dollar which would go a long way to slow the steady outsourcing of American jobs.  Which makes it a two-pronged attack on our problems.  However, I don't see the Fed or the Treasury allowing an inflationist monetary policy any time soon.  We may ultimately get there if we cannot achieve a political solution to our financial sector.   We didn't install any significant regulation to prevent another bust and bailout and what laws Congress did pass are already getting watered down in implementation.

Offline Sure

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #30 on: February 28, 2011, 06:20:30 PM »
I'd say 70% is too high a tax rate. Of those nations with progressive tax rates, I've not seen one go over 50%, and a good number stop where we do (at 35%). You've asserted that at 70% people will still work to earn money, yet I cannot find any country that actually has a 70% tax rate at any amount of income and you've not shown any studies to back up your point.

The US never had an income tax of 70%. The highest the income tax bracket that has ever been was 50% prior to 1986, when the highest bracket was lowered to 28% (though it has not remained there).

A net value tax is a bad idea. Ignoring the problem of determining someone's net value, it would destroy those who are living without an income. Such as the old living off of accumulated wealth until they die. It also discourages the transformation of wealth into permanent fixtures. For example, if you taxed net value, then a millionaire who built a house would be taxed more than a millionaire who spent that money buying a million dollar steak. The later does not make a lasting contribution to the nation's wealth, but the former at least increases the national wealth by the value of one house.

Historically, inflation screws everyone, but screws the rich less (plus some of the rich/well connected can exploit the situation). The people who get the worst of it are retirees and the middle class, usually. But each instance is a bit unto itself.

And I'm not going to go farther back into the thread than that. If anyone wants to bring up a specific point I'll look at it below.

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #31 on: February 28, 2011, 06:40:17 PM »
I'd say 70% is too high a tax rate. Of those nations with progressive tax rates, I've not seen one go over 50%, and a good number stop where we do (at 35%). You've asserted that at 70% people will still work to earn money, yet I cannot find any country that actually has a 70% tax rate at any amount of income and you've not shown any studies to back up your point.

The United States, from the 1930's to the 1970's. It was the greatest expansion of middle-class wealth the world has ever seen.

As for countries that go over 50%, Sweden, Denmark, others.

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The US never had an income tax of 70%. The highest the income tax bracket that has ever been was 50% prior to 1986, when the highest bracket was lowered to 28% (though it has not remained there).

I'm going to be generous and assume you just were too lazy to even look.

The top tax bracket exceeded 80% in the United States from 1944 through 1963. America was on top of the world during this period. It fell almost simultaneously with the dropping of the top tax rate.

Offline Sure

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #32 on: February 28, 2011, 07:00:46 PM »
Sweden is 60%, still less than your 70%. Denmark also stops at 60% which is still less than you 70% and is the most taxed country in the world. However, you are right in that one part of my statement was wrong. However, I am right in pointing out both countries have huge problems with the wealthy and entrepreneurs leaving, particularly to the Baltic states.

The only others I can find: Gabon (60%) and Belgium (55%).

And I, in turn, will be generous and presume you have evidence you can present and were just too lazy to show it to me. What you have given me is not evidence, as it cites to nothing to prove its assertions. Two sources returns that the page does not exist/cannot be found, the rest do not include the stated information.

Now, I have seen a table which claims that the taxes went up to 92% in the period you claimed, but it has a disclaimer stating it ignores, among other thing, caps which created maximum rates (that cap being 50% when the highest tax bracket would have been 70%).

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #33 on: February 28, 2011, 07:31:23 PM »
I only said those two countries went over 50%. Many also have local and municipal rates that are much larger than the comparable numbers here in the US.

And I, in turn, will be generous and presume you have evidence you can present and were just too lazy to show it to me. What you have given me is not evidence, as it cites to nothing to prove its assertions. Two sources returns that the page does not exist/cannot be found, the rest do not include the stated information.

If you want working links and will only take data straight from the IRS, here:

http://www.irs.gov/pub/irs-soi/02inpetr.pdf

Page 217-218
Quote
Maximum marginal tax rates (excluding those for
“excess profits tax”) reached 77 percent during
World War I, and 94 percent (before limitations)
during World War II.  They then reached 92 percent
during the Korean War and for several years there-
after remained at 91 percent.  Maximum rates had
declined to 24 percent during the late 1920’s, but then
rose to 79 percent in the mid-1930’s.  From 1965 to
1980, the maximum rate was 70 percent.
   In be-
tween, there were special Vietnam War surcharges.
The maximum tax rate was reduced to 69.125 per-
cent (after a statutory rebate) for 1981, to 50 percent
for 1982, then to 38.5 percent for 1987.  (These rates
for the later years exclude the effects of  “minimum
tax” and “alternative minimum tax.”)  The maximum
rate was further reduced to 28 percent for 1988, but
a phaseout of the lowest tax bracket rate and of
personal exemptions for certain high-income taxpay-
ers increased this rate to 33 percent of the income
within the phaseout range.  After the phaseout provi-
sions were rescinded, there followed increases in the
top rate to 31 percent for 1991, then 39.6 percent for
1993.   This has now been followed by gradually
diminishing maximum rates that are being phased in,
starting with 2001.  The top rate for this first year
was 39.1 percent, with 38.6 percent the top rate for
the second year (2002).

The spreadsheet referenced has been updated through 2008 and is currently found here:
http://www.irs.gov/taxstats/article/0,,id=175910,00.html

Which includes the cap figures the nicely formatted html page sites.

Quote
Now, I have seen a table which claims that the taxes went up to 92% in the period you claimed, but it has a disclaimer stating it ignores, among other thing, caps which created maximum rates (that cap being 50% when the highest tax bracket would have been 70%).

You mean like this?
Quote
<2>    For 1944-1945, the highest tax rate was subject to a maximum effective rate limitation equal to 90% of statutory "net income."
<3>    For 1946-1947, the highest rate was subject to a maximum effective rate limitation equal to 85.5% of statutory "net income."
<4>    For 1948-1949, the highest tax rate was subject to a maximum effective rate limitation equal to 77% of statutory "net income."
<5>    For 1951, the highest tax rate was subject to a maximum effective rate limitation equal to 87.2% of statutory "net income."
<6>    For 1952-1953, the highest tax rate was subject to a maximum effective rate limitation equal to 88% of statutory "net income."
<7>    For 1954-1963, the highest tax rate was subject to a maximum effective rate limitation equal to 87% of statutory "taxable income."

Those numbers are still all over 70%. And they are also in the above spreadsheet.

Offline Sure

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #34 on: February 28, 2011, 09:03:29 PM »
You seem to be confusing caps and the highest tax bracket. The highest bracket is self-explanatory, a cap is the most someone can pay. For example, if the top tax bracket is 90% say, for all money earned over $100, then every dollar you make over $100 dollars you only get ten cents. However, if you make exactly $200 with a 50% cap, the cap says the most you can be taxed is $100 dollars regardless of how the tax brackets would tax you normally. Caps have been in place since... 1945, I think? I'm not sure if they're still in place after the tax shake ups of the 1980s.

All the same, you are right in that it still brings the rate above 50%.

Quote
17For 1951, the highest tax rate (column 6) was subject
to a maximum effective rate limitation equal to 87.2
percent of statutory “net income.”
18For 1952-1953, the highest tax rate (column 6) was
subject to a maximum effective rate limitation equal to
88.0 percent of statutory “net income.”
19For 1954-1963, the highest tax rate (column 6) was
subject to a maximum effective rate limitation equal to
87.0 percent of statutory “taxable income.”
20For 1968, the highest tax rate (column 6) includes a
Vietnam War surcharge equal to 7.5 percent of tax (as
defined for this purpose). However, this surcharge did
not apply to "regular" tax generated at the lowest rate.
21For 1969, the highest tax rate (column 6) includes a
Vietnam War surcharge equal to 10 percent of tax (as
defined for this purpose). However, this surcharge did
not apply to "regular" tax generated at the lowest rate.
22 For 1970, the highest tax rate (column 6) includes a
Vietnam War surcharge equal to 2.5 percent of tax (as
defined for this purpose). However, this surcharge did
not apply to "regular" tax generated at the lowest rate.
23 For 1971, “earned net income” was subject to a
“maximum tax” of 60 percent (not shown in column 6).
24 For 1972-1981, “earned net income” (broadened to
become “personal service net income” after 1976) was
subject to a “maximum tax” of 50 percent (not shown in
column 6).

However, I would still question your assertion that people will still work at 70% or that it would be a positive influence to impose 70% on those earning more than 300,000. I am not sure how taxing those with higher incomes would do anything but boost federal income (which might be your argument) or set a ceiling on what could be earned (a bad idea, in my opinion). Additionally, with purchasing power accounted for, the top tax bracket during those eras was a tax on those earning more than 1-3.3 million dollars a year (or more in some years) in today's money, not three hundred thousand. Which I could see as an attempt to set a maximum rate for the amount you can earn in a year and, at the very least, is a tax on the very rich, not just the very wealthy.

You're suggesting we tax the top 2-3% or so of Americans or so by putting that bracket at $300,000. If we set it at 1-3 million we'd be more in the realm of the top .1%. Similarly, those earning incomes over $400,000 a year would have been from 4-7 times the amount that was the 95th percentile in the time period you mentioned. 300,000 is 1.5 the 95th percentile (a million would be about 5 times).

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #35 on: February 28, 2011, 11:16:17 PM »
You seem to be confusing caps and the highest tax bracket. The highest bracket is self-explanatory, a cap is the most someone can pay. For example, if the top tax bracket is 90% say, for all money earned over $100, then every dollar you make over $100 dollars you only get ten cents. However, if you make exactly $200 with a 50% cap, the cap says the most you can be taxed is $100 dollars regardless of how the tax brackets would tax you normally. Caps have been in place since... 1945, I think? I'm not sure if they're still in place after the tax shake ups of the 1980s.

All the same, you are right in that it still brings the rate above 50%.

There never was a 50% cap, from the data. You were looking at the earned versus unearned income top brackets, which is a completely different subject. As a rule, I would agree that unearned income deserves higher taxation.

I am not confused about anything, regardless.

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However, I would still question your assertion that people will still work at 70% or that it would be a positive influence to impose 70% on those earning more than 300,000.

They still worked at 94%. I have older friends with employers during that era. They considered it a responsibility.

I didn't say the 70% bracket should kick in at $300k. I said that the above-$300k bracket is the one earning a disproportionate share of wealth. But a lot of six figure salary earners are still on earned income for that amount.

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I am not sure how taxing those with higher incomes would do anything but boost federal income (which might be your argument) or set a ceiling on what could be earned (a bad idea, in my opinion).

It's a superior utilization of their resources, and aggressively encourages investment. Considering we have a crisis with a lack of investment now, I am not sure how you can legitimately claim to be 'not sure'. We need a faster pace of investment in the United States.

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Additionally, with purchasing power accounted for, the top tax bracket during those eras was a tax on those earning more than 1-3.3 million dollars a year (or more in some years) in today's money, not three hundred thousand. Which I could see as an attempt to set a maximum rate for the amount you can earn in a year and, at the very least, is a tax on the very rich, not just the very wealthy.

Which is why I said about one million is where the 70% bracket should kick in.

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You're suggesting we tax the top 2-3% or so of Americans or so by putting that bracket at $300,000.

Not at 70% I did not.

Taxes should be based on discretionary income (or rather, the savings rate for that region and bracket) and there are places in this country where $300k does not leave you with much discretionary income. A progressive tax system would correct that, somewhat, but not entirely and certainly not immediately.

If I were to arrange brackets it would be something like
<$100k = 0% (plus social security, possibly, though there may be a negative tax at the lower end to help supplement it) <- correlated to the point at which people spend most of what they earn.
$100k-$1M = 50%
$1M-$10M = 70%
>$10M = 95%

Possibly a bit more lenient for earned income, harsher for unearned income and giving deductions based on societal goals (child deductions, etc.)

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If we set it at 1-3 million we'd be more in the realm of the top .1%. Similarly, those earning incomes over $400,000 a year would have been from 4-7 times the amount that was the 95th percentile in the time period you mentioned. 300,000 is 1.5 the 95th percentile (a million would be about 5 times).

And you don't think that progressive taxation had anything to do with smoothing out the gross inequalities that we have now?

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #36 on: March 01, 2011, 10:54:40 AM »
No. Inflation hits those with cash savings. It won't hit those with actual wealth (homes, stocks, hard capital).

It will, however, lower the real value of debts. The potential negative impact of this on the rich is a bit hard to speculate on, because while they get paid 'less', they do actually get paid, rather than risk defaults.

Okay, I don't want to come across too harsh here, but please take this concept and internalize it.

Money is not wealth.

Wealth is a source of income, a source of production. Your tools, friends, and skills are a sort of wealth. This also makes taxing wealth a curious prospect - how do you tax skill? How do you tax friends? But anyway.

Money is just an agreed upon token of exchange. Nothing more and nothing less. It is important - as a medium of exchange - but it has no real, intrinsic value. Money does not even make good toilet paper, it chafes too much.

Money's purpose is not to be a placeholder for wealth. Money's purpose is to be a temporary token of exchange for wealth. The faster it moves in real terms - that is, the faster wages get paid and the more often people spend what they have - the bigger the economy is. This is how a couple trillion dollars in cash can float a fourteen trillion dollar economy - a dollar is spent several times throughout the course of a year.

 Money has become wealth thoug. Wether it was the gold/silver and copper coins of old or the paper (and now electronic) money of today. It has become wealth. It's used to buy goods and services. Like it or not it is one of the most visible symbols of wealth in the world. Someone that has a million dollars is seen as wealthy because that money  can buy stuff.

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Interest income is not earned through labor, it is a collection of someone else's labor. Specifically, when you deposit money in a bank, the bank lends it out (several times, actually), and gathers interest on those loans. You get paid a trivial fraction of what the bank earns as savings interest.

Savings is savings. You worked to put it there.

Regardless of whether or not you are working, you are consuming resources to live. Food. Power. Water.

If you are not working, you are not adding to humanity's net labor pool, and instead consuming from it. You might have earned this right. You might instead be a trust fund baby who will not work a day in your entire life - the rest of humanity is effectively your slave.

 Then every retired person is a slave owner. Since people are living longer, no one's retirement package lasts long enough unless they die soon after retirement. If you live 20-30-40 years past retirement, unless you had a fortune in savings, your SS account will have be drained and you will be getting paid off of other peoples smsoney. Not your own.

 It's not just trust fund people, but also anyone that falls under the 'If you are not working' umbrella. Including the unemployed that are getting unemployment benefits. 

 If someone has worked hard and gotten savings enough to retire on, why shouldn't they be allowed to enjoy their retirement as they see fit? Should they be forced to spend their money?

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Who among the democrats hate the rich? Obama is quite enamored of the rich, it cost $28k to be in the same room as him during the campaign at some points.

And if the media would create a firestorm of it, why are you not aware of events where that has actually occurred? People have given millions to various government organizations. They were news items in their own sphere. If it would generate a media firestorm, why are you unaware of it?

 I  see a lot of people that attack the wealthy, class warfare, and call for higher taxes (while ignoring their own wealthy since those wealthy (LOTS of money) are their friends and can skate under most regs).  Those people who do give money to the government, are as you are saying, giving to specific organizations, not handing a check to the government saying 'Here you go. Spend it wisely.' You address that below,

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In general, however, the rich want a return on their investment, or a fair system. Taxes, or bonds, but just giving the government money is throwing it away. When they do donate, it's usually directly to a program like the tevatron.

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It was Democrats who brought it down to 70%, remember. 70% is the rate at which people with enough money will still generally perform additional labor for money. 90% or higher is where you would set a 'no one is worth this much, period' point.

 For me, 70% would be too high. Being able to only keep 30% after federal taxes? Not counting what the state and local taxes take out of that? I can see why a lot of companies are located outside of the US and why people ise off shore banks.

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It would be more dishonest of me if I cited something that wasn't in the actual poll./quote]

 It would have helped if you'd said one was a poll. Instead you just gave two very different numbers of 'wealthy' without mentioning the context.

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Financial regulations are a separate concept from spending policy. The government is quite capable of doing a great deal more there and, when the government was actually watching, it did a pretty damned good job of it.

 I cannot argue too much with that. Unfortunately Congress seems to be in the grip of a spending binge that is lasting far too long.

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As I mentioned above, the primary value for the poor and struggling is that it lowers the real value of debts, and assuming that this generation has learned its lesson, this means that everyone will have more discretionary spending, which leads to a more active economy in general.

But you are correct in stating that it is not an automatic win-win for the poor. There are tradeoffs.

Our debt looks pretty healthy given the size of our economy, compared to a lot of nations. The issue of course, is that without actually taxing the top at some reasonable rate, even a WWII level mobilization won't really do much. The postwar boom had a lot to do with the fact that most Americans were, for the first time, relatively equal.

 How can inflation lower the value of debt?  You still owe the same amount and you do not necessarily have anymore income to spenmd. Often less income.

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #37 on: March 01, 2011, 11:43:29 AM »
Money has become wealth thoug. Wether it was the gold/silver and copper coins of old or the paper (and now electronic) money of today. It has become wealth. It's used to buy goods and services. Like it or not it is one of the most visible symbols of wealth in the world. Someone that has a million dollars is seen as wealthy because that money  can buy stuff.

Think of it this way - wealth is what keeps you fed, secure, healthy and happy. You can't eat gold, eating silver is a bad idea, those metals don't keep you particularly safe. People assign value to them because they're shiny.

Warren Buffet has a pretty good analogy with this.

Quote from: Warren Buffet
"Look," he says, with his usual confident laugh. "You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

Wealth is that which produces value.

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Then every retired person is a slave owner. Since people are living longer, no one's retirement package lasts long enough unless they die soon after retirement. If you live 20-30-40 years past retirement, unless you had a fortune in savings, your SS account will have be drained and you will be getting paid off of other peoples smsoney. Not your own.

There is some accounting for longevity in these measures. Not much but some.

Regardless, you don't think people consider this to be a looming problem of an aging, healthier populace?

Like I said, we're facing the point where we are going to be enslaving people for being born late. We are enslaving people for real already through prison labor.

Or are you simply denying that it can possibly be a problem?

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It's not just trust fund people, but also anyone that falls under the 'If you are not working' umbrella. Including the unemployed that are getting unemployment benefits. 

Two points
1) Savings is still savings, and
2) Before the recent crisis, unemployment insurance money was gathered through a special tax that everyone paid into.

Regardless, it's true, and I believe we should have a new Works Progress Administration so that these people can acquire new skills, maintain old ones, and help rebuild our infrastructure.

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If someone has worked hard and gotten savings enough to retire on, why shouldn't they be allowed to enjoy their retirement as they see fit? Should they be forced to spend their money?

Where did I say savings should be taxed? It might be something to consider, but I don't think any reasonable amount of savings needs to be taxed.

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I  see a lot of people that attack the wealthy, class warfare, and call for higher taxes (while ignoring their own wealthy since those wealthy (LOTS of money) are their friends and can skate under most regs).  Those people who do give money to the government, are as you are saying, giving to specific organizations, not handing a check to the government saying 'Here you go. Spend it wisely.' You address that below,

 For me, 70% would be too high. Being able to only keep 30% after federal taxes? Not counting what the state and local taxes take out of that? I can see why a lot of companies are located outside of the US and why people ise off shore banks.

And yet Warren Buffet would actually pay less in taxes.

It's not those who genuinely create wealth - even by wise management of money - who would be paying more.

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How can inflation lower the value of debt?  You still owe the same amount and you do not necessarily have anymore income to spenmd. Often less income.

In order for genuine inflation to occur, rather than a lopsided gain in prices, it's not enough just to give people at the top money. You can give Bill Gates a hundred trillion dollars and if he doesn't spend it, nothing happens.

In order to create inflation by printing money, it needs to actually reach the general populace's hands, meaning that yes, they are actually earning the same real income (after accounting for inflation), while the value of their debts is thus depressed, as they remain at the same dollar value while their dollar income is increased.

Offline Jude

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #38 on: March 01, 2011, 12:12:08 PM »
An aside that's not necessarily in line with the current discussion but still relevant, I don't Keynesianism is well understood as it is discussed on this thread.

You see, it isn't important to keep the debt down in absolute numbers as much as it is important to keep the debt low in terms of the GDP.  Owing 5 million if our GDP is a trillion is a lot worse than owing 1 million if our GDP is a billion.  We want to keep how much we owe "in perspective" of how much we can produce basically. {Note:  I got the analogy wrong here, it's backwards.  In the trillion case the number is a smaller percentage.}  The Keynes economic theory isn't that "you spend money to stimulate the economy" and that's it, it's the notion that if you spend money to stimulate the economy the GDP increase you get can control the growth of the debt that you incur in the process, making the increase in our debt load not a problem.  Absolute numbers of the debt aren't what's important, it's the debt/GDP ratio that should be minimized.

The Republican approach actually has the oppose effect.  Democrats always explain that we don't want to slash budgets during a recession because "people are hurting," but they never really explain the actual reason behind it.  Each and every government employee that you lay off during a recession will no longer pay taxes or buy goods and services.  This lowers the government's revenue directly and has ramifications in the private sector as well.  Thus, you've slashed the budget in an attempt to stave off debt, however the revenue stream has shrunk even more from your attempts at doing this, so you need to slash more.  It's a self-perpetuating cycle; you may end up with smaller government and a lower debt at the end of it, but the country's GDP has shrunk significantly in the process, bringing in less and less revenue as you go.

Anyone who tells you that this bad economic climate is due to debt is completely and utterly ignorant of how economics works.  Our debt could only hurt our country's economy if it resulted in excessive inflation (a bit of it is good as it encourages people to invest) or resulted in the US receiving a lower credit rating (which people often talk about, but never happens -- this is ridiculously unlikely).  The reason we're still in a recession is that companies aren't investing; they're still in their shell, the same posture they took every since the economic explosion a few years ago.  It's going to take a warmer climate for growth to get them to come out.

Keynesianism is a solid theory.  It's worked several times in our nation's history and never failed.  Even Reagan applied it in some ways.  What's important is spending money in a targeted, surgical fashion, not an overkill omni-bill that wastes a portion of what we're trying to invest into GDP growth.  When the debt increases and only a portion of it actually spurs GDP growth, it's making it harder for our GDP & Debt growth to keep parity.  Spending isn't bad unless it's done in excess or done stupidly; both of which the Democrats have accomplished to some degree.

p.s. I encourage anyone who thinks Republicans are good on fiscal issues to look up the Debt Growth/GDP Growth ratios for all of the recent Republican Presidents.  Reagan's in particular compared to Jimmy Carter's might surprise you.
« Last Edit: March 01, 2011, 03:17:01 PM by Jude »

Offline Sure

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #39 on: March 01, 2011, 02:09:19 PM »
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You see, it isn't important to keep the debt down in absolute numbers as much as it is important to keep the debt low in terms of the GDP.  Owing 5 million if our GDP is a trillion is a lot worse than owing 1 million if our GDP is a billion.

... No, it's the opposite. Owing 5 million if our GDP is a trillion is a lot better than owing 1 million if our GDP is a billion. In the later case, we owe .1% of our GDP, in the former we owe .0005% of our GDP. Outgrowing our deficit means that we spend the four million to grow our GDP from a billion to trillion (which is ridiculous, but this is illustrative) which means, even though our debt grows in absolute terms, it decreases in relative terms.

It doesn't always work, either. It has most definitely failed. See: Japan. The Republicans version of economics does not automatically fail, either. It is a solid theory, but I would not say it is more solid than Austrian, for example.

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p.s. I encourage anyone who thinks Republicans are good on fiscal issues to look up the Debt Growth/GDP Growth ratios for all of the recent Republican Presidents.  Reagan's in particular compared to Jimmy Carter's might surprise you.

Republicans, at least from what I've seen, have this annoying tendency to put cost cutting measures in place, or economic policies that effectively increase revenue, or some other fiscally responsible measure... and then to outspend that surplus. Tax revenue consistently went up during Reagan's tenure but he spent it on foreign proxy wars and collapsing the Soviet Union and spent so much we went into debt.

Of course, Democrats endorse deficit spending wholeheartedly, which isn't necessarily any better. It still puts us in debt, the only difference is we get Democratic rather than Republican projects.

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There never was a 50% cap, from the data. You were looking at the earned versus unearned income top brackets, which is a completely different subject. As a rule, I would agree that unearned income deserves higher taxation.

I am not confused about anything, regardless.

Then perhaps I am misreading something, but the footenotes from your own source I quoted seemed to suggest that to me. Would you explain how I've misread that quote/what it actually means, then?

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They still worked at 94%. I have older friends with employers during that era. They considered it a responsibility.

I have a bit of trouble believing this, but I tend to be suspicious of anything that implies any generation had more civic pride/duty than another. Did your older friends make enough money to be in that bracket?
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I didn't say the 70% bracket should kick in at $300k. I said that the above-$300k bracket is the one earning a disproportionate share of wealth. But a lot of six figure salary earners are still on earned income for that amount.

Which is why I said about one million is where the 70% bracket should kick in.

Not at 70% I did not.

I must have misread something.

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It's a superior utilization of their resources, and aggressively encourages investment. Considering we have a crisis with a lack of investment now, I am not sure how you can legitimately claim to be 'not sure'. We need a faster pace of investment in the United States.

We are suffering from a lack of investment at the moment, but taxing income only increases government investment, and even then not necessarily, since it depends on what the government spends it on. Which goes back to what I was saying about increasing government revenue. The prime point of contention here, I would predict, is an argument about the effectiveness of the government as a vehicle for investment in society.

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Taxes should be based on discretionary income (or rather, the savings rate for that region and bracket) and there are places in this country where $300k does not leave you with much discretionary income. A progressive tax system would correct that, somewhat, but not entirely and certainly not immediately.

If I were to arrange brackets it would be something like
<$100k = 0% (plus social security, possibly, though there may be a negative tax at the lower end to help supplement it) <- correlated to the point at which people spend most of what they earn.
$100k-$1M = 50%
$1M-$10M = 70%
>$10M = 95%

Possibly a bit more lenient for earned income, harsher for unearned income and giving deductions based on societal goals (child deductions, etc.)

Having those who make under 100k pay nothing is a poor idea. Those taxes make up about a tenth of government revenue, and further would build a great deal of resentment among those who do pay taxes. It also doesn’t jibe particularly well with the idea of fairness a lot of people have in regards to the system.

I don’t like the idea of a ‘cap’, even at ten million dollars. And the rates are still rather high. But then again, you’re trying to use this to force everyone onto more equal footing with this code, aren’t you? Negative equality and all that.

Also, if you want to tax more for unearned income, wouldn’t that decrease investments? ::)

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And you don't think that progressive taxation had anything to do with smoothing out the gross inequalities that we have now?

Well, perhaps it had something to do with it, but it was by no means the primary or even secondary driver.

Now, then, a brief history of income inequality in the US according to what I’ve seen of Gini: Sharp decrease in the thirties and then the same during World War Two, more or less constant increase in the 50s and 60s, accelerating increase in the 70s (twice as much as the 60s), even more accelerated in the 80s (twice as much as the 70s), even more accelerated in the 90s (twice as much as the 80s), but it slowed and reversed itself under Bush, then started again during the financial crisis, and then has begun to go down again under Obama.

Notice how it started before the tax code was changed? And how the tax code change did not have a significant effect?

Offline Jude

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #40 on: March 01, 2011, 03:14:43 PM »
Thank you for correcting the beginning of what I said sure, I totally said the exact opposite thing there incorrectly of the point I was intending to make.
« Last Edit: March 01, 2011, 03:16:06 PM by Jude »

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #41 on: March 02, 2011, 01:17:34 PM »
Of course, Democrats endorse deficit spending wholeheartedly, which isn't necessarily any better. It still puts us in debt, the only difference is we get Democratic rather than Republican projects.

This is a lie. The only party to work to eliminate the deficit since 1980 was the democrats under Clinton.

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Then perhaps I am misreading something, but the footenotes from your own source I quoted seemed to suggest that to me. Would you explain how I've misread that quote/what it actually means, then?

I quoted those footnotes above, and pointed to their source. Not one of them was a 50% cap.

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I have a bit of trouble believing this, but I tend to be suspicious of anything that implies any generation had more civic pride/duty than another. Did your older friends make enough money to be in that bracket?

Or hell, just look up public tax data from the owners of large corporations from the period.


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I must have misread something.

We are suffering from a lack of investment at the moment, but taxing income only increases government investment, and even then not necessarily, since it depends on what the government spends it on. Which goes back to what I was saying about increasing government revenue. The prime point of contention here, I would predict, is an argument about the effectiveness of the government as a vehicle for investment in society.

Was the Internet a bad investment?

Was World War II a bad investment?

Government has a pretty good track record of doing big things better than corporations could ever hope to.

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Having those who make under 100k pay nothing is a poor idea. Those taxes make up about a tenth of government revenue, and further would build a great deal of resentment among those who do pay taxes. It also doesn’t jibe particularly well with the idea of fairness a lot of people have in regards to the system.

You clearly did not bother reading my previous posts. When savings are near zero, everyone pays those taxes.

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I don’t like the idea of a ‘cap’, even at ten million dollars. And the rates are still rather high.

Whether they are high is your own opinion. And whether you like them is irrelevant.

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But then again, you’re trying to use this to force everyone onto more equal footing with this code, aren’t you? Negative equality and all that.

What do you mean by 'negative equality'?

If they don't like a more equal and just distribution of wealth, they can leave. Some of them have openly said that they would. Some of them openly and happily declare that they earned their money the old fashioned way, and feel no shame in that.

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Also, if you want to tax more for unearned income, wouldn’t that decrease investments? ::)

No. I take it you've never ran a business.

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Well, perhaps it had something to do with it, but it was by no means the primary or even secondary driver.

Now, then, a brief history of income inequality in the US according to what I’ve seen of Gini: Sharp decrease in the thirties

When the 70+% top tax rates started.

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and then the same during World War Two, more or less constant increase in the 50s and 60s,

As of the 60's, when they were slowly reduced.

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accelerating increase in the 70s (twice as much as the 60s),

When top bracket for earned income was reduced to 50%

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even more accelerated in the 80s (twice as much as the 70s),

When Reagan increased taxes on the middle class and lowered them drastically on the rich.

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even more accelerated in the 90s (twice as much as the 80s), but it slowed and reversed itself under Bush, then started again during the financial crisis, and then has begun to go down again under Obama.

Notice how it started before the tax code was changed? And how the tax code change did not have a significant effect?

I notice no such thing, only you refusing to read the data presented and instead simply lie to make up your own story.

To the point where you claim the tax code didn't change in the 1930's, for crying out loud, when I just linked that information, twice.

Offline Sure

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #42 on: March 02, 2011, 04:10:59 PM »
You have, in this last post alone, outright stated I am a liar, lack relevant experience, that what I think is irrelevant, that I am purposefully ignoring your data, and implied that I am ignorant. You have also failed to answer my questions about what you've said or claimed.

I thank you for sharing your opinions with me, but I don't wish to carry on like this.

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #43 on: March 02, 2011, 06:05:32 PM »
You have, in this last post alone, outright stated I am a liar,

You have stated things that were not true, and rather than concede the point when presented with clear, unambiguous evidence otherwise with direct, honest sources, you continued to persist as if what you said originally was true.

The US never had an income tax of 70%. The highest the income tax bracket that has ever been was 50% prior to 1986, when the highest bracket was lowered to 28% (though it has not remained there).

You then tried to make various nonsensical justifications for what you said, claiming that it came from my source (the IRS), when the document said no such thing.

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lack relevant experience,

If you did run a business you would know that taxes come after expenses and losses, and that corporations do not need to pay dividends.

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that what I think is irrelevant,

Because you lay out opinions with no facts to back them up. Or worse, false facts that you appear to have made up out of thin air.

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that I am purposefully ignoring your data,

That is the only logical explanation for the last part of your previous post, where the top tax rate was increased to 63% in 1932 and 79% in 1936, yet you claimed that the dramatic decrease in income inequality during the 1930's somehow came significantly after the 1930's tax hikes.

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and implied that I am ignorant.

What do you call someone who, when presented with facts that negate their position, continues to bleat it despite the facts explicitly stating the opposite?

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You have also failed to answer my questions about what you've said or claimed.

I believe the only one I did not specifically answer involved public returns from various CEOs and other wealthy people during the WWII-Postwar era, since you imply they didn't work into those rates. I need to find them again. That takes time and I only have so much.

I have specifically cited evidence regarding the tax rates for the period, and what the caps were, pointing straight to the irs.gov website itself. You have, repeatedly, ignored that document, and even gone so far as to claim it says something that it does not in fact say, citing the same footnotes I quoted, none of which showed the cap remotely where you claimed it was.

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I thank you for sharing your opinions with me, but I don't wish to carry on like this.

Then the next time someone presents you with facts that render your position false, I hope you will consider and admit, for once, that you, actually, are wrong, or at the very least leave the topic alone.

Presenting the wrong facts the first time can be an honest mistake. Is often an honest mistake.

Persisting with false facts when it has been clearly demonstrated to you that you are wrong is, yes, either outright lying or gross ignorance.

Offline ZakharraTopic starter

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #44 on: March 02, 2011, 10:35:10 PM »
Think of it this way - wealth is what keeps you fed, secure, healthy and happy. You can't eat gold, eating silver is a bad idea, those metals don't keep you particularly safe. People assign value to them because they're shiny.

Warren Buffet has a pretty good analogy with this.

Wealth is that which produces value.

 You cannot eat the factory or land either. It's just as wortthless as gold or  paper money. Unless you use it. Factories produce goods, which are then sold, land is used to farm or build on. Food and houses are sold, for what? Money. Gold and silver have a monetary value. Why I'm not sure. I always likes silver more, it's prettier, but just like property and assets, it has value.


quote]n order to create inflation by printing money, it needs to actually reach the general populace's hands, meaning that yes, they are actually earning the same real income (after accounting for inflation), while the value of their debts is thus depressed, as they remain at the same dollar value while their dollar income is increased.
[/quote]

 That didn't make sense. Unless the person's pay actually increases, they end up with less money. Does pay automatically increase with inflation? I don't think the minimume wage does. It requires Congressional approval to raise it.

Offline Will

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #45 on: March 02, 2011, 10:42:22 PM »
That didn't make sense. Unless the person's pay actually increases, they end up with less money. Does pay automatically increase with inflation? I don't think the minimume wage does. It requires Congressional approval to raise it.

As the value of one dollar falls, the value of your debt falls as well.  You owe the same amount of dollars, but those dollars mean less.  Debts are depressed in value due to inflation.

Offline Vekseid

Re: Taxes (was: Re: Walker Admits to being in the Koch family's pocket)
« Reply #46 on: March 02, 2011, 11:46:38 PM »
You cannot eat the factory or land either. It's just as wortthless as gold or  paper money. Unless you use it. Factories produce goods, which are then sold, land is used to farm or build on. Food and houses are sold, for what? Money. Gold and silver have a monetary value. Why I'm not sure. I always likes silver more, it's prettier, but just like property and assets, it has value.

Silver actually was more valuable than gold for a time, before methods of harvesting silver from ores like galena were discovered.

In any case, as long as silver and gold are in coinage and not in e.g. a laser or somesuch, they aren't used for direct production of goods or food like tools, factories, and land are. The silver can vanish and you can switch to something else.

More pertinent is the ability for an alternative currency to possibly supplant the dollar, if the dollar is at some point no longer trusted.

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That didn't make sense. Unless the person's pay actually increases, they end up with less money. Does pay automatically increase with inflation? I don't think the minimume wage does. It requires Congressional approval to raise it.

The other way around - in order for monetary expansion to cause inflation, real wages need to increase. Or rather, real income does. Note that the aggressive monetary expansion of the past two years resulted in nearly no inflation.

There are of course other causes of inflation - e.g. increased scarcity, where your argument holds.