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Kaptain Karl
02-13-2008, 02:09 PM
From an Obama thread, we are discussing if the rich are paying enough or too much in taxes....


<Mod Mode> Moved these posts here, because several of us made an Obama thread "jump the tracks" with this related discussion. If any of you want your posts back there, please click my Screen Name and e-mail me. I tried to choose the proper posts. </Mod Mode>



Wow! Obama's proposals scare me. Pretty soon all of us will have to be redefined as "very wealthy" to pay for his big spending. (And I thought GWB's spending was out of control...!)

- KK

alienhamster
02-13-2008, 02:24 PM
Wow! Obama's proposals scare me. Pretty soon all of us will have to be redefined as "very wealthy" to pay for his big spending. (And I thought GWB's spending was out of control...!)

- KK I think the types of spending he's proposing--which are focused on developing our DOMESTIC business and economy--are the right uses of government spending. Infrastructure and energy are smart ways to build up a national economy, and the private sector has not been forward enough in this regard. Bleeding money into Iraq, however, has been a complete waste of our resources. What infrastructure did we gain from it? There was some "job creation," but where has the bulk of profit gone from this war?

I'm open to hearing arguments about reducing spending on things like social security and the military. But these proposals from Obama seem sensible to me. He will need to explain how he plans to fund all these investments, though.

Kaptain Karl
02-13-2008, 02:51 PM
I think the types of spending he's proposing--which are focused on developing our DOMESTIC business and economy--are the right uses of government spending.Oh my! The best way the government can help business is ... get out of the way! Every time the government "helps" there are serious strings attached ... and ridiculous regulations imposed.

If you want to see the government "help" business, please have the power of Regulatory Agencies cut back by about 66%. And eliminate 66% of the asinine regulations they impose on the business people trying to do their part to advance the economy.

alienhamster, are you a business owner of any type?

Infrastructure and energy are smart ways to build up a national economy, and the private sector has not been forward enough in this regard.Because we're not stupid. ("We" being private sector business people.) The barriers to entry are too great. (See above rant.)

Bleeding money into Iraq, however, has been a complete waste of our resources. What infrastructure did we gain from it?You see war as "enterprise"??? Geez!

There was some "job creation," but where has the bulk of profit gone from this war?The way you're phrasing this question really is scary. We didn't enter the war for profit. We entered this war to meddle in the affairs of another nation, thinking we were "spreading democracy." Now that we're there -- just like in Vietnam -- we're letting too many politicians run the war. Which is why we've sunk so many of our Troops' lives and our country's money in that black hole.

When we get out (If we get out) I'd expect the whacky tribal/religious leaders to run the country of Iraq into the sewer again within one year.

- KK

lethalfang
02-13-2008, 02:55 PM
Where are you getting these numbers from? I can't tell if your source is wrong or if you're intentionally mixing numbers here to mislead.

Here's from the federal spending for the items we're talking about for 2007:

"The President's actual budget for 2007 totals $2.8 trillion. Percentages in parentheses indicate percentage change compared to 2006. This budget request is broken down by the following expenditures:

$586.1 billion (+7.0%) - Social Security
$548.8 billion (+9.0%) - Defense"

Now, admittedly not all Defense money goes towards Iraq. But obviously the vast majority of our efforts are now.

Umm, so, where are you getting your numbers from?

If you're doing some sort of "aggregate" estimate that includes how much expense has gone into Social Security over many years, then you need to equally aggregate military expenditure if you're going to make such comparisons. Otherwise, you're distorting the facts.

Another question is, how much money will we spend caring for those who lost their limbs in Iraq?

deluxe
02-13-2008, 02:56 PM
Two small remedies are to raise the retirement age (which they should since life expectancy has increased) and to raise the income cutoff level for taxation from $90,000 (or whatever it is now) to $150,000.

Because clearly the people earning over $90,000 (about the top 5% of income earners, who already pay over 50% of all federal income tax) aren't taxed enough already.

AM28143
02-13-2008, 02:59 PM
Oh my! The best way the government can help business is ... get out of the way! Every time the government "helps" there are serious strings attached ... and ridiculous regulations imposed.

Hard-core, Laissez-Faire capitalism was practiced twice in our nation's history. Both times a depression followed. The Government must relegate business to a degree.

-Adam :)

deluxe
02-13-2008, 03:13 PM
Hard-core, Laissez-Faire capitalism was practiced twice in our nation's history.
You mean never.
Both times a depression followed.
Due to government intervention.
The Government must relegate business to a degree.
Yes. They must regulate business to prevent them from using force against citizens or other businesses.

alienhamster
02-13-2008, 10:19 PM
Oh my! The best way the government can help business is ... get out of the way! Every time the government "helps" there are serious strings attached ... and ridiculous regulations imposed. I don't think it makes sense to be anti-regulation as a general principle, primarily because of three facts:

(1) The possibility of monopolies/collusion
(2) Environmental damage
(3) Labor conditions

If there aren't mechanisms in place to bust up monopolies, business can abuse price controls and employment practices in cases when competition fails. (And don't pretend like this doesn't happen.) And I've personally seen the effects of industry dumping environmental costs onto the public--even across national borders. (I've posted on this elsewhere here regarding an Austalian owned company poisoning the water of a Romanian river that flowed into Hungary.) Gov't has to step in to protect the public interest when business doesn't have any motivation to do so. And, I don't know about you, but I'm not crazy about 12 year olds and illegal immigrants working in factories/business. I'm glad the government stepped in to regulate such practices, though they obviously have been neglectful regarding illegal immigrants. Moreover, do you think business should be able to fire someone solely on the basis of gender or race? I don't, and I'm glad such practices are regulated.

Your post sounds anti-regulation entirely. Would you mind clarifying if the gov't has any role in regulating business, and if so, in what contexts?

And nope, I'm not a business owner.

ETA: I'm open to the idea of loosening some regulations if they can be demonstrated to produce better profits without sacrificing the environmental and labor concerns I expressed above.


You see war as "enterprise"??? Geez!

The way you're phrasing this question really is scary. We didn't enter the war for profit. We entered this war to meddle in the affairs of another nation, thinking we were "spreading democracy." Now that we're there -- just like in Vietnam -- we're letting too many politicians run the war. Which is why we've sunk so many of our Troops' lives and our country's money in that black hole.

Don't put words in my mouth! I personally don't see war as enterprise, though I KNOW people who do. (I've hung out with a Halliburton contractor who works in the Mid East.) If you're claiming that no one enters war in order to make profit, then you're sadly mistaken. Now, I'm not saying that profit is the sole reason advanced for us going to war, but it certainly is a motivating force for a number of people.

To clarify my position: I could understand this war better if I could figure how in the world we as a nation are supposed to benefit from it. It would disgust me to learn if we're positioning ourselves there geopolitically in order to lay primary claim to oil revenues/trading rights . . . and this may be one of the unsaid reasons we're there. I don't think it's a justifiable reason to GO to war, but at least it's a rationale.

No offense to Iraq, but I don't see how they were a "threat" to us, or how forcing our version of democracy on them helped us at all either. So, I ask again, how did we benefit from this invasion in the first place?


When we get out (If we get out) I'd expect the whacky tribal/religious leaders to run the country of Iraq into the sewer again within one year.

Sadly, you may be right.

alienhamster
02-13-2008, 10:34 PM
Because clearly the people earning over $90,000 (about the top 5% of income earners, who already pay over 50% of all federal income tax) aren't taxed enough already. I agree they aren't taxed enough. There are studies that show that overall, the richest people usually end up paying a LOWER percentage of their income in taxes than middle income families. In 2000, for example, the top 400 richest people paid 27% of their income to taxes, while other taxpayers averaged 40%. This includes all taxes, federal, state, local, and social security:

http://www.askquestions.org/articles/taxes/taxes.pdf

And of course, with awesome tax lawyers, the richest now how to squeeze out every possible deduction.

Sorry I can't join your pity party for rich people. It's about time they started paying the same average rate as everyone else.

deluxe
02-13-2008, 11:16 PM
I agree they aren't taxed enough. There are studies that show that overall, the richest people usually end up paying a LOWER percentage of their income in taxes than middle income families. In 2000, for example, the top 400 richest people paid 27% of their income to taxes, while other taxpayers averaged 40%. This includes all taxes, federal, state, local, and social security

And yet in 2000, the richest 1% (far, far more than just the richest 400 people) paid only 2% of federal income tax, but now pay 39% of federal income tax after the tax cuts.

You talk about percentages of income paid in tax, but you don't look at both sides of the tax/benefit equation. If the government takes 20% of a poor persons income in taxes and gives them 25% in benefits, but takes only 15% of a rich mans income and gives him 0.1% in benefits, you rail against the "injustice" that the rich man pays a lower % of his income in taxes.

Serve em Up
02-14-2008, 03:53 AM
Let's get the numbers correct.

Here's the link:

http://www.bea.gov/

GDP in 2007 was $13,843 billions (in current dollars)

Generally the percentages on what taxes the wealthiest pay seem correct. The wealthiest do pay the vast majority of taxes. The very top tier (top 400) may pay less in real percentages but the top 5% pay 50% of all US income tax. 50% of americans contribute no federal income tax. not incluiding FICA contributions.The misinformation that Dems use about tax cuts for the wealthy is bunk. A "cut" goes to the people that pay the tax. What the Dems really want to do is take more from the wealthy and give to the less wealthy. That's income redistribution. A different story.

I don't know how Obama is going to fund his programs. We certainly need more work on transportation infrastructure. Iraq has been very expensive. You can't really say your'e going to leave, save money and then use savings from the war to pay for domestic spending. We're in a severe deficit situation. We need to be looking at reducing the national debt. Iraq was done on borrowed money.

The war was a no sacrifice deal, except for the families who had soldiers in harm's way. The public never sacrificed anything. This was wrong. There should have been broad public sacrifice, fuel rationing, mandatory draft (without exceptions), war tax surcharges to pay for it, etc. If these things had been in place there would not have been a war. Not even the neo cons would have supported the effort if they knew their sons were going to have to leave Harvard and Yale to fight.

My children will be paying for this boy scout trip for years to come. Now it looks like I will have to pay more taxes so illegal aliens can have free health care, drivers licenses, and education. At least maybe Obama will make sure the bridge next to my house doesn't collapse.

Thank you for pointing out a little more substance about Obama. I still have an issue with how he will do it.

BTW: What should people over $100,000/year pay in taxes. 40%, 50%, 60%? Why do Dems feel that if you work hard and smart you should give up the benefit of your actions and fork it over to those that don't, won't, or can't. Seems to me that if the guy making 100,000 pays 40%, and the guy making 50,000 pays .00, Why work hard to make a a lousy 10K more?



Why should they also have to fork over estate taxes on money that was already taxed?

One last thing, what about all of the blue collar, state employees, and other pesion and 401K plans that are invested heavily in stocks, including Exxon. Are you going to go after corporate earnings and reduce the return on all of these working peoples retirement funds. It's not just the rich that have stock investments these days.

Trainer
02-14-2008, 05:35 AM
Let's get the numbers correct.

Here's the link:

http://www.bea.gov/

GDP in 2007 was $13,843 billions (in current dollars)

Generally the percentages on what taxes the wealthiest pay seem correct. The wealthiest do pay the vast majority of taxes. The very top tier (top 400) may pay less in real percentages but the top 5% pay 50% of all US income tax. 50% of americans contribute no federal income tax. not incluiding FICA contributions.The misinformation that Dems use about tax cuts for the wealthy is bunk. A "cut" goes to the people that pay the tax. What the Dems really want to do is take more from the wealthy and give to the less wealthy. That's income redistribution. A different story.

I don't know how Obama is going to fund his programs. We certainly need more work on transportation infrastructure. Iraq has been very expensive. You can't really say your'e going to leave, save money and then use savings from the war to pay for domestic spending. We're in a severe deficit situation. We need to be looking at reducing the national debt. Iraq was done on borrowed money.

The war was a no sacrifice deal, except for the families who had soldiers in harm's way. The public never sacrificed anything. This was wrong. There should have been broad public sacrifice, fuel rationing, mandatory draft (without exceptions), war tax surcharges to pay for it, etc. If these things had been in place there would not have been a war. Not even the neo cons would have supported the effort if they knew their sons were going to have to leave Harvard and Yale to fight.

My children will be paying for this boy scout trip for years to come. Now it looks like I will have to pay more taxes so illegal aliens can have free health care, drivers licenses, and education. At least maybe Obama will make sure the bridge next to my house doesn't collapse.

Thank you for pointing out a little more substance about Obama. I still have an issue with how he will do it.

BTW: What should people over $100,000/year pay in taxes. 40%, 50%, 60%? Why do Dems feel that if you work hard and smart you should give up the benefit of your actions and fork it over to those that don't, won't, or can't. Seems to me that if the guy making 100,000 pays 40%, and the guy making 50,000 pays .00, Why work hard to make a a lousy 10K more?



Why should they also have to fork over estate taxes on money that was already taxed?

One last thing, what about all of the blue collar, state employees, and other pesion and 401K plans that are invested heavily in stocks, including Exxon. Are you going to go after corporate earnings and reduce the return on all of these working peoples retirement funds. It's not just the rich that have stock investments these days.

Serve em UP.

Just to play devil's advocate, the congress has determined that the best way to tax is to distribute the tax burden equally. More simply, a dollar is worth more to a person making 30k/year than someone making 200k/year. So while having the same percentage for each may appear equitable, it actually imposes an unequal burden on the two.

I understand that this means reducing incentive, and it can be argued that ultimately it reduces revenue. But there is a fine line to finding the right tax rate to maximize revenues, and this means that people can make a valid argument from either side. This is depicted here.

http://dalefranks.com/images/laffer.gif

Knowing where that equilibrium point is is almost impossible, and it is the subject of debate of tax policy.

But the one thing we can control is spending. I think it should be illegal for congress to go into a deficit that is not paid for within 2 years. A budget that includes a deficit should also, by law, impose a tax that pays for it within that time. This would give a bit of flexibility to the congress as well as hold them, and us, accountable for the money we spend in Washington. This would make the political ramifications of a spending bill immediate.

superstition
02-14-2008, 05:36 AM
Why should they also have to fork over estate taxes on money that was already taxed?
1. Because wealth helps people get more. Estates keep growing if the money is invested.
2. Because people should have to do a bit more than invest their grandparents' money if they're going to have millions.

deluxe
02-14-2008, 06:54 AM
Knowing where that equilibrium point is is almost impossible, and it is the subject of debate of tax policy.

The sad thing is that the extent of your socialism is such that you could be anywhere near the equilibrium point.

deluxe
02-14-2008, 07:08 AM
1. Because wealth helps people get more. Estates keep growing if the money is invested.

No. Keeping that wealth takes knowledge and talent. You can pay others to do it for you, but then it requires knowledge and talent to chose who you get to do it for you. These things aren't automatic. If anything, it is the reverse. Keeping your wealth is difficult because of depreciation.

2. Because people should have to do a bit more than invest their grandparents' money if they're going to have millions.

Who has the right to say who deserves their wealth? Are you happy for me to judge how much wealth I think you deserve?

Serve em Up
02-14-2008, 07:31 AM
Trainer,

I'm having trouble with your devil's arguement. I would agree that a dollar is more to a 30K individual as opposed to a 200K individual.

But tax rates at 40 % to a 30K guy is $12,000 in taxes paid
and to a 200K guy is $80,000 in taxes paid.


The "wealthy guy" paid in 68,000 more.

This seems to me that a flat tax rate in and of itself is progressive. The wealthy pay more, the less wealthy pay less.

That is not the case however because we don't have a flat rate. The top 5% pay 50% of the collected taxes. That by definition means that 95% of households pick up the other 50%. Also we know that 50% of the people pay .00 taxes. That means that the 45% of us in the middle 51% - 95% percentile by income pay the other 50% of the taxes.

Plus the middle group does not all pay the same %. Those in the bottom middle are in different brackets from those in the upper middle.

You can argue about fairness, but I really am not able to discern how anyone can say this is not a "progressive" outcome.

BTW; Nice graph. Sorry I couldn't produce one.

Trainer
02-14-2008, 08:58 AM
Trainer,

I'm having trouble with your devil's arguement. I would agree that a dollar is more to a 30K individual as opposed to a 200K individual.

But tax rates at 40 % to a 30K guy is $12,000 in taxes paid
and to a 200K guy is $80,000 in taxes paid.

True, but consider this.

If I make a dollar, you make 10.

We each have to spent at a bare minimum 30 cents on food, clothing, housing and other bare necessities. This is a fixed amount that can't change a lot.

That 30 cents is a much larger percentage of my income than it is for you.

If the tax rate were 75%, I couldn't afford these bare necessities, but you could easily. With some to spare.

alienhamster
02-14-2008, 09:02 AM
This is turning out to be a GREAT thread so far. Let's keep these policy debates goin'. I'm certainly finding it helpful.

BTW: What should people over $100,000/year pay in taxes. 40%, 50%, 60%? Why do Dems feel that if you work hard and smart you should give up the benefit of your actions and fork it over to those that don't, won't, or can't. Seems to me that if the guy making 100,000 pays 40%, and the guy making 50,000 pays .00, Why work hard to make a a lousy 10K more?

I disagree strongly with the underlying assumption here that higher pay necessarily implies "stronger" or "harder" or "smarter" work. I guarantee you that there are people working their butts off in this country, literally with back-breaking labor over 60 hours a week, making far less than those in cushy jobs with paid vacations and bonuses. And of course these high salaries and stock profits and bonuses wouldn't be possible in the first place without this basic labor force in place.

I'm just not convinced our economy--and I'm not just talking about the tax code here--has ever been consistently structured to reward the "hardest working" with the best pay. If people are truly interested in an economy that builds incentives for all workers, we need to be talking more broadly than just the tax code here.

And I 100% agree with Trainer's supposition that a dollar is worth far more to a poor person than it is to a rich person, and it's why I wholly back a progressive tax scale. And people should keep in mind that in terms of rates, tax increases on the wealthy only need to be done in small increments to generate a lot of revenue for the government. So I doubt we'll see any increases to 60% for anyone any time soon.

A random (but related) point:

Deluxe--Good point about the tax/benefits consideration. You're right that the rich don't get as much government assistance in terms a percentage of income. Of course, the real question here is, do they need it? Of course not. One of the benefits of wealth is having the ability to afford the best food, health care, transportation, etc. Frankly, I'm not worried about these people. For full-time employees who are barely able to feed their families or get health care for themselves or for their kids based on their income, I have NO qualms about the government assisting them. If that means "the rich" are helping to fund this, then that's the price they should have pay for being able to generate mass quantities of wealth in this country (which, once again, wouldn't exist in the first place without the basic labor force). My opinions here, of course.

Kaptain Karl
02-14-2008, 09:03 AM
I don't think it makes sense to be anti-regulation as a general principle, primarily because of three facts:

(1) The possibility of monopolies/collusion
(2) Environmental damage
(3) Labor conditionsI am not opposed to *all* regulation (which is why I didn't suggest totally eliminating the Regulatory Agencies). My experience is the regulators have encroached into areas they don't belong (either marking out territory and/or empire building). And they wield far too much "police power" (and do not wield it wisely). If the Regulatory Agencies are not cut down to size, we will soon need a whole new layer of bureaucracy to "regulate the regulators."

... I don't know about you, but I'm not crazy about 12 year olds and illegal immigrants working in factories/business. I'm glad the government stepped in to regulate such practices, though they obviously have been neglectful regarding illegal immigrants. Moreover, do you think business should be able to fire someone solely on the basis of gender or race? I don't, and I'm glad such practices are regulated.Hello??? I didn't advocate the elimination of the Regulatory Agencies. Some of what they do is helpful and protective. Too much of what they do (eg.: Prebbles Jumping Mouse) is asinine and counter-productive.

Your post sounds anti-regulation entirely.How did you interpret "reduce by two-thirds" to be "wipe out?"

... I'm not saying that profit is the sole reason advanced for us going to war, but it certainly is a motivating force for a number of people.I posted in a broad, national and strategic sense. War isn't something a nation (should) enter for the means of mere "profit". (Of course some people / groups / organizations are really good at delivering a "service" which advances the agenda of one side of a conflict. Being expert, they should be compensated for that service. Yes, there is a "business" to war. But I was not posting about this.)

To clarify my position: I could understand this war better if I could figure how in the world we as a nation are supposed to benefit from it.I completely supported the Afghanistan mission. We were pursuing those who terrorized us. We were also sending a message to others who might try.

In the beginning of our shift to Iraq, I chose to hope that the Commander In Chief and his staff knew more about what justified it than I did. I also hoped they would have learned the lesson of N. Korea and Vietnam and finished the job quickly. Now I don't have hope that either is true. (The longer we stay in Iraq I believe the "message" of "Don't mess with the USA" is actually damaged; not reinforced.) So I don't know what the "benefit" is to the USA and its citizens....

I *do* understand the Iraqis have been benefitted ... temporarily. I still think the region will go right back to chaos if/when we leave. The odds are just as good that Iraq will end up with someone worse than Saddam ... as they are he will be better.

Okay, you are not a business owner. Thanks. What do you do for a living?

I agree [the rich] aren't taxed enough.That's nuts. And the author of the piece you linked is crazy!!! (I could only get through the first page of it. It is overwhelmingly shallow, emotional and demonstrates an inability to think consequentially. Her thesis is the same tired class envy model promoted by ... tenured college professors who pretend to be "professional victims" when they enter policy discussions. And "pretend" is the key word in that sentence.)

Those "rich people" you want to penalize are the same people who take the risks and start new businesses and hire people like you and me to run those businesses. This puts food on our tables and makes us productive members of society.

Instead of promoting class envy why don't you employ the same investing and business strategies used by "the rich" and join them? (Usually the answer boils down to "you don't have the guts to take the risks the rich take all the time.")

Please also understand a very basic truth and comprehend some consequential thinking of your own: Corporations don't pay taxes, period.

I own a small business. I pass-on *all* the costs of running my business ... to my clients. Taxes are merely a cost of doing business. So ... even though it "looks" like corporations are paying taxes, the truth is ... the clients and customers of that business are paying its taxes.

Ready? Here's the kicker.... So, anytime you raise taxes on the corporations, you are really only increasing the tax burden on the consumers. (You and me.)

And, like it or not, "rich people" have figured-out how to run their lives much like that of a corporation (economically speaking). They don't pay "zero" taxes, but they won't pay more than they are comfortable paying. No matter how you try to soak the rich people for more taxes ... you and I will end up paying for it somehow.

This is just a fact of life. You cannot change it. It makes many Leftists feel good about what they are saying when the talk about "taxing the rich," but they cannot (really) do it, because beyond a certain point [See the Laffer Curve.] the rich will move their money out of the reach of Uncle Sam.

Sorry I can't join your pity party for rich people. It's about time they started paying the same average rate as everyone else.It won't happen. You are "trying to push a rope."

<edit> I started composing this hours ago ... finally finished ... and see I am behind on the discussion AND the Laffer Curve has already been introduced. Good! I'll try to catch-up.... </edit>

- KK

alienhamster
02-14-2008, 09:26 AM
Karl,

(1) Apologies. I missed the 2/3 reduction of regulation part of your post. This is why I asked you to clarify your stance on what level and types of regulation should be in place. You didn't exactly spell out what types, of course, though I have a better sense of what level. Do you disagree with any of the types I listed in the previous post?

(2) I'll answer your question about my job (which I thought you already knew somewhat) after you answer this: what possible relevance to this debate does my business-owning stance have here? If you're implying in any way that I have less of an informed or credible opinion about national economic issues because I'm not a small business owner, I don't think that's fair.

(3) I wasn't thrilled with the link I provided either, but it was shorthand (2 min. max research rule when I can't find a source and I'm in an internet debate). I never claimed it was a brilliant, persuasive document, but it laid out the general side of the argument I was shooting for regarding how much taxes are paid by people as a percentage of their incomes. No one had considered these sorts of calculation up to this point in the thread.

I defer to my last post and to Trainer's last two posts for my personal philosophy on taxation. I'm interested in your comments about businesses and the wealthy always being able to find ways around getting their wealth taxed.

What is your personal view on how taxation should work in this country?

(4) Do you think the government should have any role in assisting in the scenario I mentioned in the last post?: A single parent working full time with two kids, no health coverage from work, whose wages aren't able to cover food and housing needs. (Imagine McDonald's minimum wage salary in an expensive urban area like NYC.) If so, then that money has to come from those who have higher incomes.

If not, what are these people supposed to do?

Trainer
02-14-2008, 09:38 AM
Deluxe--Good point about the tax/benefits consideration. You're right that the rich don't get as much government assistance in terms a percentage of income.

That isn't necessarily the case. Affluent communities pay more taxes and also receive superior services. They expect strong, diligent police forces, they expect nice roads, nice water recourses, and a generally nice infrastructure. Otherwise, they will move to an area that provides these things and take their tax revenues with them. Poorer communities don't have the same level of government service and don't expect it.

It's true that poorer people receive more social services, but these costs are minuscule compared to other sorts of things that government spends on. We have a strong military and a strong judicial system to protect property. The more property, the more it needs protection. Rich people benefit more from this than poor people. Poor people don't need much to protect their property because they don't have much of it to protect.

Kaptain Karl
02-14-2008, 09:44 AM
Here's a link to a helpful "quickie" on the Laffer Curve (http://www.youtube.com/watch?v=fIqyCpCPrvU).

I moved this from the Obama thread (http://tt.tennis-warehouse.com/showthread.php?t=180585) (see first post in this thread for rationale).

I'll be back but I gotta go make some obscene profits...!

- KK

Supernatural_Serve
02-14-2008, 09:53 AM
Everyone pays too much in taxes. Most government spending and functions should be eliminated.

The average guy wouldn't notice a thing missing if half of government, local, state, and federal simply disappeared.

Most government functions delivering any value would deliver more value privatized where the market place accountability demands excellence, differentiation, competitiveness, cost conciousness, and profit awareness.

The government is devoid of all those things yet very efficient at corruption, terrible quality, and splendid mediocrity.

little_e
02-14-2008, 10:00 AM
I would like to know what the dollar figure is for determining if I am wealthy or not. At what point am I considered "the rich".

movdqa
02-14-2008, 12:41 PM
Karl,
(4) Do you think the government should have any role in assisting in the scenario I mentioned in the last post?: A single parent working full time with two kids, no health coverage from work, whose wages aren't able to cover food and housing needs. (Imagine McDonald's minimum wage salary in an expensive urban area like NYC.) If so, then that money has to come from those who have higher incomes.

If not, what are these people supposed to do?

If you do a giveaway, then you promote moral hazard. I guess it would depend on the circumstances. If you make it easier to do less, then people will do less.

The better solution would be to educate the young so that they don't wind up in bad relationships; especially with kids.

Great discussion btw.

movdqa
02-14-2008, 12:55 PM
I would like to know what the dollar figure is for determining if I am wealthy or not. At what point am I considered "the rich".

There is property wealth and wealth associated with income. We have a tradition of income taxes at the Federal level and some property, sales and income taxes at the state level. So when we talk about the wealthy, we usually mean based on income as that's the easiest to measure based on IRS information.

The Federal tax code generally doesn't make adjustments for local cost of living. You might live in a place where a typical house costs $150K or $700K but your taxation remains consistent. You may buy a modest house somewhere for $800K and pay with a $5,300 mortgage and a thousand a month for property taxes which comes to $75K a year (I have a sister with a house worth that much in a suburb of San Francisco and it is not much to look at - first time I was there, I thought I was in the wrong neighborhood).

$100K a year suddenly doesn't look like very much in this city. You take your 75% Federal Income Tax on even $200K and you're not making it here. On the other hand, there are places where $70K is a lot of money.

If you pass a tax rate that is too high, then you provide a disincentive to generate taxable income and productive labor goes towards generating income that isn't taxable. Perhaps the example of Russia lowering tax rates and gonig to a flat tax that brought in much more revenue than the high rates is a good example of the disincentives of high rates of taxation.

The wealthy better use information technology to increase their wealth at higher rates than the non-wealthy. That's just life right now. Not sure what you can do about it. If you tax income, folks can just buy a bunch of gold, silver and platinum and bury it in the ground and it will grow in value without any taxation at all. The wealthy can buy favorable legislation to build their wealth.

On the regulation issue, I think that we can look at Enron and China, Inc to see that some amount of regulation is desirable.

movdqa
02-14-2008, 01:08 PM
> I disagree strongly with the underlying assumption here that higher
> pay necessarily implies "stronger" or "harder" or "smarter" work. I
> guarantee you that there are people working their butts off in this
> country, literally with back-breaking labor over 60 hours a week,
> making far less than those in cushy jobs with paid vacations and
> bonuses. And of course these high salaries and stock profits and
> bonuses wouldn't be possible in the first place without this basic
> labor force in place.

Would this labor force be employed without the other folks with high
salaries, stock profits and bonuses? Does trickle-down work?

There's a saying that money flows to where it's treated well. We live
in a global economy and it's pretty easy to move money to other parts
of the world where it will generate a higher return - and maybe generate
a better standard of living for the people in those areas.

> I'm just not convinced our economy--and I'm not just talking about the
> tax code here--has ever been consistently structured to reward the
> "hardest working" with the best pay. If people are truly interested in
> an economy that builds incentives for all workers, we need to be talking
> more broadly than just the tax code here.

In terms of corporate rewards, there are a variety of attributes that one
should have to get them. Hard work isn't necessarily one of them. And the
package is often intangible. And frequently involves luck.

> And I 100% agree with Trainer's supposition that a dollar is worth far
> more to a poor person than it is to a rich person, and it's why I wholly
> back a progressive tax scale. And people should keep in mind that in
> terms of rates, tax increases on the wealthy only need to be done in
> small increments to generate a lot of revenue for the government. So
> I doubt we'll see any increases to 60% for anyone any time soon.

Perhaps we should try taxing luxury boats again.

> Deluxe--Good point about the tax/benefits consideration. You're right
> that the rich don't get as much government assistance in terms a
> percentage of income. Of course, the real question here is, do they
> need it? Of course not. One of the benefits of wealth is having the
> ability to afford the best food, health care, transportation, etc. Frankly,
> I'm not worried about these people. For full-time employees who are
> barely able to feed their families or get health care for themselves or
> for their kids based on their income, I have NO qualms about the
> government assisting them. If that means "the rich" are helping to
> fund this, then that's the price they should have pay for being able to
> generate mass quantities of wealth in this country (which, once again,
> wouldn't exist in the first place without the basic labor force). My
> opinions here, of course.

Let's say that you're wealthy and can earn a comparable rate of return
in a country where you can legally avoid taxes, both here and there to
an investment here. Where would you invest. Where would you work
to generate mass quantities of wealth? In this country or in the other
one?

little_e
02-14-2008, 01:23 PM
Let me rephrase my question according to the IRS when am I considered wealthy? I understand cost of living and all that but that isn't what I'm asking about because several of those people that live in areas with a high cost of living are considered wealthy under the tax code.

movdqa
02-14-2008, 03:12 PM
Let me rephrase my question according to the IRS when am I considered wealthy? I understand cost of living and all that but that isn't what I'm asking about because several of those people that live in areas with a high cost of living are considered wealthy under the tax code.

I don't think that the IRS gets into the subjective business in determining whether or not one is wealthy. Congress writes the tax code and they implement it.

Legislators use it as a point of demagoguery though. And I think that this includes Obama.

movdqa
02-14-2008, 03:18 PM
Originally Posted by alienhamster :
[Two small remedies are to raise the retirement age (which they should since life expectancy has increased) and to raise the income cutoff level for taxation from $90,000 (or whatever it is now) to $150,000.]

Don't tax you, don't tax me, tax the man behind the tree. I take it that you're not near retirement age. That you don't have the aches and pains of age. Or any chronic problems that you have to deal with. Or arthritis. How about taxing the crap out of everyone under 30 just because we can?

Are you going to increase benefits to those that you tax at higher levels?

richw76
02-14-2008, 03:25 PM
Because clearly the people earning over $90,000 (about the top 5% of income earners, who already pay over 50% of all federal income tax) aren't taxed enough already.

What the He!! is Rich anyway. I make a Fair living but I'm far from "Rich" And I'm the guy that usually suffers when they raise taxes.

The Super Rich that have hundreds of millions in assets will always pay less. Most of the Rich are like me Making between $100-200K per year. There are millions of us. And we get worked. It's not fair. I don't have a jet or a vacation home in Vale. And I can't afford 500$ an hour tax attorneys.

movdqa
02-14-2008, 03:45 PM
What the He!! is Rich anyway. I make a Fair living but I'm far from "Rich" And I'm the guy that usually suffers when they raise taxes.

The Super Rich that have hundreds of millions in assets will always pay less. Most of the Rich are like me Making between $100-200K per year. There are millions of us. And we get worked. It's not fair. I don't have a jet or a vacation home in Vale. And I can't afford 500$ an hour tax attorneys.

I understand your frustration at those trying to do a transfer of wealth from folks like you. A lot of people don't understand those that toil away for amounts that are more than the lower and middle-class but that would hardly qualify for the modern notion of rich.

You might find the article on Working-Class Millionaires an interesting read:

http://www.nytimes.com/2007/08/05/technology/05rich.html

Yet each day Mr. Steger continues to toil in what a colleague calls “the Silicon Valley salt mines,” working as a marketing executive for a technology start-up company, still striving for his big strike. Most mornings, he can be found at his desk by 7. He typically works 12 hours a day and logs an extra 10 hours over the weekend.

“I know people looking in from the outside will ask why someone like me keeps working so hard,” Mr. Steger says. “But a few million doesn’t go as far as it used to. Maybe in the ’70s, a few million bucks meant ‘Lifestyles of the Rich and Famous,’ or Richie Rich living in a big house with a butler. But not anymore.”

----------------------------------------------------

Presumably he went to a good college, worked his *** off and executed well setting up good work habits for a lifetime. There are loads and loads and loads of these kinds of guys in the US. And they keep a good chunk of USA Inc running.

LuckyR
02-14-2008, 03:46 PM
Just to make sure we are all on the same page, is there agreement that:

1- It costs money to run the government

2- Different income levels have different abilities to pay for #1

3- Having the government spend more money than it is willing/able to raise is a bad idea (deficit spend).

movdqa
02-14-2008, 03:58 PM
Just to make sure we are all on the same page, is there agreement that:

1- It costs money to run the government

2- Different income levels have different abilities to pay for #1

3- Having the government spend more money than it is willing/able to raise is a bad idea (deficit spend).

1) 1Sa 8:10 So Samuel told them, delivered GOD's warning to the people who were asking him to give them a king.
1Sa 8:11 He said, "This is the way the kind of king you're talking about operates. He'll take your sons and make soldiers of them--chariotry, cavalry, infantry,
1Sa 8:12 regimented in battalions and squadrons. He'll put some to forced labor on his farms, plowing and harvesting, and others to making either weapons of war or chariots in which he can ride in luxury.
1Sa 8:13 He'll put your daughters to work as beauticians and waitresses and cooks.
1Sa 8:14 He'll conscript your best fields, vineyards, and orchards and hand them over to his special friends.
1Sa 8:15 He'll tax your harvests and vintage to support his extensive bureaucracy.
1Sa 8:16 Your prize workers and best animals he'll take for his own use.
1Sa 8:17 He'll lay a tax on your flocks and you'll end up no better than slaves.
1Sa 8:18 The day will come when you will cry in desperation because of this king you so much want for yourselves. But don't expect GOD to answer."
1Sa 8:19 But the people wouldn't listen to Samuel. "No!" they said. "We will have a king to rule us!
1Sa 8:20 Then we'll be just like all the other nations. Our king will rule us and lead us and fight our battles."

2) is to vague to be of use

3) deficit spending isn't bad per se, especially with fiat currencies. It can be inflationary but history has shown that deflation is a much bigger problem than inflation. If most of the other central bankers are doing it, it is much less of a problem. The problem is when it gets out of hand.

LuckyR
02-14-2008, 09:07 PM
1) 1Sa 8:10 So Samuel told them, delivered GOD's warning to the people who were asking him to give them a king.
1Sa 8:11 He said, "This is the way the kind of king you're talking about operates. He'll take your sons and make soldiers of them--chariotry, cavalry, infantry,
1Sa 8:12 regimented in battalions and squadrons. He'll put some to forced labor on his farms, plowing and harvesting, and others to making either weapons of war or chariots in which he can ride in luxury.
1Sa 8:13 He'll put your daughters to work as beauticians and waitresses and cooks.
1Sa 8:14 He'll conscript your best fields, vineyards, and orchards and hand them over to his special friends.
1Sa 8:15 He'll tax your harvests and vintage to support his extensive bureaucracy.
1Sa 8:16 Your prize workers and best animals he'll take for his own use.
1Sa 8:17 He'll lay a tax on your flocks and you'll end up no better than slaves.
1Sa 8:18 The day will come when you will cry in desperation because of this king you so much want for yourselves. But don't expect GOD to answer."
1Sa 8:19 But the people wouldn't listen to Samuel. "No!" they said. "We will have a king to rule us!
1Sa 8:20 Then we'll be just like all the other nations. Our king will rule us and lead us and fight our battles."

2) is to vague to be of use

3) deficit spending isn't bad per se, especially with fiat currencies. It can be inflationary but history has shown that deflation is a much bigger problem than inflation. If most of the other central bankers are doing it, it is much less of a problem. The problem is when it gets out of hand.

1- Blah, blah, blah

3- How many trillion qualifies at "out of hand" in your opinion?

movdqa
02-15-2008, 03:12 AM
1- Blah, blah, blah

3- How many trillion qualifies at "out of hand" in your opinion?

It's more of an attitude than an amount. When the hubris gets so hot that you know the perps are in for a fall.

I followed thehousingbubbleblog for several years before the crash and the evidence and arrogance of the industry rose to a fever pitch before the peak.

The dollar figures really don't matter. We're in an age of engineered finance and engineered central banks.

kairosntx
02-15-2008, 03:31 AM
Just dropping by to say I am enjoying the information. Don't pay attention to my laodicean posts if I make any.

Serve em Up
02-15-2008, 03:54 AM
One problem is the nature of government to try to fix every societal ill with a program (that costs money). There generally is no independent review once a program gets started. If the program is run in a particular state, the congressman have a keen in interest in protecting the jobs that run the program in their district.

In business, an ineffective business goes out of business, in goverenment it gets rationalized by saying yea, it costs only ten million, but we help 180 people that wouldn't get helped otherwise. Look at the tons of money being dumped into Amtrak, it's a loser, customer's hate it. But no one will kill it. If customer's had to pay what it really costs to run, the air shuttles are much cheaper and faster.

We end up with taxpayers , usually the higher income taxpayers upset that their money is being used foolishly and wastefully. This is justified because the government really has no ability or mechanism in place to review the productivity or cost /benefit of what it does. And yes I know about he CBO, it's a whole cost laden department that basically makes it's living off of producing over-written analysis that no one reads. Usually, the government takes agressive step to avoid cuts at all costs. Everyone on both sides of the aisle has their pet programs.

This is one reason I'm so opposed to a liberal progressive agenda. I'm not opposed to trying new things to help people and society, but I know that once started and it becomes written into law it will continue whether it's useful or not.

little_e
02-15-2008, 04:24 AM
My question is related to what I have heard on talk radio & TV " the top 5% of taxpayers pay 50% of the income tax and that the top 50% of taxpayers pay 95% of the income tax so that the bottom 50% of taxpayers only pay 5% of the tax burden". I am wondering where these numbers are. What is the cutoff to be in the top 5%, what is the cutoff to be in the top 50%. These are numbers that a lot of people don't know because if they did then they might be a little more upset with the current tax code and the way politcians use it against each other and as a scare tactic to get votes.

Serve em Up
02-15-2008, 06:48 AM
Here's the link from the CBO

Refer to Table 1B

http://www.cbo.gov/ftpdoc.cfm?index=5324&type=0&sequence=0

little_e
02-15-2008, 07:28 AM
Thanks

10 char

LuckyR
02-15-2008, 08:51 AM
It's more of an attitude than an amount. When the hubris gets so hot that you know the perps are in for a fall.

I followed thehousingbubbleblog for several years before the crash and the evidence and arrogance of the industry rose to a fever pitch before the peak.

The dollar figures really don't matter. We're in an age of engineered finance and engineered central banks.


Sounds very theoretical, very Intellectual.

movdqa
02-15-2008, 09:51 AM
Sounds very theoretical, very Intellectual.

Consider what happens when the Fed changes interest rates. There are immediately a bunch of winners or losers. If he lowers rates, savers don't get a decent return on their savings but entities benefit by borrowing money and taking risks. And it works in reverse. So you have a small group of people deciding major economic effects for the rest of us.

Part of the problem is that Americans are so eager to borrow money to maintain consumption and the central bank knows that if they push this button, that Americans will respond, by and large, in a predictable way. If you're making $50K, you'd have to be nuts to borrow half-a-million to buy a house. And the ultimate lender would have to be nuts too. Well, both were nuts as it turns out.

It seems to me that we're running in an extended Kondreytieff Cycle or wave, primarily due to Greenspan. Greenspan was aware of the wave and commented that he could defeat it with inflationary measures. The problem with that approach is that you have to create successively bigger bubbles. The traditional bubbles have been the stock and real estate markets. And those have been used. Can we do a stock bubble next?

What happened is that Bush I lost, partially due to interest rates not kicking in fast enough before the election and he subsequently lost. And Clinton and Bush II learned that you don't get reelected if you allow interest rates to go high enough to kill off the speculators for a while and don't have an economic recovery well before an election.

Solution? Provide hard-backing for currencies. It won't happen as it will take away the power base of the banking system.

kairosntx
02-18-2008, 01:07 AM
Perhaps someone here can offer an explanation to a local taxation issue.

A law was recently passed which freezes property tax on anyone over the age of 55. After all, the elderly need a tax break was the argument that got plenty of publicity and won the election to enact the law.

My argument was the law should not be based on age alone because what the fine voting few of my local jurisdiction have done is frozen the property tax on almost 1,100 properties worth over $1 million owned by people over 55.

Any thoughts on this issue. Is it a common issue across the country?

Serve em Up
02-18-2008, 03:50 AM
I live in an area where property values have escalated like crazy in the last 15 years.

The problem is that there are retirees that bought homes when they were working at much lower values than the homes are now worth. The property tax is based on the value of their homes which continues to go up up every year. Unfortunately, many of these people are on a fixed income and can't afford the increases. Their rates are the sames as everyone else, but they don't have the income to pay as their rates increase. It's also slightly unfair because most proplerty tax in our area goes to pay for schools. The elderly people affected really don't have kids in school any longer, and don't put cost burdens on the education system.

Some on our area were forced to move because they couldn't afford the property tax.

movdqa
02-18-2008, 04:06 AM
I'd guess that those folks with million dollar homes are paying quite a bit in taxes as it is but their incomes may have been relatively flat or declining at those ages. They've paid their fair share of property taxes to support schools over their time in the community and your municipality believes that they deserve a break. We have property tax breaks for seniors and veterans in my town and I'm fine with that.

In California where one of my sisters lives, they have something stranger where either the tax amount or assessed value is frozen to when you purchased the property. Obviously this benefits those that have lived there for a long time.

The nice thing about the property tax is that it is the tax that citizens have the most control over as it is a local tax (yes, there are some statewide property taxes). You can contact your local representative or vote him out of office and run yourself if you don't like the way taxation is going. It's a lot harder to get attention at the state and federal level when your legislators have to compete with other geographies.

kairosntx
02-18-2008, 09:49 PM
Thanks serve and mov... I appreciate your responses.