quote:Originally posted by Lyrhawn: This is something that needs to be emphasized.
ON IT
quote: In 2030, traditional Medicare insurance, CBO estimates, would only cost 60 percent as much as the private options Ryan is offering. But under Ryan’s plan, seniors would pay two-thirds of the cost, while under traditional Medicare, they’d pay only 25 percent.
quote:/alternate response is a Protoss voice going "WE REQUIRE ADDITIONAL ELABORATION"
What part of experiment didn't you understand? Well, I guess no one pays any attention to my posts anyway, so I guess I got my answer.
To be fair your post was cryptic and vague. I understand why you phrased it that way, but there's nothing wrong with actually explaining your thought if no one took your bait.
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Excellent. I was worried when you didn't bold italicize it all the first time that you weren't giving the information its due. Posts: 21898 | Registered: Nov 2004
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Walter Williams addressed this line of thought in a recent editorial:
quote:This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It's not even yacht and Lear jet money. All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.
Seizing all the assets of the richest Americans would amount to little more than killing the goose to get at the eggs - it's a one time deal. you can't go back next year and shake them down again for a few more billion.
Taxing only the rich isn't a reasonable approach to reduce the debt at the rate which is needed, even if you raised the taxes on the wealthy to an absurd level. This is why rational voices call for across-the-board cuts.
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posted
That article does come confusingly bizarre math. The thought experiment suggests a 100% tax to cover all government expenditures with no other revenue. Fortunately, that's not the problem we need to solve. Rather, we have deficit which is substantially below $3.7T (~1.7T for 2010) which needs to be offset by a number of tax increases and spending cuts. Increasing the tax on the wealthy can substantially cut into that deficit.
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posted
I've yet to hear a single person suggest that raising taxes on the wealthy is the ONLY thing that needs to be done to solve the budget problem. Everyone suggesting it pairs it with cuts and revenue enhancements in other areas. Besides, earnings are up the wealthy and down for everyone else. It seems that raising their taxes just to keep pace with this changed reality would at worst just keep the status quo.
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quote:Originally posted by capaxinfiniti: Seizing all the assets of the richest Americans would amount to little more than killing the goose to get at the eggs - it's a one time deal.
Technically, your quote refers to calculations done on household income while your interpretation refers to assets.
Agreed, it would be a one-time deal, but let's not minimize the power of seizing all the assets of the richest Americans Posts: 7593 | Registered: Sep 2006
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quote:Originally posted by capaxinfiniti: Seizing all the assets of the richest Americans would amount to little more than killing the goose to get at the eggs - it's a one time deal.
Technically, your quote refers to calculations done on household income while your interpretation refers to assets.
Agreed, it would be a one-time deal, but let's not minimize the power of seizing all the assets of the richest Americans
You are correct. I was attempting to continue with Walter's hypothetical in order to illustrate the size of the problem. I should have started that thought with "Even seizing.." to identify this. The assets do amount to a significant sum of money but the negative consequences of seizing these assets puts the proposal well beyond the realm of possibility.
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posted
Heck, creating a new 45% tax bracket at $400,000 and removing corporate tax loopholes would result in a budget surplus, no cuts needed at all. I'd still do some cuts anyway, but the rich have been coasting on the backs of actual Americans for years now, and it's time we put the brakes on.
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quote:Originally posted by capaxinfiniti: ... I was attempting to continue with Walter's hypothetical in order to illustrate the size of the problem.
I know, I'm just making sure we have the correct sizes in mind. The deficit isn't really a big deal in terms of policy, the barriers are really just political.
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If you make more than $250,000 a year, you are no longer an American?
Now there's a winning political catch phrase. "Give us your money. You don't exist."
Not that it matters (much) for your actual point, but I'm intrigued as to why you said "250,000" when Tom just EXPLICITLY said "400,000."
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posted
Because the generally bandied about definition of "the rich" has been those making more than $250,00. Tom's first sentence doesn't change that.
But you're right - that's irrelevant to my point. Rhetoric like "actual Americans" is neither effective or...anything else good.
And bringing up coasting in general isn't a good point, because the proper response would be to point out that the people who truly pay no income taxes are could therefore be accurately said to be coasting are not at the TOP of the income heap.
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quote:How to Pay No Taxes Eleven shelters, dodges, and rolls—all perfectly legal—used by America's wealthiest people
The true effective rate for multimillionaires is actually far lower than that indicated by official government statistics. That's because those figures fail to include the additional income that's generated by many sophisticated tax-avoidance strategies. Several of those techniques involve some variation of complicated borrowings that never get repaid, netting the beneficiaries hundreds of millions in tax-free cash. From 2003 to 2008, for example, Los Angeles Dodgers owner and real estate developer Frank H. McCourt Jr. paid no federal or state regular income taxes, as stated in court records dug up by the Los Angeles Times. Developers such as McCourt, according to a declaration in his divorce proceeding, "typically fund their lifestyle through lines of credit and loan proceeds secured by their assets while paying little or no personal income taxes."
posted
According to the New York Times, it is 10% of population who pay no taxes at all, including state and payroll. If they do pay payroll taxes, they get more back from the EITC than they paid.
This isn't a commentary whom to squeeze to get more money to pay for the retirement of people who didn't save enough.
It is instead an objection to excluding anyone from the list of "actual Americans" while holding your hand out to them.
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quote:Originally posted by katharina: ... the people who truly pay no income taxes are could therefore be accurately said to be coasting are not at the TOP of the income heap.
posted
You're right, Tom's not diplomatic enough to make it as a tax collector.
Now, back to the point. A 45% top bracket rate is much less than what we had back in the '50s. One might be concerned, though, that in the present environment it would lead some of the biggest earners to take their business overseas. On the other hand, it may be that those who can do this already have.
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posted
Anyone who says the super-rich live in the same country as the actual population, IMO, is not a careful observer.
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posted
One might say that therefore it's about time some of them started acting like it, and fulfill obligations that we, as a country on the whole, have agreed to make.
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posted
One could say that. One could also say that they are paying what we have collectively decided is their obligation. One could also say that we should collectively decide that their obligation is more than we are currently saying that it is.
Which is very different from excommunicating them because they make a lot.
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quote:Which is very different from excommunicating them because they make a lot.
Is "American" a religion, from which one might be cast?
The rich have been fighting and winning the class war for thirty years -- longer, even, but there was a lull for a while. I don't know that it's feasible to pretend otherwise. I mean, it would be nice if there weren't actually a class war going on, but I don't think we do anyone any favors by burying our heads in the sand and hoping that the rich will just go away and start behaving better. They've been playing to win, and at the same time manipulating the media to train us to think that playing the game is something that only horribly gauche people do; we've learned that lesson, to the extent that everyone talks as if a class war were some horrible thing that we want to avoid.
Except we haven't avoided it. We're losing it.
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posted
I thought we gave the rich low taxes because they were creating jobs and buying stuff to help the economy. Turns out, they aren't really doing that, so they are failing in their obligations.
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posted
They aren't creating jobs and buying stuff? Is that the contention? That jobs are not being created and that luxury goods are not being sold?
Or perhaps you mean that it isn't happening enough as might be wanted. Or perhaps there is another way of putting it where it is the fault of the people following the current law and not the fault of the elected decisionmakers who made the law.
The point is that if you want to change the obligations, then change them. You can pick the laws but not the consequences of them. If you don't like the present system, change the laws.
But as long as you're talking about collectively decided obligations and living up to them, then change those collectively decided obligations before chastising people for not living up to what you think, but have not put into law, their obligations should be.
posted
You're saying you wouldn't agree that citizens have societal obligations that aren't specifically codified into law?
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posted
Are you saying that you think if you are well off, you should pay more taxes than the law requires of you?
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posted
I would suggest that the wealthy have more power to change laws (and lawmakers) than the poor have.
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posted
So you wish to get rid America of elected lawmakers and the rule of law?
Or perhaps you are saying that people with money should have a different set of laws to follow, and these are not set by elected lawmakers but instead...whom?
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quote:Originally posted by katharina: Are you saying that you think if you are well off, you should pay more taxes than the law requires of you?
More than the law requires? No. I think the law should require more. I also think the whole "lower personal income taxes on job creators" thing is full of crap too. I'll cede your point specifically on taxes, but drawing a larger point from it, you seem to be suggesting that people must only do what the law tells them to do.
I would argue that we all have higher obligations to each other that aren't specifically passed as laws, but are often no less important.
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posted
I'm not sure why "the rich must pay more than the law requires" is even a subject of discussion. We're saying we should change the law and raise their taxes. We're saying we should do that because the previous tax change (lowering their taxes with the intent to stimulate the economy) didn't have the desired effect.
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posted
Then you aren't talking about government, or the government shutdown, or the budget, or anything else the thread has been about so far. Which I guess is your path to choose, although I'm not going down that particular one at the moment.
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quote:Originally posted by katharina: So you wish to get rid America of elected lawmakers and the rule of law?
Or perhaps you are saying that people with money should have a different set of laws to follow, and these are not set by elected lawmakers but instead...whom?
I think she's saying that that IS how things are, not how she would like them to be. Money buys access, and while the ra-ra America lovers might profess that America is an egalitarian society, when it comes to access and influence over our lawmakers, it most certainly is not. We all follow the same rules, but circumstances dictate who is best able to take advantage of those rules.
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quote:Originally posted by Raymond Arnold: I'm not sure why "the rich must pay more than the law requires" is even a subject of discussion. We're saying we should change the law and raise their taxes. We're saying we should do that because the previous tax change (lowering their taxes with the intent to stimulate the economy) didn't have the desired effect.
I'm saying the "collectively decided obligations" cuts both ways. We've collectively decided to give socialized medicine to old people, and we've collectively set the income tax rates and the accounting tricks to go with them. The two are becoming unreconciliable, so one of the two must change. But presently they are both collectively decided.
We can choose the laws but not their consequences. That means only that choosing the laws is more important than ever, not that people should divine what the law MEANT to do and are obligated to do that instead.
(On a micro level, it has stimulated some. My dad's business has added about 25 employees this year, which wouldn't have happened if taking on the new business hadn't been worth it. 25 blue collar jobs with health benefits is not a minor thing, and I suspect it is not an isolated incident.)
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posted
In general people don't hire more people because they have extra money to burn; they hire people because they need them to meet demand. Lots of people with some money to spend creates more demand than a very few people with more money than they can reasonably spend in a lifetime.
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quote:Originally posted by Lyrhawn: Oh? Your dad paid for 25 blue collar jobs and their health benefits out of his own pocket?
Deep pockets.
My dad owns a business with my uncle. Their income is the profit from the business, after paying taxes, facilities, all the other stuff, andm most of all, labor with benefits.
So, yeah, out of their pockets. Now, the pockets wouldn't have had as much without the people working to produce the services the business sold, but if all the extra profit was taxed away, then they wouldn't have bothered to take on the extra business that required the 25 new employees. And the employees get paid whether the business they took on ultimately is profitable or not.
That's how it works. Unless you think people should work without getting paid. Taking on business, hiring people, setting up the work, and tracking both the jobs and the employees is my dad's job, and he gets paid if the whole shebang costs less to run than he is getting from the customer. That's how job creation works - if you tax everything over a certain amount away, or so much that it is effectively not worth taking on the new business, then those 25 new jobs don't get created.
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quote:Then you aren't talking about government, or the government shutdown, or the budget, or anything else the thread has been about so far.
Who were you replying to, Kat? Because the post that immediately preceded this observed that we were in fact arguing for higher taxes on the rich, which would seem to speak directly to government, one of the underlying causes of the threatened shutdown, and the budget.
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quote: if all the extra profit was taxed away, then they wouldn't have bothered to take on the extra business that required the 25 new employees
That's not how tax brackets work. I'm aware that there's a point of diminishing returns, but even ignoring the possibility of tax breaks and shelters (which every single business owner I know uses liberally), they're still not looking at paying more than 35 cents on every dollar of profit.
I understand that at some point you're not making enough to justify the effort. Every small business hits that point, after all, where it's forced to decide whether it's really worth the risk and effort to try for further growth. But would you really refuse to bend down and pick up a dollar if it meant you had to give someone else 35 cents of it?
Let's run with that analogy. Sure, it's possible to make things onerous. You can make it hard to expand or maintain through regulation and the like; this is like making the dollar really, really, heavy. You can take more and more of that dollar away. You can make it riskier to bend down. At some point, yeah, any rational person is going to decide that the combination of risk, cost, and effort isn't worth what they'd get from that dollar. John Lennon famously complained in song about getting to keep just one out of every twenty shillings (which wasn't exactly accurate, since he wasn't actually paying 95% of his entire income in taxes, but was indeed paying 95% of the bulk of his income in taxes); I certainly agree with him that a 95% tax rate is excessively discouraging to the entreprenurial spirit.
But right now, American rich are making more money than they have made in living history, at a time when most other Americans are making less -- and continue to make less and less. For them to complain that it's too hard for them to bend down and pick up that dollar now, in an era that has made picking up that dollar easier and more rewarding than any other time in the last eighty years, seems remarkably callow.
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posted
When people talk about blithely taxing 90% of the income over a certain level, that means they either are not aware or are choosing to ignore that the income to tax will dissapear, because it wouldn't be worth the effort to make it.
Anyone who says that job creation isn't chilled by higher tax rates doesn't know, historically or economically, what they are talking about.
I'm more impressed by a knowledge of economics and the demonstrated effects of proposed laws than I am by namecalling.
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quote:Originally posted by Lyrhawn: Oh? Your dad paid for 25 blue collar jobs and their health benefits out of his own pocket?
Deep pockets.
My dad owns a business with my uncle. Their income is the profit from the business, after paying taxes, facilities, all the other stuff, andm most of all, labor with benefits.
So, yeah, out of their pockets. Now, the pockets wouldn't have had as much without the people working to produce the services the business sold, but if all the extra profit was taxed away, then they wouldn't have bothered to take on the extra business that required the 25 new employees. And the employees get paid whether the business they took on ultimately is profitable or not.
That's how it works. Unless you think people should work without getting paid. Taking on business, hiring people, setting up the work, and tracking both the jobs and the employees is my dad's job, and he gets paid if the whole shebang costs less to run than he is getting from the customer. That's how job creation works - if you tax everything over a certain amount away, or so much that it is effectively not worth taking on the new business, then those 25 new jobs don't get created.
You're missing something here. Ultimately, the owner of a business makes a judgment as to what his salary should be versus what money the company makes that should be re-invested in the company. It's different, of course, when there isn't just one or two owners, then a group decides what each individual gets. I think my argument works better in that case, but it works here as well.
If your dad used company money to hire new employees, then his decision wasn't in the slightest bit influenced by personal income taxes. That money would be affected by business tax laws, not personal income laws. And the rest goes to your dad as income, which is taxed differently. I'm all for making business taxes more fair and conducive to job creation, but I still fail to see how, with perhaps the exception of very, very small mom and pop outfits (where the levels of income we're talking about really don't apply anyway), personal income taxes are as much of a factor as many argue they are.
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quote:When people talk about blithely taxing 90% of the income over a certain level, that means they either are not aware or are choosing to ignore that the income to tax will dissapear, because it wouldn't be worth the effort to make it.
Well, I don't know. It's not like John Lennon actually stopped making his millions. At a certain income level, after all, the actual financial rewards ceases to be anything more than a number. You could probably chart actual labor against the perceived value of a dollar, if you could figure out what metrics to use.
My gut feeling is that a 90% tax rate imposed on a very high income level would not in fact prevent those people from further investment, but it would encourage illegal and unethical behavior. I think a decent level would be closer to 50-60% on the highest brackets -- which I'd set higher than $250,000 -- but believe a level that eliminates all sensible objections while still being sustainable would be, as I've said, around 45%.
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quote:If your dad used company money to hire new employees, then his decision wasn't in the slightest bit influenced by personal income taxes.
The business is set up as an S-corp (I think), which (I think) means that the business profit is personal income and is taxed by the personal income rates and not corporate income rates.
It isn't an option for a lot of businesses, but it was created for situations like their business, which is 100% owned by only two people. There is no difference between company profit and their personal income.
quote:My gut feeling is that a 90% tax rate imposed on a very high income level would not in fact prevent those people from further investment, but it would encourage illegal and unethical behavior.
You are welcome to your gut feelings. However, there is no reason for anyone else to take them seriously.
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quote:However, there is no reason for anyone else to take them seriously.
This is entirely true. Nor would I be particularly interested in quoting statistics to defend a 90% tax rate, because I'm not advocating or recommending a 90% tax rate. You're welcome to rail at that straw man, though, if it's offensive to you for some reason; I don't think anyone here will object.
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posted
You can go back to declaring that people who make over an arbitrary number are no longer Americans, I suppose. That was as persuasive as your gut feelings.
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posted
I maintain that the rich certainly do not live in the same America as, say, the poor. The countries occupied by each would be unrecognizable to the other. The leadership, the boundaries, the citizenship, and the facilities provided by the "American" state to each of those groups are fundamentally different on a level that is frankly irreconcilable.
If one must discuss, as politicans certainly appear to require, "real" Americans, it is unquestionably salient to note that the life and experiences of the richest 10% of the population diverge from the "mainstream" far more than, say, the life and experiences of the poorest 10%; there is more commonality to be found among dockworkers and the homeless than among dockworkers and the CEO who unknowingly employs them.
We have, for as long as I have been alive, labored mightily to improve the lot of that richest 10% at the expense of the middle 80% (many of whom have fought mightily to preserve the lot of the poorest 10%, who have not suffered as horribly as other groups). If we're talking -- as many on the Right are -- about cutting taxes to benefit those "real," hardworking Americans, it is IMO incredibly relevant to observe that the rich are as removed from the American experience as, well, Martians might be.
(As a side note, I haven't actually stated the "arbitrary" number that represents the amount of annual income it would take to elevate someone sufficiently beyond normal Americans that they might be considered citizens of a different state. Part of this is because I think income is at best a contributing symptom of this phenomenon, which is best predicted by accumulated wealth and family privilege.)
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posted
They are all Americans. Except for those that are Rupert Murdoch or...some other rich ex-pat living in the U.S., they are all Americans.
I object, fundamentally, to any delcarations that someone is no longer an American based on anything other than a personal renunciation of citizenship. Being wealthy doesn't make someone not an American. Comitting a crime doesn't make someone not American. Burning the flag doesn't make someone not American. Being a jerk, refusing to work, holding weird beliefs, dodging taxes, or driving drunk - none of these things are good, and none of them strip someone of their Americanness.
Colluding with an enemy state to attack America - fitting the constitutionally defined definition of treason - is the closest I can think of to warranting stripping someone of their citizenship, but, no, not even then.
Not legally. Not rhetorically. Declaring some people to no longer be Americans because you don't like them or what they have is both nonsensical and...a bit mystifying. Because if they aren't Americans, then they shouldn't have to pay for the retirements and health care for those who are.
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quote:I object, fundamentally, to any delcarations that someone is no longer an American based on anything other than a personal renunciation of citizenship.
In making any such declaration, I'm responding myself to prior claims of "realness." I'm sorry if I didn't make that clearer. If that is indeed your only objection, you can rest assured that I agree with you on all particulars. Posts: 37449 | Registered: May 1999
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quote:Part of this is because I think income is at best a contributing symptom of this phenomenon, which is best predicted by accumulated wealth and family privilege
Nope. Only a small fraction of the wealthy in America have inherited their wealth. The vast majority are entrepenuers. People who come from money tend to...live like they have money, which means they might have high incomes, but they also spend it. The truly wealthy tend to make it themselves and then not spend it.
For more information, I suggest The Millionaire Next Door. It's fascinating. It made me swear never to buy a car that was new from the factory.
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posted
Interestingly, while the percentage of income received by the wealthy has increased recently, the percentage of wealth held by the wealthy has basically held constant.
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