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Posted by G2 (Member # 2942) on :
 
Rasmussen has a poll, let's take a gander. The question is, “Do you pay your fair share of income taxes?”

Overall:
About right amount 50%
More than fair share 43%
Less than fair share 1%

Breaking it down by income:
Under 50K
About right amount 57%
More than fair share 36%
Less than fair share 2%

50K-100K
About right amount 52%
More than fair share 46%
Less than fair share 1%

Over 100K
About right amount 32%
More than fair share 66%
Less than fair share 0%

Let's talk about the under 50K crowd. The AP reports:
quote:
About 47 percent will pay no federal income taxes at all for 2009.

<snip>

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

Nearly half pay no federal taxes and the bottom 40% of American wage earners, both of which certainly fall within that under 50K group, are making a profit from the income tax structure we currently have and still more than a third think they are paying more than their share. Un-freaking-believable.

Now, some of these guys may be thinking about state income taxes but it's hard to see them whining about over-taxation when they're making a profit off the federal tax scheme. Cry G2 a river.

Is that 50K number a coincidence? No. In 2007, the median annual household income in the US was $50,233.00 according to the Census Bureau. A couple with two kids making slightly over $50,000 can now achieve zero federal tax liability while the bottom 40% makes money. See how it all fits together?

Mark Steyn, via Ed Morrisey asks what should be the obvious question:
quote:
If 51 percent can vote themselves government lollipops from the other 49 percent, soon 60 percent will be shaking down the remaining 40 percent, and then 70 percent will be sticking it to the remaining 30 percent. How low can it go?

 
Posted by Viking_Longship (Member # 3358) on :
 
No I'm not.
 
Posted by DonaldD (Member # 1052) on :
 
quote:
If 51 percent can vote themselves government lollipops from the other 49 percent, soon 60 percent will be shaking down the remaining 40 percent, and then 70 percent will be sticking it to the remaining 30 percent. How low can it go?
This seems to assume that, if given the chance, the majority at the 'bottom' will increasingly stick it to the shrinking minority at the 'top'. Which ignores that the majority has had this ability for longer than the G2 machine has been functioning, yet the rates in that period of time have fluctuated to both the benefit and the detriment of the upper minority.
 
Posted by Wayward Son (Member # 210) on :
 
Remember that the top 50 percent of those who file tax returns make over 87 percent of the income (AGI) in the United States. At least, they did back in 2005. Might be more now. [Wink]

Consider how thin income is distributed to those in the bottom 50 percent (less than 13 percent of the taxable income). Consider how much of that can be taxed. Consider how much of that money is spent on necessities, like food, housing and clothing.

The amount of income "redistributed" to the bottom 40 percent is such a small fraction of the total income that the top 50 percent makes that it is silly to even worry about it. What does all that money the bottom 40 percent receive cover? A month or two rent on an apartment? A new coat and pants? This is "sticking it" to the rich?

Regardless of what method of taxation we use, the top 50 percent will continue to pay at least 87 percent of the taxes in this nation as long as they make 87 percent of the income. And they will still feel they are paying too much taxes, because the bottom 50 percent only pay about 4 percent. Boo-hoo.

This survey is not about reality, it is about perception of reality. And the top 15 percent (those making over 100K a year) do not have a firm grasp of the reality of the situation.

[Edited to correct percentages--initially read the wrong section. [Embarrassed] ]

[ April 12, 2010, 11:01 AM: Message edited by: Wayward Son ]
 
Posted by Sauurman (Member # 6467) on :
 
Well as someone who made 47K Gross last year I know I am *NOT* paying my fair share. Between deductions and credits I ended up having a negative income tax. IE - I got more money back from the government then I paid in income taxes.
 
Posted by scifibum (Member # 945) on :
 
Don't forget your FICA taxes.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by Sauurman:
Well as someone who made 47K Gross last year I know I am *NOT* paying my fair share. Between deductions and credits I ended up having a negative income tax. IE - I got more money back from the government then I paid in income taxes.

Here's the question you should be looking at- how did your change in net worth over the past year compare to overall economic growth? Did you gain or loose ground, comparatively?
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by Wayward Son:
Remember that the top 50 percent of those who file tax returns make over 87 percent of the income (AGI) in the United States. At least, they did back in 2005. Might be more now. [Wink]

Consider how thin income is distributed to those in the bottom 50 percent (less than 13 percent of the taxable income). Consider how much of that can be taxed. Consider how much of that money is spent on necessities, like food, housing and clothing.

And that's only looking at income, which is somewhat transitory- if you look at accumulated wealth, the numbers grow even ore stark, with more than 50% of it in the top 5-10% of the population (and that share of total wealth growing as the lower shares shrink)

These are just income based- but they help drive the overall point home-
http://www.tax.com/taxcom/features.nsf/Articles/0DEC0EAA7E4D7A2B852576CD00714692?OpenDocument
http://www.perrspectives.com/blog/archives/001766.htm
http://www.articlesandanswers.com/IncomeMobility.htm

The income of one small segment of our population is growing like crazy (while seeing their effective tax rate drop significantly), while the rest are, at best treading water as they transfer wealth up to those top few.
 
Posted by G2 (Member # 2942) on :
 
quote:
Originally posted by DonaldD:
quote:
If 51 percent can vote themselves government lollipops from the other 49 percent, soon 60 percent will be shaking down the remaining 40 percent, and then 70 percent will be sticking it to the remaining 30 percent. How low can it go?
This seems to assume that, if given the chance, the majority at the 'bottom' will increasingly stick it to the shrinking minority at the 'top'. Which ignores that the majority has had this ability for longer than the G2 machine has been functioning, yet the rates in that period of time have fluctuated to both the benefit and the detriment of the upper minority.
What you're implying is not really accurate. Sure, they've had the ability to implement these things but it's not really been done. Until now.
 
Posted by jasonr (Member # 969) on :
 
quote:
The income of one small segment of our population is growing like crazy (while seeing their effective tax rate drop significantly), while the rest are, at best treading water as they transfer wealth up to those top few.
What do you mean by "transfer wealth". Is this to say that in order for one person to be richer, others below him must be poorer? When Bill Gates makes $1,000,000, does that come out of the pockets of everyone else beneath him?
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by jasonr:
quote:
The income of one small segment of our population is growing like crazy (while seeing their effective tax rate drop significantly), while the rest are, at best treading water as they transfer wealth up to those top few.
What do you mean by "transfer wealth". Is this to say that in order for one person to be richer, others below him must be poorer? When Bill Gates makes $1,000,000, does that come out of the pockets of everyone else beneath him?
To some degree- in as much as the people under him are doing the labor, but he's likely receiving the lion's share of the profit for that labor.

But the bulk of the transfer takes place as shown in this model: Say it costs $10/day to survive and you have two people- one earning $70/week and one earning $700/week. At the end of the week, the first guy has $0 left, while the second has $630. Without and compounding effects, that's a systemic transfer of $630 toward the second guy.

If you want to factor taxes and a little more of a margin in, let's say the earnings are $100 and $1000, and the first guy's effective tax rate (after all grading has been properly factored in)is 10%, while the second guy's is 15%. So after taxes and expenses, the first has $20 left over, while the second has $780- so while the second guy did in fact pay 15/16ths of the taxes while only making 10/11ths of the income, he actually walked away with 39/40ths of the total profits for the week.

That's where the real upward transfer kicks in. Despite having a nominally higher tax rate and even paying a significantly higher total share of taxes- in the final he's paying a trivial marginal value and walking away with a disproportionately large share of the total value generated. Account for investment returns after that, and the gap grows even more quickly.

And while that gap slows a little if you account for higher costs of living that usually come with higher income levels, they don't close it completely, and are more than counterbalanced by the fact that in the real world, you're often looking at more than a single order of magnitude difference between the average earners and the small fraction that holds the vast majority of the wealth and continues to increase that share.

Back to Bill- through enjoying a lower marginal tax burden, he's free to put most of that million into investments that pull more money to it, while those under him who feel a higher burden are forced to spend more of their income on base needs and may even need to trade off on those needs rather than having any significant leeway to invest their earnings.

To point toward real world changes: If he was making that $1M in 1990 and one of his workers was making 50K, he would now be making about $4M, while that worker wouldn't have even broken 70K. And with the overall costs of living keeping pace with that worker's income, the worker is not retaining any additional wealth for that increase, while Bill is retaining all but a trivial amount of his, plus the returns on all intervening investments.
 
Posted by DonaldD (Member # 1052) on :
 
quote:
Originally posted by G2:
What you're implying is not really accurate. Sure, they've had the ability to implement these things but it's not really been done. Until now.

Here's a link (linkie) showing you that rates for the highest income percentiles have generally been dropping since 1960, but did also rebound during certain periods. In fact, if you look to the earliest periods shown, it is clear that the lowest 99% were really sticking it to the rest back in the day, at a rate not even comprehensible today. Your 50, 60 and 70% are really small potatoes compared to back in the day.
 
Posted by Colin JM0397 (Member # 916) on :
 
It helps to agree on a common definition of fair. So far we have about 4 different ideas here backing the various posts. The reason those on the various "sides" can never agree is because they are not even speaking the same language.

Fair to those on the right is paying your share and being left alone. Financial fairness, in other words.

Fair to those on the left has to do with social justice, income distribution, and such. Social fairness, in other words.

Two very different things.

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

On a side note, I am baffled how after getting married we owe more this year than we individually did last year. Is this what they call the marriage penalty?

Of course, we have to pay back those damn $400 "rebates", but we owe another $600 or so more back ($1400 total federal, in other words).

I did not get a raise, and she only got about 4%, and we both had refunds around $500+ last year.
[Confused]

[ April 12, 2010, 05:33 PM: Message edited by: Colin JM0397 ]
 
Posted by Wayward Son (Member # 210) on :
 
quote:
On a side note, I am baffled how after getting married we owe more this year than we individually did last year. Is this what they call the marriage penalty?
You found it! With only one spouse working, the taxes on married couples is beneficial. But with two incomes, there is that "penalty."

When I got married, we had the same rude awakening. Fortunately, there is a provision in the tax code (or at least there was 15 years ago) that if your taxes suddenly jump, you don't get penalized for not taking out enough in payroll deductions. Otherwise I would have been fit to be tied!
 
Posted by Funean (Member # 2345) on :
 
This was the first year since my daughter was born that I didn't qualify for the earned income tax credit. I work part time to be available for my kids, and since I can't marry my partner, I qualified as a "single parent" making less than the cutoff (which was something like $34K for 2009). With the marriage penalty and both of us no longer counted as "single parents" the IRS would taking quite a bit in taxes from us, as my partner is a high earner. As it is, we've been using our tax refunds (between the two of us, close to $11K every year till now) to pay tuition at the school we send our children to since the local school we pay for with our real estate taxes is in the bottom quintile in a state already not known for its outstanding schools. The tax code is ridiculous and ought to be redone from the bottom up.
 
Posted by LetterRip (Member # 310) on :
 
Wayward Son,

quote:
You found it! With only one spouse working, the taxes on married couples is beneficial. But with two incomes, there is that "penalty."
Actually they can choose to file jointly or singly, filing singly it should be the same as previous years all else being equal.

Colin,

See, above for your taxes.

http://finance.yahoo.com/taxes/article/101901/filing_status_makes_a_difference_in_your_tax_bill

quote:

Fair to those on the right is paying your share and being left alone. Financial fairness, in other words.

Fair to those on the left has to do with social justice, income distribution, and such. Social fairness, in other words.

actually many aren't for either definition of fair.

For instance fair to me is that taxes are proportionate to the extent the resources that your income source consumed and to the burden on society that your behaviour has - ie if you own stock/run a business - then the federally provided roads, the federally provided education of your employees, the regulatory environment, the military provided international stability, all contribute to your income much more significantly than they do to an individual.

LetterRip
 
Posted by Wayward Son (Member # 210) on :
 
quote:
Fair to those on the right is paying your share and being left alone. Financial fairness, in other words.
I'm not quite sure what would constitute "fairness" for the Right, though.

I did an analysis of income percentage to tax percentage a while ago. It turned out that only two groups paid a significantly different percentage of taxes compared to their percentage of total US income: the bottom 50 percent and the top 1 percent.

The bottom 50 percent earned about 13.0 percent of the total gross income reported to the IRS by everyone, but they accounted for only 3.9 percent of the total taxes paid. About a 9 percent difference.

The top 1 percent earned about 20.8 percent of the total gross income reported, but they accounted for 37.4 percent of the total taxes paid. About a 17 percent difference.

But everyone else--51 percent to 2 percent--paid fairly close to their expected amount:

Top 2-5 percent: earned 14.5%, paid 17.0% (2.5% diff).
Top 6-10 percent: earned 10.7%, paid 12.9% (2.1% diff).
Top 11-25 percent: earned 21.1%, paid 16.7% (4.3% diff).
Top 26-50 percent: earned 19.9%, paid 12.1% (7.8% diff).

So 40 of the top 50 percent are paying less taxes than their share of income. And 9 of the top 10 percent are paying only about 2 percent more than their share of income.

Considering that most basic necessities are covered by the time you reach the top 25 percent, a couple of percentage points more seems trival.

So I'm not quite sure what would be considered "fair." [Confused]

[ April 12, 2010, 06:03 PM: Message edited by: Wayward Son ]
 
Posted by cherrypoptart (Member # 3942) on :
 
I doubt I am paying my "fair" share by the definition of most people, but since I am heartfelt in my belief that our government already has too much money that it not only completely wastes but squanders in harmful, counter-productive ways, I feel it is my patriotic duty to pay as little as I legally can.

The question shouldn't be about if you are paying your fair share but instead about the government taking more than its fair share and wasting a lot of what it does take, and often not only wasting it but using it for evil such as rewarding political contributors with taxpayer dollars in what really looks a lot like bribery being made profitable. Contributors pay a few hundred thousand to a campaign and then get tens of millions back from the taxpayers. After a while, you wonder if you wouldn't be doing more good by paying less.

But to answer the question, I'm one of those evil people that don't usually pay federal income taxes, and I've specifically worked with my investment professional to make it that way. I pay a lot for property taxes, but I guess that doesn't count, though I feel it counts more because we have a greater say and effect on how local taxes are spent and there are fewer middlemen to siphon off our hard-earned money and harder for them to get away with sending it down various ratholes, at least theoretically.
 
Posted by Greg Davidson (Member # 3377) on :
 
I like this thread, not as much of the usual quarreling (yet?).

I believe that many people "taxes" with payroll deductions, which lumps in federal taxes, state taxes, social security, medicare, state disability, as well as health insurance costs that are deducted from their paycheck. Consequently, if you are earning 50K, "taxes" can seem like a lot.

I have been thinking about some of the political arguments we keep having here, and one fundamental difference I see is the relative importance of wealth vs. the relative importance of responsibility to people. I am a big believer in property rights, because of the pernicious effects when those are not respected. But at the same time, if I had to weigh the personal importance of "stuff" vs. the importance of relationships with (and responsibilities to) people, at some point more "stuff" becomes just a fetish, whereas at no point does the value of relationships/responsibilities diminish. So I don't object to very wealthy people having a "stuff" fetish, but I don't feel that their arguments about +/- 5% of their taxes has a substantial moral component - instead, it just sounds like people mad because they want more stuff (remember, this is all talking about the wealthy - more than one home, recreational boats, foreign vacations, etc.).

Since I believe that progressive taxation is Constitutional, I don't have an ethical problem with taxation, and thus the concerns for me are mostly practical - what will be the adverse effects of certain levels of taxation vs. what are the adverse affects of different levels of revenues. I believe that I am slightly under-taxed (which should be fixed in a year or two), and I believe that as incomes go from 6-figure to 7-figure or more that the people are substantially under-taxed.
 
Posted by Sauurman (Member # 6467) on :
 
quote:
Don't forget your FICA taxes.
Yeah not including payroll taxes just income taxes. In *theory* [LOL] SS and the rest go for specific things that will be around when I retire.

quote:
Here's the question you should be looking at- how did your change in net worth over the past year compare to overall economic growth? Did you gain or loose ground, comparatively?
Gained some ground. Slightly less debt but vehicles depreciated more. My 401k is a bit larger then this time last year.
 
Posted by DonaldD (Member # 1052) on :
 
Without knowing what you mean by "a bit" it sounds like you almost certainly lost ground, comparatively.
 
Posted by Colin JM0397 (Member # 916) on :
 
LR, strangely I ran it through Turbo tax all three ways (perhaps that's my problem - not doing it myself), and individually we still owe. Granted, the "rebates" are about 1/2 of what each of us owes, yet we still owe.

I did bump my W4 withholdings one last year, yet hers was about the same - I can't think that accounts for almost a 1k swing, but it might.

I wasn't irritated enough to investigate why. I'm sure come this week when we actually have to pay, I'll look further into it.
 
Posted by msquared (Member # 113) on :
 
Colin

Did either of you have a kid turn 17 last year? There is the $1,000 per kid tax credit that is only good up to the age of 16. The year the kid turns 17 it goes away.

We got caught in that last year.

msquared
 
Posted by Colin JM0397 (Member # 916) on :
 
Greg - your point is partially valid, but you're also relying on the rich, spend-happy playboy/girl mental image of the very rich.

That is true for some, but just as many also have a valid gripe over those few percentage points. That could be capital investment money, which can and does go to jobs creation for the rest of us.

On that note, we can even make the argument that those spend-happy types are contributing just as much to the yacht builders, keeping their personal chef employed, having a staff for their stables, and their spending helping keep others afloat.

I suppose the base discussion there is around who is better positioned to insert money back into the economy in order to "help" the economy?

The invisible hand of the market, or the government (through taxation and redistribution)? The left/right paradigm is quite obvious, but still doesn't answer it.

I'll argue neither because our "problems" that need "fixed" are not economic - they are psychological, or even spiritual if you can handle that description.

Regardless of 'ism, our system is based on the idea of scarcity, which is not accurate. In other words, there is not enough money, land, food, housing, etc. to go around, so we must compete for what we can get.

We can go round and round on this left-right argument, but until we shift the discussion we get no where… IMO, that’s the way the powers that be want it. It suits them to have us arguing amongst ourselves and not bothering them too much.
 
Posted by Colin JM0397 (Member # 916) on :
 
m2 - no kids for either of us. I keep trying to declare our cats dependents, but apparently, to the chagrin of those at PETA, they have yet to achieve full personhood.
 
Posted by Greg Davidson (Member # 3377) on :
 
quote:
your point is partially valid, but you're also relying on the rich, spend-happy playboy/girl mental image of the very rich.
I know a lot of wealthy people, including brilliant, hard-working people. In general, there is a broad distribution of wealthy people, just like there is of everybody else. The curve is perhaps slightly shifted for wealthy people towards having more focus and capability (some of the capabilities are based on the mind, some are based on their looks), but there still are plenty of flawed people who are rich, and don't "deserve" it any more than a wide range of people with much less wealth. And I feel that even the very deserving ones can afford to pay more in taxes than they do.
 
Posted by Redskullvw (Member # 188) on :
 
What would I think is fair? I think 15% to the federal level, 5% to state, and 5% to local government would be fair. But when I finish my taxes this year and did the final numbers, 48 cents of every single dollar we earned was taxed away. It is acctually more than that because of hidden taxes on gasoline, electricity, and tariffed exchanges sanctioned by the state such as on liquor and even peanut butter. It's impossible to get a full final account, but the reality is at least half of every dollar my family earned went to taxation.

Our tax level will be going up on the federal level as the Bush tax package expires. Our local government schools suck in terms of NCLB so we send Alex to private school. Our local mill rate will be going up due to school board vote. There is also a planned sales tax increase planned locally, as well as one planned at the state level. It is also likely that our healthcare costs will go up in 2014 if the plans of our regional hospital insurance program is indeed effected as current Obama healthcare law is written. So in a short time I expect well over 50% of every dollar my family makes to be expropriated by government taxes.

Liberal or conservative, can you honestly agree that it is fair for any government to take half of aperson's income?
 
Posted by Colin JM0397 (Member # 916) on :
 
Of course, but people don't seem to be able to manage to see the tax forest when they are focused only on federal income tree.

Certain folks will tell you that you paying over half is perfectly "fair".

I did the same tally a year or two back and also came up with 50%+ currently. Remember that the "corporate" tax is kicked down to the consumer at around 20 cents on every dollar you spend on any given item. That's how the fair tax movement shows a federal sales tax of 20% not changing anything.

Re all your impending tax increases... At what point - from nationally to locally - do us voters finally "throw all the bums out" when they never manage to cut any spending? In NC we were supposed to have a rainy day fund - which was spent kind of like how the Feds manage to spend all the SS excess every year. Or, like here in Charlotte, when the only cuts they can manage are the “the sky is falling” variety designed to invoke citizen outrage that “something must be done”. School lunch programs, closing the libraries, etc. Of course, the Mayor’s pet street car project is still on the table. They always go for the most painful cuts first in order to avoid any responsibility.

How is it fiscal responsibility isn't demanded from all politicians, regardless of political affiliation?

[ April 20, 2010, 09:38 AM: Message edited by: Colin JM0397 ]
 
Posted by TommySama (Member # 2780) on :
 
quote:
What would I think is fair? I think 15% to the federal level, 5% to state, and 5% to local government would be fair. But when I finish my taxes this year and did the final numbers, 48 cents of every single dollar we earned was taxed away. It is acctually more than that because of hidden taxes on gasoline, electricity, and tariffed exchanges sanctioned by the state such as on liquor and even peanut butter. It's impossible to get a full final account, but the reality is at least half of every dollar my family earned went to taxation.
Why more for the federal government? For me it should be the opposite. I have a better shot of getting my views heard at the city/state level than the federal, so I get better representation for my taxes.
 
Posted by G2 (Member # 2942) on :
 
quote:
Originally posted by Redskullvw:
Liberal or conservative, can you honestly agree that it is fair for any government to take half of aperson's income?

According to the vice president, it's the patriotic thing to do. According to the president, you're supposed to say "Thank you". Just wait until someone like Adam Masterman comes along and tells you not liking to pay half your income is proof of an "unbalanced personality" ... it's only a matter of time.

[ April 20, 2010, 10:19 AM: Message edited by: G2 ]
 
Posted by cherrypoptart (Member # 3942) on :
 
Someone elderly lady in a wheelchair had a cute sign at a tea party:

"Even God only asks us to pay 10%."
 
Posted by Wayward Son (Member # 210) on :
 
Actually, the old lady didn't read the tax rules correctly in the Good Book. It actually comes to 30%, when you factor in some other taxes (including 10% put aside to be spent during the fall festivals). [Smile]
 
Posted by Redskullvw (Member # 188) on :
 
The first year when I did this and posted the results on Ornery I think the total was 42%. Of course things have changed over the years. I earn income now of differing amounts with things like a child thrown in to make an apple to apple comparison possible. But I do know this. We work exceptionally hard. And in my case I donate almost 40 hours a week to several charities as well as paying support costs for them when they need money. From literally picking up garbage in the park, to digging ditches, patching pavement, and providing free computer support and resources I give a lot back to the local community. My wife deals constantly with indigent medical care under conditions that would crush most people.

We had our yearly post tax personal economy talk severAl weeks ago. And looking to the future results of taxes and how hard we work we came to some decissions. Amoung the decissions we made were the fact that my charity work is a huge cost in both time And money. And my wife working as hard as she does places her into a taxation level that literLly will net her less than half the money she makes at a lower work obligation. We figure that by me ceasing most of my charity work and her reducing her work by about 25% we not only will pay substantially less taxes but will also have a lot more time to spend as a family.

Given the taxation penalty for being productive and charitible, we have decided to be less productive and charitible because it makes little sense to continue as we have just to be taxed higher. At some point the people who happen to bein the top tiers of level of taxation and incomes will realize as I have that the costs of being productive are too much. I believe we must pay taxes but when the taxes become so progressive in nature that the benefits of more income has less net benefit, then a wise person will realize that being less productive places a person closer to those who pay no federal tax.

We expect our taxes to be several thousands of dollars less next year. We also expect to have a lot more free time as a family. We hope the government won't miss the $20k next year.
 
Posted by Colin JM0397 (Member # 916) on :
 
God? What it should say was "even the men who run the church only ask for 10%".

God needs nothing because God is everything. The church, OTOH, is quite a large organization (some might even call it a business) and it needs funding!
[Razz]
-------------
Red, can you two work remote?
Central America and Ecuador are looking muy bien these days. IIRC, somewhere around 330+ days out of the country each year relieves you of your US tax liability.

[ April 20, 2010, 02:26 PM: Message edited by: Colin JM0397 ]
 
Posted by Redskullvw (Member # 188) on :
 
Colin
nope. A neuro icu nurse has to be in the room. And while I could phone in remote tech support, the reality is that cleaning park land requires me to be there as well.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
We figure that by me ceasing most of my charity work and her reducing her work by about 25% we not only will pay substantially less taxes but will also have a lot more time to spend as a family.

Given the taxation penalty for being productive and charitible, we have decided to be less productive and charitible....

Don't blame your decision to be less charitable on your taxes. Yes, your wife's productivity might be affected, but it's not like your taxes have an impact on your charitable labor.

I'm also not entirely sure why you think your wife's labor pushes you into a tax bracket that somehow reduces the net value of her contribution; that's not really how tax brackets work, unless you guys are currently qualifying for an Earned Income Credit. Perhaps you're also factoring in the cost of childcare?
 
Posted by Redskullvw (Member # 188) on :
 
Tom
my charity work is what I do full time. I get no renumeration for the efforts. It does have some write off value but that value does not even come close to ballancing the actual cost of my contributions due to IRS rules. In short by drasticly cutting my charity, I will personally benefit by having far less out of pocket costs. And in terms of my wife, by working less we will not fall under the tax increase that gies into effect when the tax rollback expires. We are on the end of the spectrum that pays high taxes. We don't qualify for social programs like EIC. The end of the Bush tax breaks will mean our income level will be taxed higher unless we actively lower our income as our tax bracket gets adjusted higher. By earning less we can drop one bracket, pay less net tax, and coupled with not being as charitible we should personally have the same funds we normally have by being less productive.

In short work less and pay less is our strategy. Working at our current output would mean paying more taxes on the same income with no net benefit to ourselves. Namely if we work as we have always done we will have less money left to live on. If we work less we will have more money to live on. Those who fall into the 50% that pay no federal income tax will have to make up the loss of our tax payment somewhere else.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
The end of the Bush tax breaks will mean our income level will be taxed higher unless we actively lower our income as our tax bracket gets adjusted higher. By earning less we can drop one bracket, pay less net tax, and coupled with not being as charitible we should personally have the same funds we normally have by being less productive.
Don't, again, pretend that it's dropping the bracket that's getting you more money. Even in the next tax bracket, you still have more take-home funds as a result of the work. By paying out less in charity, however, you do hang onto more of your money -- which is important if you want to maintain your lavish lifestyle. It would be awful, I'd imagine, if you couldn't be as charitable as you used to be without actually having to live more cheaply.
 
Posted by Pyrtolin (Member # 2638) on :
 
Tom- it's possible from what he's saying that they're brushing up against the AMT, which, as I understand it, creates a problematic discontinuity in the overall tax rates, especially if the current patch that was put on it is allowed to expire.

It's pretty likely that we'll see another patch to that before the year is out, but at the moment nothing has been put in place to fix the upcoming reversion.
 
Posted by TomDavidson (Member # 99) on :
 
If he's worried about the AMT, reducing his charitable deductions is just about the worst thing he can do.
 
Posted by cherrypoptart (Member # 3942) on :
 
You don't have to worry about giving to charity anymore. The government is going to take care of all that. They know how to do it better than you so they're just going to take that decision right out of your hands, quite literally by taking your money out of your pocket.
 
Posted by JWatts (Member # 6523) on :
 
quote:
Originally posted by Redskullvw:
Tom
my charity work is what I do full time. I get no renumeration for the efforts.

Redskullvw, Thanks for your charity work. I'm sure it makes the world a better place. [Smile]
 
Posted by Redskullvw (Member # 188) on :
 
Wow Tom, not only are you now a tax professional but you also are now dictating what is and what is not a suitable level of living standard.

I know its kinda hard for people like you, who are barely average in terms of economic success, to understand how tax law impacts people or what people should consider to be appropriate living standards. I know it must boggle the mind of such people to understand that by continuing working at a given level could lead to less money in ones pocket as a result of a tax increase. I can also see how it would further boggle one's mind to grasp the concept that by working less would result in a net gain in income because of taxation law. I can further see how it could boggle one's mind that charity isn't free and if someone ceases charity to the community the net effects of the tax law actually would result in less taxes.

You strike me as someone who has had a lot of bad choices made in your lifetime personally. I can understand how you might assume that I live a lavish lifestyle. I actually don't. Unlike you, I have chosen to mitigate and correct mistakes in my past that for example left me homeless. I can understand you not understanding that government handouts were not the solution to my ending my own personal poverty or gaining a higher education. I also can see how you don't realize that in my personal economics I made hard choices that for years had me barely above the federal poverty level, but insured the future I now currently enjoy. I did this myself. From working multiple jobs, including very blue collar ones, to wisely limiting my expenses for years- I set in motion a success story you now charge to be lavish.

The assumption that I do charity only as long as it doesn't impact me personally is childish and pejorative on your part. The irony is that you fail to realize that my charity work has indeed caused me to live more cheaply than I otherwise would. The reality is that at some point it indeed comes down to numbers and quality of life. My charity and my wife's work has a negative impact on my family life. We spend much more time doing for others than for ourselves. We don't have an invisible government hand doling out lavish incentives that favor us and support us when the economy does badly.

Instead, and unlike you, we work for our version of an American Dream which doesn't depend upon everyone being suitably the same in spite of whether individual efforts being unequal can impact the outcome. I don't declare your lifestyle of lower middle class stagnation to be a selfish choice on your part or offer insinuation that it is. In the decade we have been here, your lifestyle hasn't changed much at all. But mine has. I was under the poverty level, on the verge of homelessness, and not qualify-able for any government aid. Now, I guess you could call me an example of what you are not.

I have watched my taxation level go up over the years as I progressed through the table tables each year. Each year I paid more. Last year I paid the most ever. Unlike you, where I doubt your campus IT job has suffered any radical increase or decrease in income, I have not been plodding along in the same relative tax bracket paying the same tax year on end. So I can see how you would assume that it would be impossible to work less and keep more money after tax than to work more and keep less after tax money when compared to simply working at the same level and doing nothing.

AMT hasn't been patched yet, and it will likely keep on going as is until inflation finally catches up to Tom's level of income and shocks him. But given his pauper lifestyle I doubt that will happen until the end of next decade.

Tom, to sum it up, you are most likely judging from self disclosures over the years, someone who either has no federal tax liability or has such a small liability that withholding abates your annual obligation in full. Meaning, you don't actually ever "see" what your tax is. All you know is every year you get a refund or have to write a check to the IRS for a few hundred dollars. That skews your perspective. You assume people complaining are just griping due to an unfair and mean spirited greediness because paying taxes impedes their lavish lifestyle.

The reality is, us "Lavish" lifestylers are paying more every year and not seeing the bottom half improving at all. We are increasingly concerned with your poverty and inability to stand on your own two feet without excessive government entitlements. We feel that since our minority pays the vast majority of the tax bill for benefits we ourselves never receive, the right to question current tax policy belongs to us to a paramount level. We have seen no improvement in the condition of the lower 50% of the population who pay nothing. Instead we have seen an ever increasing number of people who pay no tax while at the same time the people who do pay tax enjoy higher taxation. At some point those who do pay taxes, "me", get to question those of you who don't pay taxes, "you", as to why you continue to have a right to my economic production that I do not have comparatively to yours. We further have a right to question why we should shoulder further taxes without any right to change the system or how we chose to operate under the system.

In my family's case we have decided that you and people like you pay too little in taxes and gain too many benefits from having the government tax our efforts. Since we cannot stop paying taxes, we seek an alternative solution. Our solution is to remove from the economy things like charity and a willingness to accept increased work loads beyond what is required for employment. To my family it means we will indeed earn less, but as a result we will be taxed less than we would otherwise be if we made no change at all. And in terms of a willingness to work harder to keep the same net result after taxes, we have chosen not to do so. What it means to us, is that we wil have much more free time, a lower tax burden, and still maintain our current lavish lifestyle.

What it means to you, and those like you, is that we refuse to be gamed by the system anymore. You will have one less productive person in the economy to tax at an increased level. Hopefully it will mean that people like you will wake up and realize its your own responsibility to take care of yourself. After taxes are used for the military, local safety services, regulation of trade, interstate transportation, and government administrative costs- the rest of your income should be yours. You don't realize that yet because you have never been successful. You don't face ever increasing taxes. Instead you live a nice little life with a wife and two deductions, in a postage stamp house, with disposable furniture, and two econobox cars in the garage always wondering why the people who live lavish lifestyles get to do so, while you don't.

I'll give you a hint....its called hard work and succeeding despite what the government taxation policies are at any given time. And i'll leave you with this. it isn't fair that you don't pay taxes and get to live your lavish lifestyle. At least in my case I do get to drive a Porsche and travel despite the fact that part of my taxes goes to subsidizing your existence.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
Wow Tom, not only are you now a tax professional but you also are now dictating what is and what is not a suitable level of living standard.
I haven't claimed either. I've said:

1) If you're bumping up against the AMT, the last thing you want to eliminate is charitable deductions, as they're worth considerably more in AMT calculations than they are in "normal" tax.

2) Your wife will bring home more money even if she moves you into another tax bracket (barring of course AMT issues, but that's a relatively rare situation).

3) What you are doing amounts to choosing to eliminate your charitable deductions to keep your lifestyle at its present height. Personally, I suspect that childcare costs play a significantly higher role in your decision than taxation does.

In reply to your mostly pointless rant, I have this to say:

quote:
The reality is, us "Lavish" lifestylers are paying more every year and not seeing the bottom half improving at all.
Statistically, this is untrue. In your specific case, if you only recently became wealthy, it is possibly the case that your tax burden has increased even as your income has increased. That you may have first become wealthy during a period of historically low taxes on high income is something that I can understand must be frustrating for you.

quote:
We feel that since our minority pays the vast majority of the tax bill for benefits we ourselves never receive, the right to question current tax policy belongs to us to a paramount level.
Whereas I feel you are wrong. If you would like a discussion of why you are wrong, I'd be happy to have it with you.

[ April 27, 2010, 11:51 AM: Message edited by: TomDavidson ]
 
Posted by Wayward Son (Member # 210) on :
 
From what I understand from the tax laws, the higher taxes rates only apply to the monies earned above the cut-off point. So regardless of how much you make, you will still keep more money if you make more money. It is only the percentage of the increase of that money that changes. The first dollar you keep completely. The 100,000th dollar, you keep only about 60 cents. This is known as "the tax law of diminishing returns." [Smile]

Of course, this does not take into account AMT, which very well may skew that scenario. [Frown]

From what you revealed, Red, it sounds like the main reason you will be keeping more money in the future is because you have significantly decreased your expenses. Your "charity work" was not really "work" in the traditional sense, since you were losing money doing so. (How many of us would go to work if each day we came home with less money than we started with?) This is probably more significant than the lower tax rates you will enjoy.

But, of course, since I haven't seen your figures (and do not expect to--ever! [Smile] ), I can't say for sure. But I would like to know how your situation differs from the scenario I just described.
 
Posted by Redskullvw (Member # 188) on :
 
Tom
Child care cost for alex, ZERO$ Tuition at school is the only " childcare" cost we have. I take care of him or Angela takes care of him at all other times. There is no babysitter nor are any family present assisting.

Wayward we will be avoiding AMT and also dropping income to avoid Bush tax deduction twighlight.

Tom while it is true i only recently became "wealthy" by your standards, the statistical reality is that I am the exception to the rule not the norm. Fewer people are paying taxes, and more are gettingmore from the government while the few get taxed more.

The reality- whether you chose to accept it or not- is that rates are increasingly going to go up, and unless something is changed most people will owe no federal tax.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
the statistical reality is that I am the exception to the rule not the norm. Fewer people are paying taxes, and more are gettingmore from the government while the few get taxed more.
Except that income growth has outpaced taxation rates on those making over $100,000 a year, and has done so considerably and consistently. In fact, the percentage of wealth controlled by the wealthiest has increased at a considerably faster rate than the percentage of tax paid by that same group.
 
Posted by Wayward Son (Member # 210) on :
 
And it is still true that about 96 percent of the taxes come from those who make about 87 percent of the income.

It's hard to imagine that changing by very much. [Smile]
 
Posted by TomDavidson (Member # 99) on :
 
Only if we stopped redistributing wealth, and I can't imagine our country doing something so disastrously stupid.
 
Posted by G3 (Member # 6723) on :
 
We have a update:
quote:
The top 40 percent of households by before-tax income actually paid 106.2 percent of the nation’s net income taxes in 2010, according to a new study by the Congressional Budget Office.

At the same time, households in the bottom 40 percent took in an average of $18,950 in what the CBO called “government transfers” in 2010.

Taxpayers in the top 40 percent of households were able to pay more than 100 percent of net federal income taxes in 2010 because Americans in the bottom 40 percent actually paid negative income taxes, according to the CBO study entitled, “The Distribution of Household Income and Federal Taxes, 2010.”

...

In 2010, the CBO determined, American households in the bottom 40 percent paid negative amounts in income-tax dollars and a negative average income-tax rate.

“Much of the progressivity of the federal tax system derives from the individual income tax,” said the report. “In 2010, the lowest quintile’s average rate for the individual income tax was -9.2 percent and the second income quintile’s rate was -2.3 percent.”

...

The households in the top 20 percent by income paid 92.9 percent of net income tax revenues taken in by the federal government in 2010, said CBO. The households in the fourth quintile paid another 13.3 percent of net income tax revenues. Together, the top 40 percent of households paid 106.2 percent of the federal government’s net income tax revenue.

The third quintile paid another 2.9 percent—bringing the total share of net federal income tax revenues paid by the top 60 percent to 109.1 percent.

...

The households in the bottom 40 percent of income—which on average paid negative federal income taxes—were on average receiving many thousands of dollars in what the report calls “government transfers.” These transfers included, among other things, benefits from unemployment insurance, Medicare and Social Security, as well as from means-tested programs such as the Supplemental Nutrition Assistance Program (food stamps), and Medicaid.

...

...those in the top quintile, according to CBO paid 68.8 percent of all federal tax revenues in 2010. That means those in the top quintile paid 172 times as much in taxes as those in the bottom quintile.


 
Posted by Wayward Son (Member # 210) on :
 
And, once again, how do the taxes these quintiles pay compare to their incomes? [Wink]
 
Posted by AI Wessex (Member # 6653) on :
 
G3, do you have any wisdom to add to those snippets?
quote:
The fact that most people who don’t owe federal income tax in a given year pay substantial amounts of other taxes — and also are net income taxpayers over time — belies the claim that households that do not owe income tax in a given year will form bad policy judgments because they “don’t have any skin in the game.”

Furthermore, although the federal tax system is progressive overall, state and local tax systems are regressive and undo a significant share of that progressivity. There is nothing wrong with having one part of the overall tax system shield low- and moderate-income households, who pay substantial amounts of other taxes and generally pay federal income tax as well in other years.

To substantially increase the share of households that owe federal income tax, policymakers would have to take such steps as: lowering the personal exemption or standard deduction — which would tax many low-income working families into, or deeper into, poverty; weakening the EITC or Child Tax Credit, which would significantly increase child poverty while reducing incentives for work over welfare; or paring back the tax exclusion for Social Security benefits, which would subject more seniors with modest fixed incomes to the income tax.

How would you address the issues raised in the article I (anonymously) cited?
 
Posted by Pete at Home (Member # 429) on :
 
Breaking story by our correspondent G3:

It seems that people who make more money, tend to pay more taxes!

In other breaking news, having sex seems to be linked to pregnancy and overeating to weight gain.
 
Posted by Pete at Home (Member # 429) on :
 
quote:
Originally posted by Redskullvw:
Liberal or conservative, can you honestly agree that it is fair for any government to take half of aperson's income?

Depends on what the government is giving back, Red.

Our current government, no.

But let's say we live in Switzerland circa 1941. Government says it needs half your income to build defenses against a Nazi horde. Fair under those circumstances? I think so.

Technology, politics, and other variables create a situation where what is fair may vary depending on what is needed, and what the government is giving back.

If someday we have colonies in space, government might be necessary to provide infrastructure by which we breathe, to protect us from radioactivity, etc., and who knows what that would run.

During a war or reconstruction subsequent to a war where the US was threatened on a 9/11 scale, half would be stretching it, but 40% might be fair at the top end. But IMO any income tax over 1/3 should be enacted with an expiration date.
 
Posted by AI Wessex (Member # 6653) on :
 
Can you prove any of that? I mean, you're phone is known to gobble you message from tone to tone.
 
Posted by G3 (Member # 6723) on :
 
quote:
Originally posted by Pete at Home:
It seems that people who make more money, tend to pay more taxes!

about 172 times more. While the lower wage earners receive income. Tell me, how much income redistribution is going to be needed before all the evil rich people are paying their fair share?

quote:
Originally posted by Wayward Son:
And, once again, how do the taxes these quintiles pay compare to their incomes? [Wink]

And, once again, let's look. I am curious though, when you keep asking this do you think the answer will change?

2010 mean income (since the CBO study was 2010 numbers), from lowers to highest quintile:

1st $10,994
2nd $28,532
3rd $49,167
4th $78,877
5th $169,391

The 5th paid 172 times more but earned only 15 times more than the bottom.
 
Posted by kmbboots (Member # 6161) on :
 
Originally posted by Redskullvw:
quote:
Liberal or conservative, can you honestly agree that it is fair for any government to take half of aperson's income?
Sure. Depends on how (if) they made it and how much would be left afterwards.
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by G3:
quote:
Originally posted by Pete at Home:
It seems that people who make more money, tend to pay more taxes!

about 172 times more. While the lower wage earners receive income. Tell me, how much income redistribution is going to be needed before all the evil rich people are paying their fair share?

quote:
Originally posted by Wayward Son:
And, once again, how do the taxes these quintiles pay compare to their incomes? [Wink]

And, once again, let's look. I am curious though, when you keep asking this do you think the answer will change?

2010 mean income (since the CBO study was 2010 numbers), from lowers to highest quintile:

1st $10,994
2nd $28,532
3rd $49,167
4th $78,877
5th $169,391

The 5th paid 172 times more but earned only 15 times more than the bottom.

When most of the wealth is not captured by the top 5%, I will start being concerned about their plight.
 
Posted by Wayward Son (Member # 210) on :
 
quote:
2010 mean income (since the CBO study was 2010 numbers), from lowers to highest quintile:

1st $10,994
2nd $28,532
3rd $49,167
4th $78,877
5th $169,391

The 5th paid 172 times more but earned only 15 times more than the bottom.

Good.

Now, subtract the amount of money necessary to survive (food, shelter, clothing, etc.) from the income of each quintile, then recalculate the difference in disposible income between the bottom and top quintile.

Is that any closer to 172 times? [Wink]
 
Posted by Pete at Home (Member # 429) on :
 
quote:
Originally posted by G3:
quote:
Originally posted by Pete at Home:
It seems that people who make more money, tend to pay more taxes!

about 172 times more. While the lower wage earners receive income. Tell me, how much income redistribution is going to be needed before all the evil rich people are paying their fair share?
When did I say anything about rich being equal or the apportionment of taxes being fair?

First, we figure out what the government needs, in order to do the job that we've decided it must do.

Then we figure out how to tax that from the people in a way that causes least damage and destroys the fewest opportunities.

I'm not arguing for the tax bonus. btw. I've benefited from it, but I don't think that's a good way to do things. It does smack of pure redistribution, I'll give you that.

But when we're facing two wars, I don't think it's unreasonable that the rich bear the heavier financial burden, since it's the middle class and the poor that will provide most of the blood.
 
Posted by edgmatt (Member # 6449) on :
 
kmboots:

quote:
Sure. Depends on how (if) they made it and how much would be left afterwards.
How is it fair though?
 
Posted by G3 (Member # 6723) on :
 
quote:
Originally posted by Wayward Son:
quote:
2010 mean income (since the CBO study was 2010 numbers), from lowers to highest quintile:

1st $10,994
2nd $28,532
3rd $49,167
4th $78,877
5th $169,391

The 5th paid 172 times more but earned only 15 times more than the bottom.

Good.

Now, subtract the amount of money necessary to survive (food, shelter, clothing, etc.) from the income of each quintile, then recalculate the difference in disposible income between the bottom and top quintile.

Is that any closer to 172 times? [Wink]

You tell us. I'm sure you can torture the data sufficiently.
 
Posted by TomDavidson (Member # 99) on :
 
I think it's more telling that fully 20% of the country has an annual household income of under $11K. I also think it's ridiculously pathetic that people making what I'm making -- i.e. us "makers" who're paying all the taxes, apparently -- whine about taxes.

[ December 09, 2013, 11:39 PM: Message edited by: TomDavidson ]
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by edgmatt:
kmboots:

quote:
Sure. Depends on how (if) they made it and how much would be left afterwards.
How is it fair though?
It is considerably more fair than one child born to a family with nothing and another born to a family that has more than it can ever use. What is fair about that? Where does fair even enter into this?
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by edgmatt:
kmboots:

quote:
Sure. Depends on how (if) they made it and how much would be left afterwards.
How is it fair though?
It is considerably more fair than one child born to a family with nothing and another born to a family that has more than it can ever use. What is fair about that? Where does fair even enter into this?
 
Posted by Seneca (Member # 6790) on :
 
I heard on the radio today that a report came out showing that the top 20% now pays 92% of taxes. Why is it they need to pay more? The lowest %s pay negative tax.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
Why is it they need to pay more?
Well, for one thing, it's much more economically efficient to redistribute wealth from the wealthy to the poor, who are far more likely to circulate it.
 
Posted by edgmatt (Member # 6449) on :
 
quote:
It is considerably more fair than one child born to a family with nothing and another born to a family that has more than it can ever use. What is fair about that? Where does fair even enter into this?
It doesn't, and it shouldn't. But when asked if it was fair, you were very certain that it was, so I wanted a clarification.

I think it's the wrong mindset when people start making presumptions like:
- one person is able to determine how much (money) another person deserves.
- one person is able to determine how much another person needs.
- it's morally right to take from someone and give to another.


Now, I'm not saying taxes aren't necessary. I'm saying we shouldn't be saying they are necessary based on "fairness" or a sense of righting a wrong.

The best argument for taxes is that, collectively, we have a stronger power to accomplish things than we do as individuals. Taxes allow our governing body to use that mass of money to accomplish many (good) things that we couldn't possibly do on our own. I really don't need to cite examples, everyone here can list them.

But let's not pretend that taxes are fair.
 
Posted by edgmatt (Member # 6449) on :
 
quote:
Well, for one thing, it's much more economically efficient to redistribute wealth from the wealthy to the poor, who are far more likely to circulate it.
To a point, then things go south again. Also, that's such a blanket statement. I'm not even sure I believe it the more I think about it.

And it's not like the government cuts everyone else a check, and lets them spend it. They spend it on stuff that they see fit. So the redistribution goes from the powerful financially to the powerful politically. How much of that actually leaks through to the people who need it the most?
 
Posted by Seneca (Member # 6790) on :
 
quote:
But let's not pretend that taxes are fair.
But of course they are fair!

It is fundamentally UNFAIR that some people scrimped and saved their whole lives, forgoing luxuries and pleasure in their youth to create evil things like retirement funds or acquired elitist college diplomas to allow them to achieve 'income inequity.' Those evil people need to be PUNISHED and have their ill-gotten gains redistributed to the hard-working people who decided to go into credit card debt for big screen TVs and expensive cars when they were 18 and who are now, the poor darlings, forced to live on EBT cards.
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by edgmatt:

I think it's the wrong mindset when people start making presumptions like:
- one person is able to determine how much (money) another person deserves.
- one person is able to determine how much another person needs.
- it's morally right to take from someone and give to another.

But we make those judgements anyway about poor people. "We" have decided that they don't deserve more than they have. Some have even decided that they don't need more. So it is really only the last bit that bothers you.
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by Seneca:
quote:
But let's not pretend that taxes are fair.
But of course they are fair!

It is fundamentally UNFAIR that some people scrimped and saved their whole lives, forgoing luxuries and pleasure in their youth to create evil things like retirement funds or acquired elitist college diplomas to allow them to achieve 'income inequity.' Those evil people need to be PUNISHED and have their ill-gotten gains redistributed to the hard-working people who decided to go into credit card debt for big screen TVs and expensive cars when they were 18 and who are now, the poor darlings, forced to live on EBT cards.

Some people are born into money and have never known an unfulfilled whim or worked a day in their lives. And others worked and scrimped their whole lives and still never got anywhere due to bad luck. So?
 
Posted by TomDavidson (Member # 99) on :
 
quote:
So the redistribution goes from the powerful financially to the powerful politically.
We were just saying that the bottom quintile of the population gets most of the redistribution dollars. What political power do you think the poor and the homeless have, exactly?

----------

quote:
It is fundamentally UNFAIR that some people scrimped and saved their whole lives, forgoing luxuries and pleasure in their youth to create evil things like retirement funds or acquired elitist college diplomas to allow them to achieve 'income inequity.'
Do you believe that people who win lotteries or are born wealthy are less entitled to their money?
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by edgmatt:
kmboots:

quote:
Sure. Depends on how (if) they made it and how much would be left afterwards.
How is it fair though?
Fair doesn't play in to it. Rather, there is a real public cost and danger that emerges from uncontrolled income growth above and beyond what people can reasonably spend or invest productively the excess funds financialization and speculative bubbles for lack of good returns on productive investment, while there is little corresponding danger (and, in fact significant benefit) to putting increasing low end incomes, because that money tends to be put almost completely into increased market demand (and thus serves to actively increase the profitability of making real productive investments, while diminishing the demand for loans and related financial products).

(It is far more profitable in the short term to loan someone the money to buy a car such that they have to pay you back, instead of paying them to build the car so that they can afford to buy it on their own, buy the latter leads to better long term economic health, not to mention overall greater long term profitability, however the short term returns are what primarily influence decision making, particularly when it comes to attracting individual investors who tend to care more about immediate margins than long term stability. )

Progressively taxing higher incomes both serves to reduce the amount of idle money looking for the highest margin returns and to discourage offering high salaries as compensation in favor of either deferred income instruments or other benefits, while increasing both the short term value of putting more money into low end wages and correspondingly opening up more opportunities for more productive investment to meet the rising demand from that increase in low end compensation.

Fairness doesn't enter into it. It's about preventing a natural state of market failure by aligning the actual societal costs of offering and taking high salary levels with the act of doing so, instead of allowing it to be shifted to the rest of the population in the form of the next financial bubble popping.
 
Posted by edgmatt (Member # 6449) on :
 
kmboots -

quote:
But we make those judgements anyway about poor people. "We" have decided that they don't deserve more than they have. Some have even decided that they don't need more. So it is really only the last bit that bothers you.
No we don't. I don't even really understand why you say that. Could you go into detail? (and I assure you that all 3 bother me. I can add more too....)

Tom -
quote:
We were just saying that the bottom quintile of the population gets most of the redistribution dollars. What political power do you think the poor and the homeless have, exactly?

They get a check for how much? The ~$15,000 I paid in taxes last year? Someone got bumped from 0/year to $30,000 from a check from the fed? Like I asked, how much of what the government takes in actually goes to those who need it, and allows them to spend it?

quote:
Do you believe that people who win lotteries or are born wealthy are less entitled to their money?
I won't speak for Seneca, but I am not talking about people who win the lottery. I am talking about people who have worked hard their whole lives, or who had ancestors that did so in order to provide for their kids.

I also mentioned I think taxes are necessary, and I'll add that I'm not against an unfair system, where the richer pay a little more. But I'm not pretending that that is fair, or morally just.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
They get a check for how much? The ~$15,000 I paid in taxes last year?
quote:
how much of what the government takes in actually goes to those who need it, and allows them to spend it?
For the purpose of this conversation -- namely, using income tax as a form of income redistribution -- the answer is nearly all of it. The portion of income tax that gets spent by government on things like defense obviously doesn't get handed back to the poor (except via the usual money-pump route, since defense spending injects money into the workforce in the typical way), but the complaints here about "negative tax" are specifically talking about money being taken from you and given to someone else.

----------

quote:
I won't speak for Seneca, but I am not talking about people who win the lottery. I am talking about people who have worked hard their whole lives, or who had ancestors that did so in order to provide for their kids.
How would you possibly build that into the tax code? Do you intend to somehow measure how hard someone had to work? What if someone marries into a family of hard workers and has children that, as a consequence, will never have to work hard? Do those children not deserve the tax breaks that their cousins should get by virtue of being the children of actual hard workers?

Pretending that money is a yardstick of work -- and that work is a measure of virtue -- is a complete farce. It doesn't actually add up at any stage, and is a pernicious fiction that ultimately degrades any conversation about the economy, which doesn't care how hard you or anyone else worked for what you have.
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by edgmatt:
kmboots -

quote:
But we make those judgements anyway about poor people. "We" have decided that they don't deserve more than they have. Some have even decided that they don't need more. So it is really only the last bit that bothers you.
No we don't. I don't even really understand why you say that. Could you go into detail? (and I assure you that all 3 bother me. I can add more too....)

Tom -
quote:
We were just saying that the bottom quintile of the population gets most of the redistribution dollars. What political power do you think the poor and the homeless have, exactly?

They get a check for how much? The ~$15,000 I paid in taxes last year? Someone got bumped from 0/year to $30,000 from a check from the fed? Like I asked, how much of what the government takes in actually goes to those who need it, and allows them to spend it?

quote:
Do you believe that people who win lotteries or are born wealthy are less entitled to their money?
I won't speak for Seneca, but I am not talking about people who win the lottery. I am talking about people who have worked hard their whole lives, or who had ancestors that did so in order to provide for their kids.

I also mentioned I think taxes are necessary, and I'll add that I'm not against an unfair system, where the richer pay a little more. But I'm not pretending that that is fair, or morally just.

How is deciding that the homeless guy doesn't "deserve" more than he has different from deciding that the lottery winner (and being born rich is pretty much a lottery winner) "deserves" what he has? Or that a family scraping by doesn't need anymore than they have but hedge fund manager does "need" every penny that he has.

Don't pretend that any of it is "fair". Fair has nothing to do with it.
 
Posted by scifibum (Member # 945) on :
 
Since this thread was started to talk about "fair share" it's difficult to keep the word "fair" out of the conversation, but I agree that fairness is a red herring when it comes to taxation. A fair tax code is impossible. You'd need an impartial judge to review every situation and decide how much a person deserves to keep and how much they should have to turn over.

If you decide to substitute "simple" for "fair" then it's easy to implement, but still not fair.
 
Posted by AI Wessex (Member # 6653) on :
 
It works the other way around. Society needs money to function, and government needs money to help make it work. I think that the complaint about fairness from conservatives is partially rooted in the belief that it's not fair for the government to take as much as they do because it doesn't spend it the way they want it spent. That argument breaks down completely when you shift the focus from one level of government to another, as from federal to state to municipal. I haven't seen anyone here complaining about their state or city taxes, even though in some states and cities they are both regressive and very (pejorative) high.

Many of the so-called federal tax reductions in recent years have reduced the amount of funding that goes to the states, and many of them have responded by increasing fees for services or raising their own sales or property taxes.

No matter how you cut it the less well off among us, particularly the poor, pay far more of their share of money that any of us would consider necessary to survive in a healthy way. But, it seems to be only the wealthy who complain.
 
Posted by Seneca (Member # 6790) on :
 
Life is not fair, and it is nigh impossible to make it so.

So we move to what is practical and what will make conditions the most desirable. What made this country great is freedom, and in that environment of freedom people felt empowered to take risks and build great economic wealth.

The more you disincentivize economic activity by punitively taxing it and telling people that no matter how hard they work, you are going to come and take from them to give to others who did not earn it, the less likely they are to have the desire to work hard, and the whole system will eventually collapse. But then, many liberals are aware of this argument and they usually either do not care, do not think it will happen in their lifetimes, or think that the threshold for what is considered unreasonable taxation is close to 100% so they think we can keep increasing taxes.

quote:
I think that the complaint about fairness from conservatives is partially rooted in the belief that it's not fair for the government to take as much as they do because it doesn't spend it the way they want it spent.
Wrong. It's not fair because it's the government taking something that isn't theirs period, it has nothing to do with "how it is spent."

quote:
That argument breaks down completely when you shift the focus from one level of government to another, as from federal to state to municipal. I haven't seen anyone here complaining about their state or city taxes, even though in some states and cities they are both regressive and very (pejorative) high.
The reason many don't complain about local or state taxes is because you are free to move away from areas that are dumb enough to have those policies. Which is part of the reason why more people are fleeing CA every year than moving into it, and also part of the reason on why many fled Detroit. Unfortunately, it is significantly harder to flee the US as a whole and there aren't many better places to go.

quote:
No matter how you cut it the less well off among us, particularly the poor, pay far more of their share of money that any of us would consider necessary to survive in a healthy way. But, it seems to be only the wealthy who complain.
Absolutely wrong. The poorest pay NEGATIVE tax, that means they pay nothing and receive huge amounts of "government transfers." The wealthiest 20% pay 92% of tax.

[ December 10, 2013, 01:25 PM: Message edited by: Seneca ]
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
I heard on the radio today that a report came out showing that the top 20% now pays 92% of taxes. Why is it they need to pay more? The lowest %s pay negative tax.
The top 20% have most of the wealth.

That is not a product of the "free-market" or the invisible hand. It's a product the legal privileges held by the largest corporations. As the government has basically treated such corporations as their primary clients for the last 30 years or so, wealth inequality has grown drastically.

In fact, our government will never tax such entities or their executives and other facilitators to a degree that would actually be fair, nor will they end corporate welfare without serious populist pressure over a very long period of time. In the meantime, this hand-wringing about the rich paying taxes is perversely misplaced.

quote:
The more you disincentivise economic activity by punitively taxing it and telling people that no matter how hard they work, you are going to come and take from them to give to others who did not earn it, the less likely they are to have the desire to work hard, and the whole system will eventually collapse.
But economic activity is subsidized as well as taxed.

[ December 10, 2013, 01:27 PM: Message edited by: KidTokyo ]
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
So we move to what is practical and what will make conditions the most desirable. What made this country great is freedom, and in that environment of freedom people felt empowered to take risks and build great economic wealth.
And the core of encouraging people to take risks is to mitigate the costs of doing so. If you want to encourage more entrepreneurship, you have to mitigate the cost of the inevitable failures that will occur along the way so that more people can afford it- assure people that they'll get as many shots as it takes to get something to work and that they won't end up on the streets as a result of coming up short, as will happen in 90% of all attempts. Otherwise, only people who can afford the high natural failure rate- those that already command a significant share of resources, will make such ventures and absorb the costs.
 
Posted by AI Wessex (Member # 6653) on :
 
"So we move to what is practical and what will make conditions the most desirable. What made this country great is freedom, and in that environment of freedom people felt empowered to take risks and build great economic wealth."

What made this country great was and is industry. That trend has been developing since the early 20th Century. Since individual taxes are so much lower than they were several decades ago, I think you have to look elsewhere for what is stifling the economy. IMO, it is due to a change in focus from innovating to develop markets to capitalizing on sales to take advantage of what was for several decades after WWII rising income levels and the concomitant improvement in the standard of living. Those trends have reversed themselves over the past few decades even as personal income taxes have fallen precipitously.

It isn't taxes, it's that the US no longer is the 800lb gorilla in the domestic or world economies. Here's a hint: there's no going back to the 'good old days', which also weren't so good now that I think about it.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Wrong. It's not fair because it's the government taking something that isn't theirs period, it has nothing to do with "how it is spent."
You may want to take a moment and check whose signature is on the dollar bank note before you make such an absurd claim. The government only charges taxes in terms of the portable tax credit it issues. The dollar is explicitly its tool to inject and withdraw as needed; it's a public utility, not a privately owned resource. The real property that we use them to buy are private, and no taxes are assessed in terms of private property, which are the actual measure of private wealth.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by Pyrtolin:
quote:
Wrong. It's not fair because it's the government taking something that isn't theirs period, it has nothing to do with "how it is spent."
You may want to take a moment and check whose signature is on the dollar bank note before you make such an absurd claim. The government only charges taxes in terms of the portable tax credit it issues. The dollar is explicitly its tool to inject and withdraw as needed; it's a public utility, not a privately owned resource. The real property that we use them to buy are private, and no taxes are assessed in terms of private property, which are the actual measure of private wealth.
I think you have a misunderstanding of what the government is. The government derives its power from us. We consent to letting the government do things, not the other way around. Those notes and that signature are OURS, not the government's. So when the government taxes us, it is most definitely taking something that does NOT belong to it.
 
Posted by Pyrtolin (Member # 2638) on :
 
Additionally, taxes are built into the transaction system that underlies out economy. What you make is, by definition, the amount that's left after those transaction fees. The fact that the number looked bigger before accounting for those fees does not imply that that gross number was actually what you made. The net post tax amount is the actual amount from the transaction that should be counted as credit in your accounts.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
I think you have a fundamental misunderstanding of what the government is. The government derives its power from us. We consent to letting the government do things, not the other way around. Those notes and that signature are OURS, not the government's.
Formally true. Functionally false. The government is doing and has done countless things without our consent. Pyr is correct that the dollar is a public utility.

[ December 10, 2013, 01:40 PM: Message edited by: KidTokyo ]
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by Seneca:
I think you have a misunderstanding of what the government is. The government derives its power from us. We consent to letting the government do things, not the other way around. Those notes and that signature are OURS, not the government's. So when the government taxes us, it is most definitely taking something that does NOT belong to it.

Yes, the government is us, that does not change the fact that our money is a public tool- specifically transferable credit against future tax obligations- that we authorize our government to issue and circulate to provide us with a transaction system to signal relative prices. Our government is us, we create and regulate money as a public utility so that we can better transact real wealth. The money itself never becomes private property, just public measures of accounting balances.

[ December 10, 2013, 01:44 PM: Message edited by: Pyrtolin ]
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
The money itself never becomes private property, just public measures of accounting balances.
Exactly. It's actually illegal to destroy currency, which wouldn't be true if dollars were private property of the holder.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by Pyrtolin:
quote:
Originally posted by Seneca:
I think you have a misunderstanding of what the government is. The government derives its power from us. We consent to letting the government do things, not the other way around. Those notes and that signature are OURS, not the government's. So when the government taxes us, it is most definitely taking something that does NOT belong to it.

Yes, the government is us, that does not change the fact that our money is a public tool- specifically transferable credit against future tax obligations- that we authorize our government to issue and circulate to provide us with a transaction system to signal relative prices. Our government is us, we create and regulate money as a public utility so that we can better transact real wealth. The money itself never becomes private property, just public measures of accounting balances.
The money most definitely IS private property. The government does not generate independent economic activity that is isolated from the private sector and that predates it. Just because we choose to express our private property in terms of bank notes that we allow the government to symbolize it with, does not mean it is no longer private property.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by KidTokyo:
quote:
The money itself never becomes private property, just public measures of accounting balances.
Exactly. It's actually illegal to destroy currency, which wouldn't be true if dollars were private property of the holder.
A common misunderstanding. Just because the note itself is illegal to destroy does not change that it symbolizes and represents private property. Or why else are their laws about how the authorities have to handle money as well as personal effects when putting someone into custody? They are the same under the law in terms of them both being recognized as private property.
 
Posted by Pyrtolin (Member # 2638) on :
 
If you don't want to be obligated to pay obligations to the public market for taking advantage of its services, then you have to start by not accepting the public market's credit markers to do business. Once you take payment in the public coin, you've got to follow the same rules for transacting in it that everyone else does.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
The government does not generate independent economic activity that is isolated from the private sector and that predates it.
No private sector predates the government, unless you are referring to barter and trade on some very primitive level.

Capitalism requires a government and a state.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
Or why else are their laws about how the authorities have to handle money as well as personal effects when putting someone into custody? They are the same under the law in terms of them both being recognized as private property.
I'm sorry, you're just wrong about that. Legally speaking, money is distinct from property and while there is some overlap in how the two are treated, they are definitely not the same thing.

[ December 10, 2013, 01:59 PM: Message edited by: KidTokyo ]
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by Seneca:
A common misunderstanding. Just because the note itself is illegal to destroy does not change that it symbolizes and represents private property. Or why else are their laws about how the authorities have to handle money as well as personal effects when putting someone into custody? They are the same under the law in terms of them both being recognized as private property.

Because the police should not have direct taxing authority. They can process fine payments as prescribed by legislative measures and affirmed by judicial rulings, but they generally cannot take it upon themselves to assess such fines on the spot. It does nothing to change the fact that cash is really just a standardized draft against a public currency account for the amount denominated on it.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by KidTokyo:
quote:
Or why else are their laws about how the authorities have to handle money as well as personal effects when putting someone into custody? They are the same under the law in terms of them both being recognized as private property.
I'm sorry, you're just wrong about that. Legally speaking, money is distinct from property and while there is some overlap in how the two are treaty, they are definitely not the same thing.
I'm not wrong. I personally arrested people and we had to treat cash found on them the same as a picture of their family from their wallet.

If what you said was true, police could seize cash from people whenever they wanted and no one could sue.

I disagree with your statements about money, private property and capitalism. If you really think capitalism never existed without a government, then you are ignoring huge swaths of human history, though it seems you are prepared to belittle them by referring to them as "barter and trade" on a "primitive level." Archaeological proof of non-governmental gold and silver coinage proves you wrong though.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by Pyrtolin:
quote:
Originally posted by Seneca:
A common misunderstanding. Just because the note itself is illegal to destroy does not change that it symbolizes and represents private property. Or why else are their laws about how the authorities have to handle money as well as personal effects when putting someone into custody? They are the same under the law in terms of them both being recognized as private property.

Because the police should not have direct taxing authority. They can process fine payments as prescribed by legislative measures and affirmed by judicial rulings, but they generally cannot take it upon themselves to assess such fines on the spot. It does nothing to change the fact that cash is really just a standardized draft against a public currency account for the amount denominated on it.
No court is allowed to do it either. For that matter, no agency of government or any person in society is allowed to seize cash where they are disallowed from seizing property, they are treated the same under the law.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
What made this country great is freedom...
I'd actually be interested in exploring this thought. I suspect that there were quite a few things that made -- and make -- this country great, and certain sorts of liberty were among those things.

quote:
think that the threshold for what is considered unreasonable taxation is close to 100%
Do you know what the current tax rate is? How close to 100% is anyone currently being asked to pay, do you think?

Bear in mind that I have suggested creating a 45% tax bracket that would kick in at around $500,000K of annual income, reinstating the estate tax, and increasing the capital gains tax. Do you think this would come close to taking 100% of a given millionaire's income?
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
I'm not wrong. I personally arrested people and we had to treat cash found on them the same as a picture of their family from their wallet.

If what you said was true, police could seize cash from people whenever they wanted and no one could sue.

I don't disagree that money "represents" something personal, to which rights attach.

I'm just saying that the law deals with it as a distinct thing, and that currency is a public utility.

It's somewhat academic, since your example implicitly concedes my point that money is a legal construct.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
If you really think capitalism never existed without a government, then you are ignoring huge swaths of human history, though it seems you are prepared to belittle them by referring to them as "barter and trade" on a "primitive level." Archaeological proof of non-governmental gold and silver coinage proves you wrong though.
I'm amazed at how many people seem to think that "capitalism" exists as soon as people begin using precious metals as coinage.

That is what ignores huge swaths of human history.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by KidTokyo:
quote:
If you really think capitalism never existed without a government, then you are ignoring huge swaths of human history, though it seems you are prepared to belittle them by referring to them as "barter and trade" on a "primitive level." Archaeological proof of non-governmental gold and silver coinage proves you wrong though.
I'm amazed at how many people seem to think that "capitalism" exists as soon as people begin using precious metals as coinage.

That is what ignores huge swaths of human history.

It is not the coins alone that prove this, but they show that people used money prior to governments to symbolize private property and thus making it private property. There were truly non-governmental capitalist systems that involved these as well.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
The money most definitely IS private property. The government does not generate independent economic activity that is isolated from the private sector and that predates it. Just because we choose to express our private property in terms of bank notes that we allow the government to symbolize it with, does not mean it is no longer private property.
Money is not economic activity. Money is a credit accounting system that facilitates economic activity. We use it to account for and transfer private property among ourselves, but the accounting measures themselves are publicly issued and regulated- they're a utility that we create to avoid the difficulties of verifying individual creditworthiness by instead establishing a commonly accepted credit marker against future public obligations.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
t is not the coins alone that prove this, but they show that people used money prior to governments to symbolize private property and thus making it private property.
I get that.

The point is that "using money to buy things" is not synonymous with capitalism. It's just an example of a market.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by Seneca:
I disagree with your statements about money, private property and capitalism. If you really think capitalism never existed without a government, then you are ignoring huge swaths of human history, though it seems you are prepared to belittle them by referring to them as "barter and trade" on a "primitive level." Archaeological proof of non-governmental gold and silver coinage proves you wrong though.

You are conflating a number of different things.

Private money, as markers of the credit of whoever issued them certainly existed, and those were likewise directly regulated by whoever issued that credit, be it personal coins or impressions on a clay tablet (which are, bay far, the earliest from of money that we have evidence of)

When commonly used by large numbers of people as money (and not as barterable commodities) the issuers of those markers were the de facto regulators of the markets they supported. By issuing commonly transacted coinage, they effectively became the government over that local economy, since it was only though honoring a certain degree of obligation to said issuers that a direct demand by others for their currency existed.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
No court is allowed to do it either. For that matter, no agency of government or any person in society is allowed to seize cash where they are disallowed from seizing property, they are treated the same under the law.
And it's still just as irrelevant, because the cash is just a title to an account balance. No matter who holds the cash, the money that it was drawn against is still actually an account balance at the Fed or the Treasury.
 
Posted by KidTokyo (Member # 6601) on :
 
"Negotiable instruments" are treated like property for purposes of certain crimes, as a matter of necessity, because the holder who is a victim of theft loses the rights attached to the instrument, and the loss of those rights results in damages.

But the rights attached to such instruments are not the same as or coextensive with property rights -- there are all kinds of things you can do with property as a result of ownership which you cannot do with currency or money in general. And in fact the whole point of creating money would be lost if it was treated as equivalent to property.
 
Posted by LetterRip (Member # 310) on :
 
Seneca,

first off 'the poor' is ill defined. Many of the sites that complain about the 'poor' are lumping together the retired wealthy who are collecting social security and medicade with the actual poor.

Secondly, people tend to ignore most of the benefit from taxes is proportional to wealth. Thus the average person has almost no benefit from the military and the national debt that has been accumulated to fund it; whereas the extremely wealthy derive enormous benefit due to investment in corporations.

Thirdly when talking about transfers etc. people tend to only focus on federal income taxes, as opposed to total tax burden (the poor pay a significant porportions of their income as local sales taxes as well as social security taxes; unemployment insurace; FICA, etc); and ignore most of the transfers to the wealthy including things like deducations that tend to grossly exceed any transfers to the poor.
 
Posted by edgmatt (Member # 6449) on :
 
There seems to be a disconnect between our conversations.

We all seem to be saying that "fairness" shouldn't come into play with taxes. Agreed. So next time a politician talks about "paying their fair share" and how it's "unfair for the poor/rich" we all agree that this is nonsense. Yes?

Tom-

quote:
For the purpose of this conversation -- namely, using income tax as a form of income redistribution -- *1: the answer is nearly all of it. *2: The portion of income tax that gets spent by government on things like defense obviously doesn't get handed back to the poor (except via the usual money-pump route, since defense spending injects money into the workforce in the typical way), *3: but the complaints here about "negative tax" are specifically talking about money being taken from you and given to someone else.

Statement 2 seems to contradict statement 1. As for 3, I haven't made that complaint, and I'm not talking specifically about that, that's Seneca's gripe. My point, on that subject, is that most of the money taken is not redistributed in a way that allows people to spend it on what they want/need. It's spent by one group of people on what they think another group of people want/need. This skews the market in a bad way. So when people claim taxes are justified because the money goes form those who have it to those who need it, I think they are kidding themselves.

quote:
How would you possibly build that into the tax code? Do you intend to somehow measure how hard someone had to work? What if someone marries into a family of hard workers and has children that, as a consequence, will never have to work hard? Do those children not deserve the tax breaks that their cousins should get by virtue of being the children of actual hard workers?
I couldn't possibly build that into the tax code, I don't think anyone could and that's my point. Every time we hear about taxes, the argument on the "raise them" side claims that they are able to measure how much someone has had to work, they are able to measure what someone is worth, and how much they deserve. Just look at Kid's statements. I'm claiming that it's impossible for a person to do. Furthermore, we don't have to the market does it for us. I offer to pay you X for X work, if you accept, that's how much your worth. Happens millions of times all over the nation.*

Kid-

quote:
How is deciding that the homeless guy doesn't "deserve" more than he has different from deciding that the lottery winner (and being born rich is pretty much a lottery winner) "deserves" what he has? Or that a family scraping by doesn't need anymore than they have but hedge fund manager does "need" every penny that he has.
Who decided the homeless guy doesn't deserve more? Is there a law somewhere?

quote:
Don't pretend that any of it is "fair". Fair has nothing to do with it.
I said that, a few times now. You are the one who, when asked if a %50 tax rate was fair, said "yes". Emphatically too, if I read your tone right.

quote:
The top 20% have most of the wealth.
Do you recognize this is a circular statement? Of course the top 20% of the wealthiest people have the most wealth. Why is this surprising? Why is this either bad or good? I'm suggesting that it is neither.

Are you aware that most of the people in each tax bracket move up and down throughout their lives? That is, when your talking about the top %20, your talking about different people every time you talk about it?

quote:
That is not a product of the "free-market" or the invisible hand. It's a product the legal privileges held by the largest corporations. As the government has basically treated such corporations as their primary clients for the last 30 years or so, wealth inequality has grown drastically.
How did these people start with money? Your statements imply that those with the wealth have always had it. How did they get it initially?

---------------------------
* I'm ignoring the relatively small incidents of illegal activities like extortion, corruption, theft, etc.
 
Posted by KidTokyo (Member # 6601) on :
 
Edge, the first two statements attributed to me are not mine.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
Of course the top 20% of the wealthiest people have the most wealth. Why is this surprising?
I was explaining why they pay the most taxes. Why should *that* be surprising, when they have the most wealth?

Someone thought it was outrageous that the top 20% pays 92% percent of the taxes, and I was pointing out that it is normal, given they have roughly that amount of the wealth.

quote:
Are you aware that most of the people in each tax bracket move up and down throughout their lives?
I'm aware that some do. "Most," I can't say, and in fact I doubt it.

Very few move in and out of the top 1% which still holds the majority of the wealth.

Mobility really doesn't change the calculus though, since my point is that the degree of concentration at the top is a result of planned social policy, not free-market triumph. The government amplifies and distorts the economy, creating imbalances insupportable without subsidy.

quote:
Your statements imply that those with the wealth have always had it.
They don't. In fact, they imply the opposite, though as a practical matter is makes no sense to speak of "wealth" as an absolute -- I'm using it comparatively. As a relative matter, the wealthy are much wealthier in recent decades than they ever have been.
 
Posted by kmbboots (Member # 6161) on :
 
Some of those were mine.

My point is that there is nothing "fair" about the world as it is. Some level of wealth redistribution makes things if not fair at least somewhat more equitable at any rate. It adds to the fairness rather than detracts.

You wrote that:

quote:
I think it's the wrong mindset when people start making presumptions like:
- one person is able to determine how much (money) another person deserves.
- one person is able to determine how much another person needs.
- it's morally right to take from someone and give to another.

My point is that we do the first two no matter what. Right now, Seneca is arguing both that the poor don't deserve more than they have, nor do they really need more than they have. It is certainly as much a judgement as me deciding that they both "deserve" and need more.

When it comes to government taxes and assistance, it isn't "one person" making the determination; it is a society making the determination.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by kmbboots:
Some of those were mine.

My point is that there is nothing "fair" about the world as it is. Some level of wealth redistribution makes things if not fair at least somewhat more equitable at any rate. It adds to the fairness rather than detracts.

You wrote that:

quote:
I think it's the wrong mindset when people start making presumptions like:
- one person is able to determine how much (money) another person deserves.
- one person is able to determine how much another person needs.
- it's morally right to take from someone and give to another.

My point is that we do the first two no matter what. Right now, Seneca is arguing both that the poor don't deserve more than they have, nor do they really need more than they have. It is certainly as much a judgement as me deciding that they both "deserve" and need more.

When it comes to government taxes and assistance, it isn't "one person" making the determination; it is a society making the determination.

I never made either of those judgments absolutely, I am only contending that it is fundamentally wrong for the government to confiscate property from one person to give it to another even in the name of correcting those "problems."
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
I never made either of those judgments absolutely, I am only contending that it is fundamentally wrong for the government to confiscate property from one person to give it to another even in the name of correcting those "problems."
What if they created the problems?

You presume that taxation is the only way the government confiscates or deprives people.
 
Posted by kmbboots (Member # 6161) on :
 
So what is all this about being lazy and slacking and flat screen TVs and so forth?
 
Posted by NobleHunter (Member # 2450) on :
 
I find certain species of libertarians take solace in casting the poor as moochers and frauds in order to avoid contemplating the misery that would arise from their unbending commitment to their moral principles.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by NobleHunter:
I find certain species of libertarians take solace in casting the poor as moochers and frauds in order to avoid contemplating the misery that would arise from their unbending commitment to their moral principles.

[Roll Eyes]

Do moochers and frauds who are abusing government benefits exist or not?
 
Posted by NobleHunter (Member # 2450) on :
 
Would forbidding the government "to confiscate property from one person to give it to another" result in misery or not?
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
Do moochers and frauds who are abusing government benefits exist or not?
Yes. We often refer to them as "lenders," or, simply, "banks."
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by Seneca:
quote:
Originally posted by NobleHunter:
I find certain species of libertarians take solace in casting the poor as moochers and frauds in order to avoid contemplating the misery that would arise from their unbending commitment to their moral principles.

[Roll Eyes]

Do moochers and frauds who are abusing government benefits exist or not?

So what!
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by NobleHunter:
Would forbidding the government "to confiscate property from one person to give it to another" result in misery or not?

Who knows? To my knowledge we haven't tried doing that in quite a long time, and some people would argue the US has never tried it. Might as well right?
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by kmbboots:
quote:
Originally posted by Seneca:
quote:
Originally posted by NobleHunter:
I find certain species of libertarians take solace in casting the poor as moochers and frauds in order to avoid contemplating the misery that would arise from their unbending commitment to their moral principles.

[Roll Eyes]

Do moochers and frauds who are abusing government benefits exist or not?

So what!
People usually care if they are having their stuff being taken away and then being lied to about what happened to it...
 
Posted by MattP (Member # 2763) on :
 
quote:
Do moochers and frauds who are abusing government benefits exist or not?
Do you believe they represent the majority of those receiving benefits? What proportion of them would you say are frauds and what proportion are moochers. Do these groups overlap?
 
Posted by AI Wessex (Member # 6653) on :
 
"Do moochers and frauds who are abusing government benefits exist or not?"

Sure, would they number more or less than the number of people who commit voter fraud? That number is so low as to be statistically insignificant. I wonder if the number of people who "abuse government benefits" at the low end of the economic ladder are also statistically insignificant. I strongly suspect abuse by people at the high end and corporations happens vastly more often and takes orders of magnitude more money out of the hands of the government.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by Seneca:
I never made either of those judgments absolutely, I am only contending that it is fundamentally wrong for the government to confiscate property from one person to give it to another even in the name of correcting those "problems."

Which is why we don't confiscate any property to do it. Instead we create money for them to buy those things from the market. They get what they need and the people selling those things make a profit that they can apply to things they want or need as a reward for producing things for the poor and needy.
 
Posted by KidTokyo (Member # 6601) on :
 
Welfare fraud is barely a blip on the radar in terms of what is costly to the American economy. Costs imposed by corporate fraud outweigh it by at least a hundred-fold.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by Seneca:
quote:
Originally posted by NobleHunter:
I find certain species of libertarians take solace in casting the poor as moochers and frauds in order to avoid contemplating the misery that would arise from their unbending commitment to their moral principles.

[Roll Eyes]

Do moochers and frauds who are abusing government benefits exist or not?

To cite a well respected source:

quote:
The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.

According therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion.

But this proportion must in every nation be regulated by two different circumstances; first by the skill, dexterity, and judgment with which its labour is generally applied; and, secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed. Whatever be the soil, climate, or extent of territory of any particular nation, the abundance or scantiness of its annual supply must, in that particular situation, depend upon those two circumstances.

The abundance or scantiness of this supply too seems to depend more upon the former of those two circumstances than upon the latter. Among the savage nations of hunters and fishers, every individual who is able to work, is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, or such of his family or tribe as are either too old, or too young, or too infirm to go a hunting and fishing. Such nations, however, are so miserably poor, that from mere want, they are frequently reduced, or, at least, think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger, or to be devoured by wild beasts. Among civilized and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently of a hundred times more labour than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied, and a workman, even of the lowest and poorest order, if he is frugal and industrious, may enjoy a greater share of the necessaries and conveniencies of life than it is possible for any savage to acquire.

The relatively small number of people that cost by without working productively, at the top and at the bottom combined, are pretty much irrelevant.

Do some people abuse public support systems? Sure, but so what? We gain much more in productive labor and market demand from those who do not than the trivial costs associated with them taking actions that, ultimately, only hurt themselves (and, in fact, make everyone else around them a bit wealthier from the payment that comes from supporting them).
 
Posted by AI Wessex (Member # 6653) on :
 
"People usually care if they are having their stuff being taken away and then being lied to about what happened to it..."

Seneca, here's a good opportunity for you to agree that you are perhaps overreaching in your condemnation of poor people, some small percentage of which are defrauding the government. Let me pose it as a question:

Do you agree that the abuse by poor people who receive government assistance (not including disabled or elderly on SS) is far outweighed by fraud, abuse and mooching by wealthy people who game the system or simply steal money, and by corporations who manipulate their books and misrepresent their corporate practices to defraud the government?

If you agree with that, do you think your outrage would be better directed at that group, since they are taking far more money out of your pocket illegally and immorally than those poor people are?
 
Posted by Seneca (Member # 6790) on :
 
Oh I'm quite aware of the upper-end abuse, in my book I'd rather cut the government down to very low levels and have a truly free market without all the crony capitalism that goes on. However, much of the the upper-end abuse and fraud is now directly mingled and entangled with the lower end, ie: the duality of food stamps and how they are tied to big agri-business as well as winning elections with the "gimme" demographics.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
However, much of the the upper-end abuse and fraud is now directly mingled and entangled with the lower end,
Insofar as being "mingled and entangled" with them involves defrauding them and competing unfairly against them, this statement is true.

Otherwise, it's completely nonsensical.
 
Posted by AI Wessex (Member # 6653) on :
 
quote:
Originally posted by Seneca:
Oh I'm quite aware of the upper-end abuse, in my book I'd rather cut the government down to very low levels and have a truly free market without all the crony capitalism that goes on. However, much of the the upper-end abuse and fraud is now directly mingled and entangled with the lower end, ie: the duality of food stamps and how they are tied to big agri-business as well as winning elections with the "gimme" demographics.

Ah, you found a way to pretend that the vastly greater high-end fraud and abuse is still somehow directly the fault of those at the low end, who have no money either before or after their so-called abuse of the system.

So, you ducked the question yet again. How about speaking directly to the billions if not trillions of $$ taken out of the hands of ordinary citizens by the rich among us and corporations. Just for a moment, pretend that the fraud conducted by poor people is a pathetically small amount compared to that.

I'll throw you a bone. The financial crisis of 2008 was entirely created by the twisted and corrupt financial industry. Those people cashed out bigtime to the tune of hundreds of billions of $$ that comes out of your pocket. No poor people gained a penny from that. How vehemently do you feel anger toward them?
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by AI Wessex:
quote:
Originally posted by Seneca:
Oh I'm quite aware of the upper-end abuse, in my book I'd rather cut the government down to very low levels and have a truly free market without all the crony capitalism that goes on. However, much of the the upper-end abuse and fraud is now directly mingled and entangled with the lower end, ie: the duality of food stamps and how they are tied to big agri-business as well as winning elections with the "gimme" demographics.

Ah, you found a way to pretend that the vastly greater high-end fraud and abuse is still somehow directly the fault of those at the low end, who have no money either before or after their so-called abuse of the system.

So, you ducked the question yet again. How about speaking directly to the billions if not trillions of $$ taken out of the hands of ordinary citizens by the rich among us and corporations. Just for a moment, pretend that the fraud conducted by poor people is a pathetically small amount compared to that.

I'll throw you a bone. The financial crisis of 2008 was entirely created by the twisted and corrupt financial industry. Those people cashed out bigtime to the tune of hundreds of billions of $$ that comes out of your pocket. No poor people gained a penny from that. How vehemently do you feel anger toward them?

What I'm saying is that the "gimme" constituencies ensure that elections are now won based on bribery of government handouts or fear that the "other guy" will cut them off.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
What I'm saying is that the "gimme" constituencies ensure that elections are now won based on bribery of government handouts or fear that the "other guy" will cut them off.
Of course the fact that low income people tend not to turn out to vote means that this effect happens mostly among wealth beneficiaries of corporate benefits and not those of social supports.
 
Posted by AI Wessex (Member # 6653) on :
 
"What I'm saying is that the "gimme" constituencies ensure that elections are now won based on bribery of government handouts or fear that the "other guy" will cut them off."

I don't understand how poor people are using their political power to ensure that rich people and rich corporations defraud the government of billions and billions and billions of $$ while they get a few food stamps to maybe misspend on wine. Since you're talking about them swaying the elections you're not talking about a few bad apples. It's sounding like you're talking about Romney's 47%. Is that what you really think is happening?

In my opinion, you have a really serious problem with poor people who scrape pennies from the sidewalk and have nothing at all bad to say about others who swipe almost incomprehensibly large sums out from under your nose. Both are stealing from you, but you only blame the penny ante crowd, not the ones who are stealing you blind.

For a guy who waves principle whenever he can when you see poor people getting a little more than they deserve, I seriously don't get it.

This is not an insult, by the way, so don't waste your time reporting this post. It's a very serious observation where I'm saying I would really like to understand how you think, because I can't get there on my own.

Maybe somebody else can explain to me the coherence behind your philosophy.
 
Posted by edgmatt (Member # 6449) on :
 
Kid and kmboots -

Sorry about the misquotes...I definitely had the posts from the two of you as one person in my head. [DOH]

kmboots:

quote:
My point is that we do the first two no matter what. Right now, Seneca is arguing both that the poor don't deserve more than they have, nor do they really need more than they have. It is certainly as much a judgement as me deciding that they both "deserve" and need more.

The difference is that Seneca is saying that they get what they deserve through their own choices and faults. No one determined that for them. There isn't some higher power giving out money that said "you only get 0. sorry." No one purposefully took action to make them poor.

In the case of taxes, there is someone, or group of people, that determine how much money one deserves to have taken from them. Regardless of your choices, regardless of how you got the money..."we" are taking X%.

Please remember, I am not complaining (in this thread anyway) about taxes. I'm merely pointing out that 1: no one makes the decision for anyone else to be poor. 2: someone makes the decision for the richer to be less rich.

Tom said a few pages back that economically, it makes more sense for the poor to get the money redistributed to them because they are more likely to circulate it.

I don't agree on the hidden implication there which is that the poor spend more money than the wealthy. In numbers this may be true because there are so few extremely wealthy, and so many more not. But common sense tells us that the same poor people would spend more if they had more and the wealthy will spend less if they have less. Therefore, assuming we have total control of such things, we should create ways for both to have more money, not one or the other.

Taking money from the wealthy and giving it to the poor is one solution, and not the worst, but why not create ways for the poor to gain their own wealth? That would be the best solution.
 
Posted by Greg Davidson (Member # 3377) on :
 
quote:
no one makes the decision for anyone else to be poor
I disagree. There are policy changes that affect things such as public education that have a measurable effect on poverty and future income.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by Greg Davidson:
quote:
no one makes the decision for anyone else to be poor
I disagree. There are policy changes that affect things such as public education that have a measurable effect on poverty and future income.
Then why are there some poor kids who come from bad households and bad schools that become successful in life?

What about free will? Is everyone just a product of the environment around them no matter what?

I know lots of people who "defied the odds" given their circumstances. The idea that they should have been given help and not risen on their own demeans them and demeans human free will.

There are many different kinds of poor people. Two of them that I've noticed are those who want a better life and will do anything to get it no matter how hard or how many setbacks, and those that give up and blame their lives on luck/fate/society.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
But common sense tells us that the same poor people would spend more if they had more and the wealthy will spend less if they have less.
This is incorrect. There is a certain amount of money someone needs to spend to maintain a given lifestyle; anything over that is likely to be socked away, used for security or safekeeping. The poor spend nearly every penny they have; in fact, the bottom three quintiles actually spend more money than they have, as they have negative wealth and are in substantial debt in order to maintain their lifestyle. The top two quintiles spend substantially less, and the top 5% spends much less -- because they have so much money that, as a practical matter, it is difficult for them to spend it all. Taking an additional $10,000 from Bill Gates (for example) will not affect his spending habits in any meaningful way; there is nothing he will suddenly become unable to buy as a consequence.

---------

quote:
Two of them that I've noticed are those who want a better life and will do anything to get it no matter how hard or how many setbacks...
Like illegal immigrants, you mean?
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
There isn't some higher power giving out money that said "you only get 0. sorry." No one purposefully took action to make them poor.
This may be true for individuals, but for communities I would say that this is the exact opposite of the truth.

quote:
In the case of taxes, there is someone, or group of people, that determine how much money one deserves to have taken from them. Regardless of your choices, regardless of how you got the money..."we" are taking X%.
Conservatives seem reluctant, or unable to get out of this narrow frame -- a frame which excludes almost everything from view.

The implicit assumption there is that, were it not for taxation, the money would be allocated in a manner somehow pure and unsullied, apportioned only as deserved by each recipient. Thus, taxation deprives the most successful of their fair share.

It overlooks many things. One of the most important -- anyone who makes money in the financial sector is enjoying a very lavish government subsidy. Contractual enforcement and regulation enables the complex transactions upon which the industry and finance depends. Furthermore, American industry and tech benefits from massive government investment in R&D. Also, international trade policies and support for M & A (a very complex contractual transaction) have depleted worker rights (and hence worker earnings and wealth) while boosting corporate profits. Government backed-insurance and quasi-governmental lending agencies have added value to the credit industry across the board.

A truly "laissez-faire" platform would never fly on Wall Street. Government contracts would disappear, and along with them vast swaths of our industrial base. Transactional efficiency would evaporate. An economy driven by Industry and Finance is an economy driven by heavy government subsidies and market management, without which there would be far fewer wealthy people, and much less of everything we mistakenly associate with "liberty."

So the question is: are the wealthy giving back their fair share in light of how much they benefit.

quote:
don't agree on the hidden implication there which is that the poor spend more money than the wealthy. In numbers this may be true because there are so few extremely wealthy, and so many more not. But common sense tells us that the same poor people would spend more if they had more and the wealthy will spend less if they have less. Therefore, assuming we have total control of such things, we should create ways for both to have more money, not one or the other.
It matters what they would spend it on. The poor would buy food and clothes, health care, and maybe some appliances. The wealthier would travel and invest. Hence, much more of the money spent by the wealthy would go overseas, with no benefit to the American economy.

[ December 11, 2013, 12:33 PM: Message edited by: KidTokyo ]
 
Posted by Wayward Son (Member # 210) on :
 
quote:
G3 wrote:
I'm sure you can torture the data sufficiently.

You quoted a site that said the top 60 percent pay more than 100% of the taxes, and you're worried that I will torture the data??? [LOL]
 
Posted by G3 (Member # 6723) on :
 
I'm not worried, I'm certain. Big difference.
 
Posted by Greg Davidson (Member # 3377) on :
 
quote:
Seneca: Then why are there some poor kids who come from bad households and bad schools that become successful in life?

What about free will? Is everyone just a product of the environment around them no matter what?

I know lots of people who "defied the odds" given their circumstances. The idea that they should have been given help and not risen on their own demeans them and demeans human free will.

There are many different kinds of poor people. Two of them that I've noticed are those who want a better life and will do anything to get it no matter how hard or how many setbacks, and those that give up and blame their lives on luck/fate/society.

Seneca, perhaps the difference between you and me is math. I don't disagree that there are poor people who beat the odds and become rich. But even if you could show a million specific examples, that alone does not prove that the odds are fair or just. There are 40 million people in the US who qualify as poor, 1:40 odds are pretty bad, particularly as (I believe) 2/3rds of those born into the top 20% in the US go on to be in the top 20%.

The other assumption you need to make is that there is a very high correlation between success and those who deserve success. In a sense, that would be a very optimistic view about our society - that virtuous behavior is almost always rewarded. Do you believe that? Do you generally believe that the wealthiest people you know are the best and most deserving? And that as income declines, it is due to the faults of those who are rewarded less by our economic system?

I believe there is a partial correlation - effort and capability do improve your odds, regardless of your starting position. But I also believe that policy affects the odds, and initial wealth affects the odds.

To take a simple example, a poor young adult with a chronically ailing parent or grandparent may be required to provide a great deal of care-giving themselves whereas for a wealthier family, in-home nursing care can be afforded. The poor person in that situation has a number of major additional burdens.
 
Posted by edgmatt (Member # 6449) on :
 
Kid-

quote:
quote:
quote: In the case of taxes, there is someone, or group of people, that determine how much money one deserves to have taken from them. Regardless of your choices, regardless of how you got the money..."we" are taking X%.
Conservatives seem reluctant, or unable to get out of this narrow frame -- a frame which excludes almost everything from view.

The implicit assumption there is that, were it not for taxation, the money would be allocated in a manner somehow pure and unsullied, apportioned only as deserved by each recipient. Thus, taxation deprives the most successful of their fair share.

Is the part I put in bold the part you are calling my "narrow frame"?

Because the part you quoted me on does not imply what you said it did, and I do not suggest that "were it not for taxation, the money would be allocated in a manner somehow pure and unsullied, apportioned only as deserved by each recipient."

My quote is a fact, not an opinion. Tax laws say, we take this much. Period. Does it not?

And in the context, I was comparing it to the claim made by kmboots that "we" purposfully choose to make people poor.

Tom-

quote:
This is incorrect. There is a certain amount of money someone needs to spend to maintain a given lifestyle; anything over that is likely to be socked away, used for security or safekeeping. The poor spend nearly every penny they have; in fact, the bottom three quintiles actually spend more money than they have, as they have negative wealth and are in substantial debt in order to maintain their lifestyle. The top two quintiles spend substantially less, and the top 5% spends much less -- because they have so much money that, as a practical matter, it is difficult for them to spend it all. Taking an additional $10,000 from Bill Gates (for example) will not affect his spending habits in any meaningful way; there is nothing he will suddenly become unable to buy as a consequence.
I accept this, for the most part. Can you (or anyone) determine what the max amount is that won't affect them? Your most likely right that $10,000 won't affect Bill Gates spending habits, but what is the number that will? (I'm sure he paid much more than $10,000 in taxes on any given year in the past decade.)

What about each and every one of the other people in the country? It's a very easy thing to say "you don't need this" to someone that has a lot of something. Can you actually make that determination? There are hundreds or thousands of details that *you* would need to know about that persons life to make that kind of call.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
My quote is a fact, not an opinion. Tax laws say, we take this much.
Yes, correct.

quote:
Period.
Wrong. That's what I mean by a frame that excludes crucial information.

quote:
And in the context, I was comparing it to the claim made by kmboots that "we" purposfully choose to make people poor.
Is it your understanding the existence of slums, huge wealth imbalances, and so forth is not the product of the same top-down influence of power that creates tax policy?
 
Posted by TomDavidson (Member # 99) on :
 
quote:
It's a very easy thing to say "you don't need this" to someone that has a lot of something. Can you actually make that determination?
Nope. In the same way, I can't say that a given 15-year-old isn't mature enough to drive, or that a given 21-year-old is mature enough to handle alcohol, or that a given felon shouldn't be trusted to own a gun. The whole idea of tax brackets is that we're basically engaging in semi-granular generalizations, and sometimes those generalizations do break down (like, for example, the way Republicans always trot out farmers when they're arguing against the estate tax, since versions of the estate tax without specific exemptions for things like farmland can create unfortunate situations.)

But I'd also like to note that our inability to say specifically that "family X doesn't need this" is actually a pretty good argument for not trying to bring morality and concepts of "need" and "merit" into taxation. The point of modern taxation is to a) feed the government and b) keep money flowing through the economy. It is not to move money from the undeserving to the deserving, but rather from inefficient channels to efficient ones.
 
Posted by edgmatt (Member # 6449) on :
 
Ok. I can get behind all of that.

quote:
But I'd also like to note that our inability to say specifically that "family X doesn't need this" is actually a pretty good argument for not trying to bring morality and concepts of "need" and "merit" into taxation.
I'm not sure if I follow that all the way through. Could you re-phrase?

quote:
The point of modern taxation is to a) feed the government and b) keep money flowing through the economy. It is not to move money from the undeserving to the deserving, but rather from inefficient channels to efficient ones.
Awesome. That, in my opinion, is exactly what taxes are supposed to do. I suppose I've been (very) slowly coming around to that point in this thread. Obviously, the only argument I have left now is with what the government thinks is efficient and inefficient.

Kid-

quote:
Wrong. That's what I mean by a frame that excludes crucial information.
Care to go into detail?

quote:
Is it your understanding the existence of slums, huge wealth imbalances, and so forth is not the product of the same top-down influence of power that creates tax policy?
No. Is it your understanding that the influence(s) you are speaking of creates slums, huge wealth imbalances and so forth directly and intentionally?

That is, do you believe there is a room full of people somewhere discussing how to turn San Jose, CA (for example) into a slum?

Or is it that these things occur (often) as an externality?

Where as the tax system directly and intentionally decides how much money to take from whom. And the difference between the two is my point.

You seem to be interpreting my statements as me being for slums and wealth imbalance, and against taxes. I am not. Read Tom's last post, and my response, and things ought to be cleared up.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
Is it your understanding that the influence(s) you are speaking of creates slums, huge wealth imbalances and so forth directly and intentionally?
Yes.

quote:
That is, do you believe there is a room full of people somewhere discussing how to turn San Jose, CA (for example) into a slum?
No. This does sometimes happen (Robert Moses), but usually not, and is in no way required by the above. Conspiracy theories are neither necessary nor, for the most part, plausible.

quote:
Or is it that these things occur (often) as an externality?
Sometimes, yes.

quote:
Where as the tax system directly and intentionally decides how much money to take from whom. And the difference between the two is my point.
I understand your point, always have. My point is that the government has many other ways of re-distributing wealth in addition to tax policy, and that in the aggregate it's the wealthy few that get the benefit of the deal, even though they pay higher nominal tax rates.

quote:
Care to go into detail?
About the frame? But I already did in an earlier post on this same page. If you need more elaboration, please highlight whichever part was not clear to you.

quote:
You seem to be interpreting my statements as me being for slums and wealth imbalance, and against taxes. I am not. Read Tom's last post, and my response, and things ought to be cleared up.
Actually, no, I don't think you are "for" these things. I just disagree with your view that taxation and expenditure is a unique kind of "taking" and "redistribution."

[ December 12, 2013, 08:54 AM: Message edited by: KidTokyo ]
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by edgmatt:

It's a very easy thing to say "you don't need this" to someone that has a lot of something. Can you actually make that determination? There are hundreds or thousands of details that *you* would need to know about that persons life to make that kind of call.

Yet we seem to have no trouble telling poor people what they don't need.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
My quote is a fact, not an opinion. Tax laws say, we take this much. Period. Does it not?

The trick is, though, that we take this much _money_, not this much _wealth_ by way of taxes. When we do that, particualrly at the higher end, prices adjust themselves based on how much money is left after taxes, so the taxes themselves have almost no affect on individual wealth, only on the nominal pricing of wealth. In effect, they monstly just serve to prevent inflation of luxury items purchased as status symbols. Even when you're talking a fair bit below what Rolls Royce needs to set is prices to be to sell the number of cars it wants to produce in a given year, the adjustment of money available to bit just affects the nominal price that conveniently located land an a house in, say, San Francisco goes for, not the actual value of that wealth, with the upshot being that preventing a relatively small number of people from bidding the prices up due to disproportionately high income levels also serves to both keep prices in the range where more people can participate in the bidding process to try and get a share and also allows down steam prices such as rent to come out a bit lower in turn.

If you want a measure of a good tax policy, that's a good place to start- ask "Does it help prevent inflation without directly limiting they payer's access to to needs or real wealth?"

quote:
I accept this, for the most part. Can you (or anyone) determine what the max amount is that won't affect them? Your most likely right that $10,000 won't affect Bill Gates spending habits, but what is the number that will? (I'm sure he paid much more than $10,000 in taxes on any given year in the past decade.)

What about each and every one of the other people in the country? It's a very easy thing to say "you don't need this" to someone that has a lot of something. Can you actually make that determination? There are hundreds or thousands of details that *you* would need to know about that persons life to make that kind of call.

That's where using baseline metrics on the low end (such as cost of living) and things like deductions on the high end come into play. We can peg the rough average levels of "just about everyone needs to spend this much to get by" "Most spending beyond this point tends to only be on luxury goods or go into financial speculation that promotes bubbles", etc and use those points to set the base rate levels, and then we can increase the overall granularity by letting people deduct productive expenses based on their personal situations. This much is going into educational investments, that much is going into medical costs, this much is paying the wages of employees- those are productive investments and serve to also encourage desirable expansion of the related services, so they don't count toward the danger that the person in question will bid up prices on resources with less flexible supply levels or create financial pressures that lead to future instability.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
The wealthier would travel and invest. Hence, much more of the money spent by the wealthy would go overseas, with no benefit to the American economy.
"Going over seas" is a bit of a wash (particularly since the money itself wouldn't go anywhere, unless that place over seas transacts in dollars and not its own currency)

Rather, they either bid up prices on limited resources or invest the money.

The latter issue lies not even in they fact that it's invested, but how they invest it and what signals the economy is sending for the best returns on investments. If our market is signalling that the best returns can be made investing in producing more things that people want and need, because there are people that can afford to buy them, but not enough being produced, then we get a healthy feedback cycle. If the market is signalling that people want and need more things, but don't have enough money to buy them, then investment goes to making loans to those people instead until they've got enough to buy things, but that leads to a much less healthy cycle, if not an outright unhealthy one as those loans come due, because the people they're being made to only see a marginal income benefit in the process because all of the returns on those loan go right back to the top without proportionally increasing income on the way up to any real degree, so people can't afford to pay the loans back in large and larger numbers, until the bottom falls out (while the people on top effectively retain the already realized profits on the process)

Taxes. particularly on the returns from speculative and financial investments help to keep the balance of risk/reward tiled toward productive investments that provide long term, low margin returns and away from the short term promises of high returns from speculative and financial investments- they help adjust the basic risk/reward calculus the Adam Smith used the invisible hand metaphor to describe to encourage stable, productive investments over destabilizing investments.
 
Posted by KidTokyo (Member # 6601) on :
 
Pyr,

You make good points and I don't disagree with them, but they seem inapposite of the issue.

Overseas markets transact in dollars every day, anytime someone buys a foreign currency, for instance. The dollars do eventually come back, but the purchase will be for foreign goods, services, or labor.

I would argue that there is a difference in benefit to the American economy (from an egalitarian perspective) between, say, buying labor or services in the U.S. as opposed to buying them in China. No? That difference, I would argue, is one reason for the growth in the market for credit, or what you term in somewhat Orwellian fashion "healthy" versus "unhealthy feedback cycles."

Or have I misunderstood the issue, and/or the point you were making?
 
Posted by edgmatt (Member # 6449) on :
 
quote:
Yet we seem to have no trouble telling poor people what they don't need.
This is the third or fourth time this sort of thing has been stated, and I really don't see the point. We shouldn't be telling anyone what they don't need, or do need. Pointing out that we do it on one group of people doesn't justify it to do it on others.
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by edgmatt:
quote:
Yet we seem to have no trouble telling poor people what they don't need.
This is the third or fourth time this sort of thing has been stated, and I really don't see the point. We shouldn't be telling anyone what they don't need, or do need. Pointing out that we do it on one group of people doesn't justify it to do it on others.
Except that when we make policy we make those calls. We decide that poor people don't need food stamps or subsidized healthcare because they have TVs. (People get seriously cheesed about poor people having TVs.) So why is it that we can't make those same judgements about other things. We don't dare ask if Mr. Heir really needs a second private jet because who are we to judge what he might need? We are the same people who made the judgement about who needs food stamps when we cut those programs.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
We shouldn't be telling anyone what they don't need, or do need.
Nothing wrong with asking, though.
 
Posted by edgmatt (Member # 6449) on :
 
quote:
Except that when we make policy we make those calls. We decide that poor people don't need food stamps or subsidized healthcare because they have TVs. (People get seriously cheesed about poor people having TVs.) So why is it that we can't make those same judgements about other things. We don't dare ask if Mr. Heir really needs a second private jet because who are we to judge what he might need?
Those two things aren't comparable because *we* didn't provide Mr. Heir with the jets in the first place. *We* make judgements on the food stamps because *we* provide them.
 
Posted by PSRT (Member # 6454) on :
 
quote:
Those two things aren't comparable because *we* didn't provide Mr. Heir with the jets in the first place. *We* make judgements on the food stamps because *we* provide them.
Well, no, we did provide him the jets in the first place. Its a little less obvious when we set up laws that allow wealth to accumulate than when we set up laws that distribute wealth, but we're still setting up laws and structures such that we allow wealth to accumulate. And even further down into the assumption hole, the idea that individuals can hold wealth at all is something that we determined.
 
Posted by edgmatt (Member # 6449) on :
 
That's not the same thing as a law that provides, directly and specifically, food stamps.

There is no law that, directly and specifically, provides jets.

You can't point to the policy/law that helped Mr. Heir get his jet. You can't gauge how much *we* helped him get that jet. (Those people were all compensated for anyway, but that's a different issue.)

You can point precisely to the law that provides food stamps. You can point to the precise amount of money *we* contribute to food stamps.
 
Posted by Greg Davidson (Member # 3377) on :
 
quote:
There is no law that, directly and specifically, provides jets.
Is your principle of justice that if a group can take an action that provides them benefit, but they do so in a way that the benefit is obscured (say, for example, a change in laws that allows them to take what would normally be taxable profits, and instead through accounting make it look like the profits occur offshore as laundered thru some small Caribbean nation), then it is as if they got no benefit at all? If that were the principle, then all some rich people would have to do is pay lobbyists to come up with a hidden way to extract returns.
 
Posted by edgmatt (Member # 6449) on :
 
You guys are conflating the issue. I understand the point you have made, and I understood it before this discussion.

People benefit indirectly (although sometimes purposefully) from certain laws. This is your point, I get it.

Other people benefit directly (and very purposefully) from laws.

These are two very different things.

Do you really make no distinction between the guy with the jet and the guy on food stamps, as it relates to this discussion? (Telling someone how much they can have/how much they need.)

To be more direct, Kid asked:

quote:
We decide that poor people don't need food stamps or subsidized healthcare because they have TVs. (People get seriously cheesed about poor people having TVs.) So why is it that we can't make those same judgements about other things?
And I answered: Because these things are very different. (And I explained how.)
 
Posted by PSRT (Member # 6454) on :
 
quote:
Do you really make no distinction between the guy with the jet and the guy on food stamps, as it relates to this discussion? (Telling someone how much they can have/how much they need.)
SUre. I make a distinction. The guy with the jet got a lot of production out of a lot of people who did more work and produced more wealth than they were paid for. THe guy with the jet did a lot less work and produced a lot less wealth than he was paid for.

Our laws and systems of economic transactions which we protect with those laws do not distribute wealth according to how that wealth was produced. Since money and wealth are public resources (though of different sorts), when those laws and transactions put too much money and wealth into someone's hands compared to the amount of labor and innovation they put into production, at the expense of people who now we have to publicly support if we want them to thrive, then I see no problem telling the guy with the jet to pay up. In fact, I think saying that the stuff is his rightfully is far more immoral than making him return some of his wealth to the public.
 
Posted by edgmatt (Member # 6449) on :
 
quote:
The guy with the jet got a lot of production out of a lot of people who did more work and produced more wealth than they were paid for. THe guy with the jet did a lot less work and produced a lot less wealth than he was paid for.

That's the kind of comments that are causing confusion in this particular debate. I don't even disagree with you completely, but it's irrelevant because:

1- We don't know that.
2- There's no way to know that.
3- There's no way to calculate how much either side owes the other.

With food stamps, however, I DO know that the ones receiving it are receiving it because they haven't earned it.* I DO know exactly how much food stamps (for example) are costing the rest of the country.

So we can make a judgement about food stamps. We know precisely how much in food stamps *we* can afford to give out, we can also come close to knowing how much one *deserves*. (People who make a certain amount of money aren't eligible.) We are also limited on how much in food stamps we can provide because it's a resource, like anything else, and is limited. So we not only CAN make judgements, we NEED to so we don't waste resources.

We can't make the same judgement about jets. We can't say with any accuracy that someone does or does not deserve a jet. There isn't a government program handing out jets, so there isn't any authority there (as there is with food stamps).

quote:
Our laws and systems of economic transactions which we protect with those laws do not distribute wealth according to how that wealth was produced.
I don't agree. In most cases it does. There are instances where it does not, and there are externalites that cause imbalance, but this is not the case in the majority of economic transactions, nor in the majority of laws.

*That is the point of the program; to get these people some food because they can't get (earn) it themselves. I'm not criticizing here, but I am being clear on what's happening.
 
Posted by LetterRip (Member # 310) on :
 
edgmatt,

quote:
With food stamps, however, I DO know that the ones receiving it are receiving it because they haven't earned it.
We only know that they meet the guidelines to receive food stamps - they may well have earned it, and been swindled out of it. A lot of pensions have disappeared due to a combination of corporate action and law changes that moved pensions from first creditors (which makes sense, sense pensions are compensation that should just be equivalent to a savings account managed by the corporation) to where pensions are the last creditors. We are talking at a minimum hundreds of billions of dollars and likely trillions. These law changes directly transferred wealth from the poor and middle class to the wealthy.

We also have bankruptcy protection in general - which usually ends up transferring wealth from middle class to the upper class.
 
Posted by PSRT (Member # 6454) on :
 
Going even further, even they are working, and the company they are working for is making significant profit, or the executives are making more than x times what they are making, then they have earned enough so that they shouldn't need to be on food stamps. If they were working, and fired by a company with executives making more than an upper middle class salary, then they earned enough that they shouldn't need to be on food stamps. If they are in school to improve their careers, then they have earned enough not to be on food stamps. and more...

The food stamp program is essentially a wealth transfer system from the poor and middle class to the wealthy. Employers can pay their employees less than the value of their labor, and those employees will be able to pick up additional income paid for by the public, putting more dollars into the pockets of the owners.

The whole assumption, that somehow the people who are on food stamps haven't earned that tiny amount of money, only works at all because of our systems of laws and financial exchanges. The whole assumption that people with a crap ton of money have earned it only works because of the systems of laws and financial structures that are in place.

[ December 15, 2013, 04:43 PM: Message edited by: PSRT ]
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
I don't even disagree with you completely, but it's irrelevant because:

1- We don't know that.
2- There's no way to know that.
3- There's no way to calculate how much either side owes the other.

With food stamps, however, I DO know that the ones receiving it are receiving it because they haven't earned it.* I DO know exactly how much food stamps (for example) are costing the rest of the country.

Actually, economists make monetary determinations of this sort all the time -- very specific determinations of the kind you say are impossible to make.

Your contention that someone "hasn't earned" a food stamp presupposes that the income they earn, if any, represents what they "deserve." Why are you certain they haven't earned it? Perhaps they have. Perhaps whatever money they had was defrauded from them by overprivileged men with lear jets.

Without government support of these huge corporate associations, they would shrink or cease to exist completely, and their managers would earn much smaller incomes doing whatever there is left for them to do.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
Koolade.

Or at least theories that equivocate to it.

As to the commentary from 2010, we followed through on it. We didn't expect our healthcare costs to skyrocket like they did.

So now we are strategizing how to lower our incomes and tax liabilities to a point where we are subsidized.

Our latest strategy, we may get divorced for tax reasons. Since marriage is a penalty, we will ditch the government marriage. Well go get powers of attorney for each other etc and fully replicate everything but the taxation penalty.

So I'm wondering how the economy is doing because over the past three years I'm not the only one who did what we did?
 
Posted by LetterRip (Member # 310) on :
 
RedVW,

if your income differences are significant enough that it changes your ACA subsidy, then chances are the income difference is also providing you a 'marriage bonus' in terms of income taxes that is probably about the same as the ACA subsidy.

Ie marriage is probably a 'wash' in terms of Federal income taxes and ACA subsidy.

If you then factor in other favorable tax treatment to marriages (property transfer etc.), you probably are coming out well ahead from marriage 'bonuses'.

So you might want to talk to a tax expert before doing a divorce.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
LR

Already did.
 
Posted by JoshuaD (Member # 1420) on :
 
Red: Did the tax consultant look at death taxes? I work in an estate planning law firm, and I don't believe there is any planning that can be done to replicate the 100% marital deduction.

What state are you from? If you did this in NJ, anything passing from you to her would be taxed at about 15%. If you were over the NJ estate tax threshold ($675k), the percentage could be higher. Each state is different, but the pattern is usually the same.

What have you calculated the savings to be, out of curiosity?
 
Posted by RedVW on a Laptop (Member # 615) on :
 
It's looking iffy as to whether it would work or not. Real round numbers we can make it so my child is fully covered by the state and as for myself if be fully covered as well.

Asset wise the fictive divorce would have to place our assets fully under my wife. There are tax penalties for this in the first year.

More to it than what I have posted. Ethically it's a gray area. But seeing as marriage is now an easy legal framework as far as government is concerned and is still taxed as a penalty on the federal level we feel it washes out. Other ideas we have looked at include moving to a state without state income tax and membership in health care state markets.

We have also looked at moving abroad.
 
Posted by edgmatt (Member # 6449) on :
 
quote:
Your contention that someone "hasn't earned" a food stamp presupposes that the income they earn, if any, represents what they "deserve." Why are you certain they haven't earned it? Perhaps they have. Perhaps whatever money they had was defrauded from them by overprivileged men with lear jets.

You were so sure about the specifics of the jet owner, and now your telling me we can't know the specifics of the food stamp guy.

Besides, you are helping me make my point with this. You are right with all those "perhaps". But we can't gauge it. So we have to take things at face value; one can't afford food, we give them food stamps. We assume they legititmatly can't *earn* it by paying for it. We can't start asking these deep questions about if they *actually* earned it, if they *truly* deserve it, etc.

And the same has to apply for the jet owner. Because we can't know if he legitimately *earned* every dollar to buy the jet, we have to take things at face value when it comes to making decisions about taxes. If there is a specific law you think very directly accumulates wealth towards him, then go after that law. But don't assume that every wealthy person has gotten their wealth illegitimately. That's just as horrible as assuming everyone on food stamps is scamming the system.

quote:
Your contention that someone "hasn't earned" a food stamp presupposes that the income they earn, if any, represents what they "deserve."
No, that's not my contention %100. "Deserved" isn't a good word their either; that's more of a philosophical term. Maybe that's the problem with all those comments about the rich deserving, or the poor deserving. Your trying to determine correct policy based on intangible philosophic grounds, which can't be done.

"Earned" is a much more concrete term in this context. And money, in general, tends to be a strong indicator of exactly what someone has earned. There's other factors, and that's why we have all those programs, and that's why we have all those taxes, to fill in the cracks of imbalances. And that's ok, to a point. But when *we* start making presumptions like NONE of the wealthy earned their money, and ALL of the poor earned more then they got, then things are going to spiral out of control in a bad bad way.

Another thing: It has been stated that the government, with it's laws, has set up a way for money to be continually in the hands of the wealthy, and kept away from the poor. But the solution has been to give that government more authority over the money by way of higher taxes. How is this going to solve the problem? Your going to rely on the same people who have the power to make themselves and their friends rich, (and have done so, according to you) to make things better by giving them more access to and more power over money? [Exploding]
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
You were so sure about the specifics of the jet owner, and now your telling me we can't know the specifics of the food stamp guy.

Besides, you are helping me make my point with this. You are right with all those "perhaps". But we can't gauge it.

I'm not telling you that at all. I'm suggesting a possibility that you seem to have excluded. In fact, I believe we can and do know a great deal about who uses foodstamps, and why, and I see little support for your notion that most people who use them are making use of "unearned" privileges. As with the lear jet guy, these things have been studied in great detail.

quote:
Because we can't know if he legitimately *earned* every dollar to buy the jet, we have to take things at face value when it comes to making decisions about taxes.
What does that even mean? You've written a blank slate.

quote:
If there is a specific law you think very directly accumulates wealth towards him, then go after that law.
It's more than a law, it's a system.

quote:
But don't assume that every wealthy person has gotten their wealth illegitimately.
I don't have to *assume* anything. Corporations and their managers have unique legal privileges, and these privileges are responsible for their ability to accumulate so much wealth. That's not even debated by the managers themselves. Whether or not these privileges are "legitimate" is a matter of one's politics, but that they exist is beyond debate.

quote:
Your trying to determine correct policy based on intangible philosophic grounds, which can't be done.
Not at all! What intangible about fairness? About not getting shafted or defrauded? About having control over your own life rather than being viewed as a resource to be mined and exploited by creditors?

quote:
But when *we* start making presumptions like NONE of the wealthy earned their money, and ALL of the poor earned more then they got, then things are going to spiral out of control in a bad bad way.
The gap between the wealthy and the poor in the US is an order of magnitude beyond what it was 30 years ago, and far exceeds the difference in most modern democracies. That's a product of economic policy, not the astonishing genius of our capitalists.

quote:
But the solution has been to give that government more authority over the money by way of higher taxes.
That's not my solution. My solution is to take away the legal privileges as much as possible, and hence remove the need for policies based on redistribution.

quote:
Your going to rely on the same people who have the power to make themselves and their friends rich, (and have done so, according to you) to make things better by giving them more access to and more
That is absolutely not what I'm proposing. You likely think that because you haven't really been following the implications of what I've been saying. What I propose is the literal opposite -- to reduce narrow privilege and increase access. For instance, higher regulation of financial institutions and less regulation of small business, and perhaps tax benefits to encourage worker-ownership of businesses. The solution must be structural, not centralized and based on redistribution.

[ December 16, 2013, 10:10 AM: Message edited by: KidTokyo ]
 
Posted by Seriati (Member # 2266) on :
 
So is there more to your argument, Kid, than having wealth means you are necessarily the result of priviledge and taking it from others who are more deserving? That not having wealth always indicates that you have had your rightfull earnings displaced?

I think this debate gets confused when you measure the weathly against philosophy (they have more than anyone is worth) and the poor on statistics (direct evidence of fraud is low). Statistically, fraud is low in both groups. Philosophically many rich and poor have more than they deserve based on their own efforts, and many do not.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
So is there more to your argument, Kid, than having wealth means you are necessarily the result of priviledge and taking it from others who are more deserving? That not having wealth always indicates that you have had your rightfull earnings displaced?
Yes, absolutely. As an attorney who deals with corporate law, and who has studied how it works in several countries, I have a fairly intimate understand of how it actually works, as opposed to how most people think it works.

Thing is, I've already explained this in some detail, but it's not sinking in...that's alright, it can take a while to get your head around a new idea.

The fundamental thing to realize is that for the last 30 years our policy makers have been "deregulating" big business, and yet, paradoxically, there are more regulations and government has grown.

How to explain this paradox?

Answer: our politicians, and the corporate managers who write our laws and policies, are employing something akin to doublespeak. What they call "deregulation" does not result in few laws or less government -- it results in laws that favor corporate power over the individual citizen. They call it de-regulatory because it expands legal entitlement, so on the surface there appears to be less regulation because there is less natural limitation. A classic example is that when Glass-Steagal was repealed, it was replaced by more government involvement and regulation to manage more corporate contracts of greater complexity. So, what is called "deregulation" subtracts, rather than adds to economic and legal equality. Bright-line laws get replaced by micromanagerial support systems.

This process is itself a redistributive system flowing in the opposite direction as the tax system. In fact, our income taxes have faced only modest changes over the last 30 years, but the distribution of special government support for corporate interests has drastically increased, and the wealth distribution has followed accordingly.

In systems where there is more genuine democratic control over business structure, economic egalitarianism is greatly increased, and there is little need for social safety nets because people actually are getting their fair share.

[ December 16, 2013, 11:09 AM: Message edited by: KidTokyo ]
 
Posted by TomDavidson (Member # 99) on :
 
quote:
Philosophically many rich and poor have more than they deserve based on their own efforts...
From an economics standpoint, I think it's more useful to examine which populations have more than they will circulate, and which would circulate more if they had more to spend.
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by TomDavidson:
quote:
Philosophically many rich and poor have more than they deserve based on their own efforts...
From an economics standpoint, I think it's more useful to examine which populations have more than they will circulate, and which would circulate more if they had more to spend.
I think that's a false test. No one's really sits still these days. The wealthy put it in banks, where it's loaned out, or put it in investments where it goes to work directly. Now I do agree that we've gotten into a speculation based economics model, and that detracts from the best purpose of investment.

But I don't see any value in a tax policy that causes the wealthy to engage in tax avoidance mechanisms - which they do to great extent - rather than in making investment. And I certainly don't see a benefit to the economy in a tax policy that causes that, adds in a layer of government waste, adds in another layer of government allocations to policitically favored projects, and then sends a remainder of the fraction to a large number of impoverished because it will increase circulation.

I mean get the simple principal, but I don't see anything that makes me believe you are correct that the result is more economic benefit from redistribution policies, and when you couple that with the disincentive to be productive it looks even worse.
quote:
Originally posted by KidTokyo:
Yes, absolutely. As an attorney who deals with corporate law, and who has studied how it works in several countries, I have a fairly intimate understand of how it actually works, as opposed to how most people think it works.

In fairness, it's not a unique perspective here.
quote:
The fundamental thing to realize is that for the last 30 years our policy makers have been "deregulating" big business, and yet, paradoxically, there are more regulations and government has grown.

How to explain this paradox?

Well, I'd explain it by saying that it's not true. Our government has always worked at crossed purposes, and no matter what the legislature does the career bureaucrats in the administrative agencies have NOT BEEN engaged in deregulation. Honestly its a stretch to even claim the legislature has, when they pass ten laws (at least) for everyone they rescind.
quote:
Answer: our politicians, and the corporate managers who write our laws and policies, are employing something akin to doublespeak. What they call "deregulation" does not result in few laws or less government -- it results in laws that favor corporate power over the individual citizen.
And this is where I think you've crossed a bridge too far. As many laws are against corporate interests as in favor (at least as many). What more than anything the laws do is waste money and divert resources into things like compliance (which oddly enough is more focused on technicality than the intent behind the rules - and I don't even think its bad faith, the US government's enforcement of rules is so "gotcha" there's really no other rational way to proceed).
quote:
This process is itself a redistributive system flowing in the opposite direction as the tax system. In fact, our income taxes have faced only modest changes over the last 30 years, but the distribution of special government support for corporate interests has drastically increased, and the wealth distribution has followed accordingly.
No. The only benefit the excess regulation culture has to corporations is that it raises the bariers to entry for new businesses. In almost all other ways its a parasitic waste product. It's not the opposite direction of tax flow, its in fact the same direction the federal government has taken, it maximizes middle management and entrenched bureaucracy.
quote:
In systems where there is more genuine democratic control over business structure, economic egalitarianism is greatly increased, and there is little need for social safety nets because people actually are getting their fair share.
I assume this is a complex way of saying operator owned? I do agree regulation makes this a hard model.

But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
Our government has always worked at crossed purposes, and no matter what the legislature does the career bureaucrats in the administrative agencies have NOT BEEN engaged in deregulation. Honestly its a stretch to even claim the legislature has, when they pass ten laws (at least) for everyone they rescind.
That's what I just said, dude.

quote:
As many laws are against corporate interests as in favor (at least as many). What more than anything the laws do is waste money and divert resources into things like compliance (which oddly enough is more focused on technicality than the intent behind the rules - and I don't even think its bad faith, the US government's enforcement of rules is so "gotcha" there's really no other rational way to proceed).
In essence I agree with this except the "against" part. Corporations of this magnitude cannot even exist without a strong state. Whatever "regulations" they find obnoxious are dwarfed in importance by the laws which support them. Corporations, however much they may complain, essentially get what they want out of government.

quote:
The only benefit the excess regulation culture has to corporations is that it raises the bariers to entry for new businesses.
I said something similar (though I disagree with the "only" as well as your implicit implication that a "barrier" is not in fact monumentally empowering), but you seem not to be seeing it because you are stuck in the lens of what you think my politics are.

quote:
In almost all other ways its a parasitic waste product.
In many ways, true, but that is not the whole picture.

quote:
It's not the opposite direction of tax flow, its in fact the same direction the federal government has taken, it maximizes middle management and entrenched bureaucracy.
Disagree with "middle" and "same," agree with the rest. Wealth is extracted from blue collar and middle class by the credit industry and by the dual-caste legal system.

I actually think you and I largely agree on many of the facts, just not the full extent of the damages, nor the implications.

quote:
But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.
Yes, exactly. But I don't think this means what you think it means. State capitalism has, historically, used violent and coercive means to suppress the rights of those who labor, thus keeping wages down.

[ December 16, 2013, 02:18 PM: Message edited by: KidTokyo ]
 
Posted by Seriati (Member # 2266) on :
 
I actually think we disagree on who is the motivating force. I don't see your argument on - the corporations - being the ones in control.
 
Posted by KidTokyo (Member # 6601) on :
 
Having studied how American law related to corporations has evolved from the 1850s to the present day, my conclusion -- and I believe it is unavoidable -- is that the corporation and the state have grown hand-in-glove, and that the purpose of each is to support the other and that they fundamentally protect their mutual interests. Supposed outrage and conflict between government and big business is, more often than not, a bit of a sock puppet show. Not always, to be sure, but often. Even among bosom buddies, blowups happen. Also, sometimes each has to cave a little to populist pressure, just enough to let the steam out.

To be clear, this is *not* some kind of wacky conspiracy theory, and I see no evidence of a centrally managed, directed conspiracy. I only assume profit motive and rational self-interest.
 
Posted by Adam Masterman (Member # 1142) on :
 
quote:
Originally posted by Seriati:

But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.

What if you seize it, and then pay for it? But far less than its actual value? Assuming that you don't see this as much different than simply seizing it, ethically speaking, think about the power imbalance created by a government policy that explicitly maintains a positive unemployment rate. In economic terms, what happens when the employer is free to shop around, but the employee is bound by need to take whatever is available? Do you think that leads to an equitable distribution of wealth?

One of the things people seem to miss about [Adam] Smith is that, when he said "free", as in "free markets" he wasn't saying about the presence or absence of government. In the Smithian sense, a free exchange was simply one where either party could choose to accept or reject an economic exchange. Both were "free" to pursue their economic self-interest, and this quality allowed for prices to naturally find a level that reflected their actual value to the market at large. The contemporary dumbing-down of this already simple concept is that "free" simply means "less government". But that's absurd. Government "creates the market by eliminating the most obvious obstacles to free exchange, such as me marching into the market with a machine gun and taking everything I want for free. Beyond that, government's role in a Smithian free market is ensuring that parties maintain as much freedom to walk away if the exchange doesn't reflect their perception of value. When people *always* have the freedom to "take their business elsewhere", that's when the economic optimization that Smith describes actually takes place.

Unemployment is a pressure that reduces the freedom of employees to "walk away", and thus increases the bargaining leverage of employers. With a constant, maintained positive unemployment rate, which we've had for a very long time, there is a steady, constant suppression of wages; the lack of freedom in the situation means that the market isn't able to reflect the true value of labor.

While there are many ways to address the issue, all with legitimate pros and cons, its a real issue, and ignorance of this dynamic leads to some very flawed assumptions. "Fair share", in my experience, typically refers to the fact that wages have become almost entirely divorced from their real value, in a way that's obvious to most everyone. Comparing CEO pay, or hedge fund manager compensation, to that of teachers, police officers, manufacturing jobs, and even doctors; its easy to see that our system doesn't distribute based on either merit or social benefit. Redistribution, in this context, is a misnomer; the initial distribution itself is deeply flawed, reflecting neither true market dynamics nor any measure of justice or fairness. So long as this problem remains, doing nothing is an active form of confiscation.
 
Posted by PSRT (Member # 6454) on :
 
quote:
But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.
Yes. So can we agree, then, that any law or system that allows people to pay less than the value of labor to their employees, or removes leverage from those employees so that they can't negotiate in order to receive the actual value of their labor, is a system that is at least as problematic as a system that removes wealth from those employers that puts their earnings below the value of their labor?
 
Posted by KidTokyo (Member # 6601) on :
 
Very well put, Adam.
 
Posted by PSRT (Member # 6454) on :
 
Its really disheartening to post that close to Adam. He's so much more eloquent than I am.
 
Posted by Adam Masterman (Member # 1142) on :
 
quote:
Originally posted by PSRT:
Its really disheartening to post that close to Adam. He's so much more eloquent than I am.

That's very kind, Paul, but the union point you alluded to is cogent as well. Just the need for a union is an indication that market forces are being blocked in the employment market. It means that the market is *already* structured to grant more freedom to employers than employees. A union is an attempt to re-balance the equation through cooperation. Not only should labor organization be considered sacrosanct, but the very existence of unions should be our first clue that we don't really have a free employment market.
 
Posted by Pete at Home (Member # 429) on :
 
I wish that PSRT would elaborate on what he said about the rules by which we allow acquisition of monies. Because I basically agree with him, but would like to see the thesis made clear.

Perhaps this example would help:

quote:
Richard Fuld, head of Lehman Brothers, faced questioning from the U.S. House of Representatives' Committee on Oversight and Government Reform. Rep. Henry Waxman (D-CA) asked: "Your company is now bankrupt, our economy is in crisis, but you get to keep $480* million. I have a very basic question for you, is this fair?"
Funny how some Righties say that the fairness question is all important except when lefties ask it, when it becomes "class warfare." [Confused]

*Fuld had in fact taken about $300 million in pay and bonuses over the past eight years. IMO even though Waxman overshot the number by 50%, the question is valid.

The Rightspeak answer is that Lehman brothers execs had contracts and contracts must be honored. But what of the obligations towards employees and shareholders? If that's the contracts we're giving these people, maybe we need to rewrite the damned contract. Because taxpayers paid through the nose to mitigate the mess created to make the Fulds of this world their golden parachutes. Maybe we need a different deal.
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by Adam Masterman:
[QB]
quote:
Originally posted by Seriati:
But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.

What if you seize it, and then pay for it? But far less than its actual value? Assuming that you don't see this as much different than simply seizing it, ethically speaking, think about the power imbalance created by a government policy that explicitly maintains a positive unemployment rate. In economic terms, what happens when the employer is free to shop around, but the employee is bound by need to take whatever is available? Do you think that leads to an equitable distribution of wealth?
So you equate "seizures," the forcible taking of something, with coercion, with voluntary transactions to try and make this point. With a hand wave, voluntary transactions become practically seizures.

So specifically, if you seize and then pay for it, you're a thief. While there may be times when this excusable for individuals like in an emergency when the owner can't be found, that doesn't change the general rule that this is a theft. Paying anything less than the asking price (not fair value) in a private transaction is still a theft. We do recognize a power for the state to force these transactions on fair value.

I don't however accept your unstated implication that this is what has occurred in the jobs market, there is no seizure, there is no force, there is no version of reality where the imbalance in the US is such to make this argument carry water without proof. Even if it were true that zero unemployment were somehow a good result (and that ignores completely the necessary inhibition of development and inefficient allocation of efforts such would require) it is not true that policies that enable or encourage such a result equate to seizures.
quote:
Assuming that you don't see this as much different than simply seizing it, ethically speaking, think about the power imbalance created by a government policy that explicitly maintains a positive unemployment rate.
Ethically speaking, think about the harm to the overall economy, the institutionalized waste and the inhibition on growth maintaining a policy of zero or negative unemployment causes. Those economies that have attempted it have all been autocratic and generally not successful unless they have an exploitable natural resource. So if you want to discuss specific policies feel free, but I'm not accepting a general case argument on a complex issue.
quote:
In economic terms, what happens when the employer is free to shop around, but the employee is bound by need to take whatever is available?
First, I simply reject that this is the general case in the US. Most employers are local and their ability to shop around is limited, even where it's not, the same ability to hire from a wide area means that potential employees can obtain employment from a wider market of employers. It's a reciprocal fact that you can't have one without the other.

What I see as the real situation is that you have potential employees who DON'T have to take the jobs, and the result is exactly what you'd expect, the employers attempt to tempt them out but only so far before they leave the market by either closing or where possible exporting the jobs to workers who will do them.

There are two components to the value of work, what someone is willing to accept to do it, and what someone is willing to pay. All the theories I've seen you guys express ignore the second component, apparently in the view that there is always more to be paid.
quote:
Do you think that leads to an equitable distribution of wealth?
I don't think you've accurately stated what occurs, so the question doesn't particularly have merit. If the situation you imply still existed (can you point me to the serf based economy you're describing?) then it wouldn't be particularly fair.
quote:
One of the things people seem to miss about [Adam] Smith is that, when he said "free", as in "free markets" he wasn't saying about the presence or absence of government. In the Smithian sense, a free exchange was simply one where either party could choose to accept or reject an economic exchange. Both were "free" to pursue their economic self-interest, and this quality allowed for prices to naturally find a level that reflected their actual value to the market at large. The contemporary dumbing-down of this already simple concept is that "free" simply means "less government". But that's absurd. Government "creates the market by eliminating the most obvious obstacles to free exchange, such as me marching into the market with a machine gun and taking everything I want for free. Beyond that, government's role in a Smithian free market is ensuring that parties maintain as much freedom to walk away if the exchange doesn't reflect their perception of value. When people *always* have the freedom to "take their business elsewhere", that's when the economic optimization that Smith describes actually takes place.
Two things. First I'm not an anarchist so I don't have a problem with the existence of government.

But importantly, the argument about freely entering into transactions DOES NOT mean that we must be free from all considerations. It is not an argument that we must all start from a baseline of not having to work, only that we are free to choose who to work for. Your argument about the employment rate is disingenuous in an economy where the unemployed don't stay unemployed long term other than by choice (which is largely what we had pre-recession). And I have nothing against providing help during recessions when there aren't jobs to be found.
quote:
Unemployment is a pressure that reduces the freedom of employees to "walk away", and thus increases the bargaining leverage of employers. With a constant, maintained positive unemployment rate, which we've had for a very long time, there is a steady, constant suppression of wages; the lack of freedom in the situation means that the market isn't able to reflect the true value of labor.
That's simplistic way to look at unemployment. Unemployment can mean many things, it can mean that there's been growth faster than worker's can be integrated, it can mean that people are optimistic about their prospects and are willing to wait for better opportunities, or it can mean that the situation is hopeless and there are no jobs available. It doesn't in isolation mean that wages will be suppressed, though that could certainly be a result.
quote:
While there are many ways to address the issue, all with legitimate pros and cons, it’s a real issue, and ignorance of this dynamic leads to some very flawed assumptions. "Fair share", in my experience, typically refers to the fact that wages have become almost entirely divorced from their real value, in a way that's obvious to most everyone.
Again that's because you only consider one side of the picture.
quote:
Comparing CEO pay, or hedge fund manager compensation, to that of teachers, police officers, manufacturing jobs, and even doctors; it’s easy to see that our system doesn't distribute based on either merit or social benefit.
If it's so easy to see, why don't you demonstrate it. Is it you assertion that being a teacher is tougher than being a CEO? That it takes more effort, involves more stress, takes more skill? Honestly, that's one of those things people tell themselves that isn't really true. Can just anyone be a good President? A good Senator? Invest a portfolio of billions intelligently? Our system of rewards is based on rewarding people who can do things that others can't do - that's expressly a meritocracy. And generally speaking it’s also a social benefit.
quote:
Redistribution, in this context, is a misnomer; the initial distribution itself is deeply flawed, reflecting neither true market dynamics nor any measure of justice or fairness. So long as this problem remains, doing nothing is an active form of confiscation.
Black is white. We must confiscate, else by our inaction a confiscation will continue.

That was a well written piece, but it's a still a big brother argument. It's accurate to call what you want redistribution, there's nothing fair about what you're proposing. There's no special merit of the have nots that justifies taking from the haves, there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time. If you think the rules have been corrupted, I'm willing to work on them, but the system uncorrupted is far far better than a system that attempts to equalize outcomes without regard to merit.
 
Posted by scifibum (Member # 945) on :
 
Equalizing outcomes would require a complete revolution. Enormous increases in progressive tax rates could be absorbed without coming close to "equalizing outcomes".

Also just want to say: the idea that someone can "merit" or deserve hundreds of millions, or billions of dollars, is absurd. It may be an acceptable side effect of an economic system that is beneficial for other reasons, but it's impossible for that to be what is deserved or merited.

[ December 17, 2013, 12:34 PM: Message edited by: scifibum ]
 
Posted by KidTokyo (Member # 6601) on :
 
Seriati,

I'm sure Adam is capable of defending his post and will do so, but I'd like to make a few quick points myself.

quote:
So you equate "seizures," the forcible taking of something, with coercion, with voluntary transactions to try and make this point. With a hand wave, voluntary transactions become practically seizures.
I would argue that the term "voluntary transaction" is the ultimate handwave. Voluntary transactions are, in no way, an indicator that one is at liberty, free of coercion, or that the outcome is just. Even in a maximum security prison, one may engage in a voluntary transaction. One may also do so in a totalitarian regime. Choices do not indicate the presence of freedom.

quote:
I don't however accept your unstated implication that this is what has occurred in the jobs market, there is no seizure, there is no force, there is no version of reality where the imbalance in the US is such to make this argument carry water without proof.
This is simply not true. Labor, land, and resources are seized on a routine basis. We kill for our oil, we prop up dictatorial regimes for economic reasons, and we bully weaker nations into lowering import tariffs so that we can dump subsidized products on their markets (putting their farmers out of work) and buy cheap labor where union rights are forcibly quashed (putting our factory workers out of a job). Nothing "voluntary" has occurred here. That is theft.

quote:
Is it you assertion that being a teacher is tougher than being a CEO? That it takes more effort, involves more stress, takes more skill? Honestly, that's one of those things people tell themselves that isn't really true. Can just anyone be a good President? A good Senator? Invest a portfolio of billions intelligently? Our system of rewards is based on rewarding people who can do things that others can't do - that's expressly a meritocracy.
I don't think all people are equally able, but it is very popular nowadays to vastly overestimate the "genius" of CEOs, managers, and bankers. These roles do not involved abstract ideas or esoteric skill sets. The main barriers to entry to these roles is lack of interest, lack of stamina, and social privilege (meaning not just wealth but the ability to read personality nuances carefully -- an ability that great businessmen share with successful criminals and actors).

quote:
there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time.
That is an astonishing statement. There is an abundance of evidence. There is so much evidence, in fact, that I am wondering where you would look to not find it.

[ December 17, 2013, 01:09 PM: Message edited by: KidTokyo ]
 
Posted by LetterRip (Member # 310) on :
 
Seriati,

quote:
If it's so easy to see, why don't you demonstrate it. Is it you assertion that being a teacher is tougher than being a CEO? That it takes more effort, involves more stress, takes more skill?
For many CEOs, teachers definitely have it tougher. Most of their results are independent of the CEO. I think a large percentage of the population (10-20%) might be able to outperform many CEOs.

quote:
Honestly, that's one of those things people tell themselves that isn't really true. Can just anyone be a good President?
I think many individuals (10% of the population) in the US would make better Presidents than most of the individuals who have been VP or candidates for VP (Ie Biden and Palin), and for many of our historical Presidents.

quote:
A good Senator?
Senators in general seem to be awful. A significant subset of the population (20%?) can likely perform the job of Senator or Congressman better than currently sitting senators/congressman.

quote:
Invest a portfolio of billions intelligently?
Many portfollio managers are outperformed by chance. Much of the 'success' we hear about is based on having a huge number of portfolios - and then only reporting on the lucky portfolios. (Ie if you want to be a brilliant portfolio manager - create 100 random portfolios with high volatility, and any that go down for the year, drop those and keep the remainder. After 5 years you'll have 3 portfolios with positive returns averaging way above the market for 5 years in a row.)

Others of course profit via insider trading or via lawful equivalents.

This isn't to say that there is no skill. There seem to be some managers with definite skill, but they are a small subset of the total.

A quote for you,

quote:
The surprising fact is that, on the whole, these active managers, who have spent years accumulating expertise, are paid handsome salaries, and have access to boat-loads of information, still under-perform simple indices year after year. In other words, they are unsuccessful in picking stocks that perform better than the market as a whole.
http://momanddadmoney.com/the-experts-cant-pick-stocks-can-you/

Have a look at 'report 1'

http://www.spindices.com/documents/spiva/spiva-us-mid-year-2013.pdf

quote:
Our system of rewards is based on rewarding people who can do things that others can't do - that's expressly a meritocracy.
No it really isn't even close to a meritocracy. Jobs are rewarded primarily based on connections not merit, and many attributed successess and failures are primarily based on chance, not merit - or based on merit of individuals whom the individual credited with the success or failure had nothing to do with.
 
Posted by KidTokyo (Member # 6601) on :
 
I seem to recall reading about a guy who let his five-year old pick stock investments, with the outcome that the subsequent "portfolio" performed on par with another assembled by an experienced adviser.

I'm starting to think that investment banking is similar to astrology.
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by KidTokyo:
I would argue that the term "voluntary transaction" is the ultimate handwave.

You think there is actual coercion in employment? Where are the chain gangs? Is it your view that when Adam Smith was discussing how self interest leads to society's gain, that he meant we should take from the rich and redistribute to the poor to ensure that no one has to actually work to acheive their betterment? I honestly, don't see it.

Understanding that not everyone has equal resources does not mean that there is coercion in any specific employment relationship.
quote:
Voluntary transactions are, in no way, an indicator that one is at liberty, free of coercion, or that the outcome is just.
They don't have to indicate any of that, only that you are capable of making a choice in pursuing them. We don't expect that private transactions be "just" to any greater extent than they be a choice you are free to make. Adam's argument is that notwithstanding that there is no coercion we much impute such coercion to the available employment.
quote:
Even in a maximum security prison, one may engage in a voluntary transaction. One may also do so in a totalitarian regime. Choices do not indicate the presence of freedom.
And why do you think that's relevant?
quote:
quote:
I don't however accept your unstated implication that this is what has occurred in the jobs market, there is no seizure, there is no force, there is no version of reality where the imbalance in the US is such to make this argument carry water without proof.
This is simply not true. Labor, land, and resources are seized on a routine basis. We kill for our oil, we prop up dictatorial regimes for economic reasons, and we bully weaker nations into lowering import tariffs so that we can dump subsidized products on their markets (putting their farmers out of work) and buy cheap labor where union rights are forcibly quashed (putting our factory workers out of a job). Nothing "voluntary" has occurred here. That is theft.
We're talking about the US jobs market. You see people being killed for oil? and dictorial regimes here? A global discussion is going to look very different. Honestly, if we're talking global then by Adam's theory, the rest of the world is entitled to end the way of life of all American's because we've "coercively stolen" their efforts for years. There's lots of discussion possibilities here, but I think it'll help to restrict it a bit at least short term.
quote:
I don't think all people are equally able, but it is very popular nowadays to vastly overestimate the "genius" of CEOs, managers, and bankers. These roles do not involved abstract ideas or esoteric skill sets. The main barriers to entry to these roles is lack of interest, lack of stamina, and social privilege (meaning not just wealth but the ability to read personality nuances carefully -- an ability that great businessmen share with successful criminals and actors).
Well again "CEO's" is a silly term to use, every small company has one, but you tend to only mean the creme de la creme that lead major corporations. I can't believe that anyone can be involved with a major corporation and believe that the role of a CEO is something that there are lots of people that can do well. Most CEO's are over their heads, and they are generally people that do in fact have idenifiable specific skill sets that are not fully common in the population. Just like not everyone makes a good sales man, or a good doctor, not everyone makes a good head of a business.
quote:
quote:
there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time.
That is an astonishing statement. There is an abundance of evidence. There is so much evidence, in fact, that I am wondering where you would look to not find it.
If you look around in your personal life, how many of your friends are in exactly the same financial situation as their parents. At your high school reunion has no one gone up or down in the world?

The fact that rich people exist is not evidence that the system is set up to favor them. Dynasties, caste systems, zero social mobility are evidence of that. So what's your evidence?

LetterRip, your post largely boils down to an anti-exceptionalism assertion. I guess you have to believe that it's chance not talent that lets people get ahead. I don't see it. I've known a lot of people that got ahead, and other than one who won the lottery (literally) they all were driven and talented. Now not all suceeded, but there's a definite correlation.

And I love the assertions about stock picking by children. You're correct if you get enough random pickers together one of them will beat all the professionals in the short term, but that's not a decent argument when their average is well below. Not to mention there are entire categories of investment that have nothing to do with the speculation game that is the current stock market, and no random picker even has a chance in those fields.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
You think there is actual coercion in employment?
I think there's loads of coercion in employment, yes. There's no way that your typical worker would put up with his boss' bull**** if he didn't feel that he needed the job.

quote:
Dynasties, caste systems, zero social mobility are evidence of that.
America has pretty terrible social mobility, actually.

quote:
I've known a lot of people that got ahead, and other than one who won the lottery (literally) they all were driven and talented.
In my anecdotal experience, about half the people who "got ahead" were driven and talented, and about a third were singularly untalented. All of the ones who wound up better off than they were at birth, notably, benefited enormously from some lucky event or another over which they had little to no control, or literally the accident of their birth (like, for example, being given a job by their parents.)
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by TomDavidson:
I think there's loads of coercion in employment, yes. There's no way that your typical worker would put up with his boss' bull**** if he didn't feel that he needed the job.

Needing a job and not being willing to put in the effort to switch jobs, is not coercion. Aren't you usually the one insisting on some undo linguistic precision, yet here anything at all - even a lack of actual force - is now coercion?
 
Posted by TomDavidson (Member # 99) on :
 
quote:
Needing a job and not being willing to put in the effort to switch jobs, is not coercion.
Do you believe that everyone currently unemployed is simply lacking in effort? Until very recently, for example, someone switching jobs could well have risked losing insurance for themselves and any ill family members -- and there's no guarantee that the new job would necessarily be any better. Consider the plight of someone who's gone into game design but believes strongly that time spent with his family is important; he will have to choke back his dedication to that principle as long as he stays in the industry, not because ridiculous hours are required or necessary for game development but because all the employers have produced an environment where workers have no better options without leaving the industry altogether.

And that's just a frivolous example. God help you if you start looking into industries like construction or mining or restaurant work, where employers have pretty much all the power unless their employees somehow manage to unionize.

quote:
Aren't you usually the one insisting on some undo linguistic precision, yet here anything at all - even a lack of actual force - is now coercion?
I've actually had precisely this conversation on this very site -- and, yes, social coercion is also coercion. Consider the threat of excommunication or shunning: it's clearly coercive, even though no force is applied.

[ December 17, 2013, 03:46 PM: Message edited by: TomDavidson ]
 
Posted by Seriati (Member # 2266) on :
 
Lol. What's stopping your video game designer from working for himself? For getting together with other mistreated employees and making their own company? Good gods could you have a picked a field that has more potential for individual skill to shine?

What's stopping them is capital and risk, they either don't have the first or they don't want the second. So they look to other people to employ them. It's not like the skill set they have isn't usuable in any number of other ventures, why insist only on working in an industry that has such unreasonable demands? There's absolutely nothing coercive about having to pay your dues if you want to get ahead in a specific industry.

And you qualified it, "social coercion," specifically to show that it's an analagous situation, and not directly the same thing. You're not entitled to be free of all strings.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
And you qualified it, "social coercion," specifically to show that it's an analagous situation, and not directly the same thing.
No, it's the same thing. It's a subset.
You have physical coercion and social coercion. They are both examples of coercion.

quote:
What's stopping them is capital and risk, they either don't have the first or they don't want the second.
Very true. In the same way, what's stopping you from overthrowing the federal government and putting one in place that you prefer?
 
Posted by PSRT (Member # 6454) on :
 
quote:
there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time
Ok. You don't live in reality. Fair enough.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
You think there is actual coercion in employment? Where are the chain gangs?
Ditto all the points Tom made.

More broadly, owners have used violence and coercion throughout history right up to the present to keep laborers from claiming rights. When our economy was less international, you saw plenty of violence against unions and anyone who tried to organize -- much of the violence state sanctioned. There were also very powerful private organizations hired for this purpose (Pinkertons, for example). Similar tactics are applied today, but they are cross-border.

Nowadays, domestically, a softer but equally effective approach is taken -- own the news media, control the narrative, control what kinds of social policies are discussed on both sides of the political spectrum, and humiliate "radicals" both left and right who argue for something that deviates from corporate rule. Of course, leftists still get beaten and arrested from time to time.

As a result, Orwellian constructs like "free trade" agreements can be pushed through. Using one's authority to lie to the public about what a policy is and what it will do is absolutely a form of coercion.

quote:
We're talking about the US jobs market. You see people being killed for oil? and dictorial regimes here? A global discussion is going to look very different.
It is impossible to separate domestic from international in the present day. Almost every thing in your home was manufactured overseas, with parts and resources crossing at least a dozen borders, by companies that function internationally.

quote:
Honestly, if we're talking global then by Adam's theory, the rest of the world is entitled to end the way of life of all American's because we've "coercively stolen" their efforts for years.
They certainly are entitled to see an end to our bullying.

quote:
Well again "CEO's" is a silly term to use, every small company has one, but you tend to only mean the creme de la creme that lead major corporations. I can't believe that anyone can be involved with a major corporation and believe that the role of a CEO is something that there are lots of people that can do well. Most CEO's are over their heads, and they are generally people that do in fact have idenifiable specific skill sets that are not fully common in the population.
I didn't say everyone could do it, just that the abilities are neither rare nor particularly special.

quote:
If you look around in your personal life, how many of your friends are in exactly the same financial situation as their parents.
Almost all of them. To be clear, movement from middle class to upper middle class doesn't really signify much to me, nor should it.

quote:
The fact that rich people exist is not evidence that the system is set up to favor them. Dynasties, caste systems, zero social mobility are evidence of that. So what's your evidence?
The fact that most of our politicians come from the same institutions -- educational, business, and financial -- as the wealthiest business interests. The fact that no financial law gets passed that the financial sector does not approve of or have a major hand in steering. That no presidential candidate can run for office without the backing of wall street. To name a few things.

[ December 17, 2013, 05:21 PM: Message edited by: KidTokyo ]
 
Posted by Adam Masterman (Member # 1142) on :
 
quote:
Originally posted by Seriati:
]
Paying anything less than the asking price (not fair value) in a private transaction is still a theft. We do recognize a power for the state to force these transactions on fair value.

Lets not pretend that "asking price" has any real validity if we ignore coercion: I'm pretty sure I could reduce an "asking price" by holding a gun to the seller's head.

Also, note that I was arguing for market dynamics to create fair values, not government force. The government's job in the market is to *remove* coercion, and protect against it.

quote:


I don't however accept your unstated implication that this is what has occurred in the jobs market, there is no seizure, there is no force, there is no version of reality where the imbalance in the US is such to make this argument carry water without proof. Even if it were true that zero unemployment were somehow a good result (and that ignores completely the necessary inhibition of development and inefficient allocation of efforts such would require) it is not true that policies that enable or encourage such a result equate to seizures.

First of all, full employment isn't a hastily assumed 0% unemployment rate; its an absence of a labor surplus (some economists define this as a market with an equal amount of unemployed persons and job vacancies, which works for me, and is obviously not 0% unemployment).

That said, positive unemployment rates (rates above this optimum) create a labor surplus (more jobs than vacancies), and surpluses drive down prices (wages are prices for labor). That's pretty basic economics. Now, when a government, over a long period of time, artificially maintains a labor surplus, its is distorting the market. More specifically, it is actively suppressing wages by maintaining the labor surplus. This is not a free market; its a distorted market rigged to favor employers over employees. And this distortion creates a transfer of wealth from laborers to employers, every bit as much as if I used a weapon to intimidate a seller into dropping his price for me.

quote:
First, I simply reject that this is the general case in the US. Most employers are local and their ability to shop around is limited, even where it's not, the same ability to hire from a wide area means that potential employees can obtain employment from a wider market of employers. It's a reciprocal fact that you can't have one without the other.
You don't think there is a labor surplus in the U.S.? [Confused] By "shop around", I don't mean that a business can look further afield than job seekers, I mean that more people want jobs than employers have positions to fill. This is true whether you look very locally, or nation wide. When you have two people competing for the same job, they offer more labor for less compensation in order to win the scarce commodity (the job). To the constant, ongoing benefit of the employer.

quote:


What I see as the real situation is that you have potential employees who DON'T have to take the jobs, and the result is exactly what you'd expect, the employers attempt to tempt them out but only so far before they leave the market by either closing or where possible exporting the jobs to workers who will do them.

There are two components to the value of work, what someone is willing to accept to do it, and what someone is willing to pay. All the theories I've seen you guys express ignore the second component, apparently in the view that there is always more to be paid.

Actually, I was making a pure Smithian argument, which takes both into equal account. In a labor scarcity, wages are inflated. But all else being equal, markets will tend to level themselves. Higher wages draws more labor, which counters the scarcity. The problem is when either surplus or scarcity is *artificially* maintained. The market can't level, and prices (wages, in this example) drift further and further from their true value. We have had an explicit policy in this country to keep unemployment several points higher than optimal; its part of the mechanism used to tightly control inflation, and it also gives corporate owners an unending supply of underpriced labor.

Interesting that you brought up "going somewhere else", as this makes my point exactly. If you go back to the turn of the previous century, labor conditions were obscene, and tremendously high unemployment basically allowed near-slavery working conditions in many industries. Upton Sincair, unfortunately, did not really exaggerate in his novel The Jungle; he only highlighted. The birth of the Progressive movement and a long century of struggle have made unbelievable progress, but the remnants of corporate/government mercantilism are very much alive, and labor surplus is a good way to understand how it works. While the artificially maintained domestic unemployment rate is one factor, much more important was the nearly unopposed victory of corporations to tap, without cost, vast reserves of foreign labor through the globalization of trade. Domestic unemployment rates became nearly a non-issue in terms of labor surplus in the 1990s, as companies simply outsourced their entire production lines to third-world countries. While you had a few vocal groups protesting this colossal corporate money grab, grungy college students and old hippies holding signs in Seattle, the whole thing was accomplished with a democrat president, a republican legislature, and a cheerleading mainstream media. When Kid mentioned corporate/government collusion, he wasn't kidding; this was the single biggest issue in our economy in modern history, and it simply had no opposition in government or the media. Not merely globalization of trade, but structuring it specifically to massively inflate the labor pool to the direct detriment of domestic workers. They did an end run around a century of slow, careful advances in labor rights, and not only have we not recovered, its getting worse.

quote:
Two things. First I'm not an anarchist so I don't have a problem with the existence of government.

But importantly, the argument about freely entering into transactions DOES NOT mean that we must be free from all considerations. It is not an argument that we must all start from a baseline of not having to work, only that we are free to choose who to work for. Your argument about the employment rate is disingenuous in an economy where the unemployed don't stay unemployed long term other than by choice (which is largely what we had pre-recession). And I have nothing against providing help during recessions when there aren't jobs to be found.

From a market perspective, other considerations are irrelevant (or, rather, periphery). The only relevant question is: can this person decline the exchange if it fails to reflect an equal exchange of values? When the answer is no, due to looming debt, poverty, job scarcity, and/or other obligations, then the exchange will not reflect a mutual agreement of values. When those "incorrect" exchanges aggregate, the market produces false values on a wide scale. Its easy to see the imbalance when you consider that its essentially unheard of for a company to hire someone they considered unsuitable, simply because they *needed* an employee at that moment. There are long-term market forces that might push them to need to grow their labor supply, but never is an individual hiring example coerced to any degree. On the flip side, millions of people take crappy jobs because they have to. This is not a free market; indeed, its a deep mis-understanding of what "free market" means.

quote:
If it's so easy to see, why don't you demonstrate it. Is it you assertion that being a teacher is tougher than being a CEO? That it takes more effort, involves more stress, takes more skill? Honestly, that's one of those things people tell themselves that isn't really true. Can just anyone be a good President? A good Senator? Invest a portfolio of billions intelligently? Our system of rewards is based on rewarding people who can do things that others can't do - that's expressly a meritocracy. And generally speaking it’s also a social benefit.

Its a question of values, ultimately, so people can reasonably disagree. But currently, our economy rewards money shufflers like Mitt Romney as more valuable than *hundreds* of doctors, much less teachers, firefighters, coal miners or auto workers. Even if we could grant that a hedge fund manager's labor was worth more to society than a doctor's (which I don't), can anyone reasonably claim its that many orders of magnitude more valuable? For most people, thats an absurd statement, as is the idea that our economy even remotely resembles a meritocracy. Try this experiment: grab your most conservative friend, and ask him what the most important/valuable role is in our society. Spend ten or fifteen minutes with him, and go over all the basic units of our society: government, health care, civil service, manufacturing, entertainment, etc. Find out what he considers the most indispensable, and make a ranked list. Heck, you can even factor in how difficult he thinks the job is, and how rare it would be to find a person with the requisite skills. Then, compare his list to the actual breakdown of how people are rewarded in our economy. Think they'll match? Even be close? Care to wager? [Razz]

quote:


That was a well written piece, but it's a still a big brother argument.

With all due respect, this is exactly the dumbing-down I already mentioned. The big-government/small-government tug of war is a distraction from what I'm talking about. Indeed, government has been absolutely instrumental in blocking the healthy functioning of a free market relative to labor. Its frustrating to argue for good governance and have that mistaken for an argument for more governance, but that seems to be where the debate in this country has slithered to in this last decade. More's the pity.
 
Posted by Greg Davidson (Member # 3377) on :
 
quote:
Seriati: Is it your view that when Adam Smith was discussing how self interest leads to society's gain, that he meant we should take from the rich and redistribute to the poor to ensure that no one has to actually work to acheive their betterment? I honestly, don't see it.
Seriati, have you read Adam Smith? Because he was pretty clear about the actions of labor and management:

quote:
"We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate [...] Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy till the moment of execution; and when the workmen yield, as they sometimes do without resistance, though severely felt by them, they are never heard of by other people"
Smith goes on to draw the contrast when it is business working for their own interests:

quote:
"the masters [...] never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen."
And these are not minor or isolated comments; see his comments on poverty and health

quote:
"poverty, though it does not prevent the generation, is extremely unfavourable to the rearing of children [...] It is not uncommon [...] in the Highlands of Scotland for a mother who has borne twenty children not to have two alive [...] In some places one half the children born die before they are four years of age; in many places before they are seven; and in almost all places before they are nine or ten. This great mortality, however, will every where be found chiefly among the children of the common people, who cannot afford to tend them with the same care as those of better station."[11]


[ December 17, 2013, 08:50 PM: Message edited by: Greg Davidson ]
 
Posted by Adam Masterman (Member # 1142) on :
 
If Smith were read as often as he was invoked, the world would be a better place (the same is true of Marx, as well).
 
Posted by Greg Davidson (Member # 3377) on :
 
And in fact, Smith and Marx had some surprising areas of overlap. I remember a list one time of about ten quotes, half from Marx and half from Smith, and it really was hard to tell who had written which.
 
Posted by TomDavidson (Member # 99) on :
 
Coercion: http://www.smbc-comics.com/?id=3210#comic
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by PSRT:
quote:
there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time
Ok. You don't live in reality. Fair enough.
It was a bigger point than that PSRT, "There's no special merit of the have nots that justifies taking from the haves, there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time. If you think the rules have been corrupted, I'm willing to work on them, but the system uncorrupted is far far better than a system that attempts to equalize outcomes without regard to merit."
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by TomDavidson:
quote:
And you qualified it, "social coercion," specifically to show that it's an analagous situation, and not directly the same thing.
No, it's the same thing. It's a subset.
You have physical coercion and social coercion. They are both examples of coercion.

And even then its still a gross exagerration to claim that the job market is coercive without actual threats existing. You can draw an analogy if you want and say it's "like coercion", but that's all it is. Because you know its exactly like being cut off from your entire community and being made an outcast - which is what shunning is.
quote:
quote:
What's stopping them is capital and risk, they either don't have the first or they don't want the second.
Very true. In the same way, what's stopping you from overthrowing the federal government and putting one in place that you prefer?
Capacity, belief in principals that the ends do not justify the means.

Are you seriously claiming that forming a business is like over-throwing a government? How many businesses are founded every year again?
 
Posted by TomDavidson (Member # 99) on :
 
quote:
And even then its still a gross exagerration to claim that the job market is coercive without actual threats existing.
The loss of your job is not a threat?

quote:
Are you seriously claiming that forming a business is like over-throwing a government?
Rather, I'm claiming it's a matter of degree. After all, surely it's even easier to reform a game business from the inside by working for years to achieve a lead position, then changing its policies, than to come by the necessary capital to start one. But we don't see that happen all that often, either.

If you threaten to throw someone into a cage full of angry bears unless they agree to sew your shirts, it's true that it's possible for someone to not only survive but prosper in a cage full of angry bears. A truly determined, capable person might even emerge with pelts and bear meat and a story worth the telling. So of course there's no coercion in that.
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by Adam Masterman:
quote:
Originally posted by Seriati:
Paying anything less than the asking price (not fair value) in a private transaction is still a theft. We do recognize a power for the state to force these transactions on fair value.[/qb]

Lets not pretend that "asking price" has any real validity if we ignore coercion: I'm pretty sure I could reduce an "asking price" by holding a gun to the seller's head.
What are you talking about? You're not required to pay an asking price, you're just disallowed from taking what I have and not paying it. I don't believe you think differently either, or would it be okay if I come over and purchase your car, or your house for what I choose to pay?

Simply put, the only coercion in the model you're citing is that which would be necessary to force a deal at less than the asking price. Now if you want to limit it to a unique good, that is vital for survival you may have a point, and we have laws specifically to address that. But employment is not a unique good, and in this country its not even necessary for survival so you don't have much of a point here.
quote:
Also, note that I was arguing for market dynamics to create fair values, not government force. The government's job in the market is to *remove* coercion, and protect against it.
I agree. I don't think that's the logical result of your position though.
quote:
First of all, full employment isn't a hastily assumed 0% unemployment rate; its an absence of a labor surplus (some economists define this as a market with an equal amount of unemployed persons and job vacancies, which works for me, and is obviously not 0% unemployment).
First of all, an absence of a labor surplus also has issues and inhibits growth, though I agree having 3 people available and 10 vital jobs do get done is going to result in those 3 getting more money. But that's no less a "coercive" situation than the inverse, just flips who holds the power.
quote:
That said, positive unemployment rates (rates above this optimum) create a labor surplus (more jobs than vacancies), and surpluses drive down prices (wages are prices for labor).
Maybe it would help to specifically lay out what policies you believe are designed to maintain a positive unemployment rate. It's my view that things in abstract are a lot cleaner seeming than things that have been practically implemented (which often serve dozens of masters and at conflicting purposes). It's not enough to me, that you establish results (even if I believed you had) if you're arguing intent.
quote:
That's pretty basic economics.
But it's also ignoring that the rate is a composite, and that both in regions and in industries its contra-indicated, and completely skips why we might want that sort of result to encourage movement towards other opportunities. It also ignores that we have official citizens sitting unemployed, while we have off the books workers doing jobs, and the implications that has on whether or not there really is a true labor surplus and who's holding the power if staying unemployed is preferable to doing jobs that others are doing willingly.
quote:
Now, when a government, over a long period of time, artificially maintains a labor surplus, its is distorting the market.
True, now demonstrate this occurs, and demonstrate that the redistributionist policies you're advocating, which will supress private business growth, are a better solution than encouraging more economic development.
quote:
And this distortion creates a transfer of wealth from laborers to employers, every bit as much as if I used a weapon to intimidate a seller into dropping his price for me.
Actually, not even remotely as much. Employer's gain wealth from having jobs done as a return on capital, but each employee is also gaining wealth from performing the job, this is NOT a zero sum game. If all you're arguing is that the employee piece of the allocation should be bigger, fine, there's lots of good reasons for a business to operate that way. However, it's clearly evident that in a globabl market place there's a limit to how much this can work before the US product is priced out of the market. Are you advocating tariffs to go with this?
quote:
quote:
First, I simply reject that this is the general case in the US. Most employers are local and their ability to shop around is limited, even where it's not, the same ability to hire from a wide area means that potential employees can obtain employment from a wider market of employers. It's a reciprocal fact that you can't have one without the other.
You don't think there is a labor surplus in the U.S.? [Confused] By "shop around", I don't mean that a business can look further afield than job seekers, I mean that more people want jobs than employers have positions to fill. This is true whether you look very locally, or nation wide. When you have two people competing for the same job, they offer more labor for less compensation in order to win the scarce commodity (the job). To the constant, ongoing benefit of the employer.
This is actually an interesting question. I do think there is a labor suplus in the US, however, I think that's the result of the overall lack of economic growth. It was not the case before this recession. It was rare for an employable person to be out of work for any length of time. Accordingly, the best plan is to encourage the economy, and slapping on anti-growth redistribution policies is a double hit on that. It directly reduces assets available for growth (by seizing them and by encouraging inefficient protective behaviors) and disincentivises potential employees from taking work or even starting their own businesses.
quote:
The problem is when either surplus or scarcity is *artificially* maintained.
This is the root of our disagreement. I don't believe you've adequately demonstated either this proposition, or its one directional impact in a multi-consideration environment.

I agree, there are academic impacts that a policy like this has (generally it takes a comparative extremes for this to really become evident), but they can be good or bad.

And since I reject your "coercion" argument, I'm not seeing a validity to your claim that labor has been priced unfairly.
quote:
Not merely globalization of trade, but structuring it specifically to massively inflate the labor pool to the direct detriment of domestic workers. They did an end run around a century of slow, careful advances in labor rights, and not only have we not recovered, its getting worse.
While I agree with you that this situation was borne in the abusive and coercive practices by management that did happen, what you describe is only a return to a more natural status quo than the artificial and coercive results that we got from big labor. And just to be clear the NLRB is an actual coercive force, and it did and has warped the free exchange between labor and management.

There's no question it did this initally to restore a balance that management had broken through it's own coercive practices, but then it went too far. The results are easy to see when you throw it onto a global stage. But even if you write that off to "properly balanced US companies (notwithstanding the overt coercion in our system)" not being able to compete with criminally management coerced companies in other countries, we're still left with a market where ever more jobs can be automated. We are not too far from where even third world labor will be more expensive than machine produced goods.

At some point we may have to adopt your idea about creating a permanent dole, but it won't be to undo some invisible coercion, rather it will because no one's labor will actually be worth anything making it virtually impossible to actually work.
quote:
From a market perspective, other considerations are irrelevant (or, rather, periphery). The only relevant question is: can this person decline the exchange if it fails to reflect an equal exchange of values? When the answer is no, due to looming debt, poverty, job scarcity, and/or other obligations, then the exchange will not reflect a mutual agreement of values.
The answer is almost never no, and even where it is, that's only a short term answer. Nothing prevents any person from working to get a better job while they take a job "to pay the bills."

Frankly, this is getting silly. Even highly compensated people work because they have to pay their bills.
quote:
When those "incorrect" exchanges aggregate, the market produces false values on a wide scale.
There is nothing "incorrect" about taking a job that allows you to pay your bills, nor is there any coercion inherent in having to be productive to receive compensation. What would be "incorrect" is a system that encourages leeching - ie recieving benefit without contributing to the collective good - by not requiring any effort at being productive to share the results of the communities production. Or to put it more simply, why don't we all move in with you, you can work and the rest of us will watch your TV and eat your food.
quote:
Its easy to see the imbalance when you consider that its essentially unheard of for a company to hire someone they considered unsuitable, simply because they *needed* an employee at that moment.
Have you never worked in fast food? This happens literally every day.
quote:
Its a question of values, ultimately, so people can reasonably disagree. But currently, our economy rewards money shufflers like Mitt Romney as more valuable than *hundreds* of doctors, much less teachers, firefighters, coal miners or auto workers. Even if we could grant that a hedge fund manager's labor was worth more to society than a doctor's (which I don't), can anyone reasonably claim its that many orders of magnitude more valuable?
I can't count how many retired people I know who live better lives when thier "money shufflers" are doing well than when they are not. Real quality of life type items, vacations, dinners out, gifts to family. In order for "money shufflers" to be paid they have to working for others (if they just invest their own resources its not clear what you're beef would be).
quote:
For most people, thats an absurd statement, as is the idea that our economy even remotely resembles a meritocracy.
Most people dislike everyone else's lawyer too. So what. Fact is you don't know anyone who has investments who want them to lose money do you? I've known plenty of people who'd go to the free clinic rather than pay for a top doctor, do you know anyone who want a substandard investment manager because he works for less?
quote:
Try this experiment:
why? I've already repeatedly asserted that people don't place the proper value on certain tasks because they undervalue how hard they are. Similarly they overvalue other tasks (like being a teacher) because they steadfastly refuse to consider how rewarding they are in ways other than monetarily.
 
Posted by KidTokyo (Member # 6601) on :
 
Seriati,

Do you understand that a limited-liability corporation quite literally cannot exist without the state?

Do you understand that a large, complex corporate entity cannot exist without an equally complex set of state regulations?

Do you understand the consequences of limited liability?

Until we are on the same page with the above questions, I think you and others will continue to talk past one another.

I don't think anyone here is proposing that we should "equalize outcomes without regard to merit."

I think we disagree as to how an actual meritocracy would function.

[ December 18, 2013, 01:14 PM: Message edited by: KidTokyo ]
 
Posted by Seriati (Member # 2266) on :
 
KidTokyo,

Yes. Yes. Yes.

Still think you're overplaying the corporatist angle on this.
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by TomDavidson:
quote:
And even then its still a gross exagerration to claim that the job market is coercive without actual threats existing.
The loss of your job is not a threat?
It can be a threat, it's still not coercion, anymore than all marriages are coercion because your wife can divorce you (though they may feel that way sometime).

The threat of being fired is not enough to allow a boss to get away with literally everything, people quit jobs all the time. People sue their former employers all the time. People make thier boss fire them and collect unemployment all the time.

Is it your argument that employers are not entitled to the same free association principals as employees? That they are not entitled to end employment? That's kind of a bizarre philosophy, but I guess it makes sense if you see work itself as an entitlement.
quote:
Rather, I'm claiming it's a matter of degree. After all, surely it's even easier to reform a game business from the inside by working for years to achieve a lead position, then changing its policies, than to come by the necessary capital to start one. But we don't see that happen all that often, either.
Actually for a game company, I think its easier to create one. There are tons of start up game companies, and right now its a particular hot time with the comparative ease of getting into the app market.
quote:
If you threaten to throw someone into a cage full of angry bears unless they agree to sew your shirts, it's true that it's possible for someone to not only survive but prosper in a cage full of angry bears. A truly determined, capable person might even emerge with pelts and bear meat and a story worth the telling. So of course there's no coercion in that.
You do realize that there is literally physical violence in your story, hence coercion. Why is it everytime you need an example you devolve to actually coercive ones? Oh yes, because the point is that what you're arguing is "like coercion" not actually coercion (which is fairly easy to identify).
 
Posted by KidTokyo (Member # 6601) on :
 
If you understand those three factors, then how can you argue that there is no state-sanctioned privilege granted to powerful business entities? Why do you object to policies that correct for the inherent market distortion and/or to policies which level the hierarchy?

"Overplaying"? The largest businesses have almost complete command over our legislators. We are living in their world.

Wouldn't we be better off in a world where everyone owned their property and controlled their own working life, rather than a semi-feudal system wherein the great majority mistake debt for ownership?

[ December 18, 2013, 01:38 PM: Message edited by: KidTokyo ]
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by KidTokyo:
[QB] If you understand the those three factors, then how can you argue that there is no state-sanctioned privilege granted to powerful business entities?

I didn't argue that. I don't think its relevant to this discussion.

I think you're reading way past what the 3 factors you list actually do.
quote:
Why do you object to policies that correct for the inherent distortion and/or to policies which level the hierarchy?
Because I don't see it as sinister? The first 2 factors you listed are a truism, corporations are created and not natural entities so really the only relevant one is the third.

Limited liability is not - in my view - a particularly great evil. It certainly can be abused, and piercing the corporate viel is notoriously more difficult than perhaps it should be. But the concept itself is directly responsible for encouraging a massive amount of investment that has generated a massive amount of growth and opportunity.
quote:
"Overplaying"? The businesses have almost complete command over our legislators. We are living in their world.
Literally everyone lives in a world where they are governed by others, with the possible exception of those that purported have created micro-nations. Our legislators are influenced by rich people who donate to them. You know what though, they're also influenced by groups that are passionate about voting, like the NRA or the elderly, or volunteering like big labor.

I literally see no reason to believe that getting rid of corporations would have the least impact on the amount of influence people engaging in big business have.
 
Posted by Mynnion (Member # 5287) on :
 
I have been following this thread with interest and am still waiting for a definition to "fair share." There has been talk about the haves and have nots. Who are they?

Wall street is set for another record year and the top investors and CEOs continue to see their wealth increase while the middle and lower class sees wealth decrease.

Profitable small businesses are being bought out by investor groups that slash wages and cut benefits to improve their bottom line. In some cases destroying the companies they have purchased after raiding them of value.

This practice provides no benefit to society. It stifles real growth since R & D also gets scaled back. Reduces the income of the hundreds or thousands solely to enrich a few.

Back to the original question. What is a persons fair share?
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
I didn't argue that. I don't think its relevant to this discussion.

I think you're reading way past what the 3 factors you list actually do.

When a corporation "goes public" its income and rate of growth can increase by ten-fold or a hundred-fold. Because of this state-enforced economic privilege, it drive smaller entities out of business quite easily, and thereby reduce wages.

You would not argue that the state does not have coercive power, right?

You agree that corporate privileges (like limited liability, and many other aspects of corporate structuring) are 1) why corporations can become drastically more powerful than they otherwise would and 2) that these privileges are state created and enforced.

And yet you claim there is no coercive influence on an individual worker's right to bargain. That doesn't really seem consistent, does it?

Are you aware of the history of the corporation in the United States? Familiar with the term "race to the bottom"?

quote:
Limited liability is not - in my view - a particularly great evil.
I don't think it's evil at all. It can be useful. The evil is in ignoring what it is and what it does, and the consequences. You wouldn't give the military a vast armory and then fail to subject it to civilian control and review would you? The consequences would be evil, even if the military as a generally useful entity is not.

quote:
Literally everyone lives in a world where they are governed by others, with the possible exception of those that purported have created micro-nations.
We can have greater democratic control over those institutions which most affect our lives.

quote:
literally see no reason to believe that getting rid of corporations would have the least impact on the amount of influence people engaging in big business have.
I said nothing about getting rid of corporations. I think corporations are useful and important. I actually have one of my own, a wee little s-corp.

I am suggesting that as state-administered entities they should be subject to greater levels of democratic control, which, incidentally, was the widely-held view for about the first 100 years of American history.
 
Posted by KidTokyo (Member # 6601) on :
 
Mynnion,

The definition of "fair share" is exactly what I've been getting at.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
Which should give people ample pause to adopting either man's point of view.

Then again we apparently get jobs by chance, have no economic mobility, work for crappy bosses, and have no expectation of fulfilling work.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
Then again we apparently get jobs by chance, have no economic mobility, work for crappy bosses, and have no expectation of fulfilling work.
No one is saying anything like that. Why do these discussions have to go to extremes? There are shades of gray.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
It can be a threat, it's still not coercion, anymore than all marriages are coercion because your wife can divorce you.
And yet "give me a blowjob or I'll divorce you" is indeed coercion. You are suggesting that only "give me a blowjob or I'll hit you" is coercive, but that's plainly not the case.

quote:
The threat of being fired is not enough to allow a boss to get away with literally everything, people quit jobs all the time.
Are you defining "coercion" as "manipulative pressure on a decision that cannot be resisted?" Because it seems to me that even physical coercion is frequently resisted and/or overcome.

quote:
Why is it everytime you need an example you devolve to actually coercive ones?
Because you accept physical coercion as a form of coercion. Ergo, I use examples of physical coercion to demonstrate why the ridiculous claims you are making re: social coercion are equally ridiculous when applied to physical coercion. In the same way that someone can rise above social coercion, they can rise above physical coercion; I picked a deliberately ridiculous example of physical coercion in hopes that this would make the comparison obvious.
 
Posted by LetterRip (Member # 310) on :
 
Actually jobs are rarely allocated by chance directly - they are primarily allocated via connections. Connections are allocated via a large helping of chance (ie probably 90% of your entry level job connections are based on who you were born to). Your parents will largely determine

1) Your familial connections and job opportunities (born to a farmer or fisherman - chances are most of your entry level job experience will be farming or fishing; born to a lower class - chances are your job will be McDonalds or simple manual labor; born to to a tradesman - chances are your job will be related that trade; born to someone wealthy or politically connected - chances are you will get internships at places with prestige; etc.)

2) Your family will largely determine what college you get into (born to a poor family - chances are no college or community college; middle class - community college or state university; upper class - ivy league).

There are exceptions but it takes extraordinary skill or luck. Ie an equally smart and talented kid from a poor background; a middle class background; and a wealthy background - will probably end up at community college or no college; state university; and an ivy league university respectively. Their family background is a far larger determinant of their future than their personal merit. It is only severe deviations that change those outcomes (someone from a privileged background could potentially screw up bad enough that they can't get into an Ivy League, but it is rare. Someone in poverty can overcome enormous odds, but it is rare).

Note that rare means things like '1 in 1000'. If there are 50 million in poverty - than that still results in '50 thousand success stories'. This results in dichotomy that one can know 'lots of people that overcame poverty' and yet it be something that is extraordinarily difficult to overcome. The actual odds of moving from poverty to upper class are probably far worse than 1 in 1000, I'd expect more like 1 in a million - thus 50 success stories of 'from rags to riches'. (If we include pop/rap stars and sports that increases).
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by KidTokyo:
When a corporation "goes public" its income and rate of growth can increase by ten-fold or a hundred-fold. Because of this state-enforced economic privilege, it drive smaller entities out of business quite easily, and thereby reduce wages.

Umm... corps have limited liability way before they go public. Going public has substantial costs both upfront and ongoing and is NO guarantee of any sort of financial success. And you would expect that a corporation that is in need of capital to grow, and chooses to raise it by going public would actaully grow thereafter so I'm not entirely sure where you're going here.
quote:
You would not argue that the state does not have coercive power, right?
Why would anyone?
quote:
You agree that corporate privileges (like limited liability, and many other aspects of corporate structuring) are 1) why corporations can become drastically more powerful than they otherwise would and 2) that these privileges are state created and enforced.
What do you mean by "than they otherwise would"? How do you separate what a corporation would be from the very elements of its structure? Or do you mean if business had to be conducted through general partnerships?

I agree with you, absent a corporate structure business would tend to be smaller, and it would be smaller specifically because it excludes any kind of passive investor. Who would make a thousand dollar investment in a business if they could lose their house and everything they own over it? The idea of crowd funding would be suicide. Pretty much ONLY THE RICH would own businesses of any scale, and they would have massive incentives to secrecy and abuse of authority - exactly like existed prior to the development of the corporate structure in the first place.

I feel like we're having a discussion about the utility of knives and all you want to cite to is how they can be used by serial killers.
quote:
And yet you claim there is no coercive influence on an individual worker's right to bargain. That doesn't really seem consistent, does it?
You haven't cited anything about a corporation that's relevant to whether there's coercion on a worker. Is there an unstated premise you're using here?
quote:
Are you aware of the history of the corporation in the United States? Familiar with the term "race to the bottom"?
Moderately and yes. And?
quote:
quote:
Limited liability is not - in my view - a particularly great evil.
I don't think it's evil at all. It can be useful. The evil is in ignoring what it is and what it does, and the consequences. You wouldn't give the military a vast armory and then fail to subject it to civilian control and review would you? The consequences would be evil, even if the military as a generally useful entity is not.
And what makes you think that limited liability's consequences have been ignored? Is it your claim that mega-corps are not THEMSELVES adequately capitalized such that they are a sham to inproperly shield their beneficial owners assets? Or that their widely diverse ownership bases are appropriately directly liable with unlimited liability? Or that officers have not with increasing frequency faced jail time and criminal charges, or fines? Or that its not possible to pierce the veil of sham corps?
quote:
I am suggesting that as state-administered entities they should be subject to greater levels of democratic control, which, incidentally, was the widely-held view for about the first 100 years of American history.
Be express then about what you're suggesting. I really feel like you're trying to imply something you're not stating. I still disagree with most of your premises, but if I see what you think would solve the problem it may help the discussion.
quote:
Originally posted by TomDavidson:
quote:
It can be a threat, it's still not coercion, anymore than all marriages are coercion because your wife can divorce you.
And yet "give me a blowjob or I'll divorce you" is indeed coercion. You are suggesting that only "give me a blowjob or I'll hit you" is coercive, but that's plainly not the case.
What I'm suggesting is that you're over-generalizing, and that the fact that coercion can occur within the bounds of relationship (marriage or employment) does not make the relationship inherently the result of coercion. I mean Adam's pretty much implying that there is virtually NO non-coercive employee relationship since virtually everyone needs to earn resources to pay for survival items.
quote:
Are you defining "coercion" as "manipulative pressure on a decision that cannot be resisted?" Because it seems to me that even physical coercion is frequently resisted and/or overcome.
It can be resisted or not resisted, coercion is using threats (generally of force) to get compliance.
quote:
quote:
Why is it everytime you need an example you devolve to actually coercive ones?
Because you accept physical coercion as a form of coercion. Ergo, I use examples of physical coercion to demonstrate why the ridiculous claims you are making re: social coercion are equally ridiculous when applied to physical coercion. In the same way that someone can rise above social coercion, they can rise above physical coercion; I picked a deliberately ridiculous example of physical coercion in hopes that this would make the comparison obvious.
Since I dispute that coercion is a fundemental characteristic of the job market, showing examples where someone uses actual coercion is not a particularly effective technique to make your point.

Now if you want to say that press gangs or slave labor involve coercion, or that blackmailing someone into working for you does, you'll get no argument from me. But that doesn't mean I'm ready to buy that the idea that because someone has to eat, means any particular employer is using coercion in setting the terms of their employment.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
I mean Adam's pretty much implying that there is virtually NO non-coercive employee relationship since virtually everyone needs to earn resources to pay for survival items.
I think you may be misinterpreting Adam.

quote:
coercion is using threats (generally of force) to get compliance
I would go broader than that. Coercion is the use of threats or implied threat to get compliance. A boss who laughs at his own joke, then looks at you sternly until you laugh, has not made an outright threat -- but there was an implicit threat.

quote:
Now if you want to say that press gangs or slave labor involve coercion...
I am saying that threatening someone's job if they unionize, or if they ask for a raise, or if they take disability, or if they complain about poor work conditions, is coercion. If being the squeaky wheel would get you fired, and as a direct result you do not speak up, you have been coerced into silence.

quote:
But that doesn't mean I'm ready to buy that the idea that because someone has to eat, means any particular employer is using coercion in setting the terms of their employment.
Let's set aside the word "coercion" for a moment, then, and talk purely about power disparity. Do we agree that in all but the most extreme of labor shortages, an employer has considerably more power than an individual worker in any negotiation?
 
Posted by Seriati (Member # 2266) on :
 
I have no issue with including implied threats, I thought that went without saying. But you definitely have a scale problem on what you deem to be coercion - or maybe if not then the answer is coercive relationships as you describe should not be corrected.

You know we already have laws regarding firing people for reasons like exercising their right to unionize, and for retaliation for complaints about poor working conditions. I don't object to laws that deal with specific coercive situations, honestly who would. Still has nothing to do with your actual arguments though.

I've already answered the question on labor shortages for Adam. It still doesn't have any relevance without the follow up I asked him for.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
I don't object to laws that deal with specific coercive situations, honestly who would.
A surprising number of business owners and right-wing politicians.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
Umm... corps have limited liability way before they go public. Going public has substantial costs both upfront and ongoing and is NO guarantee of any sort of financial success.
True, but beside the point. I am referring to the limited liability of investors, which greatly reduces the risk of investment. Hence, more investment, more capital. The fact that some corporations may fail at this point is, again, totally irrelevant, since I am discussing the impact of those that succeed.

quote:
And you would expect that a corporation that is in need of capital to grow, and chooses to raise it by going public would actaully grow thereafter so I'm not entirely sure where you're going here.
I'm nor sure why you're not sure, as I've already stated it point blank. You have a state-enforced contractual protection which 1) cannot exist without the state and 2) greatly empowers the economic impact of the entity.

What part of this are you missing? No company would ever develop the power and influence of Wal-Mart or Microsoft or Monsanto without extensive government support. Once successful enough, a state-supported corporation becomes a state-directing corporation, influencing policy.

You keep telling me that I'm overstating or whatever, but you haven't refuted any of this. So I'm actually "unsure" as to what your refutation is.

quote:
What do you mean by "than they otherwise would"? How do you separate what a corporation would be from the very elements of its structure? Or do you mean if business had to be conducted through general partnerships?
Than they otherwise would if not incorporated, of course. People form corporations for a reason -- they know they will make a lot more money if they succeed. My calculus is the same as theirs. Very simple.

quote:
Pretty much ONLY THE RICH would own businesses of any scale, and they would have massive incentives to secrecy and abuse of authority - exactly like existed prior to the development of the corporate structure in the first place.
This is demonstrably wrong on several levels.

In a scenario where corporations are restricted only to public-works projects (such as early America) there would be considerably less wealth imbalance -- you'd have a more transparent economy.

In a scenario where corporations are owned by stakeholders as well as shareholders, you would have more democratic control and a more equitable spread of wealth. This is done in Japan, for instance, where it works very well.

And you could go the whole hog and just have employee-owned companies, thus completely circumventing your objection that only the rich would own anything.

All of these options are viable, and there are thousands of examples of each. It's only a matter of policy choice. There is no natural law that says that corporations need be structured the way they presently are in the US.

quote:
I feel like we're having a discussion about the utility of knives and all you want to cite to is how they can be used by serial killers.
That's because you aren't, it seems to me, really concentrating on what I'm telling you. I'm telling you that everyone can use knives in a way that does not encourage anyone to be a serial killer.

quote:
You haven't cited anything about a corporation that's relevant to whether there's coercion on a worker. Is there an unstated premise you're using here?
Yes, I did. I said that they have greater leverage against the cost of labor because of their state-sanctioned ability to raise capital very quickly, and to influence social policy through lobbyists. Please respond to this point.

quote:
Moderately and yes. And?
So you know that states granted more and more executive independence to corporations to raise tax revenue, centralize authority, and suppress collective labor rights?

quote:
And what makes you think that limited liability's consequences have been ignored? Is it your claim that mega-corps are not THEMSELVES adequately capitalized such that they are a sham to inproperly shield their beneficial owners assets? Or that their widely diverse ownership bases are appropriately directly liable with unlimited liability? Or that officers have not with increasing frequency faced jail time and criminal charges, or fines? Or that its not possible to pierce the veil of sham corps?
Asked an answered. If the state is to be a government of of the people then the people have a right to control what the state does with its powers. We have a right to extract revenue from those who benefit from a form we provide with our laws and our court system. This is nothing more than commonsense reciprocity.

quote:
Be express then about what you're suggesting. I really feel like you're trying to imply something you're not stating. I still disagree with most of your premises, but if I see what you think would solve the problem it may help the discussion.
Hopefully, I have been, in my responses above.

I also made recommendations earlier on in the thread.

To summarize: ownership control by stakeholders, and legal limitations on size, form, and purpose. Favor horizontal cross-holdings and relationships over vertical pyramids of ownership. Require more transparency. One these are in place, adopt poison pill measures to defend against buyouts from overseas, where other less democratic systems may be in place.

[ December 18, 2013, 04:51 PM: Message edited by: KidTokyo ]
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by KidTokyo:
I'm nor sure why you're not sure, as I've already stated it point blank. You have a state-enforced contractual protection which 1) cannot exist without the state and 2) greatly empowers the economic impact of the entity.

What part of this are you missing?

None of it, its of the nature of a truism, it's literally of the "so what?" category for me. It's why you think that leads to the next points I'm missing. Did you ever see the South Park with the Underpants Gnomes? I seem to remember their business model when something like this:

1. Steal all the under wear.
3. Massive profits.

I'm not seeing your connector.
quote:
No company would ever develop the power and influence of Wal-Mart or Microsoft or Monsanto without extensive government support.
And would the world be better off without microsoft products, or Monsanto products? Would people have more access to inexpensive goods without Walmart? There's good and bad here, why should I jump to conclude there's a massive obvious "problem"?
quote:
Once successful enough, a state-supported corporation becomes a state-directing corporation, influencing policy.
No more so than any other rich or well coordinated group, and many times less influential than other groups.
quote:
You keep telling me that I'm overstating or whatever, but you haven't refuted any of this. So I'm actually "unsure" as to what your refutation is.
I don't see anything to refute. You basically state a simple explanation of what a corporation is, then jump straight to the end of the world without expaining why you go there. Are you against big business generally? Are you against passive investment? Is there a reason you prefer other business models - the Roman's used upper class slaves in place of corporations is that better in your mind?

The fundemental reason for the corporation is to protect investors against unrestricted risk. If there is adequate capitalization this deal usually works well, it always works well in contracting where the nature of the corp is disclosed. It work's less well where there are externalities, but that is the reason that capitalization is required. Do you know how many great products and advancements would die on the vine without such a structure? Who would engage in drug research, for example, if personal liability was required?
quote:
Than they otherwise would if not incorporated, of course. People form corporations for a reason -- they know they will make a lot more money if they succeed. My calculus is the same as theirs. Very simple.
People engage in business to make money, people use partnerships all the time and sole proprietorships are the most numerous structure out there. Not to mention, the dozens of other available structures that provide some version of limited liability - are you opposed to them too?
quote:
quote:
Pretty much ONLY THE RICH would own businesses of any scale, and they would have massive incentives to secrecy and abuse of authority - exactly like existed prior to the development of the corporate structure in the first place.
This is demonstrably wrong on several levels.
No its really not, the key word is "scale."
quote:
In a scenario where corporations are restricted only to public-works projects (such as early America) there would be considerably less wealth imbalance -- you'd have a more transparent economy.
And you'd have much less business going on, much less wealth overall, and a much larger divide between workers and owners since you've kicked everyone out of ownership who isn't willing to risk everything they own.
quote:
In a scenario where corporations are owned by stakeholders as well as shareholders, you would have more democratic control and a more equitable spread of wealth. This is done in Japan, for instance, where it works very well.
It's done in America too, with employee stock plans and retirement plans that invest in the company. Why not buy stock if you think that's the secret to great wealth.
quote:
And you could go the whole hog and just have employee-owned companies, thus completely circumventing your objection that only the rich would own anything.
Of scale. Employee direct ownership, puts every employee's entire assets at risk, pretty much ensures that small companies, even well run ones that other people would benefit by being exposed to, have little chances of ever getting scale. There would be no investors to help buy the second store for example. And no reason to link the two together if a harm caused at one causes both to be lost.
quote:
All of these options are viable, and there are thousands of examples of each. It's only a matter of policy choice. There is no natural law that says that corporations need be structured the way they presently are in the US.
Agreed, and there are literally hundreds of ways they are strucutured in the US today.
quote:
That's because you aren't, it seems to me, really concentrating on what I'm telling you. I'm telling you that everyone can use knives in a way that does not encourage anyone to be a serial killer.
But I don't believe knives encourage anyone to become a serial killer, and nothing anyone does in their use of knives will have an impact on those who become serial killers. Same with corps, you're raging against a format that has nothing inherently wrong with it, because it sometimes may be used in a way you don't like.
quote:
quote:
You haven't cited anything about a corporation that's relevant to whether there's coercion on a worker. Is there an unstated premise you're using here?
Yes, I did. I said that they have greater leverage against the cost of labor because of their state-sanctioned ability to raise capital very quickly, and to influence social policy through lobbyists. Please respond to this point.
That's the first I've seen of you stating this. Please explain why you think they have greater leverage against labor based on their ability raise capital quickly - the two items don't lend to any readyily apparent link. I'd also dispute why you think public offerings are the way to raise money quickly, most people who need money quickly do it on the private market or through loans.

Anyone with money or influence has the ability to influence policy through lobbyists. Why do you think that Corps are special risk on that?
quote:
quote:
Moderately and yes. And?
So you know that states granted more and more executive independence to corporations to raise tax revenue, centralize authority, and suppress collective labor rights?
I think you'll have to provide the step by step on that. I think you're overascribing government trends that would occur in any event to an unrelated event (though there may be a correllation in timing).
quote:
quote:
And what makes you think that limited liability's consequences have been ignored? Is it your claim that mega-corps are not THEMSELVES adequately capitalized such that they are a sham to inproperly shield their beneficial owners assets? Or that their widely diverse ownership bases are appropriately directly liable with unlimited liability? Or that officers have not with increasing frequency faced jail time and criminal charges, or fines? Or that its not possible to pierce the veil of sham corps?
Asked an answered. If the state is to be a government of of the people then the people have a right to control what the state does with its powers. We have a right to extract revenue from those who benefit from a form we provide with our laws and our court system. This is nothing more than commonsense reciprocity.
That isn't remotely an answer to what I said. Corps are in fact tax payers, and their employees and owners are tax payers. Corps have to obey the laws of the states and federal government.
quote:
To summarize: ownership control by stakeholders, and legal limitations on size, form, and purpose.
Why? I don't see any good result in prohibiting people from making passive investment. Why should I not be able to invest in a company that seems like a good idea? Putting my excess capital into what seems like the best use, even (and especially) if I don't have the knowledge to pursue it is a very efficient result.

How do you think a limit on size will work? What happens when it's hit yet there is still need for the business to grow? I don't object to anti-monopoly laws, I wouldn't object to them being enforced more liberally either.

In my experience limits on purpose have no good effect. Either people use work-arounds, or you are back to the default of discouraging legitimate business.
quote:
Favor horizontal cross-holdings and relationships over vertical pyramids of ownership. Require more transparency.
As a general matter, US public corps have more transparency than almost any other business entities in the world. I'm not sure I follow your preference for horizontal relationships and cross-holdings.
quote:
One these are in place, adopt poison pill measures to defend against buyouts from overseas, where other less democratic systems may be in place.
If you're opposed to public ownership why would you think this is a risk?

It really seems to me that you're opposed to big businesses and that you're attacking the corporate form because it enables big business. Why not leave a form that works 99% of the time without any particular hazard out of it, and just focus on the aggregation of too much corporate power under a single management team if that's your concern?
 
Posted by scifibum (Member # 945) on :
 
I think Kid's point is pretty simple:

The tax fairness evaluation should take into account the advantages that are enjoyed by the people who benefit most from other aspects of how our government works. He's been detailing some of those advantages that would weigh against a higher rate, to demonstrate that a higher tax rate isn't necessarily unfair. Those advantages aren't, practically speaking, available to everyone, so those who exploit them owe a reciprocal debt (over and above the debt that every taxpayer owes) to the rest of the society that grants them those advantages and provides the labor base that makes them so lucrative.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
None of it, its of the nature of a truism, it's literally of the "so what?" category for me. It's why you think that leads to the next points I'm missing. Did you ever see the South Park with the Underpants Gnomes? I seem to remember their business model when something like this:

1. Steal all the under wear.
3. Massive profits.

I'm not seeing your connector.

The connector is that without the state-formed entity you would have a smaller, less-powerful businesses, with less leverage in wage negotiation, and less ability to influence economic policy. You would not have massive insurance companies and credit card companies dictating legislation.

This is not an argument for their non-existence. It is an argument for a higher level of regulation and taxation than is applied to the private individual, because corporate managers are the beneficiaries of public support, whether we buy their products or not.

quote:
And would the world be better off without microsoft products, or Monsanto products? Would people have more access to inexpensive goods without Walmart?
I grow tired of repeating this, but again, I am not and have never said that such entities should not exist. Well, Wall-Mart we actually could do without.

The point I am making is directly tied into the question asked by this thread -- what is a fair share?

Corporations should pay a fair share for the privileges they benefit from.

quote:
No more so than any other rich or well coordinated group, and many times less influential than other groups.
What group are you thinking of that is neither corporate nor corporate-funded that has a comparatively huge influence on social policy?

quote:
You basically state a simple explanation of what a corporation is, then jump straight to the end of the world without expaining why you go there.
I'm doing nothing of the sort. And at this point I think you're deliberately ignoring my many clarifications.

quote:
Are you against big business generally? Are you against passive investment?
No and no.

quote:
Is there a reason you prefer other business models - the Roman's used upper class slaves in place of corporations is that better in your mind?
That's not a serious question. And I've already told you what other business models I prefer, in considerably detail.

quote:
The fundemental reason for the corporation is to protect investors against unrestricted risk.
Yes, I said that, didn't I?

quote:
If there is adequate capitalization this deal usually works well, it always works well in contracting where the nature of the corp is disclosed. It work's less well where there are externalities, but that is the reason that capitalization is required.
Now who's dealing in truisms?

quote:
Do you know how many great products and advancements would die on the vine without such a structure? Who would engage in drug research, for example, if personal liability was required?
Yet again, you are rebutting arguments I never made. Why do you continue to do this?

quote:
People engage in business to make money, people use partnerships all the time and sole proprietorships are the most numerous structure out there. Not to mention, the dozens of other available structures that provide some version of limited liability - are you opposed to them too?
No. And I am NOT OPPOSED TO THE EXISTENCE OF CORPORATIONS.

quote:
And you'd have much less business going on, much less wealth overall, and a much larger divide between workers and owners since you've kicked everyone out of ownership who isn't willing to risk everything they own.
Debatable, but I wasn't advocating this position as a solution. I was debunking your claim that only the rich would own companies. Actually, the claim is historically dead wrong, as workers in America at that time had much more ownership of production, and the risk was much less severe precisely because the economy was not as subject to the pull of huge conglomerates.


quote:
It's done in America too, with employee stock plans and retirement plans that invest in the company. Why not buy stock if you think that's the secret to great wealth.
That's not the same as being a stakeholder. I'm not going explain the difference, which you should know, and can easily look up yourself.

quote:
Of scale. Employee direct ownership, puts every employee's entire assets at risk, pretty much ensures that small companies, even well run ones that other people would benefit by being exposed to, have little chances of ever getting scale. There would be no investors to help buy the second store for example. And no reason to link the two together if a harm caused at one causes both to be lost.
You're dead wrong about that. Here are two examples:

Burns & McDonnell is an engineering design firm headquartered in Kansas City, Missouri.

Burns & McDonnell is one of the leading design firms in the United States. The company provides engineering, architecture, construction, environmental and consulting services for the aviation, defense, environmental and utilities markets. The group ranks among the top 10 designers for the power industry market, and nearly 40 percent of its revenues are earned from projects for that market. In 2005 the company created a new business unit to offer architectural, engineering and construction management services to the health care industry.

Burns & McDonnell is a 100 percent employee-owned company with more than 4,000 employees.


and

Alion Science and Technology Corporation (pronounced: ah-LYE-un)[citation needed] is an employee-owned technology solutions company delivering technical expertise and operational support to the United States Department of Defense, civilian government agencies and commercial customers.

Based in Tysons Corner, Virginia, Alion has 3300 employee-owners at major offices, customer sites and laboratories worldwide.[citation needed]

It was established in 2002 when approximately 1600 employees purchased most of the assets of IIT Research Institute. One Alion product is the simulation software tool, Micro Saint Sharp.


Here are some more:

Acadian Ambulance
Alion Science and Technology
Arup
Avis Rent a Car System - employee-owned 1987-1996; sold to HFS, which became Cendant
Bi-Mart
Bob's Red Mill
Brookshire Brothers
Burns & McDonnell Engineering
Carter's Foods
Certain Affinity
CH2M Hill
Chicago and North Western Railway - sold to Union Pacific Railroad in 1995
Columbia Forest Products
Dahl's Foods
Davey Tree Expert Company
Ebby Halliday Realtors
Edgewood Management, LLC
Ferrellgas Partners
Food Giant
Frontline Test Equipment
Full Sail Brewing Company
Gensler
Golder Associates
Graybar
Greatland Corporation
Huawei
HDR, Inc.
Hensel Phelps Construction
Herff Jones
Hot Dog on a Stick
Houchens Industries
Hypertherm
Hy-Vee
John J. McMullen & Associates - now part of Alion Science and Technology
John Lewis Partnership
Journal Communications
Kantega
King Arthur Flour
Landmark Education
Lifetouch
LPK
Mast General Store
Mathematica Policy Research
Mercedes Homes
Mondragon Corporation
Mott MacDonald
Mushkin
New Belgium Brewing Company
Niemann Foods
PA Consulting Group
Parsons Corporation
PCL Construction
Peter Kiewit Sons'
Phelps County Bank
Price Chopper (New York) (Golub Corp.)
Publix Super Markets
Raycom Media
Recology
Rosendin Electric
Scheels
Schreiber Foods
Schweitzer Engineering Laboratories
Springfield ReManufacturing
Stiefel Labs
STV Group
Swales Aerospace
Talis Group
Terracon
Tidyman's
Westat
West Highland Free Press
WinCo Foods
W. L. Gore & Associates
W. W. Norton & Company
Woodman's Food Market

quote:
But I don't believe knives encourage anyone to become a serial killer, and nothing anyone does in their use of knives will have an impact on those who become serial killers. Same with corps, you're raging against a format that has nothing inherently wrong with it, because it sometimes may be used in a way you don't like.
I'm not raging against it. I'm raging against the lack of adequate limits on the form that allow certain managers to acquire more than their share of wealth.

I will have to answer your other questions later this evening.

[ December 18, 2013, 06:02 PM: Message edited by: KidTokyo ]
 
Posted by PSRT (Member # 6454) on :
 
Seriati-
You may have had a larger point than what I responded to, but the segment of your post that I responded to is perhaps the most important. Nothing else you say matters if you are starting from the completely false premise that our financial and regulatory and legal systems are not set up in such a way that the people on the bottom are not compensated proportionate to their contribution to society, while the haves are compensated far and above their contribution to society.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
Kid

My post was in response to people previously stating what I put in my second comment.

I'll boil it down even further. I think it is morally wrong that fifty percent of my earned income is taken away in taxes. I believe it is wrong because of my remaining income I have to provide 100% of my actual needs.

I don't get any state federal or local aid, government programs, or even a usable school system. Phi get a mortgage deduction and a tax write off for my charity. But as for the rest, I'm not a leech. So I've seen estimates of how much goes for various programs such as military, nasa, courts, congress, sec, FCC, etc. and it's always some rediculously small percentage of each dollar taxed.

I simply don't find any scenario short of a World War fight for survival where we have a total war economy resulting in a 50% tax.

You guys can keep debating semantics. I'll say 50% is too much and morally bankrupt.
 
Posted by JasperWobbly (Member # 6865) on :
 
quote:
morally bankrupt
quote:
I'd kill my parents before I paid a dime to either of them. Long skipped story redacted here- but if it ever became the case where I was legally responsible for them, I'd kill them.

Period. Full stop.


 
Posted by LetterRip (Member # 310) on :
 
Red,

of each dollar taxed most of it goes to the military (current spending + most of the national debt is from previous campaigns + veterans affairs + military pensions + significant portion of social security spending for disability + part of DOE, NASA and other budgets)

It comes out to well over half of the budget.

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

http://www.warresisters.org/pages/piechart.htm

Note that none of those account for the percentage of social security spending that is for veteran disability - 3.6 million 'disabled veterans',

http://www.infoplease.com/spot/veteranscensus1.html

and given there are about 40 million people collecting from social security. That suggests 5%-10% of the social security spending is actually military related spending.

JasperWobbly, probably wrong thread.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
Why not buy stock if you think that's the secret to great wealth.
There have been a number of studies examining the rich-making effects of the stock market on the "common man" -- i.e. someone who can afford to invest less than $10K a year in a public stock. Turns out that these people are not the ones taking enormous profits out of the stock market. In fact, they're not even getting 8%. They're not even beating inflation.
 
Posted by Mynnion (Member # 5287) on :
 
Try getting in on a promising IPO without a generous portfolio or without the "right" connections.
 
Posted by KidTokyo (Member # 6601) on :
 
Red,

quote:
I think it is morally wrong that fifty percent of my earned income is taken away in taxes.
Given some of the awful and destructive things that money gets spent on, I'm inclined to agree with you.

quote:
I believe it is wrong because of my remaining income I have to provide 100% of my actual needs.
Well, this I don't agree with. Nobody provides 100% of their own needs. You are not farming or killing your own food, paving your own roads, policing your neighborhood, developing your of communications technology, etc. You may pay for some of these things voluntarily -- but there is a reason why they are there and available at a certain price, with a certain degree of safety. Infrastructure is hugely important.

quote:
I don't get any state federal or local aid, government programs, or even a usable school system.
Many people who provide the above do, and if they didn't your options as buyer of goods and services would be more limited.

quote:
Phi get a mortgage deduction and a tax write off for my charity. But as for the rest, I'm not a leech.
I would never say that anyone who works is a leech.

quote:
I simply don't find any scenario short of a World War fight for survival where we have a total war economy resulting in a 50% tax.

You guys can keep debating semantics. I'll say 50% is too much and morally bankrupt.

In a case where someone's income is so high it would be essentially impossible to achieve in a truly free-market scenario, I don't think it's bankrupt at all. There are people for whom the 50% remaining is still much higher than what they would be able to earn without state-administered privilege. In that case, 50% or more is justifiable. I don't know much about what you do so it's hard to know if you belong to that category.
 
Posted by Greg Davidson (Member # 3377) on :
 
I may have missed this, but how do you (Red) get to 50%? We don't have especially many deductions, have high income, and live in what is reputed to be the very highly taxed state of California, and our total taxes (state, federal and local) all come out to significantly less than 33%. I have understood that our tax system is skewed in some ways very favorable to higher level on incomes, but I would be surprised an an effect that large.

Also, are you including social security as a tax? If you are, it's inaccurate to say "I don't get any state federal or local aid, government programs", because you will have gotten, whether you wanted it or not, the disability or death insurance benefits of social security (not huge, I know) and built up a retirement balance (assuming you live that long) that is substantially higher than the payments that you have made in to social security (which is one of the problems of social security, as I will concede, but in your particular case it provides you an actuarial likelihood of benefits far in excess of the stream of payments that you have made).
 
Posted by TomDavidson (Member # 99) on :
 
Yeah, we're making low six figures this year and aren't coming close to a 50% tax burden.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
I'll boil it down even further. I think it is morally wrong that fifty percent of my earned income is taken away in taxes. I believe it is wrong because of my remaining income I have to provide 100% of my actual needs.
Ecept the tax is on the transation of providing you with your income. The money that you get _after_ the transation can reasonalby called your money, the amount taken in taxes was never yours to begin with, and was only padded onto the figures in the first place because of the expectation that some would be lost to transaction costs in the form of taxes.

Similarly your real buying power would, at best, be entirely identical, if not somewhat less, in the absence of those taxes, because the prices you pay are based on what people can actually afford to spend after taxes, not nominal pre-tax numbers. If you're at the very top of the income spectrum, your buying power is effectively unchanged, because you define the top bid in the system to be appealed to, anywhere lower down the line and your buying power is somewhat increased because those top bidders can't push market prices up quite as much, even though they still effectively can buy the same amount of stuff.

An the only thing that anyone's federal tax dollars do is cancel out the volume of bonds the fed can offer to people looking to make savings deposits. They don't pay for anything at all; they just make secure savings a little more scarce because we, by law, choose to link our national savings cap directly to federal net spending levels.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
The tax level is what my accountant tabulates yearly for me. It's an inclusion of everything he accounts for. Property, ad velorum, sewer tax, street tax etc all add up rather quickly.

As to my estimated SSI payout, I'd be lucky to break even on my payouts vs what I put in according to this year's estimate provided by social security. Seeing as it will be bankrupt in another 25 years and the fiscal reality that I'm likely to neither be paid this benefit or get a substantially lower payout whether they use means testing in the future or not- I'd say its counting chickens before the eggs have even appeared.

I guess I indirectly benefit from payments to life safety, transportation, and economic regulations. And I don't have issue with that. I don't have issue with military spending. I have a serious issue with the great society programs because after a trillion dollars plus, the indicators for the program targets all show worse statistics or zero change.

Again where is it a moral act to take 50% from a working leech?

I don't care if a person wouldn't notice 50% tax because he is a multi millionaire. The point is that many people pay effective tax rates of under 20%. The excuse is that they are morally worthy of being taxed less because the rich deserve to be penalized due to all the advantages they have over the poor. The fact that poor people systemically ignore the advantages of rich people, such as getting an education, living on a budget, working harder, not having out of wedlock children, not doing drugs, not playing lotto, etc. it's alwAys a case of excusable circumstance or inability to cope or compensate for the individual poor that ultimately justifies the need for more and ever increasing taxes to enable the utopian world of no poverty and the rich paying their fair share.

So the rich currently pay almost all the federal income tax. Why not have the top 10% pay all the tax? Why not increase their effective tax rate to the level that makes this possible? If it's morally justifiable to have rich people paying 50% of their annual income, why not 60 or even 90?

Maybe that will expose the nature of my objection.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
I don't care if a person wouldn't notice 50% tax because he is a multi millionaire.
Why not?

quote:
The excuse is that they are morally worthy of being taxed less because the rich deserve to be penalized...
You know, I'm pretty sure that is not the excuse.

quote:
The fact that poor people systemically ignore the advantages of rich people...
From today's Cracked:
http://www.cracked.com/blog/5-facts-about-being-poor-from-rich-person/

quote:
Why not have the top 10% pay all the tax?
Why not, indeed? I'd actually be fine with this. Of course, they'd then resort to even more criminal activity to keep their money. Is that the nature of your objection?

----------

As a side note, I just popped open my financial software -- I don't use an accountant, but I do use individual line items to track sewer taxes on my water bill, service taxes on my phone bill, sales taxes on my purchases, etc. -- and my total tax for this year (assuming I'm doing my taxes correctly) comes out to about 36% of my income (which is actually a little higher than normal, since we made some expensive purchases this year that were highly taxed). That's a hefty chunk of change -- it's equivalent to my entire annual household income just twelve years ago, albeit ignoring inflation -- but it's hardly a hardship.

[ December 19, 2013, 11:55 AM: Message edited by: TomDavidson ]
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
I don't care if a person wouldn't notice 50% tax because he is a multi millionaire.
That's not the argument. The argument is that it would not make a functional difference because the price of things that he pays for are set based on his after tax income. The only thing that the tax changes is his ability to drive inflation, the nominal price that he can push wealth to, not the access he has to it.

quote:
The excuse is that they are morally worthy of being taxed less because the rich deserve to be penalized due to all the advantages they have over the poor
No, the argument is that it makes no economic sense to attempt to moderate their puchasing power because their spending drives production, not inflation. Put more money in their hands and they buy more things, creating more jobs to produce those things. Put more money in a very high income person's hands and he buys exactly the same amount of stuff, he just forces the prices on that stuff higher because he can bid the process up a bit. No extra production, but higher prices for everyone else.

The "moral" issue is completely absurd, because it it comes from a position that is completely ignorant of what money is, pretending that it's commodity that people create through work, rather than an accounting measure that we communally share to facilitate transactions with based on a common pricing unit and, more than that, tries to pretend that short term nominal valuations are a meaningful measure of wealth.
 
Posted by Seneca (Member # 6790) on :
 
quote:
The "moral" issue is completely absurd, because it it comes from a position that is completely ignorant of what money is
I don't think many here agree with your idea of money.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
I don't think many here agree with your idea of money.
I'm not sure that's true. I think most people here agree with Pyrt's idea of money, but not everyone shares some of his other economic ideas.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
Originally posted by Seneca:
quote:
The "moral" issue is completely absurd, because it it comes from a position that is completely ignorant of what money is
I don't think many here agree with your idea of money.
The disagree that the Federal Government issues money?
That it reports every dollar appropriated to the Federal Reserve, so the Federal reserve can create deposit accounts (debts) to service those appropriations?
That the Fed maintains a master record of all money so appropriated?
That the fed sells shares of the difference between the total of all current appropriation account balances and that master "debt" record to the public as savings bonds?
That the IRS credits all of its collections back to that master record, basically reducing the total of all appropriations outstanding?

Which, exactly, of these ideas about money, that are defined in law, by the way, are you suggesting that disagreement even matters about?
 
Posted by RedVW on a Laptop (Member # 615) on :
 
Tom

If you aren't even close to 50%, bravo. But then again you seem to have an amazing level of luck. I'm not going to post my tax return for your approval before you accept my personal reality.

Then again I did post pretty much all my insurance changes verbatim from my insurer and was still told it couldn't possibly be correct and I must be telling a lie to win points in an Internet debate. The fact that my experience became part of the statistical outrage that is now the lead story concerning obamacare might lend credence that I was telling the truth.

Just as I'm telling the truth about this.
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by Pyrtolin:
quote:
Originally posted by Seneca:
quote:
The "moral" issue is completely absurd, because it it comes from a position that is completely ignorant of what money is
I don't think many here agree with your idea of money.
The disagree that the Federal Government issues money?
That it reports every dollar appropriated to the Federal Reserve, so the Federal reserve can create deposit accounts (debts) to service those appropriations?
That the Fed maintains a master record of all money so appropriated?
That the fed sells shares of the difference between the total of all current appropriation account balances and that master "debt" record to the public as savings bonds?
That the IRS credits all of its collections back to that master record, basically reducing the total of all appropriations outstanding?

Which, exactly, of these ideas about money, that are defined in law, by the way, are you suggesting that disagreement even matters about?

The disagreement is about what it represents, it's worth relative to how it comes to people and the right of people to use it how they see fit rather than the government.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
The disagreement is about what it represents, it's worth relative to how it comes to people and the right of people to use it how they see fit rather than the government.
Perhaps, but none of those were germane to what was being said above, and the last one is nonsensical, because there's no "rather than" in the process, because the federal government issues money, it doesn't ever use any that came from anyone else (see the last point- one tax dollar that's collected gets added to a negative one dollar in the record of money issued, and thus ceases to exist, never to be used by anyone again)
 
Posted by Seneca (Member # 6790) on :
 
quote:
Originally posted by Pyrtolin:
quote:
The disagreement is about what it represents, it's worth relative to how it comes to people and the right of people to use it how they see fit rather than the government.
Perhaps, but none of those were germane to what was being said above, and the last one is nonsensical, because there's no "rather than" in the process, because the federal government issues money, it doesn't ever use any that came from anyone else (see the last point- one tax dollar that's collected gets added to a negative one dollar in the record of money issued, and thus ceases to exist, never to be used by anyone again)
And therein lies the problem, you don't seem to accept that money is merely a symbolic representation of economic activity and when the government taxes that, it is stealing the economic activity generated by others and disincentivising future activity. It is morally wrong to steal, and the way the government takes from one to give to another is immoral.
 
Posted by Pyrtolin (Member # 2638) on :
 
quote:
And therein lies the problem, you don't seem to accept that money is merely a symbolic representation of economic activity
How does that contradict anything I've said?

quote:
and when the government taxes that, it is stealing the economic activity generated by others and disincentivising future activity.
That's nonsensical given that relative nominal prices adjust to accommodate taxes. The incentive to activity lies in what you can buy with the money that you end up with, not in the money itself, which has no commodity value. If a tax does not affect your ability to buy things, then the tax has no direct affect on the level of incentive that you have to be economically active.. It's only when taxes manifestly affect purchasing power that they become a concern, which is only relevant on low incomes or limited resources. In the former case I fully agree taht they're counterproductive and should be reduced or eliminated, which is the entire point of a graduated tax system, that even includes outright rebates on the bottom end to prevent suppressed purchasing power. On the other hand, when they simply limit the scale of bidding over limited resources but don't change the overall winner of the auctions on them, then they're a very useful inflation control that serve to preserve purchasing power across the economy with no actual adjustment to the incentive for high income people to be productive. They still get just as much stuff, they just can't force prices up as high in the process of doing so.

quote:
It is morally wrong to steal, and the way the government takes from one to give to another is immoral.
I fully agree with putting strong controls on eminent domain certainly, but that's about the only place where that argument is relevant. Federal taxes don't take anything away from most people, they just serve to moderate prices to remain in line with what the majority can afford to spend. And taxes don't give anything to anyone, they just zero out issued money.

We should significantly reduce most tax levels to the point where they don't buy into anyone's purchasing power, and simply just use them as a check on inflation and financial manipulation. Heck- my overall position is that, instead of introducing money to the system through a bundle of politically tangled programs that are poorly coordinate with each other, we should start everyone out at positive baseline income level, effectively making the total tax rate for most people negative, and then only introducing taxes at high net income levels to reduce the inflationary pressure that they create without actually affecting their net purchasing power.

But, again, by the very laws the define out monetary system the idea that anything is being taken away from anyone is nonsense, because it's the transaction that being taxed- the point where the money is in transit between two parties and not in possession of either of them, not the amount left after the transaction that federal taxes are applied to. The money isn't stolen, it's just the transaction cost of having and using the money in question in the first place, and it isn't given to anyone, because it cease to exist as soon as it's collected.
 
Posted by KidTokyo (Member # 6601) on :
 
quote:
money is merely a symbolic representation of economic activity and when the government taxes that, it is stealing the economic activity generated by others and disincentivising future activity. It is morally wrong to steal, and the way the government takes from one to give to another is immoral.
In many ways this is the basis of everything I've argued.

I am merely pointing out that the government has other ways of stealing aside from taxation, and that when all is accounted for and balanced out, it is not the wealthy who are the victims of theft.
 
Posted by PSRT (Member # 6454) on :
 
quote:
you don't seem to accept that money is merely a symbolic representation of economic activity and when the government taxes that, it is stealing the economic activity generated by others and disincentivising future activity.
Except that, by virtue of pretty much everything else the government does, money gets placed into the hands of the people who did NOT engage in the economic activity that actually produced the wealth that the dollars represent.

Yeah. THeft is happening. Taxation is not where you should aim your anger, though. You should be aiming it at the anti union laws, banking laws, corporate laws, stock market regulations, free trade laws... these are the laws that actually steal from people who produce wealth, and prevent people from negotiating to receive the money that represents the wealth they produce.
 
Posted by Mynnion (Member # 5287) on :
 
My company just posted record profits for the third quarter and the stock sailed to an all time high. Today they are announcing the layoff of 10% of their field staff. I guess a 25% stock growth wasn't enough for at least the halves where I work. That 10% will now start collecting unemployment instead of paying taxes. Another hidden societal cost benefiting the haves.
 
Posted by Greg Davidson (Member # 3377) on :
 
quote:
If you aren't even close to 50%, bravo. But then again you seem to have an amazing level of luck. I'm not going to post my tax return for your approval before you accept my personal reality.
Red, you don't need to post your tax returns. But to shed light on the point you are trying to make, could you possibly provide the following

Federal tax (%)
State Tax (%)
Property Tax (%)
Local Tax (you can put your street, sewer, and even trash collection charges in this percentage, but also remember you claimed you get no benefit from your 50%(%)
Social Security Tax (7.65% - or is it 15.3% as self-employed?)
Ad Valorem Tax (%)

I am still puzzled, although that may be my ignorance. The only way I could see to get to 50% would be if your income is not primarily based on wages, but rather on more complex business arrangements, and that your reported income is a relatively small fraction of the overall value of financial assets, Some of which generate additional tax liabilities against a smaller income base). And you case would not only be different from a few of us here, but also different from the vast majority of Americans who get most of their income from wages. That would not invalidate your point, but it would limit its applicability to the overall population.
 
Posted by AI Wessex (Member # 6653) on :
 
quote:
Originally posted by Mynnion:
My company just posted record profits for the third quarter and the stock sailed to an all time high. Today they are announcing the layoff of 10% of their field staff. I guess a 25% stock growth wasn't enough for at least the halves where I work. That 10% will now start collecting unemployment instead of paying taxes. Another hidden societal cost benefiting the haves.

For some investors making profit isn't the goal; for them winning is taking as much money as possible out of companies they own. That's how Bain Capital made a lot of its money under Romney and how many private equity firms conduct their business day in and day out.

Part of the theory is that the parts are worth more than the whole, so if you break up a functioning business that is under-performing you can sell the individual business units for proportionally more than their current net value. One way to make a company appear to be struggling is for the equity owners to extract huge chunks of money through "management fees" or payments for other services, thereby stripping the company of cash and weakening its ability to compete.

It sounds like you may have run into a different scenario where the company drives up sales beyond sustainable levels and then cuts staff to increase the ratio of profits to costs and inflate the value of the company. That's how HP got screwed by Autonomy. If that's what's happening here, you may see your company sold off in the very near future.
 
Posted by Greg Davidson (Member # 3377) on :
 
Slightly off topic, but I liked this quote by NFL Player Orlando Scandrick, discussing why he signed an extension that actually cut his average level of pay:
quote:
I wanted to be here... My kids come here. It’s not all about me. You can’t chase the dollar forever, man. It’s not all about the money. I don’t play this game for money.... I mean, I’ve made a ton of money, over $20 million... What the hell? What can’t I buy with 20 than I can buy with 24 or 25?

 
Posted by LetterRip (Member # 310) on :
 
AI,

quote:
It sounds like you may have run into a different scenario where the company drives up sales beyond sustainable levels and then cuts staff to increase the ratio of profits to costs and inflate the value of the company. That's how HP got screwed by Autonomy. If that's what's happening here, you may see your company sold off in the very near future.
That was exactly my thoughts. The other likely scenario is that the CEO is trying to game a contractual bonus based on hitting particular ratios and numbers.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
Greg I'm pretty sure I used to do that back in they day. Been doing this thread topic for years. You can watch my tax go up yearly.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
And as to your NFL player, he is likely well under forty. Because most nfl players have neither maturity nor perspective most end up broke and saddled with debts. I worked with two former pro bowlers. Matter of fact I was still working with one when I joined ornery. Both broke as a bent nail.

Give the guy that made the quite a couple years out of the nfl and find him again when he's in his sixties and then ask if his comment matches reality.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
Give the guy that made the quite a couple years out of the nfl and find him again when he's in his sixties and then ask if his comment matches reality.
You believe that making an extra $4 million a year would make a meaningful difference to him? Even if he turns out to be a wastrel, why would it?
 
Posted by Greg Davidson (Member # 3377) on :
 
Red, it's fine - you don't have to share your percentages. But when you introduce your own experience as an argument, and then you are unable or unwilling to spend two minutes to provide a little substantiation (seriously, there is not a whole lot of sensitive information in splitting 50+% into 5 or so standard categories), count me as skeptical. Particularly, as I can't make the math work out with my understanding of the federal tax system, and what I thought were general trends in state and local taxes.

Maybe I am wrong - maybe there are wrinkles I have not thought about. All I am asking you to do is to provide even a little substantiation or background. Because either (a) there are features of the tax system that I am unaware of, or (b) you have an unusual tax situation, or (c) you are not actually paying more than 50% of your income in taxes. You don't have to reveal your intimate tax information, but you should be able to show that the cause is (a) or (b) without doing so.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
Lol Tom way back in 2000 it was 37%. It's been going up incrementally over the last 12 years. Few years back I was at 48%. In three years it's gone up two more percent. Deal with it .
 
Posted by TomDavidson (Member # 99) on :
 
Are you loling at me, Red, or were you actually loling at Greg? [Smile]
 
Posted by AI Wessex (Member # 6653) on :
 
Red, I don't understand how your tax rate could be so high. You've made clear that your income is relatively modest, but here's the description of how much you would pay on a net income of $200,000. I can't see how anyone could possibly pay 50%, even if you include all forms of taxes at all levels:
quote:
Progressive tax rates are "marginal," meaning that each rate applies to specific portions of your taxable income within a specified range, or tax bracket. For example, if you are single and have taxable income of $200,000 in 2013, then you are in the 33 percent "bracket."

However, you will not pay 33 percent on all taxable income. Instead, you pay 10 percent on everything up to $8,925, then 15 percent on the excess up to $36,250, 25 percent on taxable income between $36,251 and $87,850, 28 percent on the amount over $87,850 up to $183,250, 33 percent on the amount over $183,250 up to $398,350, 35 percent on the amount over $398,350 up to $400,000, and 39.6 percent on the rest.


 
Posted by Pete at Home (Member # 429) on :
 
He is counting all forms of taxes at all levels. He is paying a total of over 50% of his income in taxes. Not income tax particularly
 
Posted by Greg Davidson (Member # 3377) on :
 
As I said, I can't even get to a 50% scenario for any income level including sales tax; if there is a way, it has to involve forms of taxation that I am unaware of.
 
Posted by AI Wessex (Member # 6653) on :
 
Let's assume Red pays the highest federal income tax rate, which is a marginal 39.6% for net income > $450,000. I know he doesn't because he has said his income is much lower than that, but to emphasize the point. On top of that he pays 4% Georgia sales tax on some items, but assume he spends all but $400 and pays sales tax for everything, as well as the maximum 6% state income tax. Add SS and Medicare taxes for another 9%, assuming all his income is salary (ignoring the $113,000 cap on SS tax).

All of that adds up to about 60%, but in reality he's paying a lot less than that. I'm no accountant, but I can't see any way all of his taxes add up to 50% in any realistic scenario.
 
Posted by scifibum (Member # 945) on :
 
I would suppose Red is counting things like fuel taxes too.
 
Posted by Pete at Home (Member # 429) on :
 
quote:
Originally posted by Greg Davidson:
As I said, I can't even get to a 50% scenario for any income level including sales tax; if there is a way, it has to involve forms of taxation that I am unaware of.

Try self employed double FICA with state income tax, property tax. That reaches IMO unfair levels for someone at 90 grand/ yr
 
Posted by Seneca (Member # 6790) on :
 
Just goes to show why we should scrap the 70k pages of federal tax code and replace it with a few paragraphs at most and have a low flat tax with no exemptions or deductions
Get everyone in the game. I also have a huge problem with property taxes. I'd rather have localities charge a sales tax on a parcel's initial sale than a constant property tax.
 
Posted by LetterRip (Member # 310) on :
 
Why do you have a problem with property taxes? Your benefit from most taxes is proportional to net worth, so it is a far more logical tax than taxes on income. Your household consumes fire, police, road maintenance, sanitation, waterworks, electricty, and other services provided by the government every year.
 
Posted by AI Wessex (Member # 6653) on :
 
quote:
Originally posted by Seneca:
Just goes to show why we should scrap the 70k pages of federal tax code and replace it with a few paragraphs at most and have a low flat tax with no exemptions or deductions
Get everyone in the game. I also have a huge problem with property taxes. I'd rather have localities charge a sales tax on a parcel's initial sale than a constant property tax.

What kind of flat tax? Municipal? State? Federal? You allow a sales tax on property, at what level?

My guess is that your "flat tax" would be on the order of 30-40% for everything (or do your few paragraphs have exceptions for certain items like food or medical payments).

Do you consider the civic services LR mentioned important, or do you think people should provide for them individually? That's not technically a tax, but you would be paying profit-oriented companies for them, which would raise their cost.

Seems to me that you have an abundance of ideas that violate Einstein's dictum that a solution to a problem should be as simple as possible, but not moreso.
 
Posted by Greg Davidson (Member # 3377) on :
 
There's a big difference between a marginal level of taxes over 50%, and paying 50%+ taxes on your income. At $450K of taxable income (that is, after all deductions and credits are accounted for), you are paying less than 28% of your AGI in taxes. And since social security taxes cap out at 114K, the total max percentage of federal income taxes and social security at $450K is 29%. And if he were paying 6% state income tax, that would provide a $27,000 deduction in his AGI which would pull his fed tax + SS percentage back down to 27%, making the total for fed/state/soc sec = 33%.

I could see adding another 1.5% if self-employed, and there's also the medicare tax which is another 1-2% at income that high, so I start getting close to 35-36%.

To get about 50% taxes there would need to be an additional 15% ($68K) of local taxes andf property taxes, except those would also constitute income tax deductions, meaning the level would be even higher. Someone with a very high dollar value of property that was not generating much income could make the numbers work, but we would be talking a large amount of wealth needed to turn the numbers around
 
Posted by Pete at Home (Member # 429) on :
 
quote:
Originally posted by LetterRip:
Why do you have a problem with property taxes? Your benefit from most taxes is proportional to net worth, so it is a far more logical tax than taxes on income. Your household consumes fire, police, road maintenance, sanitation, waterworks, electricty, and other services provided by the government every year.

A cunning big government lefty would use Seneca's arguments to get rid of property taxes, thereby eliminating the advantages that the rich have in terms of fire, police, road maintenance, sanitation, waterworks, electricity, SCHOOLS, and other services.
 
Posted by Seneca (Member # 6790) on :
 
The problem with property taxes are that you can't control the way you are taxed as with income and payroll taxes. For those who want to go off the grid and subsist, they can't opt out of those taxes the same way they can not earn a typical modern income/payroll.
 
Posted by Greg Davidson (Member # 3377) on :
 
Seneca, what if you go off the grid in a ship in international waters?
 
Posted by Seneca (Member # 6790) on :
 
I shouldn't have to do that as a US citizen. Our country wasn't founded with these conditions, they are despotic and contrary to what our founders envisioned.
 
Posted by LetterRip (Member # 310) on :
 
Property taxes have been around since long before the founding of the nation - ie there were property taxes in Massachusetts since before 1634, and by 1796 - 14 of the 15 states had property taxes.

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

So in fact our country was founded with property taxes, and they were in force in almost every state since before the civil war. They aren't 'despotic' in the least - they are one of the most fair taxes there are since they largely go to pay for services that benefit is derived proportionally to property.
 
Posted by Seneca (Member # 6790) on :
 
quote:
almost
key word you seemed to gloss over there.

In fact these are often unfair taxes. I've known many elderly people who worked hard and in retirement couldn't afford high property taxes and lost their property despite a lifetime of paying those taxes.
 
Posted by AI Wessex (Member # 6653) on :
 
It can happen and I'm sure does in very small numbers. You have to balance that "harm" against other kinds of harm that people would suffer because of a *lack* of government services if you took them away. How many elderly would would stay in their houses without the burden of property taxes but die from an untreated illness because they didn't have Medicare, for instance?

Seneca, I'd really like to hear details about your "few paragraphs" sales tax. Give the broad outlines with enough information so we can see how you think it should work.
 
Posted by Seneca (Member # 6790) on :
 
http://offgridsurvival.com/losinghomesovertaxliens/

quote:
The American Dream: Owning a home has become the American Nightmare for a growing number of people across the country.
Imagine owning your home free and clear, after decades of hard work and faithful payments, only to lose it over a $40 tax lien. Well that’s exactly what’s happening to a growing number of Americans who have had their homes stolen from them, after governments around the country sold miniscule tax liens and allowed greedy investors to then seize the homes.
Believe it or not, you could be at risk of losing your home over even minute amounts of unpaid property taxes. Earlier this week, the Washington Post covered the story of a 76-year-old Marine Veteran who lost his $197,000 home over a $134 property tax debt.
It all happened because governments around the country have been placing liens on properties when home owners fail to pay their property tax bills. The homes are then sold to greedy investors who foreclose on the homes, raking in profits that sometimes add up to hundreds of thousands of dollars.
The system allows investors to take these tiny debts and then add legal fees and fines that are so high the home owner can no longer afford to pay the original debt. A $100 delinquency, like the one Marine Veteran Bennie Coleman had, can then skyrocket to $4,999 — in some cases much more.

Even worse, as in Coleman’s case, the investors then take everything. Not only are they allowed to collect on the debt and all the phony fees, but they are allowed to keep everything when they sell the house. That means an investor who purchases a $100 tax lien from the government can then turn around and foreclose on a home that’s worth 10, 100, even 10,000 times what the original lien was worth.
While these local governments would like you to believe these people are tax cheats, a 10 month investigation by the post revealed that in Washington D.C. alone, one-third of the nearly 200 homeowners who lost their properties in recent years had liens of less than $1,000. One person highlighted in the investigation had a $287 tax lien that sold it less than eight weeks for $129,000.
Even more troubling, was the investigation found over 1,900 tax liens that were sold to these investors by mistake. The home owners owed nothing, yet D.C. sold these erroneous tax liens allowing investors to foreclose on homes that owed nothing.
In one case a 64-year-old woman spent two years fighting to save her home after she was mistakenly charged $8.61 in interest. Sadly most of the people who face this nightmare simply give up. Faced with huge legal bills, and a debt that grows by the day, many of them are forced to turn over their homes because of a system that allows these investors to basically steal their homes.
The American Nightmare
Over the last couple of years we have covered story after story highlighting how home ownership has become a sham in this country. From giant corporations using eminent domain to steal people’s homes, to the federal government using the Department of Homeland Security and the EPA to muscle people off their land, it seems homeowners are under attack from every direction.
We’ve warned people debt is one of the biggest threats they face, and as we see in case after case it’s being now being used to rob people of their homes. Remember, in a majority of these cases these people are not dead beats who refuse to pay their bills. They’re average Americans who are being screwed by a system that gives them no way out.


 
Posted by AI Wessex (Member # 6653) on :
 
How many times did that happen last year? That article is meant to inflame but doesn't give enough details to understand the scope of the problem. But as I've already said, I'm sure it happens - rarely - but it happens.

But consider that the government needs revenue to operate so it can provide services to citizens, and the villains here often are ruthless capitalist investors who could care less who they hurt as they make their unearned profits:
quote:
People are losing their homes over unpaid tax bills that, in some cases, add up to just a few hundred dollars.

Outdated state laws that allow local governments to sell tax liens on delinquent properties to investors in order to more quickly collect on overdue property taxes is sparking a second "foreclosure crisis," a report from the National Consumer Law Center said Tuesday.

When homeowners don't pay property taxes or other municipal bills, like water or sewer fees, local governments have less money to maintain services like schools, police and fire departments and road maintenance. By selling tax liens, those governments can collect on what it is owed.

Investors, in return, effectively own a claim against the property until the homeowner pays the county or municipality back or until they default on the debt entirely. The investor can either collect interest on the taxes owed from the homeowner. Or, if the homeowner fails to pay up, the investor can take possession, or foreclose, on the home.

"It's a win-win for investors," said John Rao, a consumer credit and bankruptcy attorney and the author of the report. Either the investor gets their investment back with interest or they get the home -- typically, for a pretty sizable discount to what the home is worth.

The report cited a case of an 81-year-old Rhode Island woman who fell behind on a $474 sewer bill. A corporation bought the home in a tax sale for $836.39. The woman was evicted from the home she had lived in for more than 40 years and the corporation resold the place for $85,000, the report said.

Most investors, however, buy tax liens for the interest. That's because many states allow investors to charge rates of 18% or more on the outstanding debts. And, in some cases, as much as 20% to 50%, the report said.

You could prevent this horror from ever occurring by doing two simple things.

First, help create awareness of this problem in those states with these antiquated laws. It might not be easy to get them repealed, but it certainly would be worth your effort.

Second, you could eradicate those kinds of incidents by setting aside money to pay these people's delinquent pittances in taxes, which I assume you could afford to do. Think about it, for a few thousand $$ a year, you could have saved perhaps 10 homes for those destitute elderly people and kept them from greedy small-minded "investors".
 
Posted by Seneca (Member # 6790) on :
 
This has nothing to do with the free market, this has to do with unnatural crony capitalism and corruption from the government itself. Any push to repeal or reform these government regulations and statutes would no doubt be resisted by the same people in government who are taking advantage of it now. That's not to say it's impossible, just showing where the blame truly lies here and why the concept of property tax vs other kinds of taxes is ripe for abuse.
 
Posted by AI Wessex (Member # 6653) on :
 
How are people in government taking advantage?

*All* forms of human endeavor are ripe for abuse. I still would like you to explain what the actual scope of this problem is. You're using it as a sledge hammer to argue that property taxes are themselves evil or at least corrupt. So far it seems like a very small problem that certainly could be fixed, rather than complaining that there's nothing you can do about it.

In the meantime, every time you hear about something like this about to happen, you and your friends could step in and save a home for an elderly widow. It would probably feel really good, too.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
I shouldn't have to do that as a US citizen.
It seems to me that living "off the grid" makes your citizenship moot.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
What gets me is the utter lack of recognition to the increasing proto fascist expansions by our government by people.
 
Posted by TomDavidson (Member # 99) on :
 
Dude, you're a fascist. Doesn't it make you happy?
 
Posted by Greg Davidson (Member # 3377) on :
 
quote:
This has nothing to do with the free market, this has to do with unnatural crony capitalism and corruption from the government itself.
That sounds like an almost religious belief in the nirvana of a "free market", and to protect that purity, anything that you don't like in the economy done by private sector entities you just label as "crony capitalism".

Can you name any country in any period in human history where there was private economic activity but no "crony capitalism"?
 
Posted by Seneca (Member # 6790) on :
 
Why is it the job of citizens to provide charity as a buffer to government corruption? Is government corruption an inevitable force of nature that we must make ritual sacrifices for?
 
Posted by Seriati (Member # 2266) on :
 
Why is it when people do "tax analysis" online they ignore that people are most likely paying the AMT, which eliminates (among other things) State tax deductions? They often ignore self employment's impact on the tax situation as well. I don't find Red's claim of 50% shocking, it's easily attainable, now that said, there are probably things that could be done to reduce it (but I couldn't guarantee it). I'm over 40%, but I could see things like renting (no mortgage deduction) or a higher property tax pushing it over 50% (depeding on income level overall).

KidTokyo, on the prior conversation, I don't see at all your point after your last clarification. I truly don't see how you can say you're not against big business, not against passive investment, yet still have so many issues with the corporate form.

And I think you completely missed the point on owner-operated businesses. It was only relevant in a context without limited liability, your list of successful set-ups in companies with limited liability has no bearing. It's a just a novelty in that environment, as their personal liability ends with their employment, and that's not materially different than anyone else's position.

If you're not arguing against limited liability (notwithstanding repeatedly making a big issue about it) and you're not against big business (notwithstanding that you keep complaining about mega-corps controlling government), I really don't understand your point. And you intimate that your concern is with manager power, if that's the sole concern I don't have any issue with constraining that.
 
Posted by TomDavidson (Member # 99) on :
 
I'm not sure why the AMT would bring you close to 50%, as the maximum bracket of the AMT is 28%. Most of us here would already be paying 28% in federal tax, unless we've got a whole boatload of exemptions or deductions.
 
Posted by Seriati (Member # 2266) on :
 
TomDavidson,

The AMT adds percentage points to you're overall effective tax rate. All it takes is a single deduction in some states - state taxes - to move someone from the standard rates to the AMT. So literally because you pay an extra percentage in state tax over what others do, you will pay an extra percentage in federal taxes over what other similarly situated persons will do.

I just don't get why people feel like their experts on taxes other people pay, when they obviously haven't dealt with any of the common issues.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
Tom
And as I have said repeatedly fascist government is one of the best, if not the outright best peacetime governments. It also has the tendency to turn to militarism once the great domestic crusades are solved. Spain being the only exception, all other fascist states have ended badly. Which is why the creep towards corporativisim is a very very bad thing.
 
Posted by TomDavidson (Member # 99) on :
 
quote:
The AMT adds percentage points to you're overall effective tax rate.
Up to 28%. The maximum tax bracket of the AMT is 28%. If you paid less federal tax than 28% and have a high enough (i.e. not particularly high) income, you wind up paying 28%. If you paid more, you don't get hit with the AMT. And, heck, if you've got an income primarily from capital gains, the AMT isn't your major concern anyway (since capital gains are taxed at 15% under the AMT.)

Now, of course it's the case that the AMT at 28% may still represent more total tax than a "regular" tax bracket at 34% or so; this is because the AMT is calculated off a different figure for income and ignores many exemptions and deductions. But it will still never be -- in fact, can never be -- more than 28% of your actual gross income.
 
Posted by NobleHunter (Member # 2450) on :
 
quote:
Spain being the only exception, all other fascist states have ended badly.
And Spain started worse than the others. So not exactly something to shoot for either.
 
Posted by Seriati (Member # 2266) on :
 
Tom, are you trying to make a point? Is it that you think you can't get from 28 to 50 (or that 28 is an absolute cap on all federal taxes)? If you live in NYC you can add almost 11% at that income level for state and local. That brings you up to about 40% (not effective 40 though) before you consider any of the other taxes that are mandatory - social security and medicare being the biggest - or possible like property tax, or likely - like 8.5% sales tax. It doesn't take all that much to get to 50% in that environment, though like I said, there'd almost have to be ways to reduce it from that level.
 
Posted by AI Wessex (Member # 6653) on :
 
"Why is it the job of citizens to provide charity as a buffer to government corruption? Is government corruption an inevitable force of nature that we must make ritual sacrifices for?"

How corrupt is the government? How much money is it stealing from us?
 
Posted by AI Wessex (Member # 6653) on :
 
quote:
Originally posted by Seriati:
Tom, are you trying to make a point? Is it that you think you can't get from 28 to 50 (or that 28 is an absolute cap on all federal taxes)? If you live in NYC you can add almost 11% at that income level for state and local. That brings you up to about 40% (not effective 40 though) before you consider any of the other taxes that are mandatory - social security and medicare being the biggest - or possible like property tax, or likely - like 8.5% sales tax. It doesn't take all that much to get to 50% in that environment, though like I said, there'd almost have to be ways to reduce it from that level.

I think you're the one who's trying too hard, given your last sentence. Also, remember that this started with Red's assertion that *he* might be subject to a 50% tax burden, but he lives in Georgia on a substantially smaller income than this hypothetical pretends to address.
 
Posted by Greg Davidson (Member # 3377) on :
 
Seriati, I have been open to the notion that there are features of the tax code that I don't understand (AMT is not one of them, neither is the phase out of deductions). But so far the math doesn't work out

quote:
If you live in NYC you can add almost 11% at that income level for state and local. That brings you up to about 40% (not effective 40 though) before you consider any of the other taxes that are mandatory - social security and medicare being the biggest - or possible like property tax, or likely - like 8.5% sales tax. It doesn't take all that much to get to 50% in that environment, though like I said, there'd almost have to be ways to reduce it from that level.
As I wrote above, by the time you are hitting the federal max tax rate, your social security and medicare are down to about 2% (since you only get charged those taxes for the first 114K). And you get a limitation on your deductions for state and local taxes, but it is only a partial limitation when you get to 450K and start paying the highest federal rate (you can have more deductions eliminated when you get to higher income, but then social security and medicare start shrinking as a % even further).

The fact that you don't "find Red's claim of 50% shocking" says more about you and your willingness to believe things that are either said in a moment of hyperbole or due to a very unusual set of circumstances not applicable to most US taxpayers. I would think that even your 40% would be hard to achieve, although the worst part is that I think that one of the easiest ways to get there is not with a high income, but rather with self-employment doubling social security and medicare and income under 114K - and that says something about the fairness of our tax code.
 
Posted by RedVW on a Laptop (Member # 615) on :
 
Unfortunately Greg it isn't hyperbole. By the way should I also include my obamacare premium as a tax? And keep in mind that it isn't subsidized.
 
Posted by Greg Davidson (Member # 3377) on :
 
Red, I "showed you mine" on the other thread - 390K income, 36% net tax rates without any fancy deductions and living in a high tax state and locality. The only way I can imagine a 50%+ tax burden is if you have some very unusual circumstances that are not representative of the vast majority of Americans.

Even without sharing numbers, can you be specific about what drives your circumstances to be different from others?
 
Posted by Greg Davidson (Member # 3377) on :
 
Actually, let me also take a step back. I do appreciate everyone's willingness to participate here, we are just having a discussion about policy. I hope that no one feels personally threatened by the nature of describing somewhat personal information. For purpose of this discussion, I don't actually need to see your information, Red. Can you just describe the circumstances of any person who could be in a situation of paying more than 50% of their income in taxes? Doesn't have to be a real person, just a hypothetical person with specific income and assets that under our tax code would face such a high liability.
 
Posted by Seriati (Member # 2266) on :
 
quote:
Originally posted by Greg Davidson:
(AMT is not one of them, neither is the phase out of deductions)

***

And you get a limitation on your deductions for state and local taxes, but it is only a partial limitation when you get to 450K and start paying the highest federal rate

Greg, my point is that you get NO DEDUCTION for state and local tax when you pay the AMT. I don't think you understand the AMT as well as you think.

I don't disagree that the social security and medicare taxes become an ever smaller percentage of income as income increases, even if you pay both sides as a a self employed person. Phase out of deductions can hurt as well.
quote:
The fact that you don't "find Red's claim of 50% shocking" says more about you and your willingness to believe things that are either said in a moment of hyperbole or due to a very unusual set of circumstances not applicable to most US taxpayers.
What is says is that if you have any familiarity with high income people at the bottom end of the top range, who don't get things like substantial capital gains, there is nothing suprising about such a tax rate. I've said it many times, income tax IS NOT a tax on the rich, its a tax on people trying to become rich. And the rates, as should be expected, are a bigger burden on those towards the bottom end of the ranges than at the top.
quote:
I would think that even your 40% would be hard to achieve, although the worst part is that I think that one of the easiest ways to get there is not with a high income, but rather with self-employment doubling social security and medicare and income under 114K - and that says something about the fairness of our tax code.
I doubt many people with high income from salary come in below forty percent. And I'd be surprised if anyone who lives in a high tax jursidiction and doesn't own their own home does.

What the double tax policy most says, is that the government has sucessfully confused most people into not even realizing the extra-compensation they get but never see because it is immediately turned over to the government by their employer. Most people never hit the SS cap and that's what about 6.5% tax on their entire income, before you even get it.
 
Posted by kmbboots (Member # 6161) on :
 
quote:
Originally posted by Greg Davidson:
Seneca, what if you go off the grid in a ship in international waters?

I was hoping that Santa would bring Seneca his own island where he could live by himself. Either that or visits from three spirits.
 
Posted by Seneca (Member # 6790) on :
 
Instead I'd rather have a Constitutional government. What a tall order, huh?
 
Posted by Pete at Home (Member # 429) on :
 
Do you know what that means?
 
Posted by Seneca (Member # 6790) on :
 
Constitutional? Yes.
 
Posted by Pete at Home (Member # 429) on :
 
So you understand that you cannot have Constitutional government without a rigorous rule of law, right? That the same law applies to people we like and don't like?
 
Posted by Seneca (Member # 6790) on :
 
What does that have to do with unconstitutional laws and bad tax policy?
 
Posted by Pete at Home (Member # 429) on :
 
Sigh. And here I was just explaining to Thing One that he should never tell people that he's a "nucular physicist ..."
 


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