Why do people think that raising taxes on the wealthy is a bad idea?

[penguinz]

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time taxes were higher for the wealthy and lower for the middle/lower class.

[BucEyedPea]

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time taxes were higher for the wealthy and lower for the middle/lower class.

What was the growth prior to then?
We came from a backward's wilderness to an economic power.
BTW, what's missing from your viewpoint is that there is the seen versus the unseen. You don't know what would have been done with all that revenue the govt confiscated had it been left in the private sector.

And, you don't mention the amount of false stimulus to our economy by govt or more by fed that creates the boom-bust cycle ( called the business cycle). We've had far, far more of these than previous to the era of Keynes. Basically, that's not all real growth but an artificial economic standard and leads to speculation and favors the rich. IMO, it's basically cheating.

[chiefforlife]

Personally I am for something fair, like a flat tax. How could anything be more fair than if everyone gave the same percentage of their income. No deductibles no loop holes. Taxes could be done on a postcard, eliminating most of the IRS.

[Donger]

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time taxes were higher for the wealthy and lower for the middle/lower class.

I suppose it's a great idea, unless you're wealthy.

[Messier]

I suppose it's a great idea, unless you're wealthy.

But then you could afford it, so....

[pikesome]

But then you could afford it, so....

Define "afford". Hell, define "wealthy".

The AMT is a good example of how "wealthy" and "afford" and "not paying their fair share" moves around.

[banyon]

And, you don't mention the amount of false stimulus to our economy by govt or more by fed that creates the boom-bust cycle ( called the business cycle). We've had far, far more of these than previous to the era of Keynes. Basically, that's not all real growth but an artificial economic standard and leads to speculation and favors the rich. IMO, it's basically cheating.

More jabberwocky courtesy of BucEyed Pea, our resident economic absurdist, who gets the facts exactly backwards again.

http://www.nber.org/cycles.html

Average, all cycles:
1854-2001 (32 cycles)
1854-1919 (16 cycles)
1919-1945 (6 cycles)
1945-2001 (10 cycles)

[little jacob]

raising the capital gains tax won't do anything. people will just realize all those gains ahead of the tax increase to avoid paying double the taxes, and the revenue from capital gains that the government gets won't actually increase much, if at all. it happened when reagan did it in 1986.

[Amnorix]

And, you don't mention the amount of false stimulus to our economy by govt or more by fed that creates the boom-bust cycle ( called the business cycle). We've had far, far more of these than previous to the era of Keynes. Basically, that's not all real growth but an artificial economic standard and leads to speculation and favors the rich. IMO, it's basically cheating.

No, we haven't.

[Amnorix]

More jabberwocky courtesy of BucEyed Pea, our resident economic absurdist, who gets the facts exactly backwards again.

http://www.nber.org/cycles.html

Average, all cycles:
1854-2001 (32 cycles)
1854-1919 (16 cycles)
1919-1945 (6 cycles)
1945-2001 (10 cycles)


Ah, I see you beat me to it, and did a better job. It's so very tiresome to constantly correct her fantasties. It's like we're pooper scoopers -- running around and cleaning up incorrect factoids thrown out there as if they were the truth.

As is often said: "you're entitled to your own opinions, but not your own facts."

*sigh*

[Amnorix]

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time taxes were higher for the wealthy and lower for the middle/lower class.

Without conceding the point, I'll assume for the sake of argument that you are correct when you say that the US had it's "best and most consistent economic growth" from about 1945 to about 1970.

You still have a massive cause/effect problem. You assume that a higher tax rate on the "wealthy" (however we defined them) and a lower rate on the "middle/lower" classes is the cause of the "best and most consistent economic growth".

Here are some other possible causes:

1. the low, consistent and essentially fixed cost of oil;

2. consistently low inflation rates;

3. the advent of the US as a world superpower, and the complete inability (for much of that period) for Europe and Japan to compete with us due to the devastation of the war on those areas.

4. China, also heavily affected by the war, was a technologically inferior country with no infrastructure that posed no competitive threat to us whatsoever.

5. Most of the world's economy was driven by heavy manufacturing, at which the US excellent, and for which the barriers to entry for potential competitors was high. That is now a very, very small percentage of the economy we live in now.

6. I imagine that some here would argue that the existence of the Bretton Woods system relating to the exchange rate of gold into currency was also a key. The abandonment of htat system in 1971 or whatever it was wasn't really voluntary, but that's a different debate altogether.

7. the massive technological advantage held by the United States in the immediate post-war era as a result of war-related funding efforts in various technologies (aero, nuclear, etc.)

8. KEY -- the lack of a MASSIVE structural federal deficit and accumulated debt helped maintain a lower interest rate environment and help direct financings to private enterprise, rather than absurd and inefficient governmental excess.

This is but a small sampling of causes, and I"m not even an economist.

Therefore, I must respectfully reject your proposition as simply unproven. Maybe higher rates on the wealthy and lower rates on middle/lower income helps lead to economic prosperity, but you certainly haven't proven it.

[banyon]

raising the capital gains tax won't do anything. people will just realize all those gains ahead of the tax increase to avoid paying double the taxes, and the revenue from capital gains that the government gets won't actually increase much, if at all. it happened when reagan did it in 1986.

Sure that will happen this year, but not the subsequent years.

[little jacob]

Sure that will happen this year, but not the subsequent years.

the next republican would change it right back i think.

its really going to put a hurting on people looking to retire i think. many more people today store value for retirement in captial gains taxable things versus 30 years ago when a lot of people still retired and went on a pension.

think about your portfolio, instead of getting taxed at 15 percent or so it's going to get taxed at 28 if Obama has his way. think what a difference in dollars that is. if the regular income tax were cut in half people would be dancing in the streets.

capital gains doesn't just affect the mega-rich.

[banyon]

the next republican would change it right back i think.

its really going to put a hurting on people looking to retire i think. many more people today store value for retirement in captial gains taxable things versus 30 years ago when a lot of people still retired and went on a pension.

think about your portfolio, instead of getting taxed at 15 percent or so it's going to get taxed at 28 if Obama has his way. think what a difference in dollars that is. if the regular income tax were cut in half people would be dancing in the streets.

capital gains doesn't just affect the mega-rich.

Capital gains are taxed progressively, along with income. I haven't heard Obama clamoring to repeal that progressivity, so it sounds like what you are saying is a stretch. He is only raising the cap gains rate on people making over a certain amount.

So, at my present salary, I don't think my portfolio is in jeopardy. Thanks for the concern, though. :thumb:

[mikey23545]

Why do people think that raising taxes on the wealthy is a bad idea?

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time taxes were higher for the wealthy and lower for the middle/lower class.

If you're stupid enough to ask the question, you're too stupid to understand the answer.

[banyon]

If you're stupid enough to ask the question, you're too stupid to understand the answer.

There's a great answer: "60% of people are stupid, but not me." :rolleyes:

[SBK]

If you're stupid enough to ask the question, you're too stupid to understand the answer.

There are lots of people that fail to see that the "rich" in this country aren't the jet setting elites that they're painted to be, but the small business owners that use tax breaks in their business to create new jobs and grow.

[Rain Man]

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time taxes were higher for the wealthy and lower for the middle/lower class.

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time we were under constant threat of nuclear annihilation from the Soviets. Therefore, it is good to be under constant threat of nuclear annihilation.

[Brock]

There are people in this country who think if you have a pot to piss in, you're rich and should be taxed until you stroke out. Most of the time it really shows up in states that tax property.

[banyon]

There are lots of people that fail to see that the "rich" in this country aren't the jet setting elites that they're painted to be, but the small business owners that use tax breaks in their business to create new jobs and grow.

There are lots of small business owners and middle class people that fail to see that they aren't really a part of "the rich" that have been slowly accumulating their wealth and are really setting policies to their detriment.

[Basileus777]

Its because most Americans still possess the delusion that they're going to become one of those wealthy people.

[damaticous]

Personally I am for something fair, like a flat tax. How could anything be more fair than if everyone gave the same percentage of their income. No deductibles no loop holes. Taxes could be done on a postcard, eliminating most of the IRS.

Exactly! I firmly believe in KISS (keep it simple stupid) and I have always thought this to be a good idea. The only problem though is that there would be loopholes. Instead of "Income" people would be claiming some kind of Bonus or perk or something like that so that their shown income would be lower than their actual income.

[Hydrae]

Exactly! I firmly believe in KISS (keep it simple stupid) and I have always thought this to be a good idea. The only problem though is that there would be loopholes. Instead of "Income" people would be claiming some kind of Bonus or perk or something like that so that their shown income would be lower than their actual income.

Which is when you start to look at taxing on the consumption side instead of the income side.

[banyon]

There's a new Gini Coefficient measurement chart showing it looks like we may have even dropped a category since the last one. See which countries we are beginning to resemble (no doubt it doesn't count illegals either).

[mlyonsd]

Why do people think that raising taxes on the wealthy is a bad idea?

Because you always order the biggest steak off the menu when you know somebody else is going to pick up the tab.

IOW, it's easy to let Congress's spending get out of hand when you think some other tax class will pay for it.

I might just be fantasizing but I think under a flat tax more of the public would watch Congress and rip them if they vote for pork projects, knowing a tax increase for them might be coming down the line.

[penguinz]

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time we were under constant threat of nuclear annihilation from the Soviets. Therefore, it is good to be under constant threat of nuclear annihilation.I think it would me important to look at what the tax dollars were spent on during that era compared to today. ;)

[banyon]

Because you always order the biggest steak off the menu when you know somebody else is going to pick up the tab.

IOW, it's easy to let Congress's spending get out of hand when you think some other tax class will pay for it.

I might just be fantasizing but I think under a flat tax more of the public would watch Congress and rip them if they vote for pork projects, knowing a tax increase for them might be coming down the line.

Your sales taxes, state and local are typically flat.

How does that impact the amount of waste coming from your city or state legislature? Can you really tell a difference?

[SBK]

There are lots of small business owners and middle class people that fail to see that they aren't really a part of "the rich" that have been slowly accumulating their wealth and are really setting policies to their detriment.

The gov't classifies you as 'rich' at what, $100,000 a year income? That ain't rich my friend.

[mlyonsd]

Your sales taxes, state and local are typically flat.

How does that impact the amount of waste coming from your city or state legislature? Can you really tell a difference?

To be honest no. But then I don't see much waste of tax money in South Dakota. We don't have a state income tax and spending is pretty frugal IMO. But I suppose the argument could be made that's just because we're such a conservative state.

[Chief Henry]

Whats the definition of rich by our tax code ? That depends really here's some basic
info from 2007.

In 2007 if you were single and had an adjusted gross income of $31,850 your federal tax rate was 25%, but if your adjusted gross income was $31,849 your federal income tax rate would be 15%. Thats a huge increase for someone making just over $15.00 an hour.

If your single and have an adjusted gross income of $63,700, then yoyour federal tax rate goes up to 28%.

[Chief Henry]

Why do people think its a good idea to raise tax's on the rich ?

Who's definition of rich are we going to use ?

[SBK]

Why do people think its a good idea to raise tax's on the rich ?

Who's definition of rich are we going to use ?

Rich=anyone who currently makes more than me, or more than I deem necessary.

[Amnorix]

Whats the definition of rich by our tax code ? That depends really here's some basic
info from 2007.

In 2007 if you were single and had an adjusted gross income of $31,850 your federal tax rate was 25%, but if your adjusted gross income was $31,849 your federal income tax rate would be 15%. Thats a huge increase for someone making just over $15.00 an hour.

If your single and have an adjusted gross income of $63,700, then yoyour federal tax rate goes up to 28%.


errr...you know that the tax rate doesn't have retroactive effect, so the "huge increase" only affects income above the ~$32K of AGI.

[Amnorix]

Rich=anyone who currently makes more than me, or more than I deem necessary.


Funny, you'd think anyone that makes any kind of money at all would automatically be a Republican, and yet you would be wrong.

[Amnorix]

The gov't classifies you as 'rich' at what, $100,000 a year income? That ain't rich my friend.


The government doesn't "classify" anyone as "rich" at all.

And, P.S., depending on whether you're talking about 100K as adjusted or gross, before or after tax, and depending on what part of the country they live in, it may or may not be "rich" compared to about 95% of Americans. 100K doesn't go nearly as far in Manhattan as it does in the middle of Mississippi.

[banyon]

To be honest no. But then I don't see much waste of tax money in South Dakota. We don't have a state income tax and spending is pretty frugal IMO. But I suppose the argument could be made that's just because we're such a conservative state.

Maybe. I'd like to curb waste as well, but I think statutory prohibitions on logrolling or transparency of earmarks would be more effective.

Zero-Based-Budgeting (starting from 0 instead of last year's figures) is an option I'd like to see some field tests on too.

[banyon]

Rich=anyone who currently makes more than me, or more than I deem necessary.

I've consistently advocated in this forum that we set that at the upper 2% of income earners.

That's typically above $200k.

[AustinChief]

Over the past 50 years, there has been a significant shift in the composition of federal tax receipts toward taxes supported by labor and away from taxes paid by the owners of capital. While the contribution of payroll taxes to federal tax receipts increased from 1.6 percent of GDP in 1950 to a whopping 6.8 percent of GDP in 2002, more than a third of total federal tax receipts, corporate income taxes fell from 4.8 percent of GDP during the 1950s to 1.3 percent of GDP in 2003.

This is the problem... LABOR is bearing too high of a percentage of the tax burden.

Cut spending and shift tax liability to the upper upper rich and corporations then try to simplify the code to eliminate the ridiculous loopholes and deductions.

I am not a fiscal liberal by any means but I do believe in a progressive tax. It certainly didn't stifle the economies of the 50s and 60s and it wouldn't hurt us now either.

[lawrenceRaider]

Cut spending and shift tax liability to the upper upper rich and corporations



Why do people think that corporations pay taxes? If you raise taxes on corporations, who in the US already pay one of the highest tax rates on corporations in the world, they just pass that on to you the consumer.

Go ahead and raise taxes on corporations, and then enjoy your indirect tax hike every time you buy anything.

[penguinz]

Why do people think that corporations pay taxes? If you raise taxes on corporations, who in the US already pay one of the highest tax rates on corporations in the world, they just pass that on to you the consumer.

Go ahead and raise taxes on corporations, and then enjoy your indirect tax hike every time you buy anything.
myth

[chiefforlife]

Rich, need not be defined by anyone if there were a flat tax. I brought this up earlier but it hasnt gained any steam. This seems to happen in the real world also and I dont understand it.

How could any taxation be more fair than a flat tax? EVERYONE would pay the same percentage regardless of income level...

[patteeu]

Rich, need not be defined by anyone if there were a flat tax. I brought this up earlier but it hasnt gained any steam. This seems to happen in the real world also and I dont understand it.

How could any taxation be more fair than a flat tax? EVERYONE would pay the same percentage regardless of income level...

There are many good reasons for a flat tax. I'm with you. There's even a sort of populist argument for the flat tax: Progressive taxation is a barrier that impedes the poor from becoming the rich.

[Alphaman]

Personally I am for something fair, like a flat tax. How could anything be more fair than if everyone gave the same percentage of their income. No deductibles no loop holes. Taxes could be done on a postcard, eliminating most of the IRS.

:clap::toast::bravo:WooWooPBJ


This would be my approach as well.

[banyon]

Why do people think that corporations pay taxes? If you raise taxes on corporations, who in the US already pay one of the highest tax rates on corporations in the world, they just pass that on to you the consumer.

Go ahead and raise taxes on corporations, and then enjoy your indirect tax hike every time you buy anything.

Given that corporate income taxes have only been raised on only two occasions in the last 60 years, we don't have much data to support that proposition.

In 1967, rates were raised from 48 to 52% and in 1951, rates were raised from 42-50.75% and to 52% in 1952. In the 1967 case, revenues went down slightly (about 6% or so) before rebounding, in 1951 and 52, revenues went up by 50% and then by about 35%. revenues (http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=203&Topic2id=20&Topic3id=21) rates (http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=65&Topic2id=70).

The only difference now is that American corporations are very patriotic and dedicated to American ideals and will pack up shop and move their operations to China or India if we ask them to sacrifice too much.

[banyon]

There are many good reasons for a flat tax. I'm with you. There's even a sort of populist argument for the flat tax: Progressive taxation is a barrier that impedes the poor from becoming the rich.

WTH does that mean?

[banyon]

Rich, need not be defined by anyone if there were a flat tax. I brought this up earlier but it hasnt gained any steam. This seems to happen in the real world also and I dont understand it.

How could any taxation be more fair than a flat tax? EVERYONE would pay the same percentage regardless of income level...

If your discretionary income is 3-4$k a year (say at $12k a yr), then asking you to give up 1200$ in discretionary income asks you to do a lot more than someone who has say $400k a year to give up what amounts to a pittance of their discretionary income.

[patteeu]

The only difference now is that American corporations are very patriotic and dedicated to American ideals and will pack up shop and move their operations to China or India if we ask them to sacrifice too much.

That's a pretty important point. We ought to be cutting corporate taxes not raising them. We need to give corporations an incentive to relocate *to* the US not *from* the US.

[banyon]

That's a pretty important point. We ought to be cutting corporate taxes not raising them. We need to give corporations an incentive to relocate *to* the US not *from* the US.

Why, so we can have a race with other countries to the bottom to see which country will give them the lowest taxation and poorest environmental and labor conditions tolerable?

[Amnorix]

There are many good reasons for a flat tax. I'm with you. There's even a sort of populist argument for the flat tax: Progressive taxation is a barrier that impedes the poor from becoming the rich.


ROFLROFL

[Amnorix]

That's a pretty important point. We ought to be cutting corporate taxes not raising them. We need to give corporations an incentive to relocate *to* the US not *from* the US.


It's functionally impossible to compete with the Cayman Islands, BVI, etc. who just charge a few hundred or a couple thousand dollars, flat, and DO NOT provide one whit of infrastructure support to the corporations domiciled there. It's just a cash cow for them with no support requirement, no military to defend the company, etc. ad infinitum.

I suppose I might not care that much if there was zero tax on corporations so long as all of the tax was deemed pass-through and then forced to be paid by the owners, but then you've got a serious issue when it comes to public corporations, etc. Investors won't be happy to have to pay taxes on deemed income when they aren't getting distributions (and that would certainly include me). In theory, however, corporations could act like many pass-thru entities and be required to dividend out the tax burden they cause (which is basically in lieu of their paying taxes to the government).

This shift some degree of tax reporting burden to individuals, however.

[patteeu]

WTH does that mean?

The way a poor person becomes a rich person is to build up wealth. The higher his annual income, the faster he can get wealthy. Progressive taxation makes it harder to get wealthy because the more income he has the more disproportionate his tax hit becomes.

A working class guy who busts his butt working overtime to double his pretax income would get twice as much aftertax income under a flat tax, but he's likely to get substantially less than twice the aftertax income under a progressive tax scheme. There's a relative disincentive to work that overtime in a progressive tax system.

[patteeu]

Why, so we can have a race with other countries to the bottom to see which country will give them the lowest taxation and poorest environmental and labor conditions tolerable?

So we don't drive our business overseas and continue to make ourselves less competitive. :shrug:

It's functionally impossible to compete with the Cayman Islands, BVI, etc. who just charge a few hundred or a couple thousand dollars, flat, and DO NOT provide one whit of infrastructure support to the corporations domiciled there. It's just a cash cow for them with no support requirement, no military to defend the company, etc. ad infinitum.

I suppose I might not care that much if there was zero tax on corporations so long as all of the tax was deemed pass-through and then forced to be paid by the owners, but then you've got a serious issue when it comes to public corporations, etc. Investors won't be happy to have to pay taxes on deemed income when they aren't getting distributions (and that would certainly include me). In theory, however, corporations could act like many pass-thru entities and be required to dividend out the tax burden they cause (which is basically in lieu of their paying taxes to the government).

This shift some degree of tax reporting burden to individuals, however.

The Caymen islands don't provide one whit of infrastructure support, but you conclude that we can't compete with them for businesses? That's a curious conclusion.

We don't necessarily have to zero out the corporate income tax (although I think we should), but we ought to lower it so that we can at least be relatively attractive to those corporations that want to be located in a country that has a bit of infrastructure.

I understand that there are always going to be complications with any tax reform idea, but there are ways to deal with them that are no more onerous than the complications we have in the current code.

[BucEyedPea]

Ah, I see you beat me to it, and did a better job. It's so very tiresome to constantly correct her fantasties. It's like we're pooper scoopers -- running around and cleaning up incorrect factoids thrown out there as if they were the truth.

As is often said: "you're entitled to your own opinions, but not your own facts."

*sigh*


Which one of the 19th century panics was worse than the Great Depression?

Can’t answer? Well get ready to pick up your poop, popper-scoopers stats and all.

I wasn’t talking about market ebb and flows which are market corrections which are natural in a growing healthy economy. In a free economy, such periods are never severe, rarely nationwide/industrywide nor inflationary. If you read my words in context you'd see what I was talking about. Always a good strawman when one can use different parameters and definitions for facts and then claim another's facts as wrong. Yawn!

Therefore you will never be able to fit the constructs of Keynesianism or the bulk of the 20th century into the paradigm I describe. It's like putting the bumper of a Mercedes on a Volkswagon bug.

The other outness is that those stats blend the 19th century into the 20th which wasn't what I was talking about, to clarify. Let's face it we're talking about a 20th ( now 21st) century phenomena here.

The 19th century was hardly a laissez-fair paradise particularly with post-Civil war subsidies, a nat'l bank system, regulation and high protective tariff but was still a time of almost uninterrupted economic growth particularly the pre-Civil war gold standard era. But most of those so-called “panics” were brief events. And most of the 19th century ones can be traced going off the gold standard for the War of 1812 and the Civil War and mismanagement of the money supply due to funding war.

The one time we had a free, classical gold standard was 1870-1913. The “Guilded Age” had the greatest economic expansion where we outpaced Old Europe and become the dominant industrial power. It also saw “gasp” to a Keynesian—deflation. Yup! The economy expanded while things got cheaper! Nice!

Not only has our current era seen more interest rate manipulation and boom-busts with more devastating effects with the costs of goods climbing but a couple of very terrible wars. It leads to odd results and they take longer to correct.

Now we expand out of them artificially, not via real increases in productivity, but with credit expansion while our wages remain stagnant. This is not a real gain, nor a market driven course. Not to mention the debt it brings. Booo!

That is not wealth.

Even the stock market crash of 1987 was a worse panic than anything pre-1900 or pre-Keynes, pre-Income tax or pre-Fed.


Now, once again can you tell me which of the so called "panics" of the 19th century worse than the Great Depression of the 20th century?

[BucEyedPea]

There are many good reasons for a flat tax. I'm with you. There's even a sort of populist argument for the flat tax: Progressive taxation is a barrier that impedes the poor from becoming the rich.

Exactly! Or no reason to aspire to more because it penalizes production.
You get what you reward. Reward true production you get more and productivity is a key part of wealth creation.

You're not going to correct Amn and ban's fantasies despite the facts.

[BucEyedPea]

I think it would me important to look at what the tax dollars were spent on during that era compared to today. ;)

Why?

Any money taken by the govt is less for the private sector to grow economically. Isn't that what you want? Or do you want goodies paid for by others?

[Amnorix]

Which one of the 19th century panics was worse than the Great Depression?

Can’t answer? Well get ready to pick up your poop, popper-scoopers stats and all.

I wasn’t talking about market ebb and flows which are market corrections which are natural in a growing healthy economy. In a free economy, such periods are never severe, rarely nationwide/industrywide nor inflationary. If you read my words in context you'd see what I was talking about. Always a good strawman when one can use different parameters and definitions for facts and then claim another's facts as wrong. Yawn!

Therefore you will never be able to fit the constructs of Keynesianism or the bulk of the 20th century into the paradigm I describe. It's like putting the bumper of a Mercedes on a Volkswagon bug.

The other outness is that those stats blend the 19th century into the 20th which wasn't what I was talking about, to clarify. Let's face it we're talking about a 20th ( now 21st) century phenomena here.

The 19th century was hardly a laissez-fair paradise particularly with post-Civil war subsidies, a nat'l bank system, regulation and high protective tariff but was still a time of almost uninterrupted economic growth particularly the pre-Civil war gold standard era. But most of those so-called “panics” were brief events. And most of the 19th century ones can be traced going off the gold standard for the War of 1812 and the Civil War and mismanagement of the money supply due to funding war.

The one time we had a free, classical gold standard was 1870-1913. The “Guilded Age” had the greatest economic expansion where we outpaced Old Europe and become the dominant industrial power. It also saw “gasp” to a Keynesian—deflation. Yup! The economy expanded while things got cheaper! Nice!

Not only has our current era seen more interest rate manipulation and boom-busts with more devastating effects with the costs of goods climbing but a couple of very terrible wars. It leads to odd results and they take longer to correct.

Now we expand out of them artificially, not via real increases in productivity, but with credit expansion while our wages remain stagnant. This is not a real gain, nor a market driven course. Not to mention the debt it brings. Booo!

That is not wealth.

Even the stock market crash of 1987 was a worse panic than anything pre-1900 or pre-Keynes, pre-Income tax or pre-Fed.


Now, once again can you tell me which of the so called "panics" of the 19th century worse than the Great Depression of the 20th century?


Once again your attempted dose of humble pie is overdone, overcooked, and underthought. You are entitled to your own opinions, but not your own facts.

You pretend to compare the market crash of 1987 with the Long Depression of the 1870s? Just because you aren't old enough to remember it doesn't mean it wasn't extremely severe.

The New York Stock Exchange (http://en.wikipedia.org/wiki/New_York_Stock_Exchange) closed for 10 days. Of the country's 364 railroads, 89 went bankrupt. A total of 18,000 businesses failed between 1873 (http://en.wikipedia.org/wiki/1873) and 1875 (http://en.wikipedia.org/wiki/1875). Unemployment (http://en.wikipedia.org/wiki/Unemployment) reached 14% by 1876 (http://en.wikipedia.org/wiki/1876), during a time which became known as the Long Depression (http://en.wikipedia.org/wiki/Long_Depression).

You should also note that the period from a peak to a trough is a period of recession. If you look at the link Banyon previously supplied, you'll see that the length of recessions prior to the 1900s was on average a good bit longer than more recent recessions.

http://www.nber.org/cycles.html

I won't argue that any depression/recession was worse than the Great Depression. That is, after all, why it is called the *GREAT* Depression. It should be noted that the advent of the Great Depression is now over 75 years ago, that it is in no way indicative of the way economies are managed today, occurred when "economists" didn't even exist as a recognized profession, for the most part, and is not a damning indictment of all that you hate, no matter how vociferously.

I could also blow up various others of your arguments, such as that real productivity has not increased, or the fact that the advent of Railroads, Civil War technologies and productivity improvements, the release of the slaves and the shift from a primarily agricultural to a more industrial society were large catalysts to the economic growth in the US from the end of the Civil War to the beginning of WWI, but I can't be bothered at the moment to do more than present it in summary fashion.

[chiefforlife]

If your discretionary income is 3-4$k a year (say at $12k a yr), then asking you to give up 1200$ in discretionary income asks you to do a lot more than someone who has say $400k a year to give up what amounts to a pittance of their discretionary income.

One might call that, an incentive to do better?

[Amnorix]

The Caymen islands don't provide one whit of infrastructure support, but you conclude that we can't compete with them for businesses? That's a curious conclusion.

I don't know enough about international tax law to argue forcefully in this sphere, but money made outside the US isn't going to be repatriated here if the owners can help it. They would rather set up a BVI or Cayman Islands entity that owns the foreign corporation and keep the money offshore. There's no effective means to "compete" with that. Even if we zeroed out corporate tax and had a pass-thru tax, that would only apply to domestic US corps and repatriated dollars.

We don't necessarily have to zero out the corporate income tax (although I think we should), but we ought to lower it so that we can at least be relatively attractive to those corporations that want to be located in a country that has a bit of infrastructure.

Why? I don't know what percentage of newly formed companies effectively require nothing more than a bit of office space, some computers and some staff, but it's huge. This isn't the 60s... BVI has the internet too...

I understand that there are always going to be complications with any tax reform idea, but there are ways to deal with them that are no more onerous than the complications we have in the current code.

Please note that I do not oppose tax code simplification, though I'm sure we would disagree (severely) on specifics.

[Adam]

No matter who the government forcibly confiscates money from, they just turn around and waste it on worthless crap. If our federal government is so bloated that 1 trillion dollars a year is less than a third of what it needs to sustain it's bloatedness, why should anybody believe that throwing more money at it will help? The answer to every budgetary issue we face today is to cut spending.

[ClevelandBronco]

I'd still argue for a national sales tax that is collected by the departments already in place on the local/county/state levels. Criminals such as drug dealers and money launderers don't pay income tax, whether it's progressive or flat. However, criminals do buy goods and services. A national sales tax would tax the proceeds of illegal business activity. That would add a substantial hidden tax base to help the folks who currently pay into the system.

In addition, the millions of illegal aliens who are here would be paying taxes on the cash they spend. For that matter, I know a few Americans who have two different rates for their services. Pay them in untraceable cash, they have a lower price than if you pay them in traceable funds.

I'd take a flat tax in a heartbeat, but I'd prefer a national sales tax.

[Logical]

I'd still argue for a national sales tax that is collected by the departments already in place on the local/county/state levels. Criminals such as drug dealers and money launderers don't pay income tax, whether it's progressive or flat. However, criminals do buy goods and services. A national sales tax would tax the proceeds of illegal business activity. That would add a substantial hidden tax base to help the folks who currently pay into the system.

In addition, the millions of illegal aliens who are here would be paying taxes on the cash they spend. For that matter, I know a few Americans who have two different rates for their services. Pay them in untraceable cash, they have a lower price than if you pay them in traceable funds.

I'd take a flat tax in a heartbeat, but I'd prefer a national sales tax.Thumbs up for a National Sales tax.

[Mr. Flopnuts]

Personally I am for something fair, like a flat tax. How could anything be more fair than if everyone gave the same percentage of their income. No deductibles no loop holes. Taxes could be done on a postcard, eliminating most of the IRS.

I'd support a flat tax if it applied to accumulated wealth to this point. If we could tax everyone 20% of everything they had, and everything they earned forward, then I think that would be fair. Everyone though, no deducts, no shit. Can the sales tax, and other bullshit taxes as well. One, flat, tax.

[Rain Man]

While I appreciate the sentiment, taxing accumulated wealth at a 20 percent annual rate could only work if you also had a Logan's Run law that killed everyone over 30.

[ClevelandBronco]

Thumbs up for a National Sales tax.

I'd like to take this chance to say that since my fine cyberfriend here agrees with me, he's obviously correct.

[ClevelandBronco]

While I appreciate the sentiment, taxing accumulated wealth at a 20 percent annual rate could only work if you also had a Logan's Run law that killed everyone over 30.

In the interest of fairness, I have to concede that a national sales tax amounts to double taxation on accumulated wealth as well.

[DaneMcCloud]

I've consistently advocated in this forum that we set that at the upper 2% of income earners.

That's typically above $200k.

The problem with having the income tax set up as is for my family is that we're taxed in the highest income tax bracket possible and the only way to reduce our tax liability is to carry debt. It's ridiculous.

So in essence, I need to own income properties so that I can write off the interest. The problem with that is that even a cheap property in Los Angeles is 500k, so I need to drop 100k in cash just for the loan. It's insane.

What further pisses me off is that people like Bush & Cheney claimed 800k in income a few years back but because of their write-offs, they dropped down to the 25% mark for taxable income.

Meanwhile, my wife and I are stuck in the 10 points higher (or more) because we don't have the "write-offs" necessary to reduce our tax burden.

It's insane.

I guess they don't call it a tax burden for nothin'.

[ClevelandBronco]

The problem with having the income tax set up as is for my family is that we're taxed in the highest income tax bracket possible and the only way to reduce our tax liability is to carry debt. It's ridiculous.

So in essence, I need to own income properties so that I can write off the interest. The problem with that is that even a cheap property in Los Angeles is 500k, so I need to drop 100k in cash just for the loan. It's insane.

What further pisses me off is that people like Bush & Cheney claimed 800k in income a few years back but because of their write-offs, they dropped down to the 25% mark for taxable income.

Meanwhile, my wife and I are stuck in the 10 points higher (or more) because we don't have the "write-offs" necessary to reduce our tax burden.

It's insane.

I guess they don't call it a tax burden for nothin'.

That's another great argument against a progressive income tax.

"Weathy" people in Dane's part of the world are spending (and therefore better damned well be earning) insane amounts of money just to live comfortably. If any of you progressive income tax fans would be willing to take each local cost of living into account, I'd be more interested in your ideas.

A dollar earned and taxed in Kansas City does not equal a dollar earned and taxed in Hollywood.

There's just no sense I can see in progressive income taxes.

[patteeu]

I don't know enough about international tax law to argue forcefully in this sphere, but money made outside the US isn't going to be repatriated here if the owners can help it. They would rather set up a BVI or Cayman Islands entity that owns the foreign corporation and keep the money offshore. There's no effective means to "compete" with that. Even if we zeroed out corporate tax and had a pass-thru tax, that would only apply to domestic US corps and repatriated dollars.



Why? I don't know what percentage of newly formed companies effectively require nothing more than a bit of office space, some computers and some staff, but it's huge. This isn't the 60s... BVI has the internet too...



Please note that I do not oppose tax code simplification, though I'm sure we would disagree (severely) on specifics.

Your focus seems to be getting the government's hands on as big a cut of corporate profits as possible. That's not my focus. My focus is on reducing the government-imposed disincentives on businesses to operate in the US where they can provide jobs for US citizens/residents. IMO, government can raise it's revenues on the backs of individuals (preferably on their consumption-related transactions). For that reason, I don't care if the corporation keeps it's money overseas, but more importantly, if we zero out the corporate income tax, there isn't an artificial (i.e. government-created) reason for them to do so.

[patteeu]

I'd support a flat tax if it applied to accumulated wealth to this point. If we could tax everyone 20% of everything they had, and everything they earned forward, then I think that would be fair. Everyone though, no deducts, no shit. Can the sales tax, and other bullshit taxes as well. One, flat, tax.

:eek:

[Amnorix]

That's another great argument against a progressive income tax.

"Weathy" people in Dane's part of the world are spending (and therefore better damned well be earning) insane amounts of money just to live comfortably. If any of you progressive income tax fans would be willing to take each local cost of living into account, I'd be more interested in your ideas.

A dollar earned and taxed in Kansas City does not equal a dollar earned and taxed in Hollywood.

There's just no sense I can see in progressive income taxes.

I live in Boston, and cost of living doesn't get that much worse than here and I still favor progressive taxes, because they just fundamentally make sense. Each additional dollar of income above a certain amount represents discretionary income, and the more you make, the more discretionary income you can give to the government without it affecting your ability to afford staples such as food, shelter, heat, etc.

20% of income for a family of 4 making $50K is much harder to afford than 20% for a family of 4 making $250K. Sure you can admit that? Sure, the first family "only" pays $10K in taxes compared to $50K for the second family, but the first family must food, clothe, shelter their family on just $40K ($50-10) while the second must make do with $200K ($250-50).

It's as simple as that.

[Amnorix]

Your focus seems to be getting the government's hands on as big a cut of corporate profits as possible. That's not my focus. My focus is on reducing the government-imposed disincentives on businesses to operate in the US where they can provide jobs for US citizens/residents. IMO, government can raise it's revenues on the backs of individuals (preferably on their consumption-related transactions). For that reason, I don't care if the corporation keeps it's money overseas, but more importantly, if we zero out the corporate income tax, there isn't an artificial (i.e. government-created) reason for them to do so.

You could eliminate taxes on corporate income and still not eliminate offshoring. You might, MAYBE, reduce it, but you sure won't elimiante it. You can pay $15/hour for a technician to answer phones for Dell or whoever here in the US, or $3/hour for someone in India to do it. You tell me what they're going to do.

My goal isn't to tax corporations at all. My true overall goal would be some fluffy thing like "to have a well-balanced and reasonably simple tax system that produces sufficient revenues for the federal government to fund its costs while doing as little harm to the economy and economic activity as possible.

I'm a corporate lawyer -- believe me when I say I understand how the tax tail often wags the corporate dog.

[vailpass]

I'd support a flat tax if it applied to accumulated wealth to this point. If we could tax everyone 20% of everything they had, and everything they earned forward, then I think that would be fair. Everyone though, no deducts, no shit. Can the sales tax, and other bullshit taxes as well. One, flat, tax.

**** you and **** you and **** you again. Nyet comrade. Get your hand out of my pocket and go earn your own.

[patteeu]

You could eliminate taxes on corporate income and still not eliminate offshoring. You might, MAYBE, reduce it, but you sure won't elimiante it. You can pay $15/hour for a technician to answer phones for Dell or whoever here in the US, or $3/hour for someone in India to do it. You tell me what they're going to do.

My goal isn't to tax corporations at all. My true overall goal would be some fluffy thing like "to have a well-balanced and reasonably simple tax system that produces sufficient revenues for the federal government to fund its costs while doing as little harm to the economy and economic activity as possible.

I'm a corporate lawyer -- believe me when I say I understand how the tax tail often wags the corporate dog.

I applaud your general goal and your recognition regarding the "tax tail".

As for eliminating offshoring, I'm not at all suggesting that we can ever do such a thing. The global economy is here and we all need to recognize that. We can, however, remove unnecessary, government-imposed burdens on business to provide as attractive a climate as possible in order to minimize the incentive for domestic business to relocate and give foreign business some reason to consider moving some or all of their operations here.

[SBK]

**** you and **** you and **** you again. Nyet comrade. Get your hand out of my pocket and go earn your own.

He's proven himself to be a man that has nothing.

[Chief Henry]

errr...you know that the tax rate doesn't have retroactive effect, so the "huge increase" only affects income above the ~$32K of AGI.


Thats my point ! If you make .01 more, uncle SAM will raise your TAX rate
SUBSTANTIALLY on that amount .(01) and everything after that. How assinine is that. Imagine the people working overtime at there job and the penalty for working that overtime

Person A making $77,100 of AGI currently pays federal tax of $15,300 with the first 1/2 of his income being at 15% and second 1/2 of his income being taxed at 25%. If Person A were to pay 15% across the board, person A only pays $11,656. Thats a HUGE differance of $3,644. Thats near 31% MORE.

[Amnorix]

Thats my point ! If you make .01 more, uncle SAM will raise your TAX rate
SUBSTANTIALLY on that amount .(01) and everything after that. How assinine is that. Imagine the people working overtime at there job and the penalty for working that overtime

Person A making $77,100 of AGI currently pays federal tax of $15,300 with the first 1/2 of his income being at 15% and second 1/2 of his income being taxed at 25%. If Person A were to pay 15% across the board, person A only pays $11,656. Thats a HUGE differance of $3,644. Thats near 31% MORE.


It's not asinine at all. The more you make, the more you can pay in taxes without it significantly affecting your lifestyle.

Absolutely nothing you say is going to dent my belief in a progressive tax system. It is in my mind both a fair and logical system. As I doubt I'll dissuade you from your opinion, I won't blather on any further.

[HonestChieffan]

From WWII thru the 60's is when the US had is best and most consistent economic growth. At this time taxes were higher for the wealthy and lower for the middle/lower class.

I think it was a result of a world war not taxes on rich folks. What we need is a good old fashioned, everybody in the pool war.

[Rain Man]

It's not asinine at all. The more you make, the more you can pay in taxes without it significantly affecting your lifestyle.

Absolutely nothing you say is going to dent my belief in a progressive tax system. It is in my mind both a fair and logical system. As I doubt I'll dissuade you from your opinion, I won't blather on any further.

I'm curious about a particular element of this. Let's pick some standard federal program. The FBI, space exploration, inspecting Chilean grapes, stamping passports, whatever. Pick one.

Now consider a person making $30,000 a year and another person making $90,000 a year. If there's a flat tax, the higher-income person will pay three times as much as the lower income person for that service.

How are you sure that they get more than three times more value out of that service, as opposed to getting twice the value or four times the value? If they get twice the value and pay accordingly, then you have a regressive tax. If they get three times the value and pay accordingly, you have a flat tax. At four times, it's a progressive tax. What is it that convinces you that three times isn't enough? Or is it simply a matter of believing that higher-income people should pay disproportionately?

[Amnorix]

I'm curious about a particular element of this. Let's pick some standard federal program. The FBI, space exploration, inspecting Chilean grapes, stamping passports, whatever. Pick one.

Now consider a person making $30,000 a year and another person making $90,000 a year. If there's a flat tax, the higher-income person will pay three times as much as the lower income person for that service.

How are you sure that they get more than three times more value out of that service, as opposed to getting twice the value or four times the value? If they get twice the value and pay accordingly, then you have a regressive tax. If they get three times the value and pay accordingly, you have a flat tax. At four times, it's a progressive tax. What is it that convinces you that three times isn't enough? Or is it simply a matter of believing that higher-income people should pay disproportionately?

I don't accept your basic premise that you're fundamentally paying for specific services that you need. In fact, I think it's fair to say that, in general, the more money you make, the less use/need you will have during the course of your lifetime for any *specific* service, though there is some kind of vague "the military and government are protecting you more than they're protecting your neighbor from foreign/domestic threats because you have more to protect", but even that is so odd an argument I wouldn't really try to make it. Ultimately, one's life, liberty and pursuit of happiness isn't really any more valuable than anyone else's in any sort of quantifiable way.

Also, obviously, there is absolutely no way to even roughly guesstimate what "value" you receive back from government spending, except to know that it's pennies on the dollar if you're a home-owning (real estate taxes), income earning (income taxes) individual.

Progressive taxes are fair in my mind for the simple reason that above basic necessities, additional income becomes increasingly discretionary spending dollars, and impacts the earning individual less and less.

What is the difference of another $20,000 in income to someone who makes $1MM per year? hardly anything. In fact, he/she barely notices it.

What is antoher $20K to someone who makes $30K/year? The difference between renting a pathetic place that needs work and a place that doesn't need to be fumigated, most likely. The possibility of *maybe* going on a vacation that year. Not living paycheck-to-paycheck quite so much. etc.

[Chief Henry]

It's not asinine at all. The more you make, the more you can pay in taxes without it significantly affecting your lifestyle.

Absolutely nothing you say is going to dent my belief in a progressive tax system. It is in my mind both a fair and logical system. As I doubt I'll dissuade you from your opinion, I won't blather on any further.

Absolutely nothing you say will CHANGE my opinion either. But what has been proved MANY times is that when you let Americans KEEP more of what they make, more money goes into the the Treasury.

[Chief Henry]

I don't accept your basic premise that you're fundamentally paying for specific services that you need. In fact, I think it's fair to say that, in general, the more money you make, the less use/need you will have during the course of your lifetime for any *specific* service, though there is some kind of vague "the military and government are protecting you more than they're protecting your neighbor from foreign/domestic threats because you have more to protect", but even that is so odd an argument I wouldn't really try to make it. Ultimately, one's life, liberty and pursuit of happiness isn't really any more valuable than anyone else's in any sort of quantifiable way.

Also, obviously, there is absolutely no way to even roughly guesstimate what "value" you receive back from government spending, except to know that it's pennies on the dollar if you're a home-owning (real estate taxes), income earning (income taxes) individual.

Progressive taxes are fair in my mind for the simple reason that above basic necessities, additional income becomes increasingly discretionary spending dollars, and impacts the earning individual less and less.

What is the difference of another $20,000 in income to someone who makes $1MM per year? hardly anything. In fact, he/she barely notices it.

What is antoher $20K to someone who makes $30K/year? The difference between renting a pathetic place that needs work and a place that doesn't need to be fumigated, most likely. The possibility of *maybe* going on a vacation that year. Not living paycheck-to-paycheck quite so much. etc.

One business owner could use that $20,000 to pay for EE's benefits or to add another EE. Imagine, a business owner hiring another EE ?

[Taco John]

I don't accept your basic premise that you're fundamentally paying for specific services that you need.



Why should *anyone* be forced to pay for services that they don't want/need/use?

[Amnorix]

Absolutely nothing you say will CHANGE my opinion either. But what has been proved MANY times is that when you let Americans KEEP more of what they make, more money goes into the the Treasury.


Well, obviously that statement can be true to a degree, depending on circumstances, but it has limits. Defining what those limits and circumstances are is an entire debate of its own.

[Amnorix]

Why should *anyone* be forced to pay for services that they don't want/need/use?


A few thoughts in response:

1. who decides what people or society in general need/want/use? You would probably have everyone decide for themselves, which I understand is a natural outgrowth of your political philosophy, but the fact is that the political philosophy of this country is a representative government, and it is our appointed representatives who decide these matters for the good governance of all.

Or would you have someone who doesn't own a car able to "opt out" of paying any highway/road related taxes? A pacifist able to avoid paying military-related taxes? Etc. ad infinitum.

2. Sometimes, it's necessary for the common good of everyone to expend funds on items that may not redound to the benefit of SOME particular persons, but does benefit ENOUGH people to be worth the cost. Since it's impossible to make taxes individualized, there's no other way to do it.

[bkkcoh]

Why not just put a ceiling on what someone can make, regardless of what they do for a living.

How much tax is enough for the rich? is 50%? Is 75%? is 90?

For the middle class? Is 20%? Is 25%?

How is one to determine what is a fair amount of tax? Based on the use of services one gets, how do you determine that. :hmmm:

[Chief Henry]

Why not just put a ceiling on what someone can make, regardless of what they do for a living.How much tax is enough for the rich? is 50%? Is 75%? is 90?

For the middle class? Is 20%? Is 25%?

How is one to determine what is a fair amount of tax? Based on the use of services one gets, how do you determine that. :hmmm:




Are you serious about that first sentance or tongue in cheek ???

[bkkcoh]

Are you serious about that first sentance or tongue in cheek ???

well, if everyone made the same amount, then everyone could get taxed at the same rate and no one would be upset, right? :doh!:

[StcChief]

definition of rich...Obama, likely about 10K.