PDA

View Full Version : Economics 9 things the rich don't want you to know about taxes


KC native
04-14-2011, 09:30 PM
David Cay Johnston pens another great column. Much of this has been said here before but here it is again in a condensed and well written form.
http://wweek.com/portland/article-17350-9_things_the_rich_dont_want_you_to_know_about_taxes.html

9 Things the Rich don't want you to know about taxes

For three decades we have conducted a massive economic experiment, testing a theory known as supply-side economics. The theory goes like this: Lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity—so much so that tax revenues will go up, despite lower rates. The late Milton Friedman, the libertarian economist who wanted to shut down public parks because he considered them socialism, promoted this strategy. Ronald Reagan embraced Friedman’s ideas and made them into policy when he was elected president in 1980.

For the past decade, we have doubled down on this theory of supply-side economics with the tax cuts sponsored by President George W. Bush in 2001 and 2003, which President Obama has agreed to continue for two years.

You would think that whether this grand experiment worked would be settled after three decades. You would think the practitioners of the dismal science of economics would look at their demand curves and the data on incomes and taxes and pronounce a verdict, the way Galileo and Copernicus did when they showed that geocentrism was a fantasy because Earth revolves around the sun (known as heliocentrism). But economics is not like that. It is not like physics with its laws and arithmetic with its absolute values.

Tax policy is something the framers left to politics. And in politics, the facts often matter less than who has the biggest bullhorn.

The Mad Men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show.

As millions of Americans prepare to file their annual taxes, they do so in an environment of media-perpetuated tax myths. Here are a few points about taxes and the economy that you may not know, to consider as you prepare to file your taxes. (All figures are inflation-adjusted.)
http://www.wweek.com/portland/imgs/media.images/3909/lede_3723_(reverse).jpg

1. Poor Americans do pay taxes.

Gretchen Carlson, the Fox News host, said last year “47 percent of Americans don’t pay any taxes.” John McCain and Sarah Palin both said similar things during the 2008 campaign about the bottom half of Americans.

Ari Fleischer, the former Bush White House spokesman, once said “50 percent of the country gets benefits without paying for them.”

Actually, they pay lots of taxes—just not lots of federal income taxes.

Data from the Tax Foundation show that in 2008, the average income for the bottom half of taxpayers was $15,300.

This year the first $9,350 of income is exempt from taxes for singles and $18,700 for married couples, just slightly more than in 2008. That means millions of the poor do not make enough to owe income taxes.

But they still pay plenty of other taxes, including federal payroll taxes. Between gas taxes, sales taxes, utility taxes and other taxes, no one lives tax-free in America.

When it comes to state and local taxes, the poor bear a heavier burden than the rich in every state except Vermont, the Institute on Taxation and Economic Policy calculated from official data. In Alabama, for example, the burden on the poor is more than twice that of the top 1 percent. The one-fifth of Alabama families making less than $13,000 pay almost 11 percent of their income in state and local taxes, compared with less than 4 percent for those who make $229,000 or more.
http://www.wweek.com/portland/imgs/media.images/3907/lede_3723_(population).jpg

2. The wealthiest Americans don’t carry the burden.

This is one of those oft-used canards. Sen. Rand Paul, the tea party favorite from Kentucky, told David Letterman recently that “the wealthy do pay most of the taxes in this country.”

The Internet is awash with statements that the top 1 percent pays, depending on the year, 38 percent or more than 40 percent of taxes.

It’s true that the top 1 percent of wage earners paid 38 percent of the federal income taxes in 2008 (the most recent year for which data is available). But people forget that the income tax is less than half of federal taxes and only one-fifth of taxes at all levels of government.

Social Security, Medicare and unemployment insurance taxes (known as payroll taxes) are paid mostly by the bottom 90 percent of wage earners. That’s because, once you reach $106,800 of income, you pay no more for Social Security, though the much smaller Medicare tax applies to all wages. Warren Buffett pays the exact same amount of Social Security taxes as someone who earns $106,800.
http://www.wweek.com/portland/imgs/media.images/3904/lede_3723_(gap).jpg

3. In fact, the wealthy are paying less taxes.

The Internal Revenue Service issues an annual report on the 400 highest income-tax payers. In 1961, there were 398 taxpayers who made $1 million or more, so I compared their income tax burdens from that year to 2007.

Despite skyrocketing incomes, the federal tax burden on the richest 400 has been slashed, thanks to a variety of loopholes, allowable deductions and other tools. The actual share of their income paid in taxes, according to the IRS, is 16.6 percent. Adding payroll taxes barely nudges that number.

Compare that to the vast majority of Americans, whose share of their income going to federal taxes increased from 13.1 percent in 1961 to 22.5 percent in 2007.

(By the way, during seven of the eight George W. Bush years, the IRS report on the top 400 taxpayers was labeled a state secret, a policy that the Obama administration overturned almost instantly after his inauguration.)
http://www.wweek.com/portland/imgs/media.images/3906/lede_3723_(pluto).jpg

4. Many of the very richest pay no current income taxes at all.

John Paulson, the most successful hedge-fund manager of all, bet against the mortgage market one year and then bet with Glenn Beck in the gold market the next. Paulson made himself $9 billion in fees in just two years. His current tax bill on that $9 billion? Zero.

Congress lets hedge-fund managers earn all they can now and pay their taxes years from now.

In 2007, Congress debated whether hedge-fund managers should pay the top tax rate that applies to wages, bonuses and other compensation for their labors, which is 35 percent. That tax rate starts at about $300,000 of taxable income—not even pocket change to Paulson, but almost 12 years of gross pay to the median-wage worker.

The Republicans and a key Democrat, Sen. Charles Schumer of New York, fought to keep the tax rate on hedge-fund managers at 15 percent, arguing that the profits from hedge funds should be considered capital gains, not ordinary income, which got a lot of attention in the news.
What the news media missed is that hedge-fund managers don’t even pay 15 percent. At least, not currently. So long as they leave their money, known as “carried interest,” in the hedge fund, their taxes are deferred. They only pay taxes when they cash out, which could be decades from now for younger managers. How do these hedge-fund managers get money in the meantime? By borrowing against the carried interest, often at absurdly low rates—currently about 2 percent.

Lots of other people live tax-free, too. I have Donald Trump’s tax records for four years early in his career. He paid no taxes for two of those years. Big real-estate investors enjoy tax-free living under a 1993 law President Clinton signed. It lets “professional” real-estate investors use paper losses like depreciation on their buildings against any cash income, even if they end up with negative incomes like Trump.

Frank and Jamie McCourt, who own the Los Angeles Dodgers, have not paid any income taxes since at least 2004, their divorce case revealed. Yet they spent $45 million one year alone. How? They just borrowed against Dodger ticket revenue and other assets. To the IRS, they look like paupers.

In Wisconsin, Terrence Wall, who unsuccessfully sought the Republican nomination for U.S. Senate in 2010, paid no income taxes on as much as $14 million of recent income, his disclosure forms showed. Asked about his living tax-free while working people pay taxes, he had a simple response: Everyone should pay less.
http://www.wweek.com/portland/imgs/media.images/3911/lede_3723_(wasnt).jpg

5. And (surprise!) since Reagan, only the wealthy have gained significant income.

The Heritage Foundation, the Cato Institute and similar conservative marketing organizations tell us relentlessly that lower tax rates will make us all better off.

“When tax rates are reduced, the economy’s growth rate improves and living standards increase,” according to Daniel J. Mitchell, an economist at Heritage until he joined Cato. He says that supply-side economics is “the simple notion that lower tax rates will boost work, saving, investment and entrepreneurship.”

When Reagan was elected president, the top marginal tax rate (the tax rate paid on the last dollar of income earned) was 70 percent. He cut it to 50 percent and then 28 percent starting in 1987. It was raised by George H.W. Bush and Clinton, and then cut by George W. Bush. The top rate is now 35 percent.

Since 1980, when Reagan won the presidency promising prosperity through tax cuts, the average income of the vast majority—the bottom 90 percent of Americans—has increased a meager $303, or 1 percent. Put another way, for each dollar people in the vast majority made in 1980, in 2008 their income was up to $1.01.

Those at the top did better. The top 1 percent’s average income more than doubled to $1.1 million, according to an analysis of tax data by economists Thomas Piketty and Emmanuel Saez. The really rich, the top one-tenth of 1 percent, each enjoyed almost $4 in 2008 for each dollar in 1980.

The top 300,000 Americans now enjoy almost as much income as the bottom 150 million, the data show.
http://www.wweek.com/portland/imgs/media.images/3905/lede_3723_(haven).jpg

KC native
04-14-2011, 09:33 PM
cont....

6. When it comes to corporations, the story is much the same—less taxes.

Corporate profits in 2008, the latest year for which data are available, were $1,830 billion, up almost 12 percent from $1,638.7 billion in 2000. Yet, even though corporate tax rates have not been cut, corporate income-tax revenues fell to $230 billion from $249 billion—an 8 percent decline, thanks to a number of loopholes. The official 2010 profit numbers are not added up and released by the government, but the amount paid in corporate taxes is: In 2010 they fell further, to $191 billion—a decline of more than 23 percent compared with 2000.

http://www.wweek.com/portland/imgs/media.images/3908/lede_3723_(profits).jpg

7. Some corporate tax breaks destroy jobs.

Despite all the noise that America has the world’s second-highest corporate tax rate, the actual taxes paid by corporations are falling because of the growing number of loopholes and companies shifting profits to tax havens like the Cayman Islands.

And right now America’s corporations are sitting on close to $2 trillion in cash that is not being used to build factories, create jobs or anything else, but acts as an insurance policy for managers unwilling to take the risk of actually building the businesses they are paid so well to run. That cash hoard, by the way, works out to nearly $13,000 per taxpaying household.

A corporate tax rate that is too low actually destroys jobs. That’s because a higher tax rate encourages businesses (who don’t want to pay taxes) to keep the profits in the business and reinvest, rather than pull them out as profits and have to pay high taxes.

The 2004 American Jobs Creation Act, which passed with bipartisan support, allowed more than 800 companies to bring profits that were untaxed but overseas back to the United States. Instead of paying the usual 35 percent tax, the companies paid just 5.25 percent.

The companies said bringing the money home—“repatriating” it, they called it—would mean lots of jobs. Sen. John Ensign, the Nevada Republican, put the figure at 660,000 new jobs.

Pfizer, the drug company, was the biggest beneficiary. It brought home $37 billion, saving $11 billion in taxes. Almost immediately it started firing people. Since the law took effect, Pfizer has let 40,000 workers go. In all, it appears that at least 100,000 jobs were destroyed.

Now Congressional Republicans and some Democrats are gearing up again to pass another tax holiday, promoting a new Jobs Creation Act. It would affect 10 times as much money as the 2004 law.
http://www.wweek.com/portland/imgs/media.images/3903/lede_3723_(bush).jpg

8. Republicans like taxes too.

President Reagan signed into law 11 tax increases, targeted at people down the income ladder. His administration and the Washington press corps called the increases “revenue enhancers.” Reagan raised Social Security taxes so high that by the end of 2008, the government had collected more than $2 trillion in surplus tax.

George W. Bush signed a tax increase, too, in 2006, despite his written ironclad pledge never to raise taxes on anyone. It raised taxes on teenagers by requiring kids up to age 17, who earned money, to pay taxes at their parents’ tax rate, which would almost always be higher than the rate they would otherwise pay. It was a story that ran buried inside The New York Times one Sunday, but nowhere else.

In fact, thanks to Republicans, one in three Americans will pay higher taxes this year than they did last year.

First, some history. In 2009, President Obama pushed his own tax cut—for the working class. He persuaded Congress to enact the Making Work Pay Tax Credit. Over the two years 2009 and 2010, it saved single workers up to $800 and married heterosexual couples up to $1,600, even if only one spouse worked. The top 5 percent or so of taxpayers were denied this tax break.

The Obama administration called it “the biggest middle-class tax cut” ever. Yet last December the Republicans, poised to regain control of the House of Representatives, killed Obama’s Making Work Pay Credit while extending the Bush tax cuts for two more years—a policy Obama agreed to.

By doing so, Congressional Republican leaders increased taxes on a third of Americans, virtually all of them the working poor, this year.

As a result, of the 155 million households in the tax system, 51 million will pay an average of $129 more this year. That is $6.6 billion in higher taxes for the working poor, the nonpartisan Tax Policy Center estimated.

In addition, the Republicans changed the rate of workers’ FICA contributions, which finances half of Social Security. The result:

If you are single and make less than $20,000, or married and less than $40,000, you lose under this plan. But the top 5 percent, people who make more than $106,800, will save $2,136 ($4,272 for two-career couples).
http://www.wweek.com/portland/imgs/media.images/3902/lede_3723_(aughts).jpg

9. Other countries do it better.

We measure our economic progress, and our elected leaders debate tax policy, in terms of a crude measure known as gross domestic product. The way the official statistics are put together, each dollar spent buying solar energy equipment counts the same as each dollar spent investigating murders.

We do not give any measure of value to time spent rearing children or growing our own vegetables or to time off for leisure and community service.

And we do not measure the economic damage done by shocks, such as losing a job, which means not only loss of income and depletion of savings, but loss of health insurance, which a Harvard Medical School study found results in 45,000 unnecessary deaths each year.

Compare this to Germany, one of many countries with a smarter tax system and smarter spending policies.

Germans work less, make more per hour and get much better parental leave than Americans, many of whom get no fringe benefits such as health care, pensions or even a retirement savings plan. By many measures the vast majority live better in Germany than in America.

To achieve this, unmarried Germans on average pay 52 percent of their income in taxes. Americans average 30 percent, according to the Organization for Economic Cooperation and Development.

At first blush the German tax burden seems horrendous. But in Germany (as well as in Britain, France, Scandinavia, Canada, Australia and Japan), tax-supported institutions provide many of the things Americans pay for with after-tax dollars. Buying wholesale rather than retail saves money.

A proper comparison would take the 30 percent average tax on American workers and add their out-of-pocket spending on health care, college tuition and fees for services, and compare that with taxes that the average German pays. Add it all up and the combination of tax and personal spending is roughly equal in both countries, but with a large risk of catastrophic loss in America, and a tiny risk in Germany.

Americans take on $85 billion of debt each year for higher education, while college is financed by taxes in Germany and tuition is cheap to free in other modern countries. While soaring medical costs are a key reason that since 1980 bankruptcy in America has increased 15 times faster than population growth, no one in Germany or the rest of the modern world goes broke because of accident or illness. And child poverty in America is the highest among modern countries—almost twice the rate in Germany, which is close to the average of modern countries.

On the corporate tax side, the Germans encourage reinvestment at home and the outsourcing of low-value work, like auto assembly, and German rules tightly control accounting so that profits earned at home cannot be made to appear as profits earned in tax havens.

Adopting the German system is not the answer for America. But crafting a tax system that benefits the vast majority, reduces risks, provides universal health care and focuses on diplomacy rather than militarism abroad (and at home) would be a lot smarter than what we have now.

Here is a question to ask yourself: We started down this road with Reagan’s election in 1980 and upped the ante in this century with George W. Bush.

How long does it take to conclude that a policy has failed to fulfill its promises? And as you think of that, keep in mind George Washington. When he fell ill his doctors followed the common wisdom of the era. They cut him and bled him to remove bad blood. As Washington’s condition grew worse, they bled him more. And like the mantra of tax cuts for the rich, they kept applying the same treatment until they killed him.

Luckily we don’t bleed the sick anymore, but we are bleeding our government to death.

http://www.wweek.com/portland/imgs/media.images/3910/lede_3723_(starving).jpg

KC native
04-14-2011, 09:34 PM
oh and a little on David Cay Johnston

David Cay Johnston is a columnist for tax.com and teaches the tax, property and regulatory law of the ancient world at Syracuse University College of Law and Whitman School of Management. He has also been called the “de facto chief tax enforcement officer of the United States” because his reporting in The New York Times shut down many tax dodges and schemes, just two of them valued by Congress at $260 billion. Johnston received a 2001 Pulitzer Prize for exposing tax loopholes and inequities. He wrote two bestsellers on taxes, Perfectly Legal and Free Lunch. Later this year, Johnston will be out with a new book, The Fine Print, revealing how big business, with help from politicians, abuses plain English to rob you blind.

prhom
04-14-2011, 10:40 PM
Personally, I like the title of the last graphic "Starving Our Government".

Sannyasi
04-14-2011, 11:18 PM
The 3rd point, if true, is pretty damning to a lot of the right wing arguments that regularly get recycled here. I'm interested to see what some of the conservative posters have to say in response.

Bewbies
04-14-2011, 11:26 PM
Germany is better because the average person pays 52% of their income in taxes?

KC native
04-14-2011, 11:45 PM
The 3rd point, if true, is pretty damning to a lot of the right wing arguments that regularly get recycled here. I'm interested to see what some of the conservative posters have to say in response.

Most of them will likely stay away. They are data and fact phobic.

Bewbies
04-14-2011, 11:54 PM
Most of them will likely stay away. They are data and fact phobic.

We hate propaganda too, which is the issue you'll run into here.

ClevelandBronco
04-15-2011, 01:09 AM
The 3rd point, if true, is pretty damning to a lot of the right wing arguments that regularly get recycled here. I'm interested to see what some of the conservative posters have to say in response.

The top marginal income tax rate in 1961 was 91%.

How close would you like to get to 91% today to make sure you fuck over those 400 people?

ClevelandBronco
04-15-2011, 01:30 AM
The 3rd point, if true, is pretty damning to a lot of the right wing arguments that regularly get recycled here. I'm interested to see what some of the conservative posters have to say in response.

Another red flag in point #3 is that the author talks about federal taxes paid by "the vast majority of Americans." Well, wait as ****ing minute. We already know that income taxes aren't paid by the vast majority of Americans. They're paid by about 53% of Americans. So what the hell is happening?

The culprit, of course, is payroll taxes, not income taxes. Payroll taxes are a tiny fraction of the federal taxes paid by people who earn a great deal of money, but they are a large fraction of the federal taxes paid by middle class workers.

Including payroll taxes is a sleight of hand that liberals love to use to confuse people on the income tax issue.

The author may work for a university, but he's an advocate, not an educator. Don't pay him any more heed than he deserves.

HonestChieffan
04-15-2011, 05:52 AM
http://3.bp.blogspot.com/-9uFj1zncT7k/Tagcd83RCrI/AAAAAAABAsQ/3NVCnEZMxSI/s400/thought.jpg

Amnorix
04-15-2011, 06:03 AM
Germany is better because the average person pays 52% of their income in taxes?

That's your response to all of that?!?

:shake:

Amnorix
04-15-2011, 06:05 AM
Another red flag in point #3 is that the author talks about federal taxes paid by "the vast majority of Americans." Well, wait as ****ing minute. We already know that income taxes aren't paid by the vast majority of Americans. They're paid by about 53% of Americans. So what the hell is happening?

The culprit, of course, is payroll taxes, not income taxes. Payroll taxes are a tiny fraction of the federal taxes paid by people who earn a great deal of money, but they are a large fraction of the federal taxes paid by middle class workers.

Including payroll taxes is a sleight of hand that liberals love to use to confuse people on the income tax issue.

The author may work for a university, but he's an advocate, not an educator. Don't pay him any more heed than he deserves.

Payroll taxes aren't taxes? And more specifically, while not typically lumped in the broad category fo "income taxes", they are taxes....on income.

Given that Social Security isn't a lockbox, as we all know, the entire concept of segregating payroll taxes from income taxes is pretty much asinine. Just a way to justify some governmental bookkeeping and tax policy.

Amnorix
04-15-2011, 06:06 AM
The top marginal income tax rate in 1961 was 91%.

How close would you like to get to 91% today to make sure you fuck over those 400 people?

Just FTR, a top bracket of 91% is pure stupidity.

alnorth
04-15-2011, 06:15 AM
Including payroll taxes is a sleight of hand that liberals love to use to confuse people on the income tax issue.

The author may work for a university, but he's an advocate, not an educator. Don't pay him any more heed than he deserves.

Sleight of hand? I'd call ignoring payroll taxes sleight of hand.

If payroll taxes are not taxes, then what are they?

Amnorix
04-15-2011, 06:19 AM
The article obviously only deals with those at the very top of the economic ladder.

It doesn't get into perfectly legal and legitimate methods by which small business owners use their businesses to pay their personal expenses, taking them as a deduct against the company's business income. There are also alot of illegitimate things that are done in this arena, as I have personally witnessed.

For anyone who is unaware, a small business owner with a reasonably prosperous business will generally:

1. have the business lease him a car.

2. possibly have the business pay all gas for the car.

3. pay for his/her cell phone, as well as monthly charges.

4. will never pay postage on anything mailed.

5. will have a life insurance policy paid for by the business.

In addition to these items, which I understand to be legal, I think it's fair to say that it's the rare busienss owner who has bought himself any computer equipment other than through the company, even if it's for his home/wife/kids, etc. etc.

All this doesn't even show up as income for the business owner, on which he pays taxes, and in fact it's an offset to his business income so it LOWERS his business's tax bill.

Amnorix
04-15-2011, 06:20 AM
Sleight of hand? I'd call ignoring payroll taxes sleight of hand.

If payroll taxes are not taxes, then what are they?


They are taxes that happen to be on income, but they are definitely NOT income taxes. Keep it straight please, JFC...

Saul Good
04-15-2011, 06:20 AM
Sleight of hand? I'd call ignoring payroll taxes sleight of hand.

If payroll taxes are not taxes, then what are they?

Pure redistribution of wealth seeing as they get that money back plus a lot more that they didn't pay.

alnorth
04-15-2011, 06:24 AM
They are taxes that happen to be on income, but they are definitely NOT income taxes. Keep it straight please, JFC...

nonsense.

I am not talking about the legal definition of income taxes in US tax law. A tax on income, is an income tax. Period. Insisting that it is not an income tax, as if that distinction somehow means something, is silly meaningless semantics.

Amnorix
04-15-2011, 06:25 AM
Pure redistribution of wealth seeing as they get that money back plus a lot more that they didn't pay.


You seem confused as to Social Security. That's redistribution not up/down in the economic chain so much as across the economic chain, from current workers to former workers.

Even the wealthiest taxpayer is going to get back alot more that they didn't pay if they live long enough.

Oh, and I wonder who tends to live longer, the wealthier or the poor? God knows smoking was a god-send for the SSA's solvency....

Amnorix
04-15-2011, 06:26 AM
nonsense.

I am not talking about the legal definition of income taxes in US tax law. A tax on income, is an income tax. Period. Insisting that it is not an income tax, as if that distinction somehow means something, is silly meaningless semantics.


Yours needs tuning.

http://t0.gstatic.com/images?q=tbn:ANd9GcT8DfAOA_atUcW4vJmCnKhFNwxO60hsjyoeGA2An6G-ChzYGr7f&t=1

Okie_Apparition
04-15-2011, 06:32 AM
Leave the true fans alone.

alnorth
04-15-2011, 06:41 AM
If the overall tax burden was flat, as in the combined sales/income/capital gains/state/payroll/etc tax paid by the wealthy were X% of what they made, and the combined sales/income/capital gains/state/payroll/etc paid by the poorest 20% was also X% of what they made, I'd be fine with it. I'm not an ideological fan of a progressive tax.

Since the wealthy are obviously going to pay less of their income in sales tax (some law mandating that you must spend everything you make or somehow basing sales tax rate on income is unworkable and stupid) than everyone else, and since the favorable treatment of capital gains income is probably never going away, I believe the social security tax probably should be uncapped and the income tax probably does need to be more progressive than it is today. But that is not because of a desire to make the total tax burden progressive and make the rich pay more than everyone else, I'd just like to see the total tax burden come back up from very regressive (which it is now), to at least flat.

Which tax bucket your money flows to isn't as important to me as whether you pay roughly the same percentage of income as everyone else.

suzzer99
04-15-2011, 06:48 AM
Germany is better because the average person pays 52% of their income in taxes?

Strongest economy in the world right now. They've also had universal health care longer than anyone. But you know, just keep repeating that whole "Europe is going broke" mantra. It's especially effective on people who have never been there.

Jaric
04-15-2011, 07:02 AM
If you want real tax reform get rid of all the loopholes and other similar nonsense from the Tax code. If the tax rate is 20%, then I should be paying 20%. No if ands or shennanagins. It should not require an accountant to figure out an individuals tax burden. Once you know that people are actually paying what they are supposed to pay, then you can legitimately start looking at tax rates assuming one stays with the progressive tax model.

Of course then government wouldn't be able to influence behavior through the tax code, but IMO that's also a good thing.

What would be nice is honest debate instead of Democrats screaming everything is the rich peoples fault while the Republicans point their fingers at the poor. It's class warfare regardless of what you want to call it.

Also, remove the ability for small businesses to file as an individual. Make up a special business designation if need be

Bewbies
04-15-2011, 07:47 AM
Strongest economy in the world right now. They've also had universal health care longer than anyone. But you know, just keep repeating that whole "Europe is going broke" mantra. It's especially effective on people who have never been there.

We could have still been #1 if only we'd have had universal health care sooner!! Preach it brother!

notorious
04-15-2011, 08:02 AM
Also, remove the ability for small businesses to file as an individual. Make up a special business designation if need be


Please explain why this needs to be done.

mlyonsd
04-15-2011, 08:11 AM
I like how the author in #1 has an issue with people making the statement the poor don't pay 'taxes' and then turns around in #3 and pulls the exact same tactic he deplores by saying "Wealthy people are paying less 'taxes'".

notorious
04-15-2011, 08:11 AM
Democrats have always helped out the poor and middle class instead of the rich when it comes to money.


Republicans still get votes due to their principles and (gulp) religious beliefs.


If people in this country were to vote based strictly on monetary benefits, democrats would win by a landslide. The democrats want to take from the successful rich and born rich (small population) and give that money to the poor (large population).

The Pubs have principles and God on their side. Democrats have America's true love on their side - Money.


When I started my business, the Democrats benefited me short term. As my business grew and continues to grow, they are going to supposed to turn into my enemy.

But, as I make more money, I can afford to help the poor. I don't mind the higher taxes, I mind who and how they give it to people.

KC native
04-15-2011, 08:11 AM
If you want real tax reform get rid of all the loopholes and other similar nonsense from the Tax code. If the tax rate is 20%, then I should be paying 20%. No if ands or shennanagins. It should not require an accountant to figure out an individuals tax burden. Once you know that people are actually paying what they are supposed to pay, then you can legitimately start looking at tax rates assuming one stays with the progressive tax model.

Of course then government wouldn't be able to influence behavior through the tax code, but IMO that's also a good thing.

What would be nice is honest debate instead of Democrats screaming everything is the rich peoples fault while the Republicans point their fingers at the poor. It's class warfare regardless of what you want to call it.

Also, remove the ability for small businesses to file as an individual. Make up a special business designation if need be

I have long argued that a dramatic simplification of the tax code and the elimination of most deductions and credits would be great for this country. IMO, we would be able to lower statutory rates, and elimintate a tremendous amount of non-productive tax compliance costs. Apply this same formula to corporate taxation and we should be back on solid footing.

notorious
04-15-2011, 08:14 AM
I have long argued that a dramatic simplification of the tax code and the elimination of most deductions and credits would be great for this country. IMO, we would be able to lower statutory rates, and elimintate a tremendous amount of non-productive tax compliance costs. Apply this same formula to corporate taxation and we should be back on solid footing.

Straight Sales Tax (Fair Tax)?

:evil:

KC native
04-15-2011, 08:15 AM
I like how the author in #1 has an issue with people making the statement the poor don't pay 'taxes' and then turns around in #3 and pulls the exact same tactic he deplores by saying "Wealthy people are paying less 'taxes'".

Do you dispute that the wealthy are paying less taxes than they have been?

Jaric
04-15-2011, 08:19 AM
Please explain why this needs to be done.

The arguement for not raising taxes on "the rich" is that those tax increases will end up by and large go to effecting small businesses who instead of filing as a business, end up filing as an individual

This would stop that from happening. That way the discussion about whether to lower or raise taxes on "teh rich!" would be seperate from lowering or raising taxes on small businesses.

Jaric
04-15-2011, 08:20 AM
Straight Sales Tax (Fair Tax)?

:evil:

I am actually a proponent of this, with the assumption that income tax is abolished and never comes back upon pain of death for any who would suggest it.

notorious
04-15-2011, 08:23 AM
I am actually a proponent of this, with the assumption that income tax is abolished and never comes back upon pain of death for any who would suggest it.

I am pleasantly surprised by your response.



Fair tax would be the only way that everyone would be taxed equally. Poor, Rich, Illegals, Dogs, Cats, Grandma, Nephews, etc. can't escape or get around it.

The bonus side effect: A person will receive their whole pay check, and if that individual has any brains can pay off their mortgage/student loans/credit cards at an accelerated rate. (Yeah, right).

KC native
04-15-2011, 08:25 AM
Straight Sales Tax (Fair Tax)?

:evil:

Rofl

Jaric
04-15-2011, 08:29 AM
I am pleasantly surprised by your response.

I aim to please. :evil:

My personal opinion is that taxes must be transparent. The more people are aware of the government taking their money the more resistant they will be to it. The less money the government has, the less it can spend. The less it can spend, the less power it has over our lives. The less power the government has over us, the closer we come to being "free."

Jaric
04-15-2011, 08:32 AM
Rofl

You disagree?

The Fair tax I've seen proposed would solve all the problems you mentioned in this post.

I have long argued that a dramatic simplification of the tax code and the elimination of most deductions and credits would be great for this country. IMO, we would be able to lower statutory rates, and elimintate a tremendous amount of non-productive tax compliance costs. Apply this same formula to corporate taxation and we should be back on solid footing.

It's still a progressive tax in that the weathly are going to spend more money than the poor and will therefore pay significantly more taxes. Of course in theory they have the option to just horde their cash but I don't see people who done what one needs to do to be in that position suddenly start living like a pauper to avoid paying taxes. What good is accumulating weath if one never intends to spend it?

I'd even support making certain items deemed as necesities (food/water/diapers ect) as non-taxable like we do currently.

notorious
04-15-2011, 08:36 AM
You disagree?

The Fair tax I've seen proposed would solve all the problems you mentioned in this post.



It's still a progressive tax in that the weathly are going to spend more money than the poor and will therefore pay significantly more taxes. Of course in theory they have the option to just horde their cash but I don't see people who done what one needs to do to be in that position suddenly start living like a pauper to avoid paying taxes. What good is accumulating weath if one never intends to spend it?

I'd even support making certain items deemed as necesities (food/water/diapers ect) as non-taxable like we do currently.

It is an unknown entity, and it takes away a lot of control from the government.


"Fair Tax" is a good idea that will never get a chance.

acesn8s
04-15-2011, 08:38 AM
If the rich doesn't want the poor to receive more money back from taxes than they paid in, then the rich need to pay their bottom tier employees more money. The point of the article (from what little I actually read) is that the rich has been increasing their income yet the not so rich has not been increasing their income as much. Supply side economics says that the rich (employer) will provide the poor with employment and pay. But the pay has not been their even though the rich have increased their income. If the rich don't want to invest in their employees then they can pay the government to redistribute their income to the poor. Even those that do not deserve it.

Saul Good
04-15-2011, 08:39 AM
I have long argued that a dramatic simplification of the tax code and the elimination of most deductions and credits would be great for this country. IMO, we would be able to lower statutory rates, and elimintate a tremendous amount of non-productive tax compliance costs. Apply this same formula to corporate taxation and we should be back on solid footing.

I actually agree with this. Before raising rates, just get the damned codes in order. The rich are able to avoid taxes by minimizing their incomes on paper, and the poor barely pay anything. Its always going to be the middle class and upper-middle who bear the brunt of the burden.

I could go along with removing the SS cap. I would love to see everything move to sales tax with some sort of prebate that would effectively exempt the first $25k or so, though.

Saul Good
04-15-2011, 08:44 AM
If the rich doesn't want the poor to receive more money back from taxes than they paid in, then the rich need to pay their bottom tier employees more money. The point of the article (from what little I actually read) is that the rich has been increasing their income yet the not so rich has not been increasing their income as much. Supply side economics says that the rich (employer) will provide the poor with employment and pay. But the pay has not been their even though the rich have increased their income. If the rich don't want to invest in their employees then they can pay the government to redistribute their income to the poor. Even those that do not deserve it.

Why is it the job of the rich and the government to give more money to these people? Shouldn't it be up to them to earn more by increasing their value?

patteeu
04-15-2011, 08:52 AM
The 3rd point, if true, is pretty damning to a lot of the right wing arguments that regularly get recycled here. I'm interested to see what some of the conservative posters have to say in response.

Damning? The 3rd point is talking about 400 taxpayers in a country of 300 million. That's a pretty tiny sliver of the population. What arguments are damned by this? Certainly not the argument that we should flatten the tax code and broaden the base which would get rid of some of the so-called loopholes that allow these mega-rich to pay a relatively low effective tax rate.

But the truth is that your can't tax the mega-rich out of their mega-rich status. If you crank up their effective tax rates too high, they'll just leave and your government will get nothing from them. Part of the problem here is that these percentages are calculated on the wrong base. We shouldn't be taxing income in the first place, we should be taxing consumption.

Chiefshrink
04-15-2011, 08:54 AM
How many clients have you f'd over believing this "tripe" ?
The real question should be do you still or ever had any clients?

Who is the 'pseudo' here?:LOL:

notorious
04-15-2011, 08:54 AM
Why is it the job of the rich and the government to give more money to these people? Shouldn't it be up to them to earn more by increasing their value?

Bingo.


If an employee is valuable enough, they will get paid. Do NOT pay a substandard employee more just because the company is successful.

notorious
04-15-2011, 08:56 AM
we should be taxing consumption.



Is this the one thing that everyone agrees with? This my be a first for DC and CP as a whole!

Chiefshrink
04-15-2011, 08:56 AM
Germany is better because the average person pays 52% of their income in taxes?

Precisely:thumb: Show me any other society in past history that even comes close to "rivaling" our economic system?

Debate over.

ClevelandBronco
04-15-2011, 08:57 AM
Straight Sales Tax (Fair Tax)?

Absolutely.

I am actually a proponent of this, with the assumption that income tax is abolished and never comes back upon pain of death for any who would suggest it.

Even more absolutely.

patteeu
04-15-2011, 08:59 AM
Payroll taxes aren't taxes? And more specifically, while not typically lumped in the broad category fo "income taxes", they are taxes....on income.

Given that Social Security isn't a lockbox, as we all know, the entire concept of segregating payroll taxes from income taxes is pretty much asinine. Just a way to justify some governmental bookkeeping and tax policy.

When that 400 member group at the top end of income ladder reaches retirement age, what percentage of their retirement income will be made up of SS payments and Medicare benefits?

The answer is that they pay a tiny percentage of their income via the payroll taxes and they receive a tiny percentage of their retirement income via SS and medicare benefits. Those bothered by point 3 are effectively suggesting that these top earners should pay a substantial percentage of their income while continuing to receive a negligible benefit.

suzzer99
04-15-2011, 09:01 AM
We could have still been #1 if only we'd have had universal health care sooner!! Preach it brother!

I didn't say that. I just said it's not like UHC or their high tax rate is crushing their economy.

But there are arguments that UHC will help our economy - or do at least enough good to offset the upfront costs and subsidies (I do agree that it will cost more at first, until medical costs are brought out of insane-land). I know several people who own small businesses who have to be extremely careful who they hire right now - since if they pick someone who's sick it will jack their health insurance rates through the roof. Also someone my age (42) who maybe wants to become an entrepreneur and has a pre-existing condition is pretty much screwed if they don't happen to be married to someone with good insurance (or live in Mass or HI).

It's not a ridiculous stretch to think our country will be more productive as a whole if people are more mobile to work for small business or be self-employed. It's not only healthy 20-somethings that have all the good ideas you know. People tend to act like Obamacare is just some straight hand out to the poor. The poor already have coverage. It's the lower-middle and middle class who don't work the govt or corporations who stand most to benefit from Obamacare. We should be fostering those groups, not hampering them.

Now tell me how much the republican party is all for small businesses and the middle class, while they try to kill these initiatives, perpetuate corporate welfare, and keep cutting taxes on the rich.

ClevelandBronco
04-15-2011, 09:02 AM
Those bothered by point 3 are effectively suggesting that these top earners should pay a substantial percentage of their income while continuing to receive a negligible benefit.

I get the idea that most of them unabashedly deny the shame in their position.

patteeu
04-15-2011, 09:04 AM
You seem confused as to Social Security. That's redistribution not up/down in the economic chain so much as across the economic chain, from current workers to former workers.

Even the wealthiest taxpayer is going to get back alot more that they didn't pay if they live long enough.

Oh, and I wonder who tends to live longer, the wealthier or the poor? God knows smoking was a god-send for the SSA's solvency....

There is also a component of redistribution "up/down in the economic chain" as you put it. The benefit calculation is designed to provide a low income worker with a benefit that represents a higher percentage of his working-years' income than that which will be received by a higher income worker.

notorious
04-15-2011, 09:06 AM
Now tell me how much the republican party is all for small businesses and the middle class, while they try to kill these initiatives, perpetuate corporate welfare, and keep cutting taxes on the rich.



If you look at what the Pubs push when it comes to money, they are as anti-poor and anti-middleclass as it gets.



If you look at what principles Pubs push, they are a bullseye shot in the (majority) middle-classes ethics and values.

suzzer99
04-15-2011, 09:13 AM
Whats a pub?

mlyonsd
04-15-2011, 09:13 AM
Do you dispute that the wealthy are paying less taxes than they have been?

To follow the point of #1 yes I do dispute they are paying less taxes. They pay property, sales, payroll, etc, etc, etc, just like poor people.

I don't necessarily disagree with his point, however when he comes right out of the box by attacking the words being used by conservatives and then turns around two paragraphs later and does the same thing I find it hypocritical.

mlyonsd
04-15-2011, 09:14 AM
Whats a pub?Where I wish I was. Or a republican.

notorious
04-15-2011, 09:15 AM
Whats a pub?

Hopefully my sarcasm meter is correct.


Pub=Republican

patteeu
04-15-2011, 09:18 AM
Is this the one thing that everyone agrees with? This my be a first for DC and CP as a whole!

KC Native opposes it, which is how I know it's a good idea.

KC native
04-15-2011, 09:20 AM
You disagree?

The Fair tax I've seen proposed would solve all the problems you mentioned in this post.



It's still a progressive tax in that the weathly are going to spend more money than the poor and will therefore pay significantly more taxes. Of course in theory they have the option to just horde their cash but I don't see people who done what one needs to do to be in that position suddenly start living like a pauper to avoid paying taxes. What good is accumulating weath if one never intends to spend it?

I'd even support making certain items deemed as necesities (food/water/diapers ect) as non-taxable like we do currently.

The fair tax is untenable. First off, it is a regressive tax because a prebate system would be unwiedly, cumbersome, and just about impossible to implement. Cash transactions would also create a huge black markets where the taxes could be evaded.

I've been over this multiple times out here. The math isn't in their favor. The assumptions in their case are garbage. I don't really feel like rehashing it in this thread. The income tax is going nowhere. Assuming otherwise is foolish.

patteeu
04-15-2011, 09:20 AM
If you look at what the Pubs push when it comes to money, they are as anti-poor and anti-middleclass as it gets.

Like what?

Jaric
04-15-2011, 09:25 AM
The fair tax is untenable. First off, it is a regressive tax because a prebate system would be unwiedly, cumbersome, and just about impossible to implement. Cash transactions would also create a huge black markets where the taxes could be evaded.

I've been over this multiple times out here. The math isn't in their favor. The assumptions in their case are garbage. I don't really feel like rehashing it in this thread. The income tax is going nowhere. Assuming otherwise is foolish.

How so?

Since I've been alive there has always been a state sales tax on what is considered "taxable" purchases regardless of if cash credit or check is used as payment.

Do you believe that federal government is incabable of instituting essentially the exact same thing the states have managed to do for at least as long as I've been alive (I'm 30 for the record)

KC native
04-15-2011, 09:34 AM
To follow the point of #1 yes I do dispute they are paying less taxes. They pay property, sales, payroll, etc, etc, etc, just like poor people.

I don't necessarily disagree with his point, however when he comes right out of the box by attacking the words being used by conservatives and then turns around two paragraphs later and does the same thing I find it hypocritical.

You really need to work on your reading comprehension.

mlyonsd
04-15-2011, 09:36 AM
You really need to work on your reading comprehension.Actually you do.

ChiefaRoo
04-15-2011, 09:40 AM
I'll just say this to all you liberal hand wringers who care so much about how much the other guy is making. America is about equal opportunity not equal outcome. Further all men may be created equal in the eyes of God and the US constititution but as it relates to making money they are not equal. Many are stupid, many are lazy, many have no ability to focus and drive towards a wealth goal. Many don't believe in hard work and there are some who ruin their chances by getting in trouble with the law, drugs and terrible interpersonal skills with others.

So at least let's all realize some reality. Get off the soap box, quit whining and be true to yourself and maybe, just maybe you'll leave your envy behind and be happy with your lot in life.

If not, grab a sign and keep protesting. I guarantee you You'll spend the rest of your life waiting for the Govt to help you.

patteeu
04-15-2011, 09:42 AM
How so?

Since I've been alive there has always been a state sales tax on what is considered "taxable" purchases regardless of if cash credit or check is used as payment.

Do you believe that federal government is incabable of instituting essentially the exact same thing the states have managed to do for at least as long as I've been alive (I'm 30 for the record)

People who hold garage sales or who sell drugs generally don't collect sales tax. This would probably expand under the Fair Tax.

On the other hand, income that doesn't get reported today (like that from garage sales and drug sales) would end up being exposed to tax when the seller went down to Wal-Mart to pick up groceries and household supplies.

vailpass
04-15-2011, 09:42 AM
Some people have no pride.

Garcia Bronco
04-15-2011, 09:43 AM
I'll just say this to all you liberal hand wringers who care so much about how much the other guy is making. America is about equal opportunity not equal outcome. Further all men may be created equal in the eyes of God and the US constititution but as it relates to making money they are not equal. Many are stupid, many are lazy, many have no ability to focus and drive towards a wealth goal. Many don't believe in hard work and there are some who ruin their chances by getting in trouble with the law, drugs and terrible interpersonal skills with others.

So at least let's all realize some reality. Get off the soap box, quit whining and be true to yourself and maybe, just maybe you'll leave your envy behind and be happy with your lot in life.

If not, grab a sign and keep protesting. I guarantee you You'll spend the rest of your life waiting for the Govt to help you.

/end forum

notorious
04-15-2011, 09:46 AM
Like what?

Democrats try to tax the hell out of the high income bracket above 250K.


Monetarily, the Democrats try to bring everyone to the middle class by taking from the rich and giving to the poor. Democrats want to un-naturally make everyone equal after the fact instead of setting the table for the motivated to flourish and the lazy to fail.


I am a "Let the Strong Survive" type of guy.

notorious
04-15-2011, 09:47 AM
America is about equal opportunity not equal outcome. .


Damn, beat me to it.

Jaric
04-15-2011, 09:49 AM
People who hold garage sales or who sell drugs generally don't collect sales tax. This would probably expand under the Fair Tax.That's kind of like someone being concerned about me peeing in the ocean affecting the water quality.

Chief Henry
04-15-2011, 09:50 AM
It is an unknown entity, and it takes away a lot of control from the government.



Less control by the gov't is a GOOD thing. Thats one of the main differences between liberals and conservatives...You just hit the nail on the
head with this one comment.

suzzer99
04-15-2011, 09:54 AM
I still would like someone to explain how making it easier (or possible) for people above say 40, or with pre-existing health conditions to work for themselves or start small businesses (w/o risking ruin from health problems) equals "taking from the rich and giving to the poor". Or doing everything your power to fight that policy equals somehow supporting the middle class.

This is my point in talking about Europe in the other thread. In no other wealthy country on earth do people have to worry about such things (or in Mass or HI in this country). The next wealthiest countries after the US that don't have some form of UHC are Turkey, Iran and Vietnam. So... the only way to get around this cognitive dissonance? Just handwave away that all of Europe is a socialist nightmare that's going broke. Of course completely ignoring that most of Europe is doing better than us right now.

patteeu
04-15-2011, 09:55 AM
Democrats try to tax the hell out of the high income bracket above 250K.


Monetarily, the Democrats try to bring everyone to the middle class by taking from the rich and giving to the poor. Democrats want to un-naturally make everyone equal after the fact instead of setting the table for the motivated to flourish and the lazy to fail.


I am a "Let the Strong Survive" type of guy.

No, I'm asking you why you say that Republicans "are as anti-poor and anti-middleclass as it gets" when it comes to money?

Jaric
04-15-2011, 09:55 AM
I still would like someone to explain how making it easier (or possible) for people above say 40, or with pre-existing health conditions to work for themselves or start small businesses (w/o risking ruin from health problems) equals "taking from the rich and giving to the poor". Or doing everything your power to fight that policy equals somehow supporting the middle class.

Well I suppose that depends on how you are planning to make it easier for them to do that. If the plan to make it easier involved taking money from rich people then there you go.

Simplex3
04-15-2011, 09:57 AM
Less control by the gov't is a GOOD thing. Thats one of the main differences between liberals and conservatives...You just hit the nail on the
head with this one comment.

If you mean that conservatives = Republicans then I would argue you're wrong. Republicans want different government control.

Jaric
04-15-2011, 09:58 AM
If you mean that conservatives = Republicans then I would argue you're wrong. Republicans want different government control.

I wish I could argue with this.

I really, really wish I could.

patteeu
04-15-2011, 10:00 AM
That's kind of like someone being concerned about me peeing in the ocean affecting the water quality.

Maybe, but the incentive to hold sales on the black market instead of through normal, taxable channels will increase if the Fair Tax is ever implemented. Instead of avoiding an 8% sales tax*, black marketeers would be avoiding that 8% plus another 30%**. 38% is a pretty big incentive.


---------------
* I'm using 8% as a nominal state sales tax level. Some states have a higher tax and some have a lower tax.

** The Fair Tax is advertised as a 23% rate tax because it's being compared to income tax rates which are typically quoted on a tax-inclusive basis. But state sales taxes are typically quoted on a tax-exclusive basis and that 23% becomes 30% when you convert it to a tax-exclusive number.

Simplex3
04-15-2011, 10:04 AM
I think you're neglecting the fact that there is a LOT of black market labor done today to avoid income taxes. You're trading one black market for another, but getting a far, far, FAR simpler tax code in the process.

patteeu
04-15-2011, 10:04 AM
I still would like someone to explain how making it easier (or possible) for people above say 40, or with pre-existing health conditions to work for themselves or start small businesses (w/o risking ruin from health problems) equals "taking from the rich and giving to the poor". Or doing everything your power to fight that policy equals somehow supporting the middle class.

That's easy. If you make it easier for 40-somethings with pre-existing conditions to work for themselves by taking from the rich and giving to the poor, then they are equal. If you do it through some other means, then no one will equate the two.

This is my point in talking about Europe in the other thread. In no other wealthy country on earth do people have to worry about such things (or in Mass or HI in this country). The next wealthiest countries after the US that don't have some form of UHC are Turkey, Iran and Vietnam. So... the only way to get around this cognitive dissonance? Just handwave away that all of Europe is a socialist nightmare that's going broke. Of course completely ignoring that most of Europe is doing better than us right now.

What, specifically, are you saying is cognitive dissonance here? Your hands were moving too fast for me to decipher what they were waving about.

patteeu
04-15-2011, 10:05 AM
I think you're neglecting the fact that there is a LOT of black market labor done today to avoid income taxes. You're trading one black market for another, but getting a far, far, FAR simpler tax code in the process.

Who are you talking to? If you're talking to me, you're wrong, as evidenced by the fact that I pointed this out in post 65. And btw, I'm a Fair Tax supporter. I'm just pointing out some real issues.

Jaric
04-15-2011, 10:06 AM
Maybe, but the incentive to hold sales on the black market instead of through normal, taxable channels will increase if the Fair Tax is ever implemented. Instead of avoiding an 8% sales tax*, black marketeers would be avoiding that 8% plus another 30%**. 38% is a pretty big incentive.


---------------
* I'm using 8% as a nominal state sales tax level. Some states have a higher tax and some have a lower tax.

** The Fair Tax is advertised as a 23% rate tax because it's being compared to income tax rates which are typically quoted on a tax-inclusive basis. But state sales taxes are typically quoted on a tax-exclusive basis and that 23% becomes 30% when you convert it to a tax-exclusive number.

There will always be people who take any means neccessary to avoid paying taxes. That will never change.

And as you mentioned, even if someone does make a purchase on the black market, at some point that money will find it's way to Walmart or wherever where it will be taxed. And even if people do start buying selling things on the black market more often, this will only stimulate legitimate buying because they have more money to spend.

I see the point that's being made about that, but in the long run I don't see that as a something that would make implementing the Fair Tax impossible.

KC native
04-15-2011, 10:07 AM
How so?

Since I've been alive there has always been a state sales tax on what is considered "taxable" purchases regardless of if cash credit or check is used as payment.

Do you believe that federal government is incabable of instituting essentially the exact same thing the states have managed to do for at least as long as I've been alive (I'm 30 for the record)

If a national sales tax were implemented, the prices of items would increasr by the amount of the tax. Well, this creates a huge incentive for a seller of goods to offer a cash discount equal to the amount of the tax. Since there would be no income tax, this type of tax evasion would be undetectable. And since busineses are profit centered,it would be a simple way to increase sales by offering this discount.

Jaric
04-15-2011, 10:11 AM
If a national sales tax were implemented, the prices of items would increasr by the amount of the tax. Well, this creates a huge incentive for a seller of goods to offer a cash discount equal to the amount of the tax. Since there would be no income tax, this type of tax evasion would be undetectable. And since busineses are profit centered,it would be a simple way to increase sales by offering this discount.

You don't think the federalis might become suspicious of my ad that gives a 30% discount for "cash purchases?"

patteeu
04-15-2011, 10:12 AM
I see the point that's being made about that, but in the long run I don't see that as a something that would make implementing the Fair Tax impossible.

Oh, I certainly agree with that.

KC native
04-15-2011, 10:18 AM
You don't think the federalis might become suspicious of my ad that gives a 30% discount for "cash purchases?"

Exactly how do you propose they monitor these types of things?

KC native
04-15-2011, 10:20 AM
The reason I ask is becase one of the asumptions in the "fair" tax case is that we can save money by eliminating most of the irs.

Jaric
04-15-2011, 10:25 AM
Exactly how do you propose they monitor these types of things?

I'm sure there would be some process set up to moniter when a businesses numbers don't add up. I don't see the federal government putting everyone on the honor system and just hoping for the best.

Yeah, the government probably won't get it's dirty theiving hands on the couch I sell my buddy for 20 bucks, but I think Uncle Sam can take one for the team so my quasi-homeless single friend has a place to sleep.

This is not going to be an issue for the vast majority of retail operations.

Jaric
04-15-2011, 10:25 AM
The reason I ask is becase one of the asumptions in the "fair" tax case is that we can save money by eliminating most of the irs.

I don't know about most, but it will eliminate the need for a degree in advance mathematics to figure out how much taxes you were supposed to pay.

ChiefsCountry
04-15-2011, 10:26 AM
How many people are on the payroll of the companies that the wealthy people in this country control?

cdcox
04-15-2011, 10:29 AM
Those bothered by point 3 are effectively suggesting that these top earners should pay a substantial percentage of their income while continuing to receive a negligible benefit


????

If all taxes went to zero and all services provided by the government ceased to exist, who would lose more wealth:

a) the billionaire
b) the person earning $12,000 per year

patteeu
04-15-2011, 10:32 AM
????

If all taxes went to zero and all services provided by the government ceased to exist, who would lose more wealth:

a) the billionaire
b) the person earning $12,000 per year

The previous sentence provides the context. Negligible benefit from the entitlement programs.

cdcox
04-15-2011, 10:34 AM
The previous sentence provides the context. Negligible benefit from the entitlement programs.

If Medicare and Medicaid were to be abolished immediately with no other government assistance programs to take their place, what would happen to:

a) the income of doctors?
b) pharmaceutical stocks?

patteeu
04-15-2011, 10:39 AM
If Medicare and Medicaid were to be abolished immediately with no other government assistance programs, what would happen to:

a) the income of doctors?
b) pharmaceutical stocks?

If a heroin addict quits cold turkey, what will happen to his attention span?

Like many huge government programs, our system has grown somewhat dependent on Medicare and Medicaid and an immediate abolition would create undesirable disruptions (probably including a sudden descrease in the income of doctors and in the value of pharmaceutical stocks). Some form of transition period would be required. Why do you ask? Surely you aren't going to tell me that this is the reason the wealthy should pay more payroll taxes.

alnorth
04-15-2011, 10:39 AM
Is this the one thing that everyone agrees with? This my be a first for DC and CP as a whole!

No. I strongly oppose any and all sales taxes.

I would go further, in that I would support a US constitutional amendment that strictly bans the federal government and all states, counties, cities, entities, etc from imposing any form of a sales tax, VAT, or any other similar tax on goods we buy.

Sales taxes are horrifically regressive. It is widely used mainly because it is convenient for the government and hard to cheat. The fair tax is one of the most unfair serious tax proposals out there. Just get rid of the sales tax and raise income taxes.

Once you do away with sales taxes, suddenly there's not as much of a need for a progressive income tax. If Forbes wants to pitch his flat tax idea to me again in a post-sales tax world, great.

alnorth
04-15-2011, 10:46 AM
????

If all taxes went to zero and all services provided by the government ceased to exist, who would lose more wealth:

a) the billionaire
b) the person earning $12,000 per year

Interesting thought.

For starters, the billionaire would probably have to buy a huge pile of guns and hire mercenaries to both protect his property and enforce contracts he signed that are no longer protected by law.

The 12k guy might have to become a subsistence farmer/hunter/fisher or something. That or band together with other 12k guys to loot and raze the billionaire's mansion. Not sure what they would do after all the billionaires were dead.

chiefsnorth
04-15-2011, 10:46 AM
If Medicare and Medicaid were to be abolished immediately with no other government assistance programs to take their place, what would happen to:

a) the income of doctors?
b) pharmaceutical stocks?

Considering Medicare patients are money losers in most contexts ("Sorry, but we're not taking any new Medicare patients at this time..." ) their income would probably go up.

patteeu
04-15-2011, 10:47 AM
No. I strongly oppose any and all sales taxes.

I would go further, in that I would support a US constitutional amendment that strictly bans the federal government and all states, counties, cities, entities, etc from imposing any form of a sales tax, VAT, or any other similar tax on goods we buy.

Sales taxes are horrifically regressive. It is widely used mainly because it is convenient for the government and hard to cheat. The fair tax is one of the most unfair serious tax proposals out there. Just get rid of the sales tax and raise income taxes.

Once you do away with sales taxes, suddenly there's not as much of a need for a progressive income tax. If Forbes wants to pitch his flat tax idea to me again in a post-sales tax world, great.

The Fair Tax is only regressive if you're stuck in the mental box of using total income (earned plus unearned) as a base. Why is a total income base more "correct" than a consumption base or an earned income only base or even an accumulated wealth base?

alnorth
04-15-2011, 10:48 AM
The previous sentence provides the context. Negligible benefit from the entitlement programs.

That is an irrelevant distinction. Billionaires also receive substantial benefits that are partially paid for with taxes from the poor.

Its not like everyone's payroll taxes go into a separate pot to be distributed unevenly to the poors, it all goes into the same general fund black hole, and out of that black hole we pay for all kinds of things.

As far as I'm concerned, payroll taxes are still income taxes. When you combine all forms of taxes that are paid, the rich tend to pay a smaller percentage of their income than people making a lot less.

patteeu
04-15-2011, 10:51 AM
That is an irrelevant distinction. Billionaires also receive substantial benefits that are partially paid for with taxes from the poor.

Its not like everyone's payroll taxes go into a separate pot to be distributed unevenly to the poors, it all goes into the same general fund black hole, and out of that black hole we pay for all kinds of things.

As far as I'm concerned, payroll taxes are still income taxes. When you combine all forms of taxes that are paid, the rich tend to pay a smaller percentage of their income than people making a lot less.

As soon as we accept this quasi-reality, SS and Medicare become welfare. Are we ready to admit this?

cdcox
04-15-2011, 10:53 AM
If a heroin addict quits cold turkey, what will happen to his attention span?

Like many huge government programs, our system has grown somewhat dependent on Medicare and Medicaid and an immediate abolition would create undesirable disruptions (probably including a sudden descrease in the income of doctors and in the value of pharmaceutical stocks). Some form of transition period would be required. Why do you ask? Surely you aren't going to tell me that this is the reason the wealthy should pay more payroll taxes.

Even given a transition period, if it were left up to individuals to pay for their own medical care (especially in old age), there would be a negative economic impact on the health care industry. And on the seemingly unrelated industries such as the sales of Mercedes Benz.

The wealthy do benefit economically more from the trappings of civilization (typically provided by government funding) than do the poor. If everyone goes back to being a cave man, the journey is a lot shorter for the homeless guy than it is for Donald Trump.

Any argument that the rich benefit negligibly from taxes is specious.

cdcox
04-15-2011, 10:56 AM
Considering Medicare patients are money losers in most contexts ("Sorry, but we're not taking any new Medicare patients at this time..." ) their income would probably go up.

So why do any doctors accept Medicare patients?

It seems you are proposing that if we removed 30 or 40% of the demand for medical services that doctor's incomes would go up. Are doctor's services completely antithetical from the laws of supply and demand?

alnorth
04-15-2011, 10:58 AM
The Fair Tax is only regressive if you're stuck in the mental box of using total income (earned plus unearned) as a base. Why is a total income base more "correct" than a consumption base or an earned income only base or even an accumulated wealth base?

Well, for starters a large tax on consumption encourages less consumption. Dave Ramsey might like that, but it would not be a desirable goal on a macro level.

A flat tax on income does not discourage people from trying to make more money, nor does it discourage consumption and economic activity. (Incidentally, that is why I oppose progressive taxes on a total all-in every tax you pay basis even while I argue for a progressive income tax to reach that flat total tax. We want people to want to make more money)

So, that is the cold pragmatic view. From there, we could talk about a moral view which liberals love, you'd dismiss out of hand, and I'm not even sure I buy so I won't.

No, I think I'd add that I believe income is a pretty good proxy for political power and ability to directly influence the government to their benefit. So, a tax based on income is appropriate to match the benefit (small and direct for poor, large and indirect if rich) you are likely to derive.

cdcox
04-15-2011, 11:01 AM
Interesting thought.

For starters, the billionaire would probably have to buy a huge pile of guns and hire mercenaries to both protect his property and enforce contracts he signed that are no longer protected by law.

The 12k guy might have to become a subsistence farmer/hunter/fisher or something. That or band together with other 12k guys to loot and raze the billionaire's mansion. Not sure what they would do after all the billionaires were dead.

It goes much further. The billionaire might need roads to distribute the goods he manufactures or to allow his people to work. Software engineers who work for Bill Gates benefit from their publicly funded education, but so does Bill Gates.

alnorth
04-15-2011, 11:02 AM
As soon as we accept this quasi-reality, SS and Medicare become welfare. Are we ready to admit this?

Yes, it is at least partially a form of welfare, and I don't know why this is taboo to say.

Social Security even has the word "social" in it. It is a terrible investment, but it is not intended to be an investment to get you a good rate of return. It is intended to subsidize the sick and the foolish so we don't have to put up with people eating dog food.

At the same time, if you decide you are going to rely on social security, you are relegated to a very low standard of living, which I'm fine with for those foolish enough not to save for retirement.

patteeu
04-15-2011, 11:03 AM
Even given a transition period, if it were left up to individuals to pay for their own medical care (especially in old age), there would be a negative economic impact on the health care industry. And on the seemingly unrelated industries such as the sales of Mercedes Benz.

The wealthy do benefit economically more from the trappings of civilization (typically provided by government funding) than do the poor. If everyone goes back to being a cave man, the journey is a lot shorter for the homeless guy than it is for Donald Trump.

Any argument that the rich benefit negligibly from taxes is specious.

No, the argument I made was undeniable. You found the need to distort the argument to make your own dubious argument. That's dishonest.

The top 400 highest income people in our country don't see more than a negligible benefit from the medicare and social security systems as they exist today. If those programs disappeared (even if they disappeared over night), it wouldn't mean a return to the cave. That idea is preposterous.

We are headed for medical care rationing in this country. That rationing can either take place under the dictates of a government body or it can take place as a result of market forces.* There's little difference between having a government panel deny a middle class retiree some form of technologically feasible treatment or having that middle class retiree priced out of the insurance plan that would provide it. No matter what happens to medicare though, there will continue to be a social safety net for the poor. It just won't be woven from golden thread.

------------
* That's not to suggest that those are the only two possibilities, but they are the most obvious two alternatives.

patteeu
04-15-2011, 11:09 AM
Yes, it is at least partially a form of welfare, and I don't know why this is taboo to say.

Social Security even has the word "social" in it. It is a terrible investment, but it is not intended to be an investment to get you a good rate of return. It is intended to subsidize the sick and the foolish so we don't have to put up with people eating dog food.

At the same time, if you decide you are going to rely on social security, you are relegated to a very low standard of living, which I'm fine with for those foolish enough not to save for retirement.

It wasn't supposed to be a welfare system. It was supposed to be a form of forced insurance where you and everyone else paid enough into it during your working years to fund your expected retirement benefit. Given that, it's partially a form of welfare even if you accept the fiction of the system where payroll taxes completely fund the program. It's even more of a welfare system when you decide that all revenues go to the same place and funding for the entitlements comes out of that general fund.

suzzer99
04-15-2011, 11:09 AM
Well I suppose that depends on how you are planning to make it easier for them to do that. If the plan to make it easier involved taking money from rich people then there you go.

How does pooling everyone who isn't currently covered under a govt or corporate plan together to spread out the risk = taking from the rich? If anything it's healthy 20-somethings that will be shouldering more of the burden (until they get older). I doubt they qualify as rich.

Time to switch gears to mandates = unconstitutional, and redirect to a purely constitutional argument.

Jaric
04-15-2011, 11:13 AM
How does pooling everyone who isn't currently covered under a govt or corporate plan together to spread out the risk = taking from the rich? If anything it's healthy 20-somethings that will be shouldering more of the burden (until they get older). I doubt they qualify as rich.

Time to switch gears to mandates = unconstitutional, and redirect to a purely constitutional argument.

You've lost me here.

If the way you make "x" easier for poor people is by making rich people pay for "x" for the poor people, then that's taking from the rich and giving to the poor.

One could of course argue the merits of such a system but that wasn't the question.

cdcox
04-15-2011, 11:14 AM
We are headed for medical care rationing in this country. That rationing can either take place under the dictates of a government body or it can take place as a result of market forces. There's little difference between having a government panel deny a middle class retiree some form of technologically feasible treatment or having that middle class retiree priced out of the insurance plan that would provide it. No matter what happens to medicare though, there will continue to be a social safety net for the poor. It just won't be woven from golden thread.

I agree with the rationing part. I'm a lot more comfortable with the government body. Maybe that comes from my three hour telephone conversation with a private insurance company trying to convince them to give me the benefits I was entitled to. I got them, but their motive was to make money and to make money part of their business plan is to make acquisition of beneifts as difficult as possible. What if I were so sick I was unable to argue on my own behalf? What if the insurance company went out of business when I needed the benefits I'd paid for?

Markets get to the right answer, on average, in the long run. But the standard deviation is high, and the noise is painful and there are plenty of both in real life economics. I would rather deal with a slightly less optimum solution (studies have shown Medicare actually to be a pretty low cost and efficient health care delivery system) that has less noise. For me, the added certainty is worthwhile.

Jaric
04-15-2011, 11:16 AM
I agree with the rationing part. I'm a lot more comfortable with the government body. Maybe that comes from my three hour telephone conversation with a private insurance company trying to convince them to give me the benefits I was entitled to. I got them, but their motive was to make money and to make money part of their business plan is to make acquisition of beneifts as difficult as possible. What if I were so sick I was unable to argue on my own behalf? What if the insurance company went out of business when I needed the benefits I'd paid for?What would you have done if they decided to not give you the benifits you were entitled to?

cdcox
04-15-2011, 11:17 AM
What would you have done if they decided to not give you the benifits you were entitled to?

Gone to my daughter's funeral, most likely.

alnorth
04-15-2011, 11:18 AM
No, the argument I made was undeniable. You found the need to distort the argument to make your own dubious argument. That's dishonest.

The top 400 highest income people in our country don't see more than a negligible benefit from the medicare and social security systems as they exist today. If those programs disappeared (even if they disappeared over night), it wouldn't mean a return to the cave. That idea is preposterous.

We are headed for medical care rationing in this country. That rationing can either take place under the dictates of a government body or it can take place as a result of market forces.* There's little difference between having a government panel deny a middle class retiree some form of technologically feasible treatment or having that middle class retiree priced out of the insurance plan that would provide it. No matter what happens to medicare though, there will continue to be a social safety net for the poor. It just won't be woven from golden thread.

------------
* That's not to suggest that those are the only two possibilities, but they are the most obvious two alternatives.

I hate to say it, but I suspect that even after we have a full, no-BS, nothing but the clinical facts discussion with the American people and we start talking about the health care they can no longer have, we'll get some pushback and the voters will go with payroll tax increases. I'm not sure if I'd go with an all-cuts solution to medicare either.

We'll still probably have to draw the line at wasteful needless end of life care that costs a huge bucket of money, but I don't think we'll ultimately avoid higher taxes. Senior voters are going to balk at Ryan's vouchers.

suzzer99
04-15-2011, 11:18 AM
You've lost me here.

If the way you make "x" easier for poor people is by making rich people pay for "x" for the poor people, then that's taking from the rich and giving to the poor.

One could of course argue the merits of such a system but that wasn't the question.

The core concept I'm talking about is how Obamacare will enable people to get something resembling corporate insurance - who are now at the mercy of the private insurance market - with it's rescission and pre-existing conditions and constant rate increases, etc.

The trade-off for this is insurance mandates. Since you can't have the service be optional, or you'd get all the sick people and only some of the healthy people. (aka adverse selection) This is why private insurance sucks so bad compared to corporate of govt-employee insurance. They know they're going to get the whole pool, not just the healthy people, so they can underwrite accordingly.

In no part of this do I see anything about taking money from the rich. Like I said the only people who might be getting the shaft are healthy 20-somethings who don't mind taking the risk and going w/o health insurance.

cdcox
04-15-2011, 11:22 AM
I hate to say it, but I suspect that even after we have a full, no-BS, nothing but the clinical facts discussion with the American people and we start talking about the health care they can no longer have, we'll get some pushback and the voters will go with payroll tax increases.

We'll still probably have to draw the line at wasteful needless end of life care that costs a huge bucket of money, but I don't think we'll ultimately avoid higher taxes. Senior voters are going to balk at Ryan's vouchers.

This is an optimum solution as far as I'm concerned. 1) cut back on end of life costs, 2) a slight increase in taxes. I'd throw in whatever other reforms were needed to cut out unnecessary tests.

VAChief
04-15-2011, 11:28 AM
This is an optimum solution as far as I'm concerned. 1) cut back on end of life costs, 2) a slight increase in taxes. I'd throw in whatever other reforms were needed to cut out unnecessary tests.

I would add one more measure. Cut the balls off of fraudsters like Florida's Governor Scott and other like Medicare hucksters and throw them in a pound them in the arse prison for life.

Simplex3
04-15-2011, 11:29 AM
If a national sales tax were implemented, the prices of items would increasr by the amount of the tax. Well, this creates a huge incentive for a seller of goods to offer a cash discount equal to the amount of the tax. Since there would be no income tax, this type of tax evasion would be undetectable. And since busineses are profit centered,it would be a simple way to increase sales by offering this discount.

Yeah, it's not like they find ways around the income tax code by hiring people off the books.

Oh, wait...

Simplex3
04-15-2011, 11:32 AM
So why do any doctors accept Medicare patients?

Some don't and almost all of them limit the number they will see. Medicare patients are a net loss in almost all cases.

Simplex3
04-15-2011, 11:36 AM
...studies have shown Medicare actually to be a pretty low cost ...

When they are low cost and/or efficient it's in large part because they pay less than cost and pay slowly.

patteeu
04-15-2011, 11:40 AM
How does pooling everyone who isn't currently covered under a govt or corporate plan together to spread out the risk = taking from the rich? If anything it's healthy 20-somethings that will be shouldering more of the burden (until they get older). I doubt they qualify as rich.

Time to switch gears to mandates = unconstitutional, and redirect to a purely constitutional argument.

Are these government plans that you talk about completely funded by user premiums?

KC native
04-15-2011, 11:40 AM
Yeah, it's not like they find ways around the income tax code by hiring people off the books.

Oh, wait...

That doesn't change the fact that it is easier to cheat on taxes with a national sales tax. I alread gave one example.

Here's another, businesses simply don't report cash sales an pocket all of the tax.

The "fair" tax is untenable.

cdcox
04-15-2011, 11:40 AM
Some don't and almost all of them limit the number they will see. Medicare patients are a net loss in almost all cases.

Lots of companies bid for jobs that are net losses in order to keep their people employed. The loser jobs provide a baseline that funds their infrastructure to makes the overall business operation feasible. You are still better off having the loser job than not having it. Same is true for the Medicare patients. Doctors are always free to turn down the Medicare cases and go play more golf. If enough of them do it Medicare will eventually have to raise the amounts they pay. Simple economics. o:-)

Simplex3
04-15-2011, 11:41 AM
That doesn't change the fact that it is easier to cheat on taxes with a national sales tax. I alread gave one example.

Here's another, businesses simply don't report cash sales an pocket all of the tax.

The "fair" tax is untenable.

Nobody would figure out that they bought 100 widgets, sold 20, and have 20 in inventory. Those 60 phantom widgets would escape everyone's attention.

KC native
04-15-2011, 11:43 AM
Nobody would figure out that they bought 100 widgets, sold 20, and have 20 in inventory. Those 60 phantom widgets would escape everyone's attention.

How would anyone know they even existed? The "fair" tax case needs an almsot complete elimination of the irs.

Simplex3
04-15-2011, 11:44 AM
Lots of companies bid for jobs that are net losses in order to keep their people employed. The loser jobs provide a baseline that funds their infrastructure to makes the overall business operation feasible. You are still better off having the loser job than not having it. Same is true for the Medicare patients. Doctors are always free to turn down the Medicare cases and go play more golf. If enough of them do it Medicare will eventually have to raise the amounts they pay. Simple economics. o:-)

The ones I've spoken to do it out of charity. I know an EENT that not only provided his time for free but also covers the hospital costs to do surgeries for poor kids. Despite the fact that a lot of doctors have a greatly inflated self image many of them are also very giving.

Simplex3
04-15-2011, 11:44 AM
How would anyone know they even existed? The "fair" tax case needs an almsot complete elimination of the irs.

Yes, except for the group that would audit retail sales. Sheesh.

Sannyasi
04-15-2011, 11:47 AM
The top marginal income tax rate in 1961 was 91%.

How close would you like to get to 91% today to make sure you **** over those 400 people?

I'm not sure how you got that I wanted to fuck over the rich from my post. I've said in the past I would support a flat tax provided it effectively got rid of the loopholes that plague our tax code. The point I was concerned with was that, according to the chart, the top 400 pay 18.7% of their total income in taxes, compared to the 23.4% of a median wage worker. I would have never guessed that our system was as regressive as it actually is judging by all the "looter/parasite" Randian rhetoric that gets thrown around here all the time.

Jaric
04-15-2011, 11:48 AM
Gone to my daughter's funeral, most likely.

Sorry, wasn't trying to go there with you. Glad to hear that isn't the case. I'll actually just drop the point I was trying to make altogther actually. That's a bit heavy of a discussion for a Friday. :thumb:

cdcox
04-15-2011, 11:50 AM
The ones I've spoken to do it out of charity. I know an EENT that not only provided his time for free but also covers the hospital costs to do surgeries for poor kids. Despite the fact that a lot of doctors have a greatly inflated self image many of them are also very giving.

I agree than many doctors are generous with their time and talents. However, lets not kid our selves that charity is covering a significant portion of the 47M Americans on Medicare. If the costs were too far out of balance, there would be many more individuals not receiving care.

Simplex3
04-15-2011, 11:52 AM
Gone to my daughter's funeral, most likely.

The problem with government is your redress couldn't have been handled over the phone. It would have been handled in court at much more expense and time to you and probably too late to actually help.

In the private sector you can get the treatment yourself and then fight the insurance company for the money. With a government system you may not even get a doctor to do it because you don't have the right form signed off on by the right bureaucrat.

Glad to hear your daughter is ok.

patteeu
04-15-2011, 11:52 AM
I agree with the rationing part. I'm a lot more comfortable with the government body. Maybe that comes from my three hour telephone conversation with a private insurance company trying to convince them to give me the benefits I was entitled to. I got them, but their motive was to make money and to make money part of their business plan is to make acquisition of beneifts as difficult as possible. What if I were so sick I was unable to argue on my own behalf? What if the insurance company went out of business when I needed the benefits I'd paid for?

Markets get to the right answer, on average, in the long run. But the standard deviation is high, and the noise is painful and there are plenty of both in real life economics. I would rather deal with a slightly less optimum solution (studies have shown Medicare actually to be a pretty low cost and efficient health care delivery system) that has less noise. For me, the added certainty is worthwhile.

Those are fair points.

One of the problems with the government option is what we're currently witnessing with respect to the budget. It's a lot easier and more beneficial politically to give stuff away than it is to make the hard choices necessary to keep the program running within it's means. There will be a lot of political pressure to expand benefits, particularly if we continue to operate under a progressive financing system where any shortfalls can be blamed on the rich not contributing enough.

Jaric
04-15-2011, 11:52 AM
The core concept I'm talking about is how Obamacare will enable people to get something resembling corporate insurance - who are now at the mercy of the private insurance market - with it's rescission and pre-existing conditions and constant rate increases, etc.

The trade-off for this is insurance mandates. Since you can't have the service be optional, or you'd get all the sick people and only some of the healthy people. (aka adverse selection) This is why private insurance sucks so bad compared to corporate of govt-employee insurance. They know they're going to get the whole pool, not just the healthy people, so they can underwrite accordingly.

In no part of this do I see anything about taking money from the rich. Like I said the only people who might be getting the shaft are healthy 20-somethings who don't mind taking the risk and going w/o health insurance.
I'll assume you know what the word "if" means. I said "If" the way you are paying for a service for the poor is by taking that money from rich people, that would be taking from the rich to give to the poor.

I'm not here to argue the benifits of Obamacare. That's a whole other thread.

That said though, you do realize why insurance companies don't extend coverage to pre-existing conditions right? Think about how that would work for auto insurance.

Simplex3
04-15-2011, 11:57 AM
I agree than many doctors are generous with their time and talents. However, lets not kid our selves that charity is covering a significant portion of the 47M Americans on Medicare. If the costs were too far out of balance, there would be many more individuals not receiving care.

Should 47M Americans be on Medicare? How many of them have simply made the choice to spend their money on things other than their healthcare because they knew someone else would pay for that?

It's a little like our schools. They take their budget and blow it on crap like a fancy administrative office, a massive salary for the superintendent, etc. Then they come begging to the parents and ask for Kleenex, white board markers, and all kinds of other supplies every year because they can't afford them.

Governments piss our money away on their pet projects then point to the things they should have been doing in the first place, tug on your heart strings, and say "but I need more to do that". I simply don't trust a government that is that far away from me and must satisfy the needs of so many other people.

patteeu
04-15-2011, 12:05 PM
I'm not sure how you got that I wanted to **** over the rich from my post. I've said in the past I would support a flat tax provided it effectively got rid of the loopholes that plague our tax code. The point I was concerned with was that, according to the chart, the top 400 pay 18.7% of their total income in taxes, compared to the 23.4% of a median wage worker. I would have never guessed that our system was as regressive as it actually is judging by all the "looter/parasite" Randian rhetoric that gets thrown around here all the time.

I'd venture to guess that none of us are, know, or in any way rub elbows with the top 400 income makers in the country. It would be interesting to see what the effective tax rates for the upper middle class (doctors, small business owners, etc.) make compared to the median wage earner. The statistics for the top 400 distort the picture.

Here's the closest thing (http://www.cbo.gov/ftpdocs/88xx/doc8885/12-11-HistoricalTaxRates.pdf) I could find in a cursory search of the internet:

2005 Effective Tax Rate (All Federal Taxes)

1st Quintile - 4.3%
2nd Quintile - 9.9%
3rd Quintile - 14.1%
4th Quintile - 17.3%
5th Quintile - 25.2%


As you can see, the system is much more progressive than the author of this article tries to suggest with his misleading point 3. Looters are still looters.

patteeu
04-15-2011, 12:09 PM
I agree than many doctors are generous with their time and talents. However, lets not kid our selves that charity is covering a significant portion of the 47M Americans on Medicare. If the costs were too far out of balance, there would be many more individuals not receiving care.

Medicare and other government programs have squeezed charity out of the picture. It's just another in the long line of negative unintended consequences of the good intentions of our liberals.

cdcox
04-15-2011, 12:12 PM
Sorry, wasn't trying to go there with you. Glad to hear that isn't the case. I'll actually just drop the point I was trying to make altogther actually. That's a bit heavy of a discussion for a Friday. :thumb:

Thanks. My reaction was a little emotional, but it is still a very raw nerve with me. I'll also let this line of the discussion die.

ClevelandBronco
04-15-2011, 12:14 PM
I'm not sure how you got that I wanted to **** over the rich from my post.

A guy who has to have his own posts explained to him. That's new.

Sannyasi
04-15-2011, 12:22 PM
I'd venture to guess that none of us are, know, or in any way rub elbows with the top 400 income makers in the country. It would be interesting to see what the effective tax rates for the upper middle class (doctors, small business owners, etc.) make compared to the median wage earner. The statistics for the top 400 distort the picture.

Here's the closest thing (http://www.cbo.gov/ftpdocs/88xx/doc8885/12-11-HistoricalTaxRates.pdf) I could find in a cursory search of the internet:

2005 Effective Tax Rate (All Federal Taxes)

1st Quintile - 4.3%
2nd Quintile - 9.9%
3rd Quintile - 14.1%
4th Quintile - 17.3%
5th Quintile - 25.2%


As you can see, the system is much more progressive than the author of this article tries to suggest with his misleading point 3. Looters are still looters.

Thanks, this was more like the information I was hoping to see.

cdcox
04-15-2011, 12:26 PM
Should 47M Americans be on Medicare? How many of them have simply made the choice to spend their money on things other than their healthcare because they knew someone else would pay for that?



I seriously don't see a private unregulated insurance industry having any answer for health care for the elderly. The risk pool is so high that the insurance will be high. So most Americans will opt out, either because they can't afford it, or it makes more sense to take their chances. So only the uber sick will enroll, which will drive the costs even higher, until it isn't a viable business strategy.

That leaves paying out of pocket. Routine open heart surgery that can add 10 or more quality years to a persons life could easily go $200K. How many retirees can pay that out of pocket and still afford the rest of their living expenses?

This isn't an us vs. them. We are all going to be old sooner or later and be in this situation.

I don't mind paying for my health care. I've been in jobs that included health insurance all my life. I've paid into Medicare and Medicade all my life. I've paid my taxes all my life. I just want to be able to have affordable care when I get older.

Jaric
04-15-2011, 12:31 PM
Thanks. My reaction was a little emotional, but it is still a very raw nerve with me. I'll also let this line of the discussion die.

I can certainly imagine.

Mizzou_8541
04-15-2011, 12:40 PM
I am pleasantly surprised by your response.



Fair tax would be the only way that everyone would be taxed equally. Poor, Rich, Illegals, Dogs, Cats, Grandma, Nephews, etc. can't escape or get around it.

The bonus side effect: A person will receive their whole pay check, and if that individual has any brains can pay off their mortgage/student loans/credit cards at an accelerated rate. (Yeah, right).

What is this "fair tax" you speak of? Seriously, can someone explain it in simple terms? And yes, I know how to use Google.

Jaric
04-15-2011, 12:42 PM
What is this "fair tax" you speak of? Seriously, can someone explain it in simple terms? And yes, I know how to use Google.

The short version is that we get rid of income tax and replace it with a national sales tax.

Mizzou_8541
04-15-2011, 12:44 PM
The short version is that we get rid of income tax and replace it with a national sales tax.

And in theory, this would accomplish...?

patteeu
04-15-2011, 12:46 PM
What is this "fair tax" you speak of? Seriously, can someone explain it in simple terms? And yes, I know how to use Google.

It's an idea to replace the current income tax and the payroll taxes with a national sales tax. The plan's designers say that the tax rate would have to be about 30% (For every $1.00 of goods you buy, you'd pay a total of $1.30 plus state sales tax). To minimize the burden of this tax on the poor, everyone would receive a "prebate" check that covers the amount of tax you'd pay on some level of spending intended to cover necessities. So in effect, poor people would have their entire tax liability sent back to them in the form of a government check.

patteeu
04-15-2011, 12:48 PM
And in theory, this would accomplish...?

It would be much simpler for the average American. It would be a flat tax so everyone would be in the same tax boat politically. It's base would be consumption instead of income which would have beneficial impacts on our ability to compete in the global economy.

donkhater
04-15-2011, 12:49 PM
And in theory, this would accomplish...?

I'm sure others will chime on theories about consumption, etc., but to me, the big allure of the fair tax (i.e. eliminating the income tax) is that politicians will have a harder time engaging in class warfare when debating policy. the tax code would mean something for every American more equally at least. When they raise taxes, it is on EVERYONE, not just a specific group.

It's this type of meddling behavoir-control mindset that leads to debt and ruins markets, despite the 'good intentions' behind them.

Mizzou_8541
04-15-2011, 12:50 PM
It's an idea to replace the current income tax and the payroll taxes with a national sales tax. The plan's designers say that the tax rate would have to be about 30% (For every $1.00 of goods you buy, you'd pay a total of $1.30 plus state sales tax). To minimize the burden of this tax on the poor, everyone would receive a "prebate" check that covers the amount of tax you'd pay on some level of spending intended to cover necessities. So in effect, poor people would have their entire tax liability sent back to them in the form of a government check.

So then how is that fair?

Mizzou_8541
04-15-2011, 12:51 PM
It would be much simpler for the average American. It would be a flat tax so everyone would be in the same tax boat politically. It's base would be consumption instead of income which would have beneficial impacts on our ability to compete in the global economy.

I'm sure others will chime on theories about consumption, etc., but to me, the big allure of the fair tax (i.e. eliminating the income tax) is that politicians will have a harder time engaging in class warfare when debating policy. the tax code would mean something for every American more equally at least. When they raise taxes, it is on EVERYONE, not just a specific group.

It's this type of meddling behavoir-control mindset that leads to debt and ruins markets, despite the 'good intentions' behind them.

Very interesting. Thanks for the input.

Amnorix
04-15-2011, 12:53 PM
Those are fair points.

One of the problems with the government option is what we're currently witnessing with respect to the budget. It's a lot easier and more beneficial politically to give stuff away than it is to make the hard choices necessary to keep the program running within it's means. There will be a lot of political pressure to expand benefits, particularly if we continue to operate under a progressive financing system where any shortfalls can be blamed on the rich not contributing enough.


You act as if a progressive tax system is some kind of new development, instead of something that's been in place since the initial adoption of the federal income tax nearly 100 years ago now...

Amnorix
04-15-2011, 12:55 PM
Medicare and other government programs have squeezed charity out of the picture. It's just another in the long line of negative unintended consequences of the good intentions of our liberals.


?

I'm not at all sure I see this as a negative unintended consequence, if unintended consequence it is...

patteeu
04-15-2011, 12:56 PM
So then how is that fair?

Fairness is in the eye of the beholder, so that question is hard to answer. IMO, it would be both more fair and more simple if the prebate feature was eliminated and everyone paid exactly the same rate on each consumption purchase, but that wouldn't be politically viable. But I think the flat nature of the tax and it's simplicity make it much fairer than our current system.

patteeu
04-15-2011, 12:57 PM
You act as if a progressive tax system is some kind of new development, instead of something that's been in place since the initial adoption of the federal income tax nearly 100 years ago now...

No, I'm not sure where you get that idea.

Amnorix
04-15-2011, 12:57 PM
It's an idea to replace the current income tax and the payroll taxes with a national sales tax. The plan's designers say that the tax rate would have to be about 30% (For every $1.00 of goods you buy, you'd pay a total of $1.30 plus state sales tax). To minimize the burden of this tax on the poor, everyone would receive a "prebate" check that covers the amount of tax you'd pay on some level of spending intended to cover necessities. So in effect, poor people would have their entire tax liability sent back to them in the form of a government check.

How do you account for regional variations in prices?

Probably you don't. The coasts already get f**ked under the national income tax scheme, so I imagine it'd be the same under this system, so maybe it's all the same.

patteeu
04-15-2011, 12:59 PM
?

I'm not at all sure I see this as a negative unintended consequence, if unintended consequence it is...

That's interesting. I'm not sure whether you're saying that it's intentional or that it's a positive or both. I don't think it's either.

patteeu
04-15-2011, 01:00 PM
How do you account for regional variations in prices?

Probably you don't. The coasts already get f**ked under the national income tax scheme, so I imagine it'd be the same under this system, so maybe it's all the same.

Right, you don't. I'm not too worried about you guys on the coast though. You have higher salaries for the same work too.

Amnorix
04-15-2011, 01:05 PM
Fairness is in the eye of the beholder, so that question is hard to answer. IMO, it would be both more fair and more simple if the prebate feature was eliminated and everyone paid exactly the same rate on each consumption purchase, but that wouldn't be politically viable. But I think the flat nature of the tax and it's simplicity make it much fairer than our current system.


Would you even exclude food and other necessities.

Your concept of "fair" astonishes me. What you call fair I call brutal. Thankfully, I'm not sure even your softer approach is politically viable, much less the "completely fair" approach you would prefer.

Your complete fairness would make me very rich, no doubt, but leave far too many in extreme poverty.

VAChief
04-15-2011, 01:07 PM
Fairness is in the eye of the beholder, so that question is hard to answer. IMO, it would be both more fair and more simple if the prebate feature was eliminated and everyone paid exactly the same rate on each consumption purchase, but that wouldn't be politically viable. But I think the flat nature of the tax and it's simplicity make it much fairer than our current system.

Very true, I didn't realize there was a national sales tax plan that addressed the impact on the poor. That makes a lot of sense to me. In theory we have a progressive system, but applied very inconsistently (maybe not exactly the right word).

Billionaires often pay the same percentage as my family (even after my mortgage interest deductions). The loopholes would become irrelevant. It would be interesting to see if luxury items would take a hit or not as a result.

petegz28
04-15-2011, 01:15 PM
How do you account for regional variations in prices?

Probably you don't. The coasts already get f**ked under the national income tax scheme, so I imagine it'd be the same under this system, so maybe it's all the same.

why should anyone consider regional varioations in price when Obama says anyone and everyone making over $250k, regardless of location, is rich?

Amnorix
04-15-2011, 01:17 PM
Right, you don't. I'm not too worried about you guys on the coast though. You have higher salaries for the same work too.

Cost of living is higher, so the higher income is needed just to offset that. Cost of housing alone is dramatically higher because space is typically at a premium.

And the higher incomes means the costs of doing business are higher, which makes it harder to compete, another negative.

Then you add that the higher income means higher taxes, and the net outflow from the coasts to the interior. You like to decry wealth redistribution --- but I dont' see many talking about the wealth distribution from the "blue states" to the "red states", and in particular the coasts to Middle America, too often.

Amnorix
04-15-2011, 01:18 PM
why should anyone consider regional varioations in price when Obama says anyone and everyone making over $250k, regardless of location, is rich?

I don't give a rat's ass what Obama said. We're discussing policy theories, not quotes from politicians looking at the next election.

Amnorix
04-15-2011, 01:19 PM
That's interesting. I'm not sure whether you're saying that it's intentional or that it's a positive or both. I don't think it's either.

Add it to the long list of things we disagree on then. :D

patteeu
04-15-2011, 01:25 PM
Would you even exclude food and other necessities.

Your concept of "fair" astonishes me. What you call fair I call brutal. Thankfully, I'm not sure even your softer approach is politically viable, much less the "completely fair" approach you would prefer.

Your complete fairness would make me very rich, no doubt, but leave far too many in extreme poverty.

No, I wouldn't even exclude necessities. By doing that, I'd be able to reduce the rate substantially for everyone.

Inflation is an effective tax that impacts everyone without regard to necessities and we don't see people starving to death because of it.

patteeu
04-15-2011, 01:29 PM
Cost of living is higher, so the higher income is needed just to offset that. Cost of housing alone is dramatically higher because space is typically at a premium.

And the higher incomes means the costs of doing business are higher, which makes it harder to compete, another negative.

Then you add that the higher income means higher taxes, and the net outflow from the coasts to the interior. You like to decry wealth redistribution --- but I dont' see many talking about the wealth distribution from the "blue states" to the "red states", and in particular the coasts to Middle America, too often.

My point was that there are things that cut both ways so it doesn't make any sense to adjust the Fair Tax rate for just one of them. If it's too much of a burden for you to live in that blue state of yours, you're welcome to redistribute yourself to Missouri or Kansas or some other red/reddish state. :)

Direckshun
04-15-2011, 01:35 PM
My point was that there are things that cut both ways so it doesn't make any sense to adjust the Fair Tax rate for just one of them. If it's too much of a burden for you to live in that blue state of yours, you're welcome to redistribute yourself to Missouri or Kansas or some other red/reddish state. :)

Yeah, if he wants his ass beat.

Because I will beat his ass.

Some way or another, I will beat so much ass.

patteeu
04-15-2011, 01:48 PM
Yeah, if he wants his ass beat.

Because I will beat his ass.

Some way or another, I will beat so much ass.

:LOL:

What's your opinion of Girl Talk (http://www.chiefsplanet.com/BB/showthread.php?t=243912)?

Direckshun
04-15-2011, 02:00 PM
:LOL:

What's your opinion of Girl Talk (http://www.chiefsplanet.com/BB/showthread.php?t=243912)?

I'm a fan, have one of his albums.

Almost got a chance to see a show in Austin.

Heard it was a blast.

patteeu
04-15-2011, 02:04 PM
I'm a fan, have one of his albums.

Almost got a chance to see a show in Austin.

Heard it was a blast.

I never heard of him before that thread, but I think it's pretty entertaining.

ClevelandBronco
04-15-2011, 02:22 PM
I never heard of him before that thread, but I think it's pretty entertaining.

I hadn't heard of him either, but I have to admit that I'm all-the-way hooked. Until he gets his ass sued into silence, at least.

notorious
04-15-2011, 06:15 PM
No, I'm asking you why you say that Republicans "are as anti-poor and anti-middleclass as it gets" when it comes to money?


If I said Anti, I apologize. They try to help the rich by giving them an even playing field tax percentage wise.

notorious
04-15-2011, 06:23 PM
That doesn't change the fact that it is easier to cheat on taxes with a national sales tax. I alread gave one example.

Here's another, businesses simply don't report cash sales an pocket all of the tax.

The "fair" tax is untenable.


I deal directly with sales, both check and cash, and I see no reason how it is easier one way or another to avoid taxes. The books will always show something coming in/going out.

If I accept cash, it's not like I can just dump it back into the business without setting off red flags. Purchases are very limited with "dirty money".

Basically the people that are already dealing black market will keep dealing black market.

Amnorix
04-15-2011, 08:28 PM
My point was that there are things that cut both ways so it doesn't make any sense to adjust the Fair Tax rate for just one of them. If it's too much of a burden for you to live in that blue state of yours, you're welcome to redistribute yourself to Missouri or Kansas or some other red/reddish state. :)


:shrug: If it's too much of a burden for the wealthy to pay so much in taxes, they should redistribute themselves to a lower tax bracket.

HonestChieffan
04-15-2011, 08:41 PM
:shrug: If it's too much of a burden for the wealthy to pay so much in taxes, they should redistribute themselves to a lower tax bracket.

Obama is making that a reality for all wage classes. I guess we shouldn't be so hard on him. Is this the tax cut he keeps saying he did?

mlyonsd
04-15-2011, 08:56 PM
If a Fair Tax is based on use and a Flat Tax is based on income I'd vote for the latter.

The Mad Crapper
04-16-2011, 09:09 AM
Trust Fund Moonbats Lobby for Those Who Earned Their Wealth to Be LootedPosted by Van Helsing at April 15, 2011 7:56 AM

Taking the hypocrisy and depraved sanctimony that characterize liberalism to a new extreme of self-parody, useless trust fund moonbats have formed a tax-exempt corporation to enforce their demand that other rich people who unlike themselves actually earned their money turn over more of it to be flagrantly wasted by bureaucrats.

"Our current tax system perpetuates inequality," [bleats] Elspeth Gilmore. "Wealthy people can really change that narrative."
Gilmore is the co-director of Resource Generation, a national nonprofit [i.e., tax exempt] organization that supports and challenges young, progressive people with wealth to leverage their privilege and resources for social change.

One way Elksbreath and his limousine Leninist friends have leveraged their privilege is by presenting a sign reading "Another trust fund baby for taxing the rich! Let's pay our fair share!" at a socialist rally in front of NYC's Waldorf Astoria.

Not all of their activities are as innocuous:

Resource Generation recently teamed up with another nonprofit that organizes affluent activists, Wealth for the Common Good, to form a Progressive Tax Campaign. They will be organizing and advocating a change in the policy, laws and perceptions of our tax system. Specifically, the campaign aims to draw attention to the social services that taxing the wealthy could fund, and advocates higher tax bracket rates for top income earners, as well as higher taxes on investment income.

Being rich with money they admittedly did not earn, they are in an excellent position to voluntarily donate to whatever cause appeals to them, even if it is a supremely moronic cause like our bloated, wasteful, and malignant federal government. But they prefer to lobby for other people's money to be stolen.

The reason for this is that like all progressives they are moral reprobates, on a lower level than a punk holding up a liquor store, who at least has the honesty to admit he's a thief.

http://www.moonbattery.com/archives/2011/04/trust-fund-moon.html

http://thepeoplescube.com/images/Medal_Order_of_Obama_160.gif

RNR
04-16-2011, 09:11 AM
:shrug: If it's too much of a burden for the wealthy to pay so much in taxes, they should redistribute themselves to a lower tax bracket.

Wrong but funny~

patteeu
04-18-2011, 10:06 AM
Another point to be made about the 400 superrich in #3 is that the composition of that group likely changes every year. There aren't many people raking in a steady income at that level year after year. I'd bet that most of those people shoot up into that group during the one year in their lives that they cash out of some major investment like a business that they spent their lives building.

KC native
04-19-2011, 08:01 AM
Another point to be made about the 400 superrich in #3 is that the composition of that group likely changes every year. There aren't many people raking in a steady income at that level year after year. I'd bet that most of those people shoot up into that group during the one year in their lives that they cash out of some major investment like a business that they spent their lives building.

ROFL I guess your baseless speculation is sufficent in your mind to dismiss real world data. Keep making it up as you go along patty.

patteeu
04-19-2011, 08:16 AM
ROFL I guess your baseless speculation is sufficent in your mind to dismiss real world data. Keep making it up as you go along patty.

Are you saying I'm wrong?

BTW, I already used real world data to explain why point #3 was so misleading as to be worthy of dismissal (see post #133).

Saul Good
04-19-2011, 08:32 AM
If a Fair Tax is based on use and a Flat Tax is based on income I'd vote for the latter.

Why would you rather tax productivity than consumption?

KC native
04-19-2011, 09:11 AM
Are you saying I'm wrong?

BTW, I already used real world data to explain why point #3 was so misleading as to be worthy of dismissal (see post #133).

More than likely. The top 1% generally stays in the top 1%. Unless you have data to the contrary, which obvously you don't, then you are simply contstructing straw men.

Saul Good
04-19-2011, 09:16 AM
More than likely. The top 1% generally stays in the top 1%. Unless you have data to the contrary, which obvously you don't, then you are simply contstructing straw men.

The top 1% in terms of net worth is pretty static. The top 1% of earners is much more dynamic.

KC native
04-19-2011, 09:17 AM
I'd venture to guess that none of us are, know, or in any way rub elbows with the top 400 income makers in the country. It would be interesting to see what the effective tax rates for the upper middle class (doctors, small business owners, etc.) make compared to the median wage earner. The statistics for the top 400 distort the picture.

Here's the closest thing (http://www.cbo.gov/ftpdocs/88xx/doc8885/12-11-HistoricalTaxRates.pdf) I could find in a cursory search of the internet:

2005 Effective Tax Rate (All Federal Taxes)

1st Quintile - 4.3%
2nd Quintile - 9.9%
3rd Quintile - 14.1%
4th Quintile - 17.3%
5th Quintile - 25.2%


As you can see, the system is much more progressive than the author of this article tries to suggest with his misleading point 3. Looters are still looters.

This doesn't refute point 3. You disagree with his characterization but it doesn't provide anything near a rebuttal.

Saul Good
04-19-2011, 09:40 AM
Point 3 removes eleven billion dollars in charitible giving from the equation. No, that wasn't paid as taxes, but its still eleven billion dollars given back to society.

patteeu
04-19-2011, 09:54 AM
More than likely. The top 1% generally stays in the top 1%. Unless you have data to the contrary, which obvously you don't, then you are simply contstructing straw men.

Speaking of straw men, we're not talking about the top 1%. We're talking about the top 0.00013% (400 individuals out of a population of 300 million).

And unless you have data to the contrary, I'm confident that that top 0.00013% involves a lot of churn.

patteeu
04-19-2011, 09:57 AM
This doesn't refute point 3. You disagree with his characterization but it doesn't provide anything near a rebuttal.

Again with the straw man, huh? I stand by "so misleading as to be worthy of dismissal". I wasn't trying to refute it, I was pointing out that it is both misleading and unimportant even if the facts contained are true.

Saul Good
04-19-2011, 10:00 AM
Speaking of straw men, we're not talking about the top 1%. We're talking about the top 0.00013% (400 individuals out of a population of 300 million).

And unless you have data to the contrary, I'm confident that that top 0.00013% involves a lot of churn.

Of course there is a lot of churn. The wealthiest of the wealthy can have a negative income for a year and remain at the top of the ladder because they had one year in the past that made them billionaires.

mlyonsd
04-19-2011, 10:32 AM
Why would you rather tax productivity than consumption?

I'm one that does think the rich need to pay more. Not in percentage but actual tax dollars. I don't think that will happen in a fair tax system if the rich guy chooses not to go out and buy boats and planes.

mlyonsd
04-19-2011, 10:33 AM
Point 3 removes eleven billion dollars in charitible giving from the equation. No, that wasn't paid as taxes, but its still eleven billion dollars given back to society.

That's the other thing nobody ever brings up when complaining of loop holes the rich use.

patteeu
04-19-2011, 10:39 AM
I'm one that does think the rich need to pay more. Not in percentage but actual tax dollars. I don't think that will happen in a fair tax system if the rich guy chooses not to go out and buy boats and planes.

The vast majority of rich would pay more in actual dollars under a consumption tax.

OTOH, under an income tax, the wealthy can invest in tax-free municipal bonds and sit at home by the pool to avoid paying tax at all if they want. This would be a small minority just like the penny-pinching rich who avoid taxes under a consumption tax, but it goes to show you that you don't necessarily get what you want by designing a tax system around the unusual cases.

suzzer99
04-19-2011, 10:46 AM
That said though, you do realize why insurance companies don't extend coverage to pre-existing conditions right? Think about how that would work for auto insurance.

They do if you have a corporate or govt plan. They sort of do if you have a small business plan. But then they jack up your rates to the stratosphere if you have a sick employee.

"We're all for small businesses and entrepreneurs!" Just another one of those areas republicans give lip-service to while doing the exact opposite.

KC native
04-19-2011, 10:58 AM
Speaking of straw men, we're not talking about the top 1%. We're talking about the top 0.00013% (400 individuals out of a population of 300 million).

And unless you have data to the contrary, I'm confident that that top 0.00013% involves a lot of churn.

Well, since you are the one making the assertion then the burden of proof is on you otherwise you are building strawmen to tear down.

Norman Einstein
04-19-2011, 10:59 AM
The 3rd point, if true, is pretty damning to a lot of the right wing arguments that regularly get recycled here. I'm interested to see what some of the conservative posters have to say in response.

The post, and the thread are nothing more than the left's side of the argument.

Average wages went down in Bush's administration? Funny, every one in my family had increases in their annual income over the Bush years.

What I feel is that most democrats are part of the "entitlement" mentality group and the republicans are generally on the other end of the spectrum.

Even Obama talks about the entitlements of the poor (mostly registered as democrats) and at the same time damns the "tea party" because they want to take away the entitlements of the poor.

My view is that those that need help should get it as a hand up, not a hand out. ALL entitlements should only be awarded after a means test to see if you qualify. i.e. A man/couple owns a business and several rental houses that depends on the VA for the husband because he was in the Army 2 years, never leaving the continent. The wife has no medical insurance at all. They can afford insurance, they choose not to purchase it and get medical coverage for one of the household from the government. I can see VA assistance for those that were injured by the military, but not someone that served a short time and was discharged.

There needs to be some accounting for the money spent, currently it's not. Once you get the entitlement it's a forever gift and the receipients hardly ever have to justify why they are there.

KC native
04-19-2011, 11:04 AM
Again with the straw man, huh? I stand by "so misleading as to be worthy of dismissal". I wasn't trying to refute it, I was pointing out that it is both misleading and unimportant even if the facts contained are true.

So what exactly is misleading and unimportant about showing how the wealthy's tax burden has been falling?

patteeu
04-19-2011, 11:10 AM
Well, since you are the one making the assertion then the burden of proof is on you otherwise you are building strawmen to tear down.

You misunderstand what "straw man" means. A straw man argument is an argument against a point that is similar to but not the same as the one you're supposed to be arguing against. Whether I prove my assertion or whether I leave it to stand on it's own doesn't affect whether or not I'm making a straw man argument. Even if it were to turn out that my assertion was false (which it isn't), it still wouldn't make it a straw man argument.

As an example of a straw man argument, see your post #179 where you decided to address some argument about the top 1% that had never been made instead of addressing the actual argument about the top 0.00013%.

As for my burden of proof, I'm content to let people use their intuition to decide whether or not my assertion is likely true or false. I invite you to try to prove me wrong.

patteeu
04-19-2011, 11:14 AM
So what exactly is misleading and unimportant about showing how the wealthy's tax burden has been falling?

It's about the way we define the "wealthy". I think describing the top quintile's tax treatment relative to the bottom 4 quintiles is more illuminating about how the "wealthy" fare under our tax system than describing the top 0.00013% versus everyone else.

For reference, the top quintile in the data set I used had incomes of greater than $214,000 (in 2005 dollars). That's a pretty close approximation to what you democrats have been calling "wealthy" under the Obama banner.

KC native
04-19-2011, 11:14 AM
blah blah blah

So who let Tom out of his cage?

KC native
04-19-2011, 11:16 AM
It's about the way we define the "wealthy". I think describing the top quintile's tax treatment relative to the bottom 4 quintiles is more illuminating about how the "wealthy" fare under our tax system than describing the top 0.00013% versus everyone else.

For reference, the top quintile in the data set I used had incomes of greater than $214,000 (in 2005 dollars). That's a pretty close approximation to what you democrats have been calling "wealthy" under the Obama banner.

Ah, so what you're saying is you want to play semantics games while avoiding the substance of the report. Got it.

Norman Einstein
04-19-2011, 11:20 AM
So who let Tom out of his cage?It's very heartwarming to know that you are still as hateful as ever.

How about addressing the issues rather than making ad hominem attacks?

KC native
04-19-2011, 11:21 AM
You misunderstand what "straw man" means. A straw man argument is an argument against a point that is similar to but not the same as the one you're supposed to be arguing against. Whether I prove my assertion or whether I leave it to stand on it's own doesn't affect whether or not I'm making a straw man argument. Even if it were to turn out that my assertion was false (which it isn't), it still wouldn't make it a straw man argument.

As an example of a straw man argument, see your post #179 where you decided to address some argument about the top 1% that had never been made instead of addressing the actual argument about the top 0.00013%.

As for my burden of proof, I'm content to let people use their intuition to decide whether or not my assertion is likely true or false. I invite you to try to prove me wrong.

I'm sorry sophositry would be a better description. Again, it's clear you want to play semantics rather than acknowledge that David Johnston's work is solid and enlighening.

patteeu
04-19-2011, 11:22 AM
Ah, so what you're saying is you want to play semantics games while avoiding the substance of the report. Got it.

Nope, what I'm saying is that point 3 was "so misleading as to be worthy of dismissal".

KC native
04-19-2011, 11:22 AM
It's very heartwarming to know that you are still as hateful as ever.

How about addressing the issues rather than making ad hominem attacks?

So how long before you get yourself put on universal ignore again? ROFL

KC native
04-19-2011, 11:24 AM
I'm sorry sophositry would be a better description. Again, it's clear you want to play semantics rather than acknowledge that David Johnston's work is solid and enlighening.

And it's clear I'm not spelling things properly today

mlyonsd
04-19-2011, 11:53 AM
The vast majority of rich would pay more in actual dollars under a consumption tax.

If all loop holes are closed? I'd like to see the numbers on that.

patteeu
04-19-2011, 11:55 AM
If all loop holes are closed? I'd like to see the numbers on that.

I'm saying that they'd pay more than poor people under the same system, not that they'd necessarily pay more than they do today.

Norman Einstein
04-19-2011, 11:57 AM
So how long before you get yourself put on universal ignore again? ROFL

Still waiting for you to address the issues. All you have done is cut and paste. You don't seem to have the intelligence to realize I responded to a post. All you have done is gone off the deep end again.

I would think you will be there before anyone else.

Now, answer the post or just go away.

KC native
04-19-2011, 01:25 PM
Still waiting for you to address the issues. All you have done is cut and paste. You don't seem to have the intelligence to realize I responded to a post. All you have done is gone off the deep end again.

I would think you will be there before anyone else.

Now, answer the post or just go away.

ROFL @ a classic tom post

Norman Einstein
04-19-2011, 02:03 PM
WSJ shows taxing the rich won’t cover the bill

Posted at 12:15 pm on April 18, 2011 by Ed Morrissey

Barack Obama told the nation last Wednesday that “improvements” in Medicare and hiking taxes on the wealthy would stabilize government spending and bring deficit spending to what can charitably be described as a dull roar. The Wall Street Journal does some fact checking on these claims and finds them entirely false. Even if the “rich” gets defined down to the top 10% of filers — whose average annual household income is $114,000 — the level of revenue from even a 100% tax would still not close the budget gap:

Consider the Internal Revenue Service’s income tax statistics for 2008, the latest year for which data are available. The top 1% of taxpayers—those with salaries, dividends and capital gains roughly above about $380,000—paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the “millionaires and billionaires” Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.

Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That’s five times Mr. Obama’s 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95%.

Well, 2008 was a bad year, especially for those whose income relied on capital gains. How about 2005, when the economy was expanding, a period that Obama argues showed the rich succeeding at the expense of the poor? The news isn’t much better, and for good reason:

In 2005 the top 5% earned over $145,000. If you took all the income of people over $200,000, it would yield about $1.89 trillion, enough revenue to cover the 2012 bill for Medicare, Medicaid and Social Security—but not the same bill in 2016, as the costs of those entitlements are expected to grow rapidly. The rich, in short, aren’t nearly rich enough to finance Mr. Obama’s entitlement state ambitions—even before his health-care plan kicks in.

In other words, a soak-the-rich policy won’t work, in part because there isn’t enough rich to soak, and in part because the bill is just too high. James Pethokouis delved into the White House’s subsequent release of generalities along which Obama’s new budget would work, and discovers a $2 trillion price tag in it:

If you’re keeping score, what Obama is actually proposing is $1 trillion in new taxes on wealthier Americans (and small businesses) and $1 trillion in higher tax revenues by reducing tax breaks and subsidies for a total of $2 trillion in new taxes over 12 years. That means total debt reduction, not counting interest, would be $4 trillion, 50 percent of which would come from higher taxes. The econ team at Goldman Sachs ran a similar analysis and found that 56 percent of Obama savings over ten years could come from higher tax revenue.
In this way, Obama relies far more on taxes than the two-parts spending/one-part taxes formula of the Obama-Bowles-Simpson debt panel that is supposedly his model. As Obama said, “It’s an approach that borrows from the recommendations of the bipartisan Fiscal Commission I appointed last year.” Not really.

Since we can’t get the money out of the rich, where do all these new tax revenues originate? The WSJ notes that the “loopholes” mentioned by Obama in his speech are targeted to the middle class:

Keep in mind that the most expensive tax deductions, in terms of lost tax revenue, go mainly to the middle class. These include the deductions for state and local tax payments (especially property taxes), mortgage interest, employer-sponsored health insurance, 401(k) contributions and charitable donations. The irony is that even as Mr. Obama says he merely wants the rich to pay a little bit more, his proposals would make the tax code less progressive than it is today.

In the class-war battlefield, the class that takes the most casualties is always the middle class. If that wasn’t clear, then this report from Bloomberg should remove all doubt:
More than 45 percent of U.S. households won’t owe federal income taxes for 2010. That stems from decades of tax cuts and, in the minds of some Republican lawmakers, it’s also a problem.

Policies designed to ease the tax burden of lower-income Americans and offer targeted tax incentives have pushed millions of people off the income tax rolls. That has bolstered an argument that these households don’t have enough of a stake in the political system because they don’t pay income taxes.

“As a matter of fairness, wouldn’t it make more sense if all citizens paid at least something in income taxes?” asked Orrin Hatch, the top Republican on the Senate Finance Committee, at a March 30 hearing. “I am convinced that it would help us in our fight against excessive federal spending. You get a lot of takers when you ask people if they want more of something and you tell them it’s free.”

There is only one place for the federal government to squeeze for the cash Obama needs to spend on his budget trajectory.

Silock
04-19-2011, 10:53 PM
More than likely. The top 1% generally stays in the top 1%. Unless you have data to the contrary, which obvously you don't, then you are simply contstructing straw men.

Since no one addressed this point, I will. Basically, what you posted is incorrect.

Percentage moving to a higher income quintile (1996-2005):
http://i247.photobucket.com/albums/gg121/Silock99/Figure-1B.png

Percentage moving to a lower quintile (1996-2005):
http://i247.photobucket.com/albums/gg121/Silock99/Figure-1A.png

Source: U.S. Treasury Dept.

Silock
04-21-2011, 05:36 PM
Bump, just because I'd like to see a response to the information I posted.

KC native
04-22-2011, 12:58 AM
Bump, just because I'd like to see a response to the information I posted.

just saw this. Could you give a more specific cite than just the treasury dept? I want to see what goes into those charts.

KC native
04-22-2011, 01:19 AM
Bump, just because I'd like to see a response to the information I posted.

Nevermind, I found it.

I find that information very lacking in it's ability to tell anything. This report may be right however based upon what I've read so far I would put no weight into its ability to give a representation of reality.

My main concern is that it doesn't use every years' data. They only use 1996 and 2005. The problem with this is that those dates don't make much sense. You're going from just before the tech bubble to the final melt up point before the credit crisis begins to hit. Second, there lack of data in between the two dates doesn't allow one to determine if 1996 or 2005 were aberrational for some reason.


This study examines income mobility over the period from 1996 through 2005 using data from a large sample of individual income tax returns for these two years. The panel uses a large sample of approximately 96,700 tax returns with 169,300 primary and secondary (i.e., spouses on joint returns) taxpayers who filed for tax years 1996 and 2005.
10 The sample represents 117.1 million taxpayers on 76.9 million income tax returns. While the income data are as reported on tax returns, the analysis includes both primary and secondary taxpayers who are each followed separately. Thus, if a married couple filed a joint tax return in 1996, divorced, and then filed separate tax returns in 2005, each person is followed separately, even if one or both of them appear as a secondary taxpayer on
another tax return.To avoid counting transitions from school to work as mobility, the analysis follows the common practice in previous research of excluding taxpayers who were under the age of 25 in 1996.

Silock
04-22-2011, 01:44 AM
Nearly 60% of the Top 1% moving to a lower quintile over a period of 10 years isn't an outlier.

patteeu
04-22-2011, 06:33 AM
LOL @ KC Native's concern about limited data sets being aberational.

He wasn't too concerned about that when his featured article tried to mislead it's readers by focusing on the aberational top 0.00013% of the income spectrum instead of a more reasonable definition of people that the average person would consider wealthy.

KC native
04-22-2011, 09:41 AM
Nearly 60% of the Top 1% moving to a lower quintile over a period of 10 years isn't an outlier.

You can't tell if those years are outliers or not because they only use two years. Without being able to look at the actual data and with only using two years that are a decade apart we're not getting a very good picture of what's going on.

For example, how many of those taxpayers had retired between '96 and '05? Is it a signifcant number? Does it push those numbers one way or the other.

Using every year over the course of those 10 years would produce a more robust picture of what's going on.

Like I said, this report may be right however this isn't much of an analysis. The years they chose don't make much sense. This is a pretty sloppy report. I would put little weight into it's findings.

KC native
04-22-2011, 09:45 AM
LOL @ KC Native's concern about limited data sets being aberational.

He wasn't too concerned about that when his featured article tried to mislead it's readers by focusing on the aberational top 0.00013% of the income spectrum instead of a more reasonable definition of people that the average person would consider wealthy.

Two complete different types of data sets and what's being analyzed. I'm not surprised you try to conflate the two.

patteeu
04-22-2011, 09:50 AM
Two complete different types of data sets and what's being analyzed. I'm not surprised you try to conflate the two.

Not only is point #3 focusing on an extremely (and deceptively) narrow group of people, but it's also looking at only two years, decades apart. Your excuses are jokes.

KC native
04-22-2011, 10:11 AM
Not only is point #3 focusing on an extremely (and deceptively) narrow group of people, but it's also looking at only two years, decades apart. Your excuses are jokes.

No, it's called being critical of what I read. The fact you only have qualms with #3 and not the rest of the report is very telling. You're just wanting to play semantics and letting your cognitive bias allow you to deny his other points because disagree with one.

patteeu
04-22-2011, 10:29 AM
No, it's called being critical of what I read. The fact you only have qualms with #3 and not the rest of the report is very telling. You're just wanting to play semantics and letting your cognitive bias allow you to deny his other points because disagree with one.

If you concede my points on #3, we can shift our focus to one of the others. Until then, I see no reason to move on.

KC native
04-22-2011, 11:36 AM
If you concede my points on #3, we can shift our focus to one of the others. Until then, I see no reason to move on.

I'm not conceding your points at all. Point #3 isn't his arbitrary number. It's based off and IRS report that is issued every year. If you have a problem with that report you should take it up with the IRS.

Again, it's clear you have nothing to really dispute. You just wantto argue semantics.

patteeu
04-22-2011, 12:05 PM
I'm not conceding your points at all. Point #3 isn't his arbitrary number. It's based off and IRS report that is issued every year. If you have a problem with that report you should take it up with the IRS.

Again, it's clear you have nothing to really dispute. You just wantto argue semantics.

You're hiding behind a misleading definition of "wealthy". I'm exposing your game. Call it semantics if you want to, but if we're trying to understand the real world here, it's important that we use definitions that are relevant to the real world.

Since you refuse to acknowledge the misleading nature of the cherry-picked data in item #3, I see no reason to move on to critiques of the rest of the article. Meanwhile, you use the same criticisms that are applicable to item #3 in your own criticism of the analysis in Silock's post. That's hypocritical.

KC native
04-22-2011, 12:50 PM
You're hiding behind a misleading definition of "wealthy". I'm exposing your game. Call it semantics if you want to, but if we're trying to understand the real world here, it's important that we use definitions that are relevant to the real world.

Since you refuse to acknowledge the misleading nature of the cherry-picked data in item #3, I see no reason to move on to critiques of the rest of the article. Meanwhile, you use the same criticisms that are applicable to item #3 in your own criticism of the analysis in Silock's post. That's hypocritical.

There is no hypocrisy involved. If you can't see the difference in the types of data and the need for a different type of analysis with both sets then I can't help you.

There I nothing misleading about #3. The author gives the background of the report and what it contains. Did he choose two extremes by choosing 1961 and the latest year? Yes he did, however if you follow his work and were familiar with the trends then you would know that the trend has been solidly down. You could follow that data series from then until now and still reach the same conclusion. Again, your issue is with semantics and not the data itself.

KC native
04-22-2011, 12:52 PM
You're hiding behind a misleading definition of "wealthy". I'm exposing your game. Call it semantics if you want to, but if we're trying to understand the real world here, it's important that we use definitions that are relevant to the real worl.

Also, if you think the top 400 tax payers is a misleading definition of wealthy then I also can't help because you delving into dongeresque sophistry at this point.

patteeu
04-22-2011, 01:03 PM
Also, if you think the top 400 tax payers is a misleading definition of wealthy then I also can't help because you delving into dongeresque sophistry at this point.

The wealthy aren't paying less taxes. Item #3 says they are. You can't get any more wrong than that. The only way to even make it an arguable statement is by choosing an absurdly narrow definition of "wealthy". Call it semantics if you want, but I'm not the one that chose that absurdly narrow definition.

KC native
04-22-2011, 01:45 PM
The wealthy aren't paying less taxes. Item #3 says they are. You can't get any more wrong than that. The only way to even make it an arguable statement is by choosing an absurdly narrow definition of "wealthy". Call it semantics if you want, but I'm not the one that chose that absurdly narrow definition.

Again, you're stuck on semantics trying to distract from what the data says. Keep trying to twist definitions and words and avoid discussing the actual data. It shows you have nothing.

Are you backing away from the hypocrisy charge now?

patteeu
04-22-2011, 01:53 PM
Again, you're stuck on semantics trying to distract from what the data says. Keep trying to twist definitions and words and avoid discussing the actual data. It shows you have nothing.

Are you backing away from the hypocrisy charge now?

No, you're definitely a hypocrite. I was just correcting the record as to who was hiding behind semantics (i.e. David Cay Johnston).

KC native
04-22-2011, 06:05 PM
No, you're definitely a hypocrite. I was just correcting the record as to who was hiding behind semantics (i.e. David Cay Johnston).

I was hoping you would come back to that.

They're completely different data series that need completely different treatments. When we're looking at movement in and out of the top percentiles/quintiles/deciles, we are tracking individuals. Because of this, trends matter immensely. Did they have a huge write off in year 10? Were they unemployed for part of the year? Did they just say "fuck it, I have enough money. I can take a year off."? This is why every year is important in a data series like that.

For the tax report, we are looking at a defined group. We don't care about who actually is in that group. Those characteristics are unimportant for noting the difference between them and the rest of the tax payers. All that is important, for purposes of this report, is the % amount of tax they pay relative to the other tax payers.

So, please point out the hypocrisy in the different approaches to the different reports.

It's clear who's hiding behind semantics and who is concerned with the empirical data (semantics=patty).

patteeu
04-22-2011, 08:41 PM
I was hoping you would come back to that.

They're completely different data series that need completely different treatments. When we're looking at movement in and out of the top percentiles/quintiles/deciles, we are tracking individuals. Because of this, trends matter immensely. Did they have a huge write off in year 10? Were they unemployed for part of the year? Did they just say "**** it, I have enough money. I can take a year off."? This is why every year is important in a data series like that.

For the tax report, we are looking at a defined group. We don't care about who actually is in that group. Those characteristics are unimportant for noting the difference between them and the rest of the tax payers. All that is important, for purposes of this report, is the % amount of tax they pay relative to the other tax payers.

So, please point out the hypocrisy in the different approaches to the different reports.

It's clear who's hiding behind semantics and who is concerned with the empirical data (semantics=patty).

I see no reason to justify the different treatment between the two data sets on the basis of that distinction, kc hypocrite. If you want to show that the data Silock presented is anomalous or otherwise misleading then show it. That's what I did to your point #3.