Raising taxes on the rich

[Robert_Sock]

It’s all a game in a miserable and corrupt world. Fix your eyes on the Hereafter and you’ll see what is in store for everyone who suffers in righteousness in this world.

 

[cynic]

Because of the way capitalism works the extreme rich receive a massive return on investments for what is basically shifting around money. The state can be a source of capital, it’s not as though that money dissapears into a black hole. Altenatively employees could receive higher wages, raising their purchasing power.

 

[copperblade]

It’s all a game in a miserable and corrupt world. Fix your eyes on the Hereafter and you’ll see what is in store for everyone who suffers in righteousness in this world.

Thanks Robert. You’re right, it is pretty much a game. For a period of time I was really concerned with how much money I made. I think it has something to do with envy.

 

[rturner76]

Clinton did not balance anything under he got a Republican House in 1994. Balancing the budget was part of the Contract with America. And to say that Reagan was not successful flies in the face of stats that show when the tax rates came down, revenue into the treasury went up. And I might also suggest that you reread the rules of the forum. Insulting other posters is a no-no.

The stats you are talking about do not exist. Regan was NOT successful. He created the first trillion dollar deficit then ran it up multi trillions. Bush1 added more more to it. The Clinton administration balanced the budget. The fact they had a republican house 1 year of 2 balanced terms means nothing. They passed the Clinton plan. It’s just more of holding on to the lie of a theory that NEVER actually worked. It;s a farce, a boondoggle. Trikledown or “Reganomics” NEVER worked, not even one year. I figure it must be more comfortable for people to believe that lie than than to admit you could possibly be wrong about making the rich richer and the poor poorer.

I didn’t think I called any one a name, I certainly didn’t mean to and I apologize if anyone took in that way. I wasn’t trying to disrespect anyone’s opinion, just state my opinion as clearly as possib;e. So I want to apoligize also if anyone is offended by any expression I am making however my opinion I don’t believe can be found offensive. Just unpopular.

 

[Prophesy]

How can we know? Even in Kenshin’s example where he gets to pick all the details you still have the jobs created from building the pool, building an art building, hiring employees to take care of those things, etc.

When was the last time you saw a scrubber at a gas station? At least in my part of the world a lot of entry jobs of yesteryear are gone because no one wants to pay a kid $9.30/hr to do that.

When thinking about economics, it’s better to talk about the things people do (i.e. what a person, group, or country is producing) rather than how the money is distributed. It’s not clear at all that higher or lower taxes are “better” unless you know exactly what’s going to be done with the money. Money is just representative of work. And that sword cuts both ways (liberal and conservative).

It’s easy to talk about what happens when the govt gives out money for free. People will take it, deserving or undeserving. With high minimum wage, it will become less worthwhile to have more entry positions at a rate much higher than their value.

For example if by “creating jobs” the government hires workers dig ditches up and fill them back in, then it’s not really valuable to society. People get paid, maybe some economic disparities are avoided, but ultimately it is inefficient if not completely worthless.

Agree completely.

On the other hand when people become wealthy enough they stop paying for things like “lawn boys” (proportionately to their wealth). More jobs are probably created by 1000 people making 1 million dollars per year than one guy making a billion dollars a year. If they get rich enough, they don’t have to work or contribute to society because they or their ancestors figured out how to game the system (which is to say they’re smart). But no one made a billion dollars in a vacuum. The opportunities are provided by the society in which they live.

So Bill Gates is only billionaire ($56 billion net worth) because his father was a lawyer? Sure his father may have chipped in on the purchase of a computer (which the first computer he programmed was the result of a school charity purchasing one for the school.)

Bill Gates was indeed able to make money only because we bough technology from him. However, he has creation millions of jobs that would not exist today. He, in fact, has created wealth.

This is why even though I am a dividend guy, I still think it’s only fair for people like me to have to pay regular income taxes on their dividends. I do however think that a flatter tax system without loopholes would be more fair and productive for everyone. We already give everyone a standard deduction on taxes, and that seems to be the appropriate way to account for the poor–just up the standard or base it on inflation.

I’m still on the “tax the sales not the income” side of the fence.

-Prophesy

 

[Ridgerunner]

I agree with the OP, and also note that the burden should fall on those shoulders strong enough to bear it—obviously the rich have the money, AND ALSO the Current System benefits them.

ADD to THIS that the rich ACTIVELY LOBBY their private interests, and have the funds to affect votes on tax policy, one should be very leery of giving the Rich a big existential pass from being citizens.

Additionally, there’s a strong moral reason: we’ve learned the problems of creating rentier societies, and how it eventually dissipates national wealth.

Part of the difficulty with this whole issue is that nobody is really proposing to tax “the rich”. What this administration wants to do is tax the high earners, most of whom can’t do a whole lot to avoid taxation. $200,000.00+ is the sort of salary the manager of a significant manufacturing plant earns, including production bonuses, etc; or a banker in a medium-size bank. Lots of doctors (but certainly not all) make $200,000.00. Some lawyers do, but not most. (The $250,000 level is for a couple) Above $250,000, the ranks thin out pretty dramatically.

It must be recognized, too, that high incomes are not necessarily stable. There is a lot of “churn” among people who make them.

The truly rich can manipulate their incomes so that they minimize taxes. In doing so, they also grow their wealth. It’s just a fact. I have seen it many times. Until a person can do that, he’s not really “rich”. Imagine for a moment how much tax on disposable income Bill Gates avoided by creating and funding the Bill and Melinda Gates Foundation.

And it must be realized that there is no correllation between high taxable earnings and wealth. High earners do not necessarily have any real wealth, and most don’t. Yes, there are the very few Warren Buffets. But most actual wealth is in the hands of smallish proprietors; people who own small manufactories or service businesses or reasonably sizeable (but not necessarily huge) farms. Such people are, in effect, “buying their jobs”, but the nature of their doing it is such that they also grow wealth, because they must necessarily reinvest a very large segment of their “income” into the operation.

So, the Obama-desired tax increases, like Obamacare,are fundamentally a transfer of income from one segment of the middle class to another. If one looks at the administration proposals for the truly “poor”, one sees that there’s nothing in it for them.
One should not be surprised at that. The truly poor don’t vote in significant percentages, whereas middle class people do.

 

[copperblade]

So Bill Gates is only billionaire ($56 billion net worth) because his father was a lawyer? Sure his father may have chipped in on the purchase of a computer (which the first computer he programmed was the result of a school charity purchasing one for the school.)

Bill Gates was indeed able to make money only because we bough technology from him. However, he has creation millions of jobs that would not exist today. He, in fact, has created wealth.

I believe Bill Gates wrote DOS using “stolen time” on the school computer when he went to Harvard. So yes, I am saying that if Bill Gates had not been born into that family he wouldn’t have done what he did, but someone else might have. I’m not saying it has nothing to with him or it’s all luck, but we have to acknowledge that the capabilities of a person in our economy is not 100% about what they can do. We do not have a meritocracy which is what I think extreme conservative thinkers would like to believe–if you made more money you were smarter or worked harder so you deserve it. I think you deserve at least most of it, but I think it’s delusional to think it’s all fair.

Or to put it another way, how many poor geniuses might be out there who would be able to contribute to our society if they had just gotten a fighting chance? It’s the same argument you can use for abortion

Please note Bill Gates agrees that people like him should be taxed more.

 

[vz71]

Please note Bill Gates agrees that people like him should be taxed more.

Interesting.
Perhaps this is some sort of bizarre flavor of ‘survivors guilt’ where he feels guilty for making millions when others he considers perhaps smarter then he is are not doing as well.

Maybe.

I, on the other hand, believe his contributions to the economy to be more then enough. There is no need to tax him any more, he has already created more jobs then the government has in the past few years.

Now if he really feels he should have more of a tax burden, perhaps he should simply cut a check and donate the funds to the government.

 

[Prophesy]

I believe Bill Gates wrote DOS using “stolen time” on the school computer when he went to Harvard. So yes, I am saying that if Bill Gates had not been born into that family he wouldn’t have done what he did, but someone else might have. I’m not saying it has nothing to with him or it’s all luck, but we have to acknowledge that the capabilities of a person in our economy is not 100% about what they can do. We do not have a meritocracy which is what I think extreme conservative thinkers would like to believe–if you made more money you were smarter or worked harder so you deserve it. I think you deserve at least most of it, but I think it’s delusional to think it’s all fair.

Or to put it another way, how many poor geniuses might be out there who would be able to contribute to our society if they had just gotten a fighting chance? It’s the same argument you can use for abortion

Please note Bill Gates agrees that people like him should be taxed more.

I don’t think it was “stolen time” but Gates is just an example regardless. And yes it isn’t a meritocracy, but I believe this is where my concessions end.

Firstly, as I’ve said before, income tax is just about the least helpful way of taxation. Secondly, the problem in the states isn’t a lack of governmental income, but an asinine spending program (outweighing the world GDP with debt and unfunded obligations is asinine, I hope we can both agree).

Thirdly, while I believe in a welfare net, I do not believe in a welfare net for corporations, small businesses, etc.

-Prophesy

 

[Prophesy]

Now if he really feels he should have more of a tax burden, perhaps he should simply cut a check and donate the funds to the government.

Agreed, but I think that the government is about the worst “charity” to donate to.

-Prophesy

 

[copperblade]

Now if he really feels he should have more of a tax burden, perhaps he should simply cut a check and donate the funds to the government.

I knew someone would try to play that card sooner or later.

He and Buffet both think that the investor class is getting too much of a free ride. Gates is a great guy, he’s trying to both solve our climate change and energy issues with TerraPower while at the same time eradicating malaria. There’s no need for him to personally emasculate his fortunes in order to make a “point” after which no one would listen to his opinion anymore. What kind of message would that send to everyone who doesn’t understand why we’re in this mess? That the world can rely on billionaires to be altruists?

 

[ComputerGeek25]

I don’t think it was “stolen time” but Gates is just an example regardless. And yes it isn’t a meritocracy, but I believe this is where my concessions end.

Firstly, as I’ve said before, income tax is just about the least helpful way of taxation. Secondly, the problem in the states isn’t a lack of governmental income, but an asinine spending program (outweighing the world GDP with debt and unfunded obligations is asinine, I hope we can both agree).

Thirdly, while I believe in a welfare net, I do not believe in a welfare net for corporations, small businesses, etc.

-Prophesy

As I’ve heard before, we don’t have a revenue generation problem, we have a spending problem.

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on, the majority always votes for the candidate promising the most benefits from the Public Treasury with the result that a democracy always collapses over loose fiscal policy”

• Alexander Fraser Tyler,‘The Decline and Fall of the Athenian Republic’.

 

[copperblade]

Firstly, as I’ve said before, income tax is just about the least helpful way of taxation.

I’m kind of torn on the issue. Solving how and who should pay what and for what seems really complicated unless we start from scratch. I’ve seen merit in a lot of philosophies. Two that kind of interested me I mentioned before was Georgism and Distributism. Georgism basically says that land is the basis for an economy. Distributism goes one step further and was an attempt to put Catholic values into an economic framework.

Secondly, the problem in the states isn’t a lack of governmental income, but an asinine spending program (outweighing the world GDP with debt and unfunded obligations is asinine, I hope we can both agree).

I can agree with you more than just that… I agree that the way the government is spending is wasteful. I think a law that requires the budget to be truly balanced would go a long way to fixing the problem if we could rely on politicians to not fudge the numbers or find loopholes. And to do that we would need real transparency and honest reporting, along with voters who actually found it offensive that politicians would do that. But right now I think most people just accept corruption, even the voters.

I don’t know how Canada pulled it off–it must be a cultural thing. They started balancing their budget in what, 1998? And since then they’ve done it every year I think.

Thirdly, while I believe in a welfare net, I do not believe in a welfare net for corporations, small businesses, etc.

Yeah, I might agree with you there too… For me a welfare net is really pragmatic concession than it is a philosophical point. In the end, I don’t want people to be so poor that they stab me when I’m in the parking lot to get the change out of my car. I’d rather them be too busy at home playing on some kind of gaming console or watching TV.

It used to be this country had a good work ethic in combination with a capitalist philosophy. That was great. Somehow just making money got glorified and there’s no pride in an honest day’s work anymore. People look up to you for being rich, however you made the money.

Likewise people should feel that accepting welfare is insulting to their dignity. Instead more and more people feel entitled to it. (Well of course, I DID pay social security tax didn’t I?)

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on, the majority always votes for the candidate promising the most benefits from the Public Treasury with the result that a democracy always collapses over loose fiscal policy”

• Alexander Fraser Tyler,‘The Decline and Fall of the Athenian Republic’.

Nice quote.

 

[copperblade]

The stats you are talking about do not exist. Regan was NOT successful. He created the first trillion dollar deficit then ran it up multi trillions. Bush1 added more more to it. The Clinton administration balanced the budget. The fact they had a republican house 1 year of 2 balanced terms means nothing. They passed the Clinton plan. It’s just more of holding on to the lie of a theory that NEVER actually worked. It;s a farce, a boondoggle. Trikledown or “Reganomics” NEVER worked, not even one year. I figure it must be more comfortable for people to believe that lie than than to admit you could possibly be wrong about making the rich richer and the poor poorer.

I agree with you about trickle-down and the deficits, however I do think Gingrich deserves a lot of credit for balancing the budget. The House was the one that negotiated the deal with Clinton and forced him to gut a lot of programs.

 

[Ridgerunner]

He and Buffet both think that the investor class is getting too much of a free ride. Gates is a great guy, he’s trying to both solve our climate change and energy issues with TerraPower while at the same time eradicating malaria. There’s no need for him to personally emasculate his fortunes in order to make a “point” after which no one would listen to his opinion anymore. What kind of message would that send to everyone who doesn’t understand why we’re in this mess? That the world can rely on billionaires to be altruists?

I wonder how Gates and Buffet define “the investor class”. Is that people like themselves who can invest huge sums, watch it rise, then donate it, without paying any tax on the increase, to some tax exampt foundation and offset real, discretionary income they put in their pockets, dollar for dollar? Is that the “investor class”?

How many people are actually in that “class”?

But that’s not what Obama is proposing. He isn’t proposing that people like Gates and Buffet be prevented from acquiring huge discretionary sums, free of tax because of appreciated assets they donate to some foundation that promotes their causes. He’s proposing that people who earn over $200,000 pay more taxes. Most of the people in the lower categories of that group get paid salaries, upon which the tax will be paid in full, as well as small and medium entrepreneurs who will simply be able to invest less in their businesses and farms.

 

[copperblade]

Ridge: I’m the one who says “investor class.” Buffet, for example, simply says that dividends should be taxed as regular income instead of as capital gains. It doesn’t really mean a person will get put in a particular class.

 

[Prophesy]

I’m kind of torn on the issue. Solving how and who should pay what and for what seems really complicated unless we start from scratch. I’ve seen merit in a lot of philosophies. Two that kind of interested me I mentioned before was Georgism and Distributism. Georgism basically says that land is the basis for an economy. Distributism goes one step further and was an attempt to put Catholic values into an economic framework.

Glad we agree so much, hopefully it’s because we’re sensible people. The US definitely isn’t using an ideal system. From what I’ve heard so far, I enjoy the FairTax system the most.

I can agree with you more than just that… I agree that the way the government is spending is wasteful. I think a law that requires the budget to be truly balanced would go a long way to fixing the problem if we could rely on politicians to not fudge the numbers or find loopholes. And to do that we would need real transparency and honest reporting, along with voters who actually found it offensive that politicians would do that. But right now I think most people just accept corruption, even the voters.

It’s hard to change non-voters into voters. It’s much harder to change activists into sensible people. There are a great many persons who want this government spending (it could be argued that most people want the spending). Sometimes people forget that there isn’t a national money tree.

I don’t know how Canada pulled it off–it must be a cultural thing. They started balancing their budget in what, 1998? And since then they’ve done it every year I think.

We were doing well. We had a Conservative minority back in the 07-08 fiscal term. The opposition threatened a non-confidence vote if Canada didn’t create a stimulus pack (the Conservatives didn’t want one). Since then we’ve run a few deficits, but we’ll be back into surplus mode again within the next few years.

The Conservatives won their majority which was great, but the didn’t change the budget much from when they introduced it (back when they were a minority government).

Yeah, I might agree with you there too… For me a welfare net is really pragmatic concession than it is a philosophical point. In the end, I don’t want people to be so poor that they stab me when I’m in the parking lot to get the change out of my car. I’d rather them be too busy at home playing on some kind of gaming console or watching TV.

It’s tragic that crime exists and I’m not saying that if you’re poor you should be forced to criminal activities to stay afloat. But where I live welfare is what we’re famous for.

It used to be this country had a good work ethic in combination with a capitalist philosophy. That was great. Somehow just making money got glorified and there’s no pride in an honest day’s work anymore. People look up to you for being rich, however you made the money. Likewise people should feel that accepting welfare is insulting to their dignity. Instead more and more people feel entitled to it. (Well of course, I DID pay social security tax didn’t I?)

I feel the problem here is the government. Once the government starts subsidizing various corporations, the corporation doesn’t have to please the customer as much to get profit since they’re getting it from somewhere aside from the customer.

-Prophesy

 

[Ridgerunner]

Ridge: I’m the one who says “investor class.” Buffet, for example, simply says that dividends should be taxed as regular income instead of as capital gains. It doesn’t really mean a person will get put in a particular class.

Well, it’s all very well for Buffett to say. What about a retired lady who has a modest stock dividend with which, with her social security, she makes it month to month. Why raise the dividend tax on her?

 

[copperblade]

Well, it’s all very well for Buffett to say. What about a retired lady who has a modest stock dividend with which, with her social security, she makes it month to month. Why raise the dividend tax on her?

In the case of retirement money, it’s equivalent if done under tax-advantaged accounts. Retirement accounts like an IRA or Roth IRA treat dividend money the same as any other income because the taxes are either taken out in the beginning or deferred. In fact, if the retired lady has an IRA and is using it to buy dividend stocks, she’s already paying the full amount when she withdraws.

I would estimate that most people who make modest money on dividends have other sources of income. The level at which capital gains tax affects you is proportional to how much of your income relies on it. But even if that’s not the case, I think just philosophically it seems that people who live off of investing shouldn’t be getting lower taxes than people who live off of working.

 

[Warrior1979]

I don’t know how Canada pulled it off–it must be a cultural thing. They started balancing their budget in what, 1998? And since then they’ve done it every year I think.

Keep in mind that Canada has a tremendous amount of natural resources relative to its population. It also enjoys implicit U.S. military protection. The same factors are true of Australia. It’s much easier to balance the budget under these conditions.