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11-28-2012, 01:31 PM
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#106
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Lifetime Premium Access
Join Date: Mar 29, 2009
Location: Texas Hill Country
Posts: 3,317
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Quote:
Originally Posted by Chica Chaser
Historical? How about 2013
Apparently the Obama administration does not see that those huge DoD cuts are needed. They are are only proposing to cut approx 1% for FY2013. If its such a huge black hole, you would think they would be cutting the shit out of "defense".
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As I mentioned earlier in the thread, Democrats made no meaningful effort to trim defense spending even when they held the presidency and large majorities in both the House and Senate in 2009:
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Originally Posted by CaptainMidnight
The discussion involving defense spending and taxation needs to become a little more reality-based. Even during the period when Democrats held the White House and big majorities in both the House and Senate (2009-2010), there was no serious discussion of significant defense cuts -- only nibbling around the edges and cuts in previously assumed increases. But let's get real here -- even if defense spending were cut as much as Barney Frank and Ron Paul proposed, and if tax rates on the "rich" were returned to pre-Bush years, we'd still be running trillion-doallar deficits.
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By the way, defense spending is nowhere near one-third of our budget. Neither is it the "hugest drain" on our resources. Ballooning entitlement, health care, and social welfare spending is.
Regarding the question of what should be the top-bracket rate on ordinary income, progressives need to realize that before we get too zealous about pushing it to very high levels, history shows that doesn't work as well as many people think.
For instance, the U.K. government decided to increase the top rate (formerly 40%) to 50% a couple of years ago. When it quickly became apparent that the increase wasn't producing much additional revenue, an official from the office of the Chancellor of the Exchequer (The British equivalent of our Department of the Treasury) said that many business owners, investors, and entrepreneurs were "maneuvering" in attempts to lessen their tax burden. (What a surprise!)
Most wealthy people don't pay much less in taxes relative to what would be the case under the tax code and rate structure of the 1970s. In those days, among other things, it was ridiculously easy to wipe out most of your tax liabilty with things like accelereted depreciation on highly-leveraged assets. Part of the problem with this was that it encouraged large amounts of malinvestment in tax shelters that made no economic sense other than to save their investors a lot of tax dollars. In my view, that is one of the myriad things wrong with the economy in the 1970s.
There's little question in my mind that taxes on high earners will need to be raised. I just don't think that people should suffer from delusions that that alone will do very much to solve our deficit problems. Taxes will also have to be raised on the non-affluent, and we will need to see meaningful entitlement reform, not just more vague promises and happy talk.
I think you could push the top-bracket rate to 40% and cap total deductions to a level that would affect very few households earning less than $500K without producing enough distortions and disincentives to do much damage to prospects for investment and capital formation.
If you go much beyond that, you run into the problem that since most states impose an income tax, the combined federal/state marginal rate would be well over 50% for many taxpayers.
Some of you may disagree, but I just think that's too high.
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11-28-2012, 02:06 PM
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#107
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Valued Poster
Join Date: Feb 9, 2010
Location: Here
Posts: 14,191
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11-28-2012, 02:33 PM
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#108
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Valued Poster
Join Date: Jan 3, 2010
Location: South of Chicago
Posts: 31,214
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Quote:
Originally Posted by Doove
Close with the analogy, but not quite.
What i do at home is make sure my needs are paid for, and then i worry about my wants.
The country has specific needs that should/need to be met. We can argue what rises to that level and what doesn't. That's a fair argument.
But what the country wants is low taxes.
Our problem is we put too much emphasis on our wants, while neglecting our needs.
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Okay, Doofus, just when did big screen TVs, cable TV, cell phones and wireless internet connections become "needs" to be subsidized out of the Federal budget?
Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States Today?
By Robert Rector and Rachel Sheffield July 19, 2011
. . . . [S]cholar James Q. Wilson has stated, “The poorest Americans today live a better life than all but the richest persons a hundred years ago.” In 2005, the typical household defined as poor by the government had a car and air conditioning. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR. If there were children, especially boys, in the home, the family had a game system, such as an Xbox or a PlayStation. In the kitchen, the household had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker.
The home of the typical poor family was not overcrowded and was in good repair. In fact, the typical poor American had more living space than the average European. The typical poor American family was also able to obtain medical care when needed. By its own report, the typical family was not hungry and had sufficient funds during the past year to meet all essential needs.
Poor families certainly struggle to make ends meet, but in most cases, they are struggling to pay for air conditioning and the cable TV bill as well as to put food on the table. Their living standards are far different from the images of dire deprivation promoted by activists and the mainstream media. . . .
http://www.heritage.org/research/rep...hat-is-poverty
Obama Reveals National Wi-Fi Plans
Jason Mick - February 10, 2011 4:06 PM
. . . . According to President Obama, $5B USD of the funding will be used to expand wireless coverage from 95 percent of Americans to 98 percent of Americans. Most of these 3 percent live in impoverished or remote areas that don't make sense for the profit-driven telecoms to come to. That said, these regions often perform vital functions to our nation's economy like food-growing. . . .
The $10B USD could cover 9.2 million Americans with 4G, if it was applied very efficiently. However, government efforts, including those of the Obama administration (and its predecessor the Bush administration) seldom showcase such fiscal responsibility.
In all likelihood the plan will end up either costing more than the Obama administration's optimistic figure, or it will deliver less results. Either way, people won't be happy.
http://www.dailytech.com/Obama+Revea...ticle20887.htm
The so called "Obamaphone"
http://www.snopes.com/politics/taxes/cellphone.asp
http://www.heritage.org/research/rep...hat-is-poverty
Obama Redefining 'Poverty'
By David Paulin July 20, 2011
http://www.americanthinker.com/2011/...g_poverty.html
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11-28-2012, 02:55 PM
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#109
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Valued Poster
Join Date: Jan 3, 2010
Location: South of Chicago
Posts: 31,214
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Quote:
Originally Posted by CJ7
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11-28-2012, 03:14 PM
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#110
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Valued Poster
Join Date: Dec 19, 2009
Location: Buffalo NY
Posts: 7,271
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Quote:
Originally Posted by ExNYer
And THEN, she still has to pay the higher (60%?) income tax on what is left over.
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Ultimately, there are too many variables for either of us to be entirely right, or entirely wrong. Not the least of which is, hours 41-60, how are they spent? Are they spent just keeping the business afloat, in which case the owner needs to work them no matter how the return ratio is calculated for hours 1-40 vs. hours 41-60. In that case, the owner has a choice to continue working 60 hours for $1.1M, or shut down entirely.
And there are other variables, but i'm not feeling like taking the time to spell them out to someone who has his mind already made up.
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You are essentially arguing that if we raise income tax rates at the top level, we will increase employment.
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And you're essentially arguing that taxes need to be at the lowest level, or else nobody will bother owning a business.
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If that was true, we would long ago have raised the top marginal rate to 90% and we would have 100% employment. But that hasn't happened, has it?
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Yeah, we'll do that at the same time we drop the tax rate to 0% for everyone to maximize revenues. Be serious.
By the way, might i remind you that the top tax rate was, at one time, 90%? And it didn't exactly destroy the small business economy now, did it?
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If what you are saying was true, then communism would have worked.
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Straw man.
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If what you are saying was true, then the high-tax countries of Europe would have lower unemployment rates than we do. But they don't. In fact their unemployment rates are typically twice our rates.
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Link? And do they calculate unemployment rates the same way we do?
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11-28-2012, 04:04 PM
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#111
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Account Disabled
Join Date: Apr 1, 2009
Location: TBD
Posts: 7,435
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Quote:
Originally Posted by Doove
Ultimately, there are too many variables for either of us to be entirely right, or entirely wrong. Not the least of which is, hours 41-60, how are they spent? Are they spent just keeping the business afloat, in which case the owner needs to work them no matter how the return ratio is calculated for hours 1-40 vs. hours 41-60. In that case, the owner has a choice to continue working 60 hours for $1.1M, or shut down entirely.
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The point was that higher taxes will cause SOME people to work less, not EVERY person. So, it isn't really relevant to the argument that some folks with be stuck at work keeping the doors open in hours 41-60.
What matters is that lots of people have discretion in terms of how many hours they put in and their economic output goes down as taxes go up. If the increased tax rate doesn't offset the reduced revenue from decreased output, then you just shoot yourself in the foot by raising rates.
Quote:
Originally Posted by Doove
And there are other variables, but i'm not feeling like taking the time to spell them out to someone who has his mind already made up.
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Made up about what? I did not say I opposed increased taxes. If you re-read what I wrote above, I said I thought they should be raised (and spending cut). But I also opined that they should not be raised above 45% in the top marginal rate. You dodged the question about a top rate and said we should to raise them as high as needed to meet our spending needs. That's how we got here.
Quote:
Originally Posted by Doove
And you're essentially arguing that taxes need to be at the lowest level, or else nobody will bother owning a business.
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No, I'm not arguing that. Don't put words in my mouth. I never said taxes should be at the "lowest" level, whatever that means (0%?). In fact, I said that they needed to be raised. Just not past a certain point. After that point - WE DO WITHOUT.
Quote:
Originally Posted by Doove
Yeah, we'll do that at the same time we drop the tax rate to 0% for everyone to maximize revenues. Be serious.
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No, you be serious. That's another straw man. I never said dropping the tax rate to 0% would maximize revenue. Only that raising taxes to 90% won't increase employment to 100%.
Quote:
Originally Posted by Doove
By the way, might i remind you that the top tax rate was, at one time, 90%? And it didn't exactly destroy the small business economy now, did it?
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Wrong twice. The top rate in the post-WWII era was 91% - and NOBODY paid it. Not even the filthy rich. There were too many deductions and too many different ways to take compensation that enabled people to avoid the top marginal rates. The real top marginal rate that multi-millionaires actually paid was only a fraction of the 91%.
Also, that 91% rate was on TRULY high incomes. Adjusted for inflation, those incomes were in the $10M per year and above range. In 1950, it would only have been paid by a few hundred taxpayers and NONE of them would be small business owners.
The current tax increase proposals levy the top rate on incomes all the way down to $250,000. That is the new definition of millionaires. And that DOES affect the small business economy.
That's the kind of money made by dentists, sales people, realtors, mid-level law firm associates, and many others folks you would never regard as "rich".
Quote:
Originally Posted by Doove
Link? And do they calculate unemployment rates the same way we do?
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Seriously? You need a link to common knowledge?
About the only large European country that can match our unemployment rate is Germany - and that is only sometimes. Most European countries - particularly in Southern Europe are at least 50% higher. Greece and Spain are both over 20%
And if anything the Europeans calculate their unemployment rates to make unemployment look artificially low. Their retirement ages are much lower than ours (57 or 59 in Greece). That enables them to claim that people who are out of work at age 60 are retired, rather than unemployed. That alone takes millions off the unemployment roles.
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11-28-2012, 04:19 PM
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#112
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Valued Poster
Join Date: Feb 9, 2010
Location: Here
Posts: 14,191
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11-28-2012, 05:06 PM
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#113
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Lifetime Premium Access
Join Date: Mar 29, 2009
Location: Texas Hill Country
Posts: 3,317
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Quote:
Originally Posted by Doove
By the way, might i remind you that the top tax rate was, at one time, 90%? And it didn't exactly destroy the small business economy now, did it?
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And may I remind you that the pre-1964 91% tax bracket was a complete sham?
(Actually, I suppose I don't need to. ExNYer already covered that.)
But don't you remember our tax policy discussions from a year or so ago in Diamonds and Tuxedos? We went over all this stuff in enough detail that I'm surprised you would bring up the 91% top-bracket rate in a context involving the apparent assumption that you thought there was anything serious or effective about its former existence.
In fact, I briefly covered the issue again way back in post #39:
Quote:
Originally Posted by CaptainMidnight
Some on the left (like Paul Krugman, for instance) have said recently that we should go back to the tax structure we had in the 1950s, when the top-bracket income tax rate was as high as 91%. What they always seem to forget, though, is that hardly anyone paid an effective tax rate more than a fraction of that. Prior to the tax reform act of 1986, it was very easy to wipe out most of your tax liability with things like accelerated depreciation on highly leveraged assets.
Some people might recall reading about the discussions leading up to passage of the AMT. A few news reports of the late 1960s indicated that a number of very wealthy households paid little or no federal tax, either on income or capital gains. Responding to public outcry, congress passed legislation designed to ensure that wealthy taxpayers at least pay something, even though at a rate only a fraction of the "headline" 91%. One big problem with that was that the AMT was not indexed for inflation, so now it hits some taxpayers who aren't well off. So lawmakers are continually confronted with demands for an "AMT fix."
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(By the way, a slight correction: I failed to note in my previous post that the top-bracket rate had been reduced to 70%, but the concept is still the same. Virtually no wealthy taxpayer paid an effective rate more than a fraction of the statutory top rate of 70%.)
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11-28-2012, 05:33 PM
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#114
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Valued Poster
Join Date: Dec 19, 2009
Location: Buffalo NY
Posts: 7,271
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Quote:
Originally Posted by ExNYer
The point was that higher taxes will cause SOME people to work less, not EVERY person.
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And i argued that SOME productivity will simply be transferred to someone else. Probably more than you think. And ultimately, if Businessman A doesn't want to work for my disposable dollar, it'll just go to Businessman B. So yeah, it's pretty much a wash.
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What matters is that lots of people have discretion in terms of how many hours they put in and their economic output goes down as taxes go up.
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I would argue that for SOME, their economic output goes up as taxes go up. If additional taxes cut into someone's lifestyle, it's entirely possible that SOME people will work even more, in order to maintain the lifestyle they're accustomed to.
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But I also opined that they should not be raised above 45% in the top marginal rate. You dodged the question about a top rate and said we should to raise them as high as needed to meet our spending needs. That's how we got here.
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I didn't dodge anything. I answered the question even more thoroughly than you did, if truth be told. All you did was pull a 45% number out of your ass, as if you have some inherent knowledge as to what the most effective tax rate is for increasing revenues. You don't. Neither do I.
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No, I'm not arguing that. Don't put words in my mouth.
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Why not? You put words in mine.
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I never said taxes should be at the "lowest" level, whatever that means (0%?). In fact, I said that they needed to be raised. Just not past a certain point. After that point - WE DO WITHOUT.
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I'm more than willing to do without. I just strongly suspect that what i think we should do without is a bit different than what you think we should do without. So if you want me to pay for what you want, then you can pay for what i want.
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No, you be serious. That's another straw man. I never said dropping the tax rate to 0% would maximize revenue. Only that raising taxes to 90% won't increase employment to 100%.
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The sarcasm went over your head, apparently. Of course you never said that dropping the rate to 0% would maximize revenue. But i never said that raising it to 90% would maximize employment.
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And if anything the Europeans calculate their unemployment rates to make unemployment look artificially low. Their retirement ages are much lower than ours (57 or 59 in Greece). That enables them to claim that people who are out of work at age 60 are retired, rather than unemployed. That alone takes millions off the unemployment roles.
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Uh huh. If you say so.
Eurostat, the statistical office of the European Union, defines unemployed as those persons age 15 to 74 who are not working, have looked for work in the last four weeks, and ready to start work within two weeks, which conform to ILO standards. Both the actual count and rate of unemployment are reported.
http://en.wikipedia.org/wiki/Unemployment
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11-28-2012, 07:57 PM
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#115
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Account Disabled
Join Date: Feb 15, 2012
Location: Houston
Posts: 10,342
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If you cannot understand that we have to cut spending everywhere, you are the problem.
IN addition to being the problem you are lacking in any form of common sense.
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11-28-2012, 08:52 PM
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#116
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Account Disabled
Join Date: Apr 1, 2009
Location: TBD
Posts: 7,435
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Quote:
Originally Posted by Doove
Eurostat, the statistical office of the European Union, defines unemployed as those persons age 15 to 74 who are not working, have looked for work in the last four weeks, and ready to start work within two weeks, which conform to ILO standards. Both the actual count and rate of unemployment are reported.
http://en.wikipedia.org/wiki/Unemployment
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How does that contradict my point? Did you even read it?
If Europeans get government pensions at age 60 (or earlier), then they are not working, are not looking for work, and not ready to start work within 2 weeks. So, they don't count as unemployed. That makes the unemployment rates artificially low compared to the US.
Those same people living in the US wouldn't be eligible for SS until age 65 and would count as unemployed because they would have to look for work, unless they were lucky enough to have a private pension.
The Europeans are going broke on their entitlement systems - they don't even need a defense budget to break them.
Their unemployment rates are already higher than ours. If they raise their retirement ages to match ours due to austerity programs, what do you think their employment rates will be then? Clearly higher tax rates aren't helping.
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11-29-2012, 02:17 PM
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#117
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Valued Poster
Join Date: Dec 19, 2009
Location: Buffalo NY
Posts: 7,271
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Quote:
Originally Posted by ExNYer
How does that contradict my point? Did you even read it?
If Europeans get government pensions at age 60 (or earlier), then they are not working, are not looking for work, and not ready to start work within 2 weeks. So, they don't count as unemployed. That makes the unemployment rates artificially low compared to the US.
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And people here don't retire in their 50's? And let's not forget the #1 theme from conservatives, that being all the deadbeat welfare recipients who "are not working, are not looking for work, and are not ready to start work within 2 weeks".
Nope, that doesn't make our unemployment rates artificially low.
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11-29-2012, 02:45 PM
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#118
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Valued Poster
Join Date: Mar 30, 2009
Location: Hwy 380 Revisited
Posts: 3,333
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I know IBAteUpWithTheDumbass thinks that there is a point in what he posts. But I, for the life of me, can't figure out what it's supposed to be. All I can figure out is that people aren't poor unless they have the exact lifestyle poor people had 50-100 years ago. The comparisons aren't contemporaneous to poor vs rich, but poor vs poor 100 years apart. Sure makes a lot of sense. Fu*k, why not pick the Middle Ages instead of merely 100 years ago. Now, back in those times, by golly, those folks really knew how to be poor.
Of course, maybe the poor of back in the day didn't have radios or read newspapers and probably NEVER went to a movie. But, my sharecropper grandfather's family did so I'm not sure if they qualified as "Land Barons" or not.
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11-29-2012, 02:52 PM
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#119
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Account Disabled
Join Date: Feb 8, 2011
Location: Louisiana
Posts: 3,979
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Quote:
Originally Posted by ExNYer
What exactly is the connection between who takes from the public treasury and who pays into it?
Even if we assume what you wrote about the day laborer, the blind guy, and the cripple (that they don't benefit as much from government spending) is true, won't it still be true if the top 5% pay 35% or 45% of taxes, instead of 40%?
And, for what it is worth, I don't think your examples hold water. The blind guy and the cripple will receive far more government support than the average healthy person. And the day laborer. like all low-income people, will receive far more in Social Security benefits and Medicare/Medicaid benefits that he will ever pay into the system.
And why exactly would a crippled person who is unemployed or underemployed not get the benefit of a police force or the military? Can he or she not still be raped, robbed, or murdered? The overwhelming majority of the violent felons in this country are themselves unemployed or underemployed people who victimized people in their own socioeconomic group. Ghetto thugs and trailer park bums don't normally beat and stab people from Turtle Creek. They attack folks right in their own neighborhood.
Wow, man. That is like TOTALLY deep. Can I get a hit off that, man?
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How right you are.
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11-29-2012, 02:53 PM
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#120
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Account Disabled
Join Date: Apr 1, 2009
Location: TBD
Posts: 7,435
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Quote:
Originally Posted by Doove
And people here don't retire in their 50's?
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No, they don't - at least not in the same numbers as in Europe. We are talking about AVERAGES here, not individual cases.
Talking about what SOME people can do is irrelevant. Only what the average persona actually does is relevant.
The only people who can retire in their 50s in the US are folks with private pensions or big savings. That's not a very big chunk of the population - here or in Europe.
For most folks, it is Social Security (SS). The Europeans can get their versions of SS earlier. So they retire earlier on average. That artificially reduces their unemployment rates.
A 58 year old in the US who gets laid off can't get SS. So he has to file for unemployment.
The same guy in Europe just takes retirement - and does not count as unemployed.
This isn't a difficult concept to grasp. Unless you are deliberately trying to avoid admitting the bleeding obvious.
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