Redistribution of wealth

[London Rayne]

Originally Posted by nevergaveitathought

how would i do that

It's not in the Constitution...it's in the Bible lol. I am waiting for my return biaaatches!! I have been giving my 10 percent for over 11 years!

[pjorourke]

Originally Posted by vkmaster

PJ, fornuately the Midwest has not seen the troubles out West.

If Bonds are AA, with insurance....and the project itself is sound, short of Treasury
Notes, I feel these type of bonds are safe. And they are such a key part to States
building their infra-struture that I believe some type of gov't backing will always be there.

Ever heard of Chicago and Illinois -- I think they are in the Midwest.

Most of those mortgage bonds/securities were rated AA or higher.

[pjorourke]

Originally Posted by Naomi4u

PJ, You are one smart man.

[Guest102513-1]

Hey PJ, actually i own a couple of muni's out of Chi-town.

So are you saying that there have been some defaults in that market???

[Camille]

Originally Posted by coast_encounter

+1 I think I am impotent now.

[atlfan999]

Originally Posted by heidilynnla

Tudor and your dad, You are missing my point. I dont mind paying my share of taxes, I am disagreeing with the distribution.

I think you would like the "fair tax" where everyone pays a high (20% or more) sales tax on their purchases, but there is no income tax. There is a lot online about it, if you feel the need to read more. Its an interesting concept, and I would be for it, but will never happen.

[pjorourke]

Originally Posted by vkmaster

Hey PJ, actually i own a couple of muni's out of Chi-town.

So are you saying that there have been some defaults in that market???

Not yet

[Texas Contrarian]

Back in the 1970s I worked with a guy who remains a friend and now runs fixed-income portfolios for a major institution. He told me recently that going long munis is (generally speaking) tantamount to betting on large federal bailouts, and that that's problematical given the Republican takeover of the House.

[charlestudor2005]

Originally Posted by atlfan999

I think you would like the "fair tax" where everyone pays a high (20% or more) sales tax on their purchases, but there is no income tax. There is a lot online about it, if you feel the need to read more. Its an interesting concept, and I would be for it, but will never happen.

The concept is that instead of "taxing" income, you "tax" purchases. So, people are taxed on the money that they spend at the point of sale. Since you do away with income tax, the POS tax is really pretty high. But the tax is relative. The rich who purchase yachts, pay a pretty hefty tax on the yachts. The poor who live on a shoestring, pay a pretty hefty tax on food, even cheap food. There are no exempt purchases (like food, drugs, services).

And the IRS still has a function. They audit all business who sell something goods and services to ensure that they are collecting and paying the tax into the treasury.

[pjorourke]

Or you can do a consumption tax as we do now but it is simpler. You just have a W-2 minus net savings. If you add to savings, you reduce taxable income. If you dip into savings you increase it. Its effectively similar to a sales tax, but you can exempt the first $x dollars. of course, that approach doesn't get at the underground economy, which is an issue.

[charlestudor2005]

Originally Posted by pjorourke

Or you can do a consumption tax as we do now but it is simpler. You just have a W-2 minus net savings. If you add to savings, you reduce taxable income. If you dip into savings you increase it. Its effectively similar to a sales tax, but you can exempt the first $x dollars. of course, that approach doesn't get at the underground economy, which is an issue.

Seems to me that would discourage savings. Right now we don't have enough people saving. I would hate to discourage savings.

[pjorourke]

No, its the reverse. Consumption is Income minus Savings. So if you save, you reduce consumption and taxes. Some formulas also adjust for taxes paid (i.e., that is not consumption).

Think of savings like a 401(k) plan. When you put money in, it reduces income. When you take it out, it is income.

[Whirlaway]

A tax system that rewards savings and penalizes consumption would be preferrable to our current system which is just the reverse.

[Texas Contrarian]

In reply to this:

Originally Posted by topsgt38801

The poor pay nothing because they make nothing and the wealthiest pay nothing because they have all the loopholes...

kingforaday said this:

Originally Posted by kingforaday

That is just not factual. The top 1% of taxpayers pay more than 30% of all of income tax the government gets...

Well, both of you are sort of right, as long as you stick to selected definitions of how you define the word "wealthy."

If you think that anyone who earns a few hundred thousand dollars per year is wealthy, even without substantial personal net worth, then kingforaday is right. People in the top 1% of the income strata pay about $400 billion annually in federal income tax.

But the truly wealthy (high net worth individuals who receive income from investments) pay taxes at a considerably lower rate than the moderately affluent. For example, someone who pulls down a $2 million annual income from salary,fees, bonuses, or commissions pays tax at a rate of 35% on every marginal dollar of income (higher in states with a state income tax). However, someone with $2 million of investment income generally pays taxes at a rate considerably less than half of that, and sometimes fairly close to zero depending on investment choices.

The events leading up to the creation of the Alternative Minimum Tax (AMT) make for an interesting story. In the late 1960s, a couple of news stories reported that some of the nation's wealthiest individuals and families paid no income tax. I'm talking about the very wealthy -- centimillionaires (there were almost no billionaires at that time). Politicians were embarrassed. How could that be? The top tax bracket was 70% at the time.

The result was that congress responded to the pressure by passing the AMT in 1969, so that the Treasury could get at least some revenue from the wealthy.

Note that all this happened a dozen years before the first of all the "tax cuts for the wealthy" liberals always whine about!

[Bebe Le Strange]

Originally Posted by charlestudor2005

Seems to me that would discourage savings. Right now we don't have enough people saving. I would hate to discourage savings.

True, we live in a country where far too many people live beyond their means.